life sciences life sciences industry trends and update bart reitter, director of marketing – life...
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Life Sciences
Life Sciences Industry Trends and Update
Bart Reitter, Director of Marketing – Life Sciences
QAD West Coast User Group November 2014
Life Sciences
Save the Date for QAD Explore 2015
www.qad.com/explore
QAD West Coast User Group November 2014
Life Sciences
• Industry Challenges & Drivers• Industry Present State• The Voice of QAD Customers• Industry Future State• QAD Solutions for Life Sciences
AgendaQAD West Coast User Group November 2014
Life Sciences
Industry Challenges and Drivers C
halle
ng
es
Dri
vers
Tightening Global
Regulatory Environment
Quality Management
Initiatives
Changing Business Models
Supply Chain Visibility & Governance
Reimbursement and Price Pressures
Patient safety driving tighter
regulations
Global regulators looking for consistent,
cGMP compliant process
FDA Case for Quality
Consistent Quality System management processes and
metrics
Risk-based quality
management process
Growth of global
partnerships and alliances
Focus on core life sciences
business processes
Rapid growth and M&A
Visibility of global supply chain partners
Governance of global supply
chain partners
Reduced prices in global
markets driving down margins
Accurate management of
Group Purchasing
Organizations (GPOs)
QAD West Coast User Group November 2014
Life Sciences
The PresentBart Reitter, Director of Marketing – Life Sciences
Life Sciences
• Drug Quality and Security Act (DQSA) – 2013- Compounding Quality Act creates a voluntary compliance
regime for compounding pharmacies - Drug Supply Chain Security Act requires the FDA to create
and implement a national track-and-trace system (2015 deadline)
• Falsified Medicines Directive - 2013- Introduces measures to prevent the entry of falsified
medicines into the legal supply chain- Substantially changes the European framework around the
supply of medicines and covers businesses that have traditionally not been directly regulated through medicines regulation
• FDA Safety and Innovation Act (FDASIA) - 2012- Directs FDA to promulgate regulations establishing a unique
device identification system for medical devices
Regulatory ActionQAD West Coast User Group November 2014
Life Sciences
• “We received a DQSA ultimatum from a customer for year end 2014”
• “We’re focused on DQSA and the Falsified Medicines Directive”
• How do we link operational data with serialized data? (i.e. PO#, Transaction # and Date)
• “The UDI problem is that all of the information is not in one place”
• “We want our UDI solution to come from our ERP vendor”
Customer Regulatory ChallengesQAD West Coast User Group November 2014
Life Sciences
• Launched in 2011, this initiative aims to bring stakeholders together to drive higher medical device quality.
• To achieve this mission, FDA identified 3 core components:- Focus on Quality
• Compliance is still a baseline, but the FDA wants to identify and promote practices that result in high-quality devices
- Enhance Data Transparency• Provide stakeholders with understandable and objective
information about medical device quality
- Stakeholder Engagement• Foster strategies that focus stakeholder interactions on
device quality
FDA’s Case for Quality InitiativeQAD West Coast User Group November 2014
Life Sciences
• Our analysis flagged manufacturing quality risks and showed that firms that managed those risks by driving quality organization-wide tend to be more productive, with fewer complaints and investigations per batch, and often have smaller quality units with lower quality-related costs than their competitors.
• …while the sophistication and complexity of medical devices has grown rapidly in recent years, the sophistication of device manufacturers’ quality systems have not necessarily kept pace.
Steve Silverman, Director, Office of Compliance
FDA CDRH
FDA’s Case For Quality InitiativeQAD West Coast User Group November 2014
Source: http://axendia.com/blog/2014/01/14/fdas-steve-silverman-on-the-case-for-quality-initiative-part-i
Life Sciences
• Global Medical Device Manufacturer- Class III implantable
• CAPA point solution• Complaint handling point solution• Paper-based supplier management “system”• Lack of integration• Looking for a complete QMS solution
- Manage incoming inspections- NCRs integrated with inventory- Complaints turn into a CAPA- Management of Field Action Notifications
Quality ChallengesQAD West Coast User Group November 2014
Life Sciences
• Virtual Pharma company with outdated QMS
• Outsourced manufacturing• CMOs have their own systems• Sponsor drives change to the CMOs via e-
mail- Updated test methods- Changes in specifications- Changes in packaging
• Duplicated data and error prone
Quality ChallengesQAD West Coast User Group November 2014
Life Sciences
• Medical Device Component Manufacturer
• Utilizing Excel for Quality Management
• Areas for Improvement:- Receiving Inspection:
• Recording inspection results
• Tracking/pulling of lot numbers associated with received materials in inventory.
• In-Process Inspection Data – recording results and tracking/pulling associated component/material lot numbers.
