Materials safety and analysis: staying lean ... - Pharma Manufacturing€¦ · Lean ManageMent...

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Materials safety and analysis: staying lean, CoMpliant,

and Cost-effeCtive Best Practices for oPtimizing

Pharma raw material insPection

Portable GMP

Thermo Scientific TruScan

Pharmaceutical Manufacturing • www.pharmamanufacturing.com 2

Materials insPection

contents

3 HowLeanisPharmaceuticalManufacturing? A10-YearProgressReport 7 ImpactofInventoryTurnsOnSpeed,Quality,and

Costs

12 LeaningQC:LonzaRollsOutRamanforMaterialsIdentification

15 TakingThePlungeToHarmonizePharmaceuticalRegulations

19 ResidualSolventsandaTraceofCooperation:FDAStepsTowardSafety

19 Video:FieldInspections:NigerianRegulatorsFindaSolutionforDrugSafety

19 Video:RoughandTumbleRamanandFTIRMaterialsAnalysis

20 AdditionalResources

Materials safety and analysis: STAYINgLeAN,COMPLIANT,AND

COST-eFFeCTIVeBest Practices for oPtimizing Pharma raw material insPection


3 Pharmaceutical Manufacturing • www.pharmamanufacturing.com

How lean is Pharma?so much is to Be gained, yet it is hard to tell whether any drug manufacturer has truly made Progress over the last decade.

By roBert e. sPector, PrinciPal, tunnell consulting

Lean ManageMent represents one of the most favored business improvement programs today. Pioneered by Toyota in the 1950s, Lean focuses on eliminating waste in new product development, manufacturing, and distribution in order to cut lead times and in-vestment, increase flexibility, and reduce costs. Its objectives include using less human effort, less inventory, less space, and less time to pro-duce high-quality products as efficiently and economically as possible while being highly responsive to customer demand [1].

As described in a previous article [2] (see p. 7), although there is no universally accepted measure of a company’s “Leanness”, inventory turns are a reliable indicator. The trend of inventory turns over time indicates how well a company is progressing in terms of becoming more Lean and improving its processes.

Over the last decade, Lean programs have become popular in the drug industry, as evidenced by the number of published case studies and articles, and conferences devoted to the topic. Unfortunately, the industry as a whole has seen little overall progress, as indicated by the lack of improvement in inventory turns performance.

Figure 1 is a listing of some of the top drug companies by 2009 revenue, and representing brand, generic, and biopharmaceutical categories. A total of 27 companies were chosen (though not all are listed in Figure 1), consisting of nine biopharmaceutical, 13 brand and five generic. Annual inventory turns data was obtained from Morningstar (www.morningstar.com).

Historically, the pharmaceutical industry has ranked at the very bottom in terms of the trend of inventory turns [2]. The average inventory turns of all the companies observed in this study has essentially remained flat over both the last five and 10 year periods (Figure 2). The

brand company average has trended downward since 2001, but the overall change has been not been significant. The biopharmaceutical company average has shown a slight upward trend, but it too is not significant. Finally, the average for generic companies has shown an upward trend over the last 10 years, although during the last two years it has declined. It is important to note that the inventory trend for a single company is indicative but sometimes not a fair and accurate gauge of excellence in Lean management. Product recalls, mergers and acquisitions, etc., as have been commonplace in the industry over the last while, may skew inventory performance for a few years. But while this impacts the grading for a single company, it washes out in the overall averages.

It is difficult to tell from the data whether any pharmaceutical company has truly made progress over the last decade. While there are some companies that have shown improvement over the last five years, there hasn’t been a strong enough trend to draw definitive conclusions.

Much to gainPharmaceutical companies have a lot to gain depending on their success in applying Lean. For example, the U.S. electronics sector was on its deathbed in the early 1980s, but now has once again become the global leader with the likes of IBM, Hewlett Packard, and Dell. They regained this leadership in part through application of Lean methods that originated in Japan, plus adding to this arsenal of process improvement tools with a western-grown improvement methodology called design for manufacturing and assembly (DFMA).

The inventory trends of the U.S. companies are reflective of the Lean improvements that have been made. In contrast, the long-range trend lines of two out of three Japanese

http://www.morningstar.com/

http://www.morningstar.com/



electronics companies have been flat or heading downward [3].

As an example of what a successful Lean program would look like, HP has successfully applied Lean concepts and has displayed significant improvement in inventory trends over the last decade (Figure 3). From 2000 to 2009, inventory turns improved at an average rate of 6.9%. HP’s upward trend translates directly into growth of free cash flow at a rate of 6.9% percent, with interest on the cash compounded over the 10 year period of lessening funds tied up in inventory. This cash may be spent on product development, equipment, pay increases, share buybacks, dividends, etc.

When measuring the success of a Lean

program, if the company’s progress isn’t accompanied by a significant upward trend in inventory turns, Lean isn’t being applied correctly.

An example of a leader that transformed another industry is Wal-Mart (Figure 4). In the 1990s, Wal-Mart was able to increase inventory turns at an accelerating rate. From 2000 to 2009, inventory turns improved at an average rate of 2.6% which translates directly into free cash flow improvement of the same rate. Wal-Mart was able to transform an entire industry via their Lean improvement approach and dictate the requirements to successfully compete.

