Generics firms unaware of Rx-360's benefits -- Hovione CEO

Bridging the divide

11 December 2009 00:00  [Source: ICB]

Rx-360 offers generics firms a cost-effective means of reducing supply-chain risk

GENERIC DRUGS firms have the most to gain from membership in Rx-360, a new pharmaceutical supply chain risk consortium. Few recognize it, however, while most wrongly assume that they will not be welcomed by the large innovator firms behind the initiative, says Guy Villax, CEO of Portugal's Hovione.

Rex Features/Chris Eyles

Nothing could be further from the truth, Villax insists. Indeed, he sees changing economic realities driving the two traditional enemies closer and closer together.

Villax understands the misconception. When he attended the Rx-360's US launch in June, he was puzzled that ordinarily secretive big pharma companies would propose sharing the results of onsite supplier audits, but conversations with these firms opened his eyes.

"Large pharma is buying into the generics business at a very fast rate," Villax says. "Branded generics is the way [to take] advantage of the growth in the BRIC countries. However, top management at large pharma will insist on the same tough compliance standards, and my guess is they simply don't have the body of knowledge to make good purchasing decisions.

"The only way they are going to fill the gap is through sharing audit reports. This, in fact, benefits everyone, especially the better API [active pharmaceutical ingredient] producers."

Villax saw that the new initiative complemented the work of the European Fine Chemicals Group (EFCG), of which he is a board member, as well as the API Committee (APIC) and so joined the board of Rx-360.

Pharmaceutical companies have always considered onsite supplier audits fundamental to ensuring the reliability of their supply chain and, ultimately, the quality of their products.

Despite the significant resources dedicated to the task, however, the system remains subject to catastrophic failures, such as the heparin affair of 2008, when raw materials adulterated in China led to 100 or more deaths in the US and Europe. In light of that episode, several large pharmaceutical companies founded Rx-360 to prevent similar incidents by enhancing the security of the supply chain and better ensuring the quality and authenticity of products moving through it.

BEST PRACTICE
At the heart of the initiative is information sharing, and not only in regard to audits. Rx-360 also aims to identify and endorse best practices; to develop a system for monitoring suspicious activity and responding to prevent mishaps; and to develop new technologies for the prevention and detection of counterfeiting or other forms of adulteration.

Villax says that the process is quickly gaining momentum.

"RX-360 is now in its first year, and already it is a well-structured organization and doing a large amount of work," he says. "It has nine working groups and a staff of 12, and an extranet is in operation to enable the coordination of members and representatives that come from eight countries in three continents."

The members so far (see table) are primarily pharmaceutical companies, but they include suppliers such as Hovione as well as trade associations and vendors of audit services.

The Rx-360 launches were well attended, says Villax, but whereas pharma companies predominated at the US launch in June, representatives of supplier firms accounted for 40% of the 100-plus attendees who met for the EU launch in London in November. Pharma companies accounted for 35%.

Villax is urging European companies to quickly come on board while the working groups are setting the consortium's agenda.

Unfortunately, he notes, very few generics companies showed up at either launch, although they have the most to gain. For even small generics companies source many more APIs than the largest innovator companies, which tend to have more limited product portfolios.

"A small generics company can't afford the salary or travel expense of an auditor to go check a plant from which they buy 200 kilos," Villax explains. "They should join and take advantage of the benefits of better sourcing through better information."

Similar consortia are well established in other industries. In the apparel industry, for instance, there is the Fair Factories Clearinghouse, which monitors suppliers for socially responsible business practices. Another, CHWMEG, helps manufacturers with the waste management component of their environmental stewardship program.

MEMBERSHIP OF Rx-360

Pharmaceutical Manufacturers
Abbott	Alcon
Amgen	AstraZeneca
Baxter	BMS
Cephalon	Eli Lilly
GlaxoSmithKline	Merck
Pfizer	Sanofi
Schering-Plough	Takeda
Watson
Suppliers
Archimica	GE Healthcare
Hovione	Mallinckrodt Baker
Merck KGaA	Sigma Aldrich
West Pharmaceutical Services
Observers: Associations
European Generic Medicines Association	International Pharmaceutical Excipients
Council of the Americas	Parenteral Drug ­Association
(European Fine Chemicals Group resolved to join as observers at their board meeting on December 3, 2009)
Vendors
Pharmaceutical Services Corp.	RMC Pharmaceutical Solutions Inc
SQA Services
Source: Rx-360

By: Clay Boswell
+1 713 525 2653

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