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Life Sciences Industry Trends and Update

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Presentation on theme: "Life Sciences Industry Trends and Update"— Presentation transcript:

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

2 Save the Date for QAD Explore 2015
QAD West Coast User Group November 2014 Save the Date for QAD Explore 2015

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

4 Industry Challenges and Drivers
QAD West Coast User Group November 2014 Industry Challenges and Drivers Tightening Global Regulatory Environment Quality Management Initiatives Changing Business Models Supply Chain Visibility & Governance Reimbursement and Price Pressures Challenges 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) Drivers

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

6 Regulatory Action Drug Quality and Security Act (DQSA) – 2013
QAD West Coast User Group November 2014 Regulatory Action Drug Quality and Security Act (DQSA) – 2013 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

7 Customer Regulatory Challenges
QAD West Coast User Group November 2014 Customer Regulatory Challenges “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”

8 FDA’s Case for Quality Initiative
QAD West Coast User Group November 2014 FDA’s Case for Quality Initiative 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

9 FDA’s Case For Quality Initiative
QAD West Coast User Group November 2014 FDA’s Case For Quality Initiative 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 Source:

10 Quality Challenges Global Medical Device Manufacturer
QAD West Coast User Group November 2014 Quality Challenges 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

11 Quality Challenges Virtual Pharma company with outdated QMS
QAD West Coast User Group November 2014 Quality Challenges Virtual Pharma company with outdated QMS Outsourced manufacturing CMOs have their own systems Sponsor drives change to the CMOs via Updated test methods Changes in specifications Changes in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

12 Quality Challenges Medical Device Component Manufacturer
QAD West Coast User Group November 2014 Quality Challenges 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

13 Device Manufacturing Current State
QAD West Coast User Group November 2014 Device Manufacturing Current State Shopfloor Warehouse Receiving Paper DHR Compliance Risk – manual data transcription Let us discuss a representation of the current state where there is no MES is deployed. Let us review how products are made by taking raw materials and adding value. The objective here is to see how different information systems help in making the right product, at the right time, in right quantities. Typically, most of you will have an ERP system in place to take care of the finance, HR, materials planning and inventory management processes. When raw materials arrive, they are booked against a purchase order in the ERP system. The ERP system would typically contain the demand for what products to make, the product master for all the parts, bill of materials and most times an ERP route. The ERP route, could be high level – where you have defined the minimum operations that are required for planning purposes. A PLM or document management system typically will contain the router for the parts that are to be made, process specification sheets, data collection plans, inspection protocols – what to inspect, how much to inspect, what rate to inspect, etc, and part drawings. Except for the part drawings, all of the other documents will be either in a word document format or in a pdf format. Depending on the type of manufacturing – discrete or repetitive, and the manufacturing strategy, the orders will be released for the shop floor. Together with this order from the ERP, sometimes a material list is attached to it. The documentation group or materials planning group, prints the order and material list from ERP, then searches for the right version of the router, data collection sheets, process specification sheets, assembly instructions, part drawings, etc in the PLM/document mgmt system and then prints them After a review of all that’s printed, they are collated and a shop floor order package is created. Usually, we see that lot of non value added activities in this area that can be automated. It is also important to note that, there is a compliance risk invlolved here in making sure all the right versions for the forms are printed. In some companies, to reduce this risk, there is a practice of maintaining the revision for all documents – parts, drawings, router, etc to be in the same version. This in turn creates a lot of burden for the document control/engineering and other organizations in having to rev up all documents even if there are no changes in them Say, the order package reached the first operation. Depending on the type of manufacturing/product there may be 1 or more operators assigned to that operation. The operator reviews all the paper work, refers to the sop’s, drawings, and as he completes th Compliance Risk – manual data transcription Compliance Risk – Error in DHR Overall Risk – Traceability & Genealogy that is paper-based PLM/Document Mgmt. Share Drive, PTC, Dassault, Siemens, Documentum Other Systems QMS, Training Management, Maintenance

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

15 Changing Business Models
QAD West Coast User Group November 2014 Changing Business Models 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

16 Changing Business Models
QAD West Coast User Group November 2014 Changing Business Models “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.”

