Regulatory requirements around the world have grown, creating heavy workloads of documentation and the need for process transparency. In addition to rising compliance concerns, Life Sciences organizations face increased security measures, including HIPAA, FDAA 2007 and more.
Regulatory risk is the possibility of being out of compliance. For many Life Sciences companies, regulations rule your compliance objectives. How you handle it is based on your product, production processes and your level of tolerance for risk. A high tolerance for risk might equate to lower compliance costs, but potentially higher non-compliance penalties.
At the same time, market pressures are tremendous
Millions of dollars are spent researching and developing new products, so naturally Life Sciences companies need to get these products to market quickly. These organizations must walk the fine line between rapidly developing a product and meeting the sluggish and often cumbersome regulatory requirements required to bring it to market.
While every company differs, one thing remains the same: you must understand your cost of compliance in terms of risk and set policies and resources to maintain the level that you are comfortable with.
Too many times, the cost of compliance is factored only in the outside costs, such as implementing a system and its associated maintenance costs. You might even lump in training, personnel and hardware into this cost and believe you have a line item for compliance. But one-time implementation costs are only the beginning of a strong balance of risk and compliance costs. As the company grows, regulations change, and demands on the industry increase, your compliance system must also change.
Although each company has different system requirements, most companies are utilizing some or all of the functions below when creating an integrated compliance and quality management system:
- Document management, SOP enforcement, regulatory submissions
- Engineering design collaboration
- Complaints handling, including electronic reporting
- Nonconformance handling
- Corrective and preventive actions (CAPA)
- Change management
- Internal and supplier audits
- Training, eLearning and employee certification
- Equipment calibration
- Supplier quality and performance management
- Quality business intelligence and reporting
- Operational and product risk management
On the flip side, if you put less time, money and effort into a compliance system, your costs of potential non-compliance are factored by your company’s individual level of risk. Non-compliance could result in additional audits, regulatory fines, lost production time, and sometimes worse situations, such as recalls and the resulting financial strains to the brand.
Companies need to establish a responsible risk management framework that is responsive to the specific needs and objectives of the organization. By establishing your risk tolerance, you establish support for management decision-making and thus, confidence in the eyes of stakeholders. A competent risk management framework links the core business processes of business planning, budgeting, and performance management, incorporating transparency among executive team and stakeholders. When a company takes this risk management framework into careful consideration, it won’t have the “wool pulled over its eyes” when it comes to the real costs of compliance.