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More FDA Intervention in Pharmaceuticals Could Be a Bitter Pill to Swallow

By J. Michael Spratt: Up to now the FDA has focused on the manufacturing side of the drug business, making sure that prescription and over-the-counter medications are as safe as they are effective. But with the growing practice of global sourcing, it is beginning to turn its attention to the ingredient side of the business to ensure that raw materials, regardless of their origins, are pharmaceutical grade.

This could have far reaching implications for producers and consumers alike, if drug companies are forced to add staff to conform to new regulations regarding ingredient strength and purity. Indeed, it is rumored that one company is currently adding 100 quality people to rewrite and validate their procedures to ensure that raw materials conform to "higher FDA standards." Another is said to be leaving some areas short-handed in order to increase staff to handle new regulations. Already the target of consumer advocacy and political action groups because of lengthy and costly development and approval processes, drug companies may have to incur additional time and expense to make their front-end processes pharmaceutical grade sterile. This will further hinder their ability to go to market in a timely fashion with competitively priced products. And they will no doubt be subjected to even more pressure from activists and regulators who will expect them to maintain prices of patented medicines despite rising ingredient costs.

So what can these companies do, in the face of these new hurdles, to stay competitive, both from a time-to-market and an expense point of view? The first thing is to wring every last bit of waste out of existing processes, from logistics and formulation to crystallization and packaging, and all areas in between. The optimization of these processes by adopting and implementing better busi-ness practices can potentially yield large returns that will make it easier to accommodate any regulatory changes, both from a financial and an operational perspective. Equally importantly, it will allow them to go to market faster than less proactive competitors. This process should begin with an objective analysis of existing systems and process flows. It should apply appropriate methodologies like Six Sigma, Lean Manufacturing and Employee Involvement Prototyping to achieve short-term process improvements. And it should culminate in a cultural change that promotes continuous improvement. Some companies will be able to do this internally, but others may need outside resources like USC Consulting Group to help. Both approaches have merit and no one approach is right for every circumstance. Suffice it to say that USCCG is very experienced in process optimization (it has been our passion and profession for over thirty years) and at tying operating improvements directly to the bottom line.

Once a drug company’s own house is in order, it needs to put its supply chain on notice to make similar preparations. This will ensure that, once the regulations are promulgated, an acceptable level and quality of raw materials will be available on the most favorable terms. The key to coping with the unknown is to be as prepared as possible so that, when it does come time to adjust, it can be done without undue disruption to operations. Knowing their processes inside and out, and determining in advance where they can be flexible will go a long way toward helping leading drug companies avoid regulatory indigestion.J. Michael Spratt is VP/senior operations manager with USC Consulting Group. He can be reached by calling 1-800-621-6943 or by e-mail at mspratt@usccg.com.

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