By Warren Perry, GRCP Compliance Consultant for Dassault Systèmes BIOVIA
The demand for generic drugs is skyrocketing. According to the US Food and Drug Administration (FDA), nearly 8 in 10 prescriptions filled in the United States are for generic drugs. This should come as no surprise to industry professionals or consumers. Generic drugs can be considerably less expensive while typically providing the same level of effectiveness as brand name therapeutics. The demand is intensified by initiatives such as the Affordable Care Act that intend to lower the cost of national healthcare by compelling a move toward less expensive generics and biosimilars.
New mandates established by the FDA will have a significant impact on generic drug manufacturers, which are based primarily in the Asia-Pacific (APAC) region, Africa, and South America. Generic drug companies in those regions have typically not been subject to the same level of scrutiny, industry standards, and best practices as pharmaceutical companies based elsewhere in the world. The new FDA directives aim to change that.
The Food and Drug Administration Safety and Innovation Act (FDASIA) brings generic drugs under a stronger set of guidelines, establishes user fee acts, and sets into motion a countdown to May 2017 when all submissions to the FDA must be made electronically. The purpose of these policies is to create a more efficient global pharmaceutical industry and safer products for consumers by streamlining the submission and approval process for new drugs and by generating funds for the FDA to conduct inspections more frequently. Allocations from user fees will enable FDA inspectors to visit foreign drug manufacturing facilities every two years using risk-based methodologies. Previously those inspections occurred approximately once every seven years.
FDASIA is a wake-up call for companies in the generic drug industry because the US market can or soon will represent as much as 80 percent of their profits. As US policy makers push to lower the cost of healthcare, eliminate millions of pieces of paper from FDA processes, and enforce safety guidelines, many companies in APAC will no longer be able to continue doing business the way they previously did. They will need to comply with more stringent FDA mandates by deploying new electronic document management, quality management, and submission management systems.
Some industry analysts in the APAC region predict that regulators may be forced to make exceptions to the rules because the US wants lower-cost healthcare and so many inexpensive generics come from APAC. As such, some executives in the region might think their companies won’t need to invest in new information systems or enforce best practices. But they are mistaken. The FDA has drawn a line in the sand: If companies want a piece of the lucrative US generic drug market, they can only get it through compliance with regulations in a way that is defensible to FDA auditors and inspectors.
The stakes are too high for generics manufacturers to roll the dice on this. Senior management and decision makers in these companies need to understand that non-compliance equals gambling with the future of their business. And it’s never wise to bet against the house. The FDA can and does place import bans on non-compliant foreign companies. Because profit margins are thin on generics, a significant number of pharmaceutical companies in the APAC region will go out of business if they can’t sell their products in the United States.
Data Integrity is the Foundation for Compliance and Best Practices
FDASIA dictates that generics and biosimilars companies must now pay user fees to the FDA, and by May 5, 2017 all submissions to the FDA must be made electronically. CFR21 Part 11 of the Code of Federal Regulations establishes FDA regulations on electronic records and electronic signatures. To comply with these rulings, companies must use Electronic Common Technical Documents (eCTD) to transfer regulatory information to the FDA. This interface is supported and enabled by enterprise document management systems (eDMS). Soon companies will not be able to communicate with the FDA without eDMS systems. They will not be able to make regulatory submissions to the FDA without eCTD publishing software.
Companies that have previously been out of compliance have an opportunity to improve their business while helping to create a more unified global industry. The US is not trying to compel these companies into compliance just because it is easier for its regulatory bodies and safer for consumers. In the long run, improved compliance will shorten manufacturing cycles, accelerate processes, and improve productivity. Implementing integrated systems, unified data, end-to-end information flow, and standard ways of identifying records across all systems and departments will make pharmaceutical companies more capable, responsive, and proactive.
Compliance with FDA guidance for current good manufacturing practices (cGMP) supports fundamental business operations. That point may seem obvious to industry professionals in the Western world where best practices are inherent. But in some companies in the APAC region, Africa, and South America, there may be a tendency for employees to try to find shortcuts that circumvent good manufacturing practices in an attempt to create more of the product faster. This is another gamble that never pays off. Shortcuts and other non-compliant practices tend to compromise data quality and data integrity, which are essential for effective collaboration, safety, quality control, and for traceability that supports defensibility for auditors and inspectors.
The issue is a growing concern. In April 2016 the FDA released new guidance for the pharmaceutical industry to clarify the role of data integrity in cGMP for drugs. The regulator drafted the guidance because its inspections were increasingly revealing cGMP violations due to poor data integrity. Having the right document management systems in place helps companies enforce data integrity requirements so they can meet demands from regulators and from sponsors who want controlled, audited environments to exchange information across their supply chains—from research through commercialization.
Investing in a Stronger Industry
Global drug companies that want to preserve US market opportunities must comply with new FDA requirements. Significant investments may be required for many APAC-based and other pharmaceutical manufactures to achieve compliance. The competitive advantages of deploying best-practice systems and processes have been discussed for many years, but this industry conversation is no longer focused purely on improving return on investment by unifying information. Companies simply won’t be able to submit required forms to the FDA without eDMS systems.
Generics producers across the supply chain that can’t comply by May 2017 risk having to go out of business—especially as the generics market becomes increasingly competitive and consolidates. It’s now more crucial than ever that all companies in the global supply chain comply with FDA specifications and cGMP regulations, and that those specifications are met electronically.
Companies that postpone this initiative until the regulations go into effect may find it much more difficult and expensive to achieve compliance. As the deadline approaches, technology vendors with available time and bandwidth may be in short supply as they help other companies install and validate complex information systems.
A safer, more unified, and compliant global pharmaceutical industry is at hand. Generic drug companies should answer the wake-up call to align with policies and practices that support a stronger industry.
About the Author:
Warren Perry has held various positions during his twelve years with BIOVIA including Product Marketing Manager, Marketing Manager, and Project Lead. He applies his understanding of governance, risk management, and compliance (GRC), regulatory publishing, and eDMS systems in global markets with clients such as Takeda, Samsung Biologics, Roche, Boehringer Ingelheim, GlaxoSmithKline, Fidelity Investments, Bank of America, Logica CMG, and Aspen Pharmaceuticals.