First SQA/BIRS Center Meeting

Purdue University Polytechnic Institute

Louis W. Yu, Ph.D.

Chief Quality Officer

The Future of Pharmaceutical Quality

1

Unique Challenges of the Pharmaceutical Industry

a. The pharmaceutical industry is a unique industry where

failure is the norm: 99 out of 100 Phase III late stage

therapeutic candidates failure clinical efficacy test

b. High hurdles in manufacturing regulatory oversight retards

post approval changes and innovation

c. Lack of extensive global harmonization imposes barriers to

changes in pharmaceutical manufacturing process and

supply chain leading to an industry slow to make changes

2

Challenges & Opportunities a. Megatrends in demographics and the “New Health Economy”

lead to growing use of healthcare products with focus on value

outcomes and institutional customers playing a larger role in

controlling drug choices, more restrictive access to approved

drugs

b. These changes in market place dynamics, has caused Pharma to

struggle with stagnant growth, further constraining innovation

c. Declining productivity of Big-Pharma R&D and pipeline woes are

leading industry to form more alliances, partnerships and use of

enterprise analytics to coax insights out of data to drive more

informed decision on drug development, target specific

populations for clinical efficacy and safety

d. The industry increasingly looks like mega dinosaurs dominating

the landscape, but outsourcing innovation and risks to small

velociraptor like virtual startups – however, I can see a parallel

here that these dinosaurs adapt and evolve into birds that soars

into the sky

3

PwC: The New Health Economy increasing lead to a

healthcare system focused on value delivery

• Consolidation among providers, especially hospitals, intending to

produce efficiency gains

• Changing demands and expectations of patients, who seek a

greater role in their own care

• Increasing cost pressures from payers leading to calls for pricing

reform

• Declining autonomy of prescribers

• To adapt, Pharmaceutical Quality has to evolve from traditional

focus on safety and technical compliance to holistic value delivery

for all customers – users, payers, regulators

“Value Delivery” means a renewed focus on total Quality

So what is the Current State of Pharmaceutical Quality?

• There are 4 degrees of separation between the patient and

the developer and manufacturer of the pharmaceutical

products:

a. A doctor prescribes a medicine

b. The prescription is filled by a pharmacist, who might

substitute the Rx based on therapeutic or generic

equivalency

c. The pharmacy is constrained by the formulary imposed

by the Pharmacy Benefit Management (PBM) company

• The payer for the majority of the cost of the medicine is not

the patient, it is the Healthcare insurance company

3

5

Current State of Pharmaceutical Quality

a. Due to the 4 degrees of separation between Pharmaceutical

manufacturers and their customers, quality is not an attribute

consumers pay a lot of attention to

b. Overall, pharmaceutical product quality stays around 4 sigma

(6,200 defects per million)

c. Batch processing and lack of automation, especially for legacy

products, still relies too heavily on human intervention, which is

prone to human error

d. Quality is about prevention, detection, correction: many

pharmaceutical quality programs are overly dependent on

detection & correction with insufficient focus on prevention

e. Process analytical technology not widely adopted

6

Current State of Pharmaceutical Quality

a. Schedule driven pharmaceutical development programs

leads to lack of full product and process understanding

before commercialization

b. The separation of consuming public and manufacturers

leads to a public not particularly sensitive to quality

c. Manufacturing and supply chain cost of manufactured

drug products are often less than 10% of cost of doing

business do not provide enough incentive for

manufacturing innovation

7

Drug Shortages

Benefit of

availability

Risk to product

quality

Source: FDA’s internal drugs and biologics shortages database

Drug Shortages by Primary Reason for Disruption in Supply in 2012

Number of New and Prevented Shortages by Dosage Form, 2005-2012

62 56 90 110

157 178

251

117

38

195

282

31 23 40 38 72

132 179

87

16

165

213

0

50

100

150

200

250

300

350

400

450

2005 2006 2007 2008 2009 2010 2011 2012

Nu

mb

er

of

Sh

ort

ag

es

Prevented - Injectables

New - Injectables

Prevented - All

New - All

8

Product Recall

9

Economic Fundamentals

“The fundamental problem we identify is the inability of

the market to observe and reward quality. This lack of

reward for quality can reinforce price competition and

encourage manufacturers to keep costs down by

minimizing quality investments...”

Woodcock, J; Wocinska, M. Clin. Pharmacol. & Thera. 93:170-176 (2013)

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Impact of Technology Innovation & Medical Science on

the Industry & Future of Pharmaceutical Quality

Breakthroughs will transform drug development, supply chain management and

quality management:

a. Biotechnology innovation leads to less small molecular entities, needs more

skills in interdisciplinary science – engineering, molecular biology, genetic

engineering and requiring new quality engineering skills

b. Mergers and acquisitions, outsourcing, in-licensing trends are leading to a

much more complex and far flung supply chain network requiring advanced

supplier quality management programs

c. Global harmonization and mutual recognition represent positive trends to

facilitate change management and continuous improvement (ICH Q, M, S, E

documents) and broadening of ICH from tripartite conference to

multinational council

d. Innovations in supply chain management strategies, continuous

manufacturing and nanomaterials will radically change drug manufacturing

and quality management

e. Innovations in regulatory science

11

Regulators are taking action to improve pharmaceutical

quality

Both CDER and CDRH are evolving the

regulatory framework to encourage

industry to embrace quality

12

21st Century Cures Act Became Law in Dec 2016

Following FDUFA (1992), FDAMA (1997), FDASIA (2012), the 21st CURES Act

(2016) builds on previous legislative and regulatory initiatives to modernize the

regulatory process

When implemented, the “Cures Act” will modernize clinical design and data

analysis, incorporate tools to shorten the drug development process, streamline

applications for new indications, create incentives to study treatments in

populations with high unmet needs, incorporate patient perspectives into the

drug review process, renew user fees act, and further clarify regulatory oversight

of combination products

On the quality front, up to until recently, regulators and regulated are still too

focused on compliance

However, FDA Program Alignment, CDER OPQ, CDRH “Case for Quality”

Initiatives will advance drug & device quality in the future

13

Innovations in Regulatory Science must be part of the enabling

factors for the future of Pharmaceutical Quality

“Pharmaceutical regulation should be designed to improve the performance of

individual and organizational behavior in ways that protect and promote public

health”

13

Coglianese, C., & Lazer, D. (2003) Law & Society Review, 37(4), 691-730.

