Supplier Audit Program Marks Progress

The Rx360 pharmaceutical supply chain consortium celebrated its first five years with an anniversary conference the week of June 5, 2014 in Washington, D.C. The conference featured key FDA officials and industry leaders. This collaborative effort to streamline and coordinate manufacturer audits of ingredient suppliers was launched in 2009 in response to the heparin adulteration crisis, which raised broad concerns about inadequate monitoring of the pharmaceutical supply chain by manufacturers.

Since then, Rx360 has attracted more pharmaceutical and biotech companies to support its efforts to enhance supply-chain security. The group has expanded to conduct approximately 25-30 joint audits a year, a collaborative process that can lower audit costs, expand the audit process, and reduce suppler “audit fatigue.” Joint audits coordinate the assessment of a particular supplier of APIs, excipients, container/closure systems, packaging materials, and other raw materials. All sponsors of the joint audit gain access to the resulting report, which then can be purchased by other parties.

To improve this program, Rx360 recently established a “strategic partnership” with BSI Supply Chain Solutions to handle joint audit scheduling and management. The goal is to conduct more than 100 joint audits in the coming year, said Martin VanTrieste, senior vice-president at Amgen and founding chair of Rx-360. While the audit volume so far is respectable, he believes that there are thousands of suppliers that could benefit from this collaborative program. “But we’re not close to that,” he commented. Not all suppliers have bought in to the joint audit process, he notes, some due to fears the process could damage their relations with customers. VanTrieste also sees a reluctance within leading manufacturers to shift from doing audits themselves.

The group’s shared audit program has developed more slowly, but now has more than 200 audits available to members. Drug manufacturers and suppliers tend to feel more proprietary about their own reports on key suppliers, even with the ability to redact confidential information.

Expansion plans

Rx-360 is looking to expand further in coming years. It has formed an Asia Working Group to develop its program in China, primarily to audit API producers. The group also is talking to medical device manufacturers about devising a similar audit program for that industry. And it has developed vendor assessment templates to streamline how manufacturers gather information on new suppliers. A future effort may expand audits to makers of manufacturing equipment.

VanTrieste is particularly proud of the organization’s supply-chain security efforts, which have worked to improve the quality of the upstream supply chain and reduce cargo theft, counterfeiting, diversion and intentional adulteration. Supplier audits involve ensuring that these firms have their own security processes to prevent quality problems. The consortium tracks

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supply-chain policies and provides members with reports on the latest developments, but does not comment on specific rules or policies. A main goal is to identify and support opportunities for regional and international cooperation in addressing pharmaceutical supply chain threats.