Streamlining Compliance: A Global Pharmaceutical Company’s Third-Party Due Diligence Transformation

Fragmented Process: Lack of a centralised approach resulted in inconsistent risk assessments, ineffective red flag mitigation, and extended turnaround times, which increased compliance risks.

Inefficient Resource Allocation: The legal team, including senior directors, was overwhelmed with escalations and inquiries regarding the Anti-Bribery and Anti-Corruption (ABAC) process. This led to misallocation of expertise and delayed processing.

Outdated Technology: The existing compliance platform was not only costly but also generated numerous false positive alerts. This cluttered workflow required extensive time for review and led to multiple queries, placing additional strain on the legal team to manage escalations.

Lack of a Unified Monitoring Solution: The absence of a single, integrated monitoring solution made it difficult to track third-party risk profiles effectively.

Overcomplicated Due Diligence Reports: The due diligence reports produced were complex and required significant effort to meet current standards, consuming valuable resources.

High Costs: Substantial investment in the ineffective compliance process was draining resources.

The pharmaceutical company partnered with Rule, a best-in-class third-party due diligence provider, to overhaul its compliance process. Instead of following the conventional route of subscribing to an expensive tech workflow and investing in a resource-heavy, multilingual compliance team for due diligence, the company leveraged its existing supplier onboarding platform and provided access to Rule. This collaboration led to the implementation of a holistic third-party due diligence solution that included:

Centralised Processing: All due diligence requests were routed through Rule, with all forms, questionnaires, reports, and communications with business requestors centrally stored within the company’s environment.

Integration with Existing Systems: The solution seamlessly integrated with the company’s procurement and third-party platforms, creating a single source of information on each third party.

Dedicated Expert Team: Specialised multilingual analysts from Rule were assigned to handle due diligence reports, freeing up internal legal resources. These analysts understood the company’s needs and procedures, acting as the single point of contact for all stakeholders involved in the process and helping to maintain the system.

Utilisation of Rule’s Compliance Platform: Rule provided several licenses for its compliance platform, replacing the expensive and inefficient legacy system. Rule’s platform offered monitoring functions and Ultimate Beneficial Ownership searches.

Tailored Due Diligence Reports: Rule developed customised reports that precisely met the company’s requirements.

Enhanced Communication with Business and Legal Teams: Rule proactively established a clear communication process to address missing information or potential alerts during the due diligence report production. This approach aimed to reduce the volume of communications once the report was finalised.

The partnership with Rule yielded remarkable improvements in the pharmaceutical company’s third-party due diligence process:

Cost Savings: 

• 80% reduction in annual compliance technology costs.
• 50% reduction in due diligence report costs.

Efficiency Gains:

• Average turnaround time for standard due diligence reports reduced from 8 days to 5 days.
• 95% of all reports were delivered within agreed SLAs, up from 60% previously.

Risk Reduction:

• Implementation of continuous monitoring led to a 100% improvement in detecting changes in third-party risk profiles.

Resource Optimisation:

• Reallocation of 14 senior legal directors to strategic tasks, roughly saving 3,080 hours of high-value time annually if they spend only an hour on compliance per day (this is often higher).
• 100% of due diligence reports are now processed by specialised analysts rather than misallocated internal resources.

Compliance Enhancement:

• 99.9% accuracy in regulatory compliance checks.