Supply Chain Security — If Your API Supply Is Important, You Should Take 5 Minutes To Read This

The Active Pharmaceutical Ingredient (API) end user supply chain security is a critical component to getting the finished dosage to market. Not only is this an expectation of the FDA, and US Customs, but supply chain security maintains continuity of product supply and uninterrupted business.

A full-service generic API supplier like ChemWerth fully understands the importance a well-documented API has in getting customers to market. It takes years of experience to create robust systems to ensure supply chain security — from processes and procedures used to move the product globally in a traceable and GMP-compliant manner, to ensuring the manufacturer of the API is fully GMP compliant at all times. Excellent documentation is paramount to success.

ChemWerth’s regulatory team has nearly 40 years of experience in all facets of Drug Master File (DMF) documents. We understand that DMFs filed with the FDA need to be accurate and current, and that finished dosage users referencing approval documents have to work with speed and urgency, but can’t afford a misstep with the DMF.

Securing the supply chain means that discipline, diligence, expertise and compliance are applied from start to finish. Consider the ChemWerth processes and protocols that are implemented to secure the chain: from regulatory affairs to product manufacturer GMP compliance to ChemWerth’s proprietary GMP compliance to logistics.

Below is a breakdown of ChemWerth’s detailed approach to securing the supply chain.

Regulatory Affairs

  • ChemWerth’s regulatory experts have the knowledge to file and maintain API regulatory submissions in virtually any regulated market in the world. In fact, ChemWerth has filed DMFs in 38 countries.
  • ChemWerth’s speed to market is unmatched in the industry, with our average end user supported ANDA approval occurring in only one regulatory review cycle. The industry average is more than two cycles.
  • The experience of our regulatory staff and good working relationship with the FDA enable ChemWerth to address regulatory issues and expedite regulatory approvals quickly.
  • Our close relationships with our represented manufacturers allow us to respond quickly and accurately in all aspects of regulatory submissions. We often solve customer problems within 24 hours.
  • Regulatory submissions filed by ChemWerth are prepared by our regulatory teams in coordination with product manufacturers. This ensures the most accurate and technically sound submission possible.
  • ChemWerth’s regulatory group is well-versed in the GDUFA law and ensures that all required ChemWerth-represented API suppliers are self-identified with the FDA and that facility fees are paid. In addition, ChemWerth ensures that all submitted DMF fees are paid and that they pass initial FDA review in a timely manner.

Product Manufacturer GMP Compliance

With more than 500 GMP audits performed, ChemWerth has an experienced compliance auditing staff, which ensures that all of our represented manufacturers are in compliance with applicable GMP regulations.

  • ChemWerth has internal procedures that are used to perform routine GMP audits of our represented manufacturers. Typically, each manufacturer is audited on a 3-, 6-, 9- or 12-month audit cycle. This auditing program is based on the FDA’s six system quality inspection approach and significantly reduces the risk that our API manufacturers will fail an agency inspection, which would interrupt API supply to our customers.
  • ChemWerth’s audits include an Audit Agenda, Audit Report and a Corrective Action Report (CAR), which includes major and minor recommendations. This CAR is issued at the conclusion of our audit and manufacturers are required to respond in full within 30 days. Based on the result of our audit, manufacturers are classified for acceptability by ChemWerth. ChemWerth will not supply from a manufacturer that does not have adequate controls in place to ensure overall product quality.
  • In addition to performing our own internal GMP audits, ChemWerth welcomes the opportunity to arrange, work with and accompany an audit by one of our customers of a represented manufacturer. ChemWerth provides a GMP-trained staff member to coordinate all audit logistics and accompany the customer auditor during the audit. We work with the manufacturer to ensure that all CAPAs are carried out in a timely manner.
  • ChemWerth works with FDA inspection teams to coordinate their inspection of our represented manufacturers. We also attend regulatory agency inspections (FDA, EDQM, etc.) as needed and act as a liaison to ensure inspections proceed as smoothly as possible. ChemWerth works with manufacturers to respond to any audit observations in a complete and effective manner.

