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Needed: Responsible Executives in Life Science Companies

The Wall Street Journal ran an article on Tuesday, September 13 about holding officers from Life Science companies personally and criminally responsible for violations of US food and drug laws.  This should strike fear in the corporate boardroom.

Congress authorized criminal sanctions against corporate officers in 1938 under the Food, Drug and Cosmetic Act.  The Supreme Court has ruled that executives can be prosecuted, regardless of their knowledge that a crime was committed, known as the “responsible corporate officer doctrine.”  This doctrine only applies to life science, food and cosmetics executives because of the potential for their products to cause injury or death.  There is no requirement to prove “criminal intent.”

The use of this doctrine has been dormant since the 80’s, however, in recent years the Justice Department has actively been bringing the use of it back in a number of noteworthy cases.

Executives in organizations of all sizes should take their responsibilities seriously and ensure global, enterprise quality management systems are in place.  Tracking and managing quality issues consistently across the enterprise protects the consumers, protects the company and now also protects the executives.  Visibility and transparency of quality issues across the enterprise, in most cases, will prevent defective and dangerous products from reaching consumers.  While many companies have internal systems in place, most have not expanded their use to include external suppliers.

The trend in life sciences is to outsource.  Companies no longer develop, run trials, manufacture and distribute products within their own walls and control.  Today, companies use contract research organizations and contract manufacturers, and outsource functions such as IT and maintenance operations.  Today’s companies provide products developed in a complex ecosystem spanning countries and many tiers of suppliers.  The organization responsible for marketing the product and the “responsible corporate officer” are still liable for any problems, regardless of where in the supply chain the issue originated.  If I were a corporate officer in a position of responsibility, this alone would keep me up at night.

Never before has it been so important to have a comprehensive, global Enterprise Quality Management System to track and manage deviations and nonconformances, investigations, CAPAs, change management, audits, supplier qualification, supplier evaluations and scorecards.  These critical processes provide the clues to potential problems, and having visibility across many of these areas that have traditionally existed in silos is crucial to providing safe and effective products to the market.   It can also keep executives from prosecution, fines and jail.

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