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Risk Mitigation For Pharmaceutical Companies Term Paper

Risk Minimization Contract, international law, and business law for WorldWide

Before entering into any legal agreement, it is essential to have our legal staff carefully review the provisions of the contract. The contract must be both legal and enforceable. Both state and, in the case of interstate commerce, federal law, should be reviewed to ensure that the agreement does not run afoul of existing regulations (Meiners, Ringleb, & Edwards 2015: 90-91). It is also important to consider the likely trajectory of future regulation. The legalities pertaining to the economic environment is always changing, especially in the volatile world of healthcare and technology. In the case of many business deals, clauses are specifically inserted to ensure that one party does not bear the brunt of excessive unexpected damages. "Within a contract, risk transfer is primarily accomplished through a combination of indemnification/hold harmless, limitation of liability, and waiver of subrogation clauses" ("Basic guidelines" 2015). Indemnity shifts the risk or responsibility to the other party "for losses or damages (physical injury or monetary) caused by that other party," liability limitation limits amounts of damages one or both parties can recover and in a waiver of subrogation one party prevents one party's insurer...

WorldWide, Inc., as it is a biotechnology company, must be particularly cognizant of the need to ensure that the responsibility of both parties are specifically delineated in a contract: if, for example, there is a problem with a drug that is not our organization's fault but is due to the actions of a third-party vendor or a subcontractor, WorldWide must protect itself against any negative financial fallout this might cause.
The world is also more interconnected ever before in terms of the global nature of modern commerce. Although it may behoove our organization to engage in international agreements to save costs and foster positive relationships abroad, there is also a greater risk (and expense) involved because of the necessary precautions to take when dealing with the legal questions which may arise between entities in different countries. Entering into joint ventures with local enterprises can be an effective risk mitigation effort, as the locally-based entity will have greater familiarity with the surrounding environment (Meiners, Ringleb, & Edwards 2015: 671). But joint ventures and franchising may mitigate the risk of falling afoul of cultural misunderstandings. It is important to remember that regardless of what…

Sources used in this document:
References

Basic guidelines for contracts and contract risk management. (2015). Harvard University.

Retrieved from:

http://rmas.fad.harvard.edu/basic-guidelines-contracts-and-contract-risk-management

Danzon, P. (2006). NBER Reporter: Research Summary. Retrieved from:
http://www.nber.org/reporter/fall06/danzon.html
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