Pharmaceutical industry compliance and regulations are evolving and becoming more challenging with globalization. This adversely affects your organization’s contracts, which are the bedrock of all your business relationships. Contracts play an imperative role in all transactions — be it buying from suppliers, accelerating drug trials, dealing with healthcare professionals or Contract Research Organizations (CROs) for clinical studies, and engaging with wholesale and Pharmacy Benefit Managers on the sell-side.
Contracts are one of the greatest revenue sources, but mismanaged contracts can end up being your biggest liabilities. To tackle the growing complications, pharma companies need a technology that would streamline their contracting process and achieve operational efficiency. Owing to the stringent regulations and consequent magnified contract risks, investing in advanced contract management systems is no more a luxury but a necessity.
Common Types of Contracts in the Pharma Industry
- Quality Agreements – Manufacturing quality agreements are signed between parties involved in the contract manufacture of drugs. They establish how each party would comply with CGMPs. Supplier and vendor quality agreements state the terms regarding the quality of materials or services provided to a manufacturing facility producing the drug.
- Licensing Agreements – Under a licensing agreement, the licensing ﬁrm permits a company in the host country to produce and/or sell a drug. The licensee pays compensation to the licensing ﬁrm in exchange for its technical expertise.
- Product Supply Agreements – A product supply agreement is signed between a supplier and a buyer who agree to supply and purchase medicine or other pharmaceutical products. The contract specifies the terms and conditions agreed by the parties and the consequences of breaching the agreement.
- R&D Agreements – Pharma companies sign collaborative R&D partnering deals whereby the contracting parties agree to collaborate on the research and development and subsequent commercialization of a drug.
- Technology Contracts – Pharma companies engage in collaborative agreements with CROs and other scientific technological providers like biochemical plants. They provide the equipment these companies need in their laboratories to conduct research or manufacture drugs.
Typical Contracting Challenges in the Pharma Industry
Lack of Visibility – Various departments like manufacturing, marketing, R&D, management, and legal do not have much visibility into the deadlines, reminders, contract expiration and renewal dates, and any other terms that must be monitored in-depth to ensure maximum contract compliance. This is mainly due to non-standardized processes and disparate systems across the enterprise, leading to delayed and sub-standard governance. Most of the critical information about the purchase price, volumes, standardized terms, suppliers, etc. is lost in the mismanaged contracts.
Poor Regulatory Compliance – On-going research and development are imperative for pharma or biotech companies. However, managing and budgeting for clinical trials for the drugs are complex as contract managers often lack the time or technological tools to check the extent to which contracting parties such as third-party drug manufacturers, suppliers, researchers, etc. are complying with everchanging regulations globally, thereby posing compliance for each state, jurisdiction, country, etc.
Poor Agility – Rigid processes and poor integration with business applications are key factors causing the business growth teams to work faster and close the commercial deals, especially with the dynamic regulatory compliances globally. A contract management software integrated with other enterprise applications will help monitor various information in a jiffy to settle the transactions.
Operational Inefficiencies – Lack of automated tools often leads to missed expiration dates. Sending wrong documents for review or approval, signing wrong documents, or failing to secure all the signatures, are also very common inefficiencies in the industry.
Losing Important Documents – Contracts or related documents are often lost due to broken links, file renaming, or indiscriminate filing. This can be traced back to the inefficient decentralized method of storing documents practiced in traditional contract management.
Learn More: Contract Management Software Solution
How Zycus’s Contract Management Can Address the Challenges?
Improved Visibility – Pharma companies deal with hundreds of contracts, making it difficult to keep track. Missing even one deadline can lead to significant monetary loss. Zycus’s AI engine Merlin Explorer can help you avoid such unfavorable situations by setting reminders that provide clarity on expiration or renewal dates. Moreover, pre-configured milestones and metrics offer visibility on contract performance.
Improved Compliance – Pharma companies must comply with FDA regulations before rolling out new drugs in the market. Lack of compliance leads to unnecessary delays, missed deadlines, and consequent financial losses. Automated contracting solutions analyze the FDA compliance documents to check for errors and ensure that they’re submitted on time. Besides managing audit trails, they also modify the contracts to cater to the regional requirements, thereby improving compliance.
Centralized Storage – Centralization is the foundation of the contract management process, and without this, reporting and analysis become highly improbable. Zycus’s contract repository software offers a single secure, centralized repository for all your contracts. It also enables you to create a library of standard templates and clauses that can be used when a contract is authored to ensure maximum compliance.
Easy Accessibility – By establishing a centralized repository, Zycus iContract allows your team to securely access contracts and associated documents anytime from anywhere. The role-based permission feature with “read-only” and other customized access settings lets you restrict your team members’ activity according to your preference.
Workflow Automation – Zycus iContract automates and streamlines the entire contracting process — from contract request through authoring and negotiation, execution, e-Signature, and obligations management. This not only saves time but also ensures accuracy by negating the possibility of human errors.
Better Supply-Chain Agility – Zycus iContract helps pharma companies gain deep visibility into their supplier relationships, including regulatory compliance and contracting risks. This further enables them to manage supplier relationships better and reduce regulatory risks.
We can see that a robust contract management solution like Zycus ensures maximum compliance and adds value to the industry by automating the contracting process and providing centralization, easy accessibility, better internal visibility, and much more. By speeding up the process, our solution allows you to leverage the time value of money — the faster you can start producing, distributing, and marketing, the quicker you realize your revenues. Download our eBook to know more about the need for contract management in the pharma industry and the other key advantages offered by Zycus that can help the pharma companies.