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Overthelasttwoyears,ClarkstonConsultinghasreleaseditsstudyonQuality in Generic Pharmaceuticals.Asinthepast,thegenericpharmaceuticalindustryhascontinuedtodominatethemarket,with80percentofdrugsprescribedintheU.S.beinggeneric.Thisshouldcomeasnosurprisesincegenericdrugsare80to85percentlessexpensivethantheirbrandcounterpartsandhavesavedU.S.consum-ers,patients,andthehealthcaresystem$1.2trillioninthepastdecade.1
InthisthirdinstallmentoftheQuality in Generic Pharmaceuticalsresearchbrief,wewilldiscussthecontinuedlowvolumetoincidentratioofgenericpharmaceuticals,demonstratingtheirupperhandinsafetyandefficacy.Thisyearwewillalsofocusontheincreaseofinspectionsinforeignfacilities,andhowtheseandotherfindingsareimpactedbypracticesthattheindustryisusing,orlookingtoadopttomaintainitshighstandardsofquality.
ThedatausedforthisanalysiscomesfromtheFDA’sinspectiondatabase.2Ourpreviousreportcompareddatafrom2009to2012.WiththeFDA’sadditionofthe2013inspectionactivity,thisreportwillcompareatwoyearrangeofinspectionsfromOctober2011toSeptember2012,andOctober2012toSeptember2013.Thecomparisonsandresultsfromtheanalysesaredetailedbelow.
Life Sciences∙ Research Brief
QualityinGenericPharmaceuticals
Dispensed Rx vs. Drug Spend Percentages1
0% 20% 40% 60% 80% 100%
Generics
Generics
Brand
Brand
80%
27%
20%
73%
Dispensed Rx
Drug Spend
2 Formoreinformation,[email protected]
Breakdown by Center and Focus Area
Comparingthepreviousyear’sanalysistotheOctober2012toSeptember2013timerange,therewasa28percentdecreaseinthetotalnumberofFDAinspectionsbycenteranda23percentdecreaseinthenumberofdrugandbiologicsinspectionsbyfocusarea.ThedecreaseinnumberofinspectionscanperhapsbeattributedtothereorganizationoftheFDA,whichhasimpactednotonlytheOfficeofGenericDrugs,buttheFDAasawhole.3
Thechartsbelowrepresentweightedaveragesofthenumberofinspectionseachyear.Inspectionsinthefoodanddrugevaluationcentersdecreasedslightly,bysevenandonepercentrespectively.Despitethisdecrease,bothfoodanddrugcentershaveseenthelargestoverallpercentincreaseinthepastfouryears.Thenumberofinspectionsamongothercentershasincreasedinpercentage.4
Clarkston Consulting www.clarkstonconsulting.com
Oct '11 - Sep '12
Oct '12 - Sep '13
# O F I N S P E C T I O N S
Inspections by Center
0 2K 4K 6K 8K 10K 12K 14K
13,4788,594
Center for Devices & Radiological Health 3,3382,883
Center for Veterinary Medicine 2,0611,818
Center for Biologics Evaluation & Research1,9611,781
Center for Drug Evaluation & Research2,5671,658
Center for Tobacco Products 3616
Center for Food Safety & Applied Nutrition
# O F I N S P E C T I O N S
Inspections by Focus Area
0 1K 2K
Drug Quality Assurance
Drug Branding / Labeling
Human Cellular, Tissue, & Gene Therapies
Vaccinated & Allergenic Products
Postmarket Surv. & Epidemiology
Special Field Assignment
Blood & Blood Products13211133
19351237
8136
584606
5642
9372
21
Center for Food Safety & Applied Nutrition
Center for Devices & Radiological Health
Center for Veterinary Medicine
Center for Biologics Evaluation & Research
Center for Drug Evaluation & Research
Center for Tobacco Products
Percentage of Inspections by CenterOct '12 - Sep '13
51%
17%
10%
11%
11%
58%
14%
11%
9%
8%
Percentage of Inspections by CenterOct '11 - Sep '12
Breakingdowntheinspectionsbyfocusarea,therewasaneightpercentdecreaseinDrugQualityAssuranceandaonepercentdecreaseinDrugBranding/Labeling.Thesetwoareassawthelargestgrowthinnumberofinspectionsinthelastfouryears.Also,althoughinspectionsinDrugQualityAssuranceincreasedinthepast,thenumberofincidenceswheretheinspectionsrequiredofficialactionactuallydecreased,whichmayexplainwhytheFDAwishestoconcentrateotherareas.