ChemWerth Internal GMP Compliance

ChemWerth realizes that as part of the supply chain, our company is also responsible for maintaining applicable GMP compliance in addition to our product manufacturers’ GMP compliance. ChemWerth’s internal global operations are fully GMP compliant according to requirements set forth in ICH Q7: “GMP Guide for Active Pharmaceutical Ingredients” for pharmaceutical distributors, as well as USP’s “Good Distribution Practices”. This internal GMP control includes the following:

  • Global operations are completely controlled by internal Standard Operating Procedures (SOPs) and quality systems, which include control of logistics and all regulatory-, compliance- and quality-related activities. These include, but are not limited to, the following:
    – Customer change communication
    – Product recall
    – Quality complaint handling
    – Product labeling control
  • Logistics procedures are fully maintained to ensure complete traceability of all distributed material.
  • Quality agreements are in place with all of our API manufacturers.


A major part of our internal SOPs and systems involves product logistics, which ChemWerth knows is a very crucial aspect of a supply chain. The following activities are critical:

  • The ability to move product from one location to another in a seamless fashion, especially from one country to another with the varying import requirements of each country.
  • The ability to perform product return and replacement functions quickly.
  • The ability to limit FDA custom “Holds” and get shipments cleared as quickly as possible.
  • The ability to ensure that all API products meet their applicable monograph/standard and are always labeled and packaged correctly. Any product damage is dealt with swiftly.
  • The ability to maintain logistics procedures, ensuring complete traceability of all distributed material.
  • The ability to track all product inventory at all of our global API suppliers. This ensures that API is restocked when inventory runs low, thus ensuring efficient delivery lead times.
  • ChemWerth is C-TPAT certified, which enables us to streamline and shorten delivery lead times even further. It also provides heightened security of all shipments.

For nearly 40 years, ChemWerth has earned the trust of some of the largest generic pharmaceutical companies in the world. We invite you to compare and contrast your current API supplier’s knowledge and expertise with ours. We’ll get you to market … and keep you on the market.

API industry is facing serious headwinds that require re-strategizing business models

peter-werthThis week, we bring you another interesting interview with Peter J. Werth, President and Chief Executive Officer of ChemWerth, a US-headquartered full-service generic active pharmaceutical ingredient (API) development and supply company providing current Good Manufacturing Practices (cGMP) quality APIs to the regulated markets. Werth talks about how complexities have increased in the last one year wherein the conversation on compliance has evolved from strictly GMP processes to data integrity and now Environmental Health and Safety (EHS). With the US Food and Drug Administration (FDA) publishing research for free, it is also becoming harder for generic manufacturers to find new products. Moreover, increasing costs mandate that API manufacturers put more efforts in product development so that the time to approval is considerably reduced. In light of these new challenges, Werth discusses the high standards and goals being set by his organization.

Read the interview on

“FDA’s enforcement actions are putting the global pharmaceutical supply chain at risk”

peter-werthPeter J. Werth, President and Chief Executive Officer of ChemWerth, a US-headquartered full-service generic active pharmaceutical ingredient (API) development and supply company providing current Good Manufacturing Practices (cGMP) quality APIs to the regulated markets, shares his view on how the government inspections have evolved over the past years. The effect of the recent US Food and Drug Administration (US FDA) inspections is putting the global pharmaceutical supply chain in real danger. Excerpts from the interview.

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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.

Generics Demand Stronger Proscriptions in REMS Compliance Letter Guidance

FDAnews Drug Daily Bulletin
Pharmaceuticals / Postmarket Safety / Submissions and Approvals
Generics Demand Stronger Proscriptions in REMS Compliance Letter Guidance

Generic drugmakers charge a December draft guidance doesn’t go far enough in enabling them to obtain bioequivalence testing batches for drugs protected by REMS product safety protocols.

> Read more here

GDUFA Fee Exemptions – A Distant Bell for Small Businesses and CMOs

Nobody likes to part with money – in business or otherwise. That being said, the idea of GDUFA fees makes sense. Long term, the fees are expected to fund faster review times, induce a higher level of compliance and safety, and even eliminate the submission of hollow applications, leaving only the well-funded players on the field. All of this is good news. But what if you’re a small to mid-sized generic drug manufacturer or a CMO that is trying to make a name for yourself in the generic drug space? Whether your company is a $20 billion industry giant or a newly formed small business with one product under development, the fee is exactly the same.

With an average approval time of over 30 months, a small company with one product waiting for market approval could potentially pay the hefty GDUFA Facility Fee for a minimum of three years without seeing a single penny in product revenue. This has left many smaller players in the generic drug arena wondering why there isn’t a tiered fee structure similar to the AGDUFA program (Animal Generic Drug User Fee Act) or a waiver for small businesses similar to PDUFA (Prescription Drug User Fee Act) or even a postponed due date until after the application is approved, also similar to PDUFA.

