| Intelligent interpretation of regulations can breed confidence and bring innovation back to pharma, says Ian Leake of BearingPoint
The pharmaceutical industry is being challenged like never before. Increasing regulation, globalisation, and the neverending search for blockbusters have all contributed to spiralling costs. Yet greater public oversight of healthcare costs is making it harder for the industry to maintain its traditional profitability.
Industry executives have responded in several ways: consolidation (mergers and acquisitions), searching for lower cost locations (globalisation), and demands to make sweeping cuts to departmental budgets – in some cases as much as 30 per cent from year to year. But all of this activity requires flexibility and promotes change, and if there’s one thing that the industry has learnt over the years it’s that change invites risk. And this heavily regulated industry is extremely risk averse.
A major contributor to the risk averse culture in the industry is the traditional approach to regulatory compliance (socalled ‘old compliance’). Overlapping and sometimes conflicting global and local regulations, accepted and rarely challenged ‘best practices,’ and personal interpretations have created a complex and expensive web of policies and procedures that make change costly, painful, and tiresome. The biggest casualty of this has been innovation. In all areas of operation – from clinical trials to manufacturing to finance – it is just too hard to innovate: it’s easier and safer to just keep doing the same thing, even if it’s unsustainably slow and expensive. |
