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Regulatory measures for cybersecurity in India’s pharmaceutical industry

By Sidharrth Shankar, Partner, JSA Advocates and Solicitors

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Pharmaceutical companies face unique challenges due to their rapid digital transformation, adopting Internet of Things (IoT), Artificial Intelligence (AI), and blockchain technologies. However, these technologies, while being beneficial, introduce significant cybersecurity risks that need to be managed effectively. The rise in cyber threats, including ransomware and phishing, threatens sensitive data related to clinical trials, patents, and patient information, potentially eroding customer trust and brand reputation.

The regulatory landscape in India mandates stringent cybersecurity measures to protect sensitive data. Recent regulations such as the ‘National Cyber Security Policy’ and the ‘Data Protection Bill’ set high standards for cybersecurity practices to prevent breaches and avoid severe penalties.

The Indian pharmaceutical industry, vital for both domestic and global healthcare, relies heavily on data to drive its operations. Recent cyberattacks on major entities like Sun Pharma, AIIMS, and Safdarjung Hospital underscore a critical vulnerability: inadequate cybersecurity infrastructure. With over 1.9 million attacks in 2022 alone, the urgency for a comprehensive cybersecurity overhaul is evident.

Pharmaceutical manufacturing executives are facing a complex array of cybersecurity challenges, driven primarily by the sector’s increasing digitalisation and the high value of intellectual property. An overview of these challenges and some practical strategies to enhance resilience illustrates the current difficulties.

 

Cybersecurity Challenges

Intellectual Property Theft: Pharmaceutical companies invest heavily in research and development. As such, the theft of intellectual data such as clinical trial data, drug formulations, and manufacturing techniques can be devastating.

Supply Chain Vulnerabilities: The pharmaceutical supply chain involves numerous stakeholders ranging from raw material suppliers to distribution networks. Each node in this chain symbolises a point of vulnerability that allows cyber attackers to infiltrate systems.

Regulatory Compliance: The pharmaceutical industry is heavily regulated. Non-compliance due to a cybersecurity breach can lead to severe penalties, loss of licence, or other regulatory actions.

Legacy Systems: Many pharmaceutical companies still rely on outdated technology systems that are not equipped to handle modern cyber threats. These systems often lack the security features necessary to protect against sophisticated attacks.

Ransomware Attacks: As seen in recent years, ransomware can cripple manufacturing operations, leading to significant financial losses and disruption of critical healthcare supplies.

 

Security Measures

Despite these challenges, the pharmaceutical sector has not historically been at the forefront of cybersecurity. However, high-profile cyberattacks have led to a heightened awareness and prioritisation of the need for enhanced security measures.

Cyber threats make pharmaceutical companies vulnerable to identity theft and evolving attack vectors. As companies increasingly digitise, more of their valuable data is stored online, heightening their appeal to cybercriminals.

Pharmaceutical companies also manage many devices that collect and store health and patient data online. They utilise big data tools and IoT, which, while increasing risks, underscores the importance for organisations to integrate security and privacy by design.

Privileged access, which involves granting higher access levels to certain files or systems, enables organisations to secure applications and IT infrastructure, operate more efficiently, and protect their most sensitive data and critical infrastructure. This access can be extended to both human users and non-human users, such as applications and machines.

The pharmaceutical industry’s cybersecurity is threatened by a wide array of risks and attack vectors, including those from third-party vendors. Pharmaceutical organisations depend heavily on these vendors for daily functions such as research, development, and logistics. Any security breach within these third-party services can lead to significant data loss for the pharmaceutical company. Healthcare cybersecurity relies on robust processes and practices to meet strict regulatory compliance requirements.

Phishing attacks, often delivered via email, persuade individuals to click on malicious links, enabling attackers to compromise email accounts and steal data, intellectual property, and funds from banking accounts.

Human error and negligence continue to be significant factors in data breaches and cyberattacks across all sectors. Ensuring employees adhere to protocols for data protection and do not use unauthorised software is critical to preventing cyber incidents.

Mergers and acquisitions in the pharma industry also pose a risk to confidential data if not managed properly due to potential data protection lapses and insufficient due diligence.

