The grave quality issues related to the willful adulteration of Heparin by a key API supplier for Baxter, the Melamine adulteration of baby formula for the world market, and the recent drug import restrictions on Ranbaxy in India have raised serious concerns about the viability of China and India to consistently compete in the U.S. and European markets. Even as organizations acknowledge the seriousness of these issues, they continue to look closely at setting up operations outside the U.S. (ex-U.S.). The decision to pursue an operation ex-U.S. raises challenges above and beyond those of building a normal commercial operation. Because facilities require significant capital investment well in advance of proof of clinical efficacy, they typically represent one of the largest capital commitments an organization will ever make. Understanding the complete risk management landscape is essential to being successful with an ex-U.S. strategy. While it cannot be argued that emerging markets offer lower capital investment and potentially faster project completion times with lower overall operating costs, they also bring the portent of heightened program risk and complexity in complying with the rapidly evolving regulatory oversight and governance standards between the U.S. and the rest of the world.
INTEGRATING RISK MANAGEMENT
The decision to establish a manufacturing operation outside the U.S. will be the output of a thoughtful strategic planning process. From the start, it is critical to expand the strategic risk assessment exercise to address harmonization challenges. The ICH has laid out a basic framework for risk management in its Q8 guidance. In a previous article, I defined a basic Facility Strategic Planning Model:
- Identify Strategic Business Objectives
- Establish a One- and Five-year Tactical Plan
- Consider Program Specific Planning
- Determine Measurement and Feedback Against Objectives
Adding harmonization risk to each of these steps escalates the need for a clear strategy and plan at the outset. SuchMany who have made this move will also highlight the fact that, despite the uniform governance defined with the EMEA, an operation must still comply with country-specific regulatory and commercial requirements. These challenges increase many times over with expansion to emerging markets such as China or India where the regulatory and strategic considerations are still evolving. The transient nature of these key considerations must be considered at the outset of any facility design intended to meet the requirements of multiple markets. The key document for capturing the final design commitments is the Basis of Design (BOD).
FACILITY BASIS OF DESIGN
Establishing the Basis for Design (BOD) is the critical first step in determining the attributes for the facility. The BOD is the single summary document which defines the technical (process and equipment), quality, regulatory, and business requirements for the facility. A comprehensive BOD document will raise many of the underlying harmonization issues for any new operation. Fundamental differences between the U.S. and EU have been understood for years: the FDA’s reliance on pressure cascades to achieve isolation and segregation, and the EU requirement for air quality cascades and static and dynamic testing must be considered at the outset to obtain both regulatory approvals. But, emerging markets represent the additional complexity of evolving regulatory requirements. In the case of China, these are often driven by the highly publicized mis-steps that signal a threat to global public safety. As a result, the flexibility in establishing an operation to meet new regulatory standards is often much less than in the U.S. and EU, and may become the primary consideration in developing a facility design.
Remember that, regardless of where the facility is located, the key consideration from a regulatory perspective will be the market in which the drug will be distributed. This translates to the need to develop several regulatory plans in parallel. Establishing a dialogue with all potential regulatory authorities early on will lay the groundwork for a successful downstream assessment.
While on paper there may be no fundamental differences between a plant built in the U.S. or in China, the level of scrutiny and confidence imposed by the regulatory agency in terms of the plant’s on-going operations will most likely be very different from one risk is somewhat diminished for established markets such as the European Union countries governed by the EMEA because of the depth of experience the industry has in operating in these markets. that is in an established marketplace and must be factored into the facility design and execution from the outset. In the U.S., the FDA has several prescribed vehicles for communication with both district and the central office. It is essential to establish a conduit for understanding the FDA’s concerns and handle the trade-off decisions which arise as we move through the design and implementation process. While EU vehicles for partnering are not as well defined, there is a long history of willingly providing feedback for operations that require licensure. In the case of emerging markets, there are fewer formalized conduits for information and even fewer absolute positions in terms of facility design for compliance. This adds another level of complexity when establishing the facility’s BOD. It is not unusual for there to be significant differences in opinion between a field office and central office decision, another factor to consider.
Quality challenges may not at first be perceived as a critical component of the facility design. However, in today’s shifting quality paradigm, in which companies strive for a Quality by Design (QbD) approach as prescribed in ICH Q8, all facets of the manufacturing process including the facility must be considered. The primary scrutiny in emerging markets will revolve around the quality architecture and its ability to guarantee product form, fit, and function. The position taken in terms of conservatism will drive many of the trade-off decisions in the new facility, such as materials of construction, HVAC design, personnel, and material flow and process design. ICH Q10 describes a possible structure designed to balance oversight, risk, and a QbD approach which may complement the decisions and commitments made in the facility design phase. Adopting a clear and integrated quality strategy will position the operation to move through the execution phase quickly and efficiently.
The highest level of scrutiny will fall upon the operating systems: U.S. and European operations are very similar in their interpretation of the system requirements for cGMP compliance. The five major manufacturing systems—Production, Packaging and Labeling, Facilities and Equipment, Materials, and Laboratory— must be subsumed within an overall quality system. It is the interrelationship between these systems defines whether your quality system is in a state of control. However, operations in emerging markets will need to raise the bar. For example, there are no FDA-approved operations in China that can manufacture and import finished therapies to the U.S. So, to be successful, it is reasonable that the greatest risk to the process—in this case the operator—must be at the forefront of the quality argument. In response, the design of the manufacturing and quality system may be considerably less dependent upon operator due diligence and will have to guarantee, by design, that the operation can be done correctly. For such a facility, defining how the quality systems and manufacturing systems are to work together from the outset will ensure that the operation builds quality into the product from every facet of the operation.
OPERATIONAL EXCELLENCE/LEAN MANUFACTURING
Integrating business excellence approaches such as Lean Manufacturing, Six Sigma, and Kepner-Tregoe Root Cause Analysis at the outset of the facility and operating system deployment will help establish a culture of performance and predictability. Marrying these principles to key quality systems, such as change control, complaint management and CAPA, will further reinforce the operation’s capabilities to satisfy the various quality expectations for each market. In addition, employing a Lean facility design process will prompt an analysis of the operating principles for the facility. This exercise can drive a very effective risk analysis at the outset of design to ensure that a strong quality argument is made and the performance metrics for the operation are clearly established from the beginning.
The decision to develop an ex-U.S. operation is a significant step in a competitive strategy that seeks lower operating and manufacturing costs in emerging markets such as China and India. Because harmonization challenges between different regulatory agencies can escalate rapidly, evolving regulatory requirements and heightened quality awareness must be reconciled at the very outset of the project to keep the competitive advantage intact. Effectively identifying the design and capability and leveraging these issues early, at the BOD phase, will ensure that the final operation is positioned for success at the compliance level required to realize the competitive opportunities these markets represent.
Bikash Chatterjee is the president of Pharmatech Associates, Inc. He has been involved in the bio-pharmaceutical, pharmaceutical, medical device and diagnostics industry for over 20 years. His expertise includes site selection, project management, design, and validation of facilities for both U.S. and European regulatory requirements.