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How Regulated Companies Can Improve the Contract Management Process to Increase Efficiency and Reduce Risks

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White Paper 1 How Regulated Companies Can Improve the Contract Management Process Introduction While all companies need contracts and agreements to do business, the process of creating, negotiating, executing, and managing contracts is particularly critical in highly regulated environments. For these companies, contracts not only have to fulfill business objectives, but they must be part of the overall compliance strategy. Regulated companies—such as pharmaceutical, medical device, biotech, and other life science companies, or manufacturers and other organizations that adhere to ISO, GMP, Annex 11, ICH, and other standards—maintain numerous types of contracts. These companies may have any or all of these contracts: quality agreements, supplier agreements, specifications agreement, services contract (for consultants, mechanical/ calibration services, hosting services, etc.), IP licensing contracts, nondisclosure contracts, confidentiality agreements, material transfer agreements, co-development, and co-marketing agreements. Depending on the size of a company, the nature of its business, and the regulations and standards it complies with, an organization may be managing a few of each type of these contracts or dozens at a time. Contract management is typically the purview of the legal, purchasing, and finance departments, whose main concern rests in fulfilling business objectives and complying with laws that apply to the contracts. However, in a regulated environment, contracts don't exist in a vacuum. For example, in buying active pharmaceutical ingredients, the procurement department may be responsible for choosing suppliers, but it must work closely with other stakeholders within the company, such as the clinical research, pharmacology, and quality/compliance teams, in choosing the supplier. Granted that all these teams have agreed on a supplier, they will then turn to the legal department in the drafting of the supplier agreement and in negotiating terms and conditions. Once the contract is signed, it has to be managed throughout its life. The teams involved earlier may have to interact at various points. And when the contract is about to expire, they will work together again to review the document before renewing it. In some companies, there is a contract manager (or several) responsible for the process. For those without contract managers, the departments are responsible for managing their own contracts. The numerous types of contracts and the multiple stakeholders involved in every contract make the contract management process complicated. How does your company manage the process? How can you improve it?

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