Unlike most products they purchase, consumers have no way to readily assess the quality of the drugs they take. For example, a consumer can immediately see that a tablet computer purchased online is faulty if it arrives with a cracked screen. Detecting impurities in medicinal tablets is not so simple.
In decades past, pharmaceutical companies essentially assured the marketplace of their product quality with the message: “We make what we sell, and we sell what we make.” In other words, consumers could be confident in the quality of a drug because the same company managed the end-to-end product lifecycle, from R&D through manufacturing and marketing.
If asked now, most consumers would likely say they believe every drug they take is still made by the company whose name is on the label. They would almost certainly expect all drugs to be manufactured and quality controlled using the best available technologies.
In reality, upwards of 60 percent of pharma manufacturing is outsourced. And while the industry has shifted dramatically in that respect, it has not changed in other areas. Pharma — including drug companies, generics makers and contract manufacturing organizations (CMOs) — lags far behind other industries in the use of modern control and information technologies to improve quality and efficiency.
Regulatory requirements and good manufacturing practices (GMPs) have evolved somewhat over time, but have not changed significantly at their core. They were conceived before outsourced manufacturing became the norm, at a time when commercially available technology was generally much less advanced. Today, pharma companies and CMOs continue to rely on disjointed, document-based processes rather than integrated digital systems to manage product knowledge and manufacturing. (The myriad reasons for this phenomenon have been discussed elsewhere at length.)
The industry’s delayed digitalization poses significant risks — to pharma companies and, more importantly, their consumers. Those risks are compounded in multiple areas by outsourcing production, from initial tech transfer to troubleshooting to ongoing process analysis and improvement.
However, the time is rapidly approaching when the entire industry must move forward. Pharma companies will demand their CMOs provide much more robust production data — in electronic form — whether it’s due to the growing momentum toward Pharma 4.0 or tightened regulations. Tech vendors to the industry will need to be prepared with the innovative new systems required to support that sea change.
CMOs that transition now to a more automated and digitized operation will enjoy a significant competitive advantage in the short term, demonstrably reducing risk for their clients. That advantage will only become greater when stakeholders across the industry finally commit to a more connected approach to manufacturing and knowledge management.
The shift to outsourcing
External manufacturing was practically unheard of some 30 years ago. However, around the early to mid-1990s, the landscape began to change as pharma companies increasingly gravitated toward CMOs. There were — and still are — compelling advantages to these partnerships. The business of manufacturing can be challenging. Outsourcing production allows pharma companies to concentrate on their core competencies, R&D and marketing, while leveraging the focused expertise of a CMO.
On the other hand, CMOs have different business objectives than pharma companies, and tend to be even more reluctant to embrace technology as a result. They generally provide only paper batch records to “prove” to clients that drugs were manufactured as specified.
What’s more, external manufacturing often takes place in locations where meaningful oversight is simply not possible. Outsourcing production is expected to continue increasing, but industry observers raise legitimate questions about just how well CMO clients can monitor quality in these partnerships.
Pharma companies currently seek to mitigate their risks by completing a reasonably extensive due diligence process when selecting a CMO. The clear business imperatives are that the CMO has:
- The required talent in its organization
- The manufacturing capacity necessary to produce and deliver product on time
- A proven quality system that ensures product can be manufactured as specified
To evaluate whether a prospective manufacturing partner meets these criteria, pharma companies typically take an audit-based approach to due diligence. This includes reviewing previous audits, particularly any conducted by regulators.
There is nothing technically wrong with this approach to due diligence, which is considered perfectly acceptable by regulatory bodies. That said, regulators often uncover deficiencies — which can be significant — when poring over a manufacturing facility’s procedures and records.
The global pharmaceutical contract manufacturing market was valued at $92.314 billion in 2017 and is expected to reach $146.41 billion by 2023
(Source: Market Reports World)
Are quality systems sufficient?
Regulators exercise oversight over manufacturing facilities — both internal to drug companies and external — by requiring them to maintain an acceptable pharmaceutical quality system (PQS). Adherence to these systems is monitored through regulatory inspections and, for CMOs, customer audits.
However, industry observers raise valid questions about the effectiveness of this approach given pharma’s general resistance to increasing automation and digitalization. Remember, current regulatory guidelines and GMPs were developed when pharma products were manufactured almost exclusively in-house and paper was the only viable way to convey manufacturing instructions and capture process data.
Regulators constructed their requirements to ensure accountability to the extent possible in that environment. Even today, a pharmaceutical manufacturer can operate a completely paper-based facility while maintaining total regulatory compliance. Given that fact, and pharma’s typically high margins relative to other industries, there is no immediate incentive for drug manufacturers to modernize. Some may even oppose greater transparency for fear it could expose issues that now go undetected due to the deficiencies of a paper- and audit-based approach to quality control.
