Legal Risks in Pharmaceutical Industry
“Traditionally, negotiating deals can take much longer, and the innovative company may be much more reluctant to share its technology,” said Mark Wicker, president of Perkins Coie LLP`s biotechnology and pharmaceutical group. “Given the Covid-19 world, there`s an increased willingness to do that that didn`t necessarily exist before.” The pharmaceutical industry is under the scrutiny of government, health insurers and consumers, all of whom are demanding greater transparency and accountability. It also competes with internal and external forces. For companies that can survive the last few months with below-average demand, the future looks bright. Some industry observers predict that the pharmaceutical sector will once again be on the path of rapid growth, as it was before the pandemic. With factors such as an aging global population, an increased prevalence of chronic diseases, and the development of new drug therapies to foster growth as the pandemic subsides and the economy recovers. Nationwide`s E&S brokerage team leverages technical investments to give wholesale brokers the quick and accurate answers they need to take tough risks. Some manufacturers have gone to great lengths to protect the pharmaceutical supply chain by introducing innovative security measures that include small electromagnetic chips known as radio frequency identification (RFID) tags on individual drug vials, allowing pharmaceutical manufacturers and wholesalers to more accurately track products as they move through the distribution chain. The financial resources and human capital of the insurance industry contribute significantly to social welfare. A leading biopharmaceutical company has gone one step further by using what-if analysis to determine the interaction between strategic decisions, business risks, and overall outcomes. It analyzes risks throughout the lifecycle of individual programs as well as those that affect the entire organization. Then, a number of strategic decisions are taken into account: adding or removing products from the portfolio, developing and marketing licenses to a partner, hiring decisions, etc.
The company then determines which selection creates the best conditions for success while allowing it to remain within its risk tolerance. The ongoing impact of COVID-19 will continue to have a severe impact on the industry until the end of the year. Fraud is associated with another major risk for the pharmaceutical industry: poor brand health. Pharmaceutical companies are closely monitored by customers, which means brand management can be more important than usual for the rest of the year. Pharmaceutical fraud remains a major challenge for the industry – and it may have been even worse during COVID-19. Industry observers have predicted that misconduct during the pandemic will lead to above-average health care fraud this year. “Collaboration is a fundamental principle in biotechnology, and conducting clinical trials in partnership with companies like Gilead is an important example of how the biotech industry and healthcare are working together successfully,” Roche officials said in a statement. “Given the global common interest in containing this public health crisis, we are confident that the industry will reach reasonable partnership agreements.” Failure to keep pace with these technological advances could open the door for non-traditional players to enter the market and hurt pharmaceutical companies` market share. According to a study by Pharma IQ, only 53% of respondents in the pharmaceutical industry say their company has a brand protection strategy. Most shockingly, 26% don`t have a brand protection strategy and/or plan to adopt one.
Several major pharmaceutical companies will lose U.S. exclusivity this year,1 including Lucentis, which generated more than $1.6 billion in sales in 2020, and Bystolic, the hypertension drug, which generated $600 million in sales in 2019. The global pharmaceutical market is valued at approximately $934.8 billion and is expected to reach more than $1.17 trillion in 2021, with locations on all continents. But as global growth develops, so does the increase in threats impacting the health of the industry. The U.S. FDA publishes an annual summary of inspection observation data by industry. The 1,120 citations published from October 2020 to September 2021 covered more than 200 different categories of violations.