Inventory control of chemicals and components is not sexy. Unfortunately, raw materials management is a draw for US Food and Drug Administration (FDA) inspectors, and, as companies from Bausch & Lomb, Amico Laboratories, and Caraco Pharmaceutical Laboratories have found out, poor inventory controls will draw a warning letter. 1
If you want to avoid public disclosure of "unreliable and inaccurate inventory records" or "control of materials is not adequate" in your company, you need to properly manage your inventory and have the supporting records. As these cited companies found out, standard operating procedures (SOPs) on warehousing and storage areas are not proof of control or compliance.
So what is the answer? For one pharmaceutical company in Massachusetts, their director of information technology stumbled onto a "hidden" secret: other industries have automated their inventory management to such a degree that now a plethora of tools exist which are not only inadvertently compliant with FDA regulations, but are flexible enough to fit small companies, big companies, and everything in between.
CAPAs and More Training
By mid-summer of 2008, management at BIRINJ Pharma2 knew they had a problem. The company was closing in on market launch of a new drug, and with a growing supply chain and an increasing number of concurrent studies, their old mix of spreadsheets and paper ledgers was no longer up to the task of managing the increasingly complicated inventory. Small quantities of expensive compounds had to be tracked and maintained properly throughout their lifespan; material inputs into the manufacturing process had to be chosen from properly maintained and certified-for-use stock; and reports for both Quality and Regulatory purposes had to be frequently generated showing what was used where, when and by whom.
Nonconformances were growing. Scientists overseeing nonclinical tests were delivered the compounds that had not passed quality control review, forcing expensive backtracking and retesting. A formulation bound for a clinical study was only discovered to have the wrong chemical component purity level after it was produced and being prepared for shipment. And to top it all off, the inventory site had been recently expanded to a second location to handle the overflow.
"It was," confided a company director, "one of those situations where when you’re in it, you only see the problems one at a time. No more storage room? Okay, let’s get another location to handle the overflow. Nonconformances for delivery of chemicals that don’t have certificates of analyses? Okay, let’s train the scientists and the warehouse staff again. Only when you stepped away from the day-to-day, and saw the bigger picture, did it become clear how it all tied back to inventory management.
Further analysis of the situation revealed that simply adding warehouse staff or writing more standard operating procedures (SOPs) would only fix a minor percentage of the problems. The real issues were the need for better controls and faster processing – an ideal business case for an automated system – and so the director of information technology (IT) was brought into the picture.
Bill was tasked with finding an automated solution that fit two "make or break" requirements:
1. The system had to fix at least 80-90% of the core issues; and
2. The system had to be affordable for a company of less than $500 million in gross revenue.
While an ideal solution would also be compliant with the FDA’s 21 CFR Part 11 regulations, the company was willing to forego out-of-the-box compliance as long as the system could make most, if not all, of the business process breakdowns and nonconformances go away. Both IT and Quality agreed that in the worst case, once breathing room was established, computer validation consultants could be brought in to bring the new system up to par.
Several weeks of internet research and emails to colleagues around the country followed. One answer became clear:an affordable system that resolved at least 80-90% of BIRINJ Pharma’s inventory control issues simply did not exist among the vendors that target the small to midsize biopharma and medical device markets. On his own, the IT director began to search out other industries and their inventory management solutions, from aerospace to telecommunications and computer equipment makers. Familiar supplier names such as SAP and IBM cropped up, both of which have pharmaceutical-oriented solutions, again leading back to an affordability issue for BIRINJ Pharma.
And then the IT director found a company called Slingshot eCity (www. SlingshotSoftware. com) that had a good track record and positive reputation among non-FDA regulated small to midsized businesses in all sorts of different industries. While Slingshot had the standard enterprise resource planning (ERP) suite of solutions, more importantly, Slingshot also offered a stand-alone software module dedicated just to inventory and warehouse management that could run on BIRINJ Pharma’s current equipment. In other words, it fit BIRINJ Pharma’s two "make or break" requirements: affordability and problem resolution. There was no mention of Part 11 compliance, but at this point, the IT director was happy to have something to discuss with both the warehouse team and his Quality counterpart.
Two Sticking Points
As usual with any undertaking involving converting a cobbled-together mix of manual processes and small-scale applications into a larger, department-wide automated system, a series of meetings and presentations was undertaken between BIRINJ Pharma and Slingshot, followed by more internal BIRINJ Pharma meetings.
Ultimately, the internal BIRINJ Pharma deliberations reached a place where, from the business and IT sides, adoption of the automated system was a "no-brainer," while from the Quality and Regulatory Affairs perspectives, there were two main sticking points:
1. The system would necessitate the move to electronic signatures, workflow, and data storage, and clearly require Part 11 compliance, something that BIRINJ Pharma Quality and Regulatory personnel were worried they were not yet ready to tackle; and
2. BIRINJ Pharma would be taking on a supplier and a system that – although it had been successful for more than 30 years outside of the pharma industry – was clearly a newcomer into the environment and was not familiar with the unique regulatory challenges and risks in the FDA world.
While BIRINJ Pharma struggled internally, Slingshot embarked on an education campaign – not of their prospective customer, BIRINJ Pharma – but of themselves, on FDA regulations, Part 11 requirements, and what would be entailed if they were to decide to enter the FDA-regulated marketplace. As a new vendor to the pharma landscape, Slingshot was worried whether its decades of non-pharma inventory management and controls expertise and knowledge could translate to the pharmaceutical industry.
