Warren Perry, Dassault Systu00e8mes BIOVIA09.11.15
As the pharmaceutical/biologics industry continues to grow in the Asia-Pacific (APAC) region, more and more life sciences companies there are looking to export products—especially to meet high demands for generic drugs. To do so, they will need to pass inspections by international regulatory agencies, including the U.S. Food & Drug Administration (FDA) and the European Medicines Agency (EMA). Being prepared for stricter regulatory scrutiny provides revenue opportunities and other benefits for those companies that are willing to invest in stepped-up compliance.
With U.S. policymakers striving to achieve more affordable healthcare, demand for less-expensive generic drugs has increased to represent 80% of the drugs prescribed.1 The vast majority of generics are manufactured outside of the U.S.—in China and India primarily. Thus, the FDA is increasing its inspections there.
This forces APAC-based, along with all other global, drug companies who want to seize U.S. market opportunities to comply with requirements outlined in the 2012 Generic User Fee Act, which generates dollars to help the FDA hire more foreign inspectors and update technology to accept electronic submissions by May 2017. At the same time, API and biologics manufacturers, contract manufacturing organizations (CMOs) and contract research organizations (CROs) also are regularly audited by their international client base who need to ensure they are in compliance. Generic producers across the supply chain who can’t pass inspections in time risk having to go out of business—especially as the generics market becomes increasingly competitive and consolidates.
Ultimately, allocations from the new user-fees will enable FDA inspectors to visit foreign drug manufacturing facilities every two years using risk-based methodologies. So it’s now more crucial than ever that all companies in the global supply chain comply with FDA specifications and the Good Manufacturing Practice (GMP) regulations, and that these specifications are met electronically.
To comply, drug manufacturing sponsors and their partners must change the way they operate and the way they collect and transfer data. This idea of data transfer covers all aspects of the supply chain, such as certificates and quality information, which can evolve over months of data collection. Most of this data is created outside of the final producer’s firewall, which poses a whole new set of obstacles. Technology to move through the firewall in a controlled way needs to be part of any solution.
The biggest challenge for the APAC drug companies and their suppliers is financial. Profit margins on generics are among the industry’s slimmest, with consumers benefitting from discounts of 27-49% of list price.1 As a good example, a China-based CMO might contribute only 10% of its output into products sold in the U.S. through various customers’ supply chains. New regulatory standards still apply to this company—whether it’s selling 1% or 99% to the U.S. It will have to decide if it wants to be exempt—and not sell to U.S.—or only sell into supply chains that end in APAC, minus Japan, which also has more stringent inspections. If this company chooses to sell into the U.S., it needs to fully understand the ramifications of chasing that potentially rewarding market.
The short-term ramification means large investments, but the benefits include a strong competitive advantage. Having the right document management systems in place meets demands from more sophisticated sponsors who want controlled, audited environments to exchange information across their supply chains—from research phases through commercialization. The contractor who can deliver Part 11 compliant data, quickly available for audits and inspections, stands to gain more business.
The example CMO that does choose to invest in electronic document management systems also should see improved efficiencies with reliable regulatory compliance and better quality. In the quality assurance arena, its users need a solution that allows for strong version control and audited distribution of standard operating procedures (SOPs), specifications, protocols, batch records, and customer agreements to ensure only the latest versions are in circulation and users across global manufacturing networks are properly trained on the correct procedures.
Best practices are emerging around the world for putting such compliance and quality management systems in place quickly and effectively to keep current with GMPs in 2015 and beyond. One example is cloud-based solutions that benefit global supply chains, from early drug development through dispersed manufacturing and advanced commercialization.
As an illustration, one U.S.-based generic pharmaceutical company with sites across multiple countries, including APAC, produces hundreds of drugs in its roles as an original manufacturer, a CMO and a CRO. It uses an electronic document management system to support compliance across the European Union (EU), FDA and APAC. Automated, efficient access to data used for Annual Product Reports (APRs), audits, change controls and work flows, to name a few, are critical in today’s competitive world.
Incorporating these systems as part of its statement of work (SOW) with all partners ensures overall benefits are realized, including:
In the end, it’s not only change-ready APAC supply chain members who embrace new technology that stand to benefit from new regulations and scrutiny. Whether you are a consumer of drugs in the U.S., or elsewhere in the world, or a drug manufacturer relying on foreign factories, it’s clear that as more companies step-up to comply with FDA requirements, a much safer and reliable drug supply chain will emerge to keep pace with global demands.
References
1. www.fda.gov
Warren Perry has been with QUMAS, now BIOVIA for over twelve years. During this time he has held various positions including Product Marketing Manager, Marketing Manager and Project Lead. Warren has years of experience working for European software companies, and an understanding of global markets in GRC, Regulatory Publishing and EDMS systems, having worked with clients such as Takeda, Samsung Biologics, Roche, Boehringer Ingelheim, GlaxoSmithKline, Fidelity Investments, Bank of America, Logica CMG and Aspen Pharmaceuticals.