• Pick Lists Integration
- Non-Conforming Material• Integrated with CAPA and Customer Complaints
• CAPA - integrated with NC Material
Quality ChallengesQAD West Coast User Group November 2014
Life Sciences
WarehouseShopfloor
PLM/Document Mgmt.Share Drive, PTC, Dassault,
Siemens, Documentum
Receiving
Other SystemsQMS, Training Management,
Maintenance
Paper
DHRCompliance Risk –
manual data transcription
Compliance Risk – Error in DHR
Overall Risk – Traceability &
Genealogy that is paper-based
Device Manufacturing Current State
QAD West Coast User Group November 2014
Compliance Risk – manual data transcription
Life Sciences
Making the product
Documenting the product
Hidden Factory
Real Factory
Pharma Manufacturing Current State
QAD West Coast User Group November 2014
Life Sciences
• Consort Medical Completion Of Acquisition of Aesica – November 2014
• Medtronic, Inc. Offers EU Concessions In $43 Billion Covidien Deal – November 2014
• Leica Biosystems Buys Devicor Medical Products For Undisclosed Amount – October 2014
• Stryker Corporation Completes Acquisition Of Small Bone Innovations, Inc. – October 2014
• Lubrizol has acquired QAD customer Vesta, Inc. – August 2014
Changing Business ModelsQAD West Coast User Group November 2014
Life Sciences
• “We are pursuing an aggressive acquisition strategy.”
• “We are expanding our business to enter the large molecule space as well.”
• “We are acquiring to be able to develop combination products.”
• “Pursuing API manufacturing so we can deliver entire value chain.”
• “We are seeing a need to develop innovative forms of packaging.”
Changing Business ModelsQAD West Coast User Group November 2014
Life Sciences
• FDA Public Meeting on Development and Regulation of Abuse-Deterrent Opioids- On October 30 and 31, 2014
• Opportunity for development of novel medications- If injected (parenteral), opioid-tolerant patients will experience
withdrawal signs and symptoms - Crush, tamper and extraction resistant technology- Push-Pull osmotic delivery system releases hydromorphone at a
controlled rate over an extended period of time.- AVERSION technology: if dissolved for injection, a viscous
gelatinous mixture will form trapping oxycodone inside- If crushed and snorted, inactive ingredients will cause nasal
discomfort
Changing Business ModelsQAD West Coast User Group November 2014
Life Sciences
• Integrate ERP and serial line level data- “We want to mingle ERP and serial data”- Operational and line level
• Opportunity to trigger the ASN on operational data- Material produced- Inventory updates- Order status update
• “Integrating quality data like a CAPA event to serialized data is a big deal.”- Level 5 of the QAD Quality Maturity Model
Supply Chain Visibility & Governance
QAD West Coast User Group November 2014
Life Sciences
Reimbursements & Cost PressuresQAD West Coast User Group November 2014
• “We are having major reimbursement pressures. This business is not as profitable as it once was.”
• “We currently need to issue electronic invoices to an authorized provider by the government.”
• “We estimate a loss of 3-4% of revenue due to chargeback mismanagement”
Life Sciences
The FutureBart Reitter, Director of Marketing – Life Sciences
Life Sciences
Industry Challenges and Drivers C
halle
ng
es
Dri
vers
Tightening Global
Regulatory Environment
Quality Management
Initiatives
Changing Business Models
Supply Chain Visibility & Governance
Reimbursement and Price Pressures
Patient safety driving tighter
regulations
Global regulators looking for consistent,
cGMP compliant process
FDA Case for Quality
Consistent Quality System management processes and
metrics
Risk-based quality
management process
Growth of global
partnerships and alliances
Focus on core life sciences
business processes
Rapid growth and M&A
Visibility of global supply chain partners
Governance of global supply
chain partners
Reduced prices in global
markets driving down margins
Accurate management of
Group Purchasing
Organizations (GPOs)
QAD West Coast User Group November 2014
Life Sciences
An Effective Enterprise in the Life Sciences is:
Every business process working at peak efficiency and perfectly aligned with your
strategic goals
Patient Focused
Manufactures safe and effective products for patient care
Compliant Complies with applicable global regulations and requirements
Innovative Innovates to improve all aspects of their operations
QAD West Coast User Group November 2014
Life Sciences
QAD in the Life Sciences Industry
QAD Cloud ERP for Life Sciences
Quality and Business Process Integration
Supply Chain Planning and Integration
Support for Life Sciences Business Models
Support for Needs of Life Sciences ERP Clients
QAD West Coast User Group November 2014
Life Sciences
QAD and the Life Sciences
QAD Cloud ERP for Life Sciences
Industry Challenges
Changing business models
Supply chain visibility and governance
Price / cost pressures
• Full-featured, cloud-based ERP• FDA “Qualified” IT environment• Single, dedicated instance for
control and regulatory compliance• Regulatory compliant SOPs• Life cycle validation support• On-premise or blended
deployment
QAD West Coast User Group November 2014
Life Sciences
Cloud Adoption
Spend on Cloud ERP will more than double (increase by 109%)
2012-2017
The cloud software model will account for $1 of every $5 spent on
software by 2016
23% to 50% increasing willingness to consider SaaS
ERP 2009 - 2012
1/5
109%
~50%Total ERP Cloud ERP
0%
4%
8%
11%
15%
19%
7.9%
14.3%
Com
pou
nd
An
nu
al G
row
th R
ate
QAD West Coast User Group November 2014
Life Sciences
Why Cloud?
