In a speech held on 29 May 2015 to the Pharmacy & Law Association Chris Fonteijn, chairman of the Board of the Authority for Consumers & Markets (ACM), addressed the importance of compliance in healthcare and pharmacy. His message was: compliance is self-interest rightly understood.
Firstly, Chris Fonteijn explained the approach by the ACM. The ACM puts the consumer centre stage. If consumer behaviour has detrimental effects on consumer welfare ACM will take action. The ACM does this by imposing a fine on the company that infringes the competition rules for example and to the natural persons who managed this infringement. In addition, the ACM has so-called ‘raised eyebrows’ discussions. These are in-depth discussions in which the ACM tries to motivate companies to change their behaviour. Finally, consumers are actively informed on the opportunities offered by the market.
What is compliance?
According to Chris Fonteijn, compliance means that a company or employer’s association is working within the statutory framework and informs, trains and holds employees to account in this respect. In this, it is very important that the top of the company sets a good example. In the vision of the ACM, all directors, managers and employees who in their work could come across competition issues, should be actively involved in compliance: “this does not stop at having one meeting or with one page on the intranet of the company”. For instance, employees should regularly have to declare that they comply with the rules, by signing an integrity declaration for example and later on during assessment interviews. A monitoring system is also important. With audits, new risks can be quickly identified. This promotes the prevention of infringements.
When companies put compliance on the agenda, according to the ACM they are demonstrating that they are in favour of “honest competition”. The companies remain sharp, as market movements determine their success. “This makes the compliance programme a stimulant for innovation. Innovation by competition.”
Compliance in healthcare
The ACM views compliance in healthcare in particular as an awareness process: “understanding of the rules and knowing under which circumstances competition risks arise”. The ACM understands that in the healthcare sector all the do’s and don’ts of competition law are not at the forefront of the minds of those involved. That is why the ACM focuses, more than in other sectors, on the explanation of its role and the competition rules. It is also the reason that the “consumer in healthcare” is on the ACM agenda 2014-2015.
According to the ACM, investments in the area of compliance must go further than laying down rules in a leaflet for employees or the use of internal checklists. Not only must employees know all the rules, they must also fully understand and apply them. Only in this way can prohibited behaviour be prevented. If the rules are breached, the ACM will not only fine and hold the company to account but also, where possible, the actual management itself. In this context Chris Fonteijn considers it reassuring that actual managers can apply for leniency: they can therefore confess the infringement to the ACM themselves in order to be eligible for fine-immunity or reduced fines.
Reduced fines on the basis of having a compliance programme?
Having a compliance programme does not according to the ACM in principle form a basis for reduced fines if an infringement does takes place. Nevertheless, having a compliance programme is useful. If the programme operates properly, infringements can be quickly detected and the company can apply for leniency. There is a good chance that the relevant company will then be granted fine-immunity or given a reduced fine.
It is understandable that in relation to compliance Chris Fonteijn focuses on the competition rules. After all, the ACM is charged with monitoring compliance with the rules. But compliance goes further. The Netherlands Compliance Institute defines compliance as: “the observance of laws and regulations, as well as working in accordance with the standards and rules as set by the institution itself”.
It is also notable that in the speech, natural persons are expressly urged to comply with the competition rules. In the event the competition rules are infringed, they can, as actual management, be held liable and fined for the infringement. Practice shows that the ACM does not hesitate to impose hefty fines to the actual management. In this context it is however noticeable that in addition to the actual management, those giving the instructions are not referred to. This must be related to the fact that actual management is easier to prove than giving instructions. Supervisory bodies therefore rely more quickly on the first remedy.
Whether the fact that the actual management can apply for leniency for themselves provides such a reassurance remains to be seen. A natural person can only apply for leniency for himself and not also for the company for which he works or any of his colleagues. Only companies (meaning entities carrying out commercial activities) can apply for ‘blanket leniency’, which means leniency for itself and all actually involved managers. A natural person applying for leniency for himself lowers therefore the chance of fine-immunity for both the company he works for and his colleagues. Not very colleague-friendly therefore. It goes without saying that a natural person will usually first allow the company the opportunity to apply for leniency before going to the ACM himself.
By Eric Janssen