Why Compliance Management System is needed for a Pharma Company

Why Compliance Management System is needed for a Pharma Company?

The regulatory environment in India has become increasingly complex and demanding in recent years, making it more difficult for enterprises to remain compliant. With the implementation of new rules and regulations such as the Companies Act, Goods and Services Tax (GST), and data privacy legislation, businesses must maintain compliance at all levels of their operations.

Compliance Management System is a solution that allows firms to easily manage their compliance requirements. Risk assessments, policy management, training and education, and reporting and analysis are common components of the software.

What does the compliance management system do?

A compliance management system is designed to help businesses stay compliant with various regulations, laws, and rules that apply to them. It automates compliance tracking and management, allowing for efficient tracking and monitoring of compliance requirements. It offers a comprehensive assessment of compliance applicability and gap analysis, which helps organizations identify risk areas and take corrective action. The system is highly configurable and customizable to suit business needs and can adapt to any change in regulations and business requirements. With a web/mobile platform-based access 24*7*365, the system can be accessed from anywhere, anytime. It also comes with an integrated compliance database that provides easy access to all relevant information on applicable compliances. 

Additionally, there are real-time and personalized legal updates, ensuring that businesses can track any changes in regulations. You also get advanced analytics and reporting capabilities that make it possible to track and analyze compliance data. The system can also generate auto-generated compliance certificates, and help with one-time and ongoing compliances. Compliance mapping, compliance reports, and escalations are other features that make the software a comprehensive solution.

Compliance challenges faced by Pharma companies

Lack of an accurate list of applicable compliances

Even a small pharmaceutical company with a single manufacturing facility needs to deal with at least 913 compliances every year. These compliances multiply as the company expands its geographical footprint and expands its scale of operations. These compliances are at three levels and classified across 7 compliance categories, namely, finance & taxation, commercial, secretarial, industry-specific, EHS, labour, and general. The list of applicable compliances for a pharma company depends on the specific equipment used in manufacturing, input materials, and end products. Furthermore, companies need to obtain several licenses and comply with various regulations related to clinical trials and the manufacturing of scheduled drugs.

Fluid regulatory environment

India has a highly fluid regulatory environment. In 2022, there were 4,880 regulatory updates published on 2,233 websites of central, state and local government bodies. These updates are introduced through notifications, circulars, directions, and gazette among others. These updates are more often than not applicable almost immediately and their compliance becomes a time-sensitive issue. The lack of a centralized repository of regulatory updates adds to the compliance burden of businesses.

Poor tracking & managing of applicable licenses, event-based compliances, and ongoing compliances

Pharmaceutical companies deal with tens, if not hundreds, of licenses. These include licenses related to the factory, shop and establishment registration, manufacturing, and wholesale of drugs among others. All these licenses have to be tracked and managed to ensure they are valid. Furthermore, the applicability of licenses and registrations can change on the basis of specific business events. Compliance officers also need to keep track of and manage ongoing compliances, including display, records, registers, and waste disposal among others.

The challenge of compliance with external regulators

The pharmaceutical industry is a highly regulated one and manufacturers are required to comply not only with domestic regulations but also those imposed by foreign agencies on the export of drugs. USFDA, European Medicines Agency, and Federal Institute for Drugs and Medical Devices, Germany are some of the country-specific regulators that impose regulations over the import of drugs manufactured in India. Manufacturing plants in India are often required to have their sites inspected and certified by these foreign regulators.

Lack of awareness at the management level

A recent survey revealed startling data that over 80% of key management personnel (KMPs) have a poor understanding of the compliance obligations of their enterprises. As such, they have to keep dealing with show cause notices, fines and penalties, cancellation of licenses and registrations, and revocation of permissions among others.

Manual, paper-based, and people-dependent compliance

While a small pharma company needs to only deal with around 913 compliances in a year, a mid-sized company can have to comply with over a few thousand regulations. Either every department has dedicated personnel for compliance management system or there is a compliance department responsible for taking care of regulatory compliance. Even then, businesses are yet to adopt technology platforms and digital solutions for compliance management and are instead still reliant on manual, paper-based, and people-dependent compliance. Once an enterprise begins expanding, these manual processes fail to scale and lead to missed compliance. This adds to the cost of poor compliance and leads to a leak in revenue.