While a small business waiver seems like the most logical path, there have been unsuccessful attempts to include a waiver or tiered fee structure component into GDUFA.

  1. 2012 FDA Safety and Innovation Act (FDASIA) – A fee waiver, originally included in the bill, was removed after the FDA and industry stakeholder groups like GPhA opposed its inclusion. The reasoning? It was believed the benefit of faster review turnaround and inspections for small to mid-size companies far outweighed the economic hardship of paying the fee.
  2. Citizen’s Petition filed by Square Pharmaceuticals in February 2013 requested the GDUFA fee be assessed one time rather than on an annual basis until approval of their first ANDA. The FDA denied the petition, explaining that the statutory language of the law could not be changed.
  3. Small Manufacturer Protection Act of 2013 introduced by Representative Robert Hurt (R-VA) was specifically designed to support smaller generic drug manufacturers but remains stagnant in the House Energy and Commerce Committee.

Part of the rationale for the exclusion is the FDA’s attempt to move away from administrative complexity. But at what or who’s cost? An amendment to the fee structure could alleviate financial hardship, promote innovation and opportunity, and accelerate the growth of smaller companies. This would be a big win for not only small businesses but also for the industry giants. These smaller companies are attractive to the larger companies as many times they service market niches that larger companies do not have the flexibility to focus on thus may acquire or invest in these smaller companies to expand their capabilities. Even GPhA, an original supporter of the flat fee, is now acknowledging the need for a reassessment of the fee structure.

As this topic seems to be growing momentum, a new piece of legislation may be introduced to amend FDASIA sooner rather than later. However, it is also a possible the FDA will wait until the first 5-year cycle of GDUFA at the 2017 renewal date to reassess the fee structure. As a 30 year generic API supplier to both large companies and small, ChemWerth would support this amendment.

FY2015 Facility Fees

On August 2nd, the FDA published the Facility Fees for Fiscal Year 2015 and as anticipated they have increased from FY 2014. Due on October 1, 2014, the FDA has provided a high level overview of what is expected and the consequences of not following through on this obligation. Your biggest concern should be managing the follow through of your API Supplier as you risk loss of market share, damaged reputation and loss of filing fee.

Who Needs to Pay? Any facility that has been identified since the implementation of GDUFA or plans to be identified during the upcoming fiscal year in a generic drug submission for a Finished Dosage Form and/or API is required to pay the facility fee. Facilities that manufacturer both Finished Dosage and API are required to pay BOTH fees.

GDUFA Facility Fees
FY2013 FY2014 FY2015
Domestic FDF $175,389 $220,152 $247,717
Foreign FDF $190,389 $235,152 $262,717
Domestic API $26,458 $34,515 $41,926
Foreign API $41,458 $49,515 $56,926

Note that foreign facility fees are higher than domestic facility fees because of the higher costs of overseas inspections.

FY2015 Facility Fees

  1. The facility will be placed on the GDUFA Facility Arrears List if the fee is not fully paid within 20 days of the due date.
  2. Generic drug submissions referencing the facility will not be received by the FDA until the fee is paid.
  3. All Finished Dosages or APIs manufactured in the non-paying facility and all Finished Dosages containing APIs manufactured in a non-paying facility will be considered misbranded. Misbranded products will be denied entry into the United States and could result in prosecution, injunctions and/or product seizures.

    More information can be found – GDUFA Fee Info

This is a great time for the generic drug industry.

While the globalization of our business has posed both opportunities and challenges, companies that can demonstrate a track record of success and product excellence are thriving while those that are lacking are being weeded out. Your company’s reputation as a high quality, reliable drug source in good standing with the FDA is the key to long term success… and that all begins with a dependable API supply partner.

Foreseeing the need for a ‘One World – One Quality’ approach to doing business, our involvement with partner factories for which ChemWerth was the regulatory agent expanded. The goal has always been to maintain a high level of compliance at the factory, not just during FDA inspections, but 365 days of the year. The Factory Regulatory Compliance Program and the Regulatory Documentation Compliance Program were both broadened to cover ALL APIs manufactured and exported from the factory, not just the ChemWerth affiliated products. The result was an outstanding 59% increase in zero 483s issued. In the last 3 years, ChemWerth has facilitated 34 FDA inspections. All 34 passed inspection. 17 of those 34 passed with zero 483s and the remaining 17 passed with minor deficiencies; an impressive compliance record in today’s FDA GDUFA environment. We also understand the importance of a high quality DMF and are willing to invest in this endeavor which can be attested to by the fact that ChemWerth is ranked 2nd in DMFs Available for Reference*, according to the FDA’s Type II Drug Master Files – Available for Reference List as of March 7, 2014.


