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Pharma Tech Outlook | Wednesday, May 12, 2021
Globalization has expanded the threat landscape due to which several pharmaceutical companies are forced to upgrade their risk-management abilities.
FREMONT, CA: Due to the globalization of the pharmaceutical industry, pharma organizations have been forced to outsource, raising their dependence on third-party vendors and suppliers. Companies are dealing with an overwhelming percentage of cyber risk as the supply chain becomes more complex.
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A data breach in the pharmaceutical sector can cost an organization up to $5 million, and expenses can increase dramatically if a third-party vendor or supplier is the reason. As a result, organizations must guarantee that the third parties in the supply chain is secured.
Why Third-Party Risk Management is Important for Pharma
Pharmaceutical companies face a significant level of cybercrime due to the high value of the intellectual property they accommodate. The pharmaceutical sector has become the primary target of cybercriminals globally, particularly in terms of intellectual property theft.
Data breaches can be disastrous for pharmaceutical companies, costing companies distress over lost or stolen data and a massive amount of money to repair any business disruptions resulting from the breach.
To protect drug production and patient safety, the industry must take precautions to reduce cyber risk, particularly when it comes to third-party vendors.
Best Practices for Third-Party Risk Management
Pharmaceutical companies must work to reduce the third-party risk posed by vendors and suppliers. Develop the third-party risk management (TPRM) strategy using the best practices listed below:
Identify the Suppliers
Pharmaceutical companies have a large, outsourced supply chain, and it is critical to know who the suppliers are at every point along the chain. Any size or type of vendor can pose a cyber risk, so the companies can list everyone they work with, from small vendors who may only work with one department to prominent vendors who create drug labels and bottle caps.
Determine a Risk Rating
After each third party has been evaluated from a risk standpoint, companies can allocate a risk rating to each. Risk ratings typically range from low to high, implying that high-risk vendors receive the most attention when prioritizing risk management strategies and determining the risk appetite.
Define Controls
It is critical to ensure that third-party partners share your organization's risk tolerance. When creating a TPRM policy, companies must specify the types of controls that the third-party vendors should employ, such as encryption, regular security patching, and data segregation. If at all possible, incorporate these security measures into the business contracts.
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