Understanding Challenges to Quality by Design - International Pharmaceutical Quality … ·...

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Confidential Page 1 Confidential and proprietary Understanding Challenges to Quality by Design Final deliverable for FDA Understanding Challenges to QbD Project December 18, 2009

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Confidential and proprietary

Understanding Challenges to Quality by Design

Final deliverable for FDA Understanding Challenges to QbD Project

December 18, 2009

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TABLE OF CONTENTS

Table of contents 2

Executive summary 3

Introduction 5

Methodology 6

Overview of current state of QbD 7

Key adoption challenges 9

Business case for QbD 14

Implications for FDA 19

Appendix 23

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EXECUTIVE SUMMARY

This report is the result of work done with the FDA, CDER - Office of Pharmaceutical Sciences as part of its effort to facilitate adoption of QbD. Its purpose is to help understand the challenges and opportunities for adoption of Quality by Design (QbD). The work was conducted with input from several sources: an outside press search / scan of relevant articles, conferences, databases, interviews with internal experts, as well as a set of blinded industry interviews. These inputs uncovered several key facts about the state of QbD adoption as well as potential catalysts.

1) The understanding and practice of QbD is evolving, gaining momentum and passion throughout the industry

2) More than half of companies interviewed identified the business case as strong, however, there are still some skeptics

3) Despite the acknowledgement of a strong business case, companies are at different levels of maturity �– characterized by four segments �– Novice, Pilot, Rollout, and Fully implemented

4) 10 key challenges are the most problematic for QbD adoption. These challenges are evaluated by their relevancy against different drug types as well as different levels of adoption

The first four challenges occur within companies

�– Internal misalignment (i.e., Disconnect between cross functional areas, e.g., R&D and manufacturing or quality and regulatory)

�– Lack of belief in business case (e.g., �“There is a lot of uncertainty over timing of and investment requirements for QbD implementation�”)

�– Lack of technology to execute (e.g., Difficulty managing data, limited understanding of Critical Quality Attribute (CQA) implications)

�– Alignment with third parties (i.e., How to implement QbD with increasing reliance on suppliers and contract manufacturers?)

The next six challenges are directly related to the FDA

�– Inconsistency of treatment of QbD across FDA (e.g., �“Although a number of people in the FDA are supportive of QbD �– this is not consistent�”)

�– Lack of tangible guidance for industry (e.g., �“We understand what you are asking for broadly, but there are hundreds of variables �– there�’s got to be an end in mind �– a tangible one we can deliver on�”)

�– Regulators not prepared to handle QbD applications (i.e., reviewers at different levels of understanding and acceptance)

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�– The way promised regulatory benefits are currently being shared does not inspire confidence (e.g., �“At the end of the day it is still unclear whether the FDA will actually back these filings�”)

�– Misalignment of international regulatory bodies (i.e., Difficulty gaining acceptance of QbD applications in other countries)

�– Current interaction with companies is not conducive to QbD (e.g. �“�… we are treated with suspicion, it does not feel like collaboration.�”)

5) Although key challenges will differ by the level of maturity, there is uniformity across the participants that FDA can increase the quality and consistency of its reviews and degree of internal alignment

6) Broadly, lack of corporate alignment is a challenge centered on cultural issues and the need for cross-functional processes and tools to execute - this alignment is crucial to reap the benefits of QbD (i.e., an aligned operating model)

7) Two commonly held beliefs about QbD are not true. If QbD is executed properly, the cost to implement QbD is negligible, and it will not lead to a longer development timeline

8) Interviews also identified several steps the FDA can take to accelerate momentum around adoption of QbD. These steps should address three main areas

FDA policy. The FDA will need to think about what incentives, regulation and direction they will give to companies in industry. These will likely vary by drug type. There is potential to mandate in areas where a strong case can be made for QbD supporting patient safety.

Internal FDA change management. The FDA should also think about how they can adjust internal alignment to ensure uniformity in QbD understanding and actions within offices, across offices, and between the center and the field.

External change management. Finally, the FDA can consider the best way to engage both with other international regulatory bodies, as well as with individual companies.

