There is virtually no activity conducted by biotech companies that is not currently monitored for compliance. Requirements
in the form of good laboratory practices (GLPs), good clinical practices (GCPs), and good manufacturing practices (GMPs) affect
nearly every aspect of the discovery, development, clinical testing, manufacturing, labeling, marketing, and distribution
of products. And product development oversight will likely become more, rather than less, intense in the future.
Such regulation can be doubly expensive. On one hand, you must shoulder regulation's direct costs: those incurred to develop
and maintain compliance programs and rectify cited failures. On the other hand, in the event of citations, you must endure
the business costs that accrue from not achieving compliance: delayed approvals; missed market opportunities; product liability;
expensive remediation; and potential loss of product, market share, and credibility.
But does compliance have to be as costly as most companies believe?
Consider that compliance, by definition, is reactive. It implies a response to something—a rule or requirement. As a result,
the compliance management strategies of most life sciences companies are fundamentally reactive. They focus on whatever issues
arise and the companies often face the same issues year after year. A few companies, however, take a more proactive approach.
They learn from regulatory experiences and aim their compliance efforts at preventing problems, thereby achieving savings
in both direct and business costs. The top performing organizations, however, take a more strategic approach. Instead of treating
compliance as a cost of doing business, they extract the business value from regulatory and quality imperatives, and move
from a culture of compliance, whether reactive or proactive, to a culture of strategic quality management.
The dimensions of quality—not compliance—must be the focus of a strategically oriented company. Such strategic quality management
is no more expensive than a reactive wait-and-fix strategy, or a proactive plan-and-prevent approach. In fact, by evolving
compliance into regulated quality, companies can achieve lower overall quality assurance costs, enormous time savings, fewer
compliance problems, and a stronger alliance with regulatory authorities.
METHODS FOR MOVING TO STRATEGIC QUALITY MANAGEMENT
Moving fast from reactive to proactive compliance, and then to genuinely strategic quality management, is a communication
and relationship challenge. Business processes throughout the organization must emphasize the forging of partnerships throughout
the organization. Departments understand their interrelationships and work together to leverage technical and business tools
jointly (Figure 1). The overall objective is to first identify and then add value to regulatory work practices by combining
traditional compliance procedures with breakthrough business methodologies.
Figure 1. A quality systems hierarchy
GMP Process Audits
Companies with strong, strategic approaches to quality use a variety of distinctive work practices and methodologies. Some,
for example, regularly perform GMP process audits that help them quantify levels of risk should compliance goals not be met.
Such auditing also helps companies strategically focus their quality assurance (QA) dollars on areas that most require adjustment,
or where savings likely will be most significant, instead of the much more costly approach of waiting until problems occur.
Enterprise Risk Assessments
Some companies are using the newly in-vogue enterprise risk assessments (ERAs) to identify and prioritize quality risk and
then draft a mitigation plan. These ERAs raise awareness of the nature of quality management and facilitate analysis of the
business value of the quality function.
To build flexibility into compliance-budgeting activities, a few companies use a "work breakdown structure" that helps them
"predefine" what has to be done and what costs are involved. Operating budgets can then be structured to portray accurately
where the company is positioned currently with respect to GMP compliance. This can be accomplished by considering baseline
costs, factoring in acceptable industry tolerances, and then developing alternative model projections. It is then possible
to track actual figures and compare them to projections. Other companies rely on trend analyses to understand the financial
impact of reaching key business goals. These analyses typically consist of industry best practices, historical data, and interpolation
of economic trends into financial projection models. Both of these elements are typically incorporated into ERAs.