Key takeaways:
- Data intelligence systems are the key to avoiding costly penalties due to non-compliance.
- Building a strong compliance foundation right from the start is crucial for startups.
- Life sciences companies should nurture relationships with regulators like the FDA.
Healthcare and life sciences companies have paid more than $1.5 billion in FCPA-related penalties and disgorgement since the first life sciences-related FCPA enforcement action in 2002.
According to Morrison Foerster, healthcare and life sciences-related FCPA enforcement actions have continued since then, with some cases resulting in penalties exceeding $62 million.
Jon Falker, VP of marketing at Redica Systems, discusses guiding principles for businesses in life sciences, focusing on regulatory compliance, foundational requirements, and practical strategies for sustainable compliance.
Who Is Jon Falker?
Jon Falker is the VP of Marketing at Redica Systems. He has led marketing and sales teams at multiple startups and publicly traded companies since 2003. He holds a BSBA from Georgetown University and an MBA from the University of Southern California. He resides in Truckee, CA, with his wife and two sons.
Many new life sciences companies tend to be lean and focused on developing their initial drug(s) and/or device(s) and getting regulatory approval to take them to market.
This means that Quality Assurance and Regulatory Compliance functions and teams are typically not fully built out yet — and so, the company is not prepared for its first CGMP inspections, like a pre-approval inspection (PAI) for pharma, or Class 3 MedTech device.
“New pharmaceutical companies will often be outsourcing their manufacturing to companies like CDMOs. They can make more informed decisions about which manufacturing partners to work with by researching their track record of CGMP compliance.
They can do that with data like the Vendor Risk Scores from Redica Systems.”
According to Jon, companies can be better prepared for these initial inspections by researching the recent inspection results for comparable products.
“That will illustrate which compliance topics are top-of-mind for investigators. The advice is very similar for MedTech startups.”
How Non-Compliance Impacts Business Growth and Reputation
Jon notes some serious consequences, ranging from an FDA Form 483 to an Import Alert, loss of commercial licenses, and criminal prosecution — not to mention the costly damage to brand reputation.
“The impact could be disruptive enough to lead to the collapse of the business.”
He believes the best approach is to take Quality Assurance and Regulatory Compliance seriously from the beginning by hiring supply chain partners with good reputations and cultivating healthy dialogue with regulators.
"You don't GET inspection ready, you have to BE inspection ready." Watch this excellent video overview from our Sales Manager, Sam McDonald, as he shows you how to prepare for an #FDA pre-approval inspection. [ 🔊 sound on!] https://t.co/o80XuyybD1#lifesciences#FDAapproval
— Redica Systems (@RedicaSystems) March 21, 2023
However, he points out that these challenges are amplified in terms of global supply chains because there is less visibility into the compliance track record of supply chain partners in countries like India and China.
“Local authorities tend not to monitor manufacturing sites in those countries as diligently as the FDA would for U.S.-based sites, for example. For a variety of reasons, there is a growing push for more near-shoring.
New life sciences companies should be extra careful about choosing supply chain partners in countries like India and China.”
On top of that, he recommends investing in modern regulatory surveillance or intelligence capability to remain up to speed with all of the local regulations for each market you intend to serve.
Using a Data Intelligence or Compliance Platform
One question that stands out, though — when is the right time for pharmaceutical companies to consider using a data intelligence or compliance platform, and why?
The answer? After passing FDA Phase 2 for at least one drug candidate, you can start planning for a mature Quality and Regulatory Intelligence (QRI) capability.
“At that point, they’ll need to prepare for commercialization. Once they pass Phase 3, they’ll need QRI to prepare for their PAI,” says Jon.
The process is different for medtech companies. According to Jon, the best time is once the initial design and development phase is complete. That’s when startups can consider inspection and enforcement analytics.
“At this stage, establishing a foundational understanding of regulatory requirements and common inspection issues can help guide further development and avoid potential compliance issues,” he adds.
“Planning for post-market surveillance and ongoing compliance monitoring is critical. Implementing inspection and enforcement analytics tools before the product launch ensures a robust system is in place for tracking and managing any post-market regulatory activities and inspections.”
How Redica Systems Helps Clients Stay Compliant
Jon explains how data intelligence tools can help ensure compliance and mitigate risks, especially as life sciences companies scale and expand globally.
For example, Redica recently helped a publicly traded pharmaceutical company analyze its major global supply chain partners for risk.
“They were able to make more informed decisions about which partnerships they should reevaluate, thereby improving their product quality and avoiding potential brand damage,” he explains.
In addition, the agency recommends new life sciences companies commit to the FDA’s relatively new Quality Management Maturity (QMM) Program to help them go beyond minimal CGMP compliance and mature towards a “quality culture”.
“Other trends include the use of artificial intelligence or machine learning, as well as the role of software in medical device solutions.”
In the end, Jon believes life sciences companies should nurture active, cooperative relationships with regulators like the FDA, and build effective regulatory compliance capabilities to adapt to these changes effectively.
Doing so will prevent costly pennies and recalls. More importantly, this will set them up for long-term success in a highly regulated industry.