The practices of leading-edge companies have shown the capability to transform

Annual Total Inventory Turns

Company 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

J&J 3.0 3.3 3.3 3.5 3.7 3.6 3.4 3.6 3.6 3.6

Pfizer 2.3 1.9 1.5 2.3 1.2 1.3 1.3 2.0 1.7 1.1

Roche 1.4 1.5 1.5 1.6 1.5 1.9 2.0 2.4 2.3 2.6

GSK 2.1 2.2 2.2 2.2 2.0 2.2 2.2 1.9 1.8 1.8

Novartis 1.9 1.9 2.0 1.9 1.9 2.4 2.5 2.2 2.0 2.1

Sanofi-Aventis 1.9 1.6 1.7 1.9 2.0 2.2 2.3 2.2 1.6 2.0

AstraZeneca 1.6 2.0 1.8 1.6 1.7 2.1 2.5 2.9 3.5 3.4

Bayer 2.81 2.77 2.88 2.8 2.9 2.6 2.6 2.6 2.6 2.3

Abbott 3.85 3.92 3.66 3.7 3.3 4.1 3.7 4.0 4.4 4.4

Merck 7.7 8.8 9.5 1.5 2.2 2.9 3.5 3.4 2.7 1.74

Eli Lilly 2.3 2.2 1.7 1.6 1.5 1.7 1.7 1.8 1.8 1.6

BMS 2.4 3.4 4.2 4.8 3.5 3.1 2.9 2.9 3.3 3.23

Amgen 1.7 1.3 1.6 2.1 2.2 1.9 1.3 1.3 1.1 1.0

Teva 2.5 2.3 2.1 2.0 2.2 2.3 2.8 2.1 1.8 1.94

Genzyme 1.94 2.13 1.83 1.9 2.1 2.1 2.2 2.3 5.5 2.6

Averages(27 Companies)

Overall Average 2.36 2.68 2.60 2.48 2.31 2.38 2.43 2.56 2.67 2.33

Brand Average 2.52 3.11 2.96 2.62 2.35 2.31 2.40 2.32 2.62 2.11

Bio Average 2.32 2.34 2.28 2.39 2.24 2.49 2.50 2.64 2.61 2.59

Generic Average 1.80 2.10 2.26 2.23 2.33 2.40 2.40 3.15 2.95 2.47Data for all figures courtesy of Morningstar

Figure 1. Inventory Turns of Top Drug Manufacturers



industries, such as the electronics example above. It’s clear that pharmaceutical companies have a lot to gain depending on how well they implement Lean management.

the task for PharMaWhy hasn’t there been significant overall im-provement in the pharma-ceutical industry? First, implementations have been isolated to what can be called “pockets of ex-cellence” that are typically showcased in magazine articles and at conferenc-es. Unfortunately many of these companies have not been able to consis-tently apply these concepts across the entire organiza-tion.

Second, the majority of Lean implementations have been focused on improving manufacturing operations, without an accompanying focus on the rest of the supply chain, such as procurement and distribution. Without focusing on the entire supply chain benefits will be limited; long lead times and high inventories within external logistics pipelines tend to cancel out the greatest Lean successes in operations.

Finally, many Lean implementations have failed for various reasons,

FONTS: Frutiger 7 pt

Body:Frutiger 57 Condensed

Headers/X&Y Axis:Frutiger 67 Bold Condensed

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Figure 4. Wal-Mart Ten Year Inventory Turns Trend

10 9.5 9 8.5 8 7.5 7 6.5 6 Turns2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Average Pharma Inventory Turns—2000-2009

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Figure 3. HP Ten Year Inventory Turns Trend

Figure 2. Pharma Inventory Turns—Ten Year Averages




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10 9.5 9 8.5 8 7.5 7 6.5 6 Turns2000 2001 2002 2003 2004 2005 2006 2007 2008 2009


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10 9.5 9 8.5 8 7.5 7 6.5 6 Turns2000 2001 2002 2003 2004 2005 2006 2007 2008 2009


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including and/or are have not been sustainable—common problems across all industries due to lack of leadership commitment, excessive cost reduction focus, improper project selection and suboptimal execution [4].

The pharmaceutical industry has the advantage of being years behind other industries such as electronics and retail in terms of Lean maturity. By assimilating the lessons learned from other industries pharmaceutical companies can improve inventory turns performance and achieve the full benefits from Lean management.

References1. Spector, R. How Con-

straints Management Enhances Lean and Six Sigma. Supply Chain Management Review, January/February 2006.

2. Spector, R. The Impact of Inventory Turns on Speed, Quality, and Costs. Phar-maceutical Manufactur-ing, June 2009.

3. Schonberger, R. Best Prac-tices in Lean Six Sigma Process Improvement—A Deeper Look. Wiley & Sons, 2008.

4. Spector, R. West, M. The Art of Lean Program Management. Supply Chain Management Re-view, September 2006.

About the AuthorRobert Spector is a Principal with Tunnell Consulting. He is a certified Enterprise Lean/Six Sigma (EL/SS) Black Belt practitioner with 17+ years of management consulting experience serving both manufac-turing and service industry clients. He has successfully led projects and

teams in multiple industries and sectors, focusing on maximizing business results through strategic and tactical improvements utilizing Lean, Six Sigma, and Theory of Constraints tools and techniques.

Remain Compliant


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Lean ManageMent represents one of the most favored business improvement pro-grams today. Pioneered by Toyota in the 1950s, Lean aims to eliminate waste in every area of the business, including customer relations, product design, supplier networks, and factory management. Its objectives include using less human effort, less inventory, less space, and less time to produce high-quality products as efficiently and economically as possible while being highly responsive to customer demand [1].

