Pharma companies rope in third-party advisors to deal with compliance issues

Written by Pallavi Ail | Mumbai | Updated: Jan 11 2014, 09:17am hrs
Inadequate resources, coupled with rising demand, has proved to be a stumbling block for Indian pharmaceutical companies, which are struggling to meet compliance standards laid down by the US and UK health regulators. Third-party consultants are being increasingly sought after to rectify problems, which, if not done, could lead to a ban on drug exports to western countries.

Contract research company Quintiles Transnational Holdings is the worlds largest provider of drug development services and has helped develop or market the top-50 best-selling drugs on the market. It also consults pharmaceutical companies that face regulatory issues in the US and its team consists of former USFDA officials.

In both emerging and developed markets, economic uncertainty and industry consolidation are forcing biopharma and device companies to do more with less straining already stretched resources, said Bob Rhoades, Quintiles vice-president of quality and compliance consulting, refusing to provide names of clients citing customer confidentiality. Add to this rapid growth of drug companies with varying infrastructure levels, training and compliance support and you have the potential for increased compliance concerns and scrutiny.

Indian pharmaceutical sector has grown at the rate of 15% over the last five years. With majority of US drug patents expiring in rapid succession from 2008 dubbed as the patent cliff the Indian generics industry cashed in on the opportunity.

Experts now peg the industry to grow at a compounded annual growth rate of 15% to 20% over the next seven years. But pharma companies seem to be have cut a few corners to keep up with the growing demand for generics.

The first wrinkle appeared in 2008 when the US Food and Drug Administration hauled up Ranbaxy Laboratories, placing two of its manufacturing units under an import ban for violating current good manufacturing practices standards.

Fraud, misconduct and related incidents are the major hindrance to global ambitions of many companies and impacts reputation, KPMG (India) partner and COO Arjun Vaidyanathan said. In recent times we have seen companies adopting varied standards with drastic consequences.

The forensics department of KPMG consults pharmaceutical companies in areas of fraud, misconduct and non-compliance. Vaidyanathan said that the level of compliance considered acceptable until a few years ago is not acceptable today. He identified corruption under Foreign Corrupt Practices Act and UK Bribery Act a key concern in the pharma sector. Data integrity was another concern noted in the recent international regulators inspections, Vaidyanathan said.

Gurgaon-based Ranbaxy has said in the past that Quintiles is advising the company on data integrity.

The issues that we deal with, across all markets, are typically related to compliance the need for proper staffing with skilled workers, accurate data capture and appropriate IT approaches applied to quality systems, Rhoades said.

Rhoades said they see an interest to improve worker skills in the biopharma industry but core to that effort will be ensuring there is a more thorough understanding by each employee of how his or her job responsibilities fit within various regulations.

India is known for its highly skilled workforce in the pharma industry. However, the regulations are becoming tougher over the years and constant training of employees is required. One-time effort is not enough, not anymore, Vaidyanathan said. NYSE-listed Quintiles usually gets called in after a company gets a warning letter but now with increasing oversight, companies are approaching it proactively.