Third Party Risk
Management inLife Science
Navigating a complex
environment into the future

An Unprecedented Challenge
The global life sciences sector faces an unprecedented challenge in today’s post-pandemic, geo-politicallyunstable environment to deliver a cost-effective risk management strategy in an increasingly complexenvironment. Risk management is critical at an operational level throughout the product lifecycle, where clear
regulatory requirements dictate behaviours. Life Science companies must also ensure that all of their thirdparty relationships adhere to regulatory requirements globally.

Complex Ecosystems of Stakeholders

Risk management levers

Life science companies typically have a complex
ecosystem of stakeholders. Factors such as a lackof integration of legacy businesses and technology
systems, R&D and business functions operating insilos and evolving internal risk landscapes
compound this complexity.

A combination of levers are required to manage
risk effectively, including:•Third party risk management with KPIs
and SLAs•

Managed services

A Focus on Risks That Matter Most•

AI and risk automation•

Risk management assurance•Quality management systems•

Standard operating procedures•Internal•

External audit

From discovery through to product launch andadministration to patients, risks are embedded in
the life science product lifecycle. Life science
companies need to carefully manage criticalstakeholder relationships whilst maintaining
compliance with global regulation which iscontinuously evolving. A clear focus on risks thatmatter most to the organization and regulators
is key.
•Non-compliance with regulatorycommitments•

Government affairs, lack ofawareness of geopoliticalsituations•

Loss of public trust•

Damage to brand value•

Safety issues unreported•

Manufacturing defects not acted
upon•

Compromised data quality•Not adhering to global regulatorycompliance

Penalties&Sanctions

Reputational

GLP/GMP/GCP

Data integrity and cyber security across theecosystem of stakeholders are also critical toensuring appropriate risk management.

•Restrictions on studies, legal,
operational risk•

Delay in approval, unable tomarket product•Product withdrawals or
suspension

Data
integrity &Security

Key Risks toLife Sciences
Organisations

Risk toLicencing

Risk toPatients•

Inappropriate promotion•

Missed safety signals•

Incorrect patient informationmaterials•

Product defects

Traditional risk defence architecture in life science is often siloed and driven by manual quality reconciliation© 2022 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG global organisation ofindependent member firms affiliated with KPMG International Limited, a private English company limited byguarantee. All rights reserved.

Document Classification: KPMG Public

Building a Learning Organisation
Monitoring Global Risk andCompliance

Breaking siloed risk
approaches monitoring Cross
Functional & SuppliersExecution ofoperational tasks;
following globaland local
procedures

Optimising
Organisation Risk
Management
Third Line ofdefence

Second Lineof defence

First Line ofdefence

FunctionalLeaders

Quality QMS CRO/Quality
CAPA Leaders GovernanceFuture Trends For Life Science Risk
Management Solutions
Risk management in the life science sector is enshrined in
global regulatory frameworks and a careful analysis of risk
benefit at the product level is the foundation for the sector.
Life science organisations have unique challenges with
operational teams that must meet prescriptive regulatory
requirements that have evolved into complex silos of risk
domains within organisations and external third parties.

How we can help
The future of effective life science risk management will
incorporate a holistic approach to facilitate risk
assessment at an organisational rather than a functional
level. Life science organisations must also be able tomonitor risks continuously and capture risk learnings
during the lifecycle of their assets to ensure ongoing
control improvements. Agile technology that canassimilate data across different data platforms should also
be adopted to provide real time metrics and use AI toidentify and monitor both single and systemic risks acrossthe organisation to ensure that risk is managed as part oforganisational strategy.

© 2022 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG global organisation ofindependent member firms affiliated with KPMG International Limited, a private English company limited byguarantee. All rights reserved.

KPMG works with Life Science
companies in selecting appropriate
partners and identifying impacted quality
processes and procedures.
KPMG recently worked with a client tounderstand the scope and risks forservices that were to be outsourced infuture. KPMG articulated the overarchingguiding principles, requirements andstandards for a successful relationshipwith service providers whilst managing
the complex third party risk impact.

Document Classification: KPMG PublicContact Us
Adrian Griffiths
Healthcare and Life Science LeadAnusha Foy
Partner

T: +44 (0)7717 272072
E: adrian.griffiths@kpmg.com

T: +44 (0)7510 376178
E: anusha.foy@kpmg.com

Annabel Reoch
Partner

Roy Waligora
Partner

T: +44 (0)7824 408704
E: annabel.reoch@kpmg.co.uk

T: +44 (0)7464 902991
E: roy.waligora@kpmg.co.uk

Alisdair Falconer
Senior Manager
T: +44 (0)7779 660719
E: alisdair.falconer@kpmg.co.uk

Philip Brame
Senior Manager
T: +44 (0)7935 603 347
E: philip.brame@kpmg.co.uk

kpmg.com/uk

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can be no guarantee that such information is accurate as of the date it is received or that it will continue to beaccurate in the future. No one should act on such information without appropriate professional advice after athorough examination of the particular situation.

© 2022 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG global organisation ofindependent member firms affiliated with KPMG International Limited, a private English company limited byguarantee. All rights reserved.

The KPMG name and logo are trademarks used under license by the independent member firms of theKPMG global organisation.

Document Classification: KPMG Public

CREATE: CRT145398A© 2022 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG global organisation ofindependent member firms affiliated with KPMG International Limited, a private English company limited byguarantee. All rights reserved.

Document Classification: KPMG Public