Life-Science Panorama

A Journal for Industry Executives

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September 28th, 2011

Cutting Regulations: How will it impact the Health and Life Science Industry?

By Ellyn McMullin

In his recent speech to Congress, President Obama stated “…I agree that there are some rules and regulations that put an unnecessary burden on businesses at a time when they can least afford it. That’s why I ordered a review of all government regulations.”  The review and potential elimination of federal regulations would have significant impact on the Health and Life Science Industry.

In response to the President’s order, the Department of Health and Human Services (HHS) recently published their “Plan for Retrospective Review of Existing Rules” aimed at improving regulation and regulatory review. The HHS regulatory review plan focuses on the elimination of rules that are no longer justified or necessary and considers strengthening, complementing or modernizing rules where necessary and appropriate.

This article reviews Food and Drug Administration (FDA) & Centers for Medicare and Medicaid (CMS) regulations affected by HHS’s retrospective regulatory review and their effect on the Health and Life Science Industry.

CMS has been proactive in reviewing obsolete, unnecessary or burdensome requirements. The agency has recently identified opportunities to improve patient care and outcomes by removing these impediments. In May 2011 CMS issued a final rule permitting hospitals to use telemedicine to obtain services from a practitioner credentialed at a distant hospital. This change improves the ability of rural and critical access hospitals to provide a broader spectrum of care and services to their patients while reducing provider burden. According to the retrospective plan, CMS intends to publish additional rules in the near future to alleviate other identified bottlenecks.

On a related move, in April 2011 the FDA issued a final rule regarding the regulation of telemedicine equipment. The Medical Device Data System (MDDS) Rule classified most Healthcare IT infrastructure, including telemedicine devices, as Class I medical devices. MDDS requires manufacturers of such devices to meet certain regulatory requirements including Registration & Listing, compliance with Quality System regulation and Adverse Event reporting.  Since the MDDS rule went into effect, manufacturers of telemedicine systems including AMD Global Telemedicine, CISCO and Polycom have registered with the FDA as medical device manufacturers. Tying the two initiatives together means that CMS approved hospitals can use telemedicine but the hospitals must ensure that telemedicine devices comply with FDA rules.

Another area of review in recognition of changing technologies is FDA’s bar code rule. A request for comment was made August 11, 2011 to initiate the review of this rule and help the FDA evaluate alternative technologies. It will be interesting to see if the bar code rule will be replaced with ePedigree and RFID requirements.

As part of the regulatory review process, FDA plans to Increase the Use of Electronic Reports and Submissions. FDA is embarking on a major campaign to revise its regulations to increase use of electronic information in the way it conducts business. To support this effort, FDA requested $400 M in 2010 to transform operational and regulatory processes to increase use of electronic systems and information. This would not only speed processing of NDA’s and clinical study data among others, but also would be more in line with how businesses process information using eMDR and similar programs. On its immediate agenda are regulatory revisions to permit electronic submission of clinical study data for drug trials, post-market reporting for drugs and biological products, and registration and listing of drugs and medical devices. FDA is also looking to require electronic package inserts for human drug and biological products.

In another initiative, FDA is reviewing its current Good Manufacturing Practices (cGMP) regulations for drugs. These revisions would accommodate advances in technology and control of components. Taken together, FDA anticipates that the revisions would provide greater assurances of safety and quality and address some of the challenges presented by the globalization of the pharmaceutical industry.  FDA recognizes that changes to cGMP regulations do not generally reduce costs, though there is a presumption of unquantifiable public health benefits from improvements to good manufacturing practices. Examples of such benefits include supply chain security for drugs and establishment of preventive controls, which improve product safety and reduce the harms associated with poorly manufactured or produced products.

The implementation of HHS’s retrospective regulatory review appears to provide a needed push to streamline regulations and reduce obstacles while still ensuring the safety and welfare of patients. It is a move in the right direction.

September 21st, 2011

Senate Testimony References Findings from Axendia’s Global Supply Chain Research

By Daniel R. Matlis

I’m sure you have heard the philosophy question: If a tree falls in a forest and no one is around to hear it, does it make a sound? The engineer in me says YES, when the tree falls it will create sound waves.

As a Strategist, the corollary is: If a research report is published and no one is around to read it, does it make an impact?

I pondered this question when we released our research report: “Global Supply Chain Visibility, Control & Collaboration; Regulatory Necessity, Business Imperative.”

Last week, the Senate Committee on the Health, Education, Labor and Pensions (HELP) conducted a hearing on “Securing the Pharmaceutical Supply Chain.”  This hearing is part of the process to reauthorize the FDA user fee legislation and examine the safety and integrity of the pharmaceutical supply chain.

