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Global Trade and the Importance of Trade Compliance for Life Sciences Companies

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 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. 

In 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 more risk.

Life Sciences Companies Lack Dedicated Trade Compliance Resources

Regulation 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, trade 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.


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. By standardizing and automating processes, and integrating compliance checks with export and transportation activities, life sciences firms can streamline compliance and mitigate the risk of violations.


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 trade compliance.

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 compliance data.

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 improve profitability. 

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.

About QAD Precision – Trusted Global Trade and Transportation Execution

QAD Precision (Precision Software), a division of QAD Inc., provides industry-leading global trade management, transportation execution and multi carrier shipping software solutions from a single, integrated platform. Preeminent industry leaders in every region of the world rely on QAD Precision’s global support centers to leverage thousands of carriers and manage millions of shipping transactions every day. Our open architecture easily integrates with Enterprise Resource Planning, Warehouse Management Systems and legacy solutions. An ISO-certified company, QAD Precision assists companies to minimize shipping costs, optimize first mile and last mile deliveries, automate free trade agreement compliance, avoid customs delays and mitigate the risks associated with dynamic trading environments to maximize their competitive advantage. QAD Precision’s customers span multiple industries including banking and finance, life sciences, high technology, retail, industrial, automotive, higher education and public sector as well as logistics providers. For more information about QAD Precision, visit www.qadprecision.com.


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