Pharmaceutical, medical device and other life sciences companies
are often subject to a wealth of regulations when they ship their
products around the world. In this QAD Precision Report we look at
trade compliance for life sciences companies.
Life sciences companies have complex supply chains. They manufacture
and distribute products that may include biological matter, scheduled
medicines and hazardous material. As a result, the life sciences
industry is, with good reason, heavily regulated.
Furthermore, life sciences enterprises that distribute their products
globally often need to work within a number of different regulatory
environments. This can make compliance a challenge.
2017, China bypassed Japan to become the world’s second-largest
national pharmaceutical market. China is also the biggest
emerging market for pharmaceuticals and growth is forecast to reach as
much as $175 billion by 2022. Although North America is still the
largest pharmaceutical market, less well established markets including
Africa, the Commonwealth of Independent States, the Indian
subcontinent and Latin America are forecast to fuel growth.
As a result trade compliance requirements are changing for life
sciences companies. Not that long ago, compliance expertise in major
markets such as North America and the Eurozone were enough to manage
most regulatory requirements. As life sciences companies move into new
markets, they are required to deal with more regulations and manage
Life Sciences Companies Lack Dedicated Trade Compliance Resources
Regulation and export controls can change quickly. A product that can
be exported with ease today may have more stringent requirements to
move across international or even domestic borders tomorrow. Yet, as
regulations change, many life sciences firms have still not dedicated
significant internal resources to handle the challenges of trade compliance.
For a number of enterprises, regulatory compliance is simply seen as
a specialty within logistics. A logistics manager may handle trade
compliance, but often does so reactively. When a problem occurs with a
shipment, the logistics manager steps in to handle it, more often than
not through manual processes.
Today, as the trade environment becomes more complex for life
sciences firms, the risks associated with trade compliance are
growing. As a result of these changes, life sciences companies should
look more broadly at trade compliance and realize the impact that it
can have on their entire business. Here are two risk reduction
strategies life sciences companies should consider.
STANDARDIZE AND AUTOMATE TRADE COMPLIANCE
Trade compliance is complex for any company that does business
internationally, but it is especially so in the life sciences
industry. Regulations related to shipping hazardous materials, trading
partners and compliance documentation can change quickly. Materials
that were approved for export one day may be banned the next. Trading
partners that could handle certain drug compounds in the past may be
subject to additional regulation tomorrow or be restricted from
handling them at all.
Regulatory procedures and documentation can also change without
warning, creating risk of shipping delays. Yet, speed is crucial when
dealing with the life or death nature of getting drugs, medications
and testing materials to their destinations on time.
Companies that want to reduce risk associated with trade compliance
should find a way to manage rapid change. Firstly, they need to set an
enterprise-wide compliance program. Next, they must consider which compliance
procedures can be automated. By standardizing and automating
business processes, and integrating compliance checks with export and
transportation activities, life sciences firms can streamline
compliance and mitigate the risk of violations.
BE GLOBAL TRADE AND AUDIT TRAIL READY
Life sciences organizations are always subject to the risk of audits.
They are required to be able to prove compliance with regulatory
controls related to pharmaceuticals and other products in the global
and national markets where they work. Some life sciences firms may
need special licenses or permits to market their products in certain
countries. Proof of these applications, licenses and permits must be
ready to show authorities at a moment’s notice.
Keeping track of these requirements and licenses can be challenging
for life sciences firms working in multiple global markets.
Nonetheless, life sciences organizations should be able to provide a
complete audit trail at any time of the compliance checks, license and
permit applications related to product compliance as well as global
Link Compliance with Business Success
Life sciences companies may regard trade compliance as a function
limited to avoiding fines rather than one that can help companies be
more profitable and competitive. But looking at compliance through
this lens is a mistake.
By leveraging trade compliance data, life sciences companies can gain
a better understanding of the true costs associated with international
trade: the “total landed costs.” Duties, taxes, trade agreements or
lack thereof, even fuel surcharges and transportation costs can add
significantly to the cost of trading internationally.
Companies that approach trade compliance simply as a matter of
avoiding fines may overlook the impact of these costs on their overall
operation. But if trade compliance is seen as being important to
business success, life sciences firms can better understand and
significantly reduce all the costs associated with getting the product
to the customer.
Companies that want to fully understand the costs and intricacies
associated with trade compliance and leverage them for greater
profitability need access to more complete and reliable trade
How QAD Precision Can Help
QAD Precision’s integrated
global trade management and transportation execution solution
enables life sciences companies to automate their trade compliance
processes, lowering risk related to compliance violations, while also
improving visibility and reporting.
With QAD Precision, life sciences companies can streamline and
automate the processes associated with trade compliance, from
generating and transmitting documents to licensing and registration checks.
Life sciences organizations can be subject to spot checks by
regulatory authorities at any time, so maintaining a complete audit
trail of transaction processing is critical. With QAD Precision, you
can provide the details and documentation for every shipment that
meets the requirements of even the most demanding trade compliance
officer or program. You can re-generate shipping documents, view
approval processes and prove thorough compliance screening, all at the
click of a button – reducing your compliance risk.
Furthermore, with QAD Precision companies can analyze all the costs
associated with trade so that they can make better decisions based on
the true cost of their trade compliance strategies. Life sciences
firms can then leverage that data to lower global trade costs and
With QAD Precision life sciences companies can:
Receive real time updates to trusted content from regulatory
agencies around the globe.
Run compliance screens multiple ways: by products and
ingredients, by partners, organizations and countries
Identify and manage license requirements by country, item, date,
quantity or value.
Automate compliance checks and documentation procedures,
integrating them with outbound shipping processes to create a
complete trade compliance solution.
Trade compliance is no longer a simple matter of avoiding fines and
ensuring a shipment can transit easily across international borders.
As companies do more business internationally and as the trading
environment becomes more complex, life sciences firms need to reduce
their risk not only of fines and border stops, but of making decisions
based on incomplete information about global trade.
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CRITICAL QUESTIONS LIFE SCIENCE SHIPPERS NEED TO ASK BEFORE CHOOSING
A PARCEL SHIPPING SOLUTION
CHALLENGES OF LIFE SCIENCES LOGISTICS