Lifesciences sector growth appears to have outpaced compliance management processes: Deloitte report

Around 48 per cent of survey respondents confirmed that compliance strategy was not a key area earmarked for investment in their organisations

The fast pace of growth in the life sciences sector in India appears to have outpaced compliance management processes. This was announced during the release of Deloitte India’s latest survey report titled ‘Managing Growth Through Better Compliance Management’. 33 companies from pharmaceutical, research institutes, medical devise/instruments, biotech, clinical laboratories and contract research organisations participated in the survey.

According to the report, the rise in regulatory non-compliance in the sector may be attributed to the evolving changes in regulatory standards, which have resulted in limited availability of compliance management professionals equipped to manage these requirements. About 55 per cent of survey respondents have indicated that their compliance teams were not adequately trained to address regulatory requirements.

党In the last two years, most regulatory bodies have introduced new areas of scrutiny beyond just testing drug efficacy and now involve risk management and mitigation programmes for R&D laboratories, manufacturing facilities and procurement functions. For compliance, management professionals to familiarise themselves with these changes and become adequately trained in them requires time. In the interim, companies could be exposed to vulnerabilities arising from non-compliance, said Rohit Mahajan, Senior Director, Deloitte Touche Tohmatsu India.

The report also mentioned that besides talent shortage, lack of an efficient internal control/ compliance system (61 per cent of survey respondents), inadequate utilisation of technology to identify red flags (45 per cent), and lack of a zero tolerance approach towards non-compliance and malpractice (45 per cent) were indicated as key contributors to non-compliance and malpractice in the sector.

Further, 30 per cent of survey respondents said they had experienced non-compliance with GxP guidelines in the last two years. However, 45 per cent said they had not experienced any type of non-compliance.

The survey unveils that poor internal controls is the key contributor to malpractice and non-compliance which contributes 61 per cent. And poor data and quality systems contributes 45 per cent, lack of skilled resources to manage compliance contributes 42 per cent highlighted as a key concerns in compliance management. It also mentions that whistle blowing gaining traction as an effective tool in detecting malpractice and fraud contributes 76 per cent.

Around 48 per cent of survey respondents confirmed that compliance strategy was not a key area earmarked for investment in their organisations, indicating that perhaps senior management did not consider this area as a high risk with serious consequences in the event of non-compliance.

“Organisations that view fraud risk management and compliance management as strategic activities, are able to identify instances of non-compliance and work towards mitigating such incidents. Unless the life sciences sector looks at compliance management strategically, it will not be able to make the necessary investments in tools and technology to build a robust control environment that can mitigate non-compliance,”  Mahajan said.

When asked how organisations detected fraud, non-compliance and malpractice, 76 per cent of the respondents indicated relying on whistle blowing channels. Upon detection of fraud, 85 per cent of respondents said they launched an internal investigation by a specially appointed committee, while 82 per cent confirmed that some form of disciplinary action was initiated as per existing policies and fraud and compliance risk management frameworks.

The survey report also discussed the key types of non-compliance observed in the sector along with providing a roadmap for organisations to build an effective compliance management system.