Global Trade & Logistics: The Other Side of Compliance

Global Trade & Logistics: The Other Side of Compliance

An innovative pharmaceutical company was awaiting FDA approval to launch its first commercial product. They were also increasing their clinical trial activities globally and advancing other programs into the clinic. The complexity of their global supply network was increasing. However, they lacked processes, knowledgeable resources, and organizational understanding of global trade compliance requirements which causes unnecessary cost and risk.

Fortunately, one of their executives understood the high risk of operating without a Global Trade Compliance (GTC) program. GTC is not just about tax collection; it is now a critical part of national security. Non-compliance can result in being flagged for more investigation of risks compromising product integrity and causing stockouts or service delays. Companies may lose their import/export privileges and be prosecuted for fraud, negligence, or gross negligence.

Although our client had obtained some government permits and was working with a customs attorney, there were significant compliance gaps. The individual responsible for logistics only focused on domestic carrier management, and responsibility for international shipping documentation was unclear. It generally fell to whoever was making a shipment. Additionally, no one was providing oversight or central management for customs brokers and key vendors. The paperwork was managed and stored by dozens of employees across the organization.

Many emerging and growing biopharmaceutical companies face similar situations because Regulatory focus is on compliance with CFR 21 – the FDA. They are typically unaware of the six other CFRs that govern import and export activities, and which play a larger role as companies advance pipeline programs toward commercialization.

The company also needed help conveying to senior management the importance and urgency of developing and executing a GTC strategy as they prepared for commercial operations.