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take a particular toll on pharmaceutical
companies in light of already strict operational requirements. In such a heav-ily-regulated industry, pharmaceutical
companies also are often the first to be
affected by these new regulations.
How do companies manage these challenges and yet continue to innovate in
expanding markets? Understanding the
risks and opportunities associated with
Latin America’s changing compliance
landscape is key for pharmaceutical companies looking to stay ahead in today’s
REGULATIONS PRESENT SUPPLY
Compliance is simply a matter of doing
business in Latin America, yet many companies operating here continue to underestimate its far-reaching consequences. While the end
goal of e-invoicing and financial reporting requirements
throughout Latin America may be tax revenue, the implications of these laws reach far beyond finance. Certainly
audits, fines, and penalties are risks of compliance errors,
but such errors, discrepancies, and disruptions can also
bring business operations and supply chains to a complete
Specifically, e-invoices act as a Bill of Lading in many
Latin American countries. Pharmaceutical suppliers cannot
ship without an approved invoice physically on the truck,
and likewise manufacturers cannot fulfill orders unless
the invoice is valid and present along with the goods.
Invoicing errors or transmission issues can shut down sup-
ply chains for days.
E-invoicing requirements can also lead to refused collections. If an invoice is not 100 percent accurate, buyers may
literally refuse shipments and physically turn trucks around
at the gate.
Brazil, the region’s largest market for pharmaceuticals,
is taking this requirement even further: now requiring
mandated buyers in the pharmaceutical industry to implement Manifestacao do Destinatario, a process that
requires matching inbound shipments to the government
approved e-invoice and acknowledging the receipt and
accuracy of that reception. Brazil’s next step to heighten
transparency, eliminate black market pharmaceutical
sales, and ensure goods are taxed properly is Project
ID—an RFID shipment tracker deployed from the moment
the truck leaves the manufacturing center to the moment
it arrives at its final destination.
Despite these supply chain challenges and risks, the
high level of standardization required by Latin American
e-invoicing and e-accounting mandates is actually helping smart companies improve processes and reallocate
resources toward innovation—not compliance.
Intense government regulations in Latin America create a unique opportunity for pharmaceutical companies
to improve their supply chains and operational processes. First, the strict e-invoicing transaction and verification requirements ensure that purchases and payments
are accurate—that you receive exactly what was ordered
without requiring accounts payable teams to manually
track down orders.