The biotech and life sciences industry houses some of the world’s most sensitive and critical information. From confidential clinical trial data to precious intellectual property, pharma companies have much to lose in a data breach. The legal and financial fallout combined with the reputational damage inflicted by a single data security oversight can cripple a company’s future and ruin its potential for creating potentially life-saving treatments.
Considering the high stakes, organizations within the industry cannot underestimate the importance of data security in pharma. Let’s examine data security under a microscope and investigate its serious implications in the biotech and life sciences realm. Then, we’ll analyze how virtual data room (VDR) technology can effectively address pharmaceutical companies’ data security demands. Along the way, we’ll highlight key features pharma should look for when choosing a VDR solution.
Biotech organizations that make data security a top priority protect themselves, clinical trial participants, employees, stakeholders, their reputation, and their bottom line from the very real possibility and consequences of a data breach.
Investing in a high-security virtual data room can help biotech companies accomplish the following operation-critical objectives:
1. Mitigating the Risks of Non-Compliance
Pharma companies are subject to regulations from several bodies and regimes, from the FDA to HIPPA and beyond. Applicable regulations vary by the location and scope of an organization’s operations. These companies must ensure and document ongoing compliance with the most updated laws governing their unique situation.
“The pharma industry is considered a highly regulated industry,” says Security Intelligence. “Cybersecurity is taking a higher priority across the many different regulatory areas. Failure to meet compliance can result in license suspensions or felony charges, as well as devastating fines. And again, these penalties can be levied in multiple states or countries, depending on where and how the rules were broken.”
Given the potentially severe consequences of non-compliance, biotechnology companies must enact a rigorous compliance program with built-in audits and regular refinements to reflect the most recent regulations.
2. Safeguarding Confidential Information & Intellectual Property
Biotech companies store mass amounts of sensitive and valuable data that attract the attention of cybercriminals.
In the context of events such as the COVID-19 pandemic – which saw a race for vaccine development – research data and other intellectual property become a particularly desirable target for cybersecurity attacks.
These organizations must implement robust cybersecurity solutions to protect their data against increasingly creative cyber attacks.
3. Protecting Biotech Companies from Costly Breaches
According to IBM’s Cost of a Data Breach Report 2024, the average cost of a data breach in the pharmaceutical industry is $5.1 million. The study also found that across industries, “More organizations paid higher regulatory fines, with those paying more than USD 50,000, rising 22.7% over last year, and those paying more than USD 100,000, rising 19.5%.”
Part of the exacting toll of a data breach includes disrupted business functions, as talent and resources must be redirected to clean up the aftermath and restore secure operations. A single security breach can take months to remediate, especially if a pharma company does not have sufficient talent resources or IT infrastructure to aid in the process.
4. Communicating Securely with Stakeholders and Regulatory Bodies
Biotech companies need a reliable IT landscape with secure tools for collaboration and communication to ensure uninterrupted and efficient operations.
For example, a regulatory authority may impose an audit, requesting large volumes of data and reports containing confidential information. Additionally, investors may reasonably expect updates on the quantifiable progress of a clinical trial. In these cases, pharma needs a way to share this data while ensuring compliance with data security laws.
Implementing a secured tech solution for handling communications and secure data sharing can help keep operations running smoothly while avoiding costly delays and compliance oversights.
Recommended reading: Virtual Data Rooms for Biotech and Pharma M&A
5. Promoting Good Public Relations
Few things cause consumer confidence to plummet like a publicized data breach. Pharma companies can work proactively to maintain a good reputation by demonstrating due diligence in the secure handling of confidential information. Investing in gold-standard data security technology shows employees, clinical trial participants, regulatory bodies, and even consumers that security – and not just profitability – is an organization’s priority.
6. Securing Financing & Raising Capital
Conducting medical research, creating new treatments, and engineering medical devices requires significant capital. Biotech and life science companies need a secure, modernized solution for connecting with investors and sharing confidential financial and research data with them so they can secure funding. Implementing the latest technology and taking a proactive approach to data security may also attract high-dollar investors.
7. Ensuring Not Just Continued, but Profitable Operations
A biotech company’s continued operations and profitability hinges, at least in part, on its approach to data security. As reflected above, a single data breach’s legal, financial, and reputational impacts can inflict irrevocable damage on an organization. However, investing in the right technology can help pharma companies mitigate these risks and yield high ROI.
More specifically, how can VDR technology aid in reaching these seven critical objectives?
How VDRs Help Maximize Data Security in Pharma
Virtual data rooms are the new ‘best practice’ in secure data storage and collaboration, with wide applications in the biotech industry.
Here are just three ways VDRs can revolutionize data security in pharma:
- Maximum-security data sharing – VDRs offer a user-friendly and secure method for sharing confidential information with authorized parties. If a deal falls through and access must be rescinded, VDRs offer comprehensive Digital Rights Management (DRM) features so companies can revoke access to documents even after they’ve been downloaded by a potential investor.
- Next-level compliance safeguards – Some VDRs employ military-grade encryption and compliance measures (Tip: look for VDR solutions with ISO 27001 compliance, AICPA SOC 2 certification, EU-US Privacy Shield certification, HIPPA compliance, FISMA compliance, and other relevant certifications) to safeguard sensitive data and intellectual property. These measures keep sensitive data under lock and key, accessible only by authorized parties.
- Efficiency-boosting collaboration tools – Without compromising security, VDRs give pharma companies a safe and intuitive platform for collaborating in-house and with external partners, such as investors and regulatory bodies. VDRs often have comprehensive document activity trackers, audit trails, messaging features, comprehensive reporting tools, and other collaboration capabilities for maximum security, control, and transparency.
These three value-adding VDR features are by no means exhaustive. CapLinked offers a cutting-edge VDR solution for data security in pharma. Reach out to learn more about the game-changing features our VDR can offer your biotech organization.