The luxury of avoiding change in this way is exceedingly rare. In most industries, ongoing innovation is required across an organization — not only in R&D — to remain competitive and meet consumers’ ever-growing quality expectations.
Exploring the risk factors
Pharma’s digital deficit in the manufacturing and supply chain presents myriad risks, which are heightened dramatically when outsourcing is added to the equation. Anyone who has worked in a drug manufacturing facility knows that each day brings new challenges. When a production problem occurs, the first step is to understand precisely what happened. In more modern plants, with high levels of instrumentation and automation, piecing together the story becomes much easier — a matter of analyzing process history, not interviewing eyewitnesses. In a paper-based world, manually recorded data is of little to no use, regardless of how many signatures it bears. Without ubiquitous shop-floor process measurements (not just laboratory-based control point measurements) there is simply no way to verify that a process was manufactured as intended.
The technology deficit in pharma goes well beyond a lack of shop-floor measurement and process automation. There are several other key areas where the use of digital tools could significantly reduce risk and improve quality assurance, particularly for outsourced manufacturing:
Quality systems: Pharma companies must move from a paper- and audit-based approach to continuous electronic monitoring of all manufacturing data associated with manufacturing processes.
Tech transfer: Document-based tech transfer does not support effective process knowledge management — or the central goal of ensuring the receiving party understands the process sufficiently for successful implementation. This is especially true when the transfer takes place between organizations rather than internal departments.
Process design and production planning: Manufacturing optimum-quality products begins with sound engineering. That means undertaking comprehensive process design and simulation prior to making production commitments. This approach fosters more informed equipment selection decisions and a better understanding of productivity, resulting in vastly improved planning, production efficiency and predictability of asset utilization.
Analytics and continuous improvement: If a facility lacks sophisticated measurement and control capabilities, clearly there isn’t much substrate for the application of advanced analytical tools. As the famous Peter Drucker quote goes, “If you can’t measure it, you can’t improve it.”
Process knowledge management: Under today’s document-based paradigm, managing process knowledge across the product lifecycle is difficult even with in-house manufacturing. Outsourcing magnifies this challenge substantially, as the client pharma company sacrifices full access to critical production information. Over time, companies stand to lose more organizational or corporate memory on a critical component of the business: Manufacturing.
Looking to the future: traceability throughout the process
Regardless of where it occurs, consumers should reasonably expect the drugs they take are manufactured using the best available technologies. Most of the information technologies that make up today’s typical stack — including systems for ERP, manufacturing, process control and lab information — have been available since the 1980s. Add the explosion in capabilities the “digital revolution” has delivered in the interim and one would think that pharma, an industry whose lifeblood is innovation, would be at the forefront of technological advancement.
The reality is far different, and the risks of adhering to an antiquated paradigm are magnified by increased outsourcing. Partnering with CMOs offers many benefits, but at the same time exacerbates information silos, further distancing key stakeholders from the details of how their products are manufactured. This is especially true because CMOs have generally invested much less in automation and digital technologies than pharma companies.
That said, CMOs have not spent more in those areas largely because their clients haven’t demanded it. The industry’s expanding discussion of Pharma 4.0 is an encouraging sign in this regard. For pharma companies, reaping the full benefits of IIoT will require a long-overdue digitalization, both internally and for their partners. This reality is among the reasons paper manufacturing records and business processes appear likely to become obsolete. Although drug companies are leading the Pharma 4.0 conversation, it won’t be long before CMOs are pulled in.
To be sure, however, pharma companies and CMOs are not completely to blame for the current state of manufacturing. Even those using all of the most current technologies would still lack the integration between systems that IIoT demands. Tech vendors to pharma must do their part by innovating new systems that digitize critical data and facilitate interconnectivity across organizations.
In this digital age, there is no reason pharma should not have the technology in place to ensure complete visibility into every aspect of manufacturing — whether it occurs in-house or thousands of miles away. Along with drums of product, pharma companies should require their CMOs to deliver a comprehensive electronic dataset that includes each and every operating detail.
Of course, Pharma 4.0 still represents a huge challenge. The industry has not yet achieved Pharma 3.0, which would require drug companies to significantly modernize their own facilities while insisting their CMOs do the same. That means the industry must essentially implement Pharma 3.0 and Pharma 4.0 simultaneously. The transformation must begin in R&D’s process development group and extend to a digital thread that provides complete traceability throughout the drug production lifecycle, whether the manufacturing assets are in-house or outsourced.
