 Outsourcing has increasingly become the mark of good resource management on the part of modern pharmaceutical companies. Why invest in equipment, machinery, space, and human resources for a novel process or product, and why spend time slogging up the learning curve, if you can find a partner company who already has the skill and equipment to move your project forward? This realization is especially relevant for firms entering new markets, manufacturing new drug types, or using novel formulations and delivery mechanisms.   

Outsourcing can be an attractive alternative for products in any stage of development, from early-stage formulation and process development through commercial-scale production. By outsourcing, the client company maximizes efficiency—freeing up time, personnel, and equipment to do what it does best, and at the same time reduces its investment exposure and capital expenditures. The partnership can be quite reasonable, but does not come without its own challenges.  

For in outsourcing, a sponsor company is giving up a good deal of control and has to balance the risk and rewards of keeping a project in-house with those of working with external partners. This challenge, although always present in any outsourced relationship, becomes more difficult with increased complexity in the supply chain. The basic expectations and requirements for the client and the outsource service provider have not changed. On-time delivery, meeting product specifications, regulatory compliance, and product quality remain the cornerstone of any successful outsourced relationship.  

The outsourcing relationship, however, increasingly operates in a truly global pharmaceutical supply chain through the supply of raw materials, ingredients, or the delivery of the contract services themselves. And with the elongation of the supply chain comes attendant obligations and costs in securing that supply chain.  

We've heard tales from firms that the cost of their due diligence can exceed the cost of the service contract, at least for the initial project. Furthermore, it's been estimated that the pharmaceutical industry collectively performs 800,000 audits each year to ensure the quality of its suppliers in the US and abroad. That's got to use up a lot of resources (not to mention paper). 

It is for this reason we applaud and encourage efforts such as those of the Rx-360 consortium, an industry initiative, which held its launch meeting in June, with an overarching mission of supporting product quality and authenticity throughout the supply chain. Among the group's efforts is to explore the feasibility, acceptability, and potential approaches for shared supplier audits.  

The consortium seeks to develop a system that will make audits broader and more thorough and will allow firms to share audit findings and corrective actions, making the system more effective and efficient. Each consortium member company could use this information for its own independent assessments on the appropriateness of a supplier based on their own company policies and product needs. Obviously, the needs of each client may differ, and standardizing audit information to make it useful to the greatest number of clients in the greatest number of cases won't be easy. Nevertheless, the ultimate saving in time alone could be worth its weight in—well, if not gold, at least in paper. 

Articles

As the pharmaceutical supply chain expands, sponsor companies need to weigh all their options.

Growing Pains

Supply-chain integrity is a critical concern for the pharmaceutical industry and its suppliers, and the industry is taking a step forward by addressing these concerns as a collective whole through the formation of Rx-360. Launched in June, Rx-360 is a nonprofit international pharmaceutical supply-chain consortium whose mission is to create and monitor a global quality system by adopting standards and best practices for the supply chain, supporting technology developments for supply-chain security, monitoring the supply chain, and developing shared audit programs. 

Nearly 130 industry representatives attended the launch meeting in June to provide feedback on the consortium's objectives and structure. A voluntary organization, membership in Rx-360 is open to suppliers of raw materials, components, excipients, and active pharmaceutical ingredients, and pharmaceutical and biotechnology companies. There are already about 10 members and another 50 or so pharmaceutical and biopharmaceutical companies as well as 13 trade and standard-setting organizations such as the European Fine Chemicals Group, the Generic Pharmaceutical Association, the International Pharmaceutical Excipient Council of the Americas, the National Institute for Pharmaceutical Technology and Education, the Parenteral Drug Association, and the Society of Chemical Manufacturers and Affiliates, had expressed interest in joining.  

There will be membership fee, which has not yet been set, but proposals range from $2000 to $20,000 depending on the number of consortium members. Whether fees will be tiered for large and small companies was also still under discussion at press time. 

The consortium's founding panel members have not publicly disclosed their names or their company affiliations, but Martin Van Trieste, vice-president of quality at Amgen (Thousand Oaks, CA) is functioning as the consortium's interim director. Van Trieste addressed the core reason for forming Rx-360 at the launch meeting. "Because the economic gain for adulterators is great, the pharmaceutical supply chain is at risk. A crisis like the heparin incident will happen again; it's just a matter of when," he said.  "We can't ask regulators to police our suppliers—it's our legal responsibility."  

Industry seems to agree. In a live poll conducted at the meeting, 100% of voting attendees said they believe a consortium like Rx-360 is a necessity in the current environment. Rx-360 plans to address its goals during a three-year period as follows:   

Year 1—Adopt standards and best practices: Rather than add to the extensive list of existing regulations, the consortium intends to act as an "umbrella" by adopting already existing standards which it feels will improve supply-chain performance. Members may consider writing new standards in the future if any gaps in standards are identified.

Year 2—Implement shared supplier audit program: Rx-360 intends to provide to the industry with a wide range of auditing services, including a system that will allow companies to share audit findings and corrective actions. 

Year 3—Develop technology: Rx-360 plans to work with academic institutions and research organizations to develop related supply-chain security technologies, such as tools that can detect contaminated or adulterated materials.

Year 3—Monitoring: The consortium sees itself as a future "clearinghouse for suspicious supplier and supply-chain information that might impact patient safety," according to the consortium. This clearinghouse, for example, may involve electronic communications to alert consortium members to potential supply-chain disruptions.

The primary push for Rx-360 is the idea of sharing supplier audit reports. Nearly 80% of participants voting at the launch meeting said their current audit programs need work. And according to Van Trieste, the head of the European QP Organization stated that industry would have to conduct 800,000 supplier audits per year to meet current and future regulatory expectations. Yet, "if just 100 companies would use 50 shared audits, industry could save $50–$80 million a year," said Van Trieste. More important than the cost savings is that, through shared audits, more information can be obtained about a supplier because all parties involved are willing to spend more time on the audit—and more information allows firms to make better decisions, he added. A shared program would also benefit suppliers because they would be able to consolidate multiple customer audits through a single shared audit. 

Rx-360 is proposing three types of shared supplier audits. The "sponsored" model involves a consortium member company paying for Rx-360 auditors to conduct an audit of a supplier of their choice. This model is essentially a third-party audit system, which benefits smaller pharmaceutical and biopharmaceutical companies that do not have their own audit staff as well as larger companies who want to audit a supplier in a region where they do not have audit coverage. Once completed, the audit report would go into the consortium's shared audit database so that other members could purchase it. Sixty-seven percent of voting participants at the launch meeting said they support this model.  

The "Rx-360" model would involve a joint decision among a certain number of consortium members to audit a supplier. Once an Rx-360 team completes the audit, the members that requested the audit would receive the audit report. In addition, the report would go into the shared audit database for purchase by other members. The Rx-360 model was the group favorite at the launch meeting, with 90% of voters supporting the idea as a viable approach. 

