Thursday, July 14, 2011

Increased vigilance is likely to improve questionable sources of ingredients

Eye on Supply

Increased vigilance is likely to improve questionable sources of ingredients

Over the past five years, pharmaceutical companies have received plenty of negative press about the safety of their products. Of course, recall shave received much of the press coverage; all current recalls can be found on the U.S. Food and Drug Administration(FDA)website.Anyone logging on finds a pretty lengthy list, which indicates the FDA is doing its part to keep drugs safe. But what is the pharmaceutical industry doing to improve drug safety?
Many of the safety issues are related to pharmaceutical supply chain management. Much of drug manufacturing takes place outside the United States, in countries like China and India. Over the past few years, there have been questions about the safety of the supply chain and how that supply chain affects the overall safety of the final drug product.
The following questions are uppermost in the minds of both manufacturers and consumers:
  • What are the major challenges in keeping the current supply chain safe?
  • Given the recent negative press received by the industry about drug safety and its relationship to the global supply chain, especially with regard to outsourced manufacturing in China, how is the industry—and your company, if applicable—ensuring the safety of drugs manufactured outside the U.S.?
  • Are there or will there be tighter U.S. regulatory standards for outsourcing the manufacturing of new drugs? If so, how is the industry addressing these issues?
“Globalization is impacting most industries, and the pharmaceutical industry is no exception,” saidMartinVan Trieste, RPh, senior vice president of quality for Amgen Pharmaceuticals in Thousand Oaks, Calif. “On the positive side, globalization has enabled the pharmaceutical industry to enter markets worldwide, providing life-giving medicines to millions of patients,” he noted, adding that “with the benefits of globalization come significant challenges and responsibilities, and one of those challenges is ensuring the authenticity and quality of materials moving through the supply chain.”
Rx-360, a volunteer industry consortium, was established in 2009 to create and monitor a global quality system that meets the expectations of industry and regulators and assures patient safety by enhancing product quality and authenticity throughout the supply chain. Van Trieste is the founder and former chair and is now a member of the board of directors of Rx-360,a position in which he provides strategic direction, promotes Rx-360’s vision and mission publicly, and recruits new member companies to join Rx-360.

Report Raises Red Flags

Drug safety issues and their relationship to the pharmaceutical supply chain were addressed in a 2010 report titled “Achieving Global Supply Chain Visibility, Control & Collaboration in Life-Sciences: RegulatoryNecessity, Business Imperative” sponsored by PricewaterhouseCoopers (PWC) and conducted by Axendia. In the report, which contains data regarding outsourcing and the supply chain,some of the numbers were staggering but not surprising. For example, 70%of pharmaceutical industry executives indicated that they have key suppliers in China and 57% in India. The industry has encountered much concern about obtaining inadequate products from these regions, a problem often attributed to poorly regulated supply chains. Is that statistic any indication that China might be one of the countries where the global supply chain has been faltering? Also, how has the global supply chain been affected by global outsourcing over the past few years?
“We have seen several high-profile instances in the last year or two where very sophisticated criminals have broken into pharmaceutical warehouses, stealing truckloads or multiple truckloads of products that they go and sell on the openmarket.”
—Wynn Bailey, head of supply chain stategies, PricewaterhouseCoopers
“The numbers are certainly eye-catching but not surprising to me,” said Wynn Bailey, head of supply chain strategies at PWC. Bailey explained that it is definitely no surprise for a pharmaceutical,biotechnology, or even a medical product and supply company to have a manufacturing presence in China. There are several reasons for this.These companies initially became active in China because of its value as a source of raw materials or intermediate materials. “Many companies will not yet go so far as to source active pharmaceutical ingredient (API) from Chinese suppliers, though many of those companies expect this situation to change within the next few years. However, companies are also increasingly looking at China as a place to do their own manufacturing. They see China as a market with a lot of potential customers and an economy that’s developing to the point where people can afford to buy Western medicines,” said Bailey.
“There are numerous quality manufacturers in China. So we must not paint all manufacturers in China with the same brush based on a group of bad actors,”said Van Trieste. “It is a pharmaceutical company’s responsibility to select an outsourcing partner that is qualified, and to actively monitor the performance of that outsourcing partner on an ongoing basis. Ultimately, it is the pharmaceutical company’s responsibility to protect the patients that they serve.”
Amgen does not outsource manufacturing in China. The vast majority of Amgen’s products are produced at one of several Amgen manufacturing plants in California, Colorado, Rhode Island, Puerto Rico, and the Netherlands.
“If you’re a major player in this industry, you cannot afford to not have a presence in China,” saidBailey,who explained that drug companies must effectively manage their activities in China, paying particular attention to managing any potential risk with supply chains associated with that market. He has observed that drug companies increasingly rely on the presence “on the ground” in China of representatives who are knowledgeable of the local market and are able to manage the logistical relationships with local supply chain sources in real time.