Although there is no universally accepted measure of a company’s “Leanness,” inventory turns are a reliable indicator. The trend of inventory turns over time indicates how well a company is progressing in terms of becoming more Lean and improving its processes.

How does the pharmaceutical industry rank on this measure compared to other industries? Unfortunately, at the very bottom. But by adopting Lean principles, Pharma companies can increase inventory turns and not only achieve significant financial benefits but also

enhance competitiveness in speed, quality and costs.

inventory turns as a Measure of Leanness Inventory turnover—defined as the cost of sales (also known as cost of goods sold) divided by the average inventory level over some time period—is a convenient proxy measure of Leanness.

Recall that the goal of Lean is to achieve improvements in the competitive edge elements of speed, quality and cost. Lower levels of inventory directly correlate to improvement in these competitive edge factors, as we will show. That’s why Japanese manufacturers focus intently on reducing inventory, sometimes characterizing inventory as “evil.” Similarly, noted Lean experts such as Richard Schonberger view inventory as a catch basin for a multitude of business ills.

Inventory turns also straightforwardly correlate with the bottom-line measure

impact of inventory turns on speed, Quality, and cost

By creating low inventory environments, pharma can estaBlish the “leanness” that it sorely lacks.

By roBert e. spector, principal, tunnell consulting




Figure 1. High Inventory Environment

Inventory

27,000 minutes (450 hrs) for total order

Average Inventory

Mins 10,000 20,000 30,000 Time

Order 1,000 Units

C 5 Mins/U

B 12 Mins/U

A 10 Mins/U

Figure 2. Low Inventory Environment

Inventory


Average Inventory

Mins 10,000 Time

Order 1,000 Units

C 5 Mins/U

B 12 Mins/U

A 10 Mins/U




Figure 1. High Inventory Environment

Inventory


Average Inventory

Mins 10,000 20,000 30,000 Time

Order 1,000 Units

C 5 Mins/U

B 12 Mins/U

A 10 Mins/U

Figure 2. Low Inventory Environment

Inventory


Average Inventory

Mins 10,000 Time

Order 1,000 Units

C 5 Mins/U

B 12 Mins/U

A 10 Mins/U



of business success: cash f lows. Reduced inventories mean more cash in the bank, freeing up cash that can be used for other purposes. However, reduced inventories are beneficial only if the reduction derives from process improvement—the core of Lean. If a company cuts inventories without improving processes, then stock-outs and lost customers will far outweigh any benefits of increased cash f lows.

In addition, inventory is a standard financial metric and is readily comparable company-to-company, as well as over time within a business. It is also highly visible. Walk around a facility characterized by high levels of inventory and you can conclude that the facility is fat, not Lean.

the iMPact on sPeedThe impact of inventory on speed, quality, and costs becomes clear when a high inven-tory manufacturing environment is contrasted with a low inventory environment. Although there is no absolute measure, comparisons with competitors can help determine whether a company is a high inventory or low inventory operation.

Suppose, for example, a company has an order for 1,000 units which are manufactured in a three-step production process that is run over two shifts, 16 hours a day, five days a week for a total of 80 working hours per week. In a traditional high inventory manufacturing environment (Figure 1), the material might be released from stores, processed and moved through the plant in a single batch of 1,000 units. That is, each operation completes work on the entire batch before any material is moved to the next operation. Each step processes and transforms the input materials incrementally.

In this high inventory example, almost six weeks are required to complete the order. Compare that to the results from a low inventory manufacturing example (Figure 2) in which Lean principles such as setup reduction, flow layouts and pull production have been applied in order to reduce the batch size all the

way through production. There is no longer any waiting until each operation is completed for the entire order before moving it to the next operation. Material is moved between operations in batch sizes of 100 units, allowing several operations to work on the same production order simultaneously.

In any production process the slowest operation acts as the constraint to the system and sets the throughput rate for the entire process. In this example, that constraint is the second operation, with a throughput rate of 12 minutes per unit. Releasing material at a rate faster than the slowest operation will only cause build-up of inventory in the system. So an additional change must be made: release material into the system only to keep the constraint busy versus that of the high inventory environment in which the entire order is released to the first operation.

As a result of these changes, the work-in-process inventory level is much lower and the order is completed in half the time. This phenomenon is also demonstrated by Little’s Law, which shows that lead times are directly proportional to the amount of work-in-progress, i.e., inventory. Production lead times and work-in-progress inventory are mirror images of each other: reducing work-in-progress inventory proportionally reduces lead times. Therefore, if a product can be produced in less time, then capacity has, effectively, been increased—that is, the number of units processed per unit time increases. For both generic and brand drug manufacturers, the ability to ramp up quickly to meet surges in market demand confers a significant competitive advantage.

the iMPact on the cost of QuaLityTo understand the impact of inventory on quality costs, suppose that an out-of-speci-fication (OOS) condition occurs at the first operation in our example. Unless in-process inspection is performed, this condition will be caught only after the entire lot is processed at that operation, possibly resulting in the entire order being scrapped. In this high inventory



environment the damage will have occurred at least two weeks (as the first operation will take 10,000 minutes to complete) before it is detected, making it very difficult to determine what caused the OOS and leading to longer investigations. Also, the plant will be forced to expedite additional units because the order will now be very late. Under this pressure, management would likely devote its efforts to expediting rather than finding and resolving the problem.

