Pharmaceutical outsourcing : when only the best will do
Practical aspects of validation
Facilitating the Audit Process
Service Providers - Partners in Prime
Directive - choosing the correct clinical
trial service provider will prove crucial to non-EC sponsors
Parker, Quality Assurance and Technical Director, Brecon Pharmaceuticals
Ltd, Hay-on-Wye, UK
An EC Directive to be implemented in May 2004 will have a
profound effect on the way clinical trials are carried out
within the Community. There are three major changes: the use
of a Qualified Person (QP) for release; the requirement for
Investigational Medicinal Products to be manufactured, assembled
and packaged in accordance with GMP guidelines; and the necessity
for various authorisations before a trial can commence. The
QP’s role in satisfying these regulations will be pivotal
and sponsors will be required to have at least one QP “permanently
and continuously” at their disposal. This will result
in a substantial increase in the subcontracting of European
clinical trial service providers by sponsors outside the EC.
Many will be calling on these services for the first time
and there are number of points to be aware of when choosing
a service provider, not least the QP’s training, experience
implementation of Directive 2001/20/EC next May, new regulations
will apply to the way clinical trials involving human subjects
are carried out within the European Community. Prior to this
point, there has been no coordinated legislation or control
over clinical trials in the EC, with local legislation applying
in most cases. However, Germany, France, Spain and Belgium
have opted to implement the Directive early and are already
conducting trials which abide by its requirements. It is likely
too that other Member States will phase in the Directive before
objective of the Directive is to introduce the application
of GxPs to clinical trials. Much of the Directive concerns
Good Clinical Practice, but manufacturing, packaging, labelling
and release are also affected. While the legislation will
cover all clinical studies originating from within the Community,
it will have particular impact on studies carried out by sponsors
based outside the EC.
significant change for these sponsors will be the mandatory
use of a Qualified Person for the release of the studies.
This means that supplies manufactured, assembled or packed
outside the EC will have to be QP released on entry after
appropriate analysis and manufacturing site authentication.
To comply with this requirement, sponsors must have at least
one QP “permanently and continuously” at their
major change is that the Directive requires that Investigational
Medicinal Products (IMPs) are manufactured, assembled and
packaged in accordance with GMP guidelines and that new minimum
labelling requirements are adhered to, as detailed in Annex
13 of the “Rules and Guidance for Pharmaceutical Manufacturers
and Distributors 2002”. The QP is responsible for checking
compliance with all these requirements.
where manufacture, packaging and analysis take place outside
the EC, and there has been no QP release, the only practical
way for the QP to verify compliance with GMP is by site familiarisation.
This requirement also applies to comparators and placebos,
which means they will be subject to the same level of regulation
and inspection if they are unlicensed in the EC.
significant change is that a sponsor company must have a trial
authorisation - on which the release site must be specified
- for a trial before it can commence supply of an IMP.
If the IMP is to be imported into the EC, authorisation must
also be sought for each individual trial import. In addition,
a product specification file must be produced which should
include manufacturing and product analysis details as well
as ethics approval. Again, the QP will be responsible for
checking compliance with these authorisations and with the
product specification file.
contains a number of other changes concerning infringements
or suspensions of the studies, reporting of adverse reactions
and other guidance, but it is the three points outlined above
- the necessity for QP release, adherence to GxPs and
the various authorisations required - which will have
the biggest impact on how trials must be conducted.
sponsors outside the EC will need access to the services of
a European QP if they wish to conduct trials within the Community.
This will naturally result in an increase in the use of European
clinical trial service providers and also reflect the importance
of their role, as it is they who will take the weight of responsibility
for authorisation compliance with respect to GMP.
Directive will consequently usher in a period where many non-EC
organisations will seek to form relationships with European
service providers for the first time and there are a number
of considerations to be taken into account when choosing a
The importance of the QP role in the authorisation process
with regard to GMP compliance cannot be overemphasised. Ideally
providers should be able to call upon a number of QPs with
experience in all dosage form areas to ensure exclusive use
of the provider for the duration of the trial. The broader
the spectrum of QP experience, the greater the versatility
that can be offered.
The Directive requires QPs to undergo “appropriate training”
with respect to experience, knowledge and formal education.
