Supplier Oversight

September 2014

PQRI

Steven Lynn, MS, CMQ/OE Vice President Global Quality Compliance Mylan

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Agenda

• Mylan –Background

• Setting the Stage with a Scenario

• Current State Thinking

• Supplier Qualification

• Supplier Oversight

• Q&A

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Background

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At Mylan, Working together around the world to provide 7 billion people

access to high quality medicine, we:

• Innovate to satisfy unmet needs

• Make reliability and service excellence a habit

• Do what’s right, not what’s easy

• Impact the future through passionate global leadership

we are committed to setting

new standards in health care.

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working around the globe to reach patients

in ~140 countries and territories.

Around the corner or

around the globe, you’ll

find innovative Mylan

medicines and products

Scientists, researchers, technicians, marketing

professionals – the men and women of Mylan

are committed to setting new standards in

health care.

More than 20,000 dedicated individuals

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Powerful global R&D driving broad

product portfolio Established regulatory track record

Providing access to more than 1,300 generic,

brand and specialty products, with thousands

more on the way.

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Leveraging our global operating platform

and unmatched commitment to

one global quality standard to meet

the needs of billions of people worldwide.

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Vertically integrated global

manufacturing platform

Reliable, proven global

supply chain

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Setting the Stage with a

Scenario

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Supplier Qualification – A Scenario To Ponder

A True Story "Ladies and gentlemen: the story you are about to hear is true. Only the names have been changed to protect the

innocent."

• A major supplier of multiple drug components in a big country overseas:

– A global health authority (HA) issued the firm an adverse inspection report in the summer of 2014.

• Key observations included data integrity assertions in the lab.

• The Firm, as a result of the adverse inspectional report voluntarily suspended API shipments from their manufacturing site to the US market, but not other non-US markets.

– What would you do if this was one of your suppliers?

– How would you respond, if you were a multi-national firm with sites in the other countries that the firm did not suspend shipments to?

– What went wrong? Was this just the tip of the risk iceberg or was it just a one-time occurrence?

– The site received multiple HA inspections in the past and was audited by a plethora of auditors from many pharma companies.

– How did this get missed?

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Current State Thinking

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Current State of the Drug Supply Chain

Risks, Threats, and Vulnerabilities permeate the Drug Supply Chain

Finished dosage form or

API

API and Inactive

Ingredients Patient

Intentional

Adulteration

Counterfeit

Unknown

threats

Terrorism

Globalization

Terrorism

Cargo theft

Diversion

Counterfeit

Unknown

threats

Manufacturer

Importer

Wholesaler

Manufacturer

Wholesaler

Pharmacy

Globalization

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Current ICH Guidance: Risk Management

ICH Q9 Quality Risk Management

• Quality Risk Management Provides Guidance Regarding Outsourcing – Members of the supply chain are partners

• Play a role in determining success

– Q9 recommends a comprehensive evaluation of suppliers and contract manufacturers

• including auditing and implementing supplier quality agreements

– A manufacturer's quality system will drive the management of outsourced processes and entities (connecting risk and quality management)

• Application of Quality Risk Management to Making Sourcing Decisions – How does one quantify the true cost of ownership in a sourcing relationship?

• What are the worst case scenarios (essentially doing a risk evaluation)?

• Will there be some learning curve that dictates a need to be present at contractor?

– How well do the supplier’s quality systems assure product quality?

• Systems often look good on paper

• Trust and confidence are built gradually

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Current ICH Guidance: Quality Systems

ICH Q10 - Pharmaceutical Quality Systems Guidance Regarding Outsourcing

• Control and review of all outsourcing activities is an element of a manufacturer’s pharmaceutical quality system.

• Manufacturer is ultimately responsible to ensure processes are in place to assure the control of outsourced activities and quality of purchased materials.

• A manufacturer should have adequate procedures for auditing and qualifying facilities prior to outsourcing and throughout the process and for contract management and supervision.

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Supplier Qualification

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Supplier Qualification – cont.

Supplier vs. Contractor Definitions

• Supplier –Refers to a company outside of the your internal network that provides components for use in the manufacture of finished drug products, APIs or medical devices.

• Such items may include, but are not limited to, active pharmaceutical ingredients, container-closure systems, labeling or other printed material for use in the manufacture or packaging of finished product.

