Life sciences sector growth outpaces compliance management processes: Deloitte

The fast pace of growth in the life sciences sector in India appears to have outpaced compliance management processes, according to Deloitte India's latest survey, Managing Growth Through Better Compliance Management.

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.

''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 programs for R&D laboratories, manufacturing facilities and procurement functions,"  says Rohit Mahajan, Senior Director, Deloitte Touche Tohmatsu India Private Limited.

"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,''

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 noncompliance 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.

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 noncompliance 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 respondents indicated relying on whistleblower 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 discusses the key types of non-compliance observed in the sector along with providing a roadmap for organisations to build an effective compliance management system.

Highlights

• Poor compliance management hindering growth: Challenges include implementing  GxP  guidelines (52 per cent) , complying with professional and industry body guidelines on pricing, sales, promotions (42 per cent)
• Poor internal controls key contributor to malpractice and non-compliance (61 per cent)
• Poor Data and quality systems (45 per cent), lack of skilled resources to manage compliance (42 per cent) highlighted as a key concerns in compliance management
• Whistle blowing gaining traction as an effective tool in detecting malpractice and fraud (76 per cent)