The Hidden Challenges of the Global Pharmaceuticals Supply Chain: Do you Have a Ticking Time Bomb?

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1 ISIS Pharma Consulting Ltd Tel: The Hidden Challenges of the Global Pharmaceuticals Supply Chain: Do you Have a Ticking Time Bomb? Overview With globalisation comes, inevitably, greater complexity. As tariff and non-tariff barriers have diminished or disappeared, so companies have grasped new opportunities to manage their supply chains. Today s multinational pharmaceutical businesses desire the benefits of labour and production site flexibility around the world, around the clock, supported by third-party partners. The development of single sites of excellence, the constant drive to reduce costs, to streamline manufacture and to improve efficiencies have combined to change the landscape dramatically. But with new opportunities come new challenges, not always immediately apparent, but significant nonetheless. Through our experience of auditing supply chains across the world, Isis Pharma Consulting has witnessed a number of recurrent challenges which procurement professionals and Qualified Persons alike need to get to grips with. Isis Associate Christine Morris reviews the seven key quality tools available to manage the new complexity successfully, and discusses the unforeseen pitfalls which lurk beneath the surface of the modern global supply chain. The message of this piece for senior managers in the pharmaceutical industry is that QPs need to work increasingly closely with Procurement, to ensure that both sides understand the risks as well as the rewards of global supply chains. If they don t, there might just be a time bomb ticking quietly away, putting the business, its customers and suppliers at unnecessary commercial risk VAT Number: Page 1 of 7 Registered office: 85C Huntingdon Street, St Neots, Cambridgeshire PE19 1DU Company Registered in England and Wales - Number

2 The simple life no more Once upon a time, a QP s life was [relatively] simple. The production of a medicinal product involved manufacture, packaging, QC testing and QP certification for release all on the same site. The most complex aspect of the supply chain was either the delivery of API to the site of manufacture or the shipment of the finished packs to an off-site storage and distribution facility. Today, with the development of single site centres of excellence and the constant drive to reduce costs, streamline manufacture and improve efficiencies, the supply chain is constantly evolving and becoming more and more complex. It is not uncommon to see separate sites for: API production Bulk manufacture Packaging QC testing QP certification for release and Storage and distribution. Often some of these sites are located outside the EU, which adds to the complexity and means that we need to add a site for EU retesting into the equation. The diagram below shows the difference between the old world and the new: Page 2 of 7

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4 Historically the releasing QP sat at the end of the supply chain, responsible for the certification of the finished product. However, as the role of this releasing QP is key to ensuring that the complexity of the modern supply chain does not adversely impact the safety, quality or efficacy of the product, there is a strong argument that the QP should sit at the centre of the Supply Chain. In the old world, the releasing QP had little need to understand the supply chain. Today s QP has to: assess compliance of each stage in the supply chain and its potential impact on the product and implement the necessary controls to manage compliance of the supply chain and the product with all relevant (and seemingly constantly-changing) legislation. The good news is that all these areas can be properly managed through effective communication. However, it is not possible to be everywhere all the time. The effective QP must therefore employ a number of tools to give them the assurance they need when it comes to the end of the process and there is a batch of product to be certified for release. The Magnificent Seven Seven standard quality tools are well proven and are key to effective management and communication: Audits; Technical Agreements; Technical and Analytical transfers; Validation of Product and Processes; Regulatory Compliance; Change Management; Annual Product Quality Reviews. In addition, the QP needs to be aware of stability data, complaints, serious adverse events and recalls/field alerts, and to understand the transport and storage requirements of the bulk and the finished product for the specific supply chain involved. We ll review the impact of these in the QP process as well. Used properly, the seven standard tools are invaluable to the QP in supporting the final batch certification decision. With a complex supply chain, however it is easier to miss something or to make mistakes. Let s look at each in turn, and the associated pitfalls: 1. Auditing of all of the steps in the Supply Chain is vital. The audit only provides a snap shot of the facility and the processes but is vital in enabling the releasing QP to demonstrate the required current personal knowledge of the site. Each point in the Supply Chain requires an audit at least every three years. Classic pitfall: Where brokers are involved in the supply chain, they too must be subject to audit. The releasing QP can rely on the audit reports of other professionals, but where he or she does so they must be able to demonstrate to the Regulatory Authorities how they have confirmed the credentials of this auditor. 2. Technical Agreements [TAs] with all parties involved in the supply chain are not only a regulatory requirement. They are an excellent way of clearly defining all the responsibilities and interrelationships of the parties involved. The releasing QP may not be responsible for creating and approving all the TAs but must confirm that they all exist. TAs with API suppliers can be particularly difficult to arrange. An increasingly common issue is the case of the MA holder who Page 4 of 7

