Industry Supports Shared Audits But Worries About Implementation

Lingering skepticism surfaces in Rx-360 member survey. While most support the concept of shared audits, many also worry that it will be difficult to establish the requisite uniform auditing standards.

While a majority of pharmaceutical manufacturers attending a recent Rx-360 consortium kickoff meeting in Washington, D.C., said that they supported the concept of shared audits, many also acknowledged that developing uniform standards would involve a significant amount of work. The majority of participants attending the meeting also acknowledged that their companies do not have well-established mechanisms to track and mitigate supply chain risk.

About 125 representatives of the pharmaceutical, biotechnology and generic drug manufacturing industry along with suppliers, professional trade groups and regulators attended the meeting. About 36 percent were from pharmaceutical manufacturing firms, followed by 21 percent from supplier organizations, 21 percent from biotech firms and 10 percent from generic drug companies. In addition, 88 percent of the participants were from the U.S., 10 percent were from Europe and 2 percent were from India and China.

At the meeting, participants were given live polling devices to collect their feedback on a range of issues related to the consortium's goals. These include developing shared supplier audits; establishing standards; monitoring suspicious events; and developing new technologies.

Most of the participants, 60 percent, said shared audits was the consortium's most important mission, followed by adopting standards at 19 percent, monitoring at 14 percent, and investing in new anti-counterfeit technology at six percent. There was 100 percent consensus from meeting participants that there was a need for the Rx-360 consortium.

Audit Sharing Feedback

The three audit sharing models proposed were the Rx-360 led model, the sponsor audit and the subscription audit (see pp. 3-5 for descriptions of audit models). Meeting participants were assigned to one of the three audit models in a breakout session during lunch and asked to present the pros and cons of the audit model they were assigned to in a general discussion afterwards.

The majority of respondents liked the RX-360 model the best at 90 percent, followed by the subscription model at 81 percent and the sponsored model the least at 67 percent (some participants voted twice). In fact, 93 percent of respondents said their companies would trust Rx-360 led audit results. The majority of participants, 62 percent, said that they would not trust anonymous member company audit results while 38 percent said they would accept them.

When asked how ready they were to share audits right now, responses were evenly divided. Thirty-three percent said that sharing audits "would require significant rework" while 33 percent said that this "could be adapted fairly easily." Eighteen percent said that they are "good to go right now" and 16 percent responded that that shared audits was "not an option" and "forbidden by policy."

Yet the overwhelming majority of participants, 94 percent, said that once the criteria for audits are refined their company would be willing to adopt these standards while six percent said they would not.

A majority of respondents, 56 percent, said that Rx360 should select their auditors from independent and third parties and 44 percent said they should be chosen from existing company auditors. And 49 percent said that inconsistent standards and practices were the major barriers to collaborating on a shared audit model followed by legal issues at 37 percent and cost at 14 percent.

In response to the question "How many auditor days would be required for a 'deep- dive' audit at a mid-sized supplier, the majority of respondents agreed that audits should be shorter rather than longer. Forty-nine percent said audits should last three to five days; 25 percent said they should take between five and eight days; 21 percent said they should take three days or less and six percent said it should take eight days or more.

In response to the question of how many years of experience an Rx-360 auditor should have, the majority of respondents, 66 percent, said at least five years experience was sufficient, while 20 percent said that at least 10 years of experience is necessary, 12 percent said that at least three years experience and one percent said that at least one year experience was necessary.

Participants were also evenly divided on the question of how many years an Rx-360 audit should stay current before expiration. Forty-three percent said two years, 43 percent said three years, eight percent said four years and five percent said five or more years.

And 66 percent believe that regulators will accept the Rx-360 approach of shared audits once auditors become accredited while 22 percent believe they will be accepted without accreditation. Six percent said that they do not believe regulators will accept consortium audits with or without accreditation and six percent said they do not believe regulators will accept these audits even with accreditation.

And a majority of respondents, 41 percent, said that four or more member requests should trigger an Rx-360 led audit, 28 percent saying that three or more member requests should trigger an audit, 16 percent said that four requests should trigger an audit and 14 percent said that two requests should suffice.

Monitoring Feedback

The majority of respondents, 63 percent, said that their organization does not have a well-established mechanism to track and mitigate supply chain risk while only 37 percent said that adequate programs were in place. In response to the question "how strong is the link between procurement supply chain and quality in proactively managing potential areas of threats in your company, 38 percent said that this link was very strong, 33 percent said it was somewhat strong, 28 percent said that it was somewhat weak and 1 percent said that it was very weak.

A majority of participants, 58 percent, also said they "strongly" agreed with the statement that "supply chain issues and shortages could be a key cause for the introduction of substandard product in the market," while 29 percent somewhat agree, six percent are neutral and six percent somewhat disagree.

In response to the question how would you rate the effectiveness of your current audit function, most respondents, 48 percent said that it was satisfactory but could be better, 30 percent said that there are some gaps but is mostly there, 17 percent said they were industry leaders, and five percent said that their audit programs need significant work.

And in responding to questions pertaining to consortium membership, a vast majority of participants, 91 percent, said that the proposed membership dues were reasonable. And 78 percent said that it was important for the consortium to seek a business review letter from the Department of Justice saying it has no intention to try to prosecute the clearinghouse for antitrust violations while 22 percent said that this was not important and should not be pursued.

- Joanne S. Eglovitch ([email protected])