In the low inventory environment, even if QC is not performed until the last operation is completed, and the damage is not detected until that point, the product is still being produced at the first operation. It is therefore much easier to determine the cause of the problem without being under pressure to expedite. Because the problem has been detected before the entire order has been produced incorrectly, fewer replacement units are required and they can be produced much more quickly than in the high inventory environment—and without resorting to expediting. Management also has the time and ability to eliminate the cause of the problem, perhaps permanently.

the iMPact on costsHigher inventories result in greater material costs, operating expenses and capital expendi-tures. Recall that quality issues have a greater impact on a high inventory facility versus one with lower inventories. In the example here, an entire production order might have to be scrapped, increasing material costs. With shorter lead times than the competition, the lower inventory manufacturer also benefits from a more accurate forecast. For example, with seasonal drugs such as flu vaccines, the higher inventory manufacturer will have to be-gin production earlier than the lower inventory manufacturer. The longer the forecast horizon becomes, the more dramatically forecast ac-curacy decreases. Because the lower inventory manufacturer can start later, it will have a more accurate forecast and will be less likely to build excess inventory that may not be sold.

Further, the higher inventory environment will take longer to process an order than will its competitors. Faced with increased customer demands for faster response time, the higher inventory facility will have no choice but to increase production, either by adding additional shifts or overtime. With lesser operating expenses, the lower inventory competitor has a lower break-even point, giving the company more f lexibility in pricing.

Even increasing the number of shifts or adding overtime may be insufficient. The high inventory facility may not have enough machines or labor to accommodate the load within the available time. As a result, this company may have to invest in more equipment. With less effective capacity than the lower inventory competitor, the higher inventory manufacturer will also have to invest in new facilities sooner.

Clearly, in the lower inventory environment the investment in equipment, facilities, and inventory is much less than that of the higher inventory environment. Consequently, the return on investment is much higher.

Where PharMa ranks in MeasurabLe “Leanness”Since 1994, Richard Schonberger has been collecting inventory-turnover data in a long-range study of how companies are progressing with the Lean/process improve-ment agenda. His study groups about 1,200 companies into 33 industrial sectors. Table 1 lists the 33 industries in rank order, best to worst by long-term trend [2]. To assess a company’s performance, its inventory turns were graphically plotted year by year. A scoring system reduced this visual assess-ment of trends to numbers which point to long-term Lean progress.

Pharmaceutical companies rank at the very bottom. Of 66 pharmaceutical companies in the Lean database, only two merit a top grade of “A,” Johnson & Johnson and Japan-based Taisho. In fact, according to Schonberger’s research, the average



score for pharmaceuticals has been going down since 2002.

Why has Pharma ranked so poorly? When profit margins were at historic highs, little attention was paid to operational efficiency and production costs. The focus of money and resources in Pharma has traditionally been on R&D rather than operations. The little attention that operations did get was focused on compliance rather than process improvement [3]. The standard practice of ensuring that more than enough of each product was available to meet customer needs coupled with a lack of attention to operational efficiencies has led to excessive inventories. Further, the sales and market-share strategy of pushing more and more inventory into the pipelines has also driven up inventories.

What PharMa can do to iMProve inventory turns A common objection to applying Lean in pharma is “that may work for automotive, but we’re different.” But consider how a real-world case study refutes the objection. A global

pharmaceutical manufac-turer, facing cost challenges at one of its plants, engaged consultants to help drive improvements using several different improvement ap-proaches including Lean. The consultants and client team members worked together to

create a Value Stream map of the production process. Improvement opportunities were identified and non-value added activities were identi-fied and either eliminated or minimized. Of critical impor-tance was the implementa-tion of a pull system, which

CoSt eFFeCtiVe RmiD





resulted in lower inventories and reduced variability in the production process. Other Lean techniques such as set-up reduction were also applied.

Among the results:• Work-in-progress

inventory was reduced by 35%, while production lead time was reduced by 56%.

• Scrap-in-tablet compression was reduced by 14%, resulting in more than $1 million savings in raw material costs.

• The conversion cost per unit was reduced by 22%.

• Direct labor productivity increased by almost 40%.

As in the example here, lower work-in-progress inventories correlate directly to reduced production lead times, improved quality and lower costs. Clearly, Lean principles are as applicable in pharmaceutical manufacturing environments as they are in automotive and other industries where they have produced similarly impressive results.

About the AuthorRobert Spector is a principal for Tunnell Consulting. He has more than 17 years of management consulting experience with a proven track record in Lean / Six Sigma, operations excellence, supply chain strategy, business process design, and information systems.

References1. Spector, R. How Constraints Man-

agement Enhances Lean and Six Sigma. Supply Chain Mgt. Review, Jan./Feb. 2006.