The adoption of new technologies in the pharmaceutical industry carries inherent security risks. Therefore, companies must ensure that all new technologies are properly secured and do not introduce vulnerabilities that hackers could exploit. Pharma companies need adaptable yet strong cybersecurity practices and protocols to protect their new technologies, allowing them to monitor threats, identify vulnerabilities, and safeguard intellectual property.

 

Hand & Glove

A pressing concern in this digital transformation is the protection of sensitive health data. With regulations such as the Personal Data Protection Bill, which is due to become law, pharmaceutical companies must ensure they comply with strict data protection standards. These regulations mandate how data should be securely handled and how breaches should be reported. Non-compliance could not only lead to significant penalties, but, more critically, it could also undermine public trust—a commodity that is as valuable as any pharmaceutical product itself.

Collaboration between the government and the private sector is crucial to fortifying the cybersecurity infrastructure. Initiatives that include the development of more robust cybersecurity frameworks, regular audits of cybersecurity practices, and fostering a culture of cyber resilience within organisations would be beneficial. Government agencies could also play a crucial role by facilitating the exchange of threat intelligence and best practices among companies and international bodies.

 

Moving Forward

Pharmaceutical companies must adopt a forward-thinking cybersecurity strategy. This involves investing in sophisticated security measures such as multi-factor authentication, firewalls, and intrusion detection systems. Implementing a zero-trust framework and developing comprehensive third-party risk management programs are also essential to protect the industry’s digital assets.

Enhancing cybersecurity is not only a regulatory necessity but also a strategic essential that will increase the pharmaceutical industry’s resilience against cyber threats, ensuring its continued growth and contribution to global healthcare.

The pharmaceutical sector is a repository for highly sensitive data and cutting-edge technology, making it a prime target for cybercriminals. Cybersecurity within the pharmaceutical sector is under threat as these organisations house sensitive patient information, patented drugs, and detailed records of clinical trials and research projects.

With rapid technological advances, the increase in automated tools, and the reliance on third-party vendors, pharmaceutical companies face significant cybersecurity challenges. A crucial task for securing information in the pharmaceutical industry is to implement security protocols and robust, comprehensive strategies that protect digital assets and minimise cyber-attacks on these companies. This is essential to prevent catastrophic data loss that could undermine consumer and patient trust, damage the brand image, and lead to plummeting share prices.

 

Road Ahead

It is clear that the cybersecurity ambience of the pharmaceutical industry in India is at a crossroads. As companies increasingly digitise their operations, the imperative to integrate stringent cybersecurity measures has never been more urgent. The burgeoning threats in cyberspace are as multifaceted as the opportunities that digital advancements present.

Moreover, the integration of technologies such as AI and machine learning into pharmaceutical research and manufacturing processes adds another layer of complexity to cybersecurity. These technologies process vast amounts of data to optimise everything from drug discovery to supply chain logistics. However, the algorithms and the data they generate and process are prime targets for cybercriminals. Intellectual property theft, particularly in the pharmaceutical industry, can have financial and broad societal impacts if sensitive research falls into the wrong hands.

Training and awareness are equally important. Human error remains one of the largest vulnerabilities in cybersecurity. Employees at every level of a pharmaceutical company need regular training on the latest cyber threats and best security practices. This is not just about avoiding phishing attacks or using strong passwords but extends to more sophisticated awareness about securing intellectual property and understanding the legal implications of data breaches.

The future landscape of cybersecurity in pharmaceuticals will likely be characterised by increased regulatory scrutiny and a greater emphasis on cross-sector collaboration. As threats evolve, so too must the strategies to combat them. Cybersecurity is not just an IT concern but also a strategic imperative that encompasses legal, regulatory, and operational aspects. Ensuring that digital innovations enhance rather than endanger the pharmaceutical sector’s mission to improve health outcomes requires persistent vigilance, innovation, and cooperation across all stakeholders in the ecosystem.

Through a proactive and comprehensive approach to cybersecurity, India’s pharmaceutical industry can protect itself against existing threats and prepare for future challenges that the digital age is sure to bring.

 

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