TheFDAhasoftenstruggledtofullymanageforeignfacilityinspectionsduetoalackofappropriateresourcesandfunding.GDUFAwaspassed,inpart,toaddressthisissueandmostlikelycontributedtothe20percentincreaseinforeignfacilityinspec-tionsin2013comparedtothepreviousOctober2011toSeptember2012timeframe.
3 Formoreinformation,[email protected]
Breakdown by Action Taken
FDAinspectionactivityforpharmaceuticalmanufacturingfacilitiesshowedasixpercentdecreasein“NoAction”inspectionresults,aonepercentdecreasein“OfficialAction”inspectionresults,andasevenpercentincreasein“VoluntaryAction”inspec-tionresults.Theincreasein“VoluntaryAction”resultsgivesthemanufacturingfacilitiesagreaterresponsibilityastheymustdecidetoapplycorrectiveactionsvoluntarily,andtheymustbepreparedtonavigatetheirdecisionandactionprocesseffectively.
Clarkston Consulting www.clarkstonconsulting.com
Blood & Blood
DQA
Branding / Labeling
Therapies
Vaccinated & Allergenic
Postmarket Surv. & Epid.
Percentage of Inspections by Focus AreaOct '11 - Sep '12
33%
48%
2%1%
2%
14%
Percentage of Inspections by Focus AreaOct '12 - Sep '13
40%
2%1%
20%
36%
1%
No Action Required
Voluntary Action Required
Official Action Required
Percentage of Inspection ResultsOct '11 - Sep '12
59%38%
3%
Percentage of Inspection ResultsOct '12 - Sep '13
53%45%
2%
The FDA has often struggled to
fully manage foreign facility in-
spections. GDUFA was passed in
part to address this, and most
likely contributed to the 20
percent increase in foreign faciltiy
inspections.
Formoreinformation,[email protected]
Spotlight on Inspection Results Classifications
Ofthe2,240drugrelatedqualityinspectionsconductedbytheFDAbetweenOctober1,2012andSeptember30,2013,only14resultedinrequestsforOfficialActionbyagenericsmanufacturer(eventhoughgenericsmanufacturersmakeupadisproportionatelygreatervolumeofthedrugswetakethandotraditionalpharma-ceuticalcompanies).ThisisespeciallyimpressivegiventhatGDUFAhaspromptedgreaterfocusoncleaningoutthebacklogofmorethan2,000genericdrugapplications.
Quality by Design
Withinthe57FDAinspectionsrequiringsomeformofofficialaction(includingthe14inspectionsofgenericsmanufacturers),FDAobservationstypicallyfellintooneofthefollowingcategories,withInvestigations,Equipment,andQualityControlrepresentingthemostfrequentlycited.
4Clarkston Consulting www.clarkstonconsulting.com
Official Action Required Percentages
0% 20% 40% 60% 80% 100%
Generics
Generics
Brand
Brand
91%
75%
9%
25%
Oct '12 - Sep '13
Oct '12 - Sep '13
•Complainthandling
•Computersystemvalidation
•Equipment
•Investigations
•Laboratoryrecords
•Materialhandling
•Microbiology
•Packaging/labeling
•QCorganization
•QCtesting
•Reporting
•Stability
•Writtenprocedures
GenericsmanufacturershaveworkedtominimizethesetypesofobservationsbytakingaproactiveapproachtypicallyreferredtoasQualitybyDesign,orQbD.QualitybyDesignappliesbasicprinciplesofbuildinginprocessesandcontrolstoensurerepeatableresultsthatmeetspecifications.Moreemphasisisplacedonpreventingqualityissuesinthefirstplace,ratherthancatchingthematthetimeofbatchrelease.TheconceptofQualitybyDesignisnotnew.Itstretchesbackover60years,generallyfoundinindustriesthatareeither(1)heavilyregulatedduetotheneedforprecisionmanufacturing,or(2)thatmanufacturehighervolume/lowermarginproducts.Brandedpharmaceuticalcompaniestraditionallyenjoyedsuchhighmarginsthattheyusedtheadditionofpeopleratherthantheimprovementofprocessestoensurequality.Butgenericsclearlyfallintobothcategoriesabove,makingQualitybyDesignarelevantandnecessarysetofprinciplesfromwhichtooperate.
