3 Focus Areas To Transition From Clinical To Commercial Readiness
By Christopher Ohms, Ohms Consulting
Transitioning from clinical-stage operations to commercial readiness in the pharmaceutical industry is a complex, multifaceted process that requires accurate planning, execution, and ongoing monitoring. It demands careful attention to both operational and regulatory details to ensure a successful product launch. The process involves not only meeting safety and efficacy standards but also establishing robust manufacturing, distribution, and delivery systems that comply with regulations. Key aspects of chemistry, manufacturing, and controls (CMC) and supply chain (SC) operations are critical to this transition, with a focus on U.S.-based activities supporting FDA-approved product launches. Throughout, the goal remains to ensure patients receive the safe and effective medications they need, making their well-being the central focus of every operational decision.
1. Establish A State License Program
While the FDA regulates the safety, efficacy, and labeling of drugs at the federal level, state licenses are still required to distribute pharmaceutical products due to the distinct regulatory responsibilities of states. The FDA ensures that drugs meet national safety and quality standards, but the distribution and practice of pharmacy within each state are subject to state-specific regulations.
States have the authority to regulate businesses operating within their borders, including pharmacies, wholesalers, and distributors. This regulatory power is crucial because it allows states to impose licensing requirements to ensure entities distributing pharmaceuticals meet professional standards. These requirements include verifying the qualifications of pharmacists and other professionals, as well as the integrity and reliability of distribution practices. According to the National Association of Boards of Pharmacy (NABP), state licensing ensures that pharmaceutical distribution within the state adheres to local standards, protecting public health and safety.
Before a pharmaceutical company distributes its FDA-approved products, it must be well-versed in the rules and regulations of its home state and those of the states where it plans to distribute. Non-compliance with state regulations can result in significant fines, penalties, and restrictions, potentially disrupting the entire supply chain. For example, a pharmaceutical company headquartered in California planning to distribute a new drug in New York must obtain a home-state license and a state license from New York's Board of Pharmacy. The company must demonstrate its distribution practices comply with California’s and New York's regulations, which may include specific requirements for storage conditions, record-keeping, and transportation methods. Failure to secure these licenses could lead to delays in product availability, affecting the company's market launch, revenue projections, and, most importantly, patients’ needs.
Establishing a state license program can be managed internally within an organization. However, for smaller companies with limited resources, specialized firms such as Pharma Solutions, Two Labs Pharma Services, and State Licensing Servicing can assist with state licensing management. These third-party services can streamline the process and ensure compliance with all state requirements. However, even when outsourcing, it remains critical for companies to understand and comply with local state laws to avoid disruptions in their distribution channels.
2. Manage Your SKUs
While a company has scaled up its manufacturing process and obtained FDA approval, it must continue to evaluate the health and integrity of its supply chain. FDA approval confirms that the product meets specific safety, efficacy, and quality standards, but it does not guarantee that the supply chain used to produce and deliver the product is robust, resilient, or optimized for long-term success. Therefore, a comprehensive assessment of the entire supply chain is necessary to identify potential risks, ensure continuity, and optimize costs.
One of the first steps is to analyze each component listed in the bill of materials (BOM) across the entire supply chain. The BOM is essentially the recipe for the product, outlining all the raw materials, intermediate goods, and components required to manufacture the final product. Understanding the dependencies between these materials and the complexity of their sourcing is critical for ensuring a smooth production process.
For instance, consider a company manufacturing a new cancer treatment drug. The BOM for this drug includes several active pharmaceutical ingredients (APIs), excipients, packaging materials, and labeling components. Some of these materials might be sourced from different suppliers worldwide, each with its own lead times and potential supply chain risks. The company must evaluate the reliability of these suppliers, the geopolitical stability of the regions where the materials are sourced, and the potential for supply disruptions due to natural disasters, regulatory changes, and/or geopolitical issues.
It is crucial to identify and assess the risks associated with each material. Risks can include supply shortages, quality variability, geopolitical issues, and vendor reliability. Materials sourced from single suppliers or regions prone to instability represent higher risks. For example, if some of the registered starting materials (RSMs) or APIs are sourced from a single supplier in a region with frequent political unrest, the company must consider alternative suppliers or develop contingency plans to mitigate the risk of supply disruption. Evaluating the critical path within the supply chain is another essential step. This involves identifying which materials or processes have the most significant impact on the overall timeline for producing the finished product. Materials that are on the critical path are those that, if delayed or compromised, could halt production entirely. High-risk areas, such as sourcing a rare RSM or API from a single supplier, require particular attention and possibly the development of alternative sourcing strategies or inventory buffers.
If a company uses a CMO to produce its commercial products, it is imperative to ensure both the company and the CMO have a thorough understanding of the sources of all materials and components. CMOs often manage multiple supply chains, and their ability to deliver on time depends heavily on their understanding of and control over these sources. Regular audits and communication with CMOs can help mitigate risks and ensure they are fully aligned with the company's supply chain strategy.
For example, a biotechnology company might contract a CMO to produce its newly approved monoclonal antibody drug. The CMO is responsible for sourcing all the necessary materials, including the cell culture media, purification resins, and packaging components. The biotechnology company must work closely with the CMO to ensure these materials are sourced from reliable suppliers with consistent quality and reasonable lead times. Any delays or quality issues with these materials could significantly impact the production schedule and delay the product launch or cause supply interruptions post launch.
Another important aspect of managing SKUs is analyzing how adjusting inventory levels for different materials impacts both cost and production timelines. Holding more inventories can act as a buffer against supply disruptions, but it also ties up capital and increases storage costs. Conversely, holding less inventory reduces costs but increases the risk of production delays. Finding the right balance requires careful consideration of lead times, the reliability of suppliers, and the cost implications of both overstocking and stockouts.
