TRANSPARENCY REPORTING

1. Transparency Hub
A PwC Product
Understanding the true cost of
transparency reporting

2. 2 | Understanding the true cost of transparency reporting eBook
When the regulatory hammer came down on pharmaceutical and
life sciences (PLS) companies in the 2010s, it introduced new
complexities for these businesses. New systems were quickly
put into place to handle proliferating transparency reporting
requirements and PLS companies struggled to understand the
operational impact and ways to improve processes and systems
to handle them. Some companies are now realizing these rushed
solutions may have met regulatory deadlines, but they’re lacking.
These early, stop-gap solutions may not be efficiently or effectively
addressing their business and compliance requirements.
Today, we’re finding that cracks are beginning to show, and
many PLS companies have begun to realize that upfront software
expenses were only a small part of the true cost of transparency
reporting. Let’s break down the four major areas where PLS
companies find themselves spending in order to meet these
significant regulatory requirements.
Many PLS companies are still struggling with outsized
expenses and needless complexity when it comes to
regulatory compliance

3. 3 | Understanding the true cost of transparency reporting eBook
Direct costs
There’s more to direct costs than just purchased software.
The cost of human capital involved to run the software can
be steep, especially if it’s a legacy solution. Older systems
tend to require IT staff and legal, compliance and data
management personnel to confirm they’re running smoothly.
Additionally, the data remediation and report generation
in many legacy solutions can be inefficient overall, which
compounds material costs.
These expenses can be especially difficult to calculate if
they’re distributed across a large, global enterprise with
multiple, incompatible systems running simultaneously. For
example, three different transparency reporting systems
could end up demanding the efforts of over 100 specialized
workers—including full-time employees and independent
contractors. The brain power of these specialists would be
much better spent on higher value-add activities—there are
real opportunity costs at stake.
Complexities, and expenses abound in these
kinds of scenarios. And they’re on track to
get more complicated. Over the last six years,
reporting requirements have increased by
approximately 600 percent.

4. Hidden technology costs
Tech expenses don’t just stop with outlays for software and
IT staff to run it. These systems invariably require additional IT
infrastructure costs that are difficult to calculate properly, all
involving the “care and feeding” of the transparency reporting
solution. These expenses can include:
ƒ Outlays for developers to update and customize the solution
ƒ Server hardware and software, which needs to be updated
and maintained to run the solution
ƒ sub-licences required for additional software needed to
enable the transparency solution
ƒ The cost of making updates to other systems, such as
creating custom extracts to meet the “data spec” for a
transparency software product and maintenance
4 | Understanding the true cost of transparency reporting eBook
Implementing these systems can also be quite
lengthy, introducing additional costs. New
requirements emerge, upstream systems change,
M&As happen—these factors have left some
companies in an indefinite project mode where
nothing about the system is ever finalized.

5. 5 | Understanding the true cost of transparency reporting eBook
Labor costs
Transparency reporting is not a year-round event, but it generally
requires full-time, year-round labor in the form of additional staff
needed to handle these specialized tasks. Most PLS companies
have to staff up to handle peak reporting seasons to get a lot of
activity done in a compressed time frame, which can also mean hiring
expensive temporary labor. Onboarding workers and acclimating
them to your systems takes time, so these efforts are often ineffective
despite good intentions.
Alternatively, organizations with full-time workers that have reporting
as just one of their job requirements often struggle to find meaningful
work for them to do the rest of the year.
Opportunity costs
No PLS company considers filing transparency reporting paperwork
its core competency. By spending time and money on a process that
isn’t a direct part of the business’s mission these enterprises may be
diverting critical resources to non-profit-making activities. Scattering
the organization’s attention in this way can mean that they’re spending
less time developing life-changing drugs and medical devices. And
that can be a lose-lose proposition for everyone.
The catch is that you can’t do away with
transparency reporting software altogether.
It’s essential to a process that needs to be
consistent. This is about avoiding fines and
audits—but most importantly, it’s about
maintaining reputational integrity
and customer relationships.
The solution to these problems is
straightforward: Standardize
on a single, stable platform
on a global scale which has
known, predictable costs of
implementation and ongoing
management.

