97% Pharma Companies Do Not Have Visibility And Control Over Their Compliances: TeamLease RegTech Report
The report undertakes an in-depth analysis of the compliance ecosystem in the pharmaceutical industry. It highlights that 97% of companies in the industry lack the required visibility and control over their compliance program. The report also points out that 90% of the companies missed at least one critical compliance during the previous year, while 95% incurred fines and penalties for non-compliance.
However, the ramifications of non-compliance are not limited to just fines and penalties. An earlier study published by TeamLease RegTech in collaboration with ORF, titled ‘Jailed for Doing Business’, spotlights the excessive use of imprisonment as a tool of control against entrepreneurs. It focuses on the 26,134 imprisonment clauses in India’s business laws with serious penal implications for key managerial personnel.
Sharing his views on the compliance ecosystem and elaborating on the report’s findings, Mr Rishi Agrawal, Founder & CEO, TeamLease RegTech, said, “Compliance management in India is complex. Pharmaceutical companies typically deal with more compliances as compared to other manufacturing sectors. In addition, the regulatory obligations evolve rapidly, leading to a more complex compliance framework. Manual processes fail to scale and lead to poor compliance. The cost of poor compliance has risen over the years. One serious non-compliance can lead to leakage of revenue and loss of reputation. As companies scale their business, compliance cannot be an afterthought. Digitisation is the only answer for a transparent, accountable and timely compliance management program.”
“A small pharmaceutical company with a single plant in just one state faces 998 compliances. Out of these, nearly half attract imprisonment for violations. Apart from the high risk of criminality, there are a host of industry-specific challenges. For instance, the pharma sector is highly regulated, facing compliances from not only domestic regulatory bodies but also international drug controllers. To stay on the right side of the law, compliance management in the industry needs a serious rethink. Simplification and rationalization of the compliance process can go a long way in helping companies to stay on top of their compliance requirements”, added Mr Rishi Agrawal.
The report makes a crucial assessment of the sentiment of compliance officers in the pharmaceutical industry. It highlights that 78% of compliance officers believe that third-party consultants have better liaisoning experience. The main concerns of the compliance officers include difficulties in keeping track of the regulatory changes and poor understanding of the compliance documents. As per the report, the costs for compliance management are also significant, especially for smaller firms, amounting to roughly INR 1,00,000 per month.
‘Simplifying Compliance Management for Pharmaceutical Companies’ is a timely report that scans the pulse of compliances in the up-and-coming pharmaceutical industry. It makes unique recommendations for augmenting compliance management at the corporate level. It also advocates for a three-vector policy approach of rationalisation, digitisation and decriminalisation to improve the ease of doing business in the industry.
