Newsmakers Interview: Rx-360
Amgen and SAFC discuss supply chain safety
By Gil Y. Roth
The Rx-360 consortium rolled out in June 2009, with the mission to “create and monitor a global quality system that meets the expectations of industry and regulators that assures patient safety by enhancing product quality and authenticity throughout the supply chain.” Several months earlier, SAFC launched its Vendor Audit Services unit to provide clients with auditor-teams that can cover wider geographic regions than in-house programs.
I spoke with two of the consortium’s founders, Martin VanTrieste, vice president Quality at Amgen, and Tom Beil, vice president of Quality and Regulatory Affairs at SAFC, to talk about Rx-360, globalization,and the challenges of securing one’s supply chain. —GYR
Contract Pharma: What led to the founding of Rx-360?
Martin VanTrieste: It was somewhat of an evolution. Over a year ago, there was a lot of publicity about contaminated raw materials in the supply chain. There was the case in Panama of diethylene glycol in cough syrup, which led to the deaths of children. Then there was the Heparin tragedy here in the U.S., followed by a series of events coming out of China with melamine in pet food, antifreeze in toothpaste, and lead-based paint on toys.
All of that caused a lot of concern in the pharmaceutical industry about our supply chain. The Parenteral Drug Association (PDA) was approached by the FDA to put together a conference that could be taken around the world to discuss security issues in the supply chain. The FDA wanted to get the message out that we need to do a better job, and also to listen to industry to find out what we’re doing and what the hurdles were.
I was asked to present as the closing speaker at that first conference in Washington, D.C., in December 2007. It was probably the most emotionally charged conference I’d ever been to in my life. When I closed out the session, people were crying because of how emotional the meeting became.
After the meeting, talking to some FDA and pharma industry people, we were trying to develop ways to move forward and capture this emotion, to use it to drive the change we all felt needed to happen. Then the PDA and FDA sponsored another conference that next year in San Diego, and that’s where we really solidified the foundations of Rx-360.
CP: What’s the mission of the consortium?
MVT: We knew that the solution had to be holistic, and it was something that would need to be tackled collaboratively. We’re trying to tackle a global problem, a complex issue that we’d really never seen before in the U.S. We understood that it was not really a failure of our GMP systems, but an introduction of the criminal element and highly unethical players into the supply chain. That is, there were parties that would contaminate ingredients for economic gain.
We recognized that no one of us could solve the problem by ourselves, and that a contaminated supply chain could happen to any one of us. So five or six quality heads from the pharma industry got together in winter of ’07-’08 and started the formation of Rx-360. It quickly developed to where it is today, where our mission is to create and monitor a global system that meets regulatory expectations, industry expectations, and ensures patient safety by enhancing product quality and authenticity through the supply chain.
To make that happen, we have several strategic pieces that we work on.
One is the sharing of information. How can we get out to our members and the larger community information to help us do our jobs better?
Two, we need to work together collaboratively and share our audit experiences with our suppliers, so that we can do it in a more efficient manner. More importantly, it allows us to spend more time with suppliers. If you think about it: today, a supplier like Tom’s company [SAFC] has hundreds of customers, and we all want to come in and run audits. We overwhelm him with audits and we can only get in there for one or two days at a time, because there’s a long line of customers who want to audit. But if we can collectively come to Tom and say that we want to audit SAFC and we’re going to replace all those individual audits, Tom’s going to allow that because it’s better for him. We’re going to get a better understanding of our supplier, not just from a GMP standpoint, but from an environmental, health and safety perspective, from risk management, from business continuity. We get much richer data this way, allowing us to make much better decisions about the suppliers we select.
The third piece is technology. How can we leverage technology to detect and prevent adulteration?
So that’s what’s driving Rx-360 forward. The membership is very diverse. There are large pharma and biopharma companies, brand and generic companies and various size suppliers providing everything from glass, stoppers, excipients and APIs,that see the value in Rx-360, It’s open to companies that have a passion for trying to solve this very complex and holistic problem.
CP: What’s the geographical reach of the membership?
MVT: It’s open to members anywhere in the world. Primarily, the members come from Europe and the U.S. We have some members from India and we have some people expressing interest out of Asia.
