ByAs a compliance officer in the dynamic world of the life sciences industry, staying ahead of regulatory changes and ensuring adherence to the law is imperative to avoid the following few repercussions:
- Regulatory Investigation
- Fines and Penalties
- Reputational Damage
- Product Bans
- Legal Action
- Sanctions
We’ve barely scratched the surface with the above-mentioned consequences of non-compliance. However,the outcomes above are enough to establish the importance of compliance in the life sciences industry.
So, how can compliance officers ensure adherence to the law?
First off, it’s important to realize that we’re in 2024, and the role of compliance officers has significantly evolved.
It now involves strategic decision-making, leveraging artificial intelligenceand data-driven insights to conduct a 100% audit, identifying the root cause of risks, mitigating them, and harnessing the power of technologies to track the top six compliance metrics that matter.
Today, we’re focusing on the top six compliance metrics. Let’s explore them and see the role they play in ensuring compliance with applicable rules and regulations.
1. Risk Assessment and Mitigation Score
The Risk Assessment and Mitigation Score (RAM score) quantifies the organization’s exposure to compliance risks.
It considers both the likelihood of an adverse event occurring and the potential impact, giving you foresight and enabling you to predict the outcome of non-compliance.
By assessing this metric comprehensively, compliance officers can allocate resources effectively and proactively address vulnerabilities.
- Why it matters: Risk assessment is the cornerstone of effective compliance. A robust risk assessment process identifies vulnerabilities, evaluates their impact, and prioritizes mitigation efforts.
- Calculable metric: Calculate the Risk Assessment and Mitigation (RAM) score by assessing risks across various compliance domains (e.g., speaker programs, third-party engagements, Open Payments Reporting). Assign weights to risks based on severity and likelihood. Regularly update the score to track improvements.
2. Training and Awareness Completion Rate
The training and awareness completion rate measures how effectively employees engage with compliance training that the organization has assigned to them.
A high completion rate indicates a well-informed workforce that knows what’s at stake, reducing the likelihood of compliance violations, risks, and policy breaches.
A protip would be to develop engaging training methods to foster better retention and understanding. Video-based training is one way to ensure effective compliance training and awareness.
- Why it matters: Well-trained employees are your first line of defense. Compliance training and awareness ensure that staff understand policies, procedures, and legal requirements.
- Calculable metric: Monitor the completion rate of mandatory compliance training modules. Set targets for completion within specified timeframes. Consider incorporatinginteractive videos to enhance the effectiveness of your organization’s compliance training.
3. Incident Reporting and Resolution Time
Incident reporting and resolution time reflect the organization’s responsiveness to compliance incidents.
There’s an entire approach to ensuring effective risk reporting and resolution, which involves improving your compliance program’s maturity level from reactive to proactive.
While improving the program’s maturity level, technologies such as qorAIplay an essential role. Coming back to the topic now, a shorter resolution time indicates efficient processes and proactive risk management.
Timely resolution prevents prolonged exposure to potential risks, mitigating them promptly to assure compliance:
- Why it matters: Swift incident reporting and resolution prevent minor issues from escalating. Timely action minimizes financial losses and reputational damage.
- Calculable metric: Track the time taken from incident identification to resolution. Set benchmarks based on severity (e.g., critical incidents vs. minor breaches). Collaborate with relevant departments to streamline the process.
4. Third-Party Due Diligence Success Rate
Third-party due diligence success rate assesses the effectiveness of identifying risks associated with external partners or third parties.
A high success rate indicates thorough assessments, reducing the risk of associating with non-compliant entities.
An example of this can be going through databases such as NPL, VPS, NPPEL, and FSMBto evaluate the status of debarred HCPs, ensuring that you’re not engaging with them in any capacity.
You need to develop rigorous due diligence to protect the organization’s compliance stature by ensuring that it is not engaging with debarred HCPs.
- Why it matters: Life sciences companies often collaborate with HCPs, distributors, vendors,and partners. Ensuring their compliance is essential to prevent regulatory violations, as engaging a debarred entity hasbeen associated with severe legal consequences, reputational damage, and more.
- Metric: Evaluate the success rate of third-party due diligence assessments. Measure accuracy in identifying high-risk partners. Implement corrective actions for gaps. You can also leverage a data-driven Engagement solution to help you centralize, track, monitor, and ensure compliance for all third-party engagements.
5. Audit Preparedness Index (API)
The audit preparedness index gauges the organization’s readiness for regulatory audits.
Regulatory authorities such as the CMS have started conducting audits, and staying prepared for such audits is critical to avoid any legal consequences.
There’s an entire process through which the government selects companies for audits, but we’ll get into that later.
For now, to ensure audit preparedness, you need to develop an APIto get thenecessary documentation, compliance data, and other essentials readily availableto minimize disruptions during regulatory audits.
You need to be proactive in your approach to preparing for audits as it instills confidence in stakeholders as well as regulators or sub-contractors assigned by the government to conduct audits.
- Why it matters: Regulatory audits can be stressful. Being audit-ready reduces anxiety and ensures a smoother process.
- Calculable metric: Develop an Audit Preparedness Index (API) that assesses documentation completeness, evidence retention, and process adherence. Regularly conduct internal mock audits to validate readiness.
6. Compliance Culture Index
The Compliance Culture Index reflects the organization’s commitment to ethical conduct.
A positive culture encourages employees to prioritize compliance, augmenting accountability and integrity.
Leaders play a pivotal role in shaping this culture, and as they say, “Culture comes from the top.”
It is important for organizational leaders, founders, and board of directors – basically, the upper echelon to ensure the creation of a culture thatsupports and promotes compliance.
- Why it matters: A strong compliance culture fosters ethical behavior and accountability throughout the organization, leading to timely risk identification, remediation, and improved compliance at all levels.
- Metric: Conduct anonymous surveys or focus groups to gauge employees’ perception of compliance. Measure factors like leadership commitment, communication, and employee empowerment to determine the organization’s current culture and plan ways on how you can improve or build a culture of compliance.
Conclusion
Remember, these metrics are interconnected, which means that by improving one, there’s a high probability that you’ll positively impact others.
Regularly review and adapt your compliance program to stay agile in an ever-evolving regulatory landscape. By continuously tracking the top six compliance metrics mentioned in this article, you’ll start gaining valuable insights.
Leveraging such insights will help you to make informed decisions, see the loopholes or gaps in the compliance program, and identify compliance vulnerabilities that are currently leaving you prone to risk of non-compliance.
By focusing on these key metrics, compliance officers can drive meaningful change, improving your organization’s commitment to compliance.
