Tech Talk: A Q&A with Oracle's Arvindh Balakrishnan

Regulation

Q. How has information technology (IT) dealt with regulatory issues (e.g., Sarbanes-Oxley, the Health Insurance Portability and Accountability Act, 21 CFR Part 11, etc.)?

Regulations such as 21 CFR Part 11 have been well understood (and implemented) by the industry for several years. However, for the first time, the life sciences industry is feeling the need to manage regulatory compliance across regulations on a risk-based approach. Often, there is one officer in the company who is charged with regulatory compliance, and this officer is keenly interested in mitigating risk proactively in a unified governance framework for the company.

The cost of noncompliance has become almost unfathomable in the pharmaceutical industry. Companies that are affected by noncompliance (be it a SOX [Sarbanes-Oxley] associated restatement or an FDA consent decree) suffer far beyond the superficial commercial aspects. Corporate culture, leadership, confidence in management, and even the capability to recruit and maintain talent are severely challenged. As a result, chief regulatory officers in the life sciences industry are at a very strategic helm, and their direct relevance to business continuity and growth is becoming well understood by boards of directors and investors.

Q. Which regulatory requirements are the most challenging and why?

For each company, a given regulation could impose challenges that are particularly difficult within their specific business. Sarbanes-Oxley provides great challenges because the extent to which companies interpret and implement regulatory compliance is sometimes subjective. As a result, companies usually go overboard in an attempt to remove regulatory risk altogether. On the other hand, with regulations such as 21 CFR Part 11 and the like, the scope is well understood, but the challenge with these initiatives is the cost of validation. Often the cost and complexity of validation is extremely high, enough to thwart continuous improvement initiatives.

Q. What industry (outside life sciences) that you know of has a good handle in dealing with regulatory compliance, and why?

Financial services firms, by the nature of their business, have incorporated risk-based strategies in their regulatory compliance initiatives for years. This makes them extremely resilient to sporadic noncompliance, changing regulations, changing market conditions, and changing customer requirements.

Q. How creative can software makers be when providing compliance solutions? Is there room for 'out-of-the-box' thinking?

Compliance is always a combination of process documentation and recording of deviations (potential, or real) from such processes. Scientifically speaking, unless all processes can be standardized across the industry, it would be impossible for any company to develop an out-of-the-box compliance solution. However, there are some process areas that are reasonably standard in the life sciences industry, and we are working toward some prebuilt compliance tools for some standard business processes and functions.

Q. Do you have any comments on regulatory requirements outside the United States?

Local regulations (or "localizations") are the cost of doing business globally. In today's economy, this is a need that cannot be ignored. We, at Oracle, have seen a trend toward incorporating local financial regulations in shared service transaction processing environments.

Q. Do you foresee unified global regulatory requirements?

To some extent, there already are unified world regulatory requirements. Market-leading regulatory bodies, such as FDA and the USDA, assume leadership roles in implementing world-wide regulations. Their regulations are immediately adopted with little or no variations by regulatory bodies in other countries. Often individual countries might adopt a superset of FDA regulations by combining FDA regulations with country-specific codes developed by their regulatory bodies. The cost of not doing business with the US is so great, that we believe that bodies such as FDA and USDA truly have a global impact.

Q. What advice do you have for drug makers in meeting the regulatory requirements?

'Be ahead of the curve' is the best advice we could give the industry. If possible, work with regulatory bodies to understand key regulatory initiatives that are in progress and the potential impact of these regulations on the real world. Attempt to influence the regulations by positive collaborative efforts across the industry. Undertake research and development efforts to implement (or simulate), in a small laboratory environment, regulatory compliance before regulations are enacted.

Technology

Q. What challenges do you have in integrating technology from different vendors with your product (for example, with a Windows server)?

Standards adoption is the most challenging aspect of integration projects. If two technologies adopt open standards, integration becomes a nonissue. On the other hand, if two proprietary standards-based technologies need to be integrated, the result is expensive and complex integration. Oracle is doing its part to enable low-cost integration by basing its integration platform (Oracle Fusion Middleware) on open standards. Similarly, our application integration architecture (AIA), an open, standards-based platform for business process management across Oracle, third-party and custom applications make it easy to integrate our products with others.

Q. What integration issues do you see up and coming in all type of industries, and any specific challenges in the pharmaceutical industry?