CP: Are you promoting in Asia through these meetings?
MVT: We’re promoting around the world. Our logo is a globe that isn’t U.S.-centric. That’s not so easy to find. The point is to stress that we’re not U.S.- or Europe-based. The reality is that the companies joining us are the ones that have the Resources to help fight this battle.
Tom Beil: I should point out that SAFC is a global organization with 35 manufacturing sites in 11 countries. So, yes, I sit in St. Louis, but our program is consistent throughout the organization. That’s where the seed starts within an organization and spreads out to other ones that we touch.
CP: How much of what you’re trying to achieve involves changing the culture within other regions? That is, when another market doesn’t have a long-standing tradition of the rule of law, how difficult is it to convey the importance of regulatory compliance?
MVT: That’s a big issue. When pharmaceutical companies start doing business in regions of the world where the regulatory systems are not as sophisticated as in Europe or the U.S., where they don’t have the same pedigree of experience, and the legal infrastructure to support our business, then it behooves the pharmaceutical companies to be more diligent and more aware, to put more safeguards in place, to use good risk management principles.
So part of our vision is education, that information will be shared not only with our members, but with the larger community. One of the mantras of Rx-360 is “open architecture.” Anything that we develop — an analytical method, a standard, a technology — all of that is going to be freely disseminated to the public.
I went to a presentation where the head of the Shanghai FDA presented a case on the Heparin tragedy. And he basically compared the Chinese pharmaceutical system to what we had in the U.S. before the Industrial Revolution. If you go back into the 1930s, similar events happened here. China is at that point, but they recognize they have to rapidly catch up to where we are in the west, in order to be competitive in the pharmaceutical market. They recognize that, and just that recognition is going to help them along that path.
CP: How far into the drug process is Rx-360 intended to go? Down to dosage form level and distribution?
MVT: It’s very holistic. We’re concerned about the upstream end, with raw materials that are coming to the pharmaceutical company, not so much from us to our patients. That’s the piece we’re focused on right now. There are many strong organizations involved in securing finished drug product distribution channels, through serialization, e-pedigree, etc.
We’re going to work on APIs, intermediates, excipients, and other critical components, like container closure systems, labeling, things of that nature.
As far as contract manufacturers go, they are involved in the consortium. Some CMOs have expressed interested in joining.
TB: From a supplier side, our challenge is that, as expectations ratchet up, they are consistent. Each of our customers is special to us, but they aren’t all that unique. The lists of questions they send for audits aren’t always the same, but there’s a basis of consistency among them.
What we’re hoping to do through Rx-360 is get some level of standardization.It becomes more cost effective, while maintaining or improving quality in a logical fashion. We receive thousands of requests for information. The basis of those is almost all the same, but there’s no structure that lets us efficiently disseminate our information back to the customers. So one of our goals is standardize and harmonize things, to make that process much more transparent and efficient. We don’t want to just push paper around.
CP: What form does that standardization take?
TB: There are several subcommittees within Rx-360, and one of them is looking at standardization of audits and auditors. Quite often, your first step is to gather information about a supplier before you purchase.
Requests can come in faster than the ability to relay that information. That aspect of expectations on the supply chain has ratcheted up incredibly. Some customers tell us, “Just give me everything,” when it comes to information, and that dilutes your efforts.
So we’re both teaching and sharing, pulling out what is essential and putting that into a “Here’s what we need to do” list. The ideal would be a transparent electronic dissemination of information so you aren’t wasting time transcribing.
CP: What differences are there with supply chain management for biologics as opposed to traditional small molecule ingredients?
MVT: We might have different suppliers of ingredients, but the processes are the same.
TB: The fundamentals are identical. Where there may be an issue is with concerns about animal origin components.
MVT: Small molecule manufacturers had globalized their supply chain faster than the biopharma companies have, but biotech uses many basic chemicals and buffers in its manufacturing process, too. Those have globalized to the point where some of those ingredients are no longer supplied by companies in the U.S. or Europe. We’re dealing with globalization just like pharmaceutical companies are. They just did it earlier and faster than biotech companies did.
