For many years, the pharmaceutical industry was highly regarded for its role as a leader in the advancement and improvement of human health. For many years, the continuous introduction of new and improved drugs has also driven substantial revenue growth in the industry. But there have been a number of recent product recalls despite well established quality assurance processes and regulatory requirements. These, incidents have led many consumers to believe that pharmaceutical manufacturers have lost sight of their original vision, and instead of focusing on bettering the human condition, are more interested in bettering their profits.
The damage to the industry has been pervasive, resulting in costly settlements on pricing and promotional practices, difficulty in obtaining clinical trial subjects, high-profile drug withdrawals, and an inability to produce and sell product due to manufacturing halts. Moreover, compliance problems have led to additional industry regulations, raising the total cost of compliance as well as the financial and reputational risks should non-compliance occur. Since 2000, pharmaceutical companies have paid a total of more than $3 billion in settlements and fines.
These developments have exacted a toll on the pharmaceutical industry’s reputation while fuelling political rhetoric. An even higher levy may be in store if the industry does not respond effectively to the issues and forces that have already lowered the public’s sense of trust. Aggressive investigations and expanding regulation alone have arguably already stifled innovation. And in the absence of trust, the public may demand an alternative business model for the pharmaceutical industry, one which may impose unacceptable controls and operating restrictions.
The industry’s past attempts to address concerns around trust through compliance and governance policies has occurred as a reaction to developments rather than a proactive assessment of risk and an integrated approach to compliance management. Moreover, new layers of added compliance load have led to bottlenecks and inefficiencies in operations.
How PwC Can Help You
PwC Pharmaceutical and Life Sciences Advisory Services practice offers a broad range of regulatory compliance, risk management and performance improvement services specifically developed to meet the needs of the industry. Our services are geared toward both the strategic and operational concerns involved in helping companies meet an increasing number of compliance requirements and the related control issues surrounding business risk management. The firm also provides performance improvement capabilities to help companies drive efficiency and achieve greater operational excellence across the corporate value chain. Taken broadly, our capabilities can provide clients with an array of services to address corporate governance, risk management, and sustainability.