Consequences of GMP Non-Compliance
When you work in the manufacturing industry, compliance with good manufacturing practices is crucial for your business. Not only does it help you create a high-quality product, but it also maintains consumer and environmental health. Overall good manufacturing practices are just that – good.
But what happens if you don’t comply with GMP guidelines? Let’s take a look at the consequences.
Hit to Reputation
For all businesses your reputation is everything. It’s how you get customers, gain brand loyalty, and keep people coming back every time. When you don’t comply with good manufacturing practices, your reputation is the first to go.
Medicine can be dangerous enough when it is prepared following guidelines, let alone when best practices aren’t followed when it’s made. Customers who don’t trust a pharmaceutical manufacturer won’t take the risk of buying your products.
Loss of Consumer Confidence
When your reputation takes a hit, you can say goodbye to consumer loyalty and retention. The good manufacturing practices guidelines are in place to keep your customers safe. If you don’t follow the guidelines, consumers will easily lose confidence in your product.
But the consequences are greater than just a business slowdown for your company. When customers lose trust in one pharmaceutical manufacturing company, they may start to wonder about other large manufacturers as well. If one company isn’t following guidelines, how many others aren’t?
The pharmaceutical industry is constantly under great scrutiny. One manufacturer mistake, intentional or otherwise, can have serious side effects for the entire industry.
Increased Product Recalls
When you produce a bad product that puts consumers at risk, you will have to recall more batches of your product. A product recall in the pharmaceutical industry can be a really big deal. While the recalls are usually voluntary, the FDA can encourage you to recall a product. A recall tells consumers that you produced a product that puts their health and well-being at risk. For example, a surge in recalls in 2014 was caused by an outbreak of meningitis, which killed 60 people, after a compounding pharmacy made a mistake.
When dealing with recalls related to not following current good manufacturing practices, you’re usually not discussing recalling one product at a time. If your plant manufactures many different products, the chances are good that many of them will be recalled- resulting in a huge loss for you.
In situations where good manufacturing practices weren’t followed and the public became seriously ill, you could face criminal prosecution. The FDA does have the ability to seize a drug and stop production through a court injunction. And, if the situation calls for it, the Department of Justice and Health and Human Services also has the ability to pursue actions against any manufacturing company that violates good manufacturing practices.
For example, as recently as 2013, Johnson & Johnson paid a grand total of $2.2 billion for violating the false claims act when they offered off-label promotions and kickbacks.
However, Johnson & Johnson’s situation is not the worst it can get. GlaxoSmithKline faced both Criminal and Civil charges for a total of $3 billion in settlement after they failed to disclose safety data, bribed physicians, made false statements and reported false best prices.
When it comes to keeping your company up and running, $3 billion is not a small chunk of change. Criminal prosecution for failing to comply with good manufacturing practices is not a joke.
And while these are large-scale examples, this doesn’t just happen to big companies. It can happen to anyone.
When working in manufacturing there are plenty of licenses that go into the process. You need everything from building permits to licensed physicians to facility licenses. If you fail to comply with good manufacturing practices guidelines, you’re putting yourself, your facility, and your physicians at risk for losing their license.
Doctors who take bribes or kickbacks could also be implemented in a GMP lawsuit and also be at risk for losing their license.
Losing a license is a huge discredit to a manufacturing company. It shows a lack of morals and ethics and a lack of concern for consumer health. Companies that lose their licenses will have a long road to get back on top.
Accusations of Fraud
Failure to comply with good manufacturing practices can also result in charges of fraud. This can come from issues with mislabeling ingredients or ingredient quantity or failing to advertise a product in compliance with good manufacturing practices guidelines.
When a manufacturing company is accused of fraud, consequences can be severe. From 2004 to 2012, 18 out of 22 large manufacturing settlements had to do with fraud. The consequences of fraud are widespread and severe. After all, the median cost of fraud at US companies was $120,000, with a higher median cost of fraud at manufacturing companies equal to $194,000.
Issues with corruption and finances can lead to fraud cases at large companies. The results of these cases can lead to lowered employee morale, low productivity, issues with leadership and management at companies and a huge loss in profits.
The GMP guidelines specifically address fraud when it comes to labeling and branding practices. Consequences for failing to comply with these guidelines can be severe.
Choose an IT Company that Can Help Keep Your Compliance On-Track
When it comes to following the good manufacturing practices guidelines to a ‘t,’ a great IT company can help keep you on track. Excellent IT support means more efficient record-keeping, better documentation, more up-time, and a powerful IT network to keep your manufacturing plant running.