THE DUCKHOUSE RULES (with apologies to John Irving)

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Last year’s MP expenses scandal taught the valuable lesson that no one can keep breaking the rules and get away with it. Code of Practice expert Joan Barnard takes a look at the rules that govern the pharmaceutical industry and the thorny issue of compliance.

You would have had to try very hard last year to avoid hearing about MPs’ expenses – second homes, bath plugs, moat cleaning and, the now infamous, duckhouse. The whole affair exposed the fact that the system was not fit for purpose. The rules were wholly inadequate and poorly understood, both by the MPs submitting expenses and by those responsible for approving them. Such rules as there were could easily be circumvented by MPs. With no system of checking, this was unlikely to be detected, and even if it was, it appears that there were no effective sanctions. The outcome of this is that MPs will lose the right to regulate themselves and their expenses will be overseen by an independent body.

The pharmaceutical industry has had its ‘duckhouses’ over the years – trips on the Orient Express, lap dancing clubs – which have attracted criticism in the medical press and been a gift to certain areas of the lay press, and thus, in the words of the Code, ’brought the industry into disrepute’. Even though there have been no such attention-grabbing activities over the last few years, there remains a deep distrust of the industry. When did you last see a positive article in the press about a pharmaceutical company? How many GPs refuse to see sales representatives? And what about meetings? – a recent report from the Royal College of Physicians called for an end to all industry-sponsored medical education within five years.

However, unlike MPs, the industry has understood for some time the importance of getting things right, and of being seen to be getting things right. In 2006, the ABPI Code of Practice was substantially revised and tightened up and this stance has been maintained in the 2008 Code. The ABPI has not been acting in isolation, as there has been similar toughening up at European level, with the EFPIA Code becoming significantly more demanding, and also at International level. This has been particularly evident in the US, where several companies that have breached the rules on promotion have received fines of billions (yes, billions) of dollars. If you work for a US-based company, you will certainly have heard of FCPA (Foreign Corrupt Practices Act), which means that similar fines could be imposed in relation to activities taking place outside US.

All of these factors have contributed to the emphasis there now is on compliance. But what is ‘compliance’? Compliance should be considered as a function. The function will take different forms in different companies but it will, in some way, address all of the following.


Set of rules

‘A duckhouse is not an allowable expense’

In the UK, in relation to pharmaceutical company activity, there are several layers of rules. First there are laws governing what can and cannot be done. Secondly, there is the ABPI Code of Practice. This goes beyond the legal requirements to include additional and more detailed requirements. Thirdly, each company should have a set of SOPs (Standard Operating Procedures) which incorporate the requirements of the Code into processes for undertaking all the various activities a company may be involved in. SOPs therefore will be practically focused, specific to each company and almost certainly more prescriptive than the Code.

As an example of how these different layers operate, in relation to meetings:

  • The law states that ‘hospitality should be “reasonable” in level’
  • The Code states that ‘The level of subsistence offered must be appropriate and not out of proportion to the occasion’
  • A company SOP will specify upper limits for the cost of hospitality in different situations.


Rules understood by everyone

‘Claim only essential expenses – a duckhouse is not considered an essential expense’

There is no point having rules if no-one understands how to apply them so an essential element of compliance is training. The Code states that ‘all relevant personnel’ must be trained, which means anyone involved in any activity which may be covered by the Code, thus including a wide variety of employees and third parties acting on behalf of the company.

The training needs to ensure that individuals understand how to apply the Code and company SOPs to their specific function. Companies provide this training in many different ways, including face-to-face and online, and will often support the training with guidance documents. It is also important that there is a management system in place which can provide individuals with access to ongoing advice, and direction in relation to specific issues.

An essential part of effective training is ensuring that everyone understands why the rules are the way they are.


Management to ensure adherence to rules

‘Detailed claims will be examined to ensure that only essential expenses are paid. A claim for a duckhouse will not be approved for payment’

Usually, there will be a requirement for approval of an activity before it takes place. This may be done in a number of different ways. Advertisements, detail aids and most other printed material will go through a comprehensive and detailed approval system centrally before they are released for use. Meetings are likely to require, at the very least, the approval of line manager, based on details of content, arrangements and attendees. Expense claims are also likely to require the approval of the line manager and of the finance department.


Documentation of activities in relation to the rules

‘All claims must be made in writing and must be accompanied by receipts, clearly identifying the item for which the claim is being made. A receipt for a duckhouse will be rejected’

No-one likes paperwork but a certain amount is essential in relation to compliance. There is a good reason for this, and a less good reason. The good reason is that documentation, as indicated above, is an integral part of any management system to ensure compliance with the rules, i.e. the documentation is a means of making sure that the rules are not broken. The less good reason is that documentation will provide the evidence if there is ever a complaint about an activity, i.e. the documentation is a means of proving that the rules were not broken.

Documentation covers a wide range of material including training records, briefing instructions, expense claims, records of customer contacts. Although your company will ultimately be responsible for maintaining and retaining documentation, it is also in your own interests to ensure that you correctly document your own activities.


Assessment of adherence to rules

Examination of all expense claims showed that no payments were made for duckhouses’

In compliance terms, this is audit, i.e. an examination of a sample of an activity to assess the extent to which is complies with the rules. Audit can be conducted based on any relevant documentation or interviews with any relevant person, usually both. Companies are required to conduct routine audits of representative expenses, and are also likely to audit other areas of activity, e.g. meetings, customer records.


Sanctions for breaking the rules

‘Anyone submitting a claim for an unacceptable expense, such as a duckhouse, will be fined’

Companies are likely to include requirements for adhering to the rules in contracts of employment, and then to deal with any employee who breaks the rules through the disciplinary procedure, with the possibility of dismissal for a serious offence.

Under the Code, however, it is always the company which is held responsible for the actions of its employees, even if these are acting contrary to instructions. A range of sanctions may be applied, with expulsion or suspension from the ABPI considered the most severe.



Case reports of complaints received by PMCPA have been made publicly available for many years, and since 2006, serious breaches of the Code have been advertised in the medical press. There is therefore a high level of transparency in relation to things going wrong.

On a more positive note, a great deal has been done over the last few years to make doctors and other people outside the industry aware of the Code of Practice – you may have taken part in one of the Code Awareness weeks that have been organised. This, and other activities, means that most doctors are now at least aware of the existence of the Code, although a much smaller number will have any awareness of what the Code actually says, and fewer still will have any understanding of the considerable lengths companies go to to comply with the Code.

Good compliance should be less about stopping people doing the wrong thing and more about helping them do the right thing. The challenge for the industry now is to continue to find ways, not just of doing the right thing, but of being seen to be doing the right thing. In that, everyone has a part to play.


What is Compliance?

  • Set of rules
  • Rules understood by everyone
  • Management to ensure adherence to rules
  • Documentation of activities in relation to the rules
  • Assessment of adherence to rules
  • Sanctions for breaking the rules
  • Transparency



Dr Joan Barnard is Managing Director of Code in Practice Ltd, which specialises in providing training and guidance on interpretation and implementation of the Code. Joan is the author and publisher of ‘The Code in Practice’, a practical guide to the ABPI Code for Head Office staff, and ‘The Code in the Field’, a guide to the ABPI Code for Medical Representatives.