6. 6 | Understanding the true cost of transparency reporting eBook
In selecting a platform for transparency reporting, stability is a vital consideration. If reporting efforts are derailed because a service or software
provider is acquired or goes out of business, the expenses outlined above become even higher, as the company is required to start its implementation
efforts over from scratch. Many top performers end up doing even more low impact work, causing the function to lose strategic focus.
To that end, PLS companies have three major options when it comes to deciding on an approach to help them standardize reporting.
Choosing the right type of platform
Outsource operations to a turnkey provider.
This final option embraces the emerging software-as-a-service (SaaS) model but also includes the data management team, subject matter
specialists, and other support staff to make it all work seamlessly. With no need to purchase software or spend money on development,
a fully baked turnkey option provides a leading model that can decrease and stabilize costs while increasing quality. These solutions can
be spun up quickly since no additional hardware or installation of software is required. When managed by a provider that understands the unique
leading practices specific to the PLS space, such as industry benchmarking and the ability to incorporate specific regulatory needs, they typically
provide impactful results.
License a commercial technology.
Naturally there are off-the-shelf tools and software-as-a-service
(SaaS) providers that can be leveraged for just about any purpose
and don’t require much custom programming, but they also come
with strings attached. Namely, they require staff to operate
and can involve a steep learning curve. Most importantly,
these providers often become acquired or otherwise go out
of business, or can elect to discontinue development on the
tool, adding additional risk.
Build your own.
This can be a venerable but extremely costly and time-consuming
solution. It requires specialized knowledge, programming time,
and long-term maintenance. And there’s no guarantee the finished
product will work as desired. The industry is well-paved with DIY
solutions that didn’t pan out, often only after millions of dollars and
years of effort had been invested.
There’s a reason many
technology implementations
are moving toward
outsourced solutions:
They can be faster,
cheaper and overall simply
perform better.
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7. 7 | Understanding the true cost of transparency reporting eBook
At PwC our goal is to give PLS companies a truly global service to help manage their
financial reporting needs – without the need for multiple, disconnected modules and years
of ongoing development and maintenance. Many of our clients who adopted the solution
were quickly able to decommission their silos and move from three or four different
tools to just one, dramatically lowering overall expense, training time and the amount of
labor needed to manage it. They can consolidate their compliance in one system, giving
analysts the ability to run a query on a single dashboard and receive an immediate answer
about financial transactions, globally.
Unfortunately, a lot of data contained in those systems exists in a rather raw state, and
it must be cleansed and processed to be made useful. Traditionally this has been a
painstaking, manual process, but at PwC we designed a transparency reporting solution
that works seamlessly with HCP engagement systems to help manage the data behind the
scenes. We can intake data in any format and integrate with major software as a service
systems. The solution also includes the data management resources required to perform
any especially complex work without having to weigh down the client’s staff, as well as
embedded monitoring and analytics that continuously improve and update in real-time.
Current software solutions might fall short. If you’re looking to lower the costs and
complexities of compliance, we can assist you with that. PwC’s service and technology
solutions help solve numerous problems for PLS companies, introducing stability,
reliability and cost control to a function that has historically been plagued with problems
and heavy expenses.
Tearing down silos, building up businesses
In our experience, companies that
have adopted our services
and products have cut their
financial reporting technology
costs by up to two-thirds.
It’s particularly worth considering
because failure on this front can lead
to regulatory fines, loss of reputation,
and the risk of a government audit. A
safer move is to implement a holistic,
one-stop-shop platform to manage
end-to-end third-party interactions and
link those activities to industry-leading
transparency and regulatory solutions.

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separate legal entity. Please see pwc.com/structure for further details. This content is for general information purposes only
and should not be used as a substitute for consultation with professional advisors. 1328883-2022
Transparency Hub
A PwC Product
Do you have a complete understanding of
your transparency reporting costs?
Learn more about how Transparency Hub,
a PwC product for PLS, can help you model
and understand the costs of transparency,
changing the game for your business when
it comes to financial reporting and
management of third-party relationships.