Over the past 4 years our generic customers have doubled the numbers of audits.  Yet if all clients audited as the Law requires our Quality Unit would have to add another 3-4 staff, and audits might become so routine they would not be paid the attention they deserve / are given today.

What has happened?

Last century Pharma was a polarized industry - Innovators at one end with rich and growing portfolios of newly patented blockbusters, at the other Generics often labeled as copy-cats (if not pirates).  Small Pharma was a stock market experiment without much impact on the patient. The Pharma market were the rich countries, and the rest a backwater of little interest. Quality and compliance was a matter dominated by FDA.  Outsourcing was an opportunistic activity. 

The Pharma Industry that is emerging in the 21^st century is very different: The Generics industry fills the majority of prescriptions worldwide; the large pharma multinationals have all embraced generics and have all launched ambitious plans to become significant players in off-patent medicines through branded generics.  Everyone's eyes are on the fast growing markets of the BRIC countries (Brazil, Russia, India and China - and Mexico, and Turkey, etc.).  Small Pharma have become the most effective Innovators and appear to have contributed more than 50% of new molecular entities since 2002, something Large Pharma watches carefully to license in, develop and market.  Big pharma is adopting outsourcing as an element of their manufacturing strategy.

In 2005 GMP requirements (finally) became a legal requirement in Europe, but it is not only the European Medicines Agency (recently renamed from EMEA) that is now concerned with quality and compliance globally.  The Japanese also recreated their agency -now named PMDA - that performs annually 120 compliance inspections abroad and has a rich English language web site.  The FDA followed the steps of the USP and opened international offices in India and China. In 2008 Brazil's ANVISA inspected more PhRMA API producers than FDA!   Congress and the European Parliament took an interest in the quality of medicines and in the enforcement of GMPs in medicines but also of APIs.

…and Rx-360 was founded - the way it came to be reflects all the fundamental changes that have impacted our industry:

• It is all embracing:  Big and small, Innovator and Generic; pharma companies and their suppliers and their supplier's suppliers; consultants and regulators, trade agencies, security companies - everyone can participate and contribute.
• It is all embracing; pharma companies, formulators, API producers, excipients producers, intermediate producers, device producers, packaging and security providers…
• Is it American? No, It’s Global - it's open to companies and to regulators of all countries. With under a year of existence it has members headquartered in over 10 countries in 3 continents.      

   

• It speaks English; it meets in Europe and in the USA - but mostly over the net and over the telephone.
• It is transversal - It brings together executives responsible for quality and compliance but also purchasing and general management.  Its board of directors has 25% of its seats reserved for the suppliers of the pharma companies.
• It is transparent and has a clear agenda:  the authenticity and reliability of the pharma supply chain, contributing to patient safety.

Rx-360 was smart enough to recognize these fundamental changes and set itself up to make the most of the opportunities but also to address the challenges - because all is not well in our Industry.

To make a pharmacy you require about 4000 APIs.  Since 1958 FDA approved only 1222 new molecular entities - the industry will therefore inevitably remain fragmented. As the market applies pressure the actors in the supply chain will further specialize and production will de-localize to lower cost countries to yield an intensely globalized and hyper-competitive pharma industry.  Regulators are evolving away from closed nation-state organization, yet they themselves recognize that they can no longer rely on 20th century methods of enforcement and deterrence to ensure patient safety. 

... yet the mission of our Industry remains unchanged; deliver medicines without compromising standards, compliance or safety.  The Industry has recognized that the current business pressures and the new risks brought about by Globalization were too critical and too challenging for 20th century business methods.  The open architecture of Rx-360 is itself the most powerful weapon against cost and crooks: information flows at virtually no cost and at the speed of light, across companies, geographies and the whole supply chain.  Old industry structure boundaries, blind spots and "taboos" are being blown apart. 

The concern with reliability and authenticity is now a red flag that is waved across all links of the chain.  Forewarned is forearmed, and Rx-360 is adopting standards and working on processes to ensure that every supplier tier in turn checks thoroughly its own suppliers - to ensure there are no weak links.

The sharing of audit reports will enable purchasing departments to make informed decisions at a fraction of the cost.  It will allow quality units to direct their audit resources and vendor qualification programs to address problem areas or improvement programs – actions with better returns on their investment.  

There are two types of barriers for pharmaceutical firms to audit adequately their suppliers: 

Internal Barriers	External Barriers
·   Cost ·   Lack of resources ·   For the smaller company –often supplying a single national market only- the volumes of API are too small to compensate the cost of auditing the supplier. ·   Many pharma companies bought the registration dossier (ANDA) ready made and had the source of API imposed on them.	·   The sanction for not auditing is insufficient to drive deterrence; ·   Regulators give the wrong example, as they continue to still inspect based on proximity not on risk

The conclusion is simple – in the uneven battle between the Quality Unit and the Purchasing Department, absent deterrence, Finance wins every time. 

Rx-360 now makes auditing affordable, instant, and reliable.  Membership of Rx-360 will soon become an imperative for being in business if you want to work to high standards of compliance.  Good decision-making demands timely and quality information - that is what you get from Rx-360.