UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Nguyễn Thị Thu Vân The Lack of Effective Training Program in Compliance Management A case of a pharmaceutical company MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year 2019 TIEU LUAN MOI download : skknchat@gmail.com UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Nguyễn Thị Thu Vân The Lack of Effective Training Program in Compliance Management MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: Phạm Phú Quốc Ho Chi Minh City – Year 2019 2 TIEU LUAN MOI download : skknchat@gmail.com SUPERVISOR’S REPORT ON THE FINAL THESIS SUBMITTED FOR THE DEGREE OF MASTER of BUSINESS ADMINISTRATION Final thesis title: The Lack of Effective Training Program in Compliance Management Company Student name: Nguyễn Thị Thu Vân Supervisor name: Phạm Phú Quốc 1. General comments: • Remarks on the student’s attitude:. • Remarks on the assignment’s academic quality:. Overall assessment: Meet requirement for submitting; Not meet requirement for submitting.
Other remarks: - Did the student follow the report schedule? Yes No Other. - The Turnitin plagiarism percentage: Supervisor’s signature 3 TIEU LUAN MOI download : skknchat@gmail.com Acknowledgement I would like to take this chance to say a special thank to my thesis supervisor Pham Phu Quoc due to his huge contribution in supporting and encouraging me to complete my big project. His advisory is one of most important sources of reference for me to realize the general picture of the problem and understand the requirement of school committee in evaluating. Also, thanks to ISB for generating this study program with practical and effective methods in learning and working and gave us a golden opportunity to build by our own this meaningful project.
Thanks to my family and my dear friends: Truc & Huy in supporting me all the time. 4 TIEU LUAN MOI download : skknchat@gmail.com CONTENTS CHAPTER 1. Risk of compliance management in healthcare industry. Overview of MSD Vietnam.
MSD’s background and management structure. MSD’s compliance management strategy. MSD’s current practice in business. High frequency of risk activities.
Repeated type of noncompliance findings. Being determined as “high risk in compliance” in audit’s assessment. Initial cause-effect map .25 Chapter 3: Problem justification. Jusitfy the existence of problems: Updated cause-effect map.
Justify the importance of solving problems. Causes of centralize problem .34 CHAPTER 4: ALTERNATIVE SOLUTIONS .36 5 TIEU LUAN MOI download : skknchat@gmail. Proposed solutions: Building comprehensive training program .46 6 TIEU LUAN MOI download : skknchat@gmail.com CONTENTS OF FIGURES Figure 1. Product lines of MSD.
Board of Management chart. Marketing budget allocation. Number of promotion activities vs population. Average number of attendees per meeting.
Relationship of top management & individual behavior. Initial cause-effect map. Updated cause-effect map - Justify the existence of problem. Updated cause-effect map - Justify the importance of problem.
Cause for centralize problem. Key criteria in training program…………. Proposed solutions for key criteria in training program……………………………………………………………. Action plan for improvement of training program…………………….50 CONTENT OF TABLES Table 1.
Listed repeat findings……………………………………. Scheme of risk definition………………………. Brief profiles of interviewees……………………………. Cost estimated for half year training program…………46 7 TIEU LUAN MOI download : skknchat@gmail.com EXECUTIVE SUMMARY The thesis is conducted to find solutions for the most centralize problem of compliance management of MSD: the lack of effective training program.
Initially, in focusing on examine operation of MSD – a pharmaceutical company with its headquarters bases in NJ, USA, three main symptoms of this problem were determined as high frequency of risky activities, repeated non-compliance findings and “high risk” rated by Global Audit team. Through interviews and references from other researches and studies of experts in field, the initial list of problems was built with 5 problems: no effective compliance training program, inappropriate compliance policies, great job pressure, low ethical culture in organization & wrong decision in recruitment. Making decision is a process based on many factors of business and management, therefore, the consideration is also presented with the justification of problem’s existence, problem’s importance and the capability to solve the problem. As a result, the problem of non-effective training program is indicated as centralize problem with 3 main causes: no real cases discussion in training, no evaluation tools and no involvement of all members in organization.
In the final chapter of this report, solutions and action plan, which focus on solving main causes of problem in different criteria of a comprehensive program, are built with the result from interview and literature knowledge. 8 TIEU LUAN MOI download : skknchat@gmail. BACKGROUND INFORMATION For several decades, employee’s corporate violations have become the key challenge in running business among companies due to their damages cause in cost and operation (1). Obviously, the involvement of different stakeholder’s damanges in consequence of violations clearly requires greater effort of managers in controlling rather than circumstances that only company’s income is negatively impacted.
Indeed, company’s image, reputation, corporate social responsibilities or people relationship within company recently attract huge attention of business owner. Along with this change in businessman’s perspective, concept of “conflicts of interest” in many areas are raised as concerns in researches, studies, debates and other kinds of discussion. Turning into business practices, especially with health care section while that conflicts cause loss of public truth in scientific professional and be in charge of unethical problems in our society (2) (3) (4), the unique controlling tools to manage and diminish wrong-doing business practices of pharmaceutical company in health-care industry are established as corporate standards and policies in organizations world-wide. In this report, there is not much focus on conflict of interest term but on the risk of compliance management in pharmaceutical company with the real case of MSD Vietnam – a member of MSD Global, one of top biggest pharmaceutical company in the world.
