Contract Pharma: Assuring Quality in the Global Supply Chain-Measuring Risk in Sourcing

In the September 2009 issue of Contract Pharma magazine, Helena Champion the Principal Consultant with Drug Quality Assurance LLC, writes a must read article for senior to mid level pharmaceutical executives about dealing with the risk of quality assurance of pharmaceuticals in this era of globalization of the pharmaceutical supply chain.

As posted on previous stories and blogs at Secure Pharma Chain Blog, the issue of the globalization of the pharmaceutical supply chain has led to a worldwide epidemic that affects the quality of medications and a proliferation of counterfeit drugs.

XStream Systems endorses the concept that both private industry and government regulatory agencies use technology such as XStream’s XT250 to screen, authenticate and verify the contents of products within the supply chain from the point of production to the consumer. The use of a material screening process, which verifies the material inside its unit-of-sale container, enables the entire supply chain to mitigate its liability and ensures the consumer that the product is safe and efficacious.

In the article titled Assuring Quality in the Global Supply Chain-Measuring Risk in Sourcing, Ms. Champion outlines a compelling history and case for quality assurance measures along with a Supplier Risk Scoring Tool for use by a Material Supplier/Provider Combination. Ms. Champion states in the introduction that, “this article explores the risks of depending, without reliable verification, on remote suppliers to maintain the quality and safety of their supply chain and the materials we buy from them.” Although Ms. Champion primarily focuses on manufacturing, much of her article is relevant and could be applied and used by members of any supply chain-from production to dispenser.

Here are some of interesting portions pulled from Ms. Champion’s article:

• Heparin Tragedy-In early 2008 there were numerous adverse events, some fatal associated with Baxter International’s heparin parenteral products and they voluntarily recalled nearly all their heparin products in the United States…at least 80 people in the United States died from contaminated heparin products.


• Experiences in Other Industries-Experiences in other industries moving production and supply to low-cost suppliers have not been very different from the heparin experience. The Economist recently reviewed a book by Paul Midler, Poorly Made in China: An Inside Account of the Tactics Behind China’s production Game. Mr. Midler is fluent in Chinese and has consulted in China since 2001 for Western companies replacing factories in Europe and America with sub-contracting relationships in China. His Western clients were delighted with how Chinese factories could do things so well, so fast and so cheaply, but were puzzled as to how this was possible. There was reason to question the low prices-he soon found that “quality fade” was common, as Chinese factories transformed what were, in fact profitless contracts into lucrative relationships.


• Even if test are made more specific, third party testing is certainly not enough to assure the quality of pharmaceuticals and especially biologics and biopharmaceuticals.


• The tryptophan dietary supplement disaster over 20 years ago provides an example of the risks of changing a process without extensive testing to validate the new process-a manufacturer made a change to the process and did not anticipate that a very toxic impurity would result, which killed at least 37 people and permanently disabled more than 1,500 people in the United States.


• The existence of a United States affiliate or a United States Agent does not guarantee real knowledge of the supply chain or its integrity.


• Economic fraud is not new and nor is it confined to any one country or industry…In the 1990’s Flavine International, a NJ-based broker of bulk drugs, bought bulk gentamicin sulfate at low prices from unapproved sources in China. Flavine repackaged the bulk drug to resemble gentamicin sulfate manufactured by Long March Pharmaceutical...there were a number of adverse events linked to drug product made with the counterfeit gentamicin…Flavine, its owner and its vice president were fined and the owner got a two-year prison sentence.


• You are Responsible For Your Supply Chain-It has become obvious that companies in general need to know much more about their supply chains than in the past and that there are hazards in taking supplier information at face value.


• Five Steps To Achieve and Maintain Comprehensive Supplier Qualification:

Step One-Quality in Depth, A company needs to perform a comprehensive, in-depth evaluation of a supplier for a particular material. API and component manufacturers often do not allow a customer to audit their operations in detail, to protect proprietary knowledge and confidentiality, but a superficial audit is no long a viable approach.

Step Two-Use Experienced, Technically Expert Auditors to Perform On-Site in Depth Audits-They Can Change the Game

Step Three- Need to Identify and Audit the Upstream Supply Chain for Critical Materials - Audits conducted by You or Your Agent

Step Four-Trust But Verify Regularly, After initially qualifying the supplier of an API or components and demonstrating that the supplier can consistently provide material that meets specifications, drug product and device manufacturers still need to regularly check supplier compliance through reliable means.

Step Five-Management Responsibility to Understand and Mitigate Supplier Risk, Senior management should be informed and updated regularly as to the security and integrity of critical supply chains.

• The best suppliers will accept the new reality of increased transparency, and brokers and distributors who can establish and guarantee the level of quality assurance associated with more rigorous auditing and supply chain verification will be invaluable.

Written for and from the standpoint of quality assurance at the point of manufacture, this very detailed article gives a solid roadmap for executives and managers to gauge and or build a process that protects their supply chains and begin to understand the potential for catastrophic consequences economically and to the general health of a population if they do not take the issue seriously.

Not mentioned by Ms. Champion in this article is the role that technology can be deployed and used to screen and protect manufacturers, packagers, distributors, dispensers and ultimately the consumers in authenticating at each step of the supply chain the veracity of their products. By using the processes described in the article with a suite of technology it is possible for the supply chain to protect itself from the various nefarious sources that threaten it.

To read Ms. Champion’s article in full in the September 2009 issue of Contract Pharma, visit their website at: www.contractpharma.com.

To learn more about XStream Systems and its revolutionary technology that allows the pharmaceutical supply chain to verify and authenticate materials inside their sealed unit-of-sale container, visit their website at: www.xstreamsystems.net.