Risks Facing Pharmaceutical Companies, From Trials to Commercialization
With an approximate one-in-seven chance of success 1, gaining the Food and Drug Administration's (FDA) approval for a drug in clinical trials is a major victory – and a cause for celebration. As pharmaceutical companies pass this milestone and move to commercialization, it’s important to understand the potential new risks they face during the journey. Whether you manufacture in-house or work with a contract manufacturer, three potential areas of risk to consider are manufacturing, marketing, and data security as you produce, launch, sell and monitor your in-market product.
Assuring Quality Across the Manufacturing Process
As production ramps up to meet commercial demand, your manufacturing needs are now significantly different than they were during clinical trials. Are your current vendors and contractors still your best options? Crucial to your success is determining whether your current suppliers can produce increased quantities of your product without sacrificing quality. A sudden change to manufacturing processes could lead to risks like product contamination and compromised safety and effectiveness.
Despite your best efforts to vet manufacturers, unforeseen circumstances can break links in the supply chain at any time. For example, if a production facility suffers downtime due to a natural disaster, the shutdown could result in unfulfilled orders, lost revenue and reputational harm. Retaining multiple suppliers for critical materials can help assure you have a proven alternative in place should a supplier experience an interruption to their business operations.
Protecting Your Supply Chain
Here are a few steps to help you reduce risk as you expand your manufacturing capacity:
- Understand all applicable regulations and standards.
- Retain legal counsel in all contractual matters, especially when interstate and global operations are involved.
- Require approval for any supplier process change.
- Develop a robust quality control program.
- Implement independent product testing.
Take this quick Supply Chain Pressure Test to find your organization’s potential vulnerabilities.
Clamping down on cyber risk
Data security is a top priority for pharmaceutical companies. The risk goes beyond protecting sensitive customer and employee information that was a concern during clinical trials. As pharmaceutical companies move toward commercialization, there’s also the data security of all the payments and customer information to consider. A breach could have negative consequences for the company’s brand and reputation. If your networks and systems are not properly segregated then a breach in one system could expose all of your organization’s data and intellectual property.
Cyber risk isn't solely an internal gatekeeping issue. You'll want to know as much as you can about the security measures your third-party vendors have in place to protect the data you share with them to ensure the business relationship is safe. Not only should you be able to assess the integrity of direct business partners’ networks and servers, but you must also account for the data that may be several steps removed from your control.
Protecting Pharmaceutical Companies from Cyber Risks
Consider these tips for securing data:
- Create a cyber security policy.
- Train employees on data security best practices.
- Adequately segregate your networks.
- Encrypt and back up data.
- Proactively manage your vendor data exposures.
- Develop and follow a data protection and destruction protocol.
- Procure cyber insurance that includes business interruption and liability coverages.
Implementing a Post-Market Surveillance Plan
Once a product makes its way into the hands of prescribers and patients, recommendation and usage present both opportunity and risk. Doctors may find new uses for bio-pharma drugs initially developed to treat a single medical condition. However, marketing these off-label uses without moving through the required FDA approval process can result in severe financial penalties.
Considering this possibility, your sales team must do their part to maintain an overall policy of pharmacovigilance, a term that relates to the detection and assessment of a drug's effects and evaluates potentially new adverse outcomes. A non-compliant communication from sales or marketing might result in an off-label promotion lawsuit. It's important for the entire organization to keep its ear to the ground for evidence of unapproved use.
To help avoid unapproved use issues, follow these tips:
- Don’t provide doctors or patients with free samples of drugs for unapproved uses.
- Establish a formal review process for dissemination of materials from outside sources.
- Set realistic sales goals based only on approved uses.
Consider including these best practices when implementing a post-market surveillance plan:
- Track and report all feedback received from the field.
- Follow up on all adverse reports and document everything.
- Update product labels as needed.
- Involve counsel when additional regulatory approval is required.
- Establish clear communication protocols for "Dear Doctor" letters regarding any regulatory or legal changes.
Insurance Is a Key Tool for Managing Risk
Risks to your company’s success can come from multiple directions, and each has the potential to significantly disrupt your growth plans. Get the guidance you need to help protect your business by working with a leading insurance carrier that has decades of experience insuring life sciences companies.
Travelers has a wide variety of coverages designed to address the unique risks facing life sciences businesses:
Through their products liability insurance solutions, Travelers offers protection against pharmaceutical product liability claims. The Travelers life sciences team has extensive experience in the pharmaceutical sector and works to understand your unique business and the risks it faces, to help you tailor coverage to your specific needs.
To help protect your organization from the costs of claims related to products, completed operations liability, and technology E&O risks, Travelers' MedFirst® insurance coverage is designed with pharma companies in mind.
Cyber insurance protects pharmaceutical companies from cyber risks, such as technological errors and information security breaches. Travelers’ coverage includes expense reimbursement, which can help cover loss of income when a covered event causes network downtime.
Talk to an agent to learn more.
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