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INTRODUCTION

In 2003, the Federal Drug Administration released its Final Report on Pharmaceutical current good manufacturing practices (cGMP) for the 21st Century. The cGMP initiative described a �“Desired State�” for pharmaceutical manufacturing through QbD in which:

¶ Product quality and performance are achieved and assured by design of effective and efficient manufacturing processes

¶ Product specifications are based on a mechanistic understanding of how formulation and process factors impact product performance

¶ Manufacturers have the ability to affect continuous improvement and continuous �“real time�” assurance of quality

¶ Regulatory policies and procedures are tailored to recognize the level of scientific knowledge supporting product applications, process validation and process capability

¶ Risk-based regulations are commensurate with the level of scientific understanding of how formulation and manufacturing process affect product quality and performance, and the capability of process control strategies to prevent or mitigate the risk of producing a poor quality product

Recent years have amplified the case for change to the desired state. Safety issues have highlighted the gap between the pharmaceutical industry�’s quality systems and those of other industries. Public pressure to reduce pharmaceutical costs is adding to the case to improve the infrastructure for drug development and continuous process improvement. The industry has made progress on QbD since the FDA began its 21st Century Quality Initiative, but this has been a limited number of QbD submissions to date. Despite the compelling case, the widespread change that the FDA envisioned has not happened at the pace that was envisioned. Achieving the 21st Century Quality vision will require a transformative journey for the industry that demands a significant shift in its development process. This transformation has not taken place due to challenges within companies, within the FDA, as well as the international regulatory community. This report is the result of a detailed look at the current state of QbD adoption, focusing on the challenges preventing full scale implementation. The report additionally takes preliminary steps to build and quantify a business case for QbD.

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METHODOLOGY

This report was generated with inputs from three main sources.

Data mining within internal McKinsey resources

Extensive search of McKinsey database, including case study libraries, benchmarking efforts, articles, survey databases, and conference presentations. Team identified and analyzed relevant materials, including previously obtained industry data and surveys, to act as a supplement to industry interviews. Team additionally conducted several interviews with global leading McKinsey experts in strategy, R&D, operations, quality and product development across Pharmaceuticals, Biologics, and Generics. Experts shared their knowledge and perspectives from many years of experience dealing with key decision makers in industry to help push thinking on the topic.

Public publication search

Extensive search for most relevant industry articles, publications, and web resources. Team identified and analyzed relevant materials to act as a supplement to industry interviews.

Interviews with industry leaders

The steering committee identified a set of industry leaders from leading Pharmaceutical, Biotechnology, and Generic pharmaceutical companies across Technical Development, Pharmaceutical Science, Chemistry Manufacturing and Control, Operations, and Regulatory. Team conducted interviews with identified set of leaders focusing on four main areas: (1) current state of the company�’s QbD adoption (2) perceived challenges or barriers to QbD adoption (3) business case for QbD and (4) potential steps to catalyze QbD adoption.

Exhibit 1: Outline for Industry Interviews

¶ Current state of company’s QbD adoption o Company definition of QbD o Current scope of application (mechanisms in place to support) o Source of motivation to utilize QbD o Characterization / Track record of company�’s QbD efforts o For generics manufacturers, impact of Question Based Review (QBR)

¶ Perceived challenges or barriers to QbD adoption o Technical / scientific barriers o Internal / organizational realities o External / regulatory / market driven factors

¶ Business case for QbD o Perceived business benefits from implementation - anticipated / realized o Costs to implement �– anticipated / realized o If applicable, comparison of development costs of QbD relative to traditional

¶ Potential steps to catalyzing QbD adoption o Internal to company o Technical / scientific o Regulatory (FDA related, International)

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OVERVIEW OF CURRENT STATE OF QBD

Evolution of QbD over the past year

QbD has continued to gain momentum over the past year. One of the most striking factors has been an increase in the codification and practice of QbD on a standardized basis. More and more companies are experimenting with the concept and developing mechanisms to support it. This is accented by an increase in the passion and recognition of QbD. Several companies, although not the majority, expressed the opinion that this is something they would do regardless of regulatory benefits from the FDA.

As companies invest and gain experience with QbD, there are also increasing demands for the FDA and other regulatory bodies. Two major demands that have emerged are the need for greater clarification of acceptable methods of execution and filing and or concrete tangible examples, as well as better codification of the benefits FDA �‘promised�’ when QbD was originally advocated.

Perception of the business case

Exhibit 2: Strength of business case by companies examined

50

33

8

Strong business case with year 1 payback

Strong businesscase with multi-yearpayback

Business case isuncertain / neutral

8

No viable business case

Percent of companies examinedPercent of companies examined

[Pie chart showing the belief in the business case for QbD. Strong case with multi-year payback = 50%, Business case is uncertain / neutral = 33%, Strong business case with multi-year payback = 8%, No viable business case = 8%]

Levels of adoption of QbD among companies

Companies are at very different places in terms of adoption of QbD. Some companies are still skeptical about the idea of QbD and have not made much, if any, change towards a QbD approach. While others have fully implemented the concept and are designing every product in development along a QbD framework. Most are in between these extremes.

