The Culture of Compliance & Employee Training in the Heightened Era of cGMP Enforcement

With the U.S. Food and Drug Administration’s (FDA) heightened focus on current Good Manufacturing Practices (cGMP) pharmaceutical and medical device companies must reduce their regulatory exposure by improving their culture of compliance. To accomplish this, Companies must implement robust and continuous employee training.

What is cGMP and Why is it Important?

The cGMP regulations provide for systems that assure proper design, monitoring and control of manufacturing processes and facilities. Adherence to the regulations assures the identity, strength, quality, and purity of drug products by requiring drug manufacturers to control manufacturing operations. The regulations were intended to provide flexibility to manufacturers in implementing such controls. When a company establishes cGMP’s -- including the protocols and tests to ensure that they are manufacturing drugs or devices in a quality manner, this demonstrates to the FDA, and the outside world, that the Company cares about product quality.

Recently the FDA has directly attacked Companies for failure to demonstrate cGMP. Because the FDA does not actually mandate the kind of tests or protocols a company must use, cGMP’s are flexible and companies can design their own quality standards. Moreover, because the cGMP standards vary across companies, the FDA keeps track of those companies which take extra steps toward compliance because they push quality standards higher and establish new benchmarks for others to follow. Therefore, a Company should not assume that because it has always been compliant, or that protocols established in the past were compliant, they remain current and compliant today.

Companies may be surprised to learn that cGMP violations can arise from the product itself (if the composition or substance  is contaminated in some form) or from other issues, such as a failure to correctly complete required regulatory paperwork. Even though a product is made perfectly to specification and has no quality problems itself, a company which fails to provide the correct paperwork may render the product “adulterated” within the meaning of cGMP standards. To this end, when a Company improves the culture of compliance, it goes a long way to improving quality standards.

What is the Impact of cGMP Violations?

Most management teams are well aware of the significant impact that cGMP violations have on their bottom line and the delivery of prompt and quality health care. These violations often result in critical drug shortages. In fact, in 2010, about 74% of the 178 drug shortages were in medically necessary drugs. About 54% were in injectable products that had direct quality problems (e.g., problems associated with particulates, microbial contamination, etc.). As a result of these shortages, hospitals were forced to cancel surgical procedures or chemotherapy infusions.

In addition, when a Company violates cGMP, the FDA may raise issues with its inspections, require product recalls, issue import alerts that block importation of foreign made products into the U.S., or impose further civil and criminal penalties. The level of the FDA’s enforcement action may be directly related to the severity of the violation, but there is no formula which actually helps a Company predict the penalty. In fact, the FDA can and will impose whatever penalty it deems appropriate, because the FDA sees its enforcement action as a valuable tool to not only redress current violation(s) but also to shape Company behaviors.

There is no question that cGMP violations can also directly impact the Company’s relationships. If a Company is faced with a product recall or if it fails to supply its buyers, this will certainly strain buyer and vendor relationships. It will likely result in breach of contract lawsuits and jeopardize future contracts. The company may also face whistleblower or qui tam suits by employees who self-report violations to the enforcement agencies.

The Need for a Culture of Compliance

The FDA has made clear that it wants manufacturers to really “get it” regarding quality standards. Reading the tea leaves from their enforcement activities, they believe that it is not enough for a company to articulate quality standards, but it must continuously apply those standards in practice. Since employees cause many of these violations, the FDA has made clear that employee training is critical and during inspections, it will also review the frequency and sufficiency of a Company’s training.

Companies which are moving manufacturing overseas should also ensure the culture of compliance exists in their new location, especially when moving manufacturing to countries where the culture of non-compliance is regrettably the norm.

The following are the most prevalent employee-related violations as reported on Form 483 observation reports filed by FDA inspectors and raised in Warning Letters:

• Failure to timely investigate a cGMP problem and failure to timely close it out; failure to do a full root cause analysis of the problem.
• Failure to audit related entities involved in manufacturing, such as relying on outside testing vendors to test products but failing to audit the vendor.
• Failure to investigate obvious impurities.
• Failure to observe proper building or facility protocols, such as building code violations, failing to seal off certain areas, failing to avoid cross-contamination, failing to cordon off areas during construction.
• Failure to follow or comply with commitments made on quality initiatives.
• Failure to properly train, re-train, or discipline employees.
• Failure to establish, where appropriate, inter-facility or global controls/systems.
• Routinely re-testing out-of-specification (OOS) violations back into specification by testing and re-testing until it happens. FDA notes that absent sufficient rationales to do so, re-testing products back into specification is non-compliance.
• Failure to have the quality department independent of key operational or sales functions so as to avoid undue influence.

The above list is certainly not exhaustive. It is clear though that when a Company properly trains and supervises its employees, it can avoid many of these problems.  Further, many FDA Form 483 observation reports and Warning Letters document Company failures to provide adequate training.

The Fixes - There is No One Cure But Changing to a Culture of Compliance Helps

Changing to a culture of compliance is the first major step towards remediating any quality problems. Companies must train and retrain employees on quality standards, and encourage employees to elevate/escalate quality problems. In addition, Companies need to institute policies to ensure that management does not retaliate against employees who report quality problems. Counsel can assist in providing training, drafting non-retaliation policies, and in dealing with consultants and enforcement agencies. Counsel can advise when to “play” along with or “fight” against the FDA.

Top management must also practice the culture of compliance by demanding quality from subordinates. They must be cognizant not to reward those that cheat the system. Companies should also recognize that international agencies speak to each other and a non-US agency may communicate their findings to the FDA. Similarly, FDA will also share its results with others. This demonstrates the need for harmonized quality systems and training.

Finally, Companies may need to realign their organizational structure. For example, if the Quality department is within the Sales & Marketing or Technical Operations departments, those departments may apply undue pressure to overlook quality problems in order to meet sales or production goals. Best practices suggest that Companies move the quality function into a stand-alone department, whose head of quality oversight is part of the senior management team. A Company may consider restructuring so the head of quality has a direct line of reporting to the CEO. Companies should also consider the role of outside, preemptive audits to ferret out quality problems before inspections occur.

In the end, given the heightened scrutiny on product quality, Companies can no longer do the bare minimum or tolerate a culture of “it’s not wrong until you are caught.” Rather, the FDA’s heightened scrutiny requires companies to proactively take positive steps to improve product quality. As set forth above, companies can fix many of the product quality issues noted in Form 483’s and Warning Letters quickly and effectively by creating this culture of compliance.