Circling the Wagons against Supply-Chain Threats

New consortium encourages pharmaceutical companies to take on the task of fighting economic adulteration together.

When certain heparin products were contaminated with oversulfated chondroitin in 2008, the occurrences did more than raise questions about the quality of imported ingredients and materials. Such adulteration showed how vulnerable the pharmaceutical industry is to criminals.

“What happened to Baxter was a criminal act, and it could have happened to anyone,” says Martin VanTrieste, vice president of operations quality for Amgen. “Good Manufacturing Practices—and their enforcement—are designed to keep honest people honest. They are not designed to catch criminals.”

When discussing the heparin contamination at a PDA workshop on supply-chain security in September 2008, VanTrieste and other pharmaceutical executives decided that the industry needed to work together to improve quality throughout the global supply chain. Amgen and several other pharmaceutical companies have taken the lead by forming Rx-360, a not-for-profit international quality and supply-chain consortium for pharmaceutical and biotechnology companies and their suppliers.

The consortium, formally launching this June, will serve as a clearinghouse of global standards and alerts. “Collaboration is important, because there could be standards and regulations around the world that are intended to tighten the supply chain, but if manufacturers have to go to 50 places for them, it can become chaotic,” says VanTrieste. “That’s when criminals benefit.”
The group will focus on four distinct functions: standard setting, technology, data sharing, and auditing.

For instance, Rx-360 will support manufacturers by identifying and endorsing existing standards and best practices. “We don’t want to redo what other standards bodies have already done,” explains VanTrieste. “We will recognize what standards and best practices already exist and encourage industry to do so, too. If work remains to be done, we’ll point that out, too.”

Rx-360 focuses on supply chains that lead into pharmaceutical manufacturing and packaging operations. Heparin contamination did reveal gaps in the supply chains of active pharmaceutical ingredients and excipients, and those will be priorities for the group. For instance, Rx-360 will be looking at work already done by IPEC and APIC.

But packaging and labeling supply chains are just as vulnerable, says VanTrieste. Labeling materials, for instance, may employ anticounterfeiting measures, but what if those materials themselves are stolen or copied in transit to the manufacturer? “It is important to protect those supplies, too,” says VanTrieste.

In addition to recognizing existing standards and practices, Rx-360 will also be evaluating available technologies to prevent adulteration. Working with research organizations, such as the Massachusetts Institute of Technology and the National Institute in Pharmaceutical Technology and Education, Rx-360 will also research and develop new technologies that will help secure the supply chain.

Data sharing will entail global surveillance and interaction with consortium members. “Rx-360 monitors situations around the world as well as encourages its members to share reports of suspicious activity. We will then actively share reports through an alert system,” says VanTrieste. “For instance, if one company rejects lots because of suspicious events, that information could be shared through the clearinghouse to protect other companies.”

Finally, the consortium hopes to develop a shared auditing model. Pharmaceutical companies routinely audit their suppliers, and given the number of different audits that take place a year, those audits may only last a day or two. “Auditors really need more time to see the whole picture and learn more about a given supplier,” he says. “One comprehensive audit that could be shared by several pharmaceutical companies would not only yield more data on a supplier, but it would also be more efficient.” Shared audits could include those of contract packaging and manufacturing locations.

The consortium members have also addressed concerns about potential competitors setting standards and sharing information regarding downstream suppliers. By modeling itself after groups with similar missions in other industries, Rx-360 hopes to receive similar favorable treatment by antitrust/competition enforcement agencies, such as the Department of Justice (DoJ). Van Trieste says there are many examples. One such organization, Fair Factories Clearinghouse, is employing a very similar shared-auditing model for the apparel supply chain that was favorably reviewed by the DoJ. “The DoJ expressed comfort with this group, in part, because it ultimately promotes human rights around the world.” He says Rx-360’s mission—to ensure supply-chain quality and authenticity to ensure patient safety—is just as critical.

Rx-360 has already begun sending out alerts to professionals who have registered at its Web site. It has also analyzed Senate bills intending to increase penalties for counterfeiting and diversion. The consortium welcomes tougher penalties as necessary deterrents, but it believes that deterrents alone won’t be enough to fight counterfeiting, diversion, and other criminal acts that fall under what FDA calls economic adulteration. VanTrieste notes that FDA and other government agencies are stepping up inspections of foreign operations, and that will certainly help tighten the supply chain. “But at the end of the day, industry is responsible for its suppliers and for policing the supply chain,” he says. “To be successful, we need to work together, collaboratively, to solve problems holistically. Independent teams won’t work.”
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