Baxter Creates New Entity to Support Ethics and Compliance at U.S. Business Level

In April 2010, Ludwig Hantson, Ph.D., joined Baxter from Novartis Pharmaceuticals Corporation, where he was chief executive officer of the company’s North American pharmaceuticals business. In October 2010, after serving a brief time as corporate vice president and president of Baxter’s International business, Hantson was named corporate vice president and president of the company’s BioScience business, where he created the U.S. BioScience Corporate Responsibility Office. The new entity is designed to bring added focus on ethics and compliance to Baxter’s U.S. BioScience business. In this interview, Hantson talks about why he formed this group and the importance he places on ethics and compliance at Baxter.

Baxter already has a Corporate Responsibility Office (CRO) to oversee ethics and compliance at the corporate level and Regional Ethics and Compliance Committees to ensure these standards are met globally. Why the need to create an ethics and compliance organization specific to U.S. BioScience?

Baxter’s CRO, of which I am a member, takes a corporate-wide view in governing ethics and compliance at Baxter. The Regional Ethics and Compliance Committees work to ensure that Baxter business is conducted appropriately outside the United States. The new U.S. BioScience CRO complements the existing structure. It allows us to focus more deeply on how BioScience operates in the U.S. business environment. Its role is basically to support and facilitate the implementation of our ethics and compliance policy across the U.S. BioScience business, and to ensure we have sufficient resources dedicated to this.

What kind of support will the U.S. BioScience CRO provide?

We plan on doing risk assessments within the U.S. operation. We are looking at how we communicate our ethics and compliance policies, programs and procedures to see how we can improve. We’ll provide additional guidance to employees to make sure we “walk the talk” as a team, consistent with our corporate policies. I think there’s only upside in providing added focus on ethics and compliance in the organization. I want to ensure transparency, understanding, visibility, ownership, best practice sharing, and monitoring of ethics and compliance throughout BioScience.

Who makes up the U.S. BioScience CRO?

It’s a multi-functional group made up largely of senior U.S. BioScience management team members. Sales and Marketing, Legal, Human Resources, Finance, Regulatory, Medical Affairs, and other key functions, including Ethics and Compliance, are represented — about 15 people in all.

What kinds of ethics and compliance issues might Baxter face that are specific to the U.S. business?

Compliance with the Sunshine Act is one example. Beginning in 2013, this will require healthcare manufacturers to report all payments to physicians of more than $100. It will require a change in our monitoring and reporting of transactions with physicians that will affect all of our U.S. operational teams, as well as our global teams that interact with healthcare providers in the United States. This is just one example of legislation and other regulatory issues that warrant increased focus at the U.S. business level.

How do you balance your focus on ethics and compliance with growing the business?

The way I look at it, it’s not about balance. Ethical business practices are the rules of the game, and we have to make sure we play within that framework. We can still play hard, but it must be according to the rules. So it’s not about finding a balance between the two. It’s about defining up front what is acceptable — this is what we can do, and this is what we cannot do — and conducting business accordingly.

Ethics and compliance is critical to any business. Is it any more critical in healthcare?

Every business must play by the rules. I think the difference between healthcare and some other industries is that healthcare is under a microscope from the U.S. government and other governments due to its importance, the money spent in this area, and past improprieties that have received a lot of attention. As an organization, we take this very seriously, and every individual in the organization must do so as well.

In tough economic times, is it more difficult to get people to adhere to high ethics and compliance standards when they may feel increased pressure to "make their numbers"?

I understand the question, because it’s natural to think that if a company is going through tough times, it may put more pressure on people in the field to do whatever is necessary to "close the deal." But if you have the right culture and people know that regardless of external factors, ethics and compliance must remain central, then the answer is no. When times are tough, we have to be more innovative in solving our customers’ problems, but the rules of the game don’t change.