TPRM for Pharmaceuticals: Delivering Quality of Life, Not a Broken Supply Chain

October 12th, 2023 Hannah Tichansky Reading Time: 5 minutes
Pharmaceutical facility

Pharmaceutical, biotechnology, and life sciences companies are facing increasing risks as well as market and regulator scrutiny. Supply chain delays, global events like COVID-19, reputational risks, and new initiatives like ESG place increased pressure on these organizations who, all the while, are balancing the need to deliver better quality of life. Adopting robust TPRM for pharmaceuticals that can help manage these risks is critical to staying afloat.

Both the public and regulators have increased pressure on pharmaceutical companies to demonstrate process, sourcing, distribution, and financial transparency across their operations and those they conduct business with. This demand for better practices and reporting extends across their supply chain and partner ecosystems, driving pharmaceutical companies to GRC and TPRM solutions that can manage tens of thousands of third parties, and enable detailed assessments, tracking, auditing, and reporting.

These capabilities are integral to ensuring pharma can focus on their mission and vision – solving complex healthcare challenges and delivering better quality of life to people around the world. An inconsistent, polluting, socially unbalanced, overly-concentrated, or otherwise broken supply chain is not acceptable and only detracts from this vision.

Risks Around Every Corner

In a world of long product cycles, pharmaceutical and life sciences organizations need to bring products to market while efficiently navigating logistical, reputational, and compliance pressures.  In order to focus on their own operations, organizations need to balance managing and mitigating third-party risks related to:

Supply Chain Disruption & Concentration Risk:

From component shortages to logistical delays to global disruptive events, supply chain interruptions are some of the biggest risks facing this industry. Any delay in these complex supply chain processes can not only disrupt an organization’s core operations but potentially lead to life-threatening situations where medicines or technologies may not be available to those who need them.

Concentration risk is direct or indirect exposure(s) that have the potential to lead to large losses that threaten an organization’s ability to perform its core business. This can be the result of dependence on a geographic area, single vendor or fourth party, or portfolio of investments. Organizations need to ensure that they are avoiding over-concentration to build resilience against unexpected threats and disruptions.

Regulatory & Stakeholder Scrutiny:

According to the Regulatory Affairs Professionals Society, changes in regulations are one of the top three disruptive trends facing pharmaceutical companies. Regulations are enacted, changed, and updated frequently, and this industry is expected to innovate and respond even faster than legislation demands.

In addition, other stakeholders like consumers and investors are paying more and more attention to safe and ethical business practices, as well as any reputational risks that arise. Pharma organizations need a consistent, controlled, transparent process documented through audit trials to meet the demands of global regulations and stakeholder demands.

Bribery & Corruption Risks:

Global operations, the overlap between healthcare or charity contacts and government officials, and strict regulatory guidelines like FCPA require pharma and life sciences organizations to be especially vigilant when it comes to bribery and corruption risk.


Taking social and environmental factors into sourcing and procurement outcomes is important to ensuring compliance, quality, and trust. ESG (Environmental, Social and Governance) forms a core component of this, and organizations must embed this into their programs. Key areas pharmaceutical and life sciences organizations are expected to engage in ESG initiatives include sustainable sourcing, reducing carbon emissions, and eliminating unethical, unsafe practices from their manufacturing operations and supply chains.

Cyber Risk and Data Privacy:

As pharmaceutical organizations engage in more third parties, the potential for third-party risks also grows. A greater reliance on outsourcing increases the risk of security breaches that threaten IP, operations, and other data assets. Breaches can lead to severe disruptions, regulatory fines, and loss of trust.

In addition, GDPR, HIPAA, and the ethical mandates to maintain confidentiality of patient data become more difficult as PHI and other personal data are shared across third-party outsourcers, such as clinical trial partners. Ensuring this data is secure is critical for organizations in this industry.

Reputational & Relationship Risks:

Pharma depends on critical partnerships with companies that:

  • Validate pharmaceutical assertions
  • Conduct clinical trials
  • Provide independent validation to government agencies
  • Promote new drugs at hospitals and healthcare professionals/organizations

Ensuring drug safety extends across the third-party ecosystem is critical. Certifying that clinical trial investigators are reporting accurately and ensuring that HCO and HCP partners avoid non-compliant communications, activities, and off-label usage is essential to ensuring quality, safety, and protecting the brand.