However, there is still some debate as to what exactly constitutes
appropriate training for clinical trials release. This will
need careful formulating between sponsors, authorities and
the outcome, ongoing in-house training to the highest standards
will be of paramount importance. It is therefore essential
to ensure the provider has the necessary infrastructure in
place to support this, as well as an ethos which demands “best
practice” training procedures are maintained.
A service provider’s experience in validating processes,
through the operation of commercial manufacturing or packaging
activities, will also be critical. Validation, whether of
machinery or an operative’s work, is a discipline which
must be instilled in a company’s working procedures.
Companies which already operate under GMP guidelines will
be much better placed to ensure compliance with the Directive.
of validation procedures will initially be particularly relevant
to Phase III and Phase IV studies, where volumes will typically
be inherently larger, and the validation requirements consequently
higher. As time goes by, however, it is likely that the requirements
for validation of stages I and II will be strengthened -
the earlier processes are validated, the greater the potential
savings in due course.
System and SOPs
Standard Operating Procedures (SOPs) are an essential part
of the provider’s modus operandi and an established
contractor with commercial and clinical trials experience
will have procedures that have been developed over a long
period and draw on the experience of numerous audits. The
SOPs will have been diligently scrutinised by both commercial
and government agency auditors from around the world and developed
accordingly - such excellence is difficult to come by
any other way.
Audit experience and a keen knowledge of regulatory requirements
are valuable commodities, as it is highly likely that the
service provider will be called upon to provide an auditing
service to ensure GMP compliance.
Direct experience of commercial packaging provides the contractor
with an immediate benefit concerning the new labelling requirements.
Although they are relatively straightforward, the requirements
vary from country to country and it is important for the service
provider to be able to comply with these, or offer the appropriate
It is advisable to consider a contractor with a full complement
of capabilities and facilities which encompass import and
release services - including analysis, process validation,
method transfer and stability testing - together with
appropriate storage and distribution and returns management.
If required, experience of sourcing EC licensed comparators
and placebos should also be checked.
Directive represents a radical change in the way non-EC sponsors
must now approach and conduct clinical trials held in the
Community, and sponsors should not delay in determining their
future strategy. At a fundamental level, the Directive’s
requirement to name the release site when applying for authorisation
for a trial means that the whole life cycle of the trial will
have to be considered at a very early stage. It will therefore
be necessary to establish a relationship with the service
provider and its associated QPs well before the trial is scheduled
to begin. This is particularly relevant if the service provider
will be required to conduct audits.
not a process to be rushed and by beginning now sponsors will
be more likely to secure the services of a provider with whom
they feel comfortable and in whom they have confidence.
First published in the Autumn 2003 issue of “Global
when only the best will do
changing complexion of the global pharmaceutical market is
creating a climate of great potential for the contract services
sector. But, says John Bath, Chief Executive of Brecon Pharmaceuticals,
to capitalise on these opportunities, companies must invest
time, money and effort into every aspect of their business.
of the global pharmaceutical industry has undergone radical
change in the past decade and the resulting impact on the
outsourcing community has been significant. Contract services
organisations in particular are having to rethink the way
they do business. Traditionally services such as packaging
might have been outsourced for products perceived as being
of lesser importance or lower value to the brand owner, or
to supplement in-house packaging capabilities on an ad hoc
basis. Faced with an unforeseen surge in demand or with production
problems in-house, a pharmaceutical manufacturer might employ
a contract house simply as a means to solve a short-term problem.
this model certainly serves a purpose, it is not necessarily
the most satisfactory means of doing business for either party.
While getting the job done on time, short-term, short-notice
requirements do not allow the contractor to develop an optimum
process and for the customer, additional costs might be incurred
or certain compromises may have to be made. In this scenario,
neither party is able to optimise cost savings, efficiencies
will always be some demand for contingency operations such
as this but the general trend now is for companies to outsource
as part of a strategic plan. As the contract sector matures,
it is increasingly apparent that in many instances, the decision
to outsource provides access to facilities, expertise and
cost savings not readily available in-house. Outsourcing is
now an added-value rather than a stopgap service.
and profit maximisation the drivers for much of the recent
M&A activity in the pharmaceutical sector, the role of
the outsourcing community has become more prominent. While
sales growth and pooled R&D resource are often primary
objectives for any merger, investors also appreciate that
rationalisation is a key to maximising profit. Therefore if
each partner involved in a merger has a production or packaging
facility operating significantly below capacity - a
fairly common state of affairs in the pharmaceutical sector
hitherto - there will undoubtedly be rationalisation.
