Global Outsourcing Conference Report

Over the last three days we've been taking part and presenting at the third Global Outsourcing Conference, jointly organized by Xavier University and the US FDA.

Although not the best attended of conferences this year, it proved to be one of the best in terms of content presented and the quality of the invited speakers, including a couple of key note addresses from senior members of US FDA. This resulted in some very interesting and beneficial discussions amongst the attendees, all of whom have taken home some thought provoking material and ideas for implementing positive change in terms of better securing the supply chain, assuring product and patient safety and in optimizing the performance of their extended enterprises.

The conference looked at a wide range of outsourcing and supply chain issues, ranging from the pragmatic management of outsourcing and supply chain management best practices, with a mixture of practical best practices from the pharmaceutical industry and research and experience from a number of leading Universities working in the field (presentations are currently available on the Xavier GOC website).

Of significant interest were the FDA presentations looking at the implications of the recent FDA Safety and Innovation Act (FDASIA - due to be signed into law next month) and the changes that this will have in terms of changes to GMP and GDP regulations.

There was a significant interest in the topic of serialization and ePedigree - which was covered in a number of sessions and signs are that companies are now realizing that rolling these solutions out will be necessary and more difficult than originally envisaged when compared to simpler pilot studies.

Supplier selection, assessment and management were also key topics with the focus on developing partnerships and relationships as the best way of meeting forthcoming regulatory expectations for the management of suppliers.

Business & Decision presented a deep dive session on the future challenges faced by ERP System and Process Owners, looking at the need to integrate with serialization systems, master data management systems, and supply chain partners systems. Acknowledging that many ERP systems were never designed to handle such a level of integration, the session looked at how middleware solutions such as Business Process Management solutions and SOA can be used to better integrate the supply chain.

Outsourcing clearly isn't going away and although some companies are looking to in-source some strategic products and services once again, the issues associated with outsourcing cannot be ignored. Although examples from India and China were much in evidence it was also acknowledged that outsourcing risks do not solely exist in so-called 'emerging economies'

This issues exist not only with product (API, excipients and other starting materials), but also with services such as IT services and it is clear that the US FDA expect companies to better manage their suppliers and supply chain.

For pharmaceutical companies looking to get involved in the debate there is the opportunity to follow the discussion on-line in the LinkedIn "Xavier Pharmaceutical Community".

In summary, the conference provided pharmaceutical companies with a comprehensive list of the topics they will need to be address in the next 1 - 3 years, which now need to be developed into a road map leading to on-going compliance, improved product and patient safety and more efficient and cost-effective supply chain operations.

Computer Systems in China - to Validate or Not?

At today's Computer System Compliance session at the ISPE-CCPIE conference in Beijing we considered the new draft SFDA GMP regulations and the requirements (or not) to validate computer systems.

As blogged yesterday, the Chinese State FDA (SFDA) are committed to improving compliance, but the current draft of the new Chinese GMP regulations are ambiguous with respect to computer systems validation.

While certain Articles and Annexes infer a need to validate, calibrate etc certain control and monitoring systems there is no equivalent to US 21 CFR211 subpart 68 or PIC/S / EU Annex 11, which states a clear requirement to validate computer systems.

Some would claim that this is deliberate ambiguity on the part of SFDA and that it suits them to provide some 'wriggle room' for Chinese manufactures, but more likely is that computerized systems have been of relatively low priority. Re-writing and updating the GMP regulations is a significant undertaking and it is only reasonable that focus is given to basic GMP, especially when China is only just catching up with more developed countries with respect to the use of computer systems and there is no history and significant risk to patients as a result of failure to validate a computer system.

However, this ambiguity does not meet the stated aim of SFDA, which is to generally align national GMP regulations with World Health Organizations (WHO) guidelines. WHO guidelines (WHO Technical Report Series 937, 2006: WHO Expert Committee on Specifications for Pharmaceutical Preparations, Appendix 5) clearly have a requirement to validate computer systems, and this does appear to be missing from the current draft of the SFDA regulations.

There is also a view that SFDA want to limit the costs they are imposing on their local manufacturers at a time when the Chinese government is looking to reduce the cost of drugs and devices while at the same time as it is looking to provide healthcare to 900 million people.

