Case Background
A global pharmaceutical company was exploring opportunities to expand its presence in Asia. One of the company’s criteria was that the potential partner should not have exposure to sanctioned countries in their supply chain. The company identified six potential joint venture partners with strong market knowledge and distribution networks.
Our Approach
Keeping the scope in mind, our due diligence process included:
- Corporate Background Check: Investigations into the company’s operations, past and present partnerships, MoUs, and their future projects. An evaluation of their corporate governance structure, including board composition, and any associations with politically exposed persons (PEPs) or entities on sanction lists.
- Regulatory Compliance Review: A comprehensive audit of Vendor’s compliance with local and international pharmaceutical regulations, including licensing, product approvals, and quality control measures.
- Supply Chain Assessment: Discreet interviews with former employees in procurement departments and upstream suppliers to identify potential risks exposure to sanctioned countries.
Key Findings
The enhanced due diligence uncovered several critical issues that were not apparent during initial discussions:
- Corporate Governance Concerns: One potential partner was predominantly controlled by a small group of executives with limited oversight, raising concerns about decision-making transparency and accountability.
- Market Challenges: The market analysis indicated that one potential partner was losing market share to newer competitors with more innovative products and better regulatory compliance, which could impact the JV’s prospects.
- Negative Media: Our media analysis flagged high incidents of medical negligence and negative reviews from patients on one potential partner, raising concerns about their operational integrity.
Outcome
While we did not identify exposure to sanctioned countries, our EDD findings helped the global pharmaceutical company narrow down its list.
