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Life Sciences Life Sciences Industry Trends and Update Bart Reitter, Director of Marketing – Life Sciences QAD West Coast User Group November 2014.

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Presentation on theme: "Life Sciences Life Sciences Industry Trends and Update Bart Reitter, Director of Marketing – Life Sciences QAD West Coast User Group November 2014."— Presentation transcript:

1 Life Sciences Life Sciences Industry Trends and Update Bart Reitter, Director of Marketing – Life Sciences QAD West Coast User Group November 2014

2 Life Sciences Save the Date for QAD Explore QAD West Coast User Group November 2014

3 Life Sciences Industry Challenges & Drivers Industry Present State The Voice of QAD Customers Industry Future State QAD Solutions for Life Sciences Agenda QAD West Coast User Group November 2014

4 Life Sciences Industry Challenges and Drivers Challenges Drivers Tightening Global Regulatory Environment Quality Management Initiatives Changing Business Models Supply Chain Visibility & Governance Reimbursement and Price Pressures Patient safety driving tighter regulations Global regulators looking for consistent, cGMP compliant process FDA Case for Quality Consistent Quality System management processes and metrics Risk-based quality management process Growth of global partnerships and alliances Focus on core life sciences business processes Rapid growth and M&A Visibility of global supply chain partners Governance of global supply chain partners Reduced prices in global markets driving down margins Accurate management of Group Purchasing Organizations (GPOs) QAD West Coast User Group November 2014

5 Life Sciences The Present Bart Reitter, Director of Marketing – Life Sciences

6 Life Sciences Drug Quality and Security Act (DQSA) – Compounding Quality Act creates a voluntary compliance regime for compounding pharmacies -Drug Supply Chain Security Act requires the FDA to create and implement a national track-and-trace system (2015 deadline) Falsified Medicines Directive Introduces measures to prevent the entry of falsified medicines into the legal supply chain -Substantially changes the European framework around the supply of medicines and covers businesses that have traditionally not been directly regulated through medicines regulation FDA Safety and Innovation Act (FDASIA) Directs FDA to promulgate regulations establishing a unique device identification system for medical devices Regulatory Action QAD West Coast User Group November 2014

7 Life Sciences “We received a DQSA ultimatum from a customer for year end 2014” “We’re focused on DQSA and the Falsified Medicines Directive” How do we link operational data with serialized data? (i.e. PO#, Transaction # and Date) “The UDI problem is that all of the information is not in one place” “We want our UDI solution to come from our ERP vendor” Customer Regulatory Challenges QAD West Coast User Group November 2014

8 Life Sciences Launched in 2011, this initiative aims to bring stakeholders together to drive higher medical device quality. To achieve this mission, FDA identified 3 core components: -Focus on Quality Compliance is still a baseline, but the FDA wants to identify and promote practices that result in high-quality devices -Enhance Data Transparency Provide stakeholders with understandable and objective information about medical device quality -Stakeholder Engagement Foster strategies that focus stakeholder interactions on device quality FDA’s Case for Quality Initiative QAD West Coast User Group November 2014

9 Life Sciences Our analysis flagged manufacturing quality risks and showed that firms that managed those risks by driving quality organization-wide tend to be more productive, with fewer complaints and investigations per batch, and often have smaller quality units with lower quality-related costs than their competitors. …while the sophistication and complexity of medical devices has grown rapidly in recent years, the sophistication of device manufacturers’ quality systems have not necessarily kept pace. Steve Silverman, Director, Office of Compliance FDA CDRH FDA’s Case For Quality Initiative QAD West Coast User Group November 2014 Source:

10 Life Sciences Global Medical Device Manufacturer -Class III implantable CAPA point solution Complaint handling point solution Paper-based supplier management “system” Lack of integration Looking for a complete QMS solution -Manage incoming inspections -NCRs integrated with inventory -Complaints turn into a CAPA -Management of Field Action Notifications Quality Challenges QAD West Coast User Group November 2014

11 Life Sciences Virtual Pharma company with outdated QMS Outsourced manufacturing CMOs have their own systems Sponsor drives change to the CMOs via e- mail -Updated test methods -Changes in specifications -Changes in packaging Duplicated data and error prone Quality Challenges QAD West Coast User Group November 2014

12 Life Sciences Medical Device Component Manufacturer Utilizing Excel for Quality Management Areas for Improvement: -Receiving Inspection: Recording inspection results Tracking/pulling of lot numbers associated with received materials in inventory. In-Process Inspection Data – recording results and tracking/pulling associated component/material lot numbers. Pick Lists Integration -Non-Conforming Material Integrated with CAPA and Customer Complaints CAPA - integrated with NC Material Quality Challenges QAD West Coast User Group November 2014

