Business Efficiency and Regulatory Compliance

Nov 01, 2005
Volume 2005 Supplement, Issue 6

Compliance in the pharmaceutical industry used to be virtually synonymous with compliance with the US Food and Drug Administration current good manufacturing practices (CGMPs), which date to the late 1970s. Once a manufacturer validated its processes and systems, it discouraged any changes that would require a time-consuming and expensive revalidation process. Manufacturing productivity, innovation, and product quality often fell victim to this approach.

The compliance challenge has become more complex in recent years as a result of significant changes at FDA and other federal government agencies, ranging from new electronic signature regulations to new manufacturing best practices. There also have been significant changes in the world market such as the increased international trade of drugs, increased drug counterfeiting, and the threat of terrorist acts targeting the food or drug supply, which have a highly visible impact on public health. In addition, increased industry consolidation makes compliance more challenging at huge multinational corporations, which have grown through the acquisition and mergers of companies with disparate compliance initiatives and approaches.

In addition to dealing with manufacturing compliance, pharmaceutical companies today grapple with at least three other sets of requirements, including:

  • General regulations. All companies must comply with many cross-industry regulations relating to employee health and safety, patient privacy, and financial integrity. Examples include Occupational Safety and Health Administration regulations, the protection of patient-related data under the Health Insurance Portability and Accountability Act, and Sarbanes-Oxley requirements.
  • Customer requirements. Increasingly, customers require compliance with quality assurance standards as part of their contractual agreements. For example, they may require certificates of conformance or analysis to accompany each shipment and may base future agreements on both quality performance data and on-time delivery. To remain competitive, manufacturers must efficiently manage these stringent vendor agreements as well as data-exchange requirements.
  • Internal rules. To lay the foundation for compliance with external requirements, internal rules must be built, maintained and documented. These rules include equipment safety procedures, standard operating procedures, nondisclosure rules, and procedures for product launches.

In the pharmaceutical industry, validation requirements and good manufacturing practices have fostered the status quo and thus have been one cause of the industry's manufacturing inefficiency. The rule of thumb has been, Once a system or process has been validated, don't touch it.

Increasingly pressured by competition from generics and public pressure to lower the cost of drugs, many innovator companies see the need to abandon the status quo to focus on improving productivity, efficiency, and quality. Unfortunately, they have often been constrained by the very regulatory processes put in place to protect the public.

Companies operating in the United States may soon get some regulatory relief, thanks to a shift in the way FDA plans to regulate the industry, emphasizing a quality-by-design model as opposed to its historical quality-by-testing results approach and encouraging a risk-based approach to compliance and enforcement.

Thus, pharmaceutical manufacturing is in a state of transition, as the industry evaluates long-standing practices and new technologies and FDA introduces new regulatory paradigms. Increasingly, information technology is playing an important role in helping companies streamline compliance and improve operational efficiency throughout their supply chain, manufacturing, and distribution operations.

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