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The extent of Cybercrime in the US Pharmaceutical Industry

Cybercrime in the pharmaceutical industry is very prominent in the United States due to its high-value intellectual property (IP), sensitive patient data, and essential role in healthcare. The extent of cybercrime in this sector is significant, as evidenced by several key factors and incidents:

Prevalence of Cyberattacks in Pharmaceuticals & Healthcare

High Incidence of Breaches: 

Reports have shown a notable increase in data breaches across U.S. pharmaceutical companies. Sensitive data exposures have been linked to both malicious cyberattacks and accidental leaks, often leading to significant regulatory scrutiny and fines. IBM Security’s 2024 Cost of a Data Breach Report highlights the financial impacts of data breaches on industries, including healthcare and pharmaceuticals, with the U.S. healthcare and pharmaceutical sectors ranking 1st and 6th respectively for the highest costs per breach. (Read the IBM Cost of a Data Breach Report 2024)

Widespread Vulnerabilities:

Research by Reposify in 2021 found that 92% of the pharmaceutical organizations surveyed had at least one exposed database, and 99% had at least one remote access platform exposed to the internet, indicating significant vulnerabilities.

Types of Cyber Threats to Pharmaceutical companies

Intellectual Property Theft: U.S. pharmaceutical companies, which invest heavily in research and development, are frequently targeted by cybercriminals aiming to steal proprietary drug formulas, clinical trial data, and research. Such IP theft can lead to severe financial losses and erode competitive advantages.

Ransomware Attacks: This type of attack is especially concerning in the U.S., where ransomware incidents have targeted major pharmaceutical players, disrupting operations by encrypting essential data and demanding payment for its release.

Phishing and Social Engineering: Many employees in U.S.-based pharmaceutical firms have been victims of social engineering attacks, which cybercriminals use to gain unauthorized access to confidential systems and data.

Financial Impact of Cybercrime to the Pharmaceutical sector

High Cost of Breaches: The average cost of a data breach in the U.S. pharmaceutical sector is among the highest of any industry, with costs often exceeding $5 million. The need for rapid response and recovery increases financial pressures, especially for firms actively involved in clinical trials and drug approvals.

 

Notable Cybersecurity Incidents in the U.S. Pharmaceutical sector

NotPetya Attack on Merck (2017): This ransomware attack had a profound impact on Merck, a major U.S. pharmaceutical company, causing operational disruptions and financial losses estimated at around $870 million. The attack affected Merck’s production and distribution capabilities, underscoring the sector’s vulnerability to large-scale cyber disruptions.

Pfizer and Moderna Phishing Attacks (2020): During the COVID-19 vaccine development period, both Pfizer and Moderna, two key players in the U.S. pharmaceutical landscape, were targeted by phishing and attempted breaches. These attacks aimed to compromise vaccine-related data, highlighting the risks around critical, time-sensitive research.

Factors Contributing to Cybercrime in the U.S. Pharmaceutical sector

Digital Transformation: The shift to digital systems and increased interconnectivity within U.S. pharmaceutical firms have expanded the attack surface, creating more entry points for cyber threats.

Third-Party Risks: Dependence on third-party vendors and supply chain partners can introduce vulnerabilities. For example, attacks on U.S.-based vendors have indirectly impacted pharmaceutical operations.

Regulatory Challenges: U.S. pharmaceutical companies must comply with multiple, evolving cybersecurity and privacy regulations, such as HIPAA. Any regulatory lapses or breaches can result in penalties and heightened vulnerability to cyberattacks. In our previous article we highlighted the sections within HIPPA that specifically detail system recovery requirements for companies governed by the regulation.

Conclusion

In summary, U.S.-based pharmaceutical companies face a high and escalating risk from cybercrime. To address this threat, they must implement rigorous cybersecurity measures and undertake a modernization of system recovery solutions to protect their sensitive data, ensure operational continuity, and safeguard public health.

Contact the Cristie Software team if you are looking to improve system recovery and replication within pharmaceutical and healthcare, or to learn more about system replication and our system recovery integration with leading backup solutions from vendors including IBM, Dell Technologies, Rubrik and Cohesity.

Learn how we are helping pharmaceutical and healthcare companies modernize system recovery in our Use Case pages.

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