Decreasing Impact of Global Outsourcing

In the report, the group measured the expected global trend for individual pharma companies over the next three years; firms expect global outsourcing will increase by about 78%. Based on this figure, does the industry have growing concerns about the quality of supply chains?
“The [drug] companies, in some cases, don’t have a lot of choices other than to source raw materials or intermediate products from markets like China, because that’s where they are available and because the economics of doing that are in many ways somewhat compelling,”saysBailey.“I think drug companies need to do a better job of identifying the significant risks that exist,so that they can assure that the processes used by their suppliers meet the quality standards of developed markets…,”said Bailey.
Some of that assurance would be in the form of FDA audits performed periodically on supply chain sources outside the United States to keep a closer eye on them and identify risks before they disrupt the supply chain and compromise drug safety. “In spite of some of the past quality issues that have surfaced, I don’t think we’re going to see a move out of China or India as a source for raw materials or products,” said Bailey. “There are two kinds of risk management activities. One is assuring that the manufacturing processes themselves are meeting GMP [good manufacturing practices], and the other is to protect against counterfeit activity. From a global pharma company’s perspective, they need to protect against criminal activity in the inbound supply chain and the supply chain for finished goods; the focus is more around assuring the quality, assuring that the requirements are met.”
To ensure that no counterfeited product enters the patient, companies have begun to invest in a lot of track-and-trace technology.
“We have seen several high-profile instances in the last year or two where very sophisticated criminals have broken into pharmaceutical warehouses, stealing truckloads or multiple truckloads of products that they go and sell on the open market,”Bailey said.“Obviously,in an age where terrorism is of particular concern,you want to make sure that you have processes and procedures in place to assure that the product you are selling under your brand name isn’t being tampered with. So those kinds of things I think are high on the agenda of people in pharmaceutical and biotech supply chains these days.”
As Van Trieste noted: “Over the last several years there have been various legislative initiatives aimed at improving the pharmaceutical supply chain, none of which have become law. I cannot speculate about the legislative process and what, if any, new requirements will become laws and when, [although] many of the ideas proposed in draft legislation have been embraced by many pharmaceutical companies and suppliers.However, I do believe that it is inevitable that additional legislation will eventually be enacted. I believe that stricter criminal penalties should be prescribed by legislation for those who counterfeit or intentionally adulterate pharmaceuticals for economic gain.”
Dr. James Netterwald is a biomedical writer based in New Jersey who writes articles and blogs on all things related to the pharmaceutical and biotechnology industry. He started Biopharmacomm LLC in 2009; his clients include medical education companies,medical advertising companies, science publishing companies, pharma-biotech companies, and public relations companies. More information on his writing can be found on

Editor’s Choice

  1. The Health Strategies Consultancy. Followthe pill: understanding the U.S. commercial pharmaceutical supply chain. The Henry J. Kaiser Family Foundation.March 2005. Available at: Accessed June 2, 2011.
  2. Pharmaceutical Supply Chain Initiative website. Available at: Accessed June 2, 2011.
  3. PricewaterhouseCoopers. Pharma 2020: supplying the future. PWCwebsite. Available at: Accessed June 2, 2011.

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