In which, the violations of regulations have particular motivations and causes, combine with management structure and practice of business that make controller more difficulty in recognizing and eliminating unexpected behaviors that damage pharma company’s most valuable asset: reputation. Risk of compliance management in healthcare industry Interest conflict in pharmaceutical industry was discussed in extensive amount of research as well as debates between policies makers, socialists, investigators and also health care professional. In the past, HCP used to base on information of drug promotion or advertisement for prescribing. However, due to FDA regulations of “Directed Print Advertisements and Promotional Labeling for Prescription Drugs”, limited information 9 TIEU LUAN MOI download : skknchat@gmail.com is allowed to transfer all useful knowledge to HCPs.
As a result, HCPs now is relying on pharmaceutical company to finance for continuing medical education (CME) for their better knowledge and enhancement of healthcare personal skills (5) (6). CMEs, are flexibly allowed to organize, can perform in different types of learning methods such as seminar, symposiums, expert information forum, online learning system, etc,. This change is now influcing the relationship between pharmaceutical company and HCPs. By collecting data about changes of behavior related to nature of human’ interest and interviewing about changes in mindset of HCPs, previous researches showed clear result that HCPs tend to bias in prescibing and advising treatment methods for patient after involving in a collaboration with a pharma company or receiving financial sponsorship of a company, even though they did not tend to be influent by these interactions (22).
Moreover, interest conflict in pharma industry also due to the different stakeholders that company and HCPs are serving for. The main stakeholders of HCPs are patient while main stakeholders of pharma company are shareholders. In one side, HCPs try to bring the best treatment for patient or improvement for patient’s life quality. However, in the other side, profit is the critical priority in running business of pharma company (7).
Therefore, the changes in regulation, laws or business policies of industry may not affect strongly the objectives to promote product, increase market share and generate more profit of company’s manager. For the purpose to against interest conflict, bias in prescribing and financial benefits provided by inappropriate purpose, regulations were required to build and implement not only at country level (by government), but also at institution and organization level. In the other hand, pharma company’s reputation is the most critical company’s asset because of the particular nature of this field while the customer is not the consumer and the quality of product cannot be easy to measure or evaluate. Doctors mainly base on the information of product provided by company, the company’s previous researches or other products as well as the reputation of company, and, their own science knowledge and judgement to make decision of treatment should be taken by patient.
Combining these business characteristics, pharma companies have to stick closely with compliance regulations and laws in running its business to protect their 10 TIEU LUAN MOI download : skknchat@gmail.com vulnerable reputation, which is easy to damage by the complexity of market, competition and stakeholders. Overview of MSD Vietnam 1. MSD’s background and management structure MSD Vietnam was establised in 1995 as a representative office, controlled by MSD Hongkong Company Limited. By focussing on special treatment for cardiovascular, diabetes, vaccines, infectious diseases, MSD Vietnam runs along 4 core businesses: Primary Care (PC), Hospital (HS), Vaccine (VV) & Tender, which each has different core products for different types of diseases or demands for improving quality of human life.
Product lines of MSD A particular characteristic in management structure of MSD Vietnam is that not all support function is under management of Chief of Respersentative office (Managing Director – MD), except Compliance manager, Director of Human resources, Director of Finance. Other support functions are under management of regional board and also report directly to regional person-in-charge. Together with 4 BUs and commercial department, compliance department, which is identified as main function, dedicates to 11 TIEU LUAN MOI download : skknchat@gmail.com the smoothy in running business and in charge of all compliance matter of business including tasks related to commercial regulations, legal issue or legitimacy in interaction with external stakeholders. Otherwise, not only report to MD, compliance manager have to report to Regional Compliance Director to ensure a transparency and consistency in controlling within company’s global network, also, ensure an independence against business by tight collaboration and continuing discussion.
Regional Regional Managing Regional IT Regional supply Compliance procurement director director chain director director director Local Director of HS Director of VV Local IT Local supply procurement business business manager chain manager manager Director of PC Director of business Tender business Director of commercial Director of Business functions human resource business Director of Support functions Medical Director of Compliance finance Manager Figure 2. Board of Management chart 1. MSD’s compliance management strategy As the leader in market about ethics and integrity, MSD commits to the highest standard of transparency in all segments as well as in all interaction with stakeholders. Operation policies and code of conducts were established consistently with recommendations of Pharmaceutical Research and Manufactures of America (PhRMA), International Federation of Pharmaceutical Manufactures & Associations (IFPMA) & Foreign Corrupt Practices Act Law of US federal (FCPA 1977).
The most priority of company in controlling interaction with HCPs is to prohibit employees and all business partners providing benefit in many kinds but out of scientific purpose. Prescribe of HCPs 12 TIEU LUAN MOI download : skknchat@gmail.com must be based on what benefit patients the most, but not based on relationship or personal impression of HCPs about company. Otherwise, MSD strictly prohibits drug promotion without guidance about caution for customer or consumer. All scientific information company provide to HCPs – both advantages and disadvantages of company’s products - must be carefully generated from researches of the most reliable universities or sciences labs.
Because of the clear direction, standards in operation mostly focus on transferring these management’s perspective into business practices in forms of guidance, processes and policies.