2. Schonberger, R. Best Practices in Lean Six Sigma Process Improve-ment. Wiley, 2008.

3. Ibid

Table 1. Lean/Process Improvement by Industry [2]

RankIndustries Ranked

by Industrial SectorInventory Turnover Score

1 Petroleum 0.93

2 Paper-converted products 0.89

3 Distribution—wholesale 0.86

4 Semiconductors 0.79

5 Electronics 0.77

6 Telecom 0.76

7 Paper 0.72

8 Metal-working/machining 0.71

9 Plastic/rubber/glass/ceramic 0.69

10 Major appliances 0.67

11 Pump/hydraulic/pressure 0.66

12 Vehicular components 0.66

13 Sheet metal 0.66

14 Machinery 0.64

15 Electric 0.61

16 Instruments/test equipment 0.61

17 Aerospace/defense 0.59

18 Personal-care products 0.59

19 Wood (lumber)/paper 0.58

20 Apparel/sewn products 0.56

21 Liquids/gases/powders/grains 0.54

22 Medical devices 0.53

23 Retail 0.53

24 Food/beverage/tobacco 0.53

25 Furniture 0.52

26 Basic metal processing 0.52

27 Motors & engines 0.52

28 Wire & cable 0.50

29 Autos, light trucks, bikes 0.50

30 Chemicals 0.36

31 Heavy industrial vehicles 0.35

32 Textiles/sewn products 0.28

33 Pharmaceuticals 0.02



as Part of an effort to Lean its raw material QC process, Lonza Biologics’ Portsmouth, New Hampshire facility evaluated several new spectroscopic technologies—Raman, NIR, and FTIR handheld or portable devices—for rapidly verifying incoming raw materials. The manufacturer sought to shave significant time off its compendial, lab-based sampling and analysis of materials, without sacrificing ID accuracy and specificity.

Ultimately, Lonza selected handheld Raman devices (TruScan, marketed by Thermo Fisher Scientific) to roll out in Portsmouth, and to extend this implementation worldwide to all of its biologics facilities.

A key factor was the need to have a more transparent supply chain and harmonized processes, says senior QC manager for raw materials, Derek Hubley. Increasingly, customers prefer materials testing and specifications to be consistent from one site to the next, he says. We spoke with Hubley about the project.

PhM: Was raw material ID an obvious candi-date to be leaned, and if so, why?

D.H.: Both sampling and testing are the lengthiest activities in the raw material receipt to release process. So, streamlining this por-tion was obvious. By decreasing the sampling and testing of raw materials, the supply chain process becomes more flexible—ultimately, al-lowing for a significant reduction in inventory carrying costs and raw material lead times.

PhM: Why were inventory carrying costs a problem?

D.H.: Basically, everything has a lead time as-sociated—ordering, sampling, testing, and re-

lease are all part of the chain of events. So, de-creasing the sampling and testing times would result in a decrease in the inventory required for the processes. For example, if we apply a three-week lead time from the vendor and a three-week lead time for sampling and testing, we would need to keep six weeks of materials on-site to support the processes. Using our new method, we can keep the three-week lead time from the vendor, but decrease the sampling and testing time to one week. This results in the need to carry only four weeks of materials on-site to support the manufacturing process-es. In this case, the inventory carrying is cut by two weeks, and in the case of high-dollar materials this can be a tremendous savings on the total inventory carrying cost.

PhM: For accuracy and sensitivity, you found Raman and NIR to outperform FTIR for various materials. Can you explain this difference?

D.H.: The main reason Raman and NIR showed better accuracy was the design of the study. The study was designed to eliminate the need for sampling raw materials for iden-tification testing. Therefore, the Raman and NIR could scan through packaging resulting in greater accuracy and sensitivity. The final conclusion of the study showed the Raman having the greatest accuracy and sensitivity and this was because of its ability to scan through multiple container types.

An exercise showing the types of materials that were active using the three technologies showed most materials were active with all three technologies. However, this would be if the analysis was done in direct contact with the material. There were a handful of materials that were active with Raman and NIR, but not FTIR.

leaning Qc: lonza rolls out raman for Materials id

after evaluating technologies, lonza Biologics is implementing a raman-Based raw materials identification process.

By paul thomas, senior editor

www.thermoscientific.com/truscan



PhM: What surprises did you encounter in terms of how any of the technologies handled specific materials (salts, sugars, solvents, etc.)?

D.H.: I guess the biggest sur-prise was the ability of both Raman and NIR to distin-

guish between hydrate forms of materials such as dextrose, sodium phosphate monobasic XH2O, and sodium phosphate dibasic XH2O. All other ma-terials functioned as expected based on the activity of the materials in the facility based on literature review.

PhM: One of the parameters that you evaluated was the ability to create reference scans. Were all three technol-ogies capable in this regard?

D.H.: Yes, all three technolo-gies had the ability to create reference scans. Both Ra-

man and FTIR only required one lot of material to create the reference scan. FTIR required direct con-tact with the material, which we wanted to avoid, as the ulti-mate goal is to limit the contact with the material. The Raman reference scan could be created using a single lot of material. However, to make it robust, the reference scan was created in each of the differ-ent container types in which the mate-rial could have been received into the fa-cility. For example, a reference of an amino acid (dry powder) was created in a poly bag, glass container, and a HDPE bottle; and the reference scan of Polysorbate (liquid) was created in a clear glass container and an amber glass container. As for NIR, although the capabil-ity is there, it was not evaluated during this study. This is because it takes more than one


StReamline mateRial VeRiFiCation




lot of material to obtain a robust library.

PhM: Your ultimate goal is to process incoming materi-als with no sampling, but are there still some materials you’re testing via traditional sampling?

D.H.: Yes, there are still some materials that would require sam-pling. This is ultimately based on where the material is used in the process or if there is a critical attribute that needs to be analyzed for each shipment. For instance, microbial safety testing would always need to be per-formed if the material is capable of support-ing microbial growth. Also, excipients require more testing even if the material is qualified for a reduced testing strat-egy. Excipients require 100% container ID, so the time saved by not needing to sample 100% of the containers is sig-nificant; the remaining attribute testing would be performed using the number of containers required per our statis-tical sampling plan.

