Three Shared Audit Models Tested at Rx-360 Consortium's Launch Meeting

June 17, 2009

The newly formed Rx-360 consortium had an impressive turnout of over 125 people at its launch meeting in Washington, DC, on June 5.

The newly formed Rx-360 organization, an international consortium developed by members of the pharmaceutical and biotech industries aimed at improving global supply chain security, had an impressive turnout of over 125 people at its launch meeting in Washington, DC, on June 5. The objective of the meeting was to increase awareness, solicit membership, and pressure-test shared audit models.

Meeting participants included a diverse group of people from big and small pharmaceutical and biopharmaceutical companies, suppliers, industry organizations, and also the FDA. Live polling was used to get immediate audience feedback on the consortium’s goals and proposed plans. All attendees were given devices to vote from their seats and the results were shared instantly.

More than 60% attendees felt that their current companies don't’t have a well-established mechanism to track and mitigate supply chain risk. “A holistic approach is required to solve this complex global problem,” said Martin VanTrieste, vice president of quality at Amgen and an Rx-360 advisory committee member, during his opening comments. According to VanTrieste, Rx-360 is not intended to replace the regulatory system or to eliminate regulatory oversight. He emphasized that the consortium’s goals complement those of the FDA and the European Medicines Agency.

In his overview presentation, VanTrieste elaborated on four distinct functions of the consortium: managing shared supplier audits; adopting standards and best practices; acting as a clearinghouse for suspicious events; and developing technology. When asked which of Rx-360’s objectives they support, 20% of the meeting attendees said adopting industry standards; 13% said monitoring; 6% said technologies; and 61% said shared audits.

Shared Supplier Audits

According to VanTrieste, by developing a system to make audits broader and more thorough, and allowing firms to share audit findings and corrective actions, the current system would become more effective and efficient. “Numerous 1 or 2 day audits will be replaced with fewer and more thorough audits thus eliminating audit fatigue,” he said. The following three shared audit models were proposed and pressure-tested at the launch meeting:

Sponsored Audits: In this system, an audit would be initiated by a single biotech, pharmaceutical, or generic company, referred to as the “sponsor.” Such audits would only be conducted using a certified auditor from a consortium-approved auditing firm or by the sponsor’s own auditing staff. Once the auditor completed the audit of a supplier, an audit report would be approved by the sponsor and placed in the consortium’s database. The sponsor would pay for the audit costs and members would be able to purchase the audit package for 10% of the original cost of the audit.

Audits Led by Rx-360: In this system, an audit would be initiated by multiple biotech, pharmaceutical, or generic companies. Individual firms would submit a request to audit a list of suppliers to Rx-360. The consortium would consolidate these requests in a blinded manner, so that the requesting firms did not know the names of the other firms requesting the audit. Rx-360 would conduct the audit, issue a report, and track corrective actions. Members would be able to buy the final audit report.

Subscription Audits: This type of audit sharing would simply place existing audits conducted by members using their internal audit standards, along with the supplier’s response, into a secure database. Such audits would have to be redacted to protect trade secrets, and to remove the pharmaceutical firm’s name to prevent any antitrust violations. Once placed into a secure database, members coould access this data for a nominal fee.

Meeting participants had a mixed response to the three audit models. When asked how comfortable they felt about sharing audits, 16% said shared audits were not an option; 33% said shared audits would require significant rework; 33% said shared audits could be adopted fairly easily; and 18% said they were “good to go right now” with shared audits.

After breakout sessions in which small groups discussed the three proposed audit models, 67% said they though the sponsored model was viable; 90% said the Rx-360 model was viable; and 81% said the subscription model was viable.

Some attendees raised concerns about shared audits because they felt that the scope of the audits might not cover different types and sizes of pharmaceutical and biopharmaceutical companies. Some felt that very detailed standards would have to be established for audits conducted by Rx-360 or third parties for member companies to trust the results. In addition, members would need some type of FDA endorsement of Rx-360–based audits.

As the Rx-360 consortium continues to address these concerns and decide on a plan of action to implement its goals, it is seeking membership, which was another key purpose of the launch meeting. VanTrieste estimates that the consortium will need a minimum of 50 dues-paying members, with membership dues running from $4,000 to 10,000 annually. The meeting participants showed full support for Rx-360; 100% agreed that Rx-360 was needed and most also said they would join or are considering joining the consortium.

Visit Rx-360’s web site for more details on shared audits

See BioPharm’s previous coverage on Rx-360

Read PharmTech’s blog post on Rx-360