Among the multitude of challenges that face the global life science industry, the reduction in the number of new drug approvals has put tremendous pressure on innovator pharmaceutical companies. Despite the FDA announcing 39 new drug approvals in 2012 – a 16 year high1 – the past decade has been characterised by a severe innovation ‘drought’ that has seen the number of new medicines fall to little more than half previous levels.
In addition to this, competition from generic manufacturers has exploded due to an increase in patent expiries. It is estimated that generic competition eroded US$67bn from top drug companies’ annual sales in the US between 2007–2012, with more than three dozen drugs losing patent protection during this period.2
Big Pharma/generics partnerships
Managing the complexity of drug development, approval and post-approval product maintenance processes, hiring specialists and the ability to manage fluctuations in resource demands are key issues that biopharma companies face. Traditional operating models are being pushed to breaking point because of cost pressures, emerging generic competition, governmental and political demands and the weight of supporting global distribution channels. In response, biopharma is exploring new growth opportunities in emerging markets, strengthening R&D by collaborating with industry and academic partners, moving towards a mixed portfolio of innovative and generic products and focusing on operational efficiency.
As a result, even marketing of pharma products is being driven by partnerships between two or more companies. There has been a substantial increase in the number of licensing and supply partnerships between generic manufacturers based in countries in the emerging markets and large or mid-sized global pharma companies. For example, Mylan recently entered into a strategic collaboration with Biocon, acquiring the rights to develop and market generic versions of Biocon’s three insulin analog products: Glargine (the generic version of Sanofi’s Lantus), Lispro (the generic of Eli Lilly’s Humalog) and Aspart (the generic of Novo Nordisk’s NovoLog). Similarly, generic drug maker Cipla is currently partnering South Africa’s Aspen Pharmacare to cater to the Australian market, whereby Cipla will develop the generic products to be launched by Aspen in Australia.
The increase in regulatory vigilance and government pressures mean that the responsibility for safety reporting has to be clearly outlined and closely monitored
These mutually beneficial partnerships allow Big Pharma companies to grow, attain a mixed portfolio of innovator drugs and generics, and expand into emerging markets while providing generic manufacturers with marketing capabilities. However, the increase in regulatory vigilance and government pressures mean that the responsibility for safety reporting has to be clearly outlined and closely monitored in such relationships.
The FDA and EMEA (which placed medical safety top of the EU legislative agenda when it released the new pharmacovigilance (PV) legislation in July 2012), hold the big innovator pharma companies legally responsible for PV within such licensing/outsourcing agreements.
Although PV may not be the driver of an agreement, when it comes to safety reporting the Marketing Authorisation Holder (MAH)/Application Holder is ultimately responsible for maintaining compliance with the application itself, and applicable laws regarding GMP, quality standards and adverse event reporting.
To minimise this risk, partners and contractors should be chosen with care, performing adequate due diligence before entering the contract. The impact of regulatory requirements on the structure of the agreement should be addressed early on. Having a contract to deal comprehensively with the issues of PV is paramount, along with actively managing the relationship in terms of auditing and implementing monitoring processes and issue management.
A contract affords an opportunity to manage the risk, and a Safety Data Exchange Agreement (SDEA) serves this purpose. These agreements are written contracts developed between the partner companies to define the responsibilities of each party with reference to each PV activity. A well-drafted agreement ensures regulatory compliance and prevents the duplication of PV activities by various partners. They are often reviewed during regulatory inspections to ensure there are written procedures for safety data exchange between the partners, and the communication timelines are adequate to meet regulatory compliance.
Managing pharmacovigilance
The challenges associated with maintaining compliance with safety reporting are rooted in the framework of the agreements – liability is placed on the biopharmaceutical company, and the responsibility for PV placed in the hands of the generic manufacturer. In many of these agreements, the generic manufacturer is based in an emerging market and often does not have the understanding or sufficient knowledge of the regulatory and legal obligations in highly regulated markets. These areas are relatively new to them, and manufacturing partners are often naïve about PV compliance requirements, and thus have limited access to expertise and to resources such as safety databases.
This can lead to compliance difficulties with PV agreements. Problems can arise when documents are written by individuals who do not fully understand PV. The documents may be ambiguous or can produce timelines that are too stringent for one or more parties. This may result in a lack of support from stakeholders within the generic manufacturer and inability to make decisions for activities such as labelling documents, safety committee leadership, aggregate report writing and regulatory affairs.
Further problems may result from parties being unable to provide reasoning for specific requirements. This may result in frequent changes in the procedures and if the agreement has a lot of operational level detail and is written like an SOP, frequent updates to the agreement will be required.
Pharma companies are becoming more comfortable with outsourcing to help fulfil PV obligations as many service providers have qualified and experienced teams
Generic manufacturers, specifically those based in emerging markets, are typically not adequately set up to cope with the intense regulatory requirements from the start. Consultancy and education are essential for mitigating such challenges, and outsourcing PV to a neutral third party offers greater opportunity for its successful management. Pharma companies were traditionally reluctant to partner with a third-party for PV due to concerns around sharing safety data and availability of the required level of drug safety and medical expertise. However, they are becoming more comfortable with outsourcing to help fulfil PV obligations as many service providers have qualified and experienced teams.
There are three strategic imperatives to consider when adopting a model for successful PV outsourcing:
- Capability – Access to PV and regulatory knowledge to ensure compliance.
- Capacity – Access to scalable and resilient sources of talent and infrastructure.
- Cost – Ability to establish global PV centres in a low cost destination.