The traditional point-to-point integration model has outlived its utility. In most industries, chief information officers are asking us for a hub-based integration framework that can incorporate an enterprise-wide common object model. Such an architecture makes it easy to plug and play applications over time, without undertaking massive integration projects. Pharmaceutical companies are beginning to adopt this model as well and are trying to understand the impact of regulatory constraints on the adoption of such models.

Q. What are the top three applications that are typically interfaced with your products? And what are the challenges in interfacing with applications with different languages (character sets)?

1. Factory-level shop floor (such as process control and process scheduling applications)

2. Statistical packages for highly advanced and specific data analysis

3. Third-party (legacy) business intelligence products. As long as all these applications accept unicode characters, integration with these applications should not be an issue. However, some applications are less "internationally robust" than others, and unique character sets, such as the Japanese character set, can pose a problem.

Q. Some companies face challenges in integrating MES (Manufacturing Execution Systems) to Enterprise Resource Planning (ERP) applications. What is your company doing to help ease this integration?

Oracle is adopting the S95 standard aggressively and using this standard to guide our AIA strategy and approach, where appropriate.

Q. Do you have any thoughts on virtualization (e.g., virtual servers) and the impact of this to your business and to the pharmaceutical industry?

[A few years ago, Oracle introduced] real application clusters, which support the deployment of a single database across a cluster of servers—providing strong fault tolerance, performance, and scalability. We aggressively promote the virtualization of an application environment through the implementation of machine clusters. This drastically lowers the cost of ownership, as a group of several smaller machines is often a small fraction of the cost of a much larger machine, and the risk of failure of a cluster is infinitesimal, as well. The adoption of this approach by the industry has been a strong validation of our commitment to lower total cost of ownership for our customers.

Q. Do you outsource application development outside the US? Do you have any comments on the trend toward outsourcing?

Oracle has software development teams in several countries around the world. We have aggressively embraced globalization as a key option for attracting the required talent to fuel our research and development engine. However, we do not typically call this outsourcing, as software development is undertaken by Oracle employees in these countries who are trained on our methodologies and standards and are subject to extremely stringent hiring criteria. So, we leverage a global pool of talent without having to outsource a key business function.

Q. What are the top three questions that your helpdesk gets from users in the pharmaceutical industry? And why do you think those are the most-asked questions?

Of the number of service requests logged in our support applications, very few actually require a software "patch." The vast majority of issues can be resolved by more aggressive end-user training. We are attempting to integrate end-user training with the application footprint with products such as the Oracle User Productivity Kit, a synchronized, customizable solution that helps organizations quickly create the critical documentation, training, and support materials needed to drive project team and user productivity throughout the life cycle of a user's software.

Q. What technology should be used more by members of the pharmaceutical industry in their 'supply-chain' business? Do you see the 'auto replenishment' feature being used in drug making?

Understanding downstream supply chain and 'demand' more accurately is a key area of focus for the pharmaceutical industry. Auto-replenishment (loosely called 'KanBan') is already used for various direct materials and will continue to be adopted by the industry.

Q. What advice can you offer the pharmaceutical industry about facing the challenges of counterfeiting?

Electronic pedigrees and RFID [radio frequency identification] solutions will greatly reduce the problems of counterfeits, grey-market sales, diversions and so on. In addition, product recalls, returns, chargebacks, and the like are all simplified and can be sources of significant savings through the adoption of such technology.

Q. Can you talk more about how RFID is used in the pharmaceutical industry?

RFID is important from two perspectives. First, it is an efficient technology that can allow a large pallet of finished products to be "scanned" in a single pass without having to unpack boxes and scan bottles one by one. Secondly, RFID is accurate, and can enable supply-chain accuracy by automating supply-chain inventory information management. As the cost of RFID chips and scanners drop, we anticipate worldwide adoption of these technologies—not just across the supply chain, but also within manufacturing plants.

Q. How is software being used in clinical trials?

Companies are looking for a clinical platform that can manage all clinical operations in a consolidated and integrated technology base. This is becoming even more important as companies are buying pipeline from others (or are licensing them from biotechs), or are merging with and acquiring other companies. Because clinical operations are the vital bloodline of these companies, it is strategically important to support this area with a comprehensive solution footprint and an overarching business intelligence approach. Our customers are asking the software industry for a comprehensive solution footprint that includes clinical trial management, clinical supplies management, financial management, investigator relationship management, remote data capture and clinical data management, product safety management, and overall clinical intelligence.

Arvindh Balakrishnan is senior director of the Life Sciences Business Unit at Oracle, balakrishnan.arvindh@oracle.com