A single unit operating close to capacity is ostensibly more
efficient and carries fewer overheads. However, the flipside
here is that the manufacturer’s ability to react to
sudden peaks in demand utilising in-house resources is considerably
is a laudable trend in all areas of business towards focussing
on core competencies. For ‘big pharma’ these are
research & development and - once a product has
gained regulatory approval - capitalising on market
presence and brand identity to maximise sales. Critical mass
is therefore concentrated in these areas, with intermediate
activities often regarded as peripheral. Nowhere is this more
starkly illustrated than in the case of virtual pharmaceutical
companies, which have never had and never intend to have anything
other than R&D and marketing functions.
To a greater
degree than ever before, pharmaceutical companies now stand
or fall by the perceived strength of their drug pipeline.
It used to be the common perception that once marketing approval
for a new drug had been obtained, its developer could relax
and reap the fruits of his labour in the form of fat profits
during several years of exclusivity. Whether this was ever
the case is open to debate but it is certainly not an accurate
depiction of the current situation.
are several pertinent factors here. The already huge costs
of drug development continue on an ever-upward spiral, against
a background of sustained pressure on healthcare costs from
governments around the world. Nor is it any longer the case
that the quest is necessarily over when one company patents
a treatment for a particular condition. Recent court actions
have shown that patents for competing products are valid,
provided that the therapeutic action is demonstrably different.
So the race for an effective treatment for ‘lucrative’
conditions continues, even after one or more companies has
crossed the finishing line.
value of companies so closely allied to the health of their
respective pipelines, it is not surprising that no stone is
left unturned in the search for a new blockbuster. This has
extended to the revival of projects previously shelved. Whether
deemed too costly, or not providing sufficiently strong indicators
for success, many studies are now under review. Scientific
advances such as the genome project may rejuvenate the prospects
for some, while others may be shown to be applicable to different
medical conditions from those for which they were originally
intended. The aim here is to avoid the daunting costs associated
with developing a new drug ab initio and, crucially, to maximise
sales under patent by cutting development time.
time to market has become something of a mantra for the pharmaceutical
sector. Typically seven out of seventeen years of patent protection
are spent in researching and developing a new drug; any reduction
in this time equates to increased profits through greater
sales during the period of exclusivity. Some of the initiatives
being undertaken to achieve this goal are described above;
a further trend is for concurrent multi-market launches, as
opposed to the sequential territory launches seen previously.
The involvement of a range of contract organisations can make
a significant contribution towards achieving this objective.
therefore, the contract sector now has the opportunity to
offer a wider range of services to its pharmaceutical industry
customers and to become involved at an earlier stage in the
drug life cycle. Business commitments of several years’
duration are commonplace, with the attendant advantages of
better planning and greater efficiencies for both parties.
do we need to do to earn our place in this exciting scenario?
Whatever service we offer, from formulation development right
through study management to commercial packaging, there is
one commodity in which we must trade above all other -
confidence. We must inspire confidence in our expertise, to
the extent that customers would feel able to walk away from
a contract, once awarded, knowing that it is being handled
by the best in the business and that the results or goods
will be delivered on time and in a professional manner.
of course, customer involvement is usually extensive. Close
lines of communication and a partnership approach are the
key ingredients for a successful and enduring relationship,
whatever the volume of business involved. Much like a marriage,
the relationship works best when each party needs the other
in equal measure.
of core competencies is significant here. The contract organisation
must invest time and money in developing expertise complementary
to that of its customers. At Brecon, for example, we have
built up a business based on excellence in packaging for solid
dose products. Having worked for over 100 major pharmaceutical
companies worldwide, we can offer unrivalled experience in
packing thousands of products into blisters, sachets and bottles.
We have invested in people and infrastructure to ensure that
we can fulfil our commitments in the best possible manner.
Our range of equipment gives us the flexibility to respond
to any requirement quickly and efficiently. Few of our customers
have had the opportunity to develop such expertise in-house,
for the simple reason that their product range is limited.
In this way we graduate from simply the contract packer supplying
extra capacity on an ad hoc basis to the status of valuable
contract services sector is fiercely competitive, with many
companies offering outwardly similar competencies and capacity.
How, then, do we differentiate ourselves?
ethos is a rather nebulous concept but judging by the frequent
customer audits carried out here at Brecon, nonetheless significant.
