Presentation on theme: "AGENDA Why am I so passionate about the Pharma supply chain?"— Presentation transcript:
0IS THE PHARMA SUPPLY-CHAIN A LOST CAUSE? Hedley ReesManaging ConsultantPharmaFlow Ltd
1AGENDA Why am I so passionate about the Pharma supply chain? What has been going on in the supply-chain?How did it get into all this trouble?Modernization – the route to salvation?What COULD the future hold?Writing bookMaufg & supply base of this sector has many issues before itTalking about shortcomings in sc performance – quality, cost and delivery lead timeheparin unfolding simultaneouslyThat is not the only reason – also personal onesThen will cover the industry dynamic which has got us hereThe current state of playThe role of regulatory modernization…then some ideas on what we can take from other secotors
2Why am I so passionate about this subject? I mentioned heparin, but also there are some personal reasonsWhy am I so passionate about this subject?
3My three phases of enlightenment Life in big PharmaLife in biotechEarly career in automotives and consumer durablesJoined miles/bayer late 70sSpent 16 years in bigpharma, 8 years in sme drug developers and 7 years as independent – they have given me deeply enlightening experiences to shareLife as an independent
4Life in big Pharma Why did we do it that way? Why is it so difficult to change anything?Why the scepticism of modern improvement methods?What is underneath it all?Always stuff handed over the wall from R&DWhy did they chose that supplier (HIP example)No-one ever wanted to go to reg affairs to change anythingModern methods were for other sectorsThe gulf between R&D and commercial manufacxture
5Life in biotech Why are they starting at the wrong end? .…and who’s doing the sourcing strategy?Does anyone knows where all the inventory is?....and what condition it is in?Who is looking after transportation and storage?….what to you mean ‘I am’!?They think I’m in charge of shopping too!….but carry on regardlessSupply chain management was something they did in warehouses – not something to think about when you were developing drugsLooking after the status and condition of inventory was for the contract manufacturer – wherever I n the world they may beT & s is why I was taken on – you know how to ship it don’t you?Vanguard incident – the ultimate insult
6Life as an independent All dressed up and nowhere to go… The Milton Park experienceMy glucose buddyMy needle free injection buddyAccepting the inevitableEnlightenment reignsLeft OSI – did my website wrote articles etcWent out looking to ply my wears, so to speakMilton parkDecided I had to create the awarenessEnlightened!
7Pharma starts at the wrong end… 3 suppliers of each starting material – just in case1 supplier of API – with 1 coming on boardNo supplier of DP – coming on board….No packaging supplier(s)… and launch approaching….
8Information, information, information…. Different groups at each contactorNumber of documents – duplication, opportunities for errorTechnical agreements, supply agreements
10Pharma as it was, and now is… Vertical integrationLocal presence in the country marketMainly small molecule2010sinnovator, virtual, biotech, generic/bio-similars, speciality PharmaBiologicsMarkets and supply locations globalize
11The vicious circle of outsourcing Mass outsourcingRapid expansion of contractor baseRise of Virtual pharmaDrives growth in contractorsDrive s growth inVirtual PharmaInnovations cost ‘real’ moneyDisconnectionControl over lead timesTactical, arms lengthPrice escalation from lock-inOpportunities for error
12Dis-integration of the supply chain Outsourcing begins in earnest…..
13Integrity issues…Economically motivated adulteration – “Heparin, supplied by Baxter, found to be adulterated, with reports of 574 adverse events and nine patient deaths estimatedJ&J/McNeil placed under a ‘Consent Decree’ after numerous recalls associated with supply chain issues.Novartis shells out hundreds of millions $ in manufacturing issuesShortages in US/EU supply chains result in governments, patient advocacy and general public searching questions.
14Security issues….. Cargo theft and diversion – “Abbott hit by $4m diagnostics theft in USA” (June 2011)“Eli Lilly warehouse thieves make off with $76m haul” (March 2011)Counterfeiting – “Operation Singapore, largest counterfeit operation in EU, where 2 million doses of counterfeit medicine enter UK supply chain in 2006/7”.“FDA is still concerned that the drug supply is increasingly vulnerable to diversion of legitimate drugs (drugs illegally circulated outside the legal distribution system ie stolen or sold illegally) and concerned about the influx of counterfeit drugs- as both present significant risks to public health”. Rx-360 Newsletter September
15A UNIVERSAL CRY FOR CHANGE! The fall-out….Crippling impacts in the areas of patient safety, brand image and reputation, costs of remediation, customer service and investor confidence.A UNIVERSAL CRY FOR CHANGE!From regulators, governments, other competent authorities and patient advocacy groups.
16What has been the response? …EU implements Falsified Medicines Directive.…EMA consults on dramatic tightening of GDP/GMP…FDA pens “Pathway to Global Safety and Quality”.…US Congressional Committees investigate.…President Obama wades in on drug shortages.…US Pharmacopeia consults on new Chapter < 1083 >.…PEW Charitable Trust writes report “After Heparin”.…GS1 Global Traceability Standard for Healthcare…FDA Safety and Innovation Act, Title VII
18The patent ‘starting pistol’ Bang!!!The starting pistol initiates behaviours aimed at reducing financial impact of failures and preparing for a race to approvalPicture of the frighteningly high attrition rates and timescales involvedSomewhere in early stage research molecule is patents – gun goes off and raced for the clinic
19The find it, file it, flog it approach…. Eureka!…seems to be…seems to beIs it safe?Is it active?Let’s get into the clinic – FAST!This is the series of events…..in exaggerated formI call it the find it, file it , flog it approach…better make some for tox studies then….