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Where companies fall on this spectrum will play a large role in how the FDA should interact with them.

¶ Novice: Company is skeptical about the value QbD can bring. Utilizes conventional development and has no platforming.

¶ Pilot: Company is trying QbD, but still on the fence about the potential value. Tends to apply QbD to a small subset of projects and processes and has implemented limited or no platforming.

¶ Rollout: Company is convinced about impact of QbD and is beginning to see some of the benefits. Uses QbD techniques regularly, but not universally. May engage in some lifecycle management with integrated platform and network strategy.

¶ Fully implemented: Company is completely convinced about the positive impact of QbD and is realizing the benefits. Uses QbD in almost every development program and almost every production step. Additionally, has a systematic, comprehensive review and re-design of in-line products.

Exhibit 3: Level of maturity and drug type of examined companies

Group Novice Pilot Rollout

22% 22% 100%

40% -- 100%

17% -- 100%

Fully implemented Total

22%

40%

17%

33%

20%

67%

New Drug

Gx

Biologics

[Chart with drug type on y-axis: New Drug, Gx, Biologics. Level of adoption on x-axis: Novice, Pilot, Rollout, Fully implemented. Level of adoption

�– New Drug: Novice (22%), Pilot (33%), Rollout (22%), Fully implemented (22%) �– Gx: Novice: (40%), Pilot (20%), Rollout (40%), Fully implemented (0%) �– Biologics: Novice (17%), Pilot (67%), Rollout (17%), Fully implemented (0%)]

The majority of examined companies develop new drugs. Of these, ~45% fall into the categories of Roll-out and Fully implemented, another ~30% are piloting. By contrast, Generics and Biologics manufacturers are at a lower level of adoption, with ~40% of Generics manufacturers at the Novice level, and ~70% of the Biologics manufacturers at the Pilot level. Overall, New Drug manufacturers are at a higher level of adoption than Generics or Biologics.

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KEY ADOPTION CHALLENGES

The key objective of this project was to develop a more nuanced understanding of the challenges preventing adoption of QbD. Research brought 10 key challenges to light. The first 4 are challenges companies face internally as they attempt to implement QbD.

¶ Internal misalignment. Internal misalignment within a company around if and how to implement is a key adoption challenge and can take several forms. These are the five most important manifestations.

1. Misalignment horizontally across the organization. An issue raised by several companies was the misalignment horizontally across the organization. This can either be a result of a misaligned organization structure or misaligned incentives. This results in pockets of QbD occurring in different areas. For example, while manufacturing is the group that tends to see the most direct benefit from QbD application, the resource investment of both time and money comes from R&D. Thus, the traditional organizational design does not incent R&D to invest in QbD. As we will see in the business case for QbD (outlined later in the document), one of the most important factors in successful implementation is application of QbD across the entire operating model. However, our research showed that several companies that have implemented QbD in R&D have not fully carried through and extracted the potential benefits in manufacturing. This was due to horizontal misalignment across the organization.

2. Disconnect between leadership and middle management. While leadership sees QbD as the way of the future and has set an agenda in the organization, it is not being executed effectively by middle management. This is often due to a lack of processes understanding, unclear goals, or lack of clarity on how to execute within an individual company context.

3. Culture of conservatism. Historically, companies have benefitted from being as conservative as possible when dealing with the FDA. A representative comment was �“the best CMC strategy is to not show all your cards.�” Additionally, in companies where people often have long careers, there is a tendency to have a historic lens and reliance on doing things the �“traditional way.�” Another cultural issue raised around QbD was the question of hampering the freedom of developers. Some feel QbD would hamper this freedom, believing �“development is an art-form�… how can you make a platform out of an art-form?�” An additional cultural challenge is the fear of doing something that is unknown. Several companies commented that they �“didn�’t understand QbD until [they] did it.�” QbD is learned by doing and fear to invest in something that is unclear is holding several companies back.

4. The amount of change required within company is not feasible. In order to really implement QbD, many companies will have to redesign certain aspects of their operating model. This type of redesign will inevitably take time, money, and involve a lot of corporate politics.

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For a lot of companies, implementing QbD is �“not enough of a priority to do that.�”

5. For some, QbD remains low on the priority list. Most managers have many things on their plates and a laundry list of priorities. Unless the benefits are guaranteed, it is made a requirement, or is specifically made a priority by senior leadership, QbD often falls low on the list of things to do.

