This discovery highlighted areas for cost recovery and set the stage for ongoing financial improvements, demonstrating the value of regular compliance assessments in identifying hidden opportunities for savings.
Client
A Leading US-Based Medical Devices and Health Care Company
Industry
Pharmaceuticals
Project Timeframe
2020-Current
Revenew Services
Contract Compliance
Project Scope
A large multinational pharmaceutical company with over $40 billion in annual revenue across its business lines faced the challenge of managing hundreds of distinct contracts with vendors, distributors, and partners. To address this complexity, the client initiated a pilot program to systematically evaluate its contracts. After putting out an RFP and going through two rounds of evaluations, the client selected Revenew for its Contract Compliance services, leveraging a no-risk contingency model to uncover potential savings and enhance contract oversight.
Revenew’s Approach
For the pilot program, the client selected three suppliers to be audited. After an initial round of due diligence, Revenew advised the client to remove one of the suppliers from the audit list to better allocate the client’s time and resources to more promising candidates. The remainder of the engagement focused on two suppliers: a hardware and software distributor and a meeting and events coordinator company.
The Revenew team then began a more in-depth due diligence and contract review process for these two suppliers. When auditing the hardware and software distributor, Revenew reviewed 154 total invoices—totaling $22 million—and identified $1.2 million in potential recoveries. When auditing the meeting and events coordinator, Revenew’s scope covered 316 invoices totaling $2.8 million, of which $657,000 was identified as recoverable.
Outcomes
In total, Revenew identified nearly $1.9 million in potentially recoverable funds for our client and successfully collected $1.2 million on its behalf. In addition, the Revenew team identified several recurring errors that were the root cause of commercial compliance and recommended strengthening contract language and auditing accordingly. In particular, the team found that suppliers had regularly neglected to pass commissions back to the client and misbilled the client and its subsidiaries after new company acquisitions, rather than adjusting the billing rate accordingly.
After the pilot program, our contract was then extended—with Revenew becoming a long-term partner and completing 7 successful audits. Let’s discuss how we can do the same for you.