PhM: To what extent has harmonization across sites been real-ized?

D.H.: Currently the

technology is being rolled out to the biopharmaceutical divi-sions. The materials across the facilities are common, making the harmonization efforts less challenging. In addition, these facilities have begun harmonizing specifications and testing procedures so the

challenges were expected. Thus far, we have approxi-mately 10 harmonized raw material specifications, which are shared between sites in the biopharmaceutical division, and have deployed the Raman units to five sites.

The Power of Raman in the Palm of Your Hand





taking the Plunge to HarmonizePharmaceutical regulations

within the past five years, more of the world’s regulatory agencies and pharmacopeias have gotten on the same wavelength.

By agnes shanley, editor in chief

internationaL standards tend to proceed at a glacial pace, especially when anything complex is involved, but efforts to streamline global pharmaceutical regulations are stepping up. Mandated by the increasingly global nature of drug manufacturing, harmonization can only help the industry improve efficiency, but its ultimate goal is to ensure that more people in the world have access to the medicines they need.

Some may complain that this goal is still a long way off. Filing clinical documentation for a new drug can be 15%-20% of the costs of trials running in the hundreds of millions of dollars. Meanwhile, the costs of supporting multiple and redundant agency plant inspections are high, running to $130,000 to $400,000 per day and 1,000 to 2,500 person hours per inspection. Citing these figures and data from a survey by EFPIA (you’ll find it on PharmaManufacturing.com), John O’Connor, senior director of corporate inspection management of Genentech, reiterated the need for increased harmonization of plant inspections at BIO 2009 last May. “These resources aren’t being directed toward other quality efforts,” he said.

However, most observers agree that the past decade, and the last five years in particular, have seen great progress in harmonizing R&D and clinical requirements, as well as overall regulations for finished drug products, active ingredients and excipients.

The guiding force for much of this work has been ICH, the International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use. Next month marks the twenty-first year of the group’s mission: to eliminate redundant paperwork, and streamline the costly and difficult process of developing and making pharmaceuticals around the world.

ICH is far from the only group working on harmonization. Pharmacopeias have their own projects and collaborations going on, including USP’s Pharmacopeial Discussion Group (PDG), which started just a few years before ICH was established.

The World Health Organization is also working on harmonization, as are the Pan American Network on Drug Regulatory Harmonization (PANDRH), various national groups focused on active pharmaceutical ingredients, and IPEC, which concentrates on pharmaceutical excipients.

However, ICH, which is made up of regulatory bodies, pharmacopeias and drug industry members from the U.S., EU and Japan, provided a framework and focus for a project that might otherwise have been too diffuse and difficult. So far, it can claim substantial gains.

big Picture iMProveMentsThe U.S. and Europe have come a long way toward harmonizing their regulatory requirements, says Mukesh Kumar, PhD, RAC, senior director of regulatory affairs and quality assurance for Ama-rex Clinical Research (Germantown, Maryland). “They’re following ICH guidelines on quality, and, by using the common technical document format, they’ve standardized on how an applica-tion is submitted,” he says. “They now offer a joint application for orphan drugs.”

Even Japan, which, despite its ICH membership, had seemed to be on its own track five years ago, continues to demonstrate its commitment to harmonization (Box, p. 16). When I contacted USP for this article, Nobuo Uemura, a senior staff member at Japan’s Pharmaceuticals and Medical Devices Agency MHLW/PMDA, had just arrived in Rockville, Maryland to begin a 15-month stint working at USP offices, a visible sign of JP’s and USP’s interests in closer collaboration.



Perhaps the most tangible 21st century symbol of progress is the electronic common technical document (eCTD), which a growing number of companies are now using for their IND’s, NDA’s, ANDA’s, BLA’s, and DMF’s. Dr. Kumar jokes about the days when documentation for a new drug had to be delivered to FDA by truck.

thinking gLobaLLy, acting LocaLLyBut harmonization today is only an outgrowth of the reality that pharmaceutical regulation has become an increasingly global affair, since most of the new drug master files being submitted are from India, and most API’s are being manufac-tured in India or China. Two years ago, both FDA and the U.S. Pharmacopeia began moving offshore, and since have set up satellite branches in China, India, and Latin America.

USP was the first to move offshore, which allowed it to advise FDA when the Agency established foreign bases as part of its Beyond our Borders program, says Susan de Mars, USP’s chief documentary standards officer. As FDA and USP work together to update compendial test methods, having an offshore presence only increased USP’s collaboration with FDA, while strengthening its local connections with regulators, industries and pharmacopeias, de Mars says. “It’s part of our efforts to work outside of ICH regions, and areas that are part of our PDG, particularly with countries that have constrained resources,” de Mars says.

PharMacoPeiaL ProgressUSP’s PDG has made good progress, says de Mars, and so far has finished harmonizing 27 out of the 34 general chapters that were part of its original Work Plan, and 40 of 63 excipient monographs. However, she concedes, it’s still “a slow and laborious process,” and the PDG only covers 15% of excipient monographs and 20% of the general chapters within the USP.