20Enter the patent fairy… Better make a batch for pre-clinical thenBye bye my babyHope she realises I’ll be watching her…
21Making enough for pre-clinical Supply chain thinking?Now let us assume the safety testing is successful and we are bound for the clinic
22Typical issues emerging… Scarce/bespoke materials specified.Limited sourcing options (starting materials and API)Inappropriate dosage forms.Contractors with insufficient capacity or capability.Poor process yields.Weak compliance with technical agreements.Analytical Methods not adequate.Shipping/storage conditions not adequately defined.Incorrect value declarations to customs.Poor contractor relationships.Channel management not considered.…the list goes on, and on, and…..Severe disconnection between sponsor company and it’s supply chain ‘partners’ due to supply chain neglect.
24The 21st Century Initiative Pharmaceutical cGMP’s for the 21st Century – A Risk-Based Approach:Started 2002 and reported late 2004Desired state:“A maximally efficient, agile, flexible pharmaceutical manufacturing sector without extensive regulatory oversight.”Dr. Janet Woodcock, the U.S. Food and Drug Administration's Deputy Commissioner for Operations
25Quality by Design (ICH Q8) and PAT QbD ConceptsQuality should be built in by designFocus on product knowledge and process understandingEstablishment of design spaceProvide opportunities for flexible regulatory approachesRisk-based regulatory decisionsReal-time quality control and less release testingProcess improvement within design space without further reviewReduction in post-approval submissionsPAT tools facilitates introduction of QbD
26History of industrial improvement Industrial EngineeringTotal Quality Management (TQM)World Class Manufacturing (WCM)Theory of Constraints (ToC)Lean and 6 sigmaToyota Production System (TPS)Systems ThinkingIt’s all INDUSTRIAL ENGINEERING!
27Lean backgroundNUMMI study, Womack & Jones “The Machine That Changed the World”Based on Toyota Production System (TPS)Reduce time between getting order and money inRespect for peopleContinuous improvementFive principlesMany parallels with TQM, WCM, TOC, etc.Relate to modernization
28Five Principles of Lean 1. Specify value from the standpoint of the end customer by product family. 2. Identify all the steps in the value stream for each product family, eliminating whenever possible those steps that do not create value. 3. Make the value-creating steps occur in tight sequence so that the product will flow smoothly toward the customer. 4. As flow is introduced, let customers pull value from the next upstream activity. 5. As value is specified, value streams are identified, wasted steps are removed, and flow and pull are introduced, continue until a state of perfection is reached in which value is created with no waste.
30Traditional functional layout– solid dose Key points:Large batchesProduce to forecastHigh in-process inventoryDefects are hidden
31Value stream alignment – solid dose Key points:Schedule pacemaker only.Set rate at TAKT (Production rate required to match rate of consumption in the market place.Pull from the pacemaker (Kanbans and supermarkets)Solve production problems (A3 Management)Take out variation (SPC).Reduce defect rates on incoming materials.Use Single Minute Exchange of Dies (SMED) to reduce cycle time
33Overview of a development process SafetyEfficacyQuality
34Principles of Prototyping Design prototype based on full stakeholder involvement, including marketing, manufacturing, procurement, key suppliersAllocate overall management responsibility for the programmeDiscovery research stays with prototype testing - iterativeFocus on manufacturability of compounds using predictive methodsBuild a deep understanding of material and process capabilityInstitutionalise risk management into development programmesBuild an outline of the end-to-end supply chain
35Principles of Commercial Supply GMP/GDP mind-set from the start: Good Supply-chain Practice - GSPChange emphasis from validation to process understanding/capabilityPlace responsibility for defective work on the producers not the quality functionRe-define the role of ‘quality’ into improvement activitiesDeploy PATBecome ‘business process’ oriented and quality systems awareInstitutionalise risk management into supply chainSafetyEfficacyQuality
36Some radical concluding thoughts Turn the development process on its head – put patient-use firstDon’t award patents for molecules until they are working prototypesSupply chain for clinic and the market should be under one responsibility - with strong SCM competenciesTeach SCM principles at University to our chemists, pharmacists etc.The IND/CTA CMC review process should require a higher level of understanding of the compound and it’s manufacturability
37More radical concluding thoughts Companies intent on making a financial exit before commercialization should prove the supply chain foundation is soundBig Pharma should demand supply chain integrity from the companies they do licensing deals withRegulations won’t solve the issues, and in EU they are likely to make matters worse.Big Pharma CEO’s must step up to the plate and make change happen – learn from Toyota’s handling of the ‘fo0t pedal’ incident (scientists eventually found no defects in Toyota vehicles and put it down to driver error)
38Questions?If there are any further questions, you can get to me in a number of ways:T: +44(0)M: +44(0)E:W:LinkedIn:Book:Supply Chain Management in the Drug Industry: Delivering Patient Value for Pharmaceuticals and Biologics