 Supply-chain integrity is a critical concern for the pharmaceutical industry and its suppliers, and the industry is taking a step forward by addressing these concerns as a collective whole through the formation of Rx-360. Launched in June, Rx-360 is a nonprofit international pharmaceutical supply-chain consortium whose mission is to create and monitor a global quality system by adopting standards and best practices for the supply chain, supporting technology developments for supply-chain security, monitoring the supply chain, and developing shared audit programs. 


 Nearly 130 industry representatives attended the launch meeting in June to provide feedback on the consortium’s objectives and structure. Rx-360 is a voluntary organization. Membership in Rx-360 is open to suppliers of raw materials, components, excipients, and active pharmaceutical ingredients, and pharmaceutical and biotechnology companies. There are already about 10 members. Another 50 or so pharmaceutical and biopharmaceutical companies as well as 13 trade and standard-setting organizations such as the European Fine Chemicals Group, the Generic Pharmaceutical Association, the International Pharmaceutical Excipient Council of the Americas, the National Institute for Pharmaceutical Technology and Education, the Parenteral Drug Association, and the Society of Chemical Manufacturers and Affiliates, have expressed interest in joining. 


There will be a membership fee, which has not yet been set, but proposals range from $2000 to $20,000, depending on the number of consortium members. Whether fees will be tiered for large and small companies was also still under discussion at press time.



 The consortium’s founding panel members have not publicly disclosed their names or their company affiliations, but Martin Van Trieste, vice-president of quality at Amgen (Thousand Oaks, CA) is functioning as the consortium’s interim director. Van Trieste addressed the core reason for forming Rx-360 at the launch meeting. “Because the economic gain for adulterators is great, the pharmaceutical supply chain is at risk. A crisis like the heparin incident will happen again; it’s just a matter of when,” he said. “We can’t ask regulators to police our suppliers-it’s our legal responsibility.” 


 Industry seems to agree. In a live poll conducted at the meeting, 100% of voting attendees said they believe a consortium like Rx-360 is a necessity in the current environment. Rx-360 plans to address its goals during a three-year period as follows: 
•    Year 1-Adopt standards and best practices: Rather than add to the extensive list of existing regulations, the consortium intends to act as an “umbrella” by adopting already existing standards which it feels will improve supply-chain performance. Members may consider writing new standards in the future if any gaps in standards are identified.
•    Year 2-Implement a shared supplier-audit program: Rx-360 intends to provide to the industry with a wide range of auditing services, including a system that will allow companies to share audit findings and corrective actions. 
•    Year 3-Develop technology: Rx-360 plans to work with academic institutions and research organizations to develop related supply-chain security technologies such as tools that can detect contaminated or adulterated materials.
•    Year 3-Monitoring: The consortium sees itself as a future “clearinghouse for suspicious supplier and supply-chain information that might impact patient safety,” according to the consortium. This clearinghouse, for example, may involve electronic communications to alert consortium members to potential supply-chain disruptions. 


 The primary push for Rx-360 is the idea of sharing supplier-audit reports. Nearly 80% of participants voting at the launch meeting said their current audit programs need work. And according to Van Trieste, the head of the European QP Organization stated that industry would have to conduct 800,000 supplier audits per year to meet current and future regulatory expectations. Yet, “if just 100 companies would use 50 shared audits, industry could save $50–$80 million a year,” said Van Trieste. More important than the cost savings is that, through shared audits, more information can be obtained about a supplier because all parties involved are willing to spend more time on the audit-and more information allows firms to make better decisions, he added. A shared program would also benefit suppliers because they would be able to consolidate multiple customer audits through a single shared audit. 


 Rx-360 is proposing three types of shared supplier audits. The “sponsored” model involves a consortium member company paying for Rx-360 auditors to conduct an audit of a supplier of their choice. This model is essentially a third-party audit system, which benefits smaller pharmaceutical and biopharmaceutical companies that do not have their own audit staff as well as larger companies that want to audit a supplier in a region where they do not have audit coverage. Once completed, the audit report would go into the consortium’s shared audit database so that other members could purchase it. Sixty-seven percent of voting participants at the launch meeting said they support this model. 


 The “Rx-360” model would involve a joint decision among a certain number of consortium members to audit a supplier. Once an Rx-360 team completes the audit, the members that requested the audit would receive the audit report. In addition, the report would go into the shared audit database for purchase by other members. The Rx-360 model was the group favorite at the launch meeting, with 90% of voters supporting the idea as a viable approach.