13 Life Sciences Warehouse Shopfloor PLM/Document Mgmt. Share Drive, PTC, Dassault, Siemens, Documentum PLM/Document Mgmt. Share Drive, PTC, Dassault, Siemens, Documentum Receiving Other Systems QMS, Training Management, Maintenance Other Systems QMS, Training Management, Maintenance Paper DHR Compliance Risk – manual data transcription Compliance Risk – Error in DHR Overall Risk – Traceability & Genealogy that is paper-based Device Manufacturing Current State QAD West Coast User Group November 2014 Compliance Risk – manual data transcription

14 Life Sciences Making the product Documenting the product Hidden Factory Real Factory Pharma Manufacturing Current State QAD West Coast User Group November 2014

15 Life Sciences Consort Medical Completion Of Acquisition of Aesica – November 2014 Medtronic, Inc. Offers EU Concessions In $43 Billion Covidien Deal – November 2014 Leica Biosystems Buys Devicor Medical Products For Undisclosed Amount – October 2014 Stryker Corporation Completes Acquisition Of Small Bone Innovations, Inc. – October 2014 Lubrizol has acquired QAD customer Vesta, Inc. – August 2014 Changing Business Models QAD West Coast User Group November 2014

16 Life Sciences “We are pursuing an aggressive acquisition strategy.” “We are expanding our business to enter the large molecule space as well.” “We are acquiring to be able to develop combination products.” “Pursuing API manufacturing so we can deliver entire value chain.” “We are seeing a need to develop innovative forms of packaging.” Changing Business Models QAD West Coast User Group November 2014

17 Life Sciences FDA Public Meeting on Development and Regulation of Abuse-Deterrent Opioids -On October 30 and 31, 2014 Opportunity for development of novel medications -If injected (parenteral), opioid-tolerant patients will experience withdrawal signs and symptoms -Crush, tamper and extraction resistant technology -Push-Pull osmotic delivery system releases hydromorphone at a controlled rate over an extended period of time. -AVERSION technology: if dissolved for injection, a viscous gelatinous mixture will form trapping oxycodone inside -If crushed and snorted, inactive ingredients will cause nasal discomfort Changing Business Models QAD West Coast User Group November 2014

18 Life Sciences Integrate ERP and serial line level data -“We want to mingle ERP and serial data” -Operational and line level Opportunity to trigger the ASN on operational data -Material produced -Inventory updates -Order status update “Integrating quality data like a CAPA event to serialized data is a big deal.” -Level 5 of the QAD Quality Maturity Model Supply Chain Visibility & Governance QAD West Coast User Group November 2014

19 Life Sciences Reimbursements & Cost Pressures QAD West Coast User Group November 2014 “We are having major reimbursement pressures. This business is not as profitable as it once was.” “We currently need to issue electronic invoices to an authorized provider by the government.” “We estimate a loss of 3-4% of revenue due to chargeback mismanagement”

20 Life Sciences The Future Bart Reitter, Director of Marketing – Life Sciences

21 Life Sciences Industry Challenges and Drivers Challenges Drivers Tightening Global Regulatory Environment Quality Management Initiatives Changing Business Models Supply Chain Visibility & Governance Reimbursement and Price Pressures Patient safety driving tighter regulations Global regulators looking for consistent, cGMP compliant process FDA Case for Quality Consistent Quality System management processes and metrics Risk-based quality management process Growth of global partnerships and alliances Focus on core life sciences business processes Rapid growth and M&A Visibility of global supply chain partners Governance of global supply chain partners Reduced prices in global markets driving down margins Accurate management of Group Purchasing Organizations (GPOs) QAD West Coast User Group November 2014

22 Life Sciences An Effective Enterprise in the Life Sciences is: Every business process working at peak efficiency and perfectly aligned with your strategic goals Patient Focused Manufactures safe and effective products for patient care Compliant Complies with applicable global regulations and requirements Innovative Innovates to improve all aspects of their operations QAD West Coast User Group November 2014

23 Life Sciences QAD in the Life Sciences Industry QAD Cloud ERP for Life Sciences Quality and Business Process Integration Supply Chain Planning and Integration Support for Life Sciences Business Models Support for Needs of Life Sciences ERP Clients QAD West Coast User Group November 2014

