Navigating the Complexity of Life Science Compliance: A QAD Regulatory Primer

Pete SchaubachOctober 10, 2011

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• Pete Schaubach• Business Development Director, Life

Sciences • Previously…

- CIO, AGA Medical - CIO, ev3- Business Systems Integration Director,

Medtronic - Information Services Director, SCIMED/BSC- …

Introduction

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• Integrating regulatory compliance into your systems and processes while maintaining business flexibility is a challenge for every Life Sciences company.

• What can we do about this?

Subject

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• Overview of business challenges• My experiences at ev3• How QAD can help

• Interaction welcome!

Agenda

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• External- Margin pressures from competitors and

customers- Increased regulatory pressure on all aspects of

product lifecycle

• Internal- Cost management/efficiency- Information Technology management

Business Challenges

• Key Issues- Increased competition- Healthcare reform- Customer consolidations- Group Purchasing Organizations- Revenue exposure in chargebacks &

fees- Higher raw material & supply chain cost

Margin Pressures

External challenges

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• cGMP- current Good Manufacturing Practice

• Track & Trace• Electronic records management

- European Commission Annex 11- US-FDA 21 CFR Part 11

Increased regulatory pressure

External challenges

• Key Issues- Regulations governing drug or device safety

- Monitoring of adverse events

- Managing global supply chain and supplier quality

Greater Focus on Quality and Safety

External challenges

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• Regulatory AgenciescGMP

External challenges

Poland Japan

China

USA Canada Mexico

Europe

Australia

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• Organization and personnel• Buildings and facilities • Equipment acquisition and maintenance• Control of components & products• Production and process controls• Packaging & Labeling• Identification and traceability• Holding and distribution• Records & Reports• Returns and Complaints

cGMP

External challenges

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• US FDA Regulations- Finished Pharmaceuticals (human and animal

products): 21 CFR 210 and 21 CFR 211- Biological products: 21 CFR 600- Blood and blood-derived products: 21 CFR 606- Medical devices (“Quality System Regulation”): 

21 CFR 820- Dietary supplements (published by FDA in June

2007): 21 CFR 111

cGMP

External challenges

FDA Quality System Requirements

External challenges

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http://www.fda.gov/MedicalDevices/ResourcesforYou/Industry/ucm126252.htm

• Annex 11 This annex applies to all forms of

computerised systems used as part of a GMP regulated

activities. A computerised system is a set of software and hardware components which

together fulfill certain functionalities. The application should be validated; IT

infrastructure should be qualified.

– Commission EuropeenneDeadline June 30, 2011

Electronic Records Management

External challenges

• 21 CFR Part 11 All production and/or quality system software, should have documented requirements that fully define its intended use, and information against which testing results and other evidence can be compared, to show that the software is validated for its intended use

– United States Food & Drug Administration

Electronic Records Management

External challenges

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• Contents- Electronic system as replacement of Paper- Security- Data Transfer- Audit Trails- Electronic Signatures- Computer System Validation- Training- Supporting Procedural Infrastructure

21 CFR Part 11

External challenges

• Key Issues- Increased product and compliance costs- Product commercialization

• Global expansion• Operating in emerging markets• Meeting revenue & growth targets

- Continued focus on Lean principles- Increased leverage of shared services

Cost management/efficiency

Internal challenges

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• Key Issues- Reliability- Scalability- Cost predictability- Flexibility- Upgrade barriers

• Customizations• Resources• Time

Information Technology Management

Internal challenges

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• So what can we do to overcome these challenges?

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• Build a $1B global medical device company from scratch- Focus on three markets

• Cardiovascular (heart)• Neurovascular (brain)• Peripheral (legs)

- Acquire and integrate quickly- Establish direct operations in global markets- Leverage centralized management and

services

ev3

My story

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• We chose QAD for core reasons- Reputation based on BSC and Medtronic

experiences- Support for regulatory requirements- Solid supply chain functionality- Ease of implementation

Selection criteria

ev3

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• One source of the truth- Single instance- Standard processes- Strong data governance- Easy access to information

• Strong alignment between business and IT- Core process focus- Ability to execute- Flexibility

Key strategies

ev3

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• Leveraged strong QAD capabilities- Compliance module controls- Forward and backward traceability- EAM for CFR Part 820 and ISO 13485

• Part 11/SOX change control requirements- Simple risk-based assessment with every

request- Compliance requirements in every project plan

• Standard SDLC/change management- Standard process continuous improvement- Reduced risk/fear of change

Compliance

ev3 strategies

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• Operate at the pace of business• Steady delivery of high-value

improvements• Project duration: 3 days, 3 weeks, 3

months- 3 Days: Single function affected

• Report modification

- 3 Weeks: Single organization• Kaizen event opportunity, process change

- 3 Months: Multi-organization• New process, acquisition integration

Flexibility

ev3 strategies

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• Europe implemented in 2 months- EU distribution center, 7 sales offices

• US implemented in 2 months- US distribution, sales & manufacturing

• Subsequent rollouts- Japan distribution and sales office- Multiple manufacturing sites in US and EU

• $40MM to >$440MM in six years• From 40 to 800 users today

Results

ev3

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• Leverage QAD compliance capabilities• Take advantage of on-demand• Use the Validation toolkit• Leverage QAD Reporting Framework and

BI

What if I had to do it again?

