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What are the key criteria that make an API factory succeed in today’s market?

Opening remarks given by Ed Vanderbeck, COO, ChemWerth. 2 day cGMP training seminar in Shanghai, China.

November 3-4th, 2016.

ChemWerth has spent the last 35 years revising the answer to that question. Understand, it needs to be put into context in an industry that is constantly evolving. The answer we come up with today is much different than 5 years ago and will most likely much different in the next 5 years. However one theme has not changed. In-fact, it is becoming more important year after year: Compliance.

We should agree that without a compliance strategy, you may as well change industries. The reality is that the bar is always being raised, and will most certainly rise again. The question is do you have a foundational strategy in place that can adapt with the often changing regulatory landscape? Is your strategy reactive or proactive?

GDUFA 2 has just come out and the USFDA is focusing on Data Integrity. The CFDA has publically stated they will crack down on non-compliant factories while EDQM audits are focused almost entirely on processes. Our customers are now actively pursuing their own Environmental Health and Safety Audits and adopting a proactive approach.

We have seen more and more factories shut down, receive warning letters and under import alert over the last 18 months than ever before. This can be good or bad, depending upon where you stand on this issue, your commitment to compliance and how important the US and your domestic market is to your business.

The cost of drug development has increased dramatically when GDUFA introduced the need to run three exhibit batches. The Finished dosage companies are now spending 3x more for API than they did only two years ago. These companies want to have confidence in the factory they choose, knowing they will be able to meet the rigors of the new compliance standards.

With this in mind, the finished dosage companies – our customers – are now going to Audits with up to four people in many cases. Two people to run the typical 6 system type audit, one to evaluate DI and one to evaluate EHS. Many, like Amneal, Pfizer, Mylan, TEVA and Sandoz are running the audits prior to committing to the project – it is that important. This will trickle down to the smaller and medium sized companies as well. Why? Because they will realize the cost of not auditing the factory prior to starting a project is too high of a risk, costing time and money.

So, what does this mean to you? It comes down to simple mathematics. If you are a factory that commits to compliance, it will equate to more business. This is because most factories that do not commit to the compliance will be eliminated in the first round by the customers, with the remainder eventually receiving warning letters from the USFDA or shut down by the CFDA. This results in less factories supplying the market with API and more business for your company.

Every year since 1998 ChemWerth has hosted a two day cGMP training seminar in Shanghai, China. Open to all CW partner factories, the two days are spent reviewing updates on FDA guidance, common FDA findings, data integrity, compliance and cGMP standards. Actual case studies are reviewed to practice determining the correct course of action and emphasize the importance of supply chain integrity. This seminar was implemented 18 years ago with one objective, routine compliance. CW takes a proactive approach to routinely make sure a factory has the support and guidance it needs three-hundred and sixty five days a year, an objective we highly value. With your presence at this seminar, it shows your commitment to compliance and quality.