Allan Coukell, Director of Medical Programs at Pew Health Group testified as an expert witness at the hearing. The following excerpt from Mr. Coukell’s Senate testimony references findings from Axendia’s research report “Global Supply Chain Visibility, Control & Collaboration; Regulatory Necessity, Business Imperative.”

“A recent survey of pharmaceutical industry executives [by Axendia] determined that 70 percent had key suppliers in China and close to 60 percent in India. About half of those surveyed were from companies with annual revenues of one billion dollars or more. 94% of those surveyed saw their greatest supply chain risk as raw materials sourced outside the United States.”

In addition to the Senate, Axendia’s Life Science Supply Chain research has made an impact on the following organizations:

I am pleased to see that findings from this research study have made an impact on the Life Science ecosystem.

Thanks for being around to read this; I hope it made a positive impact.

To discuss how your organization can leverage the findings and recommendations from this research, please schedule a briefing by emailing info(at)axendia.com

September 6th, 2011

Quality Is Not the Exclusive Domain of the Quality Department

By Daniel R. Matlis

At this year’s Camstar Customer Conference  Larry Dube, Vice President for Operations at NP Medical, presented a session entitled “quality (with a small q): Prevention, Analysis and Improvement.” Mr. Dube has a track record of successfully leading Medical Device organizations through cultural change and is a proponent of lean manufacturing.

np-medicalNP Medical is an OEM supplier of drug and fluid access devices and components that ultimately help guard both patient and healthcare provider once incorporated into the world’s most precise medical device technologies.

I recently had the opportunity to speak with Mr. Dube about his approach to quality in the Medical Device industry. This article distills key points of our conversation.

In many organizations functional boundaries and silos have developed over the years regarding who is responsible for quality. Most Life-Science manufacturers are organized in well-defined and delineated functional areas, each with specific roles and responsibilities. Each of these functional areas have traditionally operated as silos or stove pipes, having their own well defined, independent and often unaligned goals, objectives and incentives. This level of independence has led to the “catapult effect”, where deliverables are thrown over the wall to the next functional area to deal with. See the article at http://axendia.com/blog/2007/06/13/tilting-at-windmills/

Mr. Dube’s perspective is that quality is everyone’s responsibility, not the exclusive domain of the Quality Department. “In some Medical Device companies, the organizational culture has developed in such a way that certain people are responsible for making the products and then they throw it all over the wall to somebody else to inspect it. In that scenario, the Quality Department ends up ultimately owning the responsibility for the product quality. This is just inefficient. I’m a big proponent of lean manufacturing and that is the antithesis of lean manufacturing,” he told me.

The implementing of a culture of quality (small “q”) throughout an organization, rather than leaving the entire responsibility to the Quality (large “Q”) Department is a major adjustment for many Life Science companies. As Mr. Dube commented: “It’s a big shift in ownership and mentality for the responsibility for quality; and changes the focus of the Quality Department to Quality Assurance.” This QA process is more akin to an auditing or verification process aimed at ensuring that processes remain within their validated parameters and specification rather than ongoing inspection of the product.

Driving this need for change at NP Medical is the high volume of product and the impossibility of testing hundreds of millions of units per year. To enable this culture shift, NP is implementing an MES strategy.

NP Medical plans to achieve several objectives with their MES implementation. First there are some savings from labor recapture (from replacing a manual paper-based process). More importantly, MES provides the capability to capture information automatically, monitor processes in real-time and the ability to react more quickly to process or product quality issues. According to Mr. Dube: “The sooner we can figure out that there’s something wrong, the easier it is to understand the root cause, and implement corrective actions.” And lastly, there is the savings from limiting scrap costs and tying up inventory.

The ultimate goal for NP Medical’s MES implementation is to have inspection by exception as opposed to inspections as the rule. Achieving this goal requires a phased approach: collect data, continue testing, compare data to test results, implement analytics software, look at correlation between certain process parameters and establish control limits. As a better understanding of the process develops it may require some modification to the automation equipment or tooling upgrades in order to provide the types of control needed. If a process parameter is important but unable to meet control limits, the design parameters may need to be revisited. And this is where the MES system can help as noted by Mr. Dube: “Just like it can help get to root causes of a particular problem, it can also help to justify making go/no go types of decisions. If I’m not getting what I expected out of this particular process I can stop.”

Moving to an MES environment is not just about implementing the technology. A company must have not only the resources needed to make this type of investment but also the willingness to commit to changing the organizational culture as well as long-term vision to implement based on long-term results. Unfortunately, there is generally an external trigger, some sort of compelling event (like an FDA audit or a product recall) that drives the decision to implement a technology solution.

Whatever the reason for implementing MES, a key outcome of the successful implementation of an MES strategy is that quality must become everyone’s job. “Putting information in the hands of the operators permits them to make assessments now and adjustments now and allows the transition to a corporate wide culture of quality to happen,” concluded Mr. Dube.

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