Corporate culture of quality

1. Corporate culture of quality September 26, 2014 David L. Chesney, Vice President andPractice Lead, Strategic Compliance Services PAREXEL Consulting, Waltham, MA USAdave.chesney@parexel.com+1-781-434-4092 Omics Group 3rd International Summit on GMP, GCP and Quality Control Valencia Convention Center Valencia, Spain

2. Quality is difficult to define • The editors of Quality Digest say that defining the word "quality" is "no simple endeavor." • Juran said quality meant “fitness for use” • Deming said only the “customer” can define quality (so “who is the customer”?) • ISO Definition: “Quality is the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs.” • There are many other definitions in a variety of references

3. Quality is difficult to define • For purposes of this discussion, let’s use: • A “Quality” drug product always meets specifications that are designed to ensure proper clinical performance, and is manufactured under conditions that are controlled to assure consistent correct results.

4. “Quality” is not easy to sell to company leadership – why? -- • It is difficult to connect a strong quality system to sales success, unlike other industries such as automobiles, consumer electronics and other products where a reputation for quality increases sales. • The case for a strong quality system involves avoiding problems, not achieving success. If we have a strong quality system: • We will reduce deviations • We will have less defects and rejections • We will have fewer recalls, complaints and adverse publicity • We will have less regulatory problems and associated costs • You rarely hear anyone say “If we have a better quality system we will sell more products!”

5. Who is responsible for quality? • Everyone. No exceptions. • Who is responsible for quality operations? The Quality Unit. This includes: • Evaluation of materials • Evaluation of Standard Operating Procedures • Evaluation of changes to GMP governed issues, operations, and documents • Evaluation of the adequacy of qualification and validation activities • Evaluation of compliance with required GMP controls • Evaluation of compliance with company standards and internal controls that may exceed what is required by GMP • Batch release, including whether deviations have been thoroughly investigated and the impact of their occurrence has been properly evaluated • Other activities within the scope of authority of the Quality Unit under GMP and company procedures

6. Corporate culture defined • Ravasi, D., Schultz, M. (2006), Responding to organizational identity threats: exploring the role of organizational culture, Academy of Management Journal, Vol.49, No.3, pp. 433–458: • “Organizational culture is a set of shared mental assumptions that guide interpretation and action in organizations by defining appropriate behavior for various situations.” • Or, from Needle, David (2004). Business in Context: An Introduction to Business and Its Environment: • “Corporate culture…refers to those cultures deliberately created by management to achieve specific strategic ends.” (emphasis added) • If culture is “deliberately created” it is logical to think that it can be deliberately changed when necessary. But how? And how do you know it is necessary?

7. five reasons companies develop a “quality culture problem” • Innocent ignorance. Symptoms include: • Focus on clinical trial progress, particularly when successful, and ignoring the need to assure sound manufacturing processes and process understanding • Leadership that has no experience running manufacturing operations and has no idea what it takes to do that well. We often see this in companies that mature from a development focused environment to a decision to commercialize something themselves rather than sell the idea and develop something new. • “Virtual” organizations that think if you outsource everything you have no responsibility for anything other than to sit back and reap the rewards • Pipeline panic. Symptoms include: • The successful product that has sustained us for years is going off patent and we have nothing in the pipeline to replace it. We have to push product out the door while we still can. Or : • Our new product is a big success, we need to move as much of it to the market as fast as possible to satisfy impatient investors, recoup our development costs and drive up the stock price.

8. five reasons companies develop a “quality culture problem” • False sense of regulatory invulnerability, which may be caused by these or other things: • Our product is in short supply • Our product is high medical need (or A and B together) • Our product is the only thing for use in this disease condition • Authorities have inspected us several times over many years and never found anything seriously wrong (giving up quality responsibility to the regulator) • We have small numbers of complaints and adverse events reported • Our product has been sold in other countries for years with no problems • Egotism and arrogance. Exemplified by: • We are the recognized industry leaders! We set the standard! • The regulators do not understand our process! • We are unique!

9. Top five reasons companies develop a “quality culture problem” • The “science versus compliance” debate • We have the science to support this, who needs GMP? • Following GMP impedes creativity and slows the advance of science! • We are the experts, don’t tell us how to do our job! • “Everybody knows that”! Some thoughts on this to bear in mind: • Compliance without good science behind it is worthless. Science is the foundation. • No matter how good the science, you cannot “test compliance into” a product, you must build it in, which requires the application of sound quality management practices, and, GMP compliance. • You need both. There should be no debate.

10. Top five Characteristics of companies with a culture that supports quality • Focus on the patient • Patient needs and patient risk is in the forefront of every key decision • Patient safety is the paramount driver of quality decisions (batch release, deviation investigation approach, CAPA, etc.) • There is continuous messaging from leadership about the importance of the patient • Everyone is held accountable for “Quality”; the Quality Unit is held accountable for quality operations (tasks and activities) in addition to “Quality” in the larger sense of the word • Top management supports quality with words, actions and resources

11. Top five Characteristics of companies with a culture that supports quality • The Quality Organization is strongly positioned in the corporate hierarchy • The Quality organization is at a peer level to other operational units • Personnel in the Quality organization are respected for their knowledge and professionalism, even when there are disagreements • Quality Head reports to the same level as Head of Manufacturing Operations, Regulatory Affairs, and other key senior leaders of the company. • Actions are aligned with policies about quality • “The standard of quality you release to the market is your real standard”

12. How well meaning objectives can have unintended consequences • “Reduce deviations by 20% from last year” • Sounds good at first; hard to argue with…but… • Can incentivize under-reporting of things that go wrong in the interest of meeting the objective • Does not take into account production variables: • Last year we made 100 batches and had 1000 recorded deviations • This year we made 200 batches and had 1100 recorded deviations • We failed to “reduce deviations by 20%” but we cut the rate of deviations from 10 per batch to 5.5 per batch • Does not take into account seriousness of deviations that do occur, root cause, whether we had repeating deviations, etc.

13. Quality Culture Maturity Model Source: EXCELLENCE COMPETENCE UNDERSTANDING AWARENESS I’m good because I passed the last inspection Quality mainly outsourced to regulators INNOCENCE | ICH Q10 | Juan Andres | Process Improvement

14. Quality Culture Maturity Model Source: Competitive advantage through prevention of Quality issues EXCELLENCE Failure to integrate Quality is not even an option Quality mindset in all functions Design Quality in & anticipate issues COMPETENCE Tolerance to problems and mistakes is minimal Quality Systems and metrics reveal reality, and drive action UNDERSTANDING We review Q. along with other aspects of the business Quality Unit will identify the issues AWARENESS I’m good because I passed the last inspection It’s good as long as Quality approves it Quality mainly outsourced to regulators INNOCENCE | ICH Q10 | Juan Andres | Process Improvement

15. Action plan for enhancing corporate quality culture • Publish a strong corporate quality vision and mission statement. • Support it with consistent actions that send the message that you mean what you say. • Make patients who use your products visible to your employees. Reinforce this often. Use posters, videos, even focus group discussions. Get the face of the patient in front of your people. • Position the Quality Organization at the highest level, at a minimum as a peer to other operational units in the company. • Empower the Quality Organization with authority equal to its responsibility. • Put a Quality presence “on the floor” in manufacturing and laboratory areas. Engage QA and operations personnel on issues when they occur, not just later. • Hold the Quality Organization accountable to high standards of good science, sound logic and reasonable theories of regulatory compliance..

16. ¡Muchasgracias!