Kathrin Anne Meier, Board Member, SRA - Swiss Risk Association, explores how risk managers are tackling the unique threats facing the pharmaceutical industry and what other sectors can learn from their approach
Kathrin Anne Meier, Board Member, SRA - Swiss Risk Association, is speaking at the Risk-!n conference on May 26 in Switzerland.
Ahead of the session, Strategic Risk caught up with her to find out what she would be discussing and why risk managers should attend.
What are some of the key unique risks facing pharma organisations?
Pharmaceutical companies face various risks that can significantly impact their operations and profitability.
Here are some key unique risks facing organisations in the sector:
- Operational risks: these include product quality issues, supply chain disruptions, cyber threats, and regulatory non-compliance. These risks can result in significant financial losses, reputation damage, and legal liabilities.
- Patient and prescriber confidence: Lower-than-average consumer confidence can lead to reduced demand for prescription medicine, resulting in decreased revenue.
- Patent cliffs: Patent expiration is a significant risk faced by pharmaceutical companies. After patent expiry, generic competitors can enter the market, leading to a decline in sales and revenue for the pharmaceutical companies.
- Growing customer expectations: Pharmaceutical companies face increasing pressure to meet the growing expectations of customers. These expectations include providing innovative products, delivering personalised healthcare services, and ensuring product safety and quality.
- Pricing / access risks: Increasing pressure on healthcare budgets leading major markets to enact increasingly stringent cost containment policies on innovative pharmaceuticals (e.g., US Inflation Reduction Act (IRA), European Joint Health Technology Assessment regulations)
- Complexity of healthcare ecosystems: Many key markets face complex, changing, and inefficient healthcare systems, which leads to risks in pharmaceutical companies to deliver innovative medicines to patients.
What tactics are risk managers adopting to overcome these?
Risk managers in the pharmaceutical industry are adopting various tactics to overcome the unique threats faced by the industry.
Here are some examples:
- Implementing robust risk management processes: To effectively manage risks, pharmaceutical companies are implementing robust risk management processes that identify and quantify risks regularly. These processes include risk assessments, risk profiling, and risk reporting.
- Embracing technology: Pharmaceutical companies are adopting advanced analytics, machine learning, and other digital tools to identify and mitigate risks. These tools help companies to predict and prevent risks, improve compliance, and enhance patient safety.
- Developing robust compliance programs: Regulatory compliance is a critical risk for pharmaceutical companies. To overcome this, companies are developing robust compliance programs that ensure compliance with local and international regulations. These programs include training, audits, and monitoring activities.
- Focusing on innovation: Companies are investing in research and development to create new and innovative products that meet customer expectations and address emerging risks.
- New customer partnerships: Partnering with customers and payors to overcome challenges in current healthcare ecosystem can lead to sustainable risk reduction for all parties.
What can risk managers in other sectors learn from these risks?
Risk managers in other sectors can learn several valuable lessons from the risks faced by the pharmaceutical industry. Here are a few examples:
- Emphasise proactive risk management: By implementing robust risk management processes, companies can identify and mitigate risks before they become significant issues. This proactive approach can help companies to prevent negative outcomes and improve their overall resilience.
- Embrace technology: The use of technology, including advanced analytics and machine learning, to manage risks is another lesson that other sectors can learn from the pharmaceutical industry. By leveraging digital tools, companies can gain deeper insights into emerging risks, enhance compliance, and improve decision-making.
- Focus on compliance: Regulatory compliance is a significant risk for many sectors, and the pharmaceutical industry’s emphasis on compliance can provide valuable insights. By developing robust compliance programs, companies can mitigate regulatory risks and enhance their reputation with stakeholders.
- Innovate: The pharmaceutical industry’s focus on innovation can also provide valuable lessons for other sectors. By investing in research and development, companies can create new products and services that address emerging risks and differentiate themselves from competitors.
- Partnering to overcome complexity: The pharmaceutical industry operates in a highly complex healthcare ecosystem. Other companies can learn from the different types of partnerships pharmaceutical companies engage in with their customers in order to reduce risk.
What are some of the main things attendees will learn at your Risk-!n session?
Risk Management for pharmaceutical companies has its own specific challenges due to the complex nature of the industry and how current events affect them.
Enormous R&D projects, highly-regulated manufacturing processes, changing pricing and access dynamics and increasing regulatory and societal expectations are among the many risks that must be carefully managed.
In our session, we will discuss these risks and what we can do to mitigate incidents in areas such as supply chain, fraud, and cyber. We will also talk about some emerging risks and what it takes for risk managers to be ready to manage them.
To find out more about the conference, or to register to attend, visit the Risk-!n website.