However, if SFDA is serious about building a risk-based approach into the new GMP regulations it is perfectly feasible to include a clear requirement to validate computer systems while leveraging a cost effective risk-based approach which will limit the costs involved in computer systems validation according to risk.

Unless this is included in the new regulations Chinese companies face the prospect of a two tier approach to computer system validation depending on whether products are intended for the domestic or export market. This would be confusing, limit flexible operations and potentially cause problems where Enterprise Systems support domestic and export operations.

Let's hope that SFDA take on-board the need to align with international regulations in this regard and revise the current draft regulations to provide the clarity that the Chinese Life Sciences industry is looking for with respect to computer system validation.

Regulatory Changes In - and For - China

There were some interesting sessions at this morning's keynote sessions at the ISPE-CCPIE conference in Beijing.

The Chinese State FDA presented a brief history of the Chinese GMP regulations, comparing these to other international regulations (e.g. WHO) and although they provided an outline of the new Chinese GMP regulations there was no commitment in terms of a date by which these will be made effective.

Cynics at the conference suggested after the session that this is because 90% of local Chinese companies would not comply with the new Chinese GMP regulations, but while the SFDA do appear to be keeping their options open regarding timing (and appear to be moving away from introducing a target date with a period of grace during which companies could move to compliance) a session from the US FDA gave a different picture.

Its 12 months since the US FDA set up shop (a field office) in China and although there are still only seven full time FDA staff in country - with only half of these conducting for-cause and high priority inspections - there appears to have been good progress in working with the Chinese State FDA (SFDA) as well as some of the Provincial FDA offices.

What we appear to be seeing is the Chinese authorities committing to address the regulatory/quality concerns that threatened to impact their export markets last year while also starting to address the reform of regulations in their home market, recognizing that the latter will take a while to address in a market consisting of literally thousands of (rapidly consolidating) manufacturers and distributors.

The US FDA and SFDA now meet on a monthly basis, with the SFDA acting as observers to some US FDA inspections. The US FDA is helping to fund training for the SFDA, reviewed the pending Chinese GMP regulations and have provided 10 GCP regulations for the SFDA to translate. This is all part of the US FDA strategy of helping to educate other regulatory agencies on the requirements of the US market and to help build inspection capacity (through the education of a cadre of SFDA inspectors trained in international regulatory expectations).

At the same time, multinational Life Sciences companies are sharing concerns about Chinese products with the US FDA, who are in turn discussing issues with the SFDA and there is also agreement between the US FDA and SFDA to focus on ten high risk products (mainly pharmaceutical, but some medical devices).
This co-operation provides evidence of the US FDA's desire to work more effectively with other regulatory agencies and will certainly start to address concerns about Chinese product.

At the same time it will also help the Chinese authorities to better regulate their own market, which is forecast to be world's largest by 2013 (behind the US and Japan). While 'rogue traders' operating out of China will undoubtedly be of continuing concern with respect to product quality and counterfeiting at least problems with the legitimate market are starting to be addressed.

Whatever people may think about the Chinese governments method of implementing change, there is no doubt that effective reforms can be implemented and probably more quickly than in many other markets. Although this is just the beginning there is no doubt that regulatory change is happening - which will be good for patients in China as well as the rest of the world.

China - Here We Come

After a lengthy sales cycle Business & Decision Life Sciences have just closed our first compliance and validation deal in China - to retrospectively and prospectively validate a number of ERP systems for one of the largest state owned pharmaceutical companies in China.

The interesting part is that this is not only driven by a desire to export products to overseas markets such as the US (and not just APIs, but also finished pharmaceuticals), but this is also being driven in part by the Chinese State Food and Drug Administration (SFDA) looking to assure the safety of products in their own local market.

While it is understandable that commercial objectives drive the need to meet US and European regulatory expectations in the export market, the SFDA requiring the validation of computerized systems used in the distribution of pharmaceutical products appears to be a positive sign with respect to improving overall product quality and tackling the issues associated with counterfeiting and supply chain fraud which is a significant problem in China.

We'll be engaging with the client with a mix of local computer system validation experts from our Business & Decision office in Beijing as well as ERP validation experts from the U.K. and U.S. It certainly looks like a very interesting project from a number of perspectives and it will be interesting to see how seriously the Chinese government and local manufactures are taking cGMP and GDP.