¶ Lack of belief in the business case. The majority of companies believe that there is a strong business case for QbD, but there are some skeptics. Many skeptics from Generics companies believe that QbD will slow time to file, and that the �‘First to File�’ concept is not conducive to QbD development. Several Biologics companies feel the amount of clinical trials necessary to implement QbD for drug substance production steps (e.g. upstream) make the business case negative until there are further advances in the actual science. Others just didn�’t believe that QbD as a concept �“will have any benefits that will truly change the safety or efficacy of a drug.�”

¶ Lack of technology to execute

1. Insufficient solution for controlling variability of raw materials. Industry is divided on what QbD means for raw materials �– some claim since raw materials are not a part of the development process, QbD does not apply. Since they often are �“the biggest cause of variability,�” it does not make sense to apply the rigor of QbD elsewhere. On the other hand, there is the feeling amongst others that QbD provides an opportunity to apply more rigor to raw materials and better understand their parameters and impact on process performance, safety and efficacy.

2. Limited understanding of implications of quality attributes. A cornerstone of QbD is an ability to define the Critical Quality Attributes (CQA) of a product. In order to have a solid understanding of the CQAs, one must also have a solid understanding of how the drug works and what parts of the drug are most important for efficacy. Some skeptics claim that �“you will never know enough about your materials and process�” to be able to really understand. This problem was raised frequently for Biologics, especially at the molecular or bulk level. Scientifically, �“we are just not very clear about what aspects are doing what.�”

3. Knowledge of QbD techniques is limited. When implementing QbD, a company will need to explore new experimental techniques and make new types of measurements. Some companies feel they are simply not at a point where they can handle these demands and will have to �“develop new skill sets and get new technology.�” One interviewee from a company that successfully implemented QbD, commented that �“developing the technical tools and standardization necessary was a big challenge.�”

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4. Difficulty with data management. In driving to gain a deeper understanding of a product�’s CQAs, design space and monitoring the product during development �– a lot of new data will be generated. There is a challenge around the �“need to develop new skill sets and get new technology�” to execute this data gathering and analysis. Not only will this data need to be mined in a smart and understandable way, this �“huge volume of information�” will need to be continuously managed and maintained. Companies identified the need for �“more statisticians with different skill sets and more education to be able to handle all this data.�”

¶ Alignment with 3rd parties. Industry is also concerned with the role of third parties. Questions arose around how to manage both suppliers as well as contract manufacturers. Some companies are concerned that �“it will be more complicated to bring [contract manufacturers] along since all resources are not under complete control.�”

The next 6 are challenges to QbD implementation that are specific to the FDA and other regulatory bodies.

¶ Inconsistency in treatment of QbD across FDA. There is an inconsistency in how QbD is understood throughout the FDA, both between different offices and within offices. The offices define QbD differently. ONDQA thinks about QbD as being based on scientific proof, while OGD thinks about QbD in terms of Question Based Review1. Even within offices, there is inconsistency. Several examples were raised where a QbD filed product made it �“all the way to the end and then the biopharma side overturned what the reviewers had already approved.�” This inconsistency leads to a lack of �“trust that the FDA will actually accept this filing in a consistent manner.�”

¶ Lack of tangible guidance for industry. One challenge that was raised by the majority of companies, especially those in the novice and pilot categories, was a need for more tangible guidance, or �“information�… about how to actually do it on the ground.�” One interviewee commented that �“we understand what you are asking for broadly, but there are hundreds of variables �– there�’s got to be an end in mind �– a tangible one we can deliver on.�” Companies are seeking a set of ground-rules from the FDA around such things as acceptable methods, criteria to select and deselect critical quality attributes, standards to judge adequacy of controls, and criteria for analytical method substitution.

¶ Regulators not prepared to handle QbD applications. This challenge has been apparent for years, and the FDA is taking steps to remedy it. However, this is such a prominent challenge that it is important to reiterate again. Interviewees cited more specific problems than reviewers just being �“green�” including �“high turn over�” and the tendency for reviewers to �“fall back to what their organization used to do [when they worked in industry].�” �“A disconnect between compliance and field groups�… [also results in] different feedback.�” Additionally, companies are hesitant to flag these issues to senior FDA leaders as they occur since they do not want to delay or hazard the filing in question.

1 McKinsey White Paper: Transforming to the Desired State of cGMPs for the 21st Century

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¶ The way promised regulatory benefits are currently being shared does not inspire confidence. This challenge is primarily a result of the lack of codification of real regulatory benefits from the FDA. �“There is questionable payback �– it is unclear how much regulatory flexibility will actually be given.�” Without clear benefits, proponents of QbD in industry have expressed difficulty in promoting the idea within their companies, increasing �“skepticism and reliance on the internal business case.�” There are a lot of strong feelings around this challenge, interviewees commented �“the FDA has still not shown us the flexibility we can get from this�” and �“we started this because we were promised regulatory benefits, now we can�’t even talk about them �– it�’s like [the FDA] has amnesia.�” Additionally, a couple of companies expressed disappointment that they had not received as much flexibility as they thought should be granted in their previous QbD filings.

