Has Outsourcing Derailed PAT and QbD?

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Pharmaceutical Technology, Pharmaceutical Technology-08-02-2011, Volume 35, Issue 8

Quality management requires more effort in a complex supply chain.

In the days when pharmaceutical companies were vertically integrated, industry and regulators began to develop ways to change the paradigm for pharmaceutical manufacturing from "testing quality out" to "building quality in." These collaborations resulted in innovative approaches under FDA's Critical Path Initiative and included process analytical technology (PAT) and quality by design (QbD).

Daniel R. Matlis

PAT continues to drive industry to gain a deeper understanding of its products and manufacturing processes to allow for tight controls over critical quality attributes (CQAs) and process parameters (CPPs). This approach supports the implementation of control strategies aimed at improving quality while reducing the need for in-process and finished-goods testing. To collect, act, and capitalize on the knowledge gained from identifying and monitoring CQAs and CPPs, many companies have been and continue to invest significant resources in data acquisition, historian, and manufacturing execution systems.

These paradigms were designed to enable life-science organizations to speed time to market, improve quality, and lower costs while facilitating compliance with regulatory requirements.

The outsourcing effect

The pharmaceutical industry is also increasing its level of outsourcing of noncore activities, processes, and supplies as a means to lower costs. As a result of outsourcing, many brand owners have lost their visibility into CQAs and CPPs. When a company does not own the equipment, it is often difficult to collect, act, and capitalize on indicators and parameters. These data are needed to achieve PAT and QbD, and also have a significant effect on drug product safety, efficacy, and quality.

Despite this problem, globalization and outsourcing are here to stay. According to Congressional testimony given by FDA Commissioner Margaret Hamburg, "up to 40% of the drugs Americans take are manufactured outside our borders, and up to 80% of the active pharmaceutical ingredients in those drugs comes from foreign sources" (1).


According to findings from Axendia's Life-Science Global Supply Chain research, 78% of industry executives expect global sourcing to increase, and 76% anticipate their global manufacturing to grow (2). These executives also reported that they expect the top threats in the next five years to stem from these same trends. While 74% identify contract manufacturing as a "significant or moderate risk," 61% view contaminated or nonconforming raw materials as a top threat.

Today, visibility into the pharmaceutical supply chain is largely based on "snapshots in time" with little sharing of common practices and information. According to Axendia's research, more that three quarters (77%) of industry executives responding to the survey indicated that the primary method used to gain visibility into suppliers is a periodic audit. Only 25% stated that they share common practices and information with suppliers and only 3% said they have real-time access to their suppliers' data.

An audit, although required, provides visibility into a specific timeframe. After an on-site visit, the next time a sponsor company is likely to get data from the contract supplier or manufacturer is either when it receives a batch of product along with some form of document such as a quality certificate or a certificate of analysis.

This lack of visibility is illustrated by the low proportion of survey respondents able to gather critical information across their product supply chain in a timely manner. Only 19% of executives reported that they could obtain needed information from critical suppliers within two hours.

Interconnected systems that enable "on-demand-visibility" (i.e., the ability to obtain relevant product information at the appropriate time to enable decisions with a high degree of confidence) within an organization and its suppliers/contract organizations is also limited. Only 28% of survey participants said they could obtain information from their company sites within two hours, and only 43% could obtain the information within a business day.

Potential solutions

This lack of visibility supports the need for the implementation of data acquisition and analytic systems and processes that can help provide on-demand visibility across a company's supply chain. Such information would afford a sponsor company the opportunity to better and more tightly control ingredients, components, and products supplied by third parties. Because brand owners are responsible for the safety, efficacy, and quality of their products, this control is crucial and can help manage and reduce the risk of nonconformances, corrective and preventive actions, and product recalls.

To address the challenges of globalization and outsourcing, companies must implement strategies to provide appropriate levels of visibility across every stakeholder in their supply network.

The willingness of partners to share information was a top issue uncovered by Axendia's research. When asked, "What are your organization's concerns regarding increased regulatory focus on global supply-chain issues?" nearly 60% said they are concerned about the willingness of suppliers to provide information. Forty-four percent are concerned about their distributors' willingness to provide information required to meet regulatory requirements.

This information would ensure that organizations can support the full genealogy and traceability of their products, from raw materials to end users. The willingness of suppliers and contract organizations to provide that information is imperative to achieving this goal. It is not enough to look at the first link in the chain. In an age when contract organizations are also outsourcing, the supply chain is even longer and more difficult to assess. Brand owners, therefore, must go further into their supply chains to assess distributors as well as suppliers to their suppliers. Such visibility would enable downstream processes (whether local, global, or outsourced) to adjust CQAs and CPPs to compensate for product characteristics.

Today, there is mature technology available to support the implementation of interconnected and interoperable systems that provide on-demand-visibility across the supply network. This level of transparency would not only support PAT and QbD approaches, but also would manage product safety, efficacy, and quality.

Daniel R. Matlis is founder and president of Axendia, dmatlis@axendia.com.

Read the full analysis in our special Outsourcing issue.


1. M. Hamburg, Testimony before the US House Subcommittee on Oversight and Investigations, Apr. 13, 2011, www.fda.gov/NewsEvents/Testimony/ucm250710.htm.

2. Axendia Research Report, "Achieving Global Supply Chain Visibility, Control & Collaboration in Life Sciences: Business Imperative, Regulatory Necessity," 2010, www.axendia.com/2010_LS_GSC.html.

[On Aug. 17, 2011], the FDA released its Strategic Plan for Regulatory Science. The Plan identifies eight priority areas of regulatory science where new or enhanced engagement is essential to the continued success of FDA’s public health and regulatory mission.FDA’s Priority #3 is to “Support New Approaches to Improve Product Manufacturing and Quality.”To this end, FDA will continue to promote what it calls “state-of-the-art manufacturing strategies,” Process Analytical Technology (PAT) and Quality-By-Design (QbD).

Author Comment

The challenge for industry and regulators is that outsourcing may be hindering the application of PAT and QbD. As the pharmaceutical industry increases outsourcing, many brand owners have lost their ability to collect, act, and capitalize on critical quality attributes and process parameters. These data are critical to achieve PAT and QbD. This lack of visibility supports the need for the implementation of data acquisition and analytic systems and processes that can provide On-Demand Visibility across a company's supply chain.