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cGMP Compliance

What if…

Organization and personnel Process Maps

Buildings and facilities EAM

Equipment Acquisition and Maintenance EAM

Control of component & products QAD EA

Production and process controls QAD EA Compliance

PCC

Packaging and labeling QAD EA

Holding and distribution QAD EA WMS

Records and reports QAD EA

Returns and complaints SSM

E-Controls

WMS

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• Avoid multiple data center expenditures• Avoid redundant support personnel• Leverage resources and expertise for

qualified environments and upgrades• Provide remote site application support

- Europe- Asia

• Leverage Hybrid environment for emerging markets

On Demand

What if…

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Global CoverageOn Demand Services

United KingdomBrierley Hill

BelgiumAntwerp

ItalyMilan

The NetherlandsSchiphol Rijk

JapanTokyo

ThailandBangkok

ChinaShanghai

IndiaMumbai

South AfricaDurban

SpainBarcelona

BrazilSao Paulo

MexicoMexico City

United StatesCalifornia

AustraliaSydney

PolandWroclaw

United StatesIllinois

United States

New JerseyUnited StatesGeorgia

United StatesUtah

QAD Support and Data Centers = Local Presence, Global Reach

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On Premise vs. On Demand

On PremiseYour Data Center

Typ. ~95% AvailabilityYour Support HoursSome Languages

Your Upgrade CycleBackup?

Disaster Recovery?Dedicated Personnel?

On DemandSAS 70 Secure Data Center

>99.5% Availability24 x 7 Multi-Language Support

Always Current VersionConstant Database AdminUsage Analysis & Reporting

Failover & Recovery SiteOff Site Backup

Guaranteed Capacity300+ Certified Personnel

On Demand

Full Strength ERP

.NET UI

24 x 7 SupportNew Version Annually

Personalization

Revenue Expense

Scalable

On Premise

Full Strength ERP

.NET UI

Business Hours SupportNew Version?

Customization

Capital Expense

Scalability Challenge

What if…

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What if…

Implement

•Rapid Implementation•Best Practices•Fixed Fee

Transition

•Environment Migration•Transition Management•Fixed Fee

Transformation

•Upgrade•Application Conversion•Best Practice

Deliver ManageEasy

On-Boarding

Service Components

What if…

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• Proven, best-practice methodology• Built-in continuous improvement• Pre-defined reports and validation scripts

Validation toolkit

What if…

Validation Master Plan

Inst

alla

tion

Qu

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tion

•Hardware

Installation

•Software

Installation

•Installation

Qualification Report

QAD Purchase

Delivery

Installation

User RequirementsSpecification

GXP Requirements

Des

ign

Qu

alif

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ion

SystemAcceptance

Data InstallationQualification

Execute PerformanceQualification

Write PerformanceQualification Plan

Execute OperationalProtocols

OperationalQualification Plan

ConfigurationFit to Business

Ope

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Per

form

an

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Qua

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•Baseline Configuration

Document

•Define Functional Requirements

•Traceability Matrix

•Risk Assessment

•Operational Qualification Protocols

•Performance Qualification and Stress Test

•Operational Qualification ProtocolSummary Report•Disaster Recovery Protocols

•Validation Report

= Deliverables

•Performance Qualification Protocol Summary Report

•Data Migration•Data Installation QualificationProtocol Summary Report

Strategic Validation MethodologyWhat if…

• Installation Qualification Protocol (IQ)• Operational Qualification Protocol (OQ)

- Distribution - Master Files- Manufacturing

• Performance Qualification Protocol (PQ)• Functional Requirements• Risk Analysis• Traceability Matrix

Validation Toolkit includes:What if…

• Security• Sales Orders• Routings• Compliance • Quality Management • Inventory Control • Distributed Orders • Item-Site Master

Records• SSM

• Purchasing • Physical Inventory • Formulas • Product Change

Control• Processes • Work Order• Shop Floor Control• Product Structures

Validation Scripts

What if…

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• Leverage QAD Reporting Framework and BI- Minimize the use of forms packages- Easily create alerts and automatic delivery of

reports- Avoid long development time of ETL processes

and custom BI data marts

Reporting

What if…

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• Upgrade• Convert to a new version• Unwind customizations

- Convert to new standard functionality- Mitigate complex customizations with ICT

• Convert to On Demand• Validation

Problems Solutions

How can we help?

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Q & A

Thank you – please complete your survey

Life Sciences On Demand Sample Customers

On Demand Life Sciences

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Brazil

• Regulatory uncertainty and inconsistency- Serialization (EMEA, China, Turkey, US)

• Unit level serialization Rx • Track & Trace • International, Federal, and State rules differ

• California ePedigree (2015)• Federal Buyer & Matherson • FDA Serialization (2011)• EU

- EFPIA (European Pharmaceutical Industry Association) – Plans for Pilot Mass Serialization project

- Italy – Bolini, 2005- Turkey – Jan 1, 2009- Greece – National Registration Number + Sequential Number- Spain – Start to Define Serialization

• China (2009)

Serialization LegislationBusiness Requirements

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E-Pedigree Planned Schedule

Business Requirements

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 EU

Current Federal Law (1988 PDMA)

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Buyer-Matheson Legislation (HR 5839)

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 California SB1307

Pedigree (non-serialized) only on non-ADR transactions (<5%) (Implementing regulations enjoined by U.S. District court)

Pedigrees (non-serialized) on 100% of products nation wide

Manufacturer Serialized Non High Risk

Manufacturer Serialized High Risk

Dist. T&T High Risk

T&T Non-High Risk

RPH. T&T High Risk

T&T Non-High Risk

Federal PDMA Standard (Pedigree (on serialized) only on non-ADR transactions (<5%))

Manufacturer serialize 50% Rx & Pedigree

Manufacturer serialize 100% Rx products

Distributor T&T

Pharmacies T&T

Turkey

EU