17 Changing Business Models
QAD West Coast User Group November 2014 Changing Business Models 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

18 Supply Chain Visibility & Governance
QAD West Coast User Group November 2014 Supply Chain Visibility & Governance 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

19 Reimbursements & Cost Pressures
QAD West Coast User Group November 2014 Reimbursements & Cost Pressures “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 The Future Bart Reitter, Director of Marketing – Life Sciences

21 Industry Challenges and Drivers
QAD West Coast User Group November 2014 Industry Challenges and Drivers Tightening Global Regulatory Environment Quality Management Initiatives Changing Business Models Supply Chain Visibility & Governance Reimbursement and Price Pressures Challenges 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) Drivers

22 QAD West Coast User Group November 2014
Every business process working at peak efficiency and perfectly aligned with your strategic goals An Effective Enterprise in the Life Sciences is: Patient Focused Manufactures safe and effective products for patient care Compliant Complies with applicable global regulations and requirements What is an Effective Enterprise for Life Sciences? Patient-Focused - Manufactures safe and effective healthcare products for patient care. Compliant -Complies with applicable global regulations and requirements for the development, manufacture and promotion of healthcare products, ensuring that only the highest quality products are distributed to marketplace. Innovative - Leverages innovation in all aspects of their operations from maximizing the effective and efficient use of resources and processes to implementing the latest technologies in the development of safe and effective healthcare products. QAD enables life sciences companies to meet the critical quality requirements for manufacturing innovative, safe and effective healthcare products in compliance with global regulatory standards. QAD incorporates intuitive, easy to use, industry best practices that can be flexibly deployed either onsite or on demand to support global life sciences companies. Serialization, track and trace at the item level Lot control functionality Item attributes for Quality Control CEBOS Quality Management System automation software Full validation support Enhanced controls for 21 CFR Part 11 and EU Annex 11 compliance Qualified SaaS environment and regulatory compliant Standard Operating Procedures (SPO’s) for QAD’s On Demand Life Sciences Edition Easy On-Boarding process based on regulatory requirements and industry best practices Innovative Innovates to improve all aspects of their operations

23 QAD in the Life Sciences Industry
QAD West Coast User Group November 2014 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

24 QAD and the Life Sciences
QAD West Coast User Group November 2014 QAD and the Life Sciences Industry Challenges QAD Cloud ERP for Life Sciences 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

25 1/5 109% ~50% Cloud Adoption QAD West Coast User Group November 2014
The cloud software model will account for $1 of every $5 spent on software by 2016 109% Compound Annual Growth Rate Spend on Cloud ERP will more than double (increase by 109%) ~50% 23% to 50% increasing willingness to consider SaaS ERP

26 QAD West Coast User Group November 2014
Why Cloud?

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

28 QAD and Life Sciences Industry Challenges
QAD West Coast User Group November 2014 QAD and Life Sciences Industry Challenges Quality and business process integration Tightening global regulatory environment Quality management initiatives Supply chain visibility and governance 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 Roadmap Subject to change without notice.  The above is intended for information purposes and should not be incorporated into a contract

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

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

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

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

33 Supply Chain Serialization
QAD West Coast User Group November 2014 Supply Chain Serialization Multi Level Serialization DQSA Support Supply Chain Traceability Talking Points: If you are in the life sciences or food and beverage industry, you are faced with a variety of regulations that you must comply with. Most of these regulations center around proving product quality or process documentation, and they may require you to be able to manage procedures such as tracking and tracing components or ingredients. QAD can help with Serialization, Item Attributes and Quality. These are great tools for you to improve efficiency, ensure accuracy, manage quality and track and trace your products.

34 Recall Management Recall Extension Original Recall Manufacturer
QAD West Coast User Group November 2014 Recall Management Recall Extension Lot Trace – Forward Inventory Lot Trace – Back Original Recall Manufacturer 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.

35 QAD and the Life Sciences
QAD West Coast User Group November 2014 QAD and the Life Sciences Industry Challenges Support for evolving life sciences business models 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

36 Contract Price Definition Invoices at Contract Price
QAD West Coast User Group November 2014 Trade Activity Management $$ Chargeback (List – Contract Price) Serialization Integration Trade management Product safety Supply chain integrity Recall NCR / CAPA Distributor Orders from Manufacturer Manufacturer Distributor Invoices at List Price – Std disc Contract Price Definition Admin Fee ($) CAPA / NCR Manufacturer markets directly to Provider Invoices at Contract Price GPO or Buying Group Hospital/Provider Customers Order from Distributor 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.

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

38 QAD and the Life Sciences
QAD West Coast User Group November 2014 QAD and the Life Sciences Industry Challenges Supporting the needs of life sciences ERP clients 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

39 Save the Date for Explore 2015
QAD West Coast User Group November 2014 Save the Date for Explore 2015


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