Holding Your Suppliers Accountable

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Brice Nicholson
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1 Holding Your Suppliers Accountable What Defines an Ingredient Supplier of Choice? David R. Schoneker Director of Global Regulatory Affairs 0

2 Supply Chain Accountability Why and Why Now? The globalization of the dietary supplement industry and the multitude of sourcing locations have brought increased complexity to ensuring the integrity and quality of the ingredient supply chain Industry and regulatory systems have not evolved in accordance with changes in the supply chain Regulators expect the User of the ingredients (the dietary supplement manufacturer) to be responsible for the quality and safety of the ingredients that they use Therefore, it is critical that Users only work with high quality suppliers that they can TRUST can t just select suppliers based on price!

3 Definition of Supplier any active participant in the ingredient supply chain Manufacturer Distributor Re-packer Haulier...not just the company that you place the order with and pay!

4 Threats to the Supply Chain

5 Where do DS Ingredients come from? Diverse Materials Base Chemical synthesis (Polymer mixtures, Cellulose derivatives substances often less defined than low mol wt entities) Mining of minerals Harvesting of vegetation Formulated Products Biotechnology & Fermentation Genetic Modification Animal by-products

6 DS Ingredient Industry is significantly different than the Dietary Supplement Industry

7 Raw Materials may come from the farm or natural environment and are processed and packaged to become DS Ingredients

8 DS Ingredients are produced and packaged in many ways typically by chemical companies

9 The journey from the manufacturing site 8 The information contained in this presentation is proprietary to Colorcon and may not be used or disseminated inappropriately.

10 Increased Regulatory Expectations Supplier s Supplier Supplier s Supplier Supplier- Original Mfg Repacker Quality Risk Management Supplier Qualification Distributor Warehouse Dietary Supplement Manufacturer Security of Supply Chain Quality Agreements with Critical Material Suppliers The information contained in this presentation is proprietary to Colorcon and may not be used or Copyright disseminated 2015, inappropriately. All Rights Reserved IPEC-Americas

11 Effective Supply Chain Security Multiple components, all have to be in place to achieve the lowest risk: Material and Supplier Identity Supplier qualification Compliance Supply chain mapping from manufacturing plant to customer Risk management Business continuity planning (BCP) Focus on a single component alone, or in isolation, weakens the security chain

12 Why Quality Systems are Important? No amount of regulatory inspection or analytical testing by themselves can ensure the integrity or quality of a dietary supplement product Robust quality systems are required to provide this assurance Evaluation and oversight of vendors included in the ingredient supply chain is a critical element of a dietary supplement manufacturer s quality system Oates, Pfizer, Sept 08

13 Key Elements of Engagement with Vendors Selection of trustworthy vendors with strong quality systems Establishing clear expectations Ongoing collaboration with vendors across quality systems (e.g., changes, deviations) Routine trending and monitoring of vendor quality performance Routine on-site audits and visits (can be done using a qualified third party audit or certification body) Oates, Pfizer, Sept 08

14 Vendor Selection (Quality) Choose Carefully! Typically a two-step process to Establish TRUST: Step 1 Data-gathering (can be done remotely from vendor site) to collect information on the vendor s General quality systems and regulatory information (EIP, SIDI documents) Regulatory history (e.g., health authority approvals, inspection results, recalls) Current product mix Controls over their own supply chain Step 2 Due diligence audit physical audit vs. paper audit Must verify that the systems, organization, and facilities are sufficiently robust to assure quality risk assessment, appropriate GMPs for DS use, etc. Limiting factor Typically only have the ability to audit the application of vendor s quality systems to the materials being purchased Oates, Pfizer, Sept 08

Establishing Clear Expectations A clear and complete Quality Agreement is necessary to establish expectations for both you and your supplier Examples of items that may be part of a Quality Agreement

15 Establishing Clear Expectations A clear and complete Quality Agreement is necessary to establish expectations for both you and your supplier Examples of items that may be part of a Quality Agreement Access to facilities Release process Change management Material purchase, receipt, storage, and testing Specifications and test methods Notification and approvals of deviations, out of specification results, and adverse trends Inspections by regulatory authorities Handling of rejected materials and/or products Product complaint handling Market actions Oates, Pfizer, Sept 08

deemed to be of the highest risk may need to be eliminated from the supply chain Those in higher risk categories may require the

