5/19/2011

1

IPEC-Americas20th Anniversary 20th Anniversary Excipient Distribution“Past, Present, Future”

Dwight MutchlerMutchler Inc. Pharmaceutical Ingredients

VP Strategic & Supplier DevelopmentMay 10, 2011 Baltimore, Maryland

Co-marketing & Supply of…

•• Quality ExcipientsQuality ExcipientsQ y pQ y p

• utmost levels of supply & servicesupply & service

• with technical, regulatory & quality technical, regulatory & quality know-how

• from high quality manufacturersquality manufacturers

• with valuedvalued--added services added services (AVS)

• to pharmaceutical industrypharmaceutical industry

5/19/2011

2

Excipient Portfolio

Covering all areas of functionality (final product)

Coatings SurfactantsSolubilizersEmulsifiersLubricantsOils & Waxes

Binders/FillersDrug Layering SubstratesEmollientsHumectantsGlidantsDisintegrants Oils & Waxes

Sugar EstersDisintegrantsFunctional Polymers

Locations & Sales Coverage

Mutchler US – Harrington Park, NJHead QuartersS l T h R l t Q litSales, Tech, Regulatory, QualityWarehouses (Regional)

Mutchler PR – Cidra, PR Sales, Regulatory, QualityAVS (Added- Value Services)Warehouse: Cidra

5/19/2011

3

Presentation Objectives

Proactive Distribution to assure supply-chain security

During sourcing

Before product arrives at distributor

During storage

5

After it leaves distributor until arrival at the customer

Past → Present → Future

TEC Elements

ExcipientDesign

ExcipientSafety

TEC

Excipient Excipient M f t i M f t i

Excipient Distribution and Supply Chain are new to GMP’s & Regulation

Manufacturing Manufacturing Process Control and Process Control and

DistributionDistribution

5/19/2011

4

Basics of Distribution

Source

Sales Representatives (for suppliers)

Purchase

Transport

7

Stock

Deliver

Evolution of Pharma Distribution

Distributors dedicated to Pharma are few… Why?

Pharmaceutical Industry = HIGH MAINTENANCEHIGH MAINTENANCE• Quality driven• Inherent nature “slow-to-change”

Distributors traditionally are “sellers” (slug work is not popular)

Early 1980’s COA’s not required with shipments (no MSDS’)

8

Early 1980 s COAs not required with shipments (no MSDS )

Survival in Pharm Distribution is a total commitment to Supply Chain integrity

5/19/2011

5

Distributor Added-Value for Customers

Distributor gives Service & Flexibility

Why not direct?

Distributor gives Service & FlexibilityMultiple source alternatives

Local supply, support

Receive in smaller quantities

Consolidation of materials

9

Fast response → logistics, technical, regulatory

Tailored services & efficiencies (i.e.: repacking)

Effective economics (group pricing)

Key to Quality Pharma Distribution begins at the Source

Long-term Relationships as co-marketing partner and an extension of their sales , regulatory, quality and supply chain teams

5/19/2011

6

Distribution Flow

6. Supplier ships

Excipient Manufacturer

5. Distributor Buys

4. Approval & Order

3. Sourcing , tech, regulatoryqualification & commercial

7. Stock & Services 1. Material need forformulation or production

8. “PROBLEM-FREE”

Customer

Distributor

2. Sourcing

CUSTOMER BASIC EXPECTATIONS → SUPPLY CHAIN SECURITYright product, quantity, functionality, regulations… ON TIME

DELIVERIES

Today’s Reality

How is a Distributor qualified by pharma?Product availability outweighs other factors (ti ?)Product availability outweighs other factors (time?)

Reputation in business (vs. true verification)

Audits are usually done later (resources?)

IPEC Good Distribution Practices (GMP’s limited)

PO’s represent most agreements (Quality Agreements limited)

12

PO s represent most agreements (Quality Agreements limited)

Lack of time & resources → 3rd Party Audits & audit sharing are needed (IPEA, RX360)

5/19/2011

7

Today’s Reality

Audits of Distributors mostly focus on:

House keeping & Pest ControlHouse-keeping & Pest Control

In-house SOP compliance

Storage environment requirements

Inventory, receiving & shipping verification

Heat-treated pallets

13

Heat treated pallets

Storage & disposal of damaged materials

Audits for Repacking & Sampling focus on cGMPs & procedure verification

Distribution Controls - Current

Sourcing: •Qualify suppliers (specs, samples, tech/regulatory documentation, audits)•Customer approval & confirmation of conditions of sale•Importation (Bioterrorism Act regulations)

Transport & Receiving: •Internal coding of material, grade, supplier•Logistics confirmation at-all-stages (carrier & broker selection)Import & transportation regulatory compliance

14

•Import & transportation regulatory compliance•Coding transparency on all documentation & check-lists•Incoming inspection (COA, MSDS, quantity, packaging, seals, damages)•Bar-coding & repalletizing (internal inventory & location)

5/19/2011

8

Distribution Controls - Current

Storage: • Shrink-wrappedSegregation & ambience monitoring•Segregation & ambience monitoring