 The “subscription” model would allow consortium members to submit and pull from a shared database audit reports that have already been conducted, either by their own company or by a third-party. Eighty-one percent of launch-meeting voters support this model. 


 Although there is great support for Rx-360’s proposals, there is a lot of work to be done before a shared audit program can be finalized. During breakout sessions at the launch meeting, industry representatives discussed some concerns about sharing audit reports. For example, what would be the qualifications of the Rx-360 auditors? Would there be an agreed-upon template for audit questionnaires? Given that different companies manufacture different types of drugs, would an Rx-360 audit or another company’s audit fulfill a different member-company’s audit needs?  

Reflecting these concerns, 16% of the voting participants at the launch meeting said shared audits were not an option, and another 33% said shared audits would require significant rework. That said, the remaining participants seemed very open to working with the current proposed program and its models. One potential solution discussed during the breakout sessions was that consortium members use an Rx-360 audit report as an initial assessment for their company to determine to what extent additional review or time is needed for their own audit of a particular supplier. 

During the next few moths, the Rx-360 advisory panel and consortium members have their work cut out for them. Priorities, according to Van Trieste, will be to grow membership; review and address feedback received from the Washington, DC, launch meeting; form various committees to build the consortium’s infrastructure (i.e., adopting audit standards and selecting a secure database to use); and arranging for a European launch meeting. 

To listen to a podcast interview with Martin Van Trieste, log onto 

 http://reg.accelacomm.com/servlet/Frs.frs?Context=LOGENTRY&Source=source&Source_BC=93&Script=/LP/50541861/reg&

Articles

Supply Chain

A new industry consortium of pharmaceutical manufacturers and their suppliers addresses supply-chain integrity, including possible approaches to shared supplier audits.

Pharma Industry Consortium Rx-360 Tackles Supply-Chain Security

The contract manufacturing organization (CMO) Kemwell (Bangalore, Karnataka, India) and Boehringer Ingelheim (BI, Ingelheim, Germany) plan to jointly build a biopharmaceutical manufacturing plant in Bangalore, India. The joint facility provides BI with low-cost production in Asia for its contract biologics manufacturing business and adds contract biologics manufacturing to Kemwell's toolbox.   

  facility will be designed for process development, fermentation, purification, and formulation of biologics for early-phase preclinical and clinical studies. The facility will have drug-substance manufacturing under current good manufacturing practices, sterile fill–finish, and process development to support production of therapeutic proteins from mammalian-cell culture or microbial fermentation. Kemwell will provide in-house expertise in toxicology and clinical development and partner with Indian contract research organizations (CROs) to manage toxicology and clinical studies in India.  

Kemwell's contract-service capabilities are largely centered on formulation development and secondary manufacturing. Its Bangalore site manufactures tablets, semisolids, and liquids and provides pharmaceutical development services. It also performs contract manufacturing of small-molecule active pharmaceutical ingredients (APIs) at its facility in Uppsala, Sweden. The Uppsala facility also produces and packages tablets and suppositories and has annual capacity of one billion tablets. Kemwell acquired the Uppsala facility from Pfizer (New York) in 2006.  

Kemwell's pact with BI is its third alliance with a Western CMO or Big Pharma company during the past 12 months. In November 2008, Kemwell set up a research and development (R&D) facility in Bangalore in partnership with GlaxoSmithKline (London) for developing oral healthcare products. In April 2009, Kemwell formed a strategic pact with the CMO Patheon (Toronto) for client referral and marketing services. The latter deal provides Kemwell with aseptic and high-potency manufacturing and gives Patheon low-cost manufacturing for solids, semisolids, and liquids and related development services in India.  

The Kemwell–BI facility provides BI a low-cost manufacturing base in Asia. BI produces biologics captively for its own products and its contract-manufacturing  business. BI's contract business produces biological drug substances, finished-drug products, and pharmaceutical chemicals. Under the pact, BI is contributing access to its BI-HEX cell-line development process, large-scale commercial production at its European facilities, and client referrals.   

BI's European biopharmaceutical facilities are in Biberach, Germany, and Vienna, Austria. The Biberach facility focuses on mammalian-cell-culture technologies, which include the BI-HEX expression system, for producing high-volume protein therapeutics, primarily monoclonal antibodies. BI's Vienna facility uses microbial and yeast-based fermentation to produce therapeutic proteins, protein subunit vaccines, protein scaffolds, antibody fragments, and plasmid DNA for gene therapy, according to BI's 2008 annual report.   