We are passionate in our belief that each member of every
team must take responsibility for his or her part of the process
to ensure that the end result is never less than excellent
and this certainly comes across in the majority of audit reports.
Training is therefore at the heart of our business strategy,
to the extent that we would be confident of any of our employees
being challenged on GMP or protocol issues and coming through
with flying colours.
to training carries considerable costs but the rewards can
be surprisingly tangible. In our case, it has been a significant
factor in helping us to win contracts packing product for
the Japanese market, acknowledged as the most demanding in
the world. Training has enabled us to identify and retain
the staff best-suited to carrying out the rigorous product
inspection routines essential to these contracts.
and maintaining best practice is vital to the continuing success
of a contract organisation and the external audit fulfils
a valuable function in this context. Growth in demand for
outsourcing has turned these into a regular fixture, which
we at Brecon welcome. With 20 years’ experience working
with scores of pharmaceutical companies, we have established
protocols and procedures which are an amalgamation of the
industry’s best. Nevertheless, there is always opportunity
for improvement and so we view audits and the fresh view they
bring to our business not as a test but rather as one of the
best ways to improve further.
a highly-regulated industry and as such, the outsourcing community
must always remain abreast of changes in the regulatory environment.
One issue currently taxing all those involved in the clinical
studies sector is the impending implementation of the EU Clinical
Trials Directive 2001/20/EC. Member States must adopt and
publish laws, regulations and administrative provisions to
comply with the Directive by May 2003 and must have applied
these provisions by May 2004. The objective of the legislation
is to ensure the application of GxPs to all clinical trials
involving human subjects and it will have particular impact
on studies whose sponsor is based outside the EU area, since
release of study materials by a European QP will be mandatory.
eight months to go before the due date for publication of
laws, some of the detail is still to be resolved, causing
headaches for the regulators, the pharmaceutical industry
and the outsourcing community alike. A major issue is the
appropriate training of QPs: article 23 of Council Directive
75/319/EEC (2001/83/EC) sets out the threefold requirement
of formal training, practical experience and professional
assessment. However, with the legal issues not yet finalised,
there are clearly difficulties in determining what constitutes
appropriate training, experience and assessment. In these
circumstances, the GxP protocols will certainly need to be
formulated in close consultation with the authorities and
the study sponsors; ongoing in-house training to the highest
standards will be of paramount importance.
of the Directive is the recognition of the globalisation of
the pharmaceutical outsourcing community, reflecting that
of the industry it serves. Contract organisations based outside
the EU must have access to the services of a European QP if
they are to continue to offer a comprehensive international
clinical trials service as required by their customers. The
Directive notwithstanding, this requirement is one which all
service providers should be seeking to address.
in mind, Brecon established a joint venture in 1998 with ProClinical
Pharmaceutical Services Inc (Philadelphia, PA). ProClinical’s
services include formulation development of Phase I-IV clinical
supplies in various dosage forms, analytical testing, packaging,
labelling, storage and distribution. Again this is a relationship
based on equal need, with ProClinical having access to a European
QP release facility via Brecon and Brecon gaining a point
of entry to the North American market. Most importantly, however,
the relationship benefits the customers of both parties, putting
at their disposal a broader portfolio of services in a wider
of the extent of services on offer is a moot point for the
outsourcing community. With less infrastructure in-house,
our pharmaceutical customers are understandably looking to
one-stop shopping to reduce administration. So how do we expand
our offering without diluting our expertise, or losing focus
on our core competencies? How do we retain the personal touch
of a small organisation, while expanding to satisfy the requirements
of our business partners?
company ethos is the key. Continuing personnel development
is essential and we must establish a set of customer-focused
values, transmitted throughout the organisation, which ensure
that every team member understands the vital role he or she
plays. However large we grow and whatever services we add
to our portfolio, maintaining our reputation for quality,
service and dependability must remain our foremost objective.
published in Manufacturing Chemist, September 2002
aspects of validation
are looking to establish a practical, standardised approach
to validation,” says David Woolley, who joined Brecon
recently in the key post of Validation Manager.
great deal is written and spoken about this subject and to
the uninitiated, it might seem to be one of enormous technical
complexity. What we are aiming to do here at Brecon, however,
is to demystify validation and approach the subject in a very
down to earth fashion. By breaking it down into core disciplines
such as cleaning, operation, maintenance and calibration,
we are creating transparency for ourselves, our suppliers
and for our customers.”
