Pharma Industry Consortium Rx-360 Tackles Supply-Chain Security

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.

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