The "subscription" model would allow consortium members to submit and pull from a shared database audit reports that have already been conducted, either by their own company or by a third-party. Eighty-one percent of launch meeting voters support this model. 

Although there is great support for Rx-360's proposals, there is a lot of work to be done before a shared audit program can be finalized. During breakout sessions at the launch meeting, industry representatives discussed some concerns about sharing audit reports. For example, what would be the qualifications of the Rx-360 auditors? Would there be an agreed-upon template for audit questionnaires? Given that different companies manufacture different types of drugs, would an Rx-360 audit or another company's audit fulfill a different member company's audit needs?   

Reflecting these concerns, 16% of the voting participants at the launch meeting said shared audits were not an option, and another 33% said shared audits would require significant rework. That said, the remaining participants seemed very open to working with the current proposed program and its models. One potential solution discussed during the breakout sessions was that consortium members use an Rx-360 audit report as an initial assessment for their company to determine to what extent additional review or time is needed for their own audit of a particular supplier. 

During the next few moths, the Rx-360 advisory panel and consortium members have their work cut out for them. Priorities, according to Van Trieste, will be to grow membership; review and address feedback received from the Washington, DC, launch meeting; form various committees to build the consortium's infrastructure (i.e., adopting audit standards and selecting a secure database to use); and arranging for a European launch meeting.  

To listen to a podcast interview with Martin Van Trieste, log onto the 

Online Exclusives

Industry is taking a step forward by addressing supply-chain integrity through the formation of Rx-360. PhamTech's podcast explores the subject.

Pharma Industry Consortium Rx-360 Tackles Supply-Chain Security

There has been an atmosphere of doom and gloom over much of the contract services industry this year. Early development outsourcing has been hit hard by funding cuts to small biopharmaceutical and pharmaceutical companies and restructuring at the major companies. Late-stage development has maintained some momentum, but a feeling of uncertainty has overtaken the confident swagger of contract services providers.    

 ILLUSTRATION BY M. MCEVOY. IMAGES: DON FARRALL, CREATIV STUDIO HEINEMANN/GETTY IMAGES			

 Outsourcing Survey suggests that the sense of gloom is overblown. Although the positive responses are somewhat fewer and the negative responses somewhat greater compared with previous surveys, the overall picture is still one of a healthy level of activity at contract manufacturing, contract development and manufacturing, and contract research organizations (CMOs, CDMOs, and CROs). Competition has intensified at the margins, but there is a core level of activity sustaining the industry. 

The healthy image of the industry is reflected in the spending patterns reported by respondents from biopharmaceutical and pharmaceutical companies (i.e., the "buy side" of the outsourcing equation). The number of respondents reporting double-digit increases in outsourcing spend dropped sharply, while the number reporting an absolute decrease in spending more than doubled (see Figure 1). Responses from contractors mirrored these results, with a sharp drop in those expecting 2009 to be "very good" and a quadrupling of those expecting the year to be "not very good" (see Figure 2). 

Still, more than 50% of biopharmaceutical and pharmaceutical respondents expect at least some growth in their spending this year, and another 28% expect it to remain level. Among contractors, nearly 75% expect business to be "good" or "very good" in 2009. These responses indicate a slow growth year, but certainly not a disaster. 

Other survey questions illustrated just how different the current market is from the recent past. The number of contractors pointing to large biopharmaceutical and pharmaceutical companies as their best-performing customer segment has jumped sharply, while the number singling out small firms fell sharply (see Figure 3). This change reflects the reduced means of early-stage companies that depend on the crippled financial markets for capital to fund their development activities. It suggests that companies that have been disproportionately dependent on small biopharmaceutical and pharmaceutical companies have been disproportionately hurt by the downturn. 

Another big difference in this year's survey is that, for the first time in three years, more respondents report that outsourced spending is growing more slowly than total spending (see Figure 4). Con-tractor respondents also noticed this development. This may reflect efforts by major pharmaceutical companies to use internal capacity freed by the cancellation of many development programs, as well as the reduced funding available at many small companies. 

As expected in the soft business environment, competition for new business has intensified. The clearest indicator of this move is the big jump in the number of biopharmaceutical and pharmaceutical respondents claiming that contractors are willing to cut prices to get business: 52% of biopharmaceutical and pharmaceutical respondents indicated that contractors are willing to cut prices, versus 42% last year, and just 34% as recently as 2006 (see Figure 5). 

Competition has been intensified by companies' ongoing efforts to consolidate the number of contractors they use. Respondents indicating that they are reducing their vendor base increased slightly, from 27% in 2008 to 31% this year, while the number of respondents with plans to expand their vendor base continued a two-year decline (see Figure 6). 

There are still new opportunities, however, for contractors with biopharmaceutical and pharmaceutical companies: nearly half of the survey respondents indicate that they continually identify and test new vendors, while most others are looking for contractors to fill special needs or replace poor performers. Getting on the "short list" of bidders for a project, though, is becoming more difficult according to our survey. Both the number of bidders per project and the share of bids accepted from new vendors declined somewhat over past years. 

One trend that seems to have slowed slightly is sourcing from India and China. The share of biopharmaceutical and pharmaceutical respondents indicating that they have no plans to source from India and China rose from 45% last year to 51% in 2009 (see Figure 7). This minor growth does not necessarily imply a lessening of interest in sourcing from Asia, but rather a lull reflecting the overall uncertainty in companies' development programs. 

Clients and contractors continue to view contractor performance differently. Contractor respondents are downright immodest in judging their own performance: more than 90% rated their technical and operational performance as "excellent" or "good," and 88% gave themselves "excellent" or "good" ratings on customer service (see Figure 8). 

Clients graded contractor performance on a much tougher curve. Only 57% of biopharmaceutical and pharmaceutical respondents rated contractors' customer service as "excellent" or "good," and only 53% think contractors' project management skills are "excellent" or "good." Contractors fare better on technical and operational performance with 67% of respondents considering them to be "excellent" or "good." On the bright side, only 8–10% of biopharmaceutical and pharmaceutical respondents grade contractors as "poor" or "fair" in these performance categories. 

Perhaps the biggest sign of the changing times revealed by the 2009 PharmSource–

 Outsourcing Survey is the change in which market factors worry service providers the most. In past years, service providers were most concerned about competition from CROs and CMOs in India and China, and about too much capacity in the industry. In 2009, their concerns are more fundamental: they worry about whether the biopharmaceutical and pharmaceutical industries will be able to maintain their historic levels of research and development (R&D) expenditures (see Figure 9). In light of the business-model changes occurring among major companies and the pullback of venture capital, these are very valid and real concerns. 

Despite that uncertainty, respondents to this year's survey are signaling that 2010 could still be a good year. Spending growth is likely to be slower than in past years, but half of biopharmaceutical and pharmaceutical respondents expect increases in their outsourcing expenditures in 2010 (see Figure 10).  Among the ever-optimistic contractor respondents, more than half expect 2010 to be somewhat better, and relatively few are expecting a bad year. 