However, efforts are also moving forward with finished drug substances, which are outside the scope of PDG. In one pilot, USP and the European Pharmacopeia (EP) are jointly developing harmonized monographs as well as reference standards for two drug substances. This time around, the work will be done from the beginning, instead of harmonizing retroactively,

as was necessary with PDG.Pharmacopeial harmonization really began to

take off 10 years ago, when USP decided to focus on harmonization by attribute. “We decided to look at the main tests and monographs—for instance, assays and identity tests—and focus efforts on harmonizing where we can agree, always understanding there will be some cases . . . where it won’t be possible,” says Kevin Moore, senior scientific liaison for USP.

Over that time, there has been good alignment across USP, EP and JP, although de Mars concedes that Japan has special challenges, since it publishes less frequently, has fewer staff members and must translate everything into English, and then back into Japanese again.

uPdate on JaPan For many years access in Japan to drugs approved for use

in the U.S. and Europe lagged by at least four years. In

2007, when only 28 of the world’s 88 best-selling drugs

were available to the Japanese market, Akira Miyajima,

head of the Japanese Pharmaceuticals and Medical De-

vices Agency, said he planned to bring Japan’s new drug

approvals inline with those of the U.S. and Europe by

2012, and to cut approval times by 2.5 years. The Agency

was to hire 240 new reviewers at the time.

Japan’s regulatory environment is changing, due to a

change in government leadership, according to Masaru

Kitamuru, who commented in February’s edition of Who’s

Who Legal Life Sciences Roundtable. Regulators are work-

ing to expedite clinical trials and drug approvals, adding

more requirements for post-marketing surveillance, he

says. Japan has also set guidelines for approving biosimi-

lar products, he says, expecting downward cost presures

and promotion of generics.

Major changes have been seen in the amendment of

the Pharmaceutical Affairs Law, which took effect last

June, says Satoru Nagasaka, a partner with TMI Associ-

ates. A key change has been implementing risk-based

standards for information to the public. The law now cat-

egorizes nonprescription drugs depending on their risks:

Type 1 drugs, which are of particularly high risk (e.g., H2

blocker); Type 2 drugs, which are of relatively high risk,

such as cold medicine; and Type 3 drugs, which are of

relatively low risk, such as vitamin pills. Each drug’s level

of risk must now be indicated on the outside of the box,

and regulations on labels and point of sale have been

changed.



This year, USP will decide whether or not to expand PDG. Still outstanding, Moore says, are chapters on the uniformity of content, mass, and on instrumental methodology of color. “We hope to have a good amount of progress over the next year by the time we next meet in June,” he says.

aPi’s and exciPientsVariable active ingredient and excipient qual-ity are key quality issues being addressed on all harmonization fronts. USP plans to have a mono-graph for any excipient listed in FDA’s inactive ingredients database, Moore says, but progress is challenged by the diverse approaches used to

regulate them, globally. One initiative at USP has been an international working group established for good distribution practices.

The European Directorate for the Quality of Medicines & HealthCare (EDQM) has established bilateral confidentiality agreements with FDA and Australia’s Therapeutic Goods Administration (TGA) to share confidential inspection information related to API’s and excipients, and a pilot project for harmonizing inspections was launched last year.

A number of routes are being considered—either applying GMP’s to excipients or establishing a voluntary program where plants would be inspected by accredited inspectors from third-party certified companies. FDA has recently launched a pilot third-party inspection program for medical devices.

“We still believe that self-regulation for excipients is the preferred pathway, but we need to provide best practices and guidance,” says Janeen Skutnik, Chair of IPEC Americas, and Vice Chair of the IPEC Federation. IPEC aims to do this by establishing standards and best practices in the form of guidances. This approach, she says, allows users to take care of the basic GMP’s, and leaves a company’s Audit teams to focus on the individualized needs of their use of that excipient. It also allows them to focus more time on relationship management and monitoring.

IPEC Americas has been actively converting IPEC’s GMP’s (not required for manufacturers) into an ANSI standard that would provideallow regulators to refer to a universally recognized benchmark, Skutnik says. The group is also working on guidance documents for Pedigree, GMP’s, GDP’s, Excipient Qualification, and Quality Agreements, and guides for Audits, Significant Changes and Certificates of Analysis. IPEC Americas is meeting with FDA and USP to ensure consistency of standards and monographs, Skutnik adds. From the FDA perspective, they are engaged in the ANSI project to convert the IPEC-PQG GMP guide into an ANSI guide. (This work is supported by OMB Circular A-119). “The formal ANSI teams are being assembled and we expect to complete the

china bridges the gaPChina has been observing ICH activity closely and has

also been working to bring its quality systems and

regulatory standards more in line with those of Europe

and the U.S. Bikash Chatterjee of Pharmatech Associates

notes changes in its approaches to GMP, in this excerpt

from a PharmaManufacturing.com editorial:

In January 2010 the SFDA, China’s regulatory authori-

ty, attempted to close the gap between its practices and

quality and regulatory standards in the U.S. and Europe

with GMP 10. Updating GMP 8, which had been issued

in 2008, it borrows heavily from European guidance for

finished drug products. SFDA is soliciting comments,

both from within and without China. It is significant

because it emphasizes the quality management system,

specifically on the need for Deviation Control, Corrective

Action and Preventative Action (CAPA) systems and a

Product Quality Review (PQR) system.