• Contractor –refers to a company outside of your network that performs a service such as calibration, or filter installation and certification, or cleaning services at a Mylan site.

For the purpose of this discussion we are focusing on Suppliers.

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Supplier Qualification

What is the Magnitude of the Risk?

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Supplier Qualification – cont.

Supplier Selection, Qualification, and Monitoring

• The choice of a supplier is a critical one

– Supplier commitment to quality can vary – how does a firm ensure they’re receiving high-quality supplies?

– Their production lifecycle monitoring programs are sometimes deficient - What can be done on your firm’s behalf?

– Robust Evaluation - How does a firm ensure there’s robust ongoing evaluation of reliability (state of qualification to ensure state of control)?

– Disqualification - When should you disqualify a supplier? Under what circumstances? Uncorrected non-compliance?

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Supplier Qualification – cont.

Qualification of Suppliers

• Qualification is part of an overall lifecycle approach to supplier management.

– Unlikely that any one approach can possibly cover all qualification scenarios

– Utilize a risk evaluation framework

• Lifecycle approach includes:

– Prospective supplier selection

– Qualification activities

– Supplier approval

– Maintenance of qualified status of supplier

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Supplier Qualification – cont.

A Typical Process in the Pharma Industry

Identify the Need (New or

Change)

Identify the potential suppliers

Apply Risk Criteria (QRM)

Utilize Prior Knowledge of the Supplier (Friends and Family Plan)

Suppler Questionnaire

Onsite Audit

Positive Response?

Positive Outcome?

Qualify the Supplier

Oversight of Supplier

Throughout the Lifecycle

Yes

Go Fish

No

No

Contract Process

Tech Agreement/

Quality Agreement

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Supplier Qualification – cont.

• What’s a Firm to Do?

– Defined due diligence process

– Questionnaire/Survey

– In-depth risk evaluation

– GxP Audit(s)

– Change control review (how do they handle change?)

– Technical Agreements / Quality Agreements

– Supplier license documentation

– Approval of supplier

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Supplier Qualification – cont.

Some Thoughts on Technical Agreements / Quality Agreements:

• Ensure you have:

– The identification of the supplier and the exact address used for the manufacturing operation.

– Provisions to allow periodic audits of CGMP and contract specifics;

– A description of the product(s) and its intended use

– Commitment to share information from inspections and other regulatory communications

– Procedures for handling changes

e.g., new equipment, facility modifications, change in key personnel, change in SOPs or test methods

– Measurement Systems: Supplier Scorecards (as it pertains to ongoing supplier management)

– Defined monitoring of risk-based parameters such as: Rejection Rates; Right First Time, Inspection/Audit Findings; and Investigations

• Contract manufacturer should fully inform the product owner of all errors, deviations, changes, OOS results, investigations, as well as adverse events for the affected product.

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Supplier Oversight

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Supplier Oversight

• Establishing a robust – ongoing - oversight program that includes:

– Comprehensive supplier audits, including site visits (questionnaires and site visits);

– Detailed Quality Agreements;

– Appropriate ongoing QC of incoming lots; and

– Forecasting Approaches (e.g., market trends such as shortages etc.).

• Only doing business with trustworthy sources

– Avoiding grey and black markets

• Qualify the supply chain with standards

• Good manufacturing practices

• Good distribution practices

• Integrity and sustainability

• Implementing a comprehensive approach to monitor ingredient supply chain integrity.

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Supplier Oversight – cont.

Incoming Supply

Verification and Testing

In-Process Controls and

Testing

QC Release Testing

Release/Reject

Decision?

Routine Testing of Incoming Supplies and

In-Process Testing

Batch Release

Ongoing Oversight

Audit’s – Per Risk-based Schedule

Survey/Questionaire

External Intelligence (i.e. Rx360,

USP)

What Else

Can be

Done?

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Supplier Qualification

Internal Supplier Management Program – Some Additional Thoughts

– Understanding the universe of suppliers;

– Establishing minimums in audit cycle and technical agreements;

– Establishing priorities based on business requirements;

– Evaluating new and existing suppliers;

– Maintaining and strengthening relationships; and

– Benefits

• Understanding risk

• Use as a basis for reduced testing

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Click to edit

Thank You

Steven Lynn, MS, CMQ/OE

Vice President

Global Quality Compliance

Mylan

steven.lynn@mylan.comm

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