Although the 2009 survey paints a picture of an overall  healthy industry, contract services providers are right to be concerned about future levels of R&D spending. These concerns reflect fundamental changes taking place in the biopharmaceutical and pharmaceutical industry as the increasing challenges of commercial success are reflected in the level and nature of new drug development. 

For providers of formulation and manufacturing services, the silver lining is that there is still plenty of opportunity for growth—outsourcing has not penetrated as deeply into physical product development as it has into clinical research. Clinical CROs have already grabbed as much as 70% of the clinical research spend available to be outsourced, and that segment's growth curve is likely to flatten. Formulation and manufacturing service providers have achieved about half of that level of penetration, so there appears to be additional opportunity to grab more of that spend. 

The opportunity will not be an equal one for all participants in the business, however. CDMOs can no longer depend on a rising tide to lift industry participants. The increase in outsourcing penetration in the clinical segment has been accompanied by a sharp consolidation of business among a relative few CROs that offer global scope, economies of scale, financial stability, and management maturity. The same is likely to be true for formulation and manufacturing services. The highly fragmented nature of the industry will change, and many smaller CDMOs will fall by the wayside as larger participants consolidate their market shares. 

The key to capturing the opportunity will be performance—that is, the ability to deliver products and services dependably and at lower costs. The gap between how buyers and sellers view CDMO performance continues to be one of the more striking findings of the PharmSource–

Service providers must improve their understanding of client needs and expectations and figure out how to provide the levels of service clients expect. The 2009 survey suggests they aren't doing a terrible job now, but the CDMOs that can close the gap will capture the lion's share of the business in coming years.   

The contract services industry may not be as robust in 2009 as it has been in previous years, but it's not as bad as many people think.

Industry Outlook: Down But Not Out

Representatives from Pfizer (New York) and Johnson & Johnson (New Brunswick, NJ) discuss current and future trends in pharmaceutical outsourcing with a focus on chemistry, manufacturing, and controls (CMC) outsourcing. Participating in the roundtable, moderated by Jim Miller, are: Paul C. Stuart, vice-president of clinical supply manufacturing and distribution, Worldwide Pharmaceutical Sciences Supply Chain, at Pfizer Global R&D; Rhonda Griscti, senior director of category lead clinical services for Global Pharma R&D Sourcing at Johnson & Johnson Pharmaceutical R&D; and Macdara Lynch, vice-president/team leader for global contract manufacturing at Pfizer Global Manufacturing.

Chemistry, manufacturing, and controls outsourcing lags

 Over the past five years, pharmaceutical companies have outsourced much of their clinical and preclinical research, but chemistry, manufacturing, and controls (CMC) development and manufacturing seem to have lagged this trend. Why do you think CMC development and manufacturing have moved more slowly?   

 I think there are two key factors. First is the lack of robustness of the capabilities of the external market in these areas. External providers for clinical research in general are far more sophisticated compared to their CMC development counterparts. Second is the perceived risk of missing the opportunity for knowledge capture gained from internal formulation and process development. The downstream benefits gained from intimate product knowledge captured through the development cycle pay huge dividends when it comes to scale-up and commercialization activities downstream. 

 Trust. In initial outsourcing efforts, there were significant issues with performance and learning to manage partner relationships. Expectations were not clearly articulated and, therefore, were not met. This has led to a distrust of third parties for CMC development and manufacturing that has taken a lot of time and energy to overcome.  

 In terms of development work on new chemical entities, large pharmaceutical companies have tended to keep this function in-house based on a desire to retain control of the process and associated intellectual property. On the production side, if it's been moving more slowly, the reason is likely that many companies are still not comfortable with how to effectively manage the potential risk associated with outsourcing in general. Once a company begins to outsource, it starts moving up the risk curve; manufacturers always have more confidence in the robustness of their internal systems and processes. This is especially true in markets where regulatory systems are still developing.  

 What is different about CMC development relative to other development activities? 

 Diversity of work in CMC is higher than in other areas. There is very high complexity and range of dosage forms for development and clinical manufacture. This complexity requires unique areas of specialization both from a human resource/skill standpoint and asset standpoint (e.g., process trains for manufacturing). To meet the full needs of a "Major Pharma" portfolio requires a fragmented vendor base, whereas clinical research can be consolidated to a few contract research organizations (CROs) who have proven expertise in areas such as study execution or patient recruitment.  

 In reality, there is no difference. All these activities require talented individuals who can not only manage the projects and understand the science but also communicate effectively. 

 Emerging economies, including India, China, Brazil, and Eastern Europe, have become major centers for sourcing and targets for top-line revenue growth. How do you see emerging market vendors fitting into your sourcing and manufacturing plans? For example, will cost remain the major driver for sourcing in emerging markets? 

 Cost, along with a proven ability to deliver, will ultimately drive business to emerging markets.  

 Cost will always be an important consideration, but quality, sustainability, growth potential, and consistent performance will also be critical factors. 

  Cost is only one of several factors that influence outsourcing decisions today. The need to have a balanced and flexible supply network is a critical driver as well. For products that require specialized processes, it may be prohibitive to develop certain manufacturing processes internally. Balancing the supply network means retaining some internal capability but also having the flexibility to outsource to meet business needs.   

 Will having more sales and research and development (R&D) activity in the emerging-market countries result in more sourcing from those countries? 

 Not necessarily. Cost and quality of service offerings will ultimately drive the sourcing decision. 

 I do not think that increased sales will result in more sourcing. However, more R&D activity probably will.  

 How large and developed do you expect R&D activities in emerging markets (e.g., R&D centers in places like Shanghai and Bangalore) to become? 

 They have already grown at a very fast pace, and I would anticipate this rate of growth to continue.  

 I believe that the cost of doing business in India is escalating at such a rapid pace that it will become a limiting factor to continued growth there in the next 5 to 10 years. Shanghai is also expensive, so growth will not continue at the current pace. However, there are other places in the Asia/Pacific region where I expect to see substantial growth. In no case do I see these regions rivaling the scope of activities in Western countries. 

  This is an interesting question. Some people feel that the cost advantages in India and China will begin to erode. But I believe that any movement to secondary markets will develop very slowly, largely because of the need to develop stronger regulatory structures in some of these markets. I think there is enough opportunity within India and China at this stage, recognizing that effort and resources are required to develop a strong supplier base. Pharmaceutical companies committed to outsourcing must be prepared to make this investment.   

 Do you see sourcing opportunities moving beyond the first-tier countries (e.g., India, China) to second-tier country suppliers (e.g., Vietnam, South Africa) in the near future? 

 I believe there is lot of value yet to be extracted from the first-tier countries before any dramatic shift will take place toward second-tier country suppliers. I don't foresee a significant shift in the near-term (i.e., three years). 

 Not in the immediate future, but I certainly do see such changes in the near term in places such as Shanghai and Bangalore. That said, the growth will depend upon their government's ability to develop an environment that is conducive to R&D activities. 

