When Less is More: Lean Can Help Reduce Costs and Improve Compliance Simultaneously

Biopharmaceutical companies can use Lean techniques to identify opportunities and eliminate wasteful and unnecessary activities.
May 01, 2009
Volume 22, Issue 5

Chris S. Driscoll
Biotech companies appear to be caught on the horns of an irresolvable dilemma. On one hand, they face more pressure than ever to reduce costs. On the other hand, the greater complexity of biotech manufacturing and the more challenging therapeutic areas it often addresses considerably raise the bar for achieving compliance. The conventional wisdom holds that Lean might reduce costs but it will put compliance at grave risk. And noncompliance isn't an option.

As is often the case, the conventional wisdom is wrong. Rightly understood as a tool for improving business and manufacturing processes, Lean can help reduce costs and improve compliance simultaneously. The principle is simple: reduce waste. Eliminate redundancies and unnecessary steps and cost savings will not only occur, but compliance will improve as well. In fact, many compliance activities themselves involve unnecessary steps that not only waste money but also actively damage compliance.


Consider the case of a biotech and its attempt to meet FDA requirements. After an inspection, the agency informed the company that its quality systems were not robust enough to assess the effects of all the incremental changes the company had made to its processes over the years. In response, the company decided to build a "system evaluation operation," a redundant quality system that soon grew to nearly three dozen people. This elephantine operation only made compliance harder because collecting all of the data and assessments that had been promised to the FDA was virtually impossible to accomplish in a timely manner. As a result, the company often had to report instances of nonconformance. It was the worst of both worlds—higher costs and lower compliance. And it was an entirely self-inflicted wound that could have been avoided if the company had concentrated on improving its existing quality systems and showing evidence that those systems had matured.

In other cases, biotech companies accumulate costly and unnecessary compliance activities because of what amounts to company folklore about the FDA. When asked why they engage in a particular compliance activity, company personnel will often reply "because the FDA requires it." Often, however, it turns out that the agency requires no such thing. For example, at a biotech production and packaging site for a major global pharmaceutical firm, we noted that the good manufacturing practice (GMP) space was being cleaned by company employees when outsourcing the job could have saved money. When we asked about the practice, the response was: "The FDA requires that company employees clean GMP space." There is no such FDA requirement. In fact, with a little digging, we discovered that there was no such corporate requirement either.

In other cases, biotech companies know that some of their practices are redundant and costly, but they believe stripping out a prior commitment to the FDA and reporting the change will just precipitate more compliance headaches. The company doesn't want to simply stop supplying data from, for example, an extensive assay that has always been performed, so the practice continues, even though it's unnecessary. Further, redundant compliance activities suggest to the agency that the company doesn't trust its own methods to yield accurate results. The company paints itself into a corner and costs itself money year after year. Meanwhile, the FDA welcomes improvements in processes and has made it clear that it intends to encourage continuous improvement.

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