With regard to the above imperatives, various sourcing models may be considered. At one extreme is the captive model and at the other is the fully outsourced model. In the captive model, the MAH company will set up global PV operations in-house. Though this would provide more control to the MAH, it is a high risk and high cost option given the lack of infrastructure, expertise and readiness on the part of the company at the outset. The fully outsourced model is attractive if adequate controls are defined and implemented, the outsourcing partner is competent and is also sufficiently flexible to accommodate requirements arising from future partnerships of the MAH.
Intermediate approaches may be considered in place of the fully outsourced model if the manufacturer wants to retain direct control over specific aspects of the global PV operations
Other intermediate approaches may be considered in place of the fully outsourced model if the manufacturer wants to retain direct control over specific aspects of the global PV operations or is mandated by the SDEA to do so. The Build-Operate-Transfer model (BOT) is a relatively low risk and low cost outsourcing model, whereby the third party takes full responsibility for regulatory compliance and safety reporting for a pre-determined period of time before handing over responsibility to the generic manufacturer who is geared up by then to take it on.
This model can be a challenge for the third party provider unless the generic manufacturer has a few key senior managers who understand the criticality of the safety obligations and can facilitate and support decisions to enable the provider to act towards attaining compliance. There is also a risk that the company may not be ready to bring everything in-house by the agreed time.
Hence a hybrid model may be an attractive option. The manufacturer can identify elements that could be managed by third party providers (case processing, aggregate reporting, literature surveillance). For the elements that are identified to be retained in-house, the manufacturer can get the third party provider to consult and help set it up in a captive model, or these elements could go through the BOT model and be transferred in-house after a defined period of time. Such a model encapsulates the shared approach with continued long-term consultancy. As the responsibility is shared between the generic manufacturer and the third party and is not completely handed back, the model de-risks compliance with long-term regulatory obligations.
The choice of model also depends heavily on the scale of the partnership (number of products and countries/ regions that will determine the volume of work) and projected increase in the complexity of the portfolio.
A multi-partner ecosystem is becoming more common and adds a different dimension of complexity. This additional complexity requires high levels of expertise, both on domain and on process. For example, cases received from one partner need to be sent to another partner. Such involvement of multiple parties and multiple hand-offs may result in insufficient turnaround time for cases or even worse, compliance/reporting risk.
Ownership of the global safety database has to be determined upfront and interoperability of different safety databases ensured. There is also a need to drive agreement on document format for receipt (source documents, e2b, MedWatch, CIOMS, etc.). Working with a third party provider that specialises in all of these elements may prove to be the best solution in such scenarios.
Defining the roadmap: a case study
A hybrid-BOT model for PV outsourcing has recently been implemented in a partnership between a well-known global pharma company and an Indian generic manufacturer. The model embodies a roadmap that other similar partnerships may well find useful, specifically highlighting the questions and processes that must be actioned.
Firstly, the strategic objectives of the model are identified, which should include access to capability, efficiency and leadership. Through the employment of a current state/situational analysis, together with a thorough understanding of organisational limitations, it is then possible to establish the scope involved and what needs and issues require immediate attention. With the scope in place, an efficient operating model can be defined by asking questions about the process, technology and organisational changes that are required, and how plans for current initiatives will change on implementation of an operating model.
It is essential to employ a change management process to meet the set objectives
It is essential to employ a change management process to meet the set objectives. This may involve establishing a completely new working environment or amending current practices, and must allow for the measurement and management of success through quantifiable metrics around regulatory compliance and operational efficiency. Such issues can be raised through the use of a risk/benefit analysis, which is an important process in identifying the level of investment required, what risks must be managed, and how the probability of realising the objectives can be increased.
This initial planning process should take approximately 4–9 months and should be undertaken before implementing the strategy. It is important to ask questions about which areas should be implemented immediately, which pilot programmes should be instigated to ensure the success of the implementation strategy, and if the evaluation process is viable and sustainable. Questions should also be asked about which business units or geographies require involvement, and whether implementation should occur in phases over a given timeframe.
Figure 2: Companies seeking third party sourcing vendors may consider specialised service providers with proven support and expertise. This model depicts the capabilities that Scientific Process Organisation (SPO) such as Sciformix can provide
In terms of execution, metrics, service level agreements (SLAs) and measurement are vital, but it is also imperative to derive a strategy to scale the model across different geographies and the entire organisation. The timeframe is obviously dependent on the scale of activity, which in the case of our partnership example is over a few years.
The implementation of the roadmap involves planning, systems and infrastructure, recruitment and training, and process development (Figure 1). In this example, certain responsibilities were transferred to the manufacturer at the end of the agreed period and Sciformix continued to own other tasks and responsibilities, such as aggregate reporting, safety surveillance and QA.
Critical success factors
In any partnership, successful management of PV is essential for meeting regulatory obligations. Sciformix has recognised that there are a few key factors that are critical to ensure the effectiveness of PV operations, especially in partnerships involving global pharma companies and generic manufacturers. First and foremost is that there must be a single, global process owner and it should be clear that the ultimate responsibility for fulfilment of PV obligations and its integrity resides with the MAH. A high level of management commitment, specifically in ensuring that all departments are aligned on the vision and goals, is critical.
Management cannot be outsourced. SOPs have to be global and there has to be a centralised team for operations and oversight. This will help ensure consistency in processes and quality criteria across regions. Key metrics such as compliance and workload should be measured and monitored. The performance management system and workflow management system should be transparent and visible to all.
In summary, setting up global PV operations for manufacturing and marketing partnerships is a challenge that calls for special considerations. Though some considerations are similar to setting up PV operations for any pharma company, there are certain complexities and challenges that need to be carefully addressed.
References
1. http://www.reuters.com/article/2012/12/31/us-pharmaceuticals-fda-approvals-idUSBRE8BU0EK20121231 Accessed 20/05/13
2. DeRuiter, J. and Holston, P. L. (2012). US Pharm 37 (6) (Generic suppl): pp.12-20