 How would you characterize the state of the vendor base for CMC development and manufacturing services? Do CMC service providers have the requisite technical and operation skills to meet your needs? 

 In general, yes. Certainly, there are real and perceived gaps in technical expertise at CMC service providers, but many companies are figuring out ways to close these gaps. The key untapped opportunity may be more in the area of continuous improvement and demonstrated ability to drive down cycle times. 

 Suppliers are selected based on these prerequisites for any given project. 

  We see a broad range of capabilities across the vendor base. Some are highly capable and very technically competent on several fronts. If you look at the complete package of systems needed to effectively manage a manufacturing and supply system, there are invariably some gaps that need to be addressed.   

 Do CMC service providers have the global capabilities to address your growing geographic scope? 

 I don't see global scope as a barrier at this point. Certainly for those providers that have it, it can be leveraged effectively, but overall, there is a broad range of providers across all geographies to meet CMC development and manufacturing needs. Having said this, investment and partnerships by established Western suppliers in emerging markets could provide an important strategic advantage over those who remain stagnant with respect to the global footprint.  

 Across the range of service provider companies, many have established operations in the US, Europe, and in major emerging markets. However, very few companies are equipped today to support operations on a truly global scale.   

 Are you confident that the major CMC service providers have the financial staying power to be long-term partners? 

 No. This continues to be one of the greatest areas of concern, considering the potential value of the assets being developed externally. Those companies that can demonstrate some level of financial stability can really leverage this as a position of strength when bidding or negotiating development contracts. 

  It comes down to doing upfront due diligence to make sure the service providers are qualified to be long-term providers. Pfizer keeps a very close eye on the impact of global economic changes on some of these providers, and the potential to impact their ability to meet our needs.  

 Do you see a group of preferred providers emerging? 

 I think this [group] has already emerged to some extent with the larger, multiservice providers. I don't see [the group] expanding much further and believe steady-state [providers] will include both larger, multiservice preferred providers as well as niche providers. 

  We have a large number of suppliers at Pfizer, and our level of outsourcing has grown significantly in the past few years. Most of our outsourcing is now with US and European suppliers, with European suppliers accounting for about 70% of the growth in recent years. The number of sites we have divested drives much of our outsourcing activity. After two major acquisitions in the past nine years, we began a process of network optimization and were able to divest a number of sites. The divestiture process usually results in trailing supply agreements with other companies to supply product to Pfizer. In Europe, this represents a significant portion of the outsourcing we do today. Part of the evolution of our network will involve working with preferred providers.  

 Over the years we have seen a variety of sourcing models emerge, including preferred providers and full-time equivalent (FTE) arrangements. How do you see sourcing models emerging in the coming years? Do you see "one-stop shop" models gaining more traction? 

 Not at this time. It has not been proven that the one-stop shop approach is viable over the long term. Opportunities to bundle like services will always be attractive, but in the end, excellent performance in a given area will win repeat business.  

A roundtable with pharma majors Pfizer and Johnson & Johnson, moderated by Jim Miller.

The Future of Pharmaceutical CMC Outsourcing

The decision to outsource stability studies to a contract analytical laboratory (CAL) is a significant commitment for a pharmaceutical business. Stability studies evaluate the change of a material over time when stored at various environmental conditions (e.g., temperature and relative humidity [RH]) and may last as long as five years. A pharmaceutical sponsor may outsource such studies to free internal resources for other research and development activities or simply because it does not have an internal laboratory available. The sponsor company entrusts the CAL to perform studies that may cost millions of dollars, affect a product's course to commercialization, and ultimately contribute to the success or failure of the sponsor's business. This article provides basic guidelines to pharmaceutical businesses that have not previously outsourced stability studies. It highlights practices and procedures that pharmaceutical businesses should review as they select a new contract laboratory.   

Choosing a CAL is the first step of a business partnership that often requires much interaction. The sponsor expects to receive stability data at the highest quality standards, with the quickest possible turnaround and at the lowest price. Contract analytical testing is a competitive business, and the sponsor must ensure that its expectations are met. No two CALs are alike, and sponsors have different expectations. A period of acclimation is often required at the early stage of the relationship. The parties' expectations and procedures are crucial to the development of a partnership. Some sponsors are hands-on and expect to be involved in all decisions, but others prefer minimal communication and simply expect to receive an analytical report when the testing is completed. When a collaboration is established and begins to grow, small-scale stability studies should be initiated first so that problems can be addressed easily with minimal impact. Open and honest communication between both parties is a crucial component in the development of the partnership, but such communication may not occur until mutual trust is established. 

Historically, the decision to entrust a CAL with a study was based on an evaluation performed by the sponsor's technical managers. In recent years, however, procurement or strategic outsourcing groups have become increasingly involved in selecting CALs. The current process may include price negotiations, including volume discounts, in addition to an evaluation of the CAL's ability to perform stability studies with technical excellence and superior quality. Price negotiations and discount structures may be the products of a competitive market, but they give little indication of the procedures a CAL follows to meet sponsors' expectations. 

Before confidentiality agreements, master services agreements, and quality-assurance agreements are drafted, a sponsor might only provide a CAL with example methods and request a quote. After the confidentiality agreement is in place, the sponsor should allow the CAL to evaluate its actual methods. It is essential for the CAL to review the details of specific methods and protocols to determine whether the scope of the work is consistent with the example methods. 

Sponsors' quality-assurance units generally perform on-site facility audits as part of the selection process or after a CAL has been chosen and confidentiality and quality agreements are in place. Sponsors must examine the CAL's procedures for various tasks (see sidebar, "Auditing a contract analytical laboratory").  

Auditing a contract analytical laboratory 

 A sponsor should have confidence in the CAL's employee-training program. If personnel are not trained appropriately, sample-preparation or other laboratory errors may occur. Errors lead to laboratory investigations when analytical results do not meet specifications or appear to be out of trend. The additional effort required to determine the root cause of errors may delay the release of the results. Many samples are tested throughout the course of a stability study, and investigations should be anticipated because laboratory errors do occur, although they should be rare. It is therefore worth the sponsor's time to thoroughly review the CAL's training program to determine whether the training process is suitable for its requirements. CALs' training programs differ and may be based on technology such as high-performance liquid chromatography (HPLC) or gas chromatography, on-the-job training, or procedural review and qualification. In addition to its existing training program, the CAL should train employees in its sponsors' specific methods. The sponsor should be confident that the CAL can effectively train its employees so that methods are performed accurately and errors are minimized. 

 To gain an understanding of the CAL's processes, it is critical for a sponsor to review the way the CAL performs sample analyses. The review provides valuable information such as data-processing procedures or sample-testing timelines and helps the sponsor assess its confidence in the CAL's ability to manage stability programs and test samples successfully.  