In March 2009, I was brought in to help get Slingshot up to date on current FDA and ICH regulatory expectations, particularly around FDA Part 11 compliance and electronic data integrity. After a month of educational presentations, discussions, and a high-level review of the inventory management and warehouse module, and how it would be used in BIRINJ Pharma’s environment, it was clear that focusing on the terminology of Part 11 – and in particular the FDA’s conceptualization of "validation" (including all the various industry misconceptions that have evolved over the past twelve years) versus the software development industry’s understanding of "validation" – was simply getting in everyone’s way. The real questions were quite simple: did controls exist for data, workflow, and electronic signatures? Did those controls ensure data was accurate, legible, complete, original, and contemporaneous? And, as a follow-up, what testing and other records proved this?
By rephrasing the issues BIRINJ Pharma and Slingshot faced into the same questions posed by FDA reviewers when examining regulatory submission data or by FDA inspectors when looking at electronic records during an inspection, Quality, Regulatory and IT were able to sit down with Slingshot and draw up a list of those controls already in place with the software. Were there audit trails?Was there security that could be customized to different roles within BIRINJ Pharma (e. g. , auditor versus scientist versus warehouse personnel)? Did you have to enter or otherwise manually input an authorization code to electronically sign something? Did the system prevent you from sending chemical compounds without a valid certificate of analysis to a scientist? How did it do so? Could this be tested? What records were automatically produced as a result of this test (such as entries in an audit trail) so that Quality could then quickly run a report to see who wasn’t paying attention and following procedures?
In short order, Quality, Regulatory and IT came to agreement on all the questions raised by the move to an electronic, automated system. Although Slingshot’s system was not Part 11 per se, more than 85% of the specific controls the team could come up with were already in place on the software simply because other industries had needed them. Lean requirements from just-in-time manufacturers meant that only those materials already approved and ready to go could be chosen; in the context of BIRINJ Pharma, this meant the scientist could only select and request chemical compounds with valid certificates of analysis because these were the only compounds that populated the portion of the database the scientist could access. Financial auditing of inventory required the existence of a "see all, change nothing" auditor security role; as a result, BIRINJ Pharma’s internal Quality auditor group could run reports and analyses in seconds rather than days. Finished goods traceability for multi-component equipment meant that lot traceability and finished formulation batch traceability were both available. At almost every step of the way, the non-pharma vendor’s system met or exceeded the control requirements called out for by Part 11, by various FDA regulatory guidance documents, and by an analysis of 483 observations in warning letters over the previous two years.
This left BIRINJ Pharma in the position of needing to qualify Slingshot as a supplier, and then conduct a performance qualification of the system and its records in BIRINJ Pharma’s specific environment; two tasks required regardless of any vendor chosen.
For the management of BIRINJ Pharma, the decision to move ahead with a vendor from outside the traditional pharma-sphere ultimately had three things in its favor:the pricing structure, the elimination of BIRINJ Pharma’s warehousing and inventory management pains, and the willingness of the vendor to work outside of its traditional non-FDA regulated business markets to accommodate BIRINJ Pharma’s specific needs. For Quality and Regulatory, the excitement was three-fold: risk was reduced, auditing and reporting were simplified, and Part 11 compliance (although not spelled out by the vendor) was largely achieved out-of-the-box, only requiring Quality and IT to document a matrix of listed controls needed matched with those already within the Slingshot system.
And as for IT, what seems to have sealed the deal were two intangibles: the ability to buy a modular solution that didn’t need its own technical architecture and could be plugged right in, and because the system was not specifically for pharma, but instead had been designed and tweaked over the years to meet the needs of a broad set of businesses, industries, and education levels, its user interface was simple, straightforward, and clean; the end result:very little user training and hand-holding required.
Whether you’re in a traditional pharmaceutical company, a virtual pharma company, a biologics division, or a contract manufacturer or contract research organization, automating your inventory management with FDA-compliant controls may be one of the best ways to improve regulatory compliance, lower risk, speed internal business processes, and unequivocally demonstrate how IT, Regulatory, and Quality can work together to improve your company’s bottom line. When I help companies such as Slingshot and BIRINJ Pharma, it’s when I realize that oftentimes, the real challenge we face isn’t automating our inventory and warehouse management or any other business function, it’s being willing to look beyond the usual suspects for solutions.
Are you ready?
1 Warning letters from October 2006 to Bausch & Lomb (http://www. fda. gov/ICECI/EnforcementActions/WarningLetters/2006/ucm076143. htm), January 2008 to Amico Laboratories (http://www. fda. gov/ICECI/EnforcementActions/WarningLetters/2008/ucm1048453. htm), and October 2008 to Caraco Pharmaceutical Laboratories (http://www. fda. gov/ICECI/EnforcementActions/WarningLetters/2008/ucm1048080. htm).
2 "BIRINJ Pharma" is an altered name to protect the confidentiality of the individuals and company involved.
About the AuthorJohn Avellanet is the founder of the FDA regulatory intelligence and lean quality systems compliance advisory program for executives, The SmarterCompliance™ Toolkit. He is the author of more than 100 articles, our regular pharma-IT compliance columnist, and a contributing author to the book Best Practices in Biotechnology Business Development (Logos Press). He serves on the advisory boards of several trade associations, is a frequent speaker at industry events, business schools, and corporate workshops, and meets often with regulatory officials. He can be directly reached through his independent advisory firm, Cerulean Associates LLC, on the web at http://www. ceruleanllc. com