Compliance in the Pharmaceutical Industry: Between Regulatory and Market Demands

In today’s business environment, the term “compliance” does not simply mean “acting in accordance with the law,” but also entails establishing a culture of responsible behavior, ethics, and transparency in business operations. In the pharmaceutical industry, non-compliance can lead not only to financial losses but may also directly endanger people’s health and lives. This is why business compliance in this sector takes a central role in corporate strategies and draws increasing attention from legislators, regulatory bodies, and the public.

 What Is Business Compliance and What Does It Encompass?

 Compliance refers to a structured approach to ensuring adherence to legal and internal company rules. In the modern business context, the concept goes beyond legal conformity to include broader objectives -   identifying and managing risks, preserving integrity, acting responsibly toward consumers and society, and protecting the company’s reputation.

 In practice, the compliance function within a company is tasked with identifying and monitoring risks that arise from potential non-compliance. Its role is not only preventive but also strategic: aimed at preserving the company’s reputation, ensuring business continuity, and safeguarding the rights of all market participants.

 Compliance spans a wide range of areas, including:

• prevention of corruption and conflicts of interest,
• consumer protection,
• personal data protection,
• anti-money laundering,
• responsible ESG reporting (environmental, social, and governance matters),
• digital security, including the use of emerging technologies such as blockchain.

 In an era of globalization and rapidly evolving regulations, compliance has become a key mechanism for managing legal risks, as well as a tool for building public trust in businesses.

The Compliance Function in the Pharmaceutical Industry: Where Do Risks Most Commonly Arise?

 The pharmaceutical industry holds a unique position within the legal framework of business compliance, primarily because its products are directly linked to human health and lives. In this sector, the consequences of non-compliance are measured not only by financial losses but also by the potential infringement of fundamental rights, which necessitates particularly stringent control mechanisms.

 Precisely because the pharmaceutical industry stands at the intersection of science, law, and the market, it is exposed to a wide range of risks. Some of the most common compliance challenges include:

• Advertising and promotion of medicines –Legislators strictly regulate how medicines can be promoted, particularly with regard to advertising aimed at end consumers and healthcare professionals. Any non-compliance in this area may lead to product recalls, fines, or loss of licenses.
• Relationships with healthcare professionals –Collaboration with doctors and medical institutions must adhere to the principles of transparency and the prohibition of corrupt practices. This includes maintaining records of sponsorships, gifts, educational activities, and consultancy agreements.
• Clinical trials –During the drug development phase, risks range from ethical concerns to the protection of participants’ data. Irregularities can result in invalidated results and legal consequences.
• Pharmacovigilance –Monitoring the safety of a medicine once it is on the market must be organized through a system for reporting adverse events, which must be transparent, reliable, and regularly updated.
• Data management and privacy protection –Given the amount of health and personal data handled by companies, compliance with data protection laws has become a critical concern.
• Supply chain and quality control –Risks also arise concerning the authenticity of raw materials, compliance with Good Manufacturing Practice (GMP) standards, and the supervision of distributors and partners within the supply chain.

 All these risks require not only a thorough knowledge of applicable regulations but also clearly defined internal policies, regular employee training, and readiness to act swiftly when non-compliance occurs.

Practical challenges: What does it mean “to remain compliant” when the rules themselves are evolving?

 The pharmaceutical industry is faced with a challenge that is not only legal, but also strategic in nature - the constant change and evolution of regulatory requirements. Compliance is not a static process; rather, it demands continuous adjustment to new market conditions and emerging regulatory expectations.

 One of the key difficulties lies in the unpredictability of legislative changes. In recent years, significant amendments have been made to laws relating to data protection, drug promotion, and even compliance with sustainable business standards. Legislators are responding to new technologies, market models, and risks, and pharmaceutical companies must remain agile in order to adapt swiftly.

 At the same time, ethical standards and public expectations continue to evolve. Increasing focus is being placed on sustainability and responsible business conduct, meaning companies must strategically consider not only how to meet legal, but also moral obligations. As market expectations grow, so does the scope of accountability – particularly in the pharmaceutical sector, where reputation is shaped by community contribution, transparency, and long-term sustainability.

To stay aligned with these evolving requirements, companies must develop flexible systems that continuously monitor regulatory developments, assess risks, and promptly implement new solutions.

 Compliance is not merely a reactive function; it must be proactive, able to identify potential risks before they materialize.

Profit and purpose – must they really be at odds?

 As the compliance function matures, it is becoming a prerequisite for survival in the pharmaceutical sector, rather than an obstacle to growth. Companies that invest in robust compliance systems are not only avoiding penalties - they are building sustainable business models founded on trust and accountability.

 In this sense, profit and purpose need not be in conflict. On the contrary, a sustainable and successful business is one that recognizes transparency, ethics, and adherence to regulations as essential foundations of a healthy market - especially in an industry where human health is at the core of operations.

 Author:

Sonja Stojčić, Senior Associate
Email: sonja.stojcic@prlegal.rs; legal@prlegal.rs;