Asia’s Complex Compliance Landscape

Ann Beasley, PharmExec

Although it is a longstanding business practice to divide international functions into a handful of huge geographical territories, each comprising what can sometimes be a daunting variety of local cultures, languages, and policies, tackling Asia-Pacific (APAC) as a “standalone” region is particularly complex. This complexity can be amplified when crafting an organizational approach to compliance, which in itself is notably susceptible to the fluctuating influences of cultural identity and ingrained behaviors.

Both established and developing markets can present their own set of problems. Japan, for example, is still finding its way toward a “speak-up culture.” The vastness of India is subject to its own array of regional variations. And parts of Southeast Asia — smaller countries such as the Philippines and Indonesia — still suffer from emerging market problems, with the issues of corruption and small or nonexistent compliance functions.

Compliance maturity

There is broad agreement that the general concept of compliance — and the building of compliance teams — has evolved considerably in APAC in recent years. “When I first moved to Beijing in 2008, there were only a couple of dozen people who had compliance on their business card,” said Eric Carlson, a partner at Covington & Burling, now based in Shanghai. “It just wasn’t a job in China then. Ten years later, there are several thousand people working in compliance.” 

Ann Beasley, a director in Navigant’s healthcare and life sciences governance, risk management, and compliance practice, said, “I was really impressed with the quality of the people I was interacting with at the Pharmaceutical Compliance Forum conference in Asia last year.” She added, “Just a couple of years earlier, there was more naivety around the concepts of compliance. The level of conversation sophistication is definitely higher now.” 

Maria Eugenia Quindimil, executive director, JAPAC regional compliance at Amgen, told Pharm Exec that the company’s new hires in the region are given “a significant induction training in compliance, including all relevant internal SOPs, regulations, code, and local laws.” She explained: “Besides the induction training, the worldwide compliance and business ethics function implements a competency model assessment to all (new and mature) compliance professionals to ensure right developmental actions will be implemented during the year.”

There is, however, the issue of “compliance maturity,” which still leaves the problem of “massive demand and very limited supply in the region,” said Carlson. In China, he explained, nearly all of the compliance professionals “have emerged in the last seven years or so.” While multinationals “are desperate for seasoned compliance officers, there are very few people with more than six or seven years’ experience, and almost no one with 10–15 years’ experience.” 

The result is that most of the people leading compliance functions in China are relatively young. “There’s nothing wrong with that, per se — they can bring novel ideas and can be more proficient with new technologies — but we see a lack of industry experience and sometimes a lack of maturity of judgment when it comes to handling difficult or novel situations,” said Carlson. “Compliance is about making difficult choices about limited resources and managing and balancing risks. That can sometimes cause problems when you have someone who has a senior-level job title but a junior level of experience.”

In addition, even a long-established market can harbor some cultural resistance to compliance. On the issue of Japan’s “speak-up culture,” for example, Beasley observed, “When I was working in Japan years ago, even the compliance and legal people were not necessarily identifying issues and raising them.” In China, noted Carlson, there has “never been much of a problem with people speaking up, but this depends on the individual company, of course.” In Korea, employees were quite reluctant to share information outside of the company or outside the country, but Carlson said that this has changed over the last few years, as “society, in general, is becoming more aware of things like corruption.” Like everything else, the “speak-up” issue varies strongly country by country. But Carlson said that “the good companies are doing what you expect them to be doing: establishing hotlines in local languages and actually responding to and investigating information received.” 

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