Compliance Challenges for Suppliers in the Pharma Industry: Creating a Code of Conduct

The pharmaceutical industry is a landscape filled with complexity, innovation and stringent regulations. While large research organizations often have the resources and infrastructure to navigate these challenges, small suppliers, particularly those with fewer than ten employees, face unique hurdles. These ‘boutique’ suppliers play a crucial role in the industry but often struggle with demonstrating compliance with the expected policy standards of pharmaceutical companies in areas such as Anti-Bribery and Anti-Corruption (ABAC), Confidentiality, Data Privacy and IT/IS. Read on to learn more about these challenges and some solutions to overcome them.

Challenges facing small suppliers in pharma:

1. Limited Resources and Expertise: Small suppliers often lack the dedicated teams that larger companies have to draft, implement and track policy development and compliance. With limited financial and human resources, they struggle to maintain comprehensive policies across various domains.
2. Regulatory Compliance Pressure: The pressure to comply with industry standards and regulations is immense. Small suppliers must adhere to the same rigorous standards as larger companies, despite having fewer resources. This includes compliance with ABAC regulations, maintaining confidentiality, and implementing IT/IS security measures to list but a few.
3. Inadequate Governance Structures: Due to their size and number of FTEs, small suppliers may not have the governance structures necessary to enforce and monitor compliance effectively. This can lead to oversight issues and increased risk of non-compliance.

How a unified Code of Conduct can solve these issues:

Instead of drafting individual policies for each area, small suppliers could develop a comprehensive Code of Conduct that encapsulates the company’s core principles and recognized practices they follow. This approach offers several benefits:

1. Simplification and Clarity: A unified Code of Conduct provides a clear and concise framework that outlines the company’s values and ethical standards. It simplifies the communication of expectations to employees and stakeholders, reducing the complexity of multiple detailed policies.
2. Focus on Core Principles: By focusing on overarching principles such as integrity and transparency, small suppliers can address the key concerns of each policy area without getting bogged down in the complexities of developing comprehensive policies. This approach ensures that all critical areas are covered under a unified ethos without draining resources.
3. Resource Efficiency: Developing a unified Code of Conduct is less resource-intensive than drafting multiple detailed policies. It allows small suppliers to allocate their limited resources more efficiently while still maintaining compliance and ethical standards.
4. Flexibility and Adaptability: A unified Code of Conduct can be more easily updated and adapted as the company grows or as regulations change. This flexibility is crucial for small suppliers who need to remain agile in a dynamic industry.

Conclusion

Small suppliers in the pharma industry face significant challenges in policy implementation due to limited resources and governance structures. However, by adopting a strategic approach centered around a comprehensive Code of Conduct, these companies can effectively manage compliance and ethical responsibilities. This approach not only simplifies their operations but also strengthens their position in the industry by demonstrating a commitment to high standards and ethical practices. As companies grow, additional resources should be allocated to expand one overarching Code of Conduct to include individual policies overseeing the varying aspects of operations.

If you are a small to medium-sized research organization working in the life sciences and would like help creating a Code of Conduct, contact the author, Marija Ristic, at compliance@scientist.com, who can provide additional resources that are available for free to registered suppliers on Scientist.com.