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Improving Supply Chain Security Through Better Supplier Management

The recent wave of natural disasters, and likewise, counterfeiting and erratic quality from suppliers have sent tremors through biopharmaceutical supply chains. Because the industry has become increasingly complex and interconnected as companies seek service providers and suppliers worldwide, sometimes from countries with less rigorous regulatory systems or more prone to nature disasters, the need to become more compliant and secure becomes even more critical. Even the best supply chain professional cannot control Mother Nature, but s/he can proactively develop a risk-management program that includes the entire supply chain network of partners to mitigate the impact of these disruptions and protect the integrity of the chain.

There have been recent regulatory initiatives both in the US and Europe geared toward improving pharmaceutical supply chain security through a risk-management approach. The FDA unveiled a new strategy at the end of June to meet the challenges posed by complex global supply chains in a report called the “Pathway to Global Product Safety and Quality”. This report calls for the FDA to partner with global regulators to increase data gathering and sharing to ensure and improve product quality and safety, and leverage industry and third party efforts to mitigate risk. The Drug Safety and Accountability Act of 2010, introduced last year, but unfortunately abandoned after the 2010 mid-term elections, required that drug companies have quality management plans in place requiring suppliers to demonstrate that the drug and its ingredients were manufactured in a manner ensuring safety and quality. While this legislation did not become law, it, along with Pathway to Global Product Safety and Quality report, signals the FDA’s seriousness about identifying and correcting manufacturing weaknesses resulting from poorly performing suppliers and sets the expectation that Sponsors are to be more proactive in managing these suppliers to ensure product quality and to prevent breaches in supply chain security. Commissioner Hamburg solidified the FDA’s intent in the following recent statement, “Global production of FDA-regulated goods has exploded over the past ten years. In addition to an increase in imported finished products, manufacturers increasingly use imported materials and ingredients in their U.S. production facilities, making the distinction between domestic and imported products obsolete. There has been a perfect storm – more products, more manufacturers, more countries and more access. A dramatic change in strategy must be implemented.”

The European Commission published a draft revision to Chapter 7 of the EU GMP Guide, Volume 4 Good Manufacturing Practice Medicinal Products for Human and Veterinary Use Guide addressing control over contractors and the supply chain. This revision provides guidance on outsourced activities beyond the current scope of contract manufacture and analysis operations. Of particular note, the contractor cannot subcontract to a third party without the Sponsor’s prior evaluation and approval, and contractors are prohibited from making any “unauthorized” changes that may adversely affect the outsourced activities. These changes are intended to further secure pharmaceutical supply chains from indiscriminate subcontracting to unqualified or unapproved organizations and arbitrary changes to any outsourced activities without careful consideration of resultant changes. With ever-increasing pressure to decrease costs, this revision will prevent contractors from outsourcing to the lowest cost provider with questionable Quality Systems just to save money.

While we would encourage companies to maintain vigilance on their supply chains as routine good business practice rather than as a regulatory requirement, it is clear that the regulatory authorities attuned to the gravity of this issue will continue to push for changes to ensure that companies are taking appropriate measures to protect patients. Either way, the outcome will be more compliant and secure supply chains and lower risks to patients.

 

Blog article by: Patti Seymour