For example, a pharmaceutical company might decide to hold a larger inventory of a critical API with a long lead time to mitigate the risk of supply disruption. However, this decision must be balanced against the cost of holding the inventory, including storage and insurance costs. The company must also consider the potential impact on cash flow and the opportunity cost of tying up capital in inventory. Once the supply chain has been mapped and risks have been identified, it is important to establish a system for continuous monitoring. This includes tracking supplier performance, lead times, and inventory levels on an ongoing basis. Regularly reviewing and updating the supply chain strategy ensures that it remains aligned with current conditions and can adapt to changes in the market or supply environment.
Additionally, if a supplier's performance begins to deteriorate, with increasing lead times or declining product quality, the company must take action, or at the very least evaluate mitigation strategies. This might involve working with the supplier to address the issues, identifying alternative suppliers, or adjusting inventory levels to mitigate the risk of disruption. Opportunities to optimize the supply chain should also be continuously sought. This might involve reducing lead times by working with suppliers to improve their processes, diversifying the supplier base to reduce reliance on a single source, or renegotiating terms with suppliers to achieve better pricing or more favorable payment terms. Adopting advanced technologies like blockchain for transparency and traceability also can contribute to a healthier and more resilient supply chain.
3. Be Compliant With Serialization
Serialization in the pharmaceutical industry is a critical component of efforts to secure the supply chain and prevent counterfeit drugs from entering the market. It involves assigning a unique identifier to each individual saleable unit of a drug product, enabling traceability from the point of manufacture to the point of dispensing. This process is driven by regulatory requirements aimed at improving patient safety, enhancing supply chain transparency, and combating drug counterfeiting.
Each saleable unit of a pharmaceutical product must have a unique serial number. This identifier typically includes a combination of numbers, letters, or both and is encoded in a 2D data matrix bar code on the product packaging. The serial number must be unique across all units to prevent duplication and ensure traceability. Serialization often requires aggregation, where the relationship between the serialized individual units and their packaging (e.g., bundles, cases, pallets) is captured. This allows for tracking of the product through various levels of packaging, maintaining traceability even as products are bundled or repackaged.
For example, a pharmaceutical company manufacturing a popular over-the-counter pain reliever must assign a unique serial number to each bottle of the medication. The serial number is encoded in a bar code on the bottle, and the relationship between individual bottles, cases, and pallets is recorded through aggregation. This enables the company to track each bottle from the point of manufacture through distribution and ultimately to the retailer.
Manufacturers must maintain records of all serialized products, including their serial numbers, production, and distribution details. This data must be stored securely and may need to be reported to regulatory bodies or shared with supply chain partners as required by law. Serialization requirements vary by country, but most align with global standards such as those set by GS1. For example, in the United States, the Drug Supply Chain Security Act (DSCSA) mandates serialization at the package level, and the European Union's Falsified Medicines Directive (FMD) requires serialization for most prescription drugs.
The DSCSA, signed into law in 2013, provided a 10-year timeline for implementation. Different milestone dates were set to help stakeholders prepare in a phased approach. The final implementation phase, Serialized Item-Level Traceability, has seen shifts in its enforcement deadline, with the latest delay moving it to Nov. 27, 2024. This extension gives pharmaceutical companies additional time to fully implement serialization systems, but it also underscores the importance of compliance as the final deadline approaches.
Serialization enhances the security of the pharmaceutical supply chain by enabling the identification and removal of counterfeit products, reducing the risk of diversion, and improving recall processes. It also facilitates better inventory management and improves the ability to track products across global markets. For example, if a batch of a serialized drug is found to be defective, the unique serial numbers allow the manufacturer to quickly identify and recall only the affected units, rather than pulling entire batches from the market. This precision reduces waste, lowers recall costs, and minimizes disruption to patients. Implementing serialization can be complex and costly, requiring investments in new technologies, changes in packaging processes, and robust data management systems. However, compliance is mandatory, and the long-term benefits in terms of supply chain security and patient safety make it a critical initiative for pharmaceutical companies.
Conclusion
Successfully managing the transition from clinical-stage operations to commercial readiness is a formidable undertaking that requires careful coordination, strategic planning, and detailed execution. The landscape pharmaceutical companies must navigate is governed by good science, operations, and regulatory awareness. Each of these elements plays a crucial role in determining whether a product can be launched successfully and sustained in the market over the long term to support patients’ needs. The journey from clinical-stage operations to commercial readiness is not just about reaching the market; it’s about laying a solid foundation for sustained success.
Companies that invest the necessary time, resources, and expertise in managing these critical aspects will not only achieve a successful product launch but also will build the resilience and agility needed to thrive in the competitive pharmaceutical landscape. The ability to navigate these complexities with precision and foresight will determine the company’s long-term viability and its capacity to bring innovative and lifesaving products to market. Beyond the internal goals of commercial success and market presence, there is an even more critical outcome at stake: the well-being of the patients who depend on these approved products. Ensuring that patients have uninterrupted access to these lifesaving medications is the ultimate measure of a company’s success. From the moment a product is launched, there must be an unwavering commitment to maintaining its availability, quality, and safety.
.This means not only overcoming the initial challenges of the product launch but also establishing robust systems and processes that guarantee the continuity of supply long after the product has entered the market. It involves continuous monitoring and adaptation of supply chains, ensuring compliance with evolving regulations, and maintaining the highest standards of manufacturing and distribution. By doing so, we can provide the assurance that the patients who need their products will continue to receive them without interruption, regardless of external challenges.
About The Author:
Christopher Ohms is a consultant at Ohms Consulting and is a San Francisco Bay Area native. He has held positions at Gilead Sciences, Patheon, Stanford School of Medicine, Pain Therapeutics, and ALZA.