Regulatory compliance in the pharmaceutical industry is not just about following the rules, but is about protecting reputations, avoiding legal action, and ensuring ethical business practices. So, when Pfizer, a multinational pharmaceutical that has been at the forefront of medical innovation, well known for its groundbreaking work on Covid-19 vaccinations, acquired Biohaven Pharmaceuticals in 2022, it also inherited a $60 million fine against Biohaven for violations of the Anti-Kickback Statute (AKS). The U.S. Department of Justice (DOJ) determined that Biohaven had engaged in improper financial relationships with healthcare providers, leading to fraudulent claims submitted to Medicare and Medicaid.
The situation highlights a critical gap in many pharmaceutical companies’ compliance programs -the absence of proactive surveillance and communications monitoring, which can help firms mitigate risk – before they can escalate to federal investigation levels.
Biohaven or Biohell?
According to the DOJ, Biohaven made illegal payments to physicians in the form of consulting fees and other financial incentives, influencing them to prescribe its pharmaceutical products. These activities directly violated the Anti-Kickback Statute, a U.S. law designed to prevent financial conflicts of interest affecting medical decision-making.
Once Pfizer acquired Biohaven, it assumed the responsibility for addressing these past compliance failures, resulting in substantial financial and reputational damage. This case makes one thing clear – reactive compliance is not enough. Companies need to be proactive and in establishing surveillance strategies to catch and prevent misconduct, before regulators or investigators do. Firms must also conduct due diligence when acquiring other businesses and be aware of potential risks they may take on, it is not just enough to have a robust surveillance system in place for the future, but there is a need to seek out existing, and past instances of error as well.
In fact, regulatory bodies, including the DOJ, have been increasingly scrutinizing pharmaceutical companies’ interactions with healthcare professionals, as, without adequate communications monitoring solutions, organizations leave themselves vulnerable to violations, fines, and reputational damage.
Not so easy ECCPeasy
Under the DOJ’s Evaluation of Corporate Compliance Programs (ECCP), organizations are expected to capture and retain all communications made for business purposes. This expectation exists so that documents and audit trails are preserved in case of an investigation or litigation.
The ECCP emphasizes the need for firms to ‘capture it all’, including communications data such as ephemeral messaging, which has become a popular feature of comms channels. The DOJ also amended its ECCP in 2024 to encompass monitoring the compliant use of ‘bring your own device’ (BYOD) programs. The amendment expects organizations and firms to understand where all business communications come from and are stored, whether that is via corporate issued or personal devices used for business.
Regulators expect pharmaceutical companies to implement proactive monitoring systems that allow compliance teams to track employee interactions across every channel used for business communication. Without this oversight, companies risk missing early warning signs of noncompliant activity – just as Biohaven did.
Meeting expectations
A comprehensive communication surveillance solution could have allowed Biohaven detect improper discussions and financial arrangements before they escalated, with comprehensive communications surveillance solutions providing:
- Retention and preservation of data across multiple communications channels, including essential business channels like email, Microsoft Teams, and social media
- A secure cloud data archive that assists in structuring, searching, and managing data with efficient, AI-enabled tools
- Surveillance capabilities to monitor high-risk individuals, which proactively alert users in the event of misconduct or suspicious activities
With a DOJ-aligned compliance program, companies can ensure timely risk-identification, swift intervention, and avoid costly outcomes – in terms of both financial and reputational damages.
Is communications surveillance the game-changing solution that Pharma needs?
The Pfizer-Biohaven case is a clear warning that compliance failures can have serious financial and reputational implications. However, with the right tools, they can be prevented. By investing in the right surveillance technology and solutions, pharmaceutical companies can protect against costly enforcement actions and maintain trust. Effective surveillance can not only save pharma firms money, but can also save reputation, relationships with regulators and the wider market, and valuable time lost to investigations and legal wrangling. Perhaps, if Biohaven had implemented a robust compliance surveillance solution, it could have detected and prevented these violations before they escalated into a federal investigation.