24 Life Sciences QAD and the Life Sciences QAD Cloud ERP for Life Sciences Industry Challenges Changing business models Supply chain visibility and governance Price / cost pressures Full-featured, cloud-based ERP FDA “Qualified” IT environment Single, dedicated instance for control and regulatory compliance Regulatory compliant SOPs Life cycle validation support On-premise or blended deployment QAD West Coast User Group November 2014

25 Life Sciences Cloud Adoption Spend on Cloud ERP will more than double (increase by 109%) The cloud software model will account for $1 of every $5 spent on software by % to 50% increasing willingness to consider SaaS ERP /5 109% ~50% Compound Annual Growth Rate QAD West Coast User Group November 2014

26 Life Sciences Why Cloud? QAD West Coast User Group November 2014

27 Life Sciences Maintain Focus on The Business Business Agility Reduced Capital Expenditures Staffing Efficiency Speed & Simplicity Version Control Other Reasons to use Cloud Computing QAD West Coast User Group November 2014

28 Life Sciences Integration of quality and production processes Automated quality management Item data attributes for QC QAD serialization for track and trace Lot trace workbench for effective recall management QAD and Life Sciences Quality and business process integration Industry Challenges Tightening global regulatory environment Quality management initiatives Supply chain visibility and governance Roadmap Subject to change without notice. The above is intended for information purposes and should not be incorporated into a contract QAD West Coast User Group November 2014

29 Life Sciences QAD ERP/EQMS Integration Maturity Model -Integrating quality and business processes Quality and Business Process Integration Level One Non-existent integration/ automation Level Two Integration of QC QMS support Level Three Integrated QC flows ER/ES EQMS support Level Four ERP process integration Shop floor integration Mfg. quality metrics Level Five Enterprise and supply chain integration Supply chain quality metrics QAD West Coast User Group November 2014

30 Life Sciences Quality and Business Process Integration QAD West Coast User Group November 2014 Work Instructions cGMP Integration

31 Life Sciences QAD Demand Planning 7.0 QAD Cloud Supply Chain Planning QAD Supplier portal Transportation management QAD and the Life Sciences Supply Chain planning integration Industry Challenges Reduced reimbursement and price pressures Changing business models Supply chain visibility and governance Roadmap Subject to change without notice. The above is intended for information purposes and should not be incorporated into a contract QAD West Coast User Group November 2014

32 Life Sciences Supply Chain Planning Integration Global Distributors Domestic Distributors CMO Raw Material Healthcare Providers The Life Sciences Enterprise Life sciences ERP integrates supply chain elements Payers / GPOs QAD West Coast User Group November 2014

33 Life Sciences Multi Level Serialization DQSA Support Supply Chain Traceability Supply Chain Serialization QAD West Coast User Group November 2014

34 Life Sciences Original Recall Manufacturer Recall Extension Lot Trace – Forward Inventory Lot Trace – Back This information is confidential and provided for discussion purposes only; It does not form a commitment to deliver any functionality and is subject to change without notice. Recall Management QAD West Coast User Group November 2014

35 Life Sciences QAD and the Life Sciences Support for evolving life sciences business models Industry Challenges Reduced reimbursement and price pressures Changing business models GPO contract management -Trade Activity Management (for early adopter customers) -Rebate / chargeback management QAD Cloud EDI -Link to electronic healthcare exchanges Roadmap Subject to change without notice. The above is intended for information purposes and should not be incorporated into a contract QAD West Coast User Group November 2014

36 Life Sciences Manufacturer GPO or Buying Group Hospital/Provider Distributor Invoices at List Price – Std disc Invoices at Contract Price Customers Order from Distributor Admin Fee ($) $$ Chargeback (List – Contract Price) Contract Price Definition Distributor Orders from Manufacturer Manufacturer markets directly to Provider This information is confidential and provided for discussion purposes only; It does not form a commitment to deliver any functionality and is subject to change without notice. Serialization Integration Trade management Product safety Supply chain integrity Recall NCR / CAPA CAPA / NCR CAPA / NCR Trade Activity Management QAD West Coast User Group November 2014

37 Life Sciences Support for Evolving Business Models Secure, compliant connectivity for life sciences manufacturers with the healthcare ecosystem QAD Cloud EDI Providers Distributors Life Sciences Manufacturers QAD West Coast User Group November 2014

38 Life Sciences QAD and the Life Sciences Supporting the needs of life sciences ERP clients Industry Challenges Changing business models Supply chain visibility and governance Quality management initiatives QAD Customer Engagement Process -Annual assessments -Led by business consultants -Learn how software can better support your business processes -Improvement recommendations QAD West Coast User Group November 2014

39 Life Sciences Save the Date for Explore QAD West Coast User Group November 2014


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