ByusingQualitybyDesignprinciples,herearesomeofthewaysthatgenericpharmaceuticalcompaniesareminimizingmanyofthequalityissuesthataremoreprevalentwithintheirbrandedcounterparts:
•ElectronicQualityManagementSystems
•EquipmentCalibrationandManagement
•AdvancesinQualityControl
•UnitDoseSerializationandTraceability
Formoreinformation,[email protected]
Electronic Quality Management Systems
GenericshaveadoptedtheuseofElectronicQualityManagementSystemsoreQMS.Withsetupoftheproperorganizationstructuresandprocesses,aneQMScanprovideeventhelargestandmostcomplexoperationswithacomprehensive,holisticviewofreal-timequalityoperations,aswellasthecriticalandmostimportant“singleversionofthetruth.”Theestablishmentofcommon,globalqualitystandardstobeappliedacrosstheorganization,regardlessofthetypeofmanufacturingfacilityorcountry,ishoweQMSstarts.
Theseguidelines,oftencalled“DivisionDirectives,”arethenbuiltuponatthesite/locationlevel.TheeQMSthenaggregatesvitalstatisticsandinformationinaconsistentfashionbasedonkeyperformanceindicatorsthatarebothcommon(fromtheDivisionDirectives)anduniquetoaparticularlocation.TheeQMSprovidesaconsistentsetofdefinitionssuchthatstatisticsmeanthesamethingfromplacetoplace.Thisinforma-tionisthenpresentedatalllevelsoftheorganizationinadashboardformat.Foranyonewhohasworkedoneithercorporateordivisionquality,theycanseehowthisknowledgecanbeanextremelypowerfultool.TheeQMSallowsforpatternsandtrendstobeanalyzed.Systemicimprovementscanbedirectedtotroubleareas.Resourcescanalsobedeployedinadvanceofmajordownstreamissuesbeingrealized.
Equipment Calibration and Management
Asstatedabove,observationsrelatedtothecalibration,management,cleaning,andmaintenanceofequipmentareoneofthemostcommontypesofobservationsrequiringofficialactionbytheFDA.Toaddressandminimizethis,genericsmanufac-turershaveworkedtostandardizenotonlythephysicalmachineryandmanufacturingenvironments,butalsotheprocessesandsystemsusedtomanagemaintenanceandcalibrationdata.
Mostequipment-relatedobservationscanbeavoidedbyimplementingcontrolsystemsthatenforcedisciplineandconsistency.Stateoftheartequipmentcalibrationandmanagementsystemsprovideinterfacesbetweenthesystemandtheparticularcomponentbeingmanaged.Thecomponentcannotbebroughtonlineuntilaseriesofcheckshavebeenperformed.Thiscanincludepropercleaning,calibration,ormaintenanceofthecomponentorcomponentparts.Securityauthorizationcapabilityalsoensuresthatonlyauthorizedpersonnelwiththeproperbackgroundandtrainingareallowedtoperformsuchmaintenance.
Inevenmoreadvancedscenarios,componentcalibrationandmaintenanceisdoneandverifiedwithouthumanintervention–acapabilitythatwillbecomemorecommonasmanufacturingvolumeneedsincreaseandmanagingerrorsandcostsbecomesmorecritical.
5Clarkston Consulting www.clarkstonconsulting.com
Quality by Design applies basic
principles of building in processes
and controls to ensure repeatable
results that meet specifications.
More emphasis is placed on pre-
venting quality issues in the first
place, rather than catching them
at the time of batch release.
Formoreinformation,[email protected]
Advances in Quality Control
Genericsmanufacturershavebeenquicktoadopttechnologiesthatarefoundreadilyinotherindustries,suchasProcessAnalyticalTechnologyandStatisticalProcessControls.Thesetechnologiesallowforthereductionofcostanderrorwhenevaluatingqualitythroughoutthemanufacturingprocess.However,themostadvancedthinkingintheareaofQualityControl(QC)isseenincompaniesthatsplittraditionalQCfunctions:appraisalandprevention.
Appraisal-focusedQCisthemoretraditionalapproach,wheretestingisbuiltinalongtheway.Prevention-focusedQCallowspersonneltoanalyzetherootcausesofissuesanddealwiththem,inanattempttoeliminatethemalltogetherinasystemic,ratherthanone-offbasis.
