Life Sciences


Industry Definition

The life sciences segment is defined as companies that research and produce pharmaceuticals, biotechnology, neutriceuticals and medical devices for use in humans.

Types of Products
  • Pharmaceuticals – generic, brand name and over-the counter (OTC)
  • Biotech
  • Nutriceuticals
  • Medical Devices
Types of Organizations
  • Manufacturers
  • Distributors
Commonalities and Opportunity Drivers
  • FDA(Food and Drug Administration) / ICH regulations, cGMP (Currrent Good Manufacturing Practices)
  • 21 CFR (Code of Federal Regulations) Part 11 compliance requirements
  • other business drivers
BDMS
  • CXOs – Decision makers are at this level perhaps more often than other industries due to the personal risks of noncompliance
  • VP Quality – Quality is a primary component of the compliance strategy and therefore the VP if this department is often involved. cGMPs (FDA current Good Manufacturing Processes) mandate that Quality be a separate department so there is almost always a VP of Quality in the larger companies
  • Chief Compliance Officer – may be the CTO or not

Industry Challenges

Success in the life sciences often requires an enormous up-front investment. In the pharmaceutical sector, for instance, estimates (in calendar year 2000) of what it costs to bring a new drug to the U.S. market range from $110 million to $802 million, depending on who's doing the estimating. Much of that expense is tied up in complying with the elaborate—some would say exhaustive—requirements imposed by the FDA on the drug research and development (R&D) process, including multiple levels of clinical trials. But FDA oversight doesn't stop there. Once the drug has been developed and the marketplace entered, the manufacturing process becomes subject to federal scrutiny. And compliance doesn't come cheap.

One of the principal requirements is 21 CFR Part 11, which governs electronic record-keeping in the life sciences industry. The annual cost for 21 CFR Part 11 compliance can range from $5 million to $400 million, depending on a company's size. The industry-wide compliance cost will total $2 billion in 2006.

The regulation was put into place as life sciences companies adopted automated production processes, dropping the paper audit trail along the way. 21 CFR Part 11 calls for electronic audit trails and digital signatures in documenting the manufacture of any and all products subject to FDA approval. Companies that continue to track what they do the old-fashioned way—with paper—aren't affected. Of course, they're probably not as competitive either.

Another set of requirements, Current Good Manufacturing Practices (cGMPs), applies to everyone in the industry regardless of manufacturing method. cGMPs, introduced more than 40 years ago, describe the methods, equipment, facilities, and controls required for producing life sciences products. They are contained in several sections of 21 CFR.

cGMP (Current Good Manufacturing Practice)

GMP refers to the Good Manufacturing Practice Regulations promulgated by FDA under the authority of the Federal Food, Drug, and Cosmetic Act (See Chapter IV for food, and Chapter V, Subchapters A, B, C, D, and E for drugs and devices.) These regulations, which have the force of law, require that manufacturers, processors, and packagers of drugs, medical devices, some food, and blood take proactive steps to ensure that their products are safe, pure, and effective. GMP regulations require a quality approach to manufacturing, enabling companies to minimize or eliminate instances of contamination, mixups, and errors. This in turn, protects the consumer from purchasing a product which is not effective or even dangerous. Failure of firms to comply with GMP regulations can result in very serious consequences including recall, seizure, fines, and jail time.

GMP regulations address issues including recordkeeping, personnel qualifications, sanitation, cleanliness, equipment verification, process validation, and complaint handling. Most GMP requirements are very general and open-ended, allowing each manufacturer to decide individually how to best implement the necessary controls. This provides much flexibility, but also requires that the manufacturer interpret the requirements in a manner which makes sense for each individual business.

GMP is also sometimes referred to as "cGMP". The "c" stands for "current," reminding manufacturers that they must employ technologies and systems which are up-to-date in order to comply with the regulation. Systems and equipment used to prevent contamination, mixups, and errors, which may have been "top-of-the-line" 20 years ago, may be less than adequate by today's standards.

21 CFR Part 210 and 211

21 CFR Part 210 refers to Current Good Manufacturing Practice in Manufacturing, Processing, Packing or Holding of Drugs.

21 CFR Part 211 refers to Current Good Manufacturing Practice for finished pharmaceuticals.

21 CFR Part 11

21 CFR Part 11, passed in 1997, is an FDA mandate that sets forth the criteria under which electronic records and electronic signatures are considered trustworthy, reliable and as valid as signatures on paper. As more manufacturers automate production, FDA inspectors are increasing their scrutiny of the systems those manufacturers use to manage the flow of materials and finished products through the plant. Therefore, 21 CFR Part 11 compliance is central to the compliance strategy of any life sciences manufacturer using systems to manage its business.

The annual cost for 21 CFR Part 11 compliance can range from $5 million to $400 million, depending on a company's size. The industry-wide compliance cost will total $2 billion in 2006.

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