In addition to the GMP 10 guidance, the SFDA has also

created an annex to the main guidance which specifies

the requirements for sterile API, sterile manufactur-

ing and terminally sterilized product. What is interest-

ing about this document is the specific requirements

called for concerning facility design and environmental

conditions. To date, the GMP guidances have relied on

a general discussion of the end result, e.g.: “Article 6,

Annex 1; The Manufacture of products should be carried

out in clean areas, entry to which should be carried out

through airlocks for personnel and/or equipment and

materials.” This has allowed each inspector to interpret

the requirements as they saw fit for each manufacturer.



drafts this year,” she says. Additionally, International

Pharmaceutical Excipients Auditing (IPEA) has applied to ANSI to become accredited. Skutnik expects IPEA to receive accreditation soon, so that it could handle third-party audits.

Managing riskHarmonization doesn’t mean replication. There will always remain differ-ences across regulatory agencies. For instance, one can either go the centralized route for introducing a new drug in Europe (via EC) or via each regional authority. In addition, drug approv-als are “phased” in Eu-rope, where manufactur-ers must get reapproved, based on safety.

FDA’s Risk Evaluation and Mitigation Strategy, part of the FDA Amendments Act of 2007, effectively harmonizes practices, closing the gap between the EU (which requires postmarketing safety data) and U.S. (which hasn’t), by asking manufacturers to collect patient safety data. So far, Kumar says, one drug approved by FDA has already undergone REMS. Depending on the drug involved, the costs can be high, he says, running from $50-$100 million for a psychotropic drug but much less for

niched cancer therapies.There will always be differ-ences, too, in such things as plant inspection practices. EFPIA’s survey noted regional flavors, with FDA focusing on deviations and investigations, buildings and facilities, valida-tion and equipment cleaning

and maintenance. The EU focused on room classifications and cleanliness, maintenance, laboratory controls and qual-ity agreements, while Japan’s inspectors emphasized raw material and facility cleanliness and product appearance.

Portable GMP





the Latest FDA Guidance on residual solvents is interesting on several levels. On the plus side, this cooperation between the FDA, USP, and ICH is an excellent example of multi-national law enforcement and one set of rules for everybody. In the age of outsourcing and companies that are engaged in producing and selling in many countries (and continents), the country-to-country regulations that tended to restrict free trade are slowly disappearing.

In fact, with respect to inter-agency cooperation, the FDA Guidance even states, “This guidance is intended to assist manufacturers in responding to the issuance of the United States Pharmacopeia (USP) requirement for the control of residual solvents in drug products marketed in the United States.” Two major product categories are:

1. Compendial drug products that are not marketed under an approved NDA or ANDA can comply with USP General Chapter <467>

“Residual Solvents” and the Federal Food, Drug, and Cosmetic Act (a.k.a., “the Act”).

2. Holders of NDAs or ANDAs for compendial drug products should report changes in chemistry, manufacturing, and controls specifications to FDA to comply with General Chapter <467> and 21 CFR 314.70.

The residual solvents are given in three categories by the ICH Q3C Guidance: Class 1, Solvents to be avoided, Class 2, Solvents to be limited, and Class 3, Solvents with low toxic potential. These categories are based on health experimental hazards.

cLassification of residuaL soLvents by risk assessMent (as Per ich Q3c)The term “tolerable daily intake” (TDI) is used by the International Program on Chemical Safety (IPCS) to describe exposure limits of toxic chemicals and “acceptable daily intake”

residual solvents and a trace of cooperation

the new guidelines are evidence of multinational law enforcement at its Best.

By emil w. ciurczak, contriButing editor

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(ADI) is used by the World Health Organiza-tion (WHO) and other national and interna-tional health authorities and institutes. The new term “permitted daily exposure” (PDE) is defined in the present guideline as a pharma-ceutically acceptable intake of residual solvents to avoid confusion of differing values for ADI’s of the same substance.

Residual solvents assessed in this guideline are listed in Appendix 1 (Q3C) by common names and structures. They were evaluated for their possible risk to human health and placed into one of three classes as follows:

Class 1 solvents: Solvents to be avoided. These are known human carcinogens, strongly suspected human carcinogens, and environmental hazards. As examples we have Benzene (2ppm Carcinogen), Carbon tetrachloride (4ppm Toxic and environmental hazard), 1,2-Dichloroethane (5ppm Toxic), 1,1-Dichloroethene (8ppm Toxic), 1,1,1-Trichloroethane (1500ppm Environmental hazard).

Class 2 solvents: Solvents to be limited. Non-genotoxic animal carcinogens or possible causative agents of other irreversible toxicity such as neurotoxicity or teratogenicity. Solvents suspected of other significant but reversible toxicities; for instance, acetonitrile and methanol.

Class 3 solvents: Solvents with low toxic potential. Solvents with low toxic potential to man; no health-based exposure limit is needed. Class 3 solvents have PDEs of 50 mg or more per day. Some common solvents include Acetic acid, Heptane, Acetone Isobutyl acetate, Anisole, Isopropyl acetate, 1-Butanol Methyl acetate.

These are the positive points of the cooperation among agencies. The best way to address the downside is to refer to Yogi Berra. Once, when receiving an award (MVP?), he was quoted as saying, “I want to thank everyone who made this award necessary.” To paraphrase Yogi, the industry would like to thank all the countries who made this Guidance necessary.

As has been seen in recent instances (i.e., DEG in toothpaste, melamine in gluten, OSC in heparin), API’s and excipients now need better and more specific analytical methods to determine purity. Since more products are also being made in these countries that supplied tainted raw materials, newer and more sensitive methods, along with stricter limits, are needed. The Guidance from FDA is another step in the safety of the supply chain and should be lauded.

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