TB: We’re probably seeing a steeper learning curve and more questionnaires coming in from biopharmaceutical and vaccine companies. The issues remain pretty much identical.
If we all laid out our processes together on a table, and we had to pick one or meld them together, I believe we’d find the answer among those options. I don’t think we’d need to create anything out of whole cloth.
I think Martin has done a great job of bringing other industries in, looking at vendor relations and supplier relations. We’re trying to model after others and move quickly to improve quality while not reinventing the whole system and infrastructure.
CP: Can you name some of those industries and what you’ve learned from them?
MVT: You have to look to semiconductor industries. What have companies like Intel and IBM done? We also look to the auto industry. It’s not magic. It all goes back to what Dr. Demming taught: your suppliers are really part of your manufacturing network. You need to treat them as such and educate them about what you use their products for and how you use them, because no one knows the inner workings of a product like the person who makes it. By giving them that knowledge, they can do a better job of satisfying your needs. It’s building that infrastructure so that your quality system incorporates your suppliers.
The big difference between those other two industries and the pharmaceutical industry is that, if you’re selling to Toyota, Ford or GM, that company is probably a major part of your business. If you make a particular automotive grade of plastic, then those clients are probably buying more than half of your capacity.
In the pharmaceutical industry, on the other hand, even if we collectively worked together, we’re very small portions of some suppliers. API suppliers, of course, depend exclusively on pharmaceutical clients. But to the excipient manufacturers, we’re a very small piece of their business.
Every pharmaceutical and biotech company uses dextrose in one of its products. But if you were to go to the two largest dextrose producers in the world, I would imagine that the pharmaceutical industry represents 1% or less of their sales of dextrose. Most of it goes to the food and beverage industry.
That makes our relationship with our suppliers different than what an auto company or a semiconductor company has. They have economic leverage with suppliers that a pharmaceutical company doesn’t have. So not everything can correlate between industries.
TB: Rx-360 is about not stepping away from your responsibilities, but being able to leverage the information among companies. Safety is not supposed to be a competitive advantage. Safety is what we all have to achieve, and we have to achieve it together.
If we spend an inordinate amount of time gathering the same information a hundred different ways, that’s not helping anybody. Or if we have a hundred different customers auditing a single location, while 99 other places are going unaudited, that’s not helping anybody.
There are some suppliers who shouldn’t be in the chain. We want to be able to help identify them, and either help them move forward or push them aside, in order to secure the supply chain.
CP: So the idea is to build a critical mass of users so that you can standardize audits.
MVT: By working collaboratively, we’ll get more data and richer data, in a more efficient manner, to make better decisions.
TB: When an audit takes place, Rx-360 is not there to say, “Use this supplier,” or “Don’t use them,” but to gather information so that people can make good decisions. (Unless there’s something so egregious that we need to raise a flag.) It’s really about information sharing.
CP: On the final dosage side, there are some obvious prospects for counterfeiting: high-margin cancer drugs, ED treatments, and others. What are the corollary targets on the ingredient side?
MVT: We could be lulled into a false sense of security by thinking it’s only the high dollar-value items that are at risk. If you look around the world where we’ve had these tragedies of counterfeiting and adulterated ingredients, you see things like glycerin adulterated with antifreeze. It’s happened in Haiti, Panama, Nigeria, and many places, but glycerin is one of the cheapest raw materials you can purchase. It’s a basic commodity, but because it’s sold in such large quantities, you don’t have to make a lot on each unit you sell.
So I think there are multiple factors we have to account for in risk management for adulteration. Is there a high-cost item? Is there a high-volume item? Is there a shortage in the marketplace that’s causing an increase in price?
If you look at Heparin, what happened there was a viral outbreak in China that reduced the swine population significantly. All pork products were in shortage in China, but at that same time, Heparin yields increased. That’s because someone got the smart idea to cut Heparin with oversulfanated chondroitin and make a profit. They took advantage of a shortage.
There are other things to look at. Is there a fad out there that’s creating a surge in demand for a product? We have to think differently. We have to think like a criminal so we can understand what they’re going to do and try to stay one step ahead of them.