With U.S. policymakers striving to achieve more affordable healthcare, demand for less-expensive generic drugs has increased to represent 80% of the drugs prescribed.1 The vast majority of generics are manufactured outside of the U.S.—in China and India primarily. Thus, the FDA is increasing its inspections there.
This forces APAC-based, along with all other global, drug companies who want to seize U.S. market opportunities to comply with requirements outlined in the 2012 Generic User Fee Act, which generates dollars to help the FDA hire more foreign inspectors and update technology to accept electronic submissions by May 2017. At the same time, API and biologics manufacturers, contract manufacturing organizations (CMOs) and contract research organizations (CROs) also are regularly audited by their international client base who need to ensure they are in compliance. Generic producers across the supply chain who can’t pass inspections in time risk having to go out of business—especially as the generics market becomes increasingly competitive and consolidates.
Ultimately, allocations from the new user-fees will enable FDA inspectors to visit foreign drug manufacturing facilities every two years using risk-based methodologies. So it’s now more crucial than ever that all companies in the global supply chain comply with FDA specifications and the Good Manufacturing Practice (GMP) regulations, and that these specifications are met electronically.
To comply, drug manufacturing sponsors and their partners must change the way they operate and the way they collect and transfer data. This idea of data transfer covers all aspects of the supply chain, such as certificates and quality information, which can evolve over months of data collection. Most of this data is created outside of the final producer’s firewall, which poses a whole new set of obstacles. Technology to move through the firewall in a controlled way needs to be part of any solution.
The biggest challenge for the APAC drug companies and their suppliers is financial. Profit margins on generics are among the industry’s slimmest, with consumers benefitting from discounts of 27-49% of list price.1 As a good example, a China-based CMO might contribute only 10% of its output into products sold in the U.S. through various customers’ supply chains. New regulatory standards still apply to this company—whether it’s selling 1% or 99% to the U.S. It will have to decide if it wants to be exempt—and not sell to U.S.—or only sell into supply chains that end in APAC, minus Japan, which also has more stringent inspections. If this company chooses to sell into the U.S., it needs to fully understand the ramifications of chasing that potentially rewarding market.
The short-term ramification means large investments, but the benefits include a strong competitive advantage. Having the right document management systems in place meets demands from more sophisticated sponsors who want controlled, audited environments to exchange information across their supply chains—from research phases through commercialization. The contractor who can deliver Part 11 compliant data, quickly available for audits and inspections, stands to gain more business.
The example CMO that does choose to invest in electronic document management systems also should see improved efficiencies with reliable regulatory compliance and better quality. In the quality assurance arena, its users need a solution that allows for strong version control and audited distribution of standard operating procedures (SOPs), specifications, protocols, batch records, and customer agreements to ensure only the latest versions are in circulation and users across global manufacturing networks are properly trained on the correct procedures.
Best practices are emerging around the world for putting such compliance and quality management systems in place quickly and effectively to keep current with GMPs in 2015 and beyond. One example is cloud-based solutions that benefit global supply chains, from early drug development through dispersed manufacturing and advanced commercialization.
As an illustration, one U.S.-based generic pharmaceutical company with sites across multiple countries, including APAC, produces hundreds of drugs in its roles as an original manufacturer, a CMO and a CRO. It uses an electronic document management system to support compliance across the European Union (EU), FDA and APAC. Automated, efficient access to data used for Annual Product Reports (APRs), audits, change controls and work flows, to name a few, are critical in today’s competitive world.
Incorporating these systems as part of its statement of work (SOW) with all partners ensures overall benefits are realized, including:
- Improved compliance, such as electronic access to updated SOPs and readily available documentation for inspections and customer audits;
- Time savings, including e-signatures for workflows and speedier regulatory approvals; and
- Cost savings, realized from achieving quality in new markets without hiring additional employees and accelerating product launches to add revenue streams.
In the end, it’s not only change-ready APAC supply chain members who embrace new technology that stand to benefit from new regulations and scrutiny. Whether you are a consumer of drugs in the U.S., or elsewhere in the world, or a drug manufacturer relying on foreign factories, it’s clear that as more companies step-up to comply with FDA requirements, a much safer and reliable drug supply chain will emerge to keep pace with global demands.
References
1. www.fda.gov
Warren Perry has been with QUMAS, now BIOVIA for over twelve years. During this time he has held various positions including Product Marketing Manager, Marketing Manager and Project Lead. Warren has years of experience working for European software companies, and an understanding of global markets in GRC, Regulatory Publishing and EDMS systems, having worked with clients such as Takeda, Samsung Biologics, Roche, Boehringer Ingelheim, GlaxoSmithKline, Fidelity Investments, Bank of America, Logica CMG and Aspen Pharmaceuticals.
