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The healthcare industry in India is growing at a tremendous CAGR of 16.5%. The size of the industry is expected to reach US$160 Bn by 2017 and US$280 Bn by 2020. However, compliance management, internal control, secured data and quality systems remains a subject of concern in this fast-growing industry. Civil and criminal liability is a growing threat for health care companies. Complex and fluctuating laws and regulations makes compliance difficult for these companies.

Health care growth

Clinical Establishments (Registration and Regulation) Act 2010 and Clinical Establishments (Central Government) Rules 2012 are some of the regulations that clinical establishments in India need to comply with apart from privacy law compliance, data protection requirements, cloud computing compliance, encryption related compliance, cyber law due diligence. There aren’t well developed laws on the setting up of online pharmacy stores. Thus, organizations are exposed to serious legal risk as there is lack of clarity regarding the compliance in this field.

For instance, All India Institute of Medical Sciences (AIIMS) Bhubaneswar is introducing an electronic health card, a smart-card based system which automates the storage and management of medical records of patients. However, this innovative technology has failed to comply with Techno Legal compliance.

Data breach has now become a global issue in the healthcare sector as well. Recently, India witnessed a  leak of electronic medical records (EMR) of over 35,000 patients held by a Maharashtra-based pathology lab . This pointed towards a lack of availability of adequate safeguards for security of data. The U.S. department of Health and Human Sciences’ Health data reported a data breach in the United States as depicted in the graph below –

Healthcare record breach

Imperfect knowledge of the compliance, multiple laws and regulations that keep evolving and time constraints makes compliance difficult for healthcare companies. Lack of skilled resources and insufficient funds earmarked for compliance management is a major concern in this industry.

A survey by Deloitte reveals that Canada banned 25 Indian drug firms for non-compliance of standards. These include Sun Pharmaceuticals, Ranbaxy and Wockhardt.

Benefits of Compliance Management

A compliance management program can prevent violations of the law and avoid penalties. If the preventative function somehow fails it can reduce the penalties imposed. In short, compliance programs are a corporation’s best hope to prevent violations. Moreover, they also  limit the exposure if a problem has occurred.

Ensuring that the organization meets international or national standards improves the overall quality of services provided to patients. Consumers never make compromises when it comes to their health and safety. Hence, a healthcare company with a fair and honest reputation will attract consumers. A fair reputation also enhances employee morale and aids in recruiting brightest and best employee.

Its cost-effective in the sense that having a compliance management program in place will help avoid or mitigate any civil, criminal or administrative penalties which would have cost them far more than the management cost.


Hence development, companies should consider organization and implementation of compliance management as an integral part of the operations. Given their lack of resources and time the best option for them would be to move digitize these operation. It can be done with the help of a compliance software. V-Comply, an application on the cloud which provides a solution for governance, risk and compliance, would help make healthcare companies more efficient and accountable.

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