validation is about verifying that equipment and associated
software is capable of fulfilling its stated purpose. The
process should therefore begin well before equipment is specified,
with the first step being the compilation of a URS (User Requirement
Specification) detailing exactly what the user - and,
in many cases, its customers - want the equipment to
do and how. At this stage the document represents an ideal
scenario, a series of benchmarks against which the candidate
equipment can be measured. The next step is to check off the
items in the URS against the features of the various pieces
of equipment under consideration and through this process
of elimination, to identify which option most closely matches
the specification. It would be a fortunate buyer indeed who
was able to locate his ideal machine through this process
but nevertheless, a leading contender should emerge.
choice has been made, the URS will again be used as the basis
for a second process - that of Design Qualification
(DQ). This involves checking off the various aspects of the
URS against the machine specification to identify positives
and negatives and possibly giving the prospective vendor the
opportunity to address the negatives.
order placement, the process moves to its practical stage
with Factory Acceptance Tests (FATs). It is at this stage
that the vendor must prove to the purchaser’s satisfaction
that the equipment does indeed match up to its specification.
at the equipment supplier’s site, the equipment is installed
at the user’s site, at which point Operational Qualification
(OQ) is carried out. The purpose of these tests is to confirm
on site that the equipment is operating safely and correctly.
Confirmation of calibration here is essential, as are cleaning,
maintenance and training.
specific testing is performed during Performance qualifications
(PQ’s). This process confirms the operation of the equipment
in specific applications and is the major area of challenge
as far as the customer is concerned.
a validation professional, it’s my job to convey to
colleagues and customers that validation has clear practical
advantages which can help us all,” says David Woolley.
“Initially it is about proving the equipment can do
what it claims to do. However, PQ’s should not be seen
to be the end of the process: validation should continue throughout
the life of the machine to ensure that it continues to perform
safely, securely and at optimum levels. This can be as simple
as establishing and adhering to a routine for calibration
of critical functions such as temperature and pressure, or
as complex as software change control when a sophisticated
system is upgraded.”
and validated equipment has benefits for all parties. For
the user, it ensures that productivity is maximised. For the
equipment supplier, it reduces the incidence of spurious breakdown
callouts. And for the customer, it means that his product
is packed to consistently high standards and that he can expect
a reliable service. The establishment and maintenance of good
practice in the area of validation, such as documented cleandown
between batches, has a direct impact on the quality of the
finished product and minimises the potential for reject packs.
published in Packaging Today, August 2002
Facilitating the Audit
External auditing of suppliers is a time consuming
exercise, but there are ways to ease the process. A Veteran
of over 500 audits, Mike Parker of Brecon Pharmaceuticals,
audits are an expensive business, both for the auditing company
and the supplier or contractor under scrutiny. The time involved
in preparation, the audit itself, subsequent questions and
clarifications and, for the auditing company, the writing
up of the report, is not inconsiderable.
Even for a small facility, the hours involved for the total
process will tie up the personnel involved for upwards of
three days and for larger sites it could be considerably longer.
Times this by the number of suppliers a typical pharmaceutical
house has - plus the number of internal audits carried
out - and it comes as no surprise that large pharmaceutical
houses have teams of dedicated auditors and even small concerns
will have some staff seriously distracted from their “real
jobs” by the auditing process.
Of course, these personnel are carrying out a vital role in
ensuring that those supplying goods and services to the company
are of a standard. Their role in maintaining internal procedures
will also reflect positively on the quality of their end products.
This, in itself more than justifies their cost to the business
and over time it is likely they will save the company considerable
sums by helping to avoid the repercussions associated with,
for example, reject products, late deliveries, or even recalls.
So while audit teams may not be considered a direct contributor
to the bottom line, they can be instrumental in maintaining
it and in some circumstances, preventing it getting badly
dented. Nonetheless, the fact cannot be avoided that audits
represent a considerable cost to businesses and it is in the
interest of both the auditing company and the audited supplier
to make the process as efficient as possible in terms of both
time and effectiveness.
Obviously, there are no tablets of stone, as the concept of
a “standard” audit is by and large a misnomer.
A number of variables - not least the nature of the
job the third party is carrying out - will ensure that
each audit is likely to be unique in some way. However, there
are predictable elements of every audit which can be pre-planned
and basic tenets which can be followed which will make the
process more efficient.
