@Risk

The US Pharmacopeial Convention (USP) has proposed a set of recommended best practices to help the pharmaceutical industry improve supply chain integrity and reduce risks of counterfeit or mishandled medicines.

Improvements like these are long overdue. As I reported last spring, research from PwC concluded that many pharmaceutical supply chains have suffered from what amounts to benign neglect. As a result, they are inefficient, under-utilized and ill-equipped to cope with new medicines, cost pressures and health reform expectations.

Sure, in today’s global economy relationships between suppliers and other business entities are often opaque and difficult to track, but clearly, it’s time for the pharmaceutical industry to step up to better ensure that medicines can be traced back to their original manufacturer, are not adulterated or counterfeited and are transported to their intended destination with their quality intact.

Too many companies have discovered the hard way that “willful blindness” only increases their culpability in the eyes of Federal agents, regulators who now are cracking down on businesses that aren’t compliant with the Foreign Corrupt Practices Act (FCPA).

Don’t take that kind of risk. Resolve that this is the year to start better managing your multiple supplier master databases as you monitor and mitigate supplier risk in a global operating arena.

“There is incentive for all players in the pharmaceutical industry—large and small companies, regulators and standards-setting bodies—to come to some agreement on hotbutton issues such as track and trace technology and, at the larger level, to codify what constitutes a solid, universal approach to global supply chain integrity,” said Praveen Tyle, Ph.D., chief science officer for USP.

USP’s proposed standard covers four main areas: (more…)

Recent drug shortages in the US underscore the complexities, interdependencies and volatility of modern global supplier networks.

According to an IMS Institute for Healthcare Informatics study released last week, most of the 168 products on the drug shortage lists compiled by the US Food and Drug Administration and American Society of Health-System Pharmacists have only one or two manufacturers. Thirteen companies have stopped supplying products on the shortages lists within the past two years. As Murray Aitken, executive director, IMS Institute for Healthcare Informatics, points out, this leaves a growing number of products open to possible production disruptions that cannot be offset rapidly by other manufacturers.

“Patients throughout the US, including hundreds of thousands being treated for cancer, may be at risk of treatment disruption due to drug shortages,” Aitken said. “Understanding the nature of these medicines, their suppliers and the supply volume dynamics – and focusing sharply on the market and supply chains that are most impacted – are essential to formulating meaningful solutions to this complex, and often misunderstood, issue.”

The new study, Drug Shortages: A Closer Look at Products, Suppliers and Volume Volatility, also found that: (more…)

Health care executives now face a variety of unprecedented demands, many of which center on their relatively new networks of extensive global supply chains.

In fact, the combination of extended supply chains due to globalization and the introduction of more specialized products into the marketplace has many health care executives particularly concerned about regulatory compliance, product integrity and security, according to new results from the fourth annual Pain in the (Supply) Chain survey from UPS.

More specifically, the survey, which  questioned senior-level healthcare supply chain executives at pharmaceutical, biotech and medical device companies in the US, Europe and Asia, found that:
(more…)

Earlier this month, the US Food and Drug Administration, together with its European and Australian counterparts, released two reports detailing the results of pilot programs focused on increasing international regulatory collaboration with regard to drug quality and safety.

One report reviewed the Good Clinical Practice (GCP) initiative and assessed the success of information-sharing and collaboration on inspections relating to clinical trials.

The second report reviewed the Active Pharmaceutical Ingredients initiative and presented results of the information-sharing among the FDA, Australia’s Therapeutic Goods Administration and for Europe, the EMA, France, Germany, Ireland, Italy, the United Kingdom and European Directorate for the Quality of Medicines & Healthcare (EDQM). Based on the shared information, the FDA was able to refine its decisions, such as whether to postpone or expedite certain inspections, and in some cases also prohibited imports into the US of a firm’s products based on negative findings from a European inspection. According to the FDA, the information-sharing and collaborative inspections were important milestones in establishing a sense of mutual trust and common purpose among the drug regulatory agencies involved.

In June, the FDA released Pathway to Global Product Safety and Quality, a report which unveiled a new strategy to meet the challenges posed by rapidly rising imports of FDA-regulated products and a complex global supply chain. This FDA report calls for the agency to: (more…)

Federal agencies are cracking down on businesses that aren’t compliant with the Foreign Corrupt Practices Act (FCPA).

The US Department of Justice, the Securities and Exchange Commission and the FBI are joining forces on a rigorous anti-corruption campaign, targeting not only a company’s employees, but also its agents, contractors, investors and suppliers.

It appears that Pharmaceutical and Life Sciences companies are at the top of the DOJ’s list for investigations, and a leading firm in this sector recently agreed to pay $70 million in FCPA penalties. However, supply chain and procurement executives of all multi-national corporations now face distinct risks and business challenges.

In general terms, the FCPA consists of two core elements:

• The anti-bribery provision, which prohibits companies from giving money, gifts, or anything of value to obtain or retain business.
• The internal records and process standards provision, which requires companies to keep accurate records and maintain clear, detailed and adequate controls with employees and trading partners (including suppliers, intermediaries and subsidiaries) to protect against improper payments or influence.

Even though relationships between suppliers and other business entities are often opaque and difficult to track, too many companies have discovered the hard way that “willful blindness” only increases their culpability in the eyes of Federal regulators. Today, lack of evidence to verify proper, compliant management of these trading relationships is itself a cause for investigation. In fact, companies having no knowledge of corrupt payments can be prosecuted even if they were aware of potential warning signs and consciously failed to conduct due diligence and implement controls.

What can you do to mitigate your risk?

For starters, get informed.  Aravo is hosting a one-hour webinar next Wednesday, June 29, 2011, at 9am Pacific (12 pm Eastern) so you can hear how leading pharma companies are working to ensure compliance with FCPA.

Please join us and our featured speaker William Barry, of Richards Kibbe & Orbe LLP, and learn best practices for FCPA program design and tracking around:

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