Shipping & Delivery: •Unit labeling (customer PO, code, spec)•Final cleaning & inspection•Coding verification & check-lists, internal sign-off•COA’s B/L packing list consistency

15

COAs, B/L, packing list consistency•Inspection of carrier, check-list, sign-off

Customer Receiving: Verification of material, documentation & sign-off

Distribution Controls - Current

Internal Audits• Quality Manager dedicated verification of operationInternal a diting & contin o s impro ement•Internal auditing & continuous improvement

•Trainings

Non-Conforming Issues (NCI): •Internal investigation tracking•Customer complaints (full investigations, reports, corrective actions)•Internal deviation NCI’s

16

•Change controls & customer communication

Security• Guarded facility, video monitoring & recording•Controlled area access (training required)

5/19/2011

9

Distribution Demands of the FutureFuture

•Multiple-global locations & creation of “pharma” distribution•FDA registration & monitored•FDA registration & monitored

•Electronic “track & trace” (tamper chips)

•Start-to-Finish supply chain transparency (chips)

•Photo libraries (product, packaging, labeling, seals)

•Infrared product identification scanning

17

Infrared product identification scanning

•Go-Green (paperless & scan-smart)

••AddedAdded--value services & efficiency creation value services & efficiency creation

Building Efficiency from Distribution

18

5/19/2011

10

• = Sampling, Repacking, Dispensing, Testing

Testing Services via Strategic Partnership

Delivery of “Production Ready” “Production Ready” Excipients

Ultimate Scenario• Sampled

• Tested

• Dispensed & weighed

• Sealed, Labeled

Shi d i h ll t

20

• Shipped on in-house pallets

Integration of all… or one in supply chain → efficiencies

5/19/2011

11

Real Cost of Ownership

Cost of Excipient XYZ

+ $$________________1. Incoming2. Sampling3. Testing4. Dispensing & Weighing 5. Cleaning procedures6. Maintenance & PM

$$ $$ $$ $$$$$$$$$$

7. Waste & expiration8. Overhead, storage +++

and lots of TIME…and lots of TIME…

• Cost of Excipient XYZ … $$

Price

Goes far beyond the perGoes far beyond the per-- KG priceKG price

Price

Residuals

$$$$$$$$$$$$Residual costs overResidual costs over--shadow the base cost→shadow the base cost→

5/19/2011

12

RM Mfg. DistributorShip to Pharma

Incoming Warehouse

Inspection & Sampling

Lab Testing Release Weighing Compo

unding Mfg Release Testing Pkg Release for

Distribution

Current Process Manufacturing Cycle

Testing unding Testing

RM MfgMutchlerPharma

RM Mfg. Distributor Incoming Warehouse

Inspection & Sampling

Lab Testing Release Weighing Ship to

PharmaCompou

nding Mfg Release Testing

Pkg Release for Distribution

AVS = Shorter Manufacturing Cycle Cycle Cycle…The whole is greater than the sum of the parts

24

5/19/2011

13

Quality not sacrificed for Savings…

AVS cGMP standards seek…

• Equivalency ISO class 8 & FDA 100,000 PC

• ISO 9001 & IPEC Certification (pending)

• Customer certification

AVS cGMP standards seek…

• Equivalency ISO class 8 & FDA 100,000 PC

• ISO 9001 & IPEC Certification (pending)

• Customer certification

25

• Excipient manufacturer’s certification• Excipient manufacturer’s certification

Compliance to cGMP’s: CFR Part 211

What Regulatory Agencies are asking:

Compliance to cGMP s: CFR Part 211

Supply Chain Integrity

Robust Supplier Qualification (Audits, Q Agreements)

Ownership of quality process

Risk management

5/19/2011

14

M f t lti t l ibl f lif i li

FDA on Sampling, Testing, Dispensing

Manufacturers ultimately responsible for qualifying suppliers

Outsourced sampling-dispensing → FDA registration is notrequired

Testing services do require FDA registrationTesting services do require FDA registration

Phase I: Risk Assessment & User Requirements (Done)

• AVS Quality-Validation Process

Phase II: SOP Development (Done)

Phase III & IV: Verification Protocol & Execution (Done)

Phase VPhase V: Operational trials (in process): Operational trials (in process)

Ph VIPh VI N j tN j tPhase VI:Phase VI: New projects New projects (3 x big pharma and supplier sampling)(3 x big pharma and supplier sampling)

Tail gate sampling, released material in extension whse, testing - dispensing - kitting options

5/19/2011

15

YESYES to Supply Chain Efficiencies

•• Yes,Yes, There are quality compliant strategic partnersYes, Yes, There are quality compliant strategic partners

•• Yes, Yes, Pharma can receive production ready Excipients

•• Yes, Yes, Cycle times, overhead & waste will be reduced

•• No, No, Quality will not be compromised… with validation of AVS

29

y p

Time, Resources, Support RequiredExcipient

Manufacturers

Excipient Di t ib t

Pharmaceutical Manufacturers

Product Transparency

Product Traceability

PRODUCT INTEGRITY

Distributor

PATIENT SAFETY

5/19/2011

16

“A good investment starts with a relationship of quality integrity & trust”relationship of quality, integrity & trust

THANK YOU

31