The following is particularly applicable when auditing suppliers
of contract services, but it also has relevance to those looking
at component and material suppliers. Some of the points made
may appear obvious, but often it is the simplest of things
which cause misinterpretations and delays.
Firstly, it is frequently the case that certain information
- from both sides - can be supplied ahead of audit
day so pre-preparation is maximised and any questions or required
clarifications can be properly considered. Information that
is not pre-supplied should be readily at hand on audit day.
It is therefore useful to make the company to be audited aware
of your requirements.
For example, you will want to discuss the organogram of the
company structure to assure yourself that the potential supplier
has the required skill-sets and procedures to cope with the
demands of the contract. Similarly, you will need to see all
A word to the wise here too. Please do not be tempted to apply
your own SOPs to a third party’s operation. Contractors
will have aspects of their SOPs that can be modified, within
limits, to incorporate particular needs - say with differing
limits on reconciliation for bulk product - but it is
not recommended that you insist on changing them entirely
to dovetail with your own internal procedures as the operational
personnel’s unfamiliarity with them could lead to difficulties.
It may help to reassure you if you remember that most contractor’s
SOPs have been developed over a long period and are the result
of hundreds of audits which equates to months’ worth
of “free” consultancy. They have been diligently
scrutinised by both commercial and government agency auditors
from around the world and adjusted appropriately - they
are effectively as good as you get.
It is also important to ensure that all the personnel who
are key to the project on the contractor’s side are
available during the period of the visit, as it may be that
questions will arise that only they can answer. However, if
you make this request, try not to make a habit of changing
the date of the audit as this will obviously cause friction
with the contractor who may have rescheduled the diaries of
various senior personnel to comply with your demands.
There are also a number of things you can do to ease the process
and save everybody time. You have presumably checked the company’s
accreditations and testimonials and seen its work, so the
basis of your visit should be co-operative rather than confrontational.
As such the audit should not be treated strictly as an exam,
but more as an investigation to ascertain whether, with the
necessary input from you, the contractor can provide the right
quality product within the specified time schedule. If the
audit is successful a number of variables may then come into
play when negotiating the contract.
It is important that the contractor knows exactly what the
job entails so that they can be confident they can meet your
needs (It may appear very obvious, but those carrying out
the audit on the day should also be fully briefed on the requirements).
For example, it helps if the contractor knows if they will
be required to supply materials and components and who will
apply controls to these items. Other areas to consider include
the type and design of the pack, especially if it is an unusual
format which may need specialist forming or handling. The
nature of the labelling and language requirements should also
be disclosed to ensure they can comply with your needs.
Most contractors will also be able source analytical services
if you required them to, but it is worth checking that they
have the experience and contacts to fulfil this need. Similarly,
if you want the contractor to handle final release, make sure
they are happy to take on this responsibility.
It is useful too if the audit plan is supplied prior to the
site visit so that the contractor can carry out some preparatory
planning for specific issues that may arise. This is not a
case of “making it easy” for the contractor, it
is a way of ensuring they are as best prepared as they can
be to respond to your requests.
Indeed, the more pre-knowledge a prospective contractor has
about the job, the more relevant and effective the audit will
be. Moreover, should the contractor be awarded the project,
less discussion and planning will be needed at a later stage
when time will undoubtedly be more pressing.
In order to process this information in as quick and clear
a way as possible, it is also vital that both sides establish
firm channels of communication for both commercial and technical
It may also be pertinent to contact colleagues ahead of the
audit to check if the company to be visited is being considered
for any other contracts, in which case you could save a re-visit
by covering specific points they may wish to be raised.
As mentioned, at the audit itself, adopt a positive attitude
towards your prospective partner and the day will run much
more smoothly without altering the result. If things are not
what they should be, it will soon become apparent anyway and
if everything is up to spec, you will not have put a potential
strain on the relationship. How the company applies standards
can be gauged by close observation of operatives and procedures
during the visit. Conversing with staff at all levels is also
useful to gain an insight into the company’s philosophy
and modus operandi.
The most crucial part of any audit is the summary session
- if there are any concerns from any party, they must
come up at this point. All facts should be agreed at this
session before the report is written-up and as a final measure
to ensure it is a true account, the report should be sent
to the audited company for checking before it is finalised.