Global Flexibility/Capa-
bility40%
Regulatory Compliance
7%
Corporate Direc-tive16%
Lack of IT Resource
37%
QAD West Coast User Group November 2014
Life Sciences
• Maintain Focus on The Business• Business Agility• Reduced Capital Expenditures• Staffing Efficiency• Speed & Simplicity• Version Control
Other Reasons to use Cloud Computing
QAD West Coast User Group November 2014
Life Sciences
• Integration of quality and production processes
• Automated quality management
• Item data attributes for QC• QAD serialization for track and
trace• Lot trace workbench for
effective recall management
QAD and Life Sciences
Quality and business process integration
Industry Challenges
Tightening global regulatory environment
Quality management initiatives
Supply chain visibility and governance
Roadmap Subject to change without notice. The above is intended for information purposes and should not be incorporated into a contract
QAD West Coast User Group November 2014
Life Sciences
• QAD ERP/EQMS Integration Maturity Model- Integrating quality and business processes
Quality and Business Process Integration
Level One
Non-existent integration/ automation
Level Two
Integration of QC
QMS support
Level Three
Integrated QC flows
ER/ES
EQMS support
Level Four
ERP process
integration
Shop floor integration
Mfg. quality metrics
Level Five
Enterprise and supply
chain integration
Supply chain
quality metrics
QAD West Coast User Group November 2014
Life Sciences
Quality and Business Process Integration
QAD West Coast User Group November 2014
Work Instructions
211.100
211.101
211.103
211.105
211.110
211.111
cGMP Integration
Life Sciences
• QAD Demand Planning 7.0• QAD Cloud Supply Chain
Planning• QAD Supplier portal• Transportation management
QAD and the Life SciencesSupply Chain planning integration
Industry Challenges
Reduced reimbursement and price pressures
Changing business models
Supply chain visibility and governanceRoadmap Subject to change without notice. The above is intended for information purposes and should not be incorporated into a
contract
QAD West Coast User Group November 2014
Life Sciences
Supply Chain Planning Integration
Global Distributor
s
Domestic Distributor
sCMO
Raw Material
Healthcare Providers
The Life Sciences Enterpris
e
Life sciences ERP integrates supply chain elements
Payers / GPOs
QAD West Coast User Group November 2014
Life Sciences
• Multi Level Serialization• DQSA Support• Supply Chain Traceability
Supply Chain SerializationQAD West Coast User Group November 2014
Life Sciences
Original Recall
Manufacturer
Recall Extension
Lot Trace – Forward
Inventory
Lot Trace – Back
This information is confidential and provided for discussion purposes only; It does not form a commitment to deliver any functionality and is subject to change without notice.
Recall ManagementQAD West Coast User Group November 2014
Life Sciences
QAD and the Life Sciences
Support for evolving life sciences business models
Industry Challenges
Reduced reimbursement and price pressures
Changing business models
• GPO contract management- Trade Activity Management (for
early adopter customers)- Rebate / chargeback management
• QAD Cloud EDI - Link to electronic healthcare
exchanges
Roadmap Subject to change without notice. The above is intended for information purposes and should not be incorporated into a contract
QAD West Coast User Group November 2014
Life Sciences
Manufacturer
GPO orBuying Group
Hospital/Provider
DistributorInvoices at List Price – Std disc
Invoices at Contract Price
Customers Order from Distributor
Admin Fee ($)
$$ Chargeback (List – Contract Price)
Contract Price
Definition
Distributor Orders from Manufacturer
Manufacturer markets directly to Provider
This information is confidential and provided for discussion purposes only; It does not form a commitment to deliver any functionality and is subject to change without notice.
Serialization Integration• Trade management• Product safety• Supply chain integrity• Recall• NCR / CAPA
CAPA /NCR
Trade Activity ManagementQAD West Coast User Group November 2014
Life Sciences
Support for Evolving Business Models
• Secure, compliant connectivity for life sciences manufacturers with the healthcare ecosystem
QAD Cloud EDI
Providers
Distributors
Life Sciences Manufacturers
QAD West Coast User Group November 2014
Life Sciences
QAD and the Life Sciences
Supporting the needs of life sciences ERP clients
Industry Challenges
Changing business models
Supply chain visibility and governance
Quality management initiatives
• QAD Customer Engagement Process
- Annual assessments- Led by business consultants- Learn how software can better
support your business processes- Improvement recommendations
QAD West Coast User Group November 2014
Life Sciences
Save the Date for Explore 2015
www.qad.com/explore
QAD West Coast User Group November 2014