Vendor Performance:

Vendor performance management is a risk management area that measures how vendors and suppliers are performing against contract SLAs, meeting objectives/KPIs, and other measurement tools. Pharma and biotech companies deal with a huge amount of third parties for critical operations, and any dip in vendor performance can cause delays or damage. Today, pharma risk teams must take a microscope to vendor performance, as including this in TPRM data will heighten security and reduce vulnerabilities posed by third parties.

Top TPRM Priorities to Meet These Challenges

There are several key areas third-party risk and compliance teams within pharmaceutical organizations can prioritize in order to boost their resilience and improve their TPRM programs.

Secure Delivery Assurances Across Your Supply Chain

There will always be unknown variables when it comes to engaging with third parties, and it is impossible to avoid every possible risk. Despite this, there are program improvements and efficiencies that can be made in order to reduce the likelihood of risks occurring, reduce the severity of a loss, and make improvements for the future.

  • Ensure your suppliers are meeting delivery expectations through SLAs, assurances, quality controls, as well as ESG reporting across your multi-risk domains
  • Use a third-party management solution that enables visibility into supplier risks associated with bribery & corruption, adverse media, PEPs, reputational damage, performance & delivery assurance risks, concentration risks, cyber, and others
  • Escalate scrutiny of supply chains for ethical, responsible, environmentally friendly behaviors and processes

Adapt to Evolving Stakeholder Expectations

There are a lot of eyes on the pharmaceutical and life sciences industries. In addition, this industry has had reputational ups and downs in the last few years. There is increasing scrutiny on organizations’ business practices, transparency, and reporting. Several areas to focus on include:

  • Pharma organizations need a consistent, controlled, transparent process with audit trails to meet the demands of global regulations and stakeholder demands
  • Flexibility is critical to responding quickly to evolving market demands, including ESG, regulatory, and reporting requirements
  • Standardizing integration with risk intelligence providers is also important to augment third-party and supply chain assessments

Gain Confidence in Your Network of Third-Party Testers and Distributors

Pharma depends on critical partnerships with companies that validate pharmaceutical assertions, conduct clinical trials, provide independent validation to government agencies, and promote new drugs at hospitals and healthcare organizations.

Pharma and life sciences need TPRM solutions for third-party vetting, onboarding, due diligence, and continuous monitoring. These capabilities protect against bribery & corruption, conflicts of interest, and unethical and irresponsible practices across market-facing partnerships.

TPRM Solutions for the Pharmaceutical Industry

Aravo’s cloud-based solution is designed to help pharmaceutical and life sciences firms manage third-party relationships in accordance with increased and expansive regulatory expectations. Our products are designed to help pharmaceutical companies modernize and mature their third-party risk programs that extend across their supplier networks, and demonstrate a commitment to ethical, compliant, and defensible supply chains.

Aravo’s comprehensive third-party risk management platform helps pharmaceutical companies effectively manage their tens of thousands of third parties in a scalable, automated way. Enhanced risk mitigation workflows, performance management, and risk intelligence functionality give assurance that risks are managed proactively.

In addition to our core TPRM capabilities, Aravo also offers applications tailored to the needs of these industries, including Supply Chain Resilience, ABAC, ESG, and more.

To learn more about how pharmaceutical and life sciences organizations can take steps to improve their TPRM and supply chain risk management programs, explore Aravo’s solutions or reach out to one of our experts today!

Hannah Tichansky

Hannah Tichansky is the Senior Content Marketing Manager at Aravo Solutions, the market’s smartest third-party risk and resilience solutions, powered by intelligent automation. At Aravo, she manages all content and thought leadership produced for products and campaigns, and contributes as an author for articles and blog posts.

Hannah holds over 12 years of writing and marketing experience, with 6 years of specialization in the risk management, supply chain, and ESG industries. Hannah holds an MA from Monmouth University and a Certificate in Product Marketing from Cornell University.

Hannah Tichansky is the Senior Content Marketing Manager at Aravo Solutions, the market’s smartest third-party risk and resilience solutions, powered by intelligent automation. At Aravo, she manages all content and thought leadership produced for products and campaigns, and contributes as an author for articles and blog posts.

Share with Your Friends:

Subscribe to Blog Updates

Our Expertise
Who We Help

Ready to get started?

Get in touch for a better approach to third-party risk management