How Indian Firms Are Rebooting For Quality Transformation

Against a backdrop of heightened regulatory scrutiny of manufacturing sites and processes, the heads of five top Indian firms told a recent forum in Mumbai how they are “rebooting” quality compliance and culture within their organizations. Tangible and intangible results are beginning to show but there is a long road ahead.

The India Pharmaceutical Forum 2017 saw the chiefs of five top Indian firms - Sun Pharmaceutical Industries Ltd., Dr. Reddy's Laboratories Ltd., Cipla Ltd., Lupin Ltd. and Zydus Cadila - share glimpses of quality “transformation” initiatives underway at their respective companies, and also of broader industry collaboration in the area despite some initial skepticism around such joint efforts.

Their reflections came against the backdrop of regulatory action against several Indian firms, including some of the frontline companies, over good manufacturing practice (GMP) deviations that have dented both earnings and the image of the Indian industry as a whole.

Dilip Shanghvi, founder and managing director of Sun Pharma, India’s top-ranked firm, noted how the company had been able to standardize quality metrics across plants on various issues that impact “product quality, productivity and throughput”.

“It kind of allows us to look at overall performance on a constant and consistent basis, so we can do inter-plant comparison and also the same plant - how it is progressing,” Shanghvi told a packed house that included senior officials from international regulatory agencies at the forum Feb.24.

The forum was organized by the Indian Pharmaceutical Alliance (IPA), which represents leading domestic firms, in collaboration with the US FDA, the EMA, the MHRA, EDQM and India's Central Drugs Standard Control Organization.

Over the course of the two-day forum, officials from the regulatory agencies identified critical issues around quality compliance, including those pertaining to data integrity, and compliance trends around Indian manufacturing were also discussed at the Mumbai event.

New Systems, Reduced Failures

Shanghvi said that with Sun becoming almost “twice its size overnight” with the integration of Ranbaxy Laboratories Ltd., it required “a very different organization” to handle the significantly higher level of complexity of managing around 40 manufacturing plants.

“We redesigned our organization, started using technology to ensure that we review and manage all our plants with more or less consistent processes and standards. The emphasis and focus [is] on having a common organizational policy on quality rather than a country- or geography-specific quality policy,” he explained.

Significant change has been effected at the firm, aimed at enhancing its capability to reach global standards. (Also see "Analysts Cut Sun Forecasts After New Halol Site Faults" - Scrip, 15 Dec, 2016.)

Dr. Reddy’s chair Satish Reddy referred to how his company had strengthened the quality management system overall starting “right from the top”. On the governance front, reviews commence at the board level, he said.

“When the warning letters came, it’s reviewed at the board level itself. CEO GV Prasad spends a considerable amount of time on this. That commitment takes us a long way,” Reddy added. (Also see "Three-Plant FDA Warning Spooks Dr Reddy's, Clouds ANDAs" - Scrip, 6 Nov, 2015.)

He also noted how the “number of incidents being picked up” had gone up significantly.

“People are beginning to report quickly but we also saw a decreasing trend in some of the parameters…ultimately in terms of batch failures we saw a much-reduced figure, which gives us quite a bit of confidence.”

Fundamental Reboot

Other corporate heads emphasized the need for robust process reviews – even a “reboot” of sorts at times.

Lupin's managing director Nilesh Gupta said that the nine regulatory observations [by the US FDA] at the firm’s Goa facility were a “wake up call” that led to a formal quality transformation exercise at the firm.

“That [quality transformation] is necessary in the life of every organization/plant because over the years there is too much of ‘post it’ that starts getting stamped onto everything else. Things just start getting too complicated and you need to have that fundamental reboot at some point and that’s exactly what we did,” the young Lupin scion told the forum.

The company, he noted, reviewed aspects such as SOPs [standard operating procedures], training people on those SOPs, documentation practices, and the kind of “gemba” walks being undertaken.

“You need to have that refresh every few years as an organization/site.”

The gemba walk is the term used to describe an actual and personal observation of work where it happens in practice. The original Japanese term is derived from “gembutsu”, which essentially means “real thing” and has been adopted in processes such as automobile production.

Such walks can, in general, help officials observe, among other things, real machinery and equipment conditions, ask about the practiced standards, gain knowledge about work status, and foster relationships with employees.

Long Road Ahead

Despite these efforts, the Indian pharma quality transformation journey is undoubtedly expected to be a long and arduous one. On Feb. 21, Dr. Reddy’s informed Indian bourses that its active pharmaceutical ingredients facility at Miryalaguda had been issued a Form 483 with three observations, which it is addressing.

A Form 483 is a notice of the US FDA's inspectional observations that lists deficiencies in the quality system.

On Mar. 1, Wockhardt Ltd., which has been grappling with compliance issues for a considerable time now, said that the FDA had issued a warning letter to Morton Grove Pharmaceuticals Inc, its stepdown US subsidiary. New product approvals from the unit will now be “withheld” until resolution.

“The current portfolio of the company will continue to be made available in the market. The company, with the help of the consultants, has already initiated appropriate measures since last several months to address the issues raised by the FDA,” Wockhardt informed the Bombay Stock Exchange. (Also see "Data Integrity Lapses Continue To Erode Wockhardt" - Pink Sheet, 4 Jan, 2017.)

Some experts had earlier indicated that 2016 was a relatively better year for the Indian industry on the compliance front in terms of fewer overall warning letters and import alerts from the FDA for Indian sites. However, in 2015-16 regulators, mainly the FDA, stepped up the frequency of checks, demanding stricter compliance and leading to a higher number of Form 483 issuance rates versus the past.

Changing The Culture

The IPA Forum also heard the top leadership at Indian firms emphasize the value of developing a quality culture across the organization.

Zydus Cadila chairman and managing director, Pankaj Patel, among a string of observations around quality culture, said that it was critical that employees at the lowest rung be involved in understanding quality and expectations of quality.

He referred to the firm’s “Quest” program, under which training is provided not by managers but by workers who are selected as leaders and trained by a talent academy.

“Over a period this would bring a huge change in the culture of the organization. We are seeing the advantages; there is tremendous awareness at the bottom of the organization,” Patel said.

Cipla’s managing director and global CEO Umang Vohra noted that culture is essentially created by a set of people who work together, adding that setting these first principles was most challenging.

He referred to how each site at Cipla has a root cause identification and solution-finding team that works together, “creates a culture, builds learning and a safety system within themselves.”

The quality forum also saw the release of data reliability guidelines by the IPA, working with knowledge partner McKinsey & Company. The guidelines outline a holistic approach, with multiple elements required to help ensure the reliability of data throughout the product lifecycle.

Culture, process design, data reliability risk detection and mitigation, and technology and IT systems are among the key elements covered in the guidelines, which note corporate culture is the “foundation” for a strong data reliability mindset.

Birth Of An Ecosytem

Vohra also underscored the importance of the collaborative quality transformation effort among industry peers in India and the resultant “birth of an ecosystem”.

“We all hire from each other’s companies, this is the same set of quality, operations talent that is going around. If we work together as a group, it is very important that the entire system reaches a certain level as against somebody doing it at one company and someone else in another organization.”

The IPA launched the quality forum in 2015 as part of efforts to support Indian drug manufacturers to achieve parity with global benchmarks in quality. (Also see "Indian CEOs On Plugging Quality Gaps: Yes We Can" - Pink Sheet, 24 Mar, 2016.)