The sponsor should determine how the CAL transfers a stability study from its business-development group to its laboratory. The point at which the relevant department manager becomes involved will affect the success of the information transfer. For example, if the CAL's new-business development group is only responsible for providing a price quote, then the technical input such as analysis run times or specifics regarding the purity analysis may not occur until the business contract is signed. A great deal of technical information, including sponsors' special requests, may be created during this time. This information should be transferred to the stability manager and to the personnel working on the project (e.g., the lead chemist and analysts).  

The CAL should demonstrate how it manages resources and schedules the work to ensure that the analyses are completed within the expected timelines. For example, large-scale registration stability pulls include many samples. A team of analysts may be required to complete the testing in the required timelines. The CAL should describe how it allocates resources, how it determines that the correct samples are pulled and tested, and how it communicates activities and responsibilities to the team members. 

The CAL should demonstrate how it processes and reports analytical data within self-imposed timelines. Data should be generated far enough in advance so that anomalous results can be investigated in a timely manner, preferably before the sample and standard solutions have expired.  

The sponsor should review the CAL's conventions for rounding numbers and reporting them to determine whether they are consistent with expectations. For example, does the CAL round up a value of 5 to the nearest digit, follow the American Society for Testing and Materials's convention, or truncate its values? The sponsor will have to accept the CAL's process or impose its own. Sponsors that impose their own rounding process should be aware, however, that they may cause unexpected consequences such as affecting validated spreadsheets. 

Data review should occur in a timely manner to ensure the prompt evaluation and confirmation of final results. The frequency depends on the sponsor's policy because no established guidelines have been established. The process should ensure that analytical investigations are initiated when appropriate and allow reinjections to occur before the sample in solution expires. If structured correctly, timely data review can detect errors that occur during reagent preparations before sample analysis is affected. 

 If the CAL has not developed and validated analytical methods, then a formal method transfer is required. This transfer determines the CAL's proficiency in performing the methods. Method transfer should be performed sufficiently in advance of the corresponding stability study so that the sponsor can fully review the data. Issues with instrument compatibility, data evaluation, and reporting should be addressed during method transfer. Method transfer precedes and sets the benchmark for the entire stability study. The sponsor should receive a full report of the data generated so that it may conduct a thorough review.  

Analytical method transfer may simply mean that the CAL performs the methods. It may include other aspects such as spiking samples with additional impurities or degradation products during purity evaluation, linearity, or other qualification analyses. The analysis should include samples that have higher and lower strength than the product. The originating laboratory and the CAL should test the same lots or batches of samples, and testing should be within a similar time period so that the samples are aged to a similar degree. The sponsor establishes the acceptance criteria and issues a certificate of conformance once it has evaluated the data. 

 Before the initiation of the stability study, the lead technical staff from the sponsor and CAL should meet to review the data and results of the analytical method transfer. This review provides the opportunity to evaluate the transfer and address any problems that arose during analysis or reporting. This opportunity should also be used to review the final stability protocol, specification requirements, and anticipated timelines to confirm that both parties' expectations are met. Document review may occur several weeks or months after the original agreement is established, and it is prudent to revisit these items in case subsequent changes have affected the scope of work or timelines. If the scope of work has increased or timelines shortened, then the CAL may negotiate to revise the contractual agreement. 

 The manner in which data are reported is often overlooked, and expectations should be communicated and agreed upon by both parties. A significant volume of data may be generated early in the process, and several stability reports may be created during the first 12 months of the study. If the reporting details are not thoroughly established in advance, the stability reports may need to be reissued, which could potentially compromise the sponsor's ability to evaluate the data properly or submit regulatory filings within the planned timeframe. 

The format of the analytical report should be established during the startup meeting. The sponsor may require the data to be presented in a specific report format that it provides (e.g., Excel or Word). The sponsor might prefer the CAL's standard report or require a custom report. If a sponsor's format is to be used, then the CAL's quality-assurance unit may request a review of the template before the study is initiated. This review ensures that all of the information and references that the CAL requires are included in the template.  

 The CAL compares the results it generates with the sponsor's specifications. It may use action limits to highlight results that approach the specification limits. If the sponsor requires an investigation procedure that is different from the CAL's standard procedure, then specific notification and processes should be described in the study protocol, specifications, or quality agreement. CALs' investigation processes are generally specific to investigation notification and review process and typically do not include reanalysis procedures because of sponsors' differing internal policies. Therefore, a sponsor should specify the particular processes it requires so that the CAL can conform to the sponsor's requirements. The process maybe listed in the protocol or specifications. The sponsor may choose to provide its own standard operating procedure for investigation under the confidentiality agreement. 

Results that meet specifications but are out of trend should also be considered. For example, suppose the assay specification is 95.0–105.0%, the initial results are 101.0%, and the three-month results are 97.0%. Although the results are within specification, the drop in the assay value may be considered aberrant. This interpretation is subjective, therefore clarification may be required in the specifications. 

 If the CAL generates and validates the analytical method, then it should ensure that the sponsor is notified of revisions to analytical methods and other relevant documents. Also, the sponsor should provide the CAL with the most recent versions of protocols, methods, specifications, and other pertinent documents. The two parties should agree on a chain of custody or other form of acknowledgement process to ensure that the documents are successfully received and implemented. The sponsor should also release updated documents at appropriate times. For example, a method release that occurs while the CAL is actively testing the associated samples will conflict with the effective period of the method. The CAL will have used a method that is no longer valid, and the sponsor will potentially need to justify how this occurred. 

 A CAL may use vendors if it cannot perform a particular function in house. These functions may include calibrations or specialty analyses that are not among the CAL's normal services (e.g., microbial limits, container integrity, or sterility testing). The sponsor should therefore review the qualification program and list of qualified vendors to determine whether the program meets its requirements. An internal policy may require the sponsor to qualify the subcontract laboratory independently of the CAL's vendor-qualification program. If the CAL intends to subcontract analyses and the sponsor requires prior notification, then this requirement should be stated in the quality agreement or master services agreement.  

Corrective and preventive action program.

 During the course of a stability study, procedural deviations, analytical investigations, or other quality-related investigations will inevitably occur. The CAL's corrective and preventive action (CAPA) program should enable deviations and investigations to be evaluated and remedied thoroughly to prevent future occurrence. The root cause, therefore, must be identified, and appropriate performance factors must be categorized and monitored so that trends can be identified and addressed. The sponsor should review the CAL's standard operating procedures for the CAPA program because inadequacies could compromise the study data. 

 Environmental stability chambers must be operated to the guidelines established by the International Conference of Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use (ICH) if the stability study is for a new drug substance or product (1). Nonrefrigerated products must be maintained within ±2 °C of their specified temperature and at ±5% of the specified RH. Refrigerated products must be maintained within ±3 °C of their specified temperature. The CAL should have procedures for installing, operating, and monitoring its stability chambers. Periodic maintenance and disaster scenario plans are highly recommended. 