16 Ongoing Collaboration with Vendors A risk assessment model may be used to determine the extent of oversight/involvement required in the Quality Agreement Allows resources expended to match the risk level Practical application of risk assessment output Vendors deemed to be of the highest risk may need to be eliminated from the supply chain Those in higher risk categories may require the highest level of oversight by the dietary supplement firm Highest quality (lowest risk) vendors may require less oversight Oates, Pfizer, Sept 08

Routine Monitoring and Trending Risk assessment of each supplier should be conducted on an ongoing basis to allow for the identification of trends and implementation of corrective actions Significant

17 Routine Monitoring and Trending Risk assessment of each supplier should be conducted on an ongoing basis to allow for the identification of trends and implementation of corrective actions Significant changes (planned or unplanned) at the vendor or other events may require a reassessment Vendors may move from one sector of the risk assessment matrix to another, resulting in the need for developing an exit strategy or applying more or less resources based on the change in risk profile Routine meeting held with key vendors is another way to monitor and influence quality performance Oates, Pfizer, Sept 08

Routine Audits and Visits A risk model similar to that described earlier to define extent of oversight can help determine the required frequency of audits and visits First, assess the quality risk

18 Routine Audits and Visits A risk model similar to that described earlier to define extent of oversight can help determine the required frequency of audits and visits First, assess the quality risk Then take criticality of the material in the formulations where it is used into account A supplier you have never physically visited (or had a 3 rd party audit) should be considered your highest risk Paper audits are rarely enough except for very low risk suppliers but how can you assess risk without any physical audit information? Oates, Pfizer, Sept 08

19 How do you identify and control RISK in the excipient supply chain? For the RISK Not going to see the full picture from a certificate of analysis a questionnaire a label stating USP or FCC inspection on receipt lab analysis audit of the manufacturer audit of the distributor

20 RISK Knowing the true risk is the first step in preventing programs that look good on paper but offer only a false sense of security. You can t manage risk you don t see!.

Vulnerabilities in Industry Quality Systems: Concerns expressed by various Regulators Lack of traceability High complexity due to increased brokerage and trade activity Ingredient repackaged or

21 Vulnerabilities in Industry Quality Systems: Concerns expressed by various Regulators Lack of traceability High complexity due to increased brokerage and trade activity Ingredient repackaged or relabeled multiple times Non-specific ID test frequently performed on composite sample Lack of verification of appropriate food and color additive status where applicable for use in DS Certificates of Analysis (CoAs) Over-reliance on CoAs Original manufacturer s CoA not always obtained CoA often altered to remove true identity of manufacturer Reported test results may be unreliable or falsified Rivera, FDA, Dec 08

22 Vulnerabilities (cont d) Supplier qualification programs, quality agreements, and lifecycle monitoring are often deficient Distant (foreign) manufacturing sites can pose special risks Audits of suppliers by dietary supplement manufacturers are superficial or not conducted at all Over-reliance on inspections by regulatory authorities Counterfeiting, i.e., deliberately and fraudulently mislabeling with respect to its identity or source Criminal substitution of cheaper ingredients in dietary supplement products Rivera, FDA, Dec 08

Measures to Ensure the Quality of the Supply Chain Implement a comprehensive approach to monitoring ingredient supply chain integrity Only do business with trustworthy sources Establish a robust

23 Measures to Ensure the Quality of the Supply Chain Implement a comprehensive approach to monitoring ingredient supply chain integrity Only do business with trustworthy sources Establish a robust supplier qualification program (e.g., vendor audits, quality agreements, appropriate ongoing QC of incoming lots, appropriate GMPs in place) Verify each ingredient shipment comes from approved suppliers/manufacturers and meet appropriate dietary ingredient or food/color additive regulatory requirements for use in DS Verify shipments came through expected routes and were not diverted Use specially designed tamper-evident container seals Thoroughly examine containers upon receipt for damage and evidence of tampering Insist on original authentic CoAs Refer to IPEC and CRN CoA Guides Rivera, FDA, Dec 08

