Compliance of products to QA safety and regulatory standards is not usually a Board-level issue - except that is, when the threat of non-compliance becomes real. Non-compliance, the glare of bad publicity and action by regulators can quickly become a nightmare for companies as they suffer brand damage, high costs of recalls and fines, or even personal liability claims against executive officers.
If we look back at some of the well known compliance failures in recent years including Perrier (1990), Intel (1995), Abbott (2000) and Schering Plough (2001), it is notable that senior management in each of these cases found out about the problem only when it was too late to avert it. The result in each case was shareholder value destruction, damage to their brand and costs running into tens or hundreds of millions of dollars.
So what can companies do to head off this type of problem in the future?
When a leading medical company saw some early warning signals, it pre-empted non-compliance problems by commissioning PA to produce an independent review. This revealed a series of failures in the firm’s manufacturing and quality processes, placing products at risk of recall and withdrawal. A recovery programme was put in place and the recommended corrective measures taken so that the company could satisfy the FDA in a site review. As a result, the firm escaped fines and continues to supply the market. They were also able to capitalize on Abbott’s failure to comply with FDA requirements at around the same time.
Some companies are taking action even earlier than this, commissioning independent reviews of their whole approach to compliance. A benefit in some cases has been the identification of over compliance in certain areas - which adds unnecessary cost, ties up valuable resource and extends timescales in product launches. In these cases savings will be possible and key resources can be freed up by taking an optimized approach to compliance.
Contact us
For more information on PA’s expertise in compliance management, please e-mail: innovation@paconsulting.com or call +44 1763 267492.
