"Quality assurance departments are often given a low priority in the pharma industry"

Leading global consultancy firms like Lachman Consultants, Parexel and Quintiles (now QuintilesIMS), have been in demand in India with pharmaceutical companies seeking their services to resolve regulatory compliance issues. While most head honchos of pharma companies will not go on record, they will tell you that once you get a warning letter, you cannot go on your own and represent yourself before the regulator. They need a face now because there is now an element of distrust, according to them. The most efficient way is to engage a consultant. But then, it is only the beginning -- not only does this mean spending a lot on money as most leading consultants are expensive but it also involves a lot of work and investment into rebuilding or redesigning the facilities to address the concerns raised by the regulator. Though it is hard to generalise the costs involved, since cost of remediation and cost of consultants are a function of number and size of plants, their nature (making tablets or injectables), the issue on hand (an observation or a warning letter), unconfirmed figures doing the rounds in pharma circles is that many charge by the hour - some as much as $ 300 to $ 400 an hour. Most leading Indian pharma companies like Sun Pharma, Dr Reddy's and others, have engaged consultants. To get a fix on the nature of the problems and the costs involved, Business Today reached out to Bob Rhoades, senior vice president, Quality and Compliance Services at QuintilesIMS. Here are excerpts from an email response to questions from Business Today's E Kumar Sharma.

What is your reading of the trends in India on the remediation measures by pharmaceutical companies following the US Food & Drug Administration (FDA) letters. How do the numbers look in terms of companies seeking help in remediation compared to earlier?
 
It is well known that the US FDA has increased its enforcement activities, boosting manpower for performing inspections, increasing funding for enforcement, and establishing FDA offices overseas. This is a direct response to the fact that the United States imports around 40 per cent of finished drugs and close to 80 per cent of active pharmaceutical ingredients.
 
The agency carried out 203 inspections at Indian manufacturing sites in 2015, up significantly from the 114 inspections conducted in 2014, and the 66 inspections in 2007. FDA staff also conducted 132 inspections of Chinese manufacturers in 2015, compared with 117 in 2014, and only 19 inspections in 2007. As of February 2016, 41 pharmaceutical manufacturing sites in China and five in Hong Kong were included on FDA's import alert list, which is a list of all the sites banned from shipping products to the US. There were 42 sites under import alert from India, although for some facilities the alert applied only to certain products and not the entire site.
 
The numbers of warning letters are not necessarily indicative of trends in the market, due to the long timeline involved for companies to respond appropriately to resolve issues, based on many variables. An appropriate response to FDA's heightened scrutiny for companies with manufacturing sites in India, China, or any other country, is to dedicate appropriate resources and expertise to ensuring that these sites operate a sustainable quality system as defined by CGMPs. Sustainable compliance comprises the art and science of managing a business with a clear view of regulatory requirements. Done well, it provides competitive advantage, growth, and financial health for the shareholders. Done poorly, it can mean interruption of supply to customers, long-term decline of a firm's credibility, and the ultimate demise of the business enterprise.
 
It is mandatory for them to seek out help from consultants after the FDA letter. This is not new. So what is different this time as compared to earlier occasions in the nature of remediation?
 
In fact, it is not mandatory for a company that receives an FDA form 483 or a Warning Letter to seek help from third-party consultants, although such a move may be suggested by the agency. Partnering with consultants is only mandatory when a consent decree is issued. However, it has become the industry norm, even at the level of the 483, for companies to seek out a third party's assistance, to provide the required skill sets and manpower.
 
In the pharmaceutical industry, a major issue is that quality assurance (QA) departments are typically designed only to cope with positive outcomes, without adequate contingencies for addressing any problems that may arise. QA departments are often given a low priority and/or impacted by cost-related cutbacks, plant consolidations, or mergers. Gradualism is an enemy here, making it harder for companies to make the necessary adjustments to QA within a timely, globally consistent framework. To protect market share and reputation, timely achievement of baseline regulatory compliance is vital. The best time to take action is before quality problems or enforcement actions surface. Timely and proactive efforts to drive sustainable compliance minimize the risk of future quality issues.
 
What can you tell us about the profile of the companies seeking help? What are some of the common errors that need to be corrected?
 
The Indian companies impacted by 483s range from small to multinational operations. Much growth in the generics sector - both in India and elsewhere - has been achieved via acquisitions, yielding organizations with multiple, legacy IT systems, which may face challenges coping with an up-to-date Quality System. Implementing robust and effective information systems that are compliant with regulations is a key challenge faced by all drug manufacturers.
 
Leading violations highlighted in FDA warning letters and enforcement activities include Corrective and Preventative Action Plans (CAPA), complaint handling, and supplier purchasing controls. Data integrity is increasingly also being cited.
 
Consulting is not cheap and is an expensive proposition especially in cases where remediation is involved. Can you please throw some light on the costs involved. Yes, it would vary from company to company, plant to plant and the amount of work involved but what could be the cost range?
 
A baseline audit of a large multi-product facility might cost a pharmaceutical firm $65,000 to $90,000 and involve three to five consultants on site roughly for a week.
 
The high costs of remediation were highlighted by the 2013 closure of Boehringer Ingelheim's US-based Ben Venue Laboratories, following a consent decree for failure to comply with GMP. BI was quoted at the time as saying that despite spending more than $350 million to improve the facility and operations, the company did not want to keep Ben Venue open. The company reportedly characterized the plant as an ageing facility and projected operating losses adding up to about $700 million over the next five years.