OR WAIT null SECS
The pandemic has raised the stakes for companies pursuing new data-harnessing capabilities in contract management and KPI benchmarking and tracking.
As the COVID-19 pandemic began to take hold, many pharmaceutical companies turned to contract lifecycle management (CLM) software to help digitize their contract processes. At Contract Logix, for example, we’ve seen the number of contracts executed with our software using electronic signatures increase by 682% during COVID-19 across our overall customer base, which includes pharmaceutical and biotech customers. In addition, the number of contracts managed using our software over the last eight months has grown 307%. This is in addition to triple-digit increases in the number of documents, contract requests, and tasks our customers manage with CLM software as more companies move to digitally manage contracts to harness the data in those legal agreements. COVID-19 is forcing the pharmaceutical industry to accelerate digital transformation initiatives, and CLM can help.
Whether it’s optimizing vendor management, controlling R&D expenditures, or identifying other economies of scale throughout the organization, such as better inter-department spend visibility, contract management plays a critical role. With the right analytics and insights, pharma organizations can benchmark and track key performance indicators (KPIs) that allow them to optimize legal agreements with their supply chains, pharmacy benefit managers (PBMs), and other parties; their business processes and data is the key to making it all possible. And these KPIs don’t have to just be about cutting costs. They can also be about uncovering hidden opportunities in their legal agreements or mitigating risk and increasing compliance.
One example of this might be a pharma organization that wants to improve the speed of its internal business processes. By benchmarking and tracking how long each contract stage takes for each contract type, such as a confidential disclosure agreement (CDA) or HCP agreement, from the time they are requested to execution, they can identify bottlenecks that need to be addressed. A KPI like “Average Number of Days in a Contract Lifecycle” will inform them if they are making improvements. Another example might have to do with risk management. By establishing a KPI for “Number of Contracts by Risk Level,” the organization can monitor its overall contract risk exposure and how the probability and consequence of it changes over time. A variation of this might be a KPI around “Product Pricing over Time.” Regardless, identifying, benchmarking, and tracking contract-related KPIs using data can provide any business real and actionable insights for improvement.
But how do pharma companies capture the data they need for these KPIs in a meaningful and practical way? Digital contract transformation (DCX) is all about the digitization of contracts and CLM processes, and should be a foundational element of a drug manufacturer’s broader digital transformation strategy. DCX not only modernizes contracting efforts, it enables organizations to harness the data in contracts to deliver actionable business insights.
These insights can be used to accurately and efficiently optimize every aspect of a pharma company’s contract management process such as drug discovery, clinical trials, contract manufacturing, rebate tracking, marketing approvals, and more.
While there are many contract management solutions on the market, the best will help pharma organizations deal with their key challenges and offer the following features:
A digital and centralized cloud-based repository to store, manage, search, and secure all contracts and contract data. This helps to search all agreements for a specific clause, rebate term, drug, or vendor.
A way to collaborate effectively and maintain version control. The key for pharma companies to effectively manage version control is to use a digital contract management solution that tracks changes by user and allows them to simultaneously review, redline, and approve contracts directly in the system. This ensures that organizations avoid missing, duplicating, or using inaccurate data that can result from emailing back and forth and comparing different versions between contract manufacturers or other suppliers, contract research organizations (CROs), PBMs, physicians, etc.
An automated alerting system to avoid missed deadlines and obligations. For example, missing the termination window of an automatic renewal, the deadline of a supporting document for a drug application, or a certain condition that’s activated by a milestone that makes the organization eligible for a discount.
Cloud-based clause and template libraries to improve compliance and speed. A study done by IFPMA found that the average CDA is over 4,000 pages long. Creating shared and legal-approved clause and template libraries is key to increasing the productivity and compliance of any contract process. They help assemble documents faster—while eliminating deviations from standard legal language and can be customized for individual organizations’ special circumstances and geographies.
Define and automate contract workflows for business process management. It’s very common for there to be many steps and stages throughout a contract’s lifecycle whether it’s a CDA, clinical trial agreement (CTA), or other agreement type. To keep things moving smoothly, it’s important to have well-defined and documented business processes that are followed and enforced using workflows. This ensures governance and compliance to internal processes as well as regulatory ones such as Title 21 of the Code of Federal Regulations (CFR).
Features to speed up approvals. Securing contract approvals is one of the slowest parts of contract management for most pharmaceutical companies, and is even harder in today’s new remote operating environment. Automating and digitizing the approval process with automated notifications and e-signatures is one of the keys to digital contract transformation.
An easy way to visually establish, benchmark, and report on metrics. Reports and dashboards are key for pharma companies to measure the success of contracts, tracking productivity, and evaluating performance so organizations can refine and optimize processes. For example, a manager can build a report to see how drug pricing changes over time, how long each contract stage takes during the creation and execution of a CDA, or monitor the performance of contracts associated with a particular CRO.
Demonstrate regulatory compliance with audit trails. Contracts play an important role when preparing for Good Manufacturing Practice (GMP) audits, Good Clinical Practice (GCP) audits, demonstrating CFR 21 compliance, and other regulatory requirements. By centralizing contracts and supporting documents in a cloud-based repository that’s searchable and reportable, organizations have a complete audit trail tied to each agreement.
Effective contract management is critical to any pharma company hoping to compete in a post-COVID economy, and the ability to use the data in contracts and benchmark and track KPIs can help flexibly optimize business processes to adapt whenever and however the economy rebounds. Given the regulatory pressures, new supply chain dynamics, M&A activity, and other industry-related pressures, digitally transforming contract management can be an instrumental factor in any pharma company’s ability to accelerate commercialization and innovation.
Rick Ralston, CEO, Contract Logix