Prevention-focusedQCalsolooksforwaystoreducecostsandeliminateactivitiesthatdonotaddvalue.Theseactivitiesareoftenmeasuredbythereductioninincidents,aswellasthereductioninQCconversioncost(i.e.,thecostoftestingallocatedperproductvolumeorproductrevenuebasis).Herearesomecharacteristicsofappraisalversusprevention-focusedqualitycontrol:
APPRAISAL-FOCUSED QUALITY CONTROL PREVENTION-FOCUSED QUALITY CONTROL
Typical of higher margin products Typical of lower margin products
Focus is “after the fact” Focus is “before the fact”
Focus is on recovery and minimizing the impact of the error
Focus is on avoidance and minimizing the occurrence of the error
Stop something wrong from “getting out the door” Stop something wrong from “getting in the door”
Higher “switching costs” that discourage process innovation
Lower “switching costs” that encourage process innovation
Quality costs increase with product volume Quality costs decrease with product volume
Quality is labor intensive Quality is equipment intensive
Indicative of products with profit potential defined by time
Indicative of products with profit potential defined by brand
6Clarkston Consulting www.clarkstonconsulting.com
Generics manufacturers have
been quick to adopt technologies
that are found readily in other
industries, such as Process
Analytical Technology and
Statistical Process Controls.
Formoreinformation,[email protected]
Unit Dose Serialization and Traceability
SerializationandtraceabilityhavebeenmajorareasoffocusforpharmaceuticalcompaniesoverthepastseveralyearsduetobothpendingandenactedlegislationintheU.S.andabroad.Serializationisdefinedastheabilitytoputauniqueidentifieronthesaleabledoseofpharmaceuticalproduct.Traceabilityistheabilitytothentracethatproductthroughdistributionandultimatelytodispensinglocationssuchaspharmacies,hospitals,andclinics.
Mostpharmaceuticalcompanieshavedonesomekindofpilotactivitywithaplantoimplementserialization,traceability,orbothbasedonthemarketswheretheymanufactureandsell.Butleadinggenericscompaniesseetrackandtracenotjustasacomplianceitem,butasawaytofurtherdifferentiatetheirproducts,engagewithpatients,andplanandmeasuretheirabilitytoimpacttheglobalhumanhealthcondition.Ifthesaleableunitdosecanbetracedthroughthesupplychaintotheendconsumer,analysesofdiseasestatesingivengeographies/patientpopulationscanbedone.Beforeandafterpicturescanbecreatedfromtheseanalyses,andpharmaceuticalcompaniesandcaregiverscanworktogethertoensuretherightmedicationsgettotherightpatientpopulationsattherighttimes.
Beyondalloftheregulatorydiscussion,thisistherealpowerandpromiseoftrackandtrace.Genericscompanieswithglobaldistributionofawidevarietyofproductsareuniquelypositionedtodeliveronthispromise.
In Conclusion
Whatoftenmakesheadlinesaretheone-offincidentsthatsurpriseusandcaptureourattention.Whatshouldalsomakeheadlinesisananalysisofthefacts.Thefactsshowthatgenericdrugsfill80percentoftheprescriptionsdispensedintheUS,butconsumejust27percentofthetotaldrugspend.ThefactsalsoshowthatgenericscompanieshaveanextremelylownumberofofficialactionsrequiredbasedontheresultsofFDAqualityinspections.Andfinally,thefactsshowthatthebestgenericscompanieswillcontinuetomakemanufacturingexcellenceanutmostpriority,ultimatelyreapingthebenefitsofincreasedglobalreachandmarketshare,justaspatientswillreapthebenefitsofthereducedcostsofhealthcareoverall.
References1. GenericPharmaceuticalAssociation(GPhA).GPhA2012AnnualReport.2013.2. U.S.FoodandDrugAdministration(FDA).“Inspections,Compliance,Enforcement,andCriminal
Investigations:InspectionsDatabase.”2014.3. U.S.Congress.BudgetControlActof2011.4. ClarkstonConsulting.QualityinGenericPharmaceuticals.2013.5. U.S.FoodandDrugAdministration(FDA).“ForIndustry:GenericDrugUserFeeAmendmentsof2012.”2014.
7Clarkston Consulting www.clarkstonconsulting.com
The Facts are Clear
• Generic drugs fill 80%
of the prescriptions in
the U.S., but consume just
27% of total drug spending
• Generics companies have
an extremely low number of
official actions required based
on the results of FDA quality
inspections
• The best generics companies
will continue to prioritize
manufacturing excellence
0961_0614
About Clarkston Consulting
Clarkston Consulting is a different kind of management and technology consulting firm. We deliver
a unique experience for market leaders within the Consumer Products and Life Sciences industries.
