I am of the belief that in our field of medical devices, and pharmaceuticals like you mentioned, that transference is not a risk management strategy that can be used and accepted from both the patients perspective and the manufacturers perspective. These fields deal with the health and safety of the consumer and it is widely expected that when a consumer is using the product, it is because they are in need of it to either survive or improve their quality of life to a point where they can live comfortably. For example suppose a patient had a total hip arthroplasty performed and the implant ended up degrading inside the patient due to a chemical reaction and the patient ended up with an infection. Having an "insurance plan" via the transference strategy may help the patient pay off the resulting medical bills, but does nothing to improve the health of the patient and actually results in the reputation of the manufacturing company to degrade, especially if the issue becomes more prevalent. The same philosophy applies to pharmaceuticals. In this industry, the only two acceptable risk management strategies that I can see being applied are avoidance and mitigation as we should be doing everything we can to improve the life of our consumers while minimizing the amount of unintentional damage that could occur along the way. The only health related field I can see the transference strategy being applied is directly in the medical field with a doctors malpractice insurance.

I agree with pv223, transference is not a feasible risk management strategy in the medical device/pharmaceutical field. Like pv223 mentioned, avoidance and mitigation are the two primarily used strategies with mitigation being preferred. In Dr. Simon's medical device development course, we learned that for medical device companies there are 3 main ways to implement risk management through mitigation.

The first, and best way, is to design out the risk. For example, a table might have sharp corners, one way to prevent someone from getting cut on the corner is to add rounds. The second way is to put up safeguards. An example of this is a retractable syringe that prevents the person using the syringe from being accidently stabbed. This is an example of a case where the risk (the needle being sharp) cannot be designed out for the device to work, so making the needle retract once a volume has been expressed is a great safeguard from accidental stabbings. The last, and least preferred way is to have warnings/trainings to make sure the person using the product understands the do's/don'ts and can avoid the risk that can't be designed out or safeguarded against.

I would love to hear if anyone knows of a transference strategy used by companies!

Thanks,

Matt

I don't see transference as negative as it may come across depending on how it is used. For instance, a company may hand off a risk to a third party to use their resources towards working on other projects. In this way the company gives business to possibly a smaller start up company while ensuring their own resources are adequately used. It may seem counter productive but in the long run it may actually be a better investment of their time and money. The other company may also be well versed in handling such risks and may able to resolve it in a shorter period of time. 

Transference as a risk management strategy is widely used in the pharmaceutical and medical device industries, particularly through Contract Manufacturing Organizations (CMOs) and Contract Research Organizations (CROs). Companies often transfer the risks associated with clinical trials, manufacturing, or regulatory compliance by outsourcing these processes to specialized third-party firms.

For example, a medical device company might outsource its clinical trials to a CRO to ensure regulatory compliance while focusing its internal resources on product development. The CRO assumes the risks related to trial execution, patient recruitment, and data integrity. Similarly, a pharmaceutical company might rely on a CMO to manufacture its drug products, transferring risks associated with production quality, scalability, and supply chain logistics.

However, while transference shifts responsibility, it does not eliminate accountability. Companies must conduct supplier audits, regulatory inspections, and quality control assessments to ensure that CMOs and CROs maintain compliance with FDA and ISO standards. If a third party fails to meet quality or regulatory expectations, the liability can still fall on the original company, damaging its reputation and financial stability.

Risk transfer is commonly confused with risk shifting. To reiterate, risk transfer is passing on (“transferring”) risk to a third party. On the other hand, risk shifting involves changing (“shifting”) the distribution of risky outcomes rather than passing on the risk to a third party.

Pharmaceutical industry can use risk transfer in  various ways,

1) Outsourcing: Purchasing cyber liability insurance to cover financial losses from data breaches or outsourcing security monitoring to a third-party provider.

When to use: When an organization prefers to share the financial or operational burden of a specific risk.

2) Risk based method transfer: Applying the principles of risk management to analytical technical transfer,there is a risk of the two sites generating noncomparable data either during transfer or post-transfer. Risk-based thinking can be beneficial for analytical technical transfer in the evaluation of the product and associated analytical methods prior to method transfer, to determine the probability of the risk occurring.

3) Knowledge Transfer. Knowledge transfer is the key step to a successful method transfer. In many ways, method transfer is similar to training a new analyst in an existing laboratory, although method transfer has the added complexity of potential differences in instrumentation. Ensuring that the expertise is captured and transferred to the receiving unit staff is the most critical activity in a successful simultaneous method transfer for multiple products.

3) Operational risk: The pharmaceutical industry relies on an intricate global supply chain involving numerous suppliers, manufacturers, and distributors. Pharmaceutical organizations must have complete visibility into their suppliers and suppliers' suppliers to mitigate risks. Understanding the entire supply chain and identifying potential weaknesses at every stage is crucial. Without the proper precautions, a single supplier could disrupt or shut down an entire supply chain.

4) Geopolitical risk: The pharmaceutical industry heavily relies on a global network of vendors for the procurement of raw materials and the execution of manufacturing, packaging, and distribution processes. Geopolitical uncertainties, including political unrest, regional tensions, and public demonstrations, can disrupt supply chains, leading to shortages and delays. 

5) Financial risk: Unmanaged vendor risks can result in severe economic losses. Drugs pulled from the market due to manufacturing errors, contamination, or other safety concerns impact a pharmaceutical organization’s reputation and revenue. Investments made in research and development may be forfeited due to a lab's questionable regulatory compliance or testing protocols. 

Ref: ( https://www.biopharminternational.com/view/risk-based-approach-transferring-mature-biopharmaceutical-process)

In the pharmaceutical and medical device industries, risk transference is a commonly used strategy—especially in areas where a third party may be better equipped to handle a specific type of risk.
A clear example of transference is outsourcing clinical trials to a Contract Research Organization (CRO). Clinical trials carry regulatory, operational, and financial risks—such as failing to meet FDA requirements or encountering patient safety issues. By hiring a CRO, a medical device or pharma company transfers much of that operational and compliance risk to a third party that specializes in managing clinical studies. While the original company still owns the overall responsibility, the CRO takes on day-to-day execution and risk mitigation related to trial design, patient recruitment, site management, and data collection.
Another example is product liability insurance. If a medical device company is concerned about potential lawsuits from adverse events, they may purchase insurance—transferring the financial risk of litigation to an insurance provider.