Performance qualification should include mapping the chambers for temperature and humidity. A chamber's recovery performance and ability to hold its set temperature and humidity conditions should be confirmed so that the chamber can withstand power losses. The chambers should be locked, located in a restricted area, and include door alarms, so that unauthorized personnel cannot access the chambers. An alarm should be activated if the door is open for an extended period. The chambers and monitoring system should be calibrated every every six months. 

Stability disaster recovery and sponsor notification.

 The CAL should have a procedure for occasions when the chambers cannot maintain the setpoints because of malfunction or power loss. The sponsor must be notified if the chambers have been outside of their setpoints for a period longer than that specified by the CAL's internal procedure (24 h is a standard limit). Samples should be relocated if the chambers cannot be restored within this timeframe. The sponsor is typically responsible for determining whether the pull dates require reevaluation if samples are stored outside the intended conditions for a prolonged period. 

In addition, the stability chambers and environmental-monitoring system should have a backup power source (i.e., a generator) that automatically activates when power is lost. A backup water supply is also required in case the main water supply is interrupted. Backups prevent the loss of power and subsequent deviation from the temperature and humidity conditions. 

 The CAL's shipping and receiving group should be capable of handling large-scale deliveries. Long-term stability studies may involve thousands of samples that may be received in bulk shipments directly from the sponsor, manufacturer, or packaging plant. The CAL should have the physical capacity for such shipments and a means of transferring the samples into the laboratory in an efficient manner.  

The procedure for initiating a stability study should demonstrate how the CAL controls the placement of the samples in the chambers and should require all stability studies to be performed according to a sponsor-approved stability protocol. An initial sample inventory should be taken and updated as the samples are removed. 

The process for calculating pull dates should be reviewed, and the sponsor should provide specific details if it prefers its own practices to be followed. Various approaches exist, including a sliding pull date that depends on the time point or a fixed time point on a specific date. Weekends, holidays, and other company closures should be taken into account. The CAL should have a procedure for removing and destroying the stability samples when the stability study is complete. The sponsor should inform the CAL in advance if it prefers a process different from that stated in the CAL's procedure so that samples are not removed and destroyed but rather retained or returned to the sponsor. 

The CAL should have a procedure for storing the samples after being pulled and before being tested. The typical condition is room temperature, unless they are refrigerated or frozen, in which case they may remain at those conditions until testing. If the sponsor requires specific conditions, they should be included in the stability protocol. 

If samples are kept in bottles or blister packs, an entire bottle or strip is typically removed from the chamber at the pull point, except for in-use tests. If a sample is drawn from a bulk container, however, a sponsor's preferred procedure must be described if it differs from that of the CAL. For example, if the bulk material is vacuum packed and the container must be resealed at each interval, this process should be explained in the stability protocol. 

Stability-testing windows typically are based on a sliding time window that depends on the time point (e.g., test within 10 days for intervals of three months or less and within one month for intervals of six months or greater) or on a specific timeframe regardless of test interval (e.g., test within one month). If the CAL's procedure does not meet the sponsor's expectations, the latter must be addressed in the protocol or quality assurance agreement. 

 The CAL must monitor the stability chambers' performance on a daily basis. Chart recorders and electronic probes can monitor temperature and humidity. Chart recorders should be monitored every day. They are vulnerable to malfunction when pens run out of ink and other basic errors occur. Electronic probes combined with a commercial environmental-monitoring program constantly evaluate the chambers and provide performance-trending data, so that malfunctions may be predicted before they occur. If a chamber deviates from its setpoint (e.g., it exceeds ±2 °C or 5% RH), the system can be programmed to call an employee to investigate and resolve the problem. If the CAL uses chart recorders, it may not detect the error until the chamber is checked during the daily routine. The sponsor should review the CAL's procedure to determine whether the process is appropriate and adequate. If electronic probes are used, their performance should be confirmed periodically (e.g., every six months). 

 If the sponsor is storing the stability samples in its own chambers or in a vendor's chambers, it must decide on the timing for pulling samples and shipping them to the CAL. During large studies, the CAL may have a team waiting to receive and test the samples. If a shipment is delayed, it might compromise the CAL's ability to test the samples within the test-window period.  

If the CAL is to store the stability samples in its chambers, then the parties should decide in advance whether the CAL or the sponsor will decide how the samples are distributed and how much overage will be placed on station. A recommended overage is a minimum of 25% additional samples in case the study is extended or additional samples are required. The party responsible for labeling the samples should be specified clearly. This decision will help the CAL plan and place the samples on station. Once the samples are on station, the pull dates must be communicated to the sponsor. For large, complex studies, the sponsor may choose to audit the stability setup.  

For registration stability studies, it is increasingly common for a secondary set of samples to be maintained at a different facility. This arrangement prevents samples from being compromised if the primary storage facility is shut down. Secondary storage facilities should be in separate regions. Disaster recovery scenarios should always be in place. 

The US Food and Drug Administration accepts lot and packaging matrices for stability studies that are based on ICH guidelines. The guidelines greatly reduce the number of samples to be tested but increase a study design's complexity. Special tests such as in-use tests, which may be triggered by the failure of the corresponding open-dish tests, also contribute to the complexity. 

Studies often have contingency conditions for when failures are observed. For example, samples may be stored at long-term conditions of 30 °C and 65% RH and at 25 °C and 60% RH. The latter samples might only be tested if the former samples fail specifications. Ideally the former samples' results should be approved by the quality assurance unit before the latter samples are tested. The two sets of samples should therefore be placed on station at staggered intervals to allow the first set to be evaluated to avoid erroneously testing the contingency samples. 

The anticipated time of the beginning of a study should be clearly communicated and mutually decided by both parties. When a CAL commits to a study, its resource allocation is based on the information that the sponsor provides for the start date. The CAL considers resource allocations to determine whether they may conflict with current active studies. If delays such as manufacturing difficulties occur, then the CAL should be notified to ensure that no resource conflicts with the new proposed start date. Open communication also serves the interest of the sponsor because it may require the CAL to report the analyses quickly to meet a filing deadline. Such deadlines should be communicated and mutually agreed upon in advance. 

If the CAL's procedures are not consistent with the sponsor's expectations, then specific details may be addressed in the quality assurance agreement or the study protocol. In addition, the CAL and the sponsor's lead technical staff should meet to evaluate the study. This evaluation should include a comparison of the instrumentation specified in the methods and the CAL's equipment. Items such as the compatibility of available HPLCs may be addressed (e.g., dwell volume comparison), as may questions such as whether a wrist-action or reciprocating shaker is preferred.  

The sponsor should evaluate the CAL's departmental structure to determine the necessary resources. The sponsor should be informed about whether the same person will remain the technical lead throughout the study and whether the same resources will be used for each time point. The sponsor should also learn whether temporary employees will be used for large stability pulls, which occur during the first six months and include accelerated conditions and special time points such as photostability. The early time points generate critical data, and the sponsor must be confident that the teams are sufficiently trained. Inexperienced temporary employees can reduce the study's quality. 

