New Coalition Aims to Improve Pharmaceutical Supply Chain

May 13, 2009

Members of the pharmaceutical and biotech industries have formed a new industry coalition, called "Rx-360," with the goal of improving supply chain safety.

Members of the pharmaceutical and biotech industries have formed a new industry coalition, called “Rx-360,” with the goal of improving supply chain safety.

Prompted to create the new organization by cases like the heparin adulteration last year, the founders hope that collaboration across companies can reduce the risk of future contamination incidents—whether accidental or intentional.

Group Audits of Suppliers

One of consortium’s first goals is to set up a system for carrying out shared audits of suppliers. Most pharmaceutical companies conduct 2- or 3-day audits of their suppliers. Large suppliers may receive hundreds of audit requests a year, however, so for practical reasons, they often have to limit the number and scope of these audits. Shared audits would address this problem, says Martin van Trieste, vice president of commercial quality at Amgen, and one of the founders of Rx-360.

“Let’s say 50 companies want to conduct an audit of one supplier,” says Van Trieste. “If we can share our resources and audit as one group, that supplier will of course be more willing to let me come in and do a more thorough audit.” So instead of just reviewing good manufacturing practice, the audit might also cover the supplier’s own supply chain security, such as how they receive their raw materials, and how they distribute the product to the end customer. “We can get a much deeper view of the supplier, and do it in an more efficient manner,” he says.

The cost of conducting such an audit—and the data produced—would be shared equally by participating companies. Additional companies also could purchase the report.

Pooling Intelligence

Van Trieste also points out that the group can gain by pooling intelligence. As an example, he notes that if he audits a supplier on behalf of his company alone, he may be confident that the company can supply 100 kilos of citric acid a year.

On the other hand, if Rx-360 knows there are 50 members who buy 10,000 kilos of that product a year, he may realize that the facility doesn’t have the capacity to do so. That might make him wonder if the plant is a show factory, with a shadow factory somewhere else.

“I can’t do that today, because I have no way to make those connections,” says Van Trieste. “Sharing that information gives us data that allows us to connect the dots.”

Early Warning System

Van Trieste can think of other ways that pooling data can serve as an early-warning system of supply chain problems. He continues with the example of citric acid. “For example, if I reject one lot of a raw material shipment because of trace contamination, I’ll do an investigation, but to me, that is a single event,” explains Van Trieste. “But if 30 of us all got one batch that was contaminated, we would look at that supplier differently.”

“If we can act as a clearing house, to blind that data and to share it so that people can make more informed decisions, we’ll go a long way toward solving these problems,” he concludes.

Identifying Potential Problem Areas

Pooling intelligence can be taken a step further, to identify situations that offer the potential for malfeasance. Van Trieste cites the example of today’s shortage of acetonitrile, which is used in some small-molecule pharmaceutical manufacturing processes as well as in chromatography. The high demand for a product in short supply might seem like a good opportunity for counterfeiters, Van Trieste says. So simply making drug makers more aware of the shortage and alerting them to watch for suspicious activity may help avert a problem.

Filling Gaps, Not Duplicating Efforts

Van Trieste stresses that Rx-360 does not want to duplicate efforts already undertaken elsewhere. “We don’t want to create anything if it already exists,” he says. “We want to adopt best practices.”

As an example, he hopes his group will be able to adopt the auditing standards developed by the International Pharmaceutical Excipients Council ( and the Active Pharmaceutical Ingredients Committee ( “In other cases, however, there may be a gap, and in that case we would need to fill it ourselves,” he says. One such gap would be auditing standards for container–closure systems.

They also plan to benchmark work by groups in other industries, including people he met at a May 1 meeting on adulteration organized by the US Food and Drug Administration. “Every industry regulated by the FDA, from pet food to cosmetics to pharmaceuticals faces this problem,” he says.

Ambitious Goals, and A Lot of Passion

The group, which will host a June 5 launch meeting in Washington, DC, has an ambitious three-year plan.

Goals for the first year include setting auditing standards, training and certifying auditors to carry out audits on behalf of the consortium, and creating or obtaining the infrastructure to share data.

In year two, they hope to begin shared audits and develop a consortium supplier certification that would allow suppliers to promote that they have been certified by the consortium.

The key goal for year three is to fund the development of new technologies for securing the supply chain and detecting adulteration.

Asked if these were ambitious goals for a volunteer-based organization, Van Trieste recognized the hurdle, but was optimistic. “I can tell you that there are people out there who have a lot of passion to make this happen,” he says. “We need to protect patients.”