The Kemwell–BI joint facility represents two important turns to pharmaceutical outsourcing in Asia: the entry of an Indian CMO in contract biologics manufacturing and a joint facility by Indian and Western CMOs. Unlike the established market for contract small-molecule manufacturing, contract biologics manufacturing in India and China is emerging. Indian and Chinese CMOs compete with Western CMOs in contract small-molecule manufacturing, particularly in early-stage intermediates and generic APIs, and to a larger degree Indian CMOs compete in advanced intermediates and custom APIs. Pure-play CMOs for biologics manufacturing in India are less common and largely serve the domestic market (1).  

Recent deals between Western CMOs and pharmaceutical companies with Indian CMOs have involved outright acquisitions of companies or production facilities as well as strategic alliances. These moves have strengthened Indian CMOs' positions in North America and Western Europe and given Western companies access to lower-cost production.   

Some notable deals include Piramal's Pharma Solution's (Mumbai) acquisition of Pfizer's former primary and secondary manufacturing facility in Morpeth, United Kingdom (UK), in 2006, and of Avecia's custom-manufacturing business and related manufacturing facilities in the UK and Canada in 2005. In 2008, Dr. Reddy's Laboratories (Hyderabad, India), bought Dow Chemical's (Midland, MI) small-molecules business associated with its UK sites, as well as BASF's (Ludwigshafen, Germany) manufacturing facility in Shreveport, Louisiana, and related contract-manufacturing business for finished pharmaceuticals. Dr. Reddy's started building its custom manufacturing business in 2005 with the acquisition of a former Roche API manufacturing facility in Cuernavaca, Mexico.  

Dishman Pharmaceutical & Chemicals (Ahmedabad, Gujarat, India) bought the Swiss-based CMO Carbogen Amcis and I03S, a company specializing in ozone chemistry, in 2006, and the UK-based contract-research company Synprotec in 2005. In 2007, Dishman acquired Solvay Pharmaceuticals' (Brussels) fine-chemicals and vitamin businesses, which included facilities in The Netherlands, and the intellectual property rights for fine chemicals, vitamin D, and vitamin D analogues (4). Jubilant Organosys (Noida, Uttar Pradesh, India), made two key acquisitions in contract secondary manufacturing: Hollister-Stier Spokane, WA) in 2007and Draxis (Montreal) in 2008. And in 2006, Degussa (now Evonik, Essen Germany) formed a long-term, nonexclusive agreement with the Indian CMO Hikal (Mumbai), India) for Hikal to supply advanced intermediates and APIs (3). 

Joint facility development and ownership are far less common, although there are some examples. The CRO/CMO Syngene (Bangalore), a subsidiary of the biotechnology company Biocon (Bangalore), opened a dedicated R&D facility for Bristol-Myers Squibb (New York) earlier this year. The CROs Covance (Princeton, NJ) and WuXi Apptec (Shanghai) had announced plans for a joint preclinical facility in 2008, but Covance later announced that it would build the facility alone. 

 and guest contributor for Jim Miller while on vacation, tel. 732.346.3072, 

 1.  P.Van Arnum, "Assessing Market Opportunities in Contract Biologics Manufacturing," 

Outsourcing

A joint biopharmaceutical manufacturing facility in India by Kemwell and Boehringer Ingelheim ushers in a new era.

East Meets West in Contract Biologics Manufacturing

Increased globalization of clinical trials has made effective management of the supply chain for clinical trial materials (CTM)  an evermore crucial component of the drug-development process. The greater complexity inherent with increased globalization, combined with higher levels of outsourcing, has raised the bar in organizational and operational performance for CTM supply for both sponsor companies and contract manufacturers supplying CTM.

“The level of outsourcing in CTM supply is increasing due to a variety of factors,” says Robert Handfield, PhD, Bank of America University Distinguished Professor of Supply Chain Management at North Carolina State University, and director of the Supply Chain Resource Cooperative at North Carolina State University, Jenkins College of Management. Handfield will be speaking at the “Second Vetter Drug Management Leadership Conference: New Pathways in the Pharma Landscape,” which will be held in Lindau on Lake Constance, Germany, Sept. 23–24, 2009. “Pharmaceutical and biopharmaceutical companies are reluctant to increase internal headcounts and see increased outsourcing as means to reduce and manage costs,” he says. “In the face of increased numbers of clinical programs over the next two years, it is important for companies to evaluate and address problems in both clinical operations and the supply chain to avoid delays in the drug-development process.”

Handfield recently completed a clinical supply-chain maturity assessment to examine the current challenges and critical success factors in CTM supply. The study was based on a supply-chain maturity model.  “Proper planning between clinical operations and supply-chain managers is critical,” says Handfield. The assessment analyzed input from clinical operations and supply-chain managers to understand the factors from each area that contribute to problems in CTM supply and the resulting delays in the drug-development process.