This should not engender a debate unless the contractor believes
there are blatant errors in the findings. The primary reason
for this exercise is simply that factual inaccuracies do find
their way into reports. These may be down to simple misinterpretations
on the auditor’s behalf, or poor communication from
the audited company. Whatever, it makes sense to avoid embarrassment
all round by passing it in front of the eyes of all senior
This co-operation in getting a true and correct result should
reflect the overall manner in which the relationship between
client and contractor is conducted, as there is an inevitable
link between the nature of this relationship and the degree
of success of the project.
The more information exchanged and the more the client takes
the contractor into their confidence, the better the result
will be. By fostering a “partnership” approach,
the contractor will accept a degree of ownership of the project
which ensures a high level of service and, if required, innovation.
Indeed, given the right brief, we find we can often provide
added value way beyond the simple fulfilment of the contract
through application of the experience and expertise we have
gained over the years.
So what of the future of audits? The most glaringly obvious
fact about current practice is the duplication. Every major
pharmaceutical company in the world and numerous middle-sized
and small concerns, have passed through Brecon’s doors,
all basically to check the same equipment, procedures and
A central database of approved contractors held and monitored
by an industry body or government agency and backed up by
the agreed use of testimonials and references would seem to
make perfect sense. The funding of such a body would only
represent a fraction of that spent by drug houses annually
on external audits.
Of course, audits can have differing emphases, or be very
product specific and if the database does not hold the required
information, individual audits could still be carried out.
New audits and re-audits at specific intervals would also
continue, but the total number would be radically reduced
which would ultimately cut the time to market for many products,
a crucial factor nowadays for most companies.
To rationalise the audit process itself and to ensure a full
and frank exchange of information between the parties, standard
- though flexible - pre-audit questionnaires could
also be compiled. One would be completed by the contractor
to save time at audit and the other by the client to ensure
the audit is as relevant as possible.
For the nearer future though, I believe the industry will
increasingly move away from the traditional sponsor/contractor
relationship and the trend towards constructing partnerships
and even co-sponsorships will strengthen, which will inevitably
change the nature of the audit process for the better.
Top ten tips for an effective audit
the contractor aware of your full information needs pre-audit
as much information as possible supplied prior to audit
colleagues of the audit as it could save a re-visit
a full job specification and audit plan in advance
all the contractor’s key staff are on-site on the day
responsibilities of each party at an early stage
firm channels of communication
a partnership approach to maximise contractor’s commitment
all concerns and questions are aired at summary session
the contractor sight of the report before finalising it
This feature first appeared in the Spring 2002 issue
of PMPS magazine
- Partners in Prime
pharmaceutical services companies face the most challenging
of tasks, as they are required to offer speed, flexibility
and competitive pricing combined with impeccable standards.
Yet, says Steve Kemp, Business Development Director of Brecon
Pharmaceuticals, this ideal can be achieved when a partnership
approach is adopted.
The rash of mergers and acquisitions over the past decade
has transformed the research-based pharmaceutical sector.
Almost without exception, the top companies in the sector
are shedding 'non-core' functions such as manufacture and
packaging, as a diverse range of operations is increasingly
viewed as a hindrance rather than an asset in today's aggressive
Traditionally, large companies existed to reduce transaction
costs - that is, to retain the profit generated by each stage
of product development, manufacture and sale. However, current
business models suggest that focussing on core competencies
is more desirable, and with improved communications and the
globalisation of the economy, it is easier to identify the
most suitable suppliers and the best prices for services on
the open market. The attraction of variable rather than fixed
costs is also considerable.
Many mergers and acquisitions have been justified on the basis
of aggressive sales forecasts, which can only be achieved
if companies are able to increase the number of new drugs
coming out of their pipelines. Several of the world's top-selling
drugs will come off patent in the next few years and these
must be replaced by New Chemical Entities (NCEs) if revenue
streams are to be maintained and increased. Most companies
in this sector now have a clear strategy to focus on their
core competencies of drug development and marketing, pledging
publicly to increase the amount of sales revenue they spend
on R&D and to cut typical time to market for NCEs by as
much as 30%.
These are ambitious targets indeed but in the context of the
average of £350m development costs for each NCE and
£1m sales revenue each day during patent protection,
they are understandable enough.