Planning Acting Outputs (both

good and bad)

Stage of

Production

Type of

Regulation

Management

Based

Technology

Based

Performance

Based

Stages of Organizational Production and Types of Regulation

14

Performance-based Regulation

Lawrence Yu, Ph.D. – FDA Deputy Director Office of Pharm Quality

• A regulatory approach that focuses on desired,

measurable outcomes, rather than prescriptive

processes, techniques, or procedures.

• Performance-based regulation leads to defined

results without specific direction regarding how those

results are to be obtained

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15

CDER Quality Initiative:

Early 2000s: FDA Embarks upon Pharmaceutical Quality for

21st Century Initiative

Vision

“A maximally efficient, agile, flexible pharmaceutical

manufacturing sector that reliably produces high quality

drugs without extensive regulatory oversight”

-Dr. Janet Woodcock

16

CDER Established the Office Of Pharmaceutical Quality

FDA is Moving to Clinically

Relevant Specification

Quality by Testing

▪ Specification acceptance criteria are based on one or

more batch data

▪ Testing must be made to release batches

Quality by Design

▪ Specification acceptance criteria are based on

performance

▪ Testing itself may not be necessary to release batches

Lawrence Yu (Deputy Director, OPQ):

”We Need to Decouple Acceptance

Criteria from Process Variability”

17

CDER Quality Initiative

FDA Quality Metrics Program

Vision

▪ A more rigorous and comprehensive approach to quality surveillance that

allows for improved monitoring of current status across the inventory of

FDA-regulated drug products and manufacturing sites

Goals: Objective measures

▪ Quality of a drug product

▪ Quality of a site

▪ Effectiveness of systems associated with the manufacture of pharmaceutical

products

Draft Guidance published July 27, 2015

▪ http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInform

ation/Guidances/UCM455957.pdf

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2017 CDRH Strategic Priority – Promoting the Case for Quality

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What Does This Mean?

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The Role of Industry in Advancing Pharmaceutical Quality

As a quality leader in industry, I see it as my personal

responsibility to work with colleagues inside and outside of my

company, regulators and academic institutions to advance a

quality culture to deliver value to all customers:

1. Collaborate with regulators to advance regulatory science

2. Active participation with NGOs such as ISPE, PDA to advance

product and process excellence

3. Volunteer in academic institutions to disseminate and cross

pollinate quality science and quality education, e.g. BIRS in

USA and Africa, Brookings

4. Actively build robust quality capabilities and quality culture at

work

22

Quality Capability Building Blocks

Organizational Culture

Smart & healthy; Continuous improvement learning organization

Governance

Employee Engagement

& Enablement

Quality Systems

Robustness

(in place and in use)

Fit For Purpose

(Facility, product

mix, process, equipment,

technology, capacity, complexity)

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Establishing A Robust Quality Culture

• Employees deliver quality

• Engaged & enabled workforce is the key to

quality

• The right systems and process enable the

workforce

• Employee engagement & enablement are

shaped by the actions of company leadership

• The collective positive behaviors & actions of

leaders, managers and associates builds a

robust quality culture

The most important work of leaders is to cultivate the culture of the

company

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Principles

Systems

Behavior

Culture

Guide the purpose of your:

Which encourage, reinforce, and drive:

Which is your:

Em

plo

yees

Manag

ers

Leaders

Behavior Model

25

The Future of Pharmaceutical Quality

Adoption of Lean and Six Sigma Operational Excellence ▪ a customer-focused, results-oriented approach to business improvement –

deliver value to the customer ▪ E2C Total Quality (effectiveness, efficiency, compliance) ▪ Use analytics to target fit for purpose design, development, capability

Globalization of Quality ▪ Global networking to focus on best practices and leverage economies of scale ▪ No significant differences among regions around the world

Advances in Quality & Regulatory Sciences ▪ Evolving from manufacturing quality to full value chain (SIPOC) quality ▪ Advancing from testing quality in to quality by design ▪ Broadening focus from commercial production to full life cycle quality

Current and future challenges ▪ Move to culture based Quality (principles, systems, tools) ▪ Making quality certain – optimize the total cost of quality ▪ Elevation of Quality to the “C” suite in recent years signifies the importance of

quality to the success of biopharmaceutical and healthcare sector

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Academic Institutions’ Role in Enabling the Future of Pharmaceutical Quality

Design programs to produce a future workforce with a new competency profile:

a. Skills in design engineering and analytics to make effective use of big data

b. Knowledge in global regulatory science is essential

c. Skills and knowledge in material science will be in high demand

Interdisciplinary collaborations and interfaces will become crucial

d. Team and strategic leadership competencies, ability to drive continuous

improvement and organization learning

e. A workforce with strong linguistic skills that are able to operate across

multiple continents

f. Strong leadership and behavioral science competencies