Considering professionalism, expertise, and value as prerequisites, we take service a step further
through our unyielding commitment to the success of people as individuals, both our clients and
our employees. By combining integrity, adaptability, and a whatever-it-takes attitude, we have
achieved an extremely high rate of referral and repeat business and a 10-year average client
satisfaction rating of 97%.
Observations Defined• Complaint Handling.Failuretoestablishandfollowwrittenproceduresdescribingthehandlingofall
writtenandoralcomplaintsregardingadrugproduct.
• Computer System Validation.Failuretomaintainappropriatevalidationofcomputerorotherautomatedprocessesusedtoperformcalculationsinconnectionwithdrugmanufacturingorlaboratoryanalysis.
• Equipment.Writtenproceduresarenotestablishedandfollowedforthecleaningandmaintenanceofequipment,includingutensils,usedinthemanufacture,processing,packingorholdingofadrugproduct.
• Investigations.Failuretothoroughlyinvestigatethefailureofabatchoranyofitscomponentstomeetanyofitsspecificationswhetherornotthebatchhasalreadybeendistributed.
• Laboratory Records.Laboratoryrecordsaredeficientinthattheydonotincludeacompleterecordofalldataobtainedduringtesting.
• Material Handling.Failuretofollowwrittenproceduresdescribingthereceipt,identification,storage,handling,sampling,testing,andapprovalorrejectionofcomponentsanddrugproductcontainersandclosures.
• Microbiology.Failuretofollowappropriatewrittenproceduresdesignedtopreventmicrobiologicalcontaminationofdrugproductstobesterile.
• Packaging/Labeling.Failuretoincludeaspecimenorcopyofeachapprovedlabelandallotherlabelinginthemasterproductionandcontrolrecord.
• QC Organization.Thequalitycontrolunitlacksresponsibilitytoapproveandrejectallproceduresorspecificationsimpactingontheidentity,strength,quality,andpurityofdrugproducts.
• QC Testing.Forexample,Drugproductsfailingtomeetestablishedqualitycontrolcriteriaarenotrejected.
• Reporting.Forexample,FailuretosubmitNDA/ANDAfieldalertreports(FARs)intherequiredtimeframe,withinthreeworkingdaysofbecomingawareofinformationconcerninganysignificantchemical,physical,orotherchangeordeteriorationinthedistributeddrugproduct.
• Stability.Failuretoassurethatadrugproductmeetsapplicablestandardsofidentity,strength,quality,andpurityatthetimeofusebyestablishinganexpirationdateasdeterminedbyappropriatestabilitytesting.
• Written Procedures.Yourfirmdoesnothaveadequatewrittenproceduresforproductionandprocesscontrolsdesignedtoassurethatthedrugproductsyoumanufacturehavetheidentity,strength,quality,and/orpuritytheypurportorarerepresentedtopossess.
Inspection Results Classifications• NAI.NoActionIndicated.Noobjectionableconditionsorpracticeswerefoundduringtheinspection
(orthesignificanceofthedocumentedobjectionableconditionsfounddoesnotjustifyfurtherFDAaction).
• VAI.VoluntaryActionIndicated.Objectionableconditionswerefoundanddocumentedbutthedistrictand/orcenterisnotpreparedtotakeorrecommendanyregulatoryactions(advisory,administrative,orjudicial)sincetheobjectionableconditionsdonotmeetthethresholdforregulatoryaction.ThedistrictmayuseanUntitledLetter,RegulatoryMeetingorothercommunicationwithresponsibleindividualstoinformtheestablishmentoffindingsthatshouldbecorrected.Awrittenresponsebytheestablishmentmaybeanoption,butisnotnecessary.Anycorrectiveactionislefttotheestablishmenttotakevoluntarily.
• OAI.OfficialActionIndicated.Objectionableconditionswerefoundandthedistrictand/orcenterispreparedtotakeorrecommendregulatoryactions(advisory,administrative,orjudicial)sincetheobjectionableconditionsdomeetthethresholdforregulatoryaction.Typically,anOAIclassificationshouldbemadeonlyifanFDA-483hasbeenissuedandthedocumentedevidencesupportstheactionrecommended.
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