Medtech companies need risk intelligence to survive and thrive

18 December 2006

New York, USA. Life science companies (medical devices, pharmaceuticals and biotechnology) must successfully navigate a seemingly endless sea of risks to survive. They face demands from many quarters: regulators, investors, partners, insurers, physicians, patients, lawyers, and more. Meeting these needs adds complexity and heightens risk, and as these risks converge and overlap, management of them becomes simultaneously more difficult and more essential.

The key to overcoming the hazards is intelligence, or more appropriately, Risk Intelligence, according to Deloitte & Touche LLP in a new white paper: "The Risk Intelligent Life Sciences Company". This provides life sciences executives and directors with practical guidance and real-world examples of how to more effectively address the industry's complex risk matrix.

"Risk permeates every aspect of the life sciences industry," explains Terry Hisey, U.S. Managing Principal of Life Sciences, Deloitte Consulting LLP. "Discovering and developing new products entails high risk, given the heavy upfront investments of money, time and expertise. Factor in the complexity brought on by the pressures from patients, payers, physicians and the markets, and now you get a picture of how challenging the risk environment is within this industry."

Deloitte & Touche cites a number of fundamental steps organizations need to undertake to create a Risk Intelligent Enterprise(TM). The whitepaper also includes a section that looks specifically at the risks in life sciences that arise around definable initiatives and occurrences, which Deloitte & Touche calls "life events" for a life sciences company. These include:

  • research & development;
  • product commitment; s
  • cale manufacturing capability;
  • commercialization;
  • merger, acquisition and divestiture; and
  • unexpected occurrences.

A hypothetical case study of risks associated with commercialization is also included to demonstrate a Risk Intelligent approach in action within the life sciences industry.

"Becoming Risk Intelligent will require people and systems to change the way they handle risk. Supporting technologies are still in development, but the human factor is truly the most imposing hurdle. Once executives and risk management professionals in life sciences see the value of changing their thinking, behaviour, and approach toward risk, the benefits soon become apparent," says Jody Noon, National Practice Leader of Life Sciences & Health Care Regulatory, Deloitte & Touche LLP.

The whitepaper is the fourth in a series on Risk Intelligence developed by the professional services organization. It defines the Risk Intelligent approach as follows:

  • Recognizing and managing the full spectrum of risk an organization faces;
  • Minimizing "siloed" behaviour that can obscure an integrated view of risk;
  • Allocating proportionally more resources to the most strategic and pertinent risks;
  • Making sure risk management is an organizational-wide responsibility and competency;
  • Anticipating and preparing integrated responses to risk
  • Managing risk with a view toward maximizing the upside of strategic decisions while minimizing the downside.

Free copies of "The Risk Intelligent Life Sciences Company" may be obtained at www.deloitte.com/RiskIntelligence

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