Improving Key Elements in Quality System Clear, thorough communication of all requirements (not just specifications) and expectations from user Quality Agreements are useful Knowledge of supply chain

24 Improving Key Elements in Quality System Clear, thorough communication of all requirements (not just specifications) and expectations from user Quality Agreements are useful Knowledge of supply chain pedigree from the ingredient manufacturing site (including all distributors) Robust supplier qualification and development programs that stand the test of time anticipate and mitigate risks Ability to detect anomalies limited testing is needed but tests have limitations Wolfgang, FDA, June 08

25 Supply Chain Controls Excipient Pedigree Do you know where all your ingredients are produced? Do you know how they were distributed? What evidence do you have which demonstrates this? More than One Up and One Down is needed!! What is your weakest link..? 24

Quality Agreements IPEC Guide Common starting point standard format, covers most fundamental quality issues specific to manufacture, distribution and use of excipients Puts both parties on the

26 Quality Agreements IPEC Guide Common starting point standard format, covers most fundamental quality issues specific to manufacture, distribution and use of excipients Puts both parties on the two-way street Reduces time & effort needed to reach agreement Individual company agreements frequently designed to cover multiple types of products (APIs, excipients, packaging) different needs! Gets more successful quality agreements in place The benefits can t be realized until the agreement is in place! The information contained in this presentation is proprietary to Colorcon and may not be used or Copyright disseminated 2015, inappropriately. All Rights Reserved IPEC-Americas

IPEC Quality Agreement Guide Flexible model containing the appropriate topics for excipients. Complements, does not replace, commercial supply agreements.

27 IPEC Quality Agreement Guide Flexible model containing the appropriate topics for excipients. Complements, does not replace, commercial supply agreements. Not a substitute for supplier qualification processes or audits. Specifies specific quality commitments between the parties. Formalizes agreement on the quality standard that will be the basis of the QA. The information contained in this presentation is proprietary to Colorcon and may not be used or Copyright disseminated 2015, inappropriately. All Rights Reserved IPEC-Americas

28 Parties to Quality Agreements Quality agreements should cover the entire supply chain manufacturers, distributors, customers It is important to understand who in the chain is responsible for which quality activities

29 Supply Chain: Management & Mitigation Greater capabilities = lower risk to interruption of supply BCP Ingredient Design Controls Global Manufacturing & Technical Support Supplier Qualification & Change Control Programs Quality Management Systems Manufacturing & Distribution Number of Suppliers 28

identified for key raw materials Manufacturing Multiple Manufacturing Facilities Interchangeability

30 Business Continuity (BCP) Formal Business Continuity Program Raw Materials Risk based approach to potential disruption of supply approved, mapped suppliers Alternate interchangeable suppliers identified for key raw materials Manufacturing Multiple Manufacturing Facilities Interchangeability Data for ALL Manufacturing Facilities Information Management Backup systems for all key data and control systems

31 CASE STUDY - What does Colorcon Do to Qualify and Control Suppliers and provide Value to Customers? 30

32 Management of Suppliers and Materials Supply Chain Management Product Development /Formulators Material Review Board Quality Assurance/ Quality Control Commercial Regulatory

33 Colorcon Raw Material and Supplier Qualification Process Material Request Materials Review Board Supplier Viability Check Regulatory requirements investigated Samples tested Specification Agreement Assign Risk Category Add to cgmp routine Audit schedule Supplier Questionnaire Qualification / Capability Audit Materials Review Board Approve for Use

Supplier Assessment and Qualification Supplier Qualification Process: Supply Chain Viability Check List Supplier Qualification Questionnaire and supporting documentation Quality management system

34 Supplier Assessment and Qualification Supplier Qualification Process: Supply Chain Viability Check List Supplier Qualification Questionnaire and supporting documentation Quality management system registration IPEC site quality overview (EIP) Other certifications Distributor Qualification Questionnaire Supplier Approval Form The process also includes a physical audit where necessary using the IPEC/PQG & IFAC GMP guides as a reference standard

