Person in protective suit sitting at a computer in a pharmaceutical lab

Mergers and Acquisitions in the Pharma Space: The Impact on Security

In 2020 alone, 14 major mergers and acquisitions occurred within the pharmaceutical industry, eight of them with a collective value exceeding $1 billion. This followed a banner year in 2019 where the top 10 pharmaceutical mergers and acquisitions all exceeded $5 billion. Whether your pharmaceutical company is worth $10 million or $100 billion, navigating the transition in security protocols is no small part of the M&A challenge. Today’s blog from CustomVault Convergint explains how mergers and acquisitions in the pharma industry affect the overall security plan.

Who Oversees Who?

Merging two companies takes time given the requisite changes to protocols, staffing and overall corporate structure. Security is always part of the equation as well. With both companies entrenched in their own security protocols, your CTO and security teams must ask hard questions about how to move forward with cyber protections, electronic, and physical security including:

  • Whose protocols do you follow for software and hardware?
  • Do you centralize your security responses or keep them separate? Which options would allow for the most appropriate responses?
  • What is the plan for succession and oversight?

Cybercrime

Perhaps the biggest challenge facing pharmaceutical companies comes from cybercrime. According to Pharmaceutical Technology, a cybersecurity breach at a pharmaceutical facility typically costs each company $5.06 million, 1.3 times more than the global average.

Furthermore, a two-week analysis performed in March 2021 by Reposify found that 92 percent of pharmaceutical companies the firm analyzed had at least one exposed database with potential data leakage. Another 46 percent had an exposed server message block (SMB). An SMB allows systems within the same network to share files. And an astounding 99% of companies had at least one remote access platform exposed to the internet.

Since mergers and acquisitions require sharing files as a significant communication tool, you absolutely need to make sure you have robust cybersecurity to protect your assets.

What About Physical Security?

Physical and electronic security may need upgrades when combining forces. Can your current electronic security measures adapt to adding dozens or even hundreds of new employees? Can the company improve to a newer system with centralized controls? Should certain elements be kept separate? You’ll need a comprehensive security audit before finalizing any merger and acquisition deal. Your internal people are an excellent resource for this, but you’ll need a firm with security expertise to give you honest results. 

Why?

Because everyone has preconceptions about pharmaceutical security at their respective companies, you’ll need an objective third party that has no such preconceptions or prejudices and is outside of any past history in both companies. An objective third party can give you honest information about gaps in your security, how you can improve pharmaceutical security, and what infrastructure you should change.

M&A With Negative Security Impacts

Reposify analyzed 20 mergers and acquisitions in 2020. The firm found that in 70 percent of cases, the subsidiary’s security measures had a negative impact on the acquirer’s security posture. 

How do you combat having potential security breaches? 

Very simply, perform due diligence, attend to cyber security threats and be sure to consider physical security assets.

CustomVault Convergint Can Help

We can consult with you to find out how best to approach your pharmaceutical company’s electronic and physical security concerns. Contact CustomVault Convergint, and we’ll start discussing your needs based on your specific requirements.