The United States pharmaceutical sector is the world’s most important national market; in 2016, the US alone held more than 45% of its overall global value, which was estimated to be $446 billion.1 Many of the world’s top pharmaceutical companies are stateside, with Johnson & Johnson, Pfizer and Merck & Co. leading the way. There are also several non-US based companies such as British/Swedish AstraZeneca and Swiss-based Novartis, which are among the top pharmaceutical companies by revenue alone in the US.1 The US produces three quarters of its pharmaceuticals in situ, but this still makes it the world’s largest importer, with the value of imports totalling $86 billion in 2015 — twice as much as a decade ago — predominately from Ireland, Germany, Switzerland, Israel and India.2
The worldwide pharmaceutical market is expected to grow from around $1 trillion in 2015 to $1.3 trillion by 2020 (representing an annual growth rate of 4.9%).2 There are several global demographic and economic trends that are driving this growth, including a rapidly ageing population and an associated rise in chronic diseases, increased urbanisation, greater government expenditure on healthcare and a growing demand for more effective treatments.2 Interestingly, Chinese firms are now producing 40% of the world’s active pharmaceutical ingredients (APIs), which means it can be assumed that these are broadly used across the US market.2 With this increase in cross-border activity, the US Food and Drug Administration (FDA) has increased its scrutiny of both foreign and domestic companies that manufacture, process or pack products that are destined for the US — meaning the time is now for manufacturers to tighten their operations and ensure there are no gaping holes.
The FDA and its warning
FDA reports that the number of warning letters issued to pharmaceutical companies in 2017 remains significantly above 2013 levels, which highlights a concerning increase in violations of current good manufacturing practices (cGMPs). cGMPs are enforced by FDA and they provide systems that ensure the proper design, monitoring and control of manufacturing processes and facilities.3 It is important to remember that cGMPs are a mere minimum requirement; many pharmaceutical companies are already implementing comprehensive, modern quality systems and risk management plans that surpass these minimum standards.
A warning letter means that an FDA inspector has completed a site visit and has issued form 483 (this is issued to management at the conclusion of an inspection when investigators have observed any conditions that, in their judgment, may constitute violations of the Food Drug and Cosmetic Act4) listing observations that are deemed to be serious regulatory concerns. The increase in warning letters is not in the US alone … but can be seen amongst both US and foreign manufacturers. Any manufacturer who receives a sub-par inspection from FDA will see an impact to their bottom line owing to reputational damage and high remediation costs; it will also have a negative influence on new product approval processes as they can potentially be excluded from markets — increasing the impact of financial pressure that manufactures are already seeing from global competitors.
Warning letters don’t just have a fiscal impact on manufacturers; when a pharmaceutical company fails to comply with regulatory standards, it poses a real threat to overall public health. In fact, following an FDA inspection in 2015, a UK-based plant had to recall more than 427,000 products that had been put at risk of penicillin cross-contamination in the manufacturing process and posed “great risks to patient safety, including anaphylaxis and death.”5 FDA and other international regulatory authorities are already finding new ways of collaborating to share the burden of inspections, optimise resources and leverage their work, ultimately creating greater efficiencies and to better fulfil public health goals.6
Where are manufacturers falling short?
FDA and the European Medicines Agency (EMA) — who share basic principles — list the key violations within pharmaceutical manufacturing as “the responsibilities and procedures applicable to the quality control unit are not in writing, or not fully followed” and “the absence of written procedures governing production and process controls.”7 In facilities across the world, many areas of non-compliance have been highlighted, including, but not limited to, systematic data manipulation, failure to exercise sufficient controls regarding computerised systems to prevent unauthorised access to data as well as failure to dispose of quality related documents appropriately.
Manufacturers are also experiencing quality violations associated with contamination, hygiene and Quality Management Systems. In 2016, a Spanish firm received a warning letter after being found to lack suitable laboratory control mechanisms, and a Dutch company failed to have “satisfactory conformance” to final specifications for each batch of its drug products prior to release.8,9 A major US manufacturer had to recall vitamin D drops marketed to infants and pregnant women in Denmark as the active concentration was “75 times too high.”10
Mitigate risk
With the increase in scrutiny of pharmaceutical manufacturers, it is apparent that there is an urgent need for the pharmaceutical industry to ensure that its quality, safety and risk controls are meeting regulatory standards; failure to do so will result in a loss of business opportunities. In many cases, it is highly recommended that specialist consultants are brought in-house to oversee compliance improvements and help to construct a successful roadmap for remediation.
Hiring an external consultant can be an invaluable asset, particularly as they will bring a wealth of experience with them having implemented best practice across a variety of businesses. Whether taking a cautionary approach or if a violation has already occurred, a consultant can help with handling 483s and warning letters while taking an all-inclusive approach to ensure remediation and regulatory compliance.
Increasing scrutiny on compliance not only helps pharmaceutical companies to avoid pitfalls during an inspection, but also delivers widespread commercial benefits such as a greater understanding of demand and capacity, and an improved ability to assess and react to disruptions. It is also important that when it comes to outsourcing various parts of the business that manufacturers regularly monitor and evaluate all their contracted services and implement a method to capture and evaluate data to get a real-time overview of what is happening. Well-planned, well-documented and successfully executed supplier and quality agreements are essential to control the quality of the final manufactured product. Ultimately, putting these processes in place will also deliver cost savings through continuous supply and will avoid product recalls, complaints and non-conformances.
Mergers and acquisitions in the global pharmaceutical sector are another factor that can complicate supply chains and increase risk. Typically, areas of non-compliance are often not identified nor adequately managed to speed the process up for the deal to complete. However, pharmaceutical companies cannot afford to shirk due diligence.
When it comes to auditing, supplier certification is the first to fall behind in a long list of priorities. If pharmaceutical companies outsource their supplier auditing, then they must ensure that a robust technical and quality agreement is in place to manage these business functions, which will ensure that this key part of the quality management system does not fall to the wayside. Ultimately, this means that risks, both operationally and commercially, are avoided.
The way forward
It is apparent that there has been a shift in the way that compliance within pharmaceutical manufacturing is monitored, mainly because of the fast-evolving nature of the industry. Tightened scrutiny within quality and compliance will continue to increase, with global authorities collaborating to promote transparency and safety in their sectors. If pharmaceutical manufacturers in the US and across Europe want to continue expanding their businesses and differentiating their brand in a busy marketplace, they must ensure that they conform to the highest cGMP standards, implement an achievable and realistic auditing strategy and address risk in their ever-more complex supply chains.
References
- www.statista.com/topics/1719/pharmaceutical-industry.
- www.trade.gov/topmarkets/pdf/ Pharmaceuticals_Executive_Summary.pdf.
- www.fda.gov/Drugs/DevelopmentApprovalProcess/ Manufacturing/ucm169105.htm.
- www.fda.gov/ICECI/Inspections/ucm256377.htm.
- www.fiercepharma.com/manufacturing/fda-savages-gsk-plant-warning-letter.
- www.pharmtech.com/fda-recognize-inspections-eu-drug-authorities.
- www.fda.org/ICECI/Inspections/ucm481432.htm#Drugs.
- www.pharmacompass.com/jAssets/pdf/news/Natura-Bisse-International-Receives-FDA-Warning-Letter-1482917347.pdf.
- www.pharmacompass.com/jAssets/pdf/news/Delarange-Cosmetics-BV-Receives-FDA-Warning-Letter-1484159741.pdf.
- www.pharmacompass.com/radio-compass-blog/compliance-troubles-emerge-at-pfizer-teva-wockhardt-and-xiamen-origin.
