How to Avoid Becoming a Biotech Zombie Part 2 - Putting business principles to work in biotechs requires careful implementation of nine critical business systems. - BioPharm International


How to Avoid Becoming a Biotech Zombie Part 2
Putting business principles to work in biotechs requires careful implementation of nine critical business systems.

BioPharm International
Volume 21, Issue 2


Some of the components of an effective quality system should be designed based on the company's business model, others are mandated by law, and still others should be designed with widely recognized standards and non-mandatory regulatory guidance in mind.

For a company whose business model is vertical integration—taking a drug from discovery to market—the quality system should be designed to interface with other key departments for mutual problem-solving and communication, in addition to handling field monitoring. By contrast, a company whose business model depends on outlicensing must have a quality system capable of transferring its innovation to a licensee and then continuing to monitor the product's performance in the market to ensure that the company can respond appropriately and quickly to any adverse developments. The company's quality system should also include a mechanism for retrieving information on performance from licensees and may also entail having personnel on-site at the licensees' facilities. The quality system for a company that intends to outlicense but has not yet done so should be focused on Quality by Design (QbD) to ensure that they get it right from the first.

Quality components mandated by law include compliance, customer service, and product design. Further, manufacturers of devices and hybrids are required by law to establish design controls and meet quality systems regulations (QSRs) pertaining to purchasing controls. They must also meet the requirements for management responsibility, which are laid out in 21 CFR 820. Nonbinding standards and guidelines that can help shape the quality system include those promulgated by the International Standards Organization (ISO), ICH, FDA, and EMEA.

Because the quality components necessitated by the business model and by law are likely to be obvious, familiar, and inescapable, the greatest opportunities for creating a significantly value-added quality system lie in non-mandatory standards and guidelines. Achieving ISO certification for your quality management system signals your company's commitment to quality and international standards and helps establish valuable credibility with industry partners, government authorities, and the public. Further, cconcepts such as process analytical technology (PAT), QbD, and design space (DS), which figure prominently in ICH Q8 and ICH Q9, encourage greater scientific understanding of processes and products and hold out the promise of a lighter regulatory burden for companies that adopt them. But because the regulatory agencies don't spell out precisely how to go about it, some companies fail to take advantage of the opportunities those principles offer for reducing compliance risk, establishing more robust processes, continuously improving and creating more regulatory room in which to operate. Companies that take advantage of these opportunities will not only establish greater trust with regulators but also gain additional advantage over competitors whose quality systems lack such capabilities and therefore slow their progress to market, enmesh them in compliance issues, and bog them down in costly rework.


Regulatory hurdles, complex uncertainties, and the difficulty of doing something that's never been done before make each biotech a uniquely risky business both scientifically and financially. A comprehensive risk management system should be designed to perform four critical tasks: identify risks, calculate their impact, mitigate their potential effects, and recover from crisis.

The system should be able to identify internal and external risks, including gaps in core competencies, management bandwidth, product development risks, times to various gates in development, regulatory hurdles, competitive risks, and many other factors. It must also quantitatively calculate the likely risks and their effect on cash flow.

The system should also be able to determine which risks are critical—the "killer concerns" that could seriously derail the company—and develop plans to mitigate those potentially disastrous occurrences. For example, if you're in a race with a competitor to get to market first, anything that slows down commercialization could severely diminish the lifecycle sales of the product. To minimize the risk of being second, you might decide to go after only one indication for therapeutic treatment. You could then pursue only a narrow segment in Phase 3 clinical trials, requiring only about one year plus the six months required for an expedited review. But if you chose to pursue three indications instead of one, you might be tied up in clinical trials for as long as four years or more.

When it comes to crisis recovery, the challenges for life sciences companies are extraordinarily acute because the lives of patients are often at stake. The risk management system should therefore include a fully agreed on action plan that can be rapidly and comprehensively implemented in the event of a major crisis. It should be designed to address the crisis immediately and in full, with the ultimate goal of re-establishing genuine trust with the public and regulators. Moreover, it should be designed with the underlying science of the product in mind, which allows you to project worst-case scenarios and plan your responses to them.

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