A sponsor that seeks to hire a CAL to perform stability studies should consider several important factors and take critical steps during its evaluation process. The sponsor should perform a thorough audit of the CAL's procedures, paying attention to the latter's training program, environmental chambers, data processing, and reporting practices and timelines. Timing and study design should be considered so that the appropriate resources are allocated and the sponsor receives analytical reports in a timely manner. The relationship between the sponsor and the CAL should be viewed as a partnership with open communication between both parties. The parties should have the same objective: to perform the stability study within the expected timelines so that the product can get to market successfully. 

 is a manager of stability and pharmaceutical testing at Intertek QTI, 291 Route 22 East, Whitehouse, NJ, 08888, tel. 908.534.4445, ext. 658, fax 908.534.1054, 

The author provides advice about evaluating contract analytical laboratories and establishing an effective procedure for working with them to perform reliable stability studies.

Outsourcing Stability Studies

Jim Miller, contributing editor to Pharmaceutical Technology and president of PharmSource Information Services, discusses current and future trends in pharmaceutical outsourcing with Michael J. Kosko, president of Pfizer CentreSource. The discussion focuses specifically on chemistry, manufacturing, and controls services.

   How would you characterize the state of the vendor base for chemistry, manufacturing and controls (CMC) development and manufacturing services? Do CMC service providers have the requisite technical and operation skills to meet your needs?   

 Speaking to the contract manufacturing services sector, Pfizer is in an interesting position. Pfizer Global Contract Manufacturing manages a broad range of service provider relationships, companies from which we source active pharmaceutical ingredients (APIs) and drug product. The part of the business I manage, Pfizer CentreSource (PCS), actually provides fine chemicals and contract manufacturing services to other pharmaceutical companies. We continually draw on our position as part of Pfizer to help guide us in meeting the technical and operational needs of PCS' customers; so many of them face similar challenges to those faced by Pfizer's pharmaceutical sourcing efforts.  

   Do CMC service providers have the global capabilities to address your growing geographic scope?  

 Geographic scope is an important consideration for many companies that outsource today. At PCS, we have located our own business development colleagues for convenient geographic access by PCS global customers. We also draw on the manufacturing operations of Pfizer's plant network, around the world, to site production in regions convenient to our customers.  

   Are you confident that the major service providers have the financial staying power to be long-term partners?   

 Being on the service provider side of the table, PCS is in a strong position given current economic conditions. Our role as a part of Pfizer Global Manufacturing means we have access to the financial strength of Pfizer and the benefit of reaping the rewards of ongoing investment in capabilities and talent that affiliation with a large pharmaceutical business can provide.  

   Do you see a group of preferred providers emerging?   

 I can envision a consolidation within various segments of the contract manufacturing market over the next three to five years. Having a strong technical knowledge base, well-developed quality systems, top-notch facilities and customer focus will separate the winners from the losers.   

   During the next five years, what would you identify as the greatest challenges facing pharmaceutical manufacturers in managing an increasingly global supply chain? What role do you see for CMOs and other contract service providers (e.g., third party logistics providers) in helping to manage that supply chain?   

 Companies who outsource today are definitely concerned about managing risk. The potential downside is simply too great not to. As supply chains become more complex, we see PCS customers increasingly relying on us to understand and address their concerns in keeping the supply chain both effective and secure. Fortunately, our role within Pfizer puts us in a situation where quality and EHS capabilities are among our biggest strengths. This is one area where we can add real value to customers seeking improved supply chain control and security.  

A Q&A with Pfizer CentreSource, moderated by Jim Miller.

Issue Extra: Executive Roundtable—The Future of Pharmaceutical CMC Outsourcing

The Pediatric Research Equity Act of 2007 (PREA), enacted as Title IV of the Food and Drug Administration Amendments Act of 2007 (FDAAA), authorizes the US Food and Drug Administration to require pediatric studies of drugs or biologics that are likely to be used in a substantial number of children or would provide meaningful benefit over existing treatments for children. A consequence of this Act is that all new drug applications (NDAs) must address pediatric assessment. However, not all NDAs require that pediatric clinical studies be done, or that they be done before NDA approval. The challenge for drug-development companies is to determine when and how they can avoid unnecessary clinical studies and delays to drug approval. 

PREA recognizes that, under some circumstances, pediatric assessment may be unnecessary, undesirable, impractical, or delayed, and so the legislation authorizes FDA to grant waivers or deferrals to the pediatric assessments required under the Act. If the applicant requests a waiver or deferral, either full or partial, appropriate and sufficient supporting evidence must be provided. The criteria for granting waivers or deferrals center on safety, the nature of the drug product, and the practicability of the requisite studies. FDA has provided some specific information in a draft guidance, that describes how to comply with PREA (1).    

 Under a waiver, the pediatric assessment does not have to be completed. Three criteria taken directly from PREA are listed in the draft guidance as a basis for FDA granting a waiver, either on their own initiative or at the request of the applicant as follows:  

 Necessary studies are impossible or highly impracticable (Federal Food, Drug and Cosmetic Act (FD&C), as amended by PREA, Section 505B(a)(4)(A)(i)) 

 There is evidence strongly suggesting that the drug or biologic product would be ineffective or unsafe in all pediatric age groups (FD&C, as amended by PREA, Section 505B(a)(4)(A)(ii)) 

 The drug or biological product does not represent a meaningful therapeutic benefit over existing therapies for pediatric patients and is not likely to be used in a substantial number of pediatric patients (FD&C, as amended by PREA, Section 505B(a)(4)(A)(iii)). 

Necessary studies are impossible or highly impracticable (FD&C, as amended by PREA, Section 505B(a)(4)(A)(i)).

Under this provision, FDA provides some general examples of the type of situations where it would be likely to grant a waiver. These are:  

 The patients are "geographically dispersed" and 

 The product's indication has "extremely limited applicability to pediatric patients because the pathophysiology or disease occurs for the most part in adult populations." 

There does not appear to be much difference between the first two examples; either would probably involve a product which was at or below orphan-drug levels with regard to pediatric use. The third example likely represents the most readily available type of waiver situation (i.e., one in which the product and indication are aimed at a disease or affliction occurring primarily in the adult population, making a pediatric assessment moot). For this example, the FDA guidance provides a list of 20 specific diseases such as Alzheimer's, arteriosclerosis, menopause symptoms, and 12 types of cancer that presumably would qualify for a waiver. The list appears on a sample waiver request and includes, in addition to the 20 specified diseases, an "other" option that includes the instruction, "please state and justify." Thus, while providing a list of specific candidates for a waiver, the FDA presumably leaves the door open for other products and indications to be accepted as essentially limited to adults, provided the sponsor can make that case convincingly.  

There is evidence strongly suggesting that the drug or biologic product would be ineffective or unsafe in all pediatric age groups (FD&C, as amended by PREA, Section 505B(a)(4)(A)(ii))

 In this situation the FDA's guidance does not provide any examples, so the applicant would have to assemble the evidence regarding the specifics for the product or disease in question. It's unlikely that the applicant would have actually run studies in this regard, but if so, they would go directly to support of the waiver. More often, studies in the published literature could provide the evidence necessary to support a waiver under this requirement. Also, the Act requires that, if a waiver is granted under this section, the product labeling must include the information supporting the waiver. 