With drug companies avowedly focussing on the beginning and
the end of the product cycle, a wide range of services once
performed by full- time employees is now outsourced. Estimated
at £13bn in 1998, the pharmaceutical outsourcing market
continues to grow at some 20% p.a.
Outsourcing creates access to expertise and production capacity
and can be a major factor in reducing time to market for a
new product. It also allows pharmaceutical companies to be
fast and flexible, while avoiding the financial risk associated
with investment in facilities and personnel. It is attractive
because it provides the flexibility required, whatever the
degree of success achieved by the product in question.
Providers of outsourced services take many and varied forms
but they must all offer in common speed and flexibility of
response. The degree of regulatory control applicable to the
production of pharmaceutical products, however, means that
no corners must be cut, whatever the pressure to offer flexibility
and fast turnaround combined with a competitive price.
The nature and extent of outsourcing also varies widely from
company to company and from product to product. The linchpin
of many such arrangements is the contract research organisation
(CRO). Established initially to take drugs through the clinical
trials procedure, many CROs have now expanded the range of
services they offer, with some now moving into early stage
R&D, while others are offering production, packaging or
sales and marketing services. Others in turn contract out
requirements such as the preparation of packs for clinical
trials to companies with expertise in this area.
The growth in the outsourcing sector and the increased range
of services it offers is engendering a new spirit of partnership
with the pharmaceutical industry.
In common with most companies in the field, Brecon Pharmaceuticals
has experienced significant changes in the past decade. A
decade ago, outsourcing was generally viewed as something
of an emergency measure, and certainly not a long-term option.
Over the years this perception has changed and ongoing partnerships
are now more the rule than the exception. Teamwork has replaced
the old approach of simply handing over aspects of research,
manufacture or packaging and naming a date by which the finished
product must be delivered.
For example, on the packaging side, many pharmaceutical companies
use contract houses as an extension of their in-house facilities.
As order patterns become less predictable, these companies
can remain efficient and competitive by outsourcing small
orders and those requiring rapid turnaround, for which their
in-house facilities are not always appropriate.
Most recently, the emergence of 'virtual' pharmaceutical companies,
established for the sole purpose of drug discovery, has given
a further boost to the sector. These companies require production
on demand, with no overhead for production and packing facilities
Selecting the right service provider is a lengthy and complex
process - each company and each project has different criteria.
However, there are certain requirements which are common to
all and which should be addressed at the earliest stage of
the supplier demonstrate experience relevant to the project
the company have a track record of delivering on time and
to the agreed specification?
it provide the required degree of flexibility, in terms of
availability of suitably qualified personnel and relevant
it accredited by all the authorities appropriate to the project?
The level of expertise available in service companies is typically
extremely high, as most tend to focus on a specific area of
the supply chain. Moreover, established companies will have
been audited many more times than their counterparts in the
research-based pharmaceutical industry and be adaptable to
the exigencies of their many different customers. Brecon,
for example, has in the past developed a number of new services
and facilities in direct response to customer requirements.
It may also be true that as service companies rely exclusively
on fulfilling specific tasks and, ideally, retaining clients,
the levels of service and quality are often greater than those
achieved in-house. In certain circumstances, particularly
when a partnership approach is adopted, the service provider
can add value way beyond the simple fulfilment of the contract
through the application of their experience and expertise.
A major contributing factor in the success of any such relationship
is the degree of openness existing between the parties. A
key aspect here is the audit process, conducted before any
work commences. The more information provided by the Contract
Giver at the audit stage, the better the Contract Acceptor
will be able to perform, if and when an order is forthcoming.
Many contract projects are undertaken in pressure situations,
so time is of the essence.
Auditors should also be briefed by their employers on the
precise nature of the project for which the potential supplier
is being considered. A focused audit will produce much more
satisfactory results for both parties than a non-specific
one. Any perception of the audit as a negative process is
now outdated: one the one hand, auditors should be looking
to save their employer time and money by find a suitable supplier
as quickly as possible, rather than seeking minor non-compliances.
On the other, the potential supplier must view it as an opportunity
to demonstrate the extent of his capabilities.
Successful outsourcing reduces costs, improves flexibility
and enlarges the pool of expertise available to the research-based
pharmaceutical sector. As such, it is now generally part of
a strategic plan rather than an emergency measure. And long-term
business relationships are most fruitful when founded on mutual
trust and confidence.
published in Manufacturing Chemist, September 2001