With over 30 years of experience, our responsibility has always been to helping our customers develop safe products for everyone across the globe with a ‘One World-One Quality’ approach that is the back bone of everything we do, every decision we make; making ChemWerth the ‘One Company’ for your API needs.

*Data does not include vertically integrated companies.

How to Avoid a Refuse-to-Receive Under the New ICH Stability Guidelines

With the June 20th deadline looming, there are many uncertainties regarding what will happen on June 21st. From published reports in the Pink Sheet and Generics Bulletin, the FDA has rejected about 40% of all ANDAs filed in fiscal year 2014. With the rush to meet the June 20 deadline, it is anticipated that a flood of applications will be filed in the next two weeks. By some estimates, more applications will have gone into the FDA in the months of May and June than the rest of the year combined. The current rejection rate combined with the hiring and training of 400+ new people at the FDA to handle the GDUFA workload and the massive influx of new ANDA applications may be the perfect set up for a disaster.

As Senior Vice President of Sales at ChemWerth, I am in the unique position to hear about the top issues and concerns from our Finished Dosage customers. This, in turn, allows ChemWerth to get a broad understanding of the stumbling blocks our partners are facing with respect to the FDAs new and constantly evolving recommendations. Outside the usual checklist of items like paying fees and making sure the DMF is on the AFR list, the best advice I can give in these last 10 days is to be sure your filing is in perfect condition. While the pressure is on to get as many filings submitted before the deadline, it is in your company’s best interest to file fewer high quality ANDAs, than file a greater number of mediocre quality. Mediocrity will most likely produce a Refuse-to-Receive which in turn will cause you to lose your filing fee and force you to refile under the new stability guidance of 3 batches and 6 months stability data. Under the FDA environment that exists today, quality is more important than quantity.

As a full service generic API development and supply company with over 30 years of experience, ChemWerth has a skilled regulatory team dedicated to managing your submission and approval process from beginning to end. We know how to navigate through the constantly changing guidelines and have a 31 year track record of compliance and product excellence with a ‘One World-One Quality’ approach that is the backbone of everything we do, every decision we make; making ChemWerth the ‘One Company’ for your API needs.

Overseas Generic Drugs: Problem and Solution

The FDA is making good on their promise. The dollars generated from GDUFA fees are funding the increased scrutiny of overseas generic drug suppliers. As a result, the quality of many finished dosage companies are making headlines, as exampled below.

Medicines Made in India Set Off Safety Worries
Article published in New York Times, February 14, 2014

The implementation of GDUFA has allowed the FDA to increase resources to inspect overseas finished dosage facilities as well as API providers. The bar has been raised for those that want to participate in key regulated markets like the US and EU and it appears this might just be the tip of the iceberg. These inspections have become a top priority for the FDA. If you haven’t already received a knock on your door, you will. It’s only a matter of time. The FDA is coming.

The Big Picture:

GDUFA’s focus on safety, accessibility and transparency in an effort to provide low cost, high quality pharmaceuticals to the US generic drug market is good for the industry. However, it will continue to be overwhelming as companies try to keep track of supplier quality, submission checklists, facility standards, increased inspections, fee obligations, and all of the other requirements involved in getting a drug to market. Businesses that can endure this paradigm shift will have a competitive advantage over those companies that struggled with acclimating or shut down for good. So, how do you do it?

The Solution:

Minimize your variables. Focus on your facility and let ChemWerth worry about the quality of your API and all of the back office work involved in getting the DMF Available for Reference. Within the past 12 months, ten of ChemWerth’s represented factories in China and India have been inspected by the FDA. All ten passed inspection. Six of those ten passed with zero 483s. We know how to navigate through the constantly changing guidelines and have a 31 year track record of compliance and product excellence. Our responsibility to helping our customers develop safe products for everyone in every country, makes ChemWerth the “go to” source for API supply and management with a ‘One World-One Quality’ approach that is the back bone of everything we do, every decision we make; making ChemWerth the ‘One Company’ for your API needs.