Supply-chain managers point to several problems in clinical operations. These include: failure by clinical operations to provide accurate patient-enrollment forecasts; a lack of resources and capacity in clinical operations and distribution; a lack of processes and distribution lanes for new country distribution; and poor clinical visibility and interactive-voice-response-system (IVRS) performance.

In turn, clinical operations personnel point to several supply-chain weaknesses. A key problem relates to the increased globalization of clinical trials and the resulting problems in rest-of-world distribution management that cause delays in receiving CTM on time. These problems involve delays in the customs-clearance processes, a lack of distribution capacity, and poorly established distribution lanes. Other concerns in the supply-chain include poor planning processes in clinical contract manufacturing that can cause delays as well as long lead times for comparator sourcing.

Managers in clinical operations and supply-chain activities also point to some common problems. These involve the necessity of having to re-order production quantities of active pharmaceutical ingredients (APIs), leading to delays of trials; inherited small-molecule programs that are not well-developed that result in delays in trials; and difficulties in controlling shipping-temperature excursions. Effective cold-chain management is of growing importance as the level of biopharmaceuticals in clinical development increases.

“The poor handoff between clinical research, clinical logistics, and supply-chain managers is a reason for delays,” says Handfield. “Effectively managing the interface between clinical operations and supply-chain managers, whether it is done internally or through third-party suppliers in an outsourced relationship, is key.”To avoid these problems, Handfield recommends that regularly scheduled tactical forecasting and planning meetings be held to update clinical trials information and to ensure alignment between planning, contract manufacturing, and logistics. “Planning is a critical lynchpin in the clinical supply chain and relies on effective forecasting, communication, and capacity analysis,” he says. Using tools such as country-risk analysis to prioritize planning requirements and lead times in clinical trials and more importantly, establishing defined roles and responsibilities for staffing in pharmaceutical operations and technology and clinical operations is crucial. “There needs to be a discipline that is driven by metrics and changes in behaviors, with consequences for a lack of compliance to the planning process,” says Handfield.

Another cause for delay in CTM supply relates to securing internal approvals for sourcing and contract-manufacturing arrangements. “A lack of a framework and direction on approval rules and policies can cause undue delays,” says Handfield. To address these problems, Handfield recommends defining more clearly and streamlining the approval process through improved documentation, the use of contract-manufacturing and sourcing approval coordinators, and automation of the approval process.

Tools for improving the planning and implementation of clinical logistics are also valuable. “A common problem relates to missed deliveries to a clinical trial site,” says Handfield. “Time is spent in trying to determine what went wrong with a shipment, locating a shipment, and then trying to get the material delivered.” Limited use of capabilities of IVRS inventory and order tracking, poor coordination in notifying logistics of changes in schedules or trial locations, a lack of performance metrics for logistics, and inadequate resources for staffing and training in logistics are some common problems encountered in clinical logistics. Designing and building a logistics tracking and planning system that effectively uses IVRS capabilities for inventory control and replenishment is critical, says Handfield. Another important strategy is to establish local-country logistics-planning coordinators that can monitor market and government developments, manage local depots and supplier relationships, troubleshoot shipments, and supervise depots.

As in outsourcing any function, the selection of a contract-service provider in CTM supply is a decision that involves proper due diligence based on financial, geographic, and performance criteria. Once a vendor has been selected, ongoing performance evaluations are essential. To evaluate CTM supply, a metric of increasing importance is that of the “perfect order,” which includes various criteria to measure customer satisfaction. “Perfect order means getting the right dose in the right quantity at the right temperature to the clinical trial site,” explains Handfield. Good planning and execution in a collaborative relationship among clinical research, clinical operations, and  contract manufacturers or internal supply-chain staff are needed to reach that metric. It also is important to evaluate performance using a scorecard to provide a quantitative assessment of other factors such as quality, level of responsiveness, and service criteria. 

In sum, proper planning, execution, performance evaluation, and review are essential elements in achieving the continuous improvement required to managing the changing CTM supply chain.

Contract Manufacturing for Clinical Trials

Collaborative planning and execution among clinical research, clinical operations, and supply-chain managers are key elements in effectively managing an increasingly complex and global supply chain for clinical trial materials.

PTSM: Pharmaceutical Technology Sourcing and Management-08-07-2009

Pharma Industry Consortium Rx-360 Tackles Supply-Chain Security

East Meets West in Contract Biologics Manufacturing

Managing the Clinical-Trial-Materials Supply Chain