5 subcontracts bulk manufacture to a third party. The MA holder has to assure the quality of the API, but as they are not directly purchasing the API it is often necessary to entrust responsibility to the bulk manufacturer for signing a TA with the API supplier. Classic pitfall: This applies even to organisations which own the separate sites in a complex supply chain. There must be inter-company agreements in place which clearly describe and define responsibilities. Informal understandings, however well-intentioned, are not enough! 3. Technical and Analytical Transfers. Modern complex supply chains have arisen out of the transfer of manufacture from a seemingly expensive single site in high-wage economies to third parties elsewhere, to cut costs and improve efficiencies. When an existing product is transferred to a new site or sites then the releasing QP must be involved in the Technical and Analytical Transfers to ensure that any changes to the product required as part of the site transfer variation are properly validated and documented. In addition, if a product is being manufactured outside the EU there is a requirement to retest on importation. This means that there will be a need for an analytical transfer between the site of manufacture and the EU retest site. The QP must work with Procurement to ensure the protocols and reports include all the required data. Regulatory actions may then be required to ensure the new site is approved for use. The approval of these changes may take some time, which must be built into the project plan. Classic pitfall: Look carefully at the methods of analysis used. Small variations in sample selection and, in particular, standards, can have a huge impact on the results. Ensure you are comparing like with like. 4. Validation Reports for the Product and Processes. As with the TA review, these documents can often be reviewed at audit and should be referred to in the annual Process Quality Review. Once the product is on the market then the QP needs to ensure that any changes are properly validated. Classic pitfall? It is important for the QP to have a good oversight of the change control procedure to ensure that changes which may impact on registered details have been appropriately reviewed and authorized. 5. Regulatory Compliance. The UK MHRA [Medicines and Healthcare products Regulatory Agency] refers to the Regulatory Black Hole as way of describing the failure to communicate effectively between Regulatory Affairs and Quality in some pharmaceutical organisations. Regulatory Compliance is key to the releasing QP. He or she cannot fulfill their legal responsibilities at the point of batch certification if they do not have a full picture of the product s Marketing Authorisation. Classic pitfall: Organisations too often inform their QPs as an afterthought. Use IT to ensure the QP has access to current registered details and is fully informed of proposed, ongoing and approved variations. 6. Change Management. This has been alluded to already in some of the sections above. Put simply, the releasing QP needs to have systems in place that ensure he or she if aware of all relevant changes and the supporting validation, regulatory and if necessary auditing work that is being done to support such changes. Classic pitfall: All too often, others in the organisation fail to alert their QPs to changes in advance because they cannot see the implications of these changes. The effect is to create delay and unnecessary cost. Wherever possible, involve the releasing QP in the decision to make the change before it happens, so the organization is fully informed about the work that needs to be done to support it. Page 5 of 7

6 7. Annual Product Quality Review [PQR] If the audit provides a snapshot of the facilities and processes, then the Annual PQR serves to fill the gaps. A comprehensive PQR provides the releasing QP with all of the information needed to ensure the safety, quality and efficacy of the finished product. In the complex supply chain the challenge is to ensure a PQR is provided by each facility involved in the manufacturing, packaging and testing processes. The releasing QP should then summarise the individual PQRs to create an overall picture of the compliance and control of the finished product. Classic pitfall: Where any EU retesting is performed prior to QP certification then the releasing QP s summary report should include a comparison of the original QC lab data with that generated by the EU retest lab. What can fall through the gaps? The use of these techniques is generally well understood. However, even when these tools are conscientiously deployed there remain some areas in the supply chain where responsibility or process ownership is often shared, and where unanticipated problems arise. Visibility of Stability data and timely access to this information for the QP is key. Where a batch of bulk product is produced in one site and the QC analysis of the batch is performed at another, what happens to the stability data for the finished pack? Often the packaging site for the bulk will not have a QC lab while the bulk manufacturing site will not have access to the product in its finished pack. In these cases it is key that the releasing QP understands and clearly defines (using TAs) who is responsible for managing and performing the stability study and who will provide results to the releasing QP and the MA Holder. Transport is a second area which links closely to stability. The QP has to be satisfied that the transport route and stability data support both the holding times and transshipment of bulk product from site of production to site of packaging. Complaints and recalls are a third area where only a full understanding of the supply chain and a detailed set of TAs can ensure sufficient control and compliance. Increasingly, bulk manufacturers produce one batch and split this across several orders to different customers. If complaints are received relating to a split batch, the bulk manufacturer has to understand that this information is communicated to all the relevant customers: and the QP has to be satisfied that such procedures are in place. What should the modern pharmaceutical organization take away from this thought-piece? First, there are inevitably some trade-offs to be made when the supply chain is reconfigured. Some of these only become fully apparent after the reconfiguration has taken place. In a complex supply chain, risk in its various forms has not become reduced it has rather been dispersed. The management of risk is correspondingly more complex and requires investment in people, systems and processes. Second, the role of the QP is changing. Traditionally seen as a focused specialist, today s QP is becoming much more of a generalist who needs to understand the business as a whole. Without that systematic understanding, he or she is unlikely to be able to meet the demands of the business as they become ever greater. Page 6 of 7

7 Third, the QP needs to become more closely integrated within the supply chain management team, and specifically Procurement. The closer the integration, the earlier the QP can spot problems and ensure that any time bombs are safely defused in good time! Isis Pharma Consulting Ltd is a specialist supplier of high-value consulting services to the global pharma industry. To discuss the views expressed in this piece, contact Principal and company founder Indira Walker on or at indira@isispharmaconsulting.com Page 7 of 7