35 Material Compliance Formal specification agreement with supplier Assessment against official standards does it meet the correct compendia, food standard or other regulatory requirements? Colorcon specification requirements e.g. color, particle size, physical characteristics Other regulatory attributes e.g. GMO status, BSE/TSE status, Kosher, allergens Three batch samples are requested and are subjected to: Full regulatory (ie; 21CFR, E#) and compendial analysis for the target markets Colorcon product specification analysis including any performance based tests/limits which may be needed for the intended use at Colorcon Comparison vs supplier s reported results and typical values from current source Where necessary, performance and stability testing in model products

36 Supply Chain Mapping Every Supply Chain is fully mapped Control inbuilt into Colorcon Business Systems purchasing & receiving processes mandate approved suppliers only Colorcon s Global Watch management system established to assess and understand the potential impact of environmental and political events and vulnerability

Supply Chain Map Manufacturer X Manufacturer X Site (location DE) This example shows one manufacturing location that supplies Colorcon sites directly and through multiple distribution routes.

37 Supply Chain Map Manufacturer X Manufacturer X Site (location DE) This example shows one manufacturing location that supplies Colorcon sites directly and through multiple distribution routes. Distributor (US) Distributor (CN) Distributor (IN) Colorcon West Point (US) Colorcon Dartford (UK) Colorcon Shanghai (CN) Colorcon Goa (IN) Colorcon Humacao (PR) Colorcon Japan (JP) There is more complexity for a raw material with interim processing or repacking in the chain.

38 Global Watch Canada 6 Europe 120 USA 233 West Indies 2 Japan 43 China 7 South Korea 6 India 11 Thailand 1 Taiwan 1 Mexico 1 Belize 2 Peru 6 South America 1 Brazil 6 Ghana 1 Ivory Coast 1 Cameroon 1 Africa 2 Tanzania 2 Mauritius 2 Swaziland 2 Singapore 1 Malaysia 8 Philippines 1 Indonesia 4 Fiji 2

39 Impact Analysis (eg. Japan Supply Chain Map) Within 24 hours we were able to establish which suppliers were impacted, contact them and understand the status of their facilities. 30 KM exclusion zone G A C I J L N M B F E K H F D O B

40 Supply Chain Map: Colorcon to Customer Colorcon Site Colorcon Approved Carrier Customer s Carrier Customer

41 Risk Management GMP audit Change control process Warehouse & carrier audit Risk Management MRB Vendor performance monitoring Supplier issue management

42 Business Continuity Plan (BCP) Managing multiple source and manufacturing locations Alternative manufacturing site from same supplier Maintains consistency Qualified interchangeable material Colorcon has multiple manufacturing sites & distribution centres around the world..

43 Business Continuity: Interchangeable Facilities Puerto Rico West Point, USA Dartford, UK Shanghai, China Goa, India Nishiyama, Japan Interchangeable Dispersion Facilities Brazil Coming Soon!! 42

Colorcon Global Manufacturing and Distribution Facilities Manufacturing Distribution DARTFORD, UK BAZAINVILLE, FR STOUGHTON,WI INDIANAPOLIS, IN IRVINE, CA WEST POINT,

44 Colorcon Global Manufacturing and Distribution Facilities Manufacturing Distribution DARTFORD, UK BAZAINVILLE, FR STOUGHTON,WI INDIANAPOLIS, IN IRVINE, CA WEST POINT, PA SEOUL, KR SHANGHAI, CN NISHIYAMA, JP HUMACAO, PR GOA, IN CUAJIMAIPA, MX CARACAS, VE BOGOTA, CO SINGAPORE COTIA, BR SANTIAGO, CL BUENOS AIRES, AR Global Capability - BCP

45 Ensure Your Supply Chain Security Establish Your Suppliers of Choice Carefully!

46 Questions 45

Regulatory Perspective on Assuring Ingredient Quality

Regulatory Perspective on Assuring Ingredient Quality PQRI Conference December 15, 2009 Rockville, MD Steven M. Wolfgang, Ph.D., Acting Associate Director, Regulatory Science US Food and Drug Administration