The drug or biological product does not represent a meaningful therapeutic benefit over existing therapies for pediatric patients and is not likely to be used in a substantial number of pediatric patients (FD&C, as amended by PREA, Section 505B(a)(4)(A)(iii))

 This section provides a waiver for a product that is a variation on already existing therapies. The guidance notes a number of ways that a new product could provide a meaningful therapeutic benefit, but does not provide any examples of one that would not. A possible example would be if there were already a product or products available in a solution or suspension, and an applicant developed a comparable product in a solid dosage form, then the solid form could qualify for a waiver under this section. The solid form would not represent a meaningful therapeutic benefit over the existing therapies, and the likelihood of a substantial number of pediatric patients using the product should be low because  pediatric patients commonly use liquid medications. Substantiating the second part of the requirement could be challenging in some cases. In the guidance, FDA points out that the Act does not define "substantial number," but cites prior FDA consideration of 50,000 patients as meeting the definition.  

The Act also provides for the grant of a partial waiver for specific pediatric age groups. The FDA guidance generally defines the pediatric population as "birth to 16 years, including age groups often called neonates, infants, children and adolescents" (21 

 201.57(f)(9)). No actual age ranges are provided, though suggestions have been provided in other documents (2). The guidance states: "For the purposes of satisfying the requirements of PREA, the appropriate age ranges to be studied may vary, depending on the pharmacology of the drug or biological product, the manifestations of the disease in various age groups, and the ability to measure the response to therapy." This provision means that the drug developer is required to make the case that not all pediatric age groups need to be studied, although some should be. 

The guidance supplies the same three criteria for a partial waiver as for full waiver, and adds a fourth requirement as follows:  

 The applicant can demonstrate that reasonable attempts to produce a pediatric formulation for that age group have failed  (FD&C, as amended by PREA, Section 505B(a)(4)(B)(iv)). 

In the guidance, FDA discusses the likelihood that the physiological differences and dosing requirements for pediatric patients, especially the very young, will often require one or more separate pediatric formulations. This partial waiver provision acknowledges the possibility that workable formulations may not always be possible. For example, a pediatric formulation that avoided the use of a potentially problematic excipient might result in a product that was unstable. If no acceptable substitute excipient were available, a waiver for the affected age group could be granted.   

Overall, unless the applicant can make a case for a waiver under the first provision (demonstrating that the product is simply not applicable to children), obtaining a waiver can be difficult.   

As implied by the name, a deferral delays the submission of the pediatric assessment rather than eliminating it. The Act allows for delay in submitting the pediatric assessment until after the NDA has been submitted, or even until a specific date after approval of the NDA (FD&C, as amended by PREA, Section 505B(a)(3)). FDA is often receptive to this. 

Three criteria for a deferral are available as follows:  

 The drug or biological product is ready for approval for its use in adults before pediatric studies are complete (FD&C, as amended by PREA, Section 505B(a)(3)(A)(i)). 

 Pediatric studies should be delayed until additional safety or efficacy data have been collected (FD&C, as amended by PREA, Section 505B(a)(3)(A)(ii)). 

There is another appropriate reason for the deferral (FD&C, as amended by PREA, Section 505B(a)(3)(A)(iii)). For this deferral, the guidance cites technical difficulties with a pediatric formulation as an example.  

The guidance supplies an appendix which provides a suggested format and content for a deferral request. Also provided is a list of factors the FDA will use in making its case-by-case determinations on deferrals as follows:  

The need for the drug or biologic in pediatric patients. 

Availability of sufficient safety data to initiate pediatric trials. 

The nature and extent of pediatric data to support pediatric labeling. 

The existence of substantiated difficulties in enrolling patients. 

Evidence of technical problems in developing pediatric formulations. 

The bar for reaching agreement with FDA regarding a deferral appears relatively low. This provision makes sense because the issue is not if the studies will be performed, but when.

, PhD and RN, is a senior director of research services, and 

, JD, is senior director of regulatory affairs and quality assurance, both with Camargo Pharmaceutical Services. 

Pediatric Formulations: Technical and Regulatory Considerations

European Requirements for Pediatric Formulations

Guidance for Industry: How to Comply with the Pediatric Research Equity Act

www.fda.gov/downloads/Drugs/DevelopmentApprovalProcess/DevelopmentResources/UCM077855.pdf

Premarket Assessment of Pediatric Medical Devices

www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/GuidanceDocuments/ucm089740.htm

The authors explain waivers and deferrals for pediatric studies of drugs and biologics as provided by the Pediatric Research Equity Act of 2007.

Waivers and Deferrals Under the Pediatric Research Equity Act

Similar to the United States, authorities across the Atlantic also have changed the way pediatric formulations are regulated. In January 2007, the European Medicines Agency (EMEA) implemented a new "Pediatric Regulation" that requires pharmaceutical companies to submit a development plan known as the "pediatric investigation plan (PIP)" (this is essentially a drug-development plan) with their marketing authorization applications (known as new drug applications in the US) (1). As of July 2008, all new products in the European Union that have not been authorized in the European Union before Jan. 26, 2007, must contain the results of studies conducted based on a PIP unless a waiver or deferral has been granted (2). 

 According to EMEA, the new regulation "aims to facilitate the development and accessibility of medicinal products for use in the pediatric population, to ensure that medicinal products used to treat the pediatric population are subject to research of high quality, and are appropriately authorized for use in the pediatric population, and to improve the information available on the use of medicinal products in the various pediatric populations" (3). 

Meant to ensure necessary data are obtained for children aged 0 to 17 years without subjecting them to unnecessary trials or delaying the authorization of drugs for adult use, the plan can be modified as information is gained (3). The PIP must include the drug's formulation and study descriptions and must cover children from infancy to adolescence. If children are not targeted to use a particular drug, a PIP is not required (e.g., Parkinson's disease does not tend to affect children, so drugs targeted to treat Parkinson's would not need a pediatric formulation) (4). In this case, however, the company must obtain a waiver from EMEA allowing it to forego a PIP. Also exempt from the Pediatric Regulation are generic drugs, hybrid medicinal products, biosimilars, and medicinal products that contain one or more active substances of well-established medicinal use (1). 

Several incentives are included in the Pediatric Regulation. For example, manufacturers of older, off-patent drugs developed specifically for pediatric use can apply for a new pediatric use marketing authorization (PUMA) and, upon approval, obtain 10 years of data protection; orphan drugs receive 12 years (2). In addition, new drugs approved under the PIP receive a six-month patent extension. EMEA provides free scientific advice on pediatric development questions as well (5). 

A summary of recent changes to European regulatory requirements for pediatric formulations.

Pharmaceutical Technology-08-01-2009