¶ Misalignment of international regulatory bodies. A large concern, consistently raised by companies at the Rollout and Fully Implemented levels of adoption, is whether QbD applications would be accepted by other regulatory bodies. For example, one interviewee commented that �“we are very concerned about the response to this outside the US and Europe. We sell products in 75 countries, most are not a part of the ICH.�” Although no interviewees have experienced flat-out rejection, there were comments about the increased time and effort required in other markets. �“It is much more difficult in secondary markets �– it takes longer to review because they ask a lot of questions several times.�” This increased effort has caused some companies to implement QbD practices but not bother to submit QbD filings.

¶ Current interaction with companies is not conducive to QbD. There is an admittance that �“historically, there is not a lot of comfort talking with the FDA,�” however, companies are eager to open and improve this communication. Companies that are passionate about QbD want this to be an open, collaborative journey. One interviewee felt �“the pilots asked a lot of tough questions, there were several tough interactions. When we are treated with suspicion, it does not feel like collaboration.�” One interviewee suggested joint teams working together. Whatever the solution is, a clear challenge is the current closed way companies interact with the FDA.

Challenges by industry segments

In order to gain a more nuanced understanding of the challenges, it is interesting to analyze which challenges are most relevant for the different types of drugs.

¶ New Drug. The challenge companies cited as the most important was the consistency across the FDA. This consistency pertains to both quality of reviews, in other words the �“amount of reviewer inconsistency,�” as well as the understanding of QbD within and across departments. Another challenge that was cited very frequently, although not highlighted as the most important, was the lack of international harmonization. The increased effort and time to file QbD outside of the USA, a result of those countries�’ regulatory agencies taking �“a while to �‘get it,�’�” negatively affected the business case. The next big challenge highlighted was the lack of codification of regulatory benefits and or

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what it takes to achieve them. It makes sense that New Drug issues center around execution of actual applications; in general, examined New Drug companies were at a more mature stage of adoption. Internally, alignment across the company is a problem for many New Drug companies. In many companies �“R&D is incentivized by shots on goal, not QbD�” �– a concept contrary to good QbD practices of focusing on developing a solid understanding of the product.

¶ Generics. The most prominent challenge identified by Generics manufacturers was a lack of belief in the business case. However, there are two camps. One half believes that there is a business case for QbD in generics and is implementing. The other half believes that today, �“generics is all about file first, figure it out later.�” These companies fear the potential additional time in early development will disadvantage them in making it �‘first to file.�’ Generics manufacturers also identified unclear regulatory benefits as a key challenge �– likely closely related to the lack of belief in a business case. A final key challenge from Generics manufacturers was lack of guidance for how to actually implement.

¶ Biologics. The most prominent challenge identified by Biologics manufacturers was around the lack of technology to execute. There is consensus across the board that it is almost impossible to �“prove the molecular parameters necessary in a QbD file since we don�’t really understand what effects what�” at the molecular level. Despite the inability to execute in this upstream arena, there is general agreement that QbD can be applied to downstream processes, for example purification and formulation processes. Biologics manufacturers also identified lack of codification of regulatory benefits as a key challenge.

Challenges by stages of adoption

¶ Novice. Novices have very little experience with QbD. Most of their challenges are perceived rather than experienced. Internally, they face a lack of belief in the business case. Externally, Novices feel the regulatory benefits are unclear and there is a lack of tangible guidance. They simply do not see the case for pursuing QbD.

¶ Pilot. Companies in the pilot phase are beginning to implement QbD. They begin to see more tangible internal challenges, such as internal misalignment, and limited knowledge of QbD techniques. As with novices, there is still a substantial problem with lack of clarity of the business case. They face the same external challenges as Novices, including unclear regulatory benefits and lack of tangible guidance for the industry. As companies in the pilot phase have begun experimenting with QbD, they have started to realize other external challenges, including inconsistency of treatment of QbD across FDA, and misalignment of international regulatory bodies.

¶ Rollout. Companies in the rollout phase have solved, or are solving, most of their internal problems in terms of implementation �– the majority of their challenges are external. These challenges are focused on the lack of alignment of regulatory bodies, we well as lack of clarity of regulatory benefits. They

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also identified regulator�’s ability to handle QbD applications as a big challenge, as well as the fact that the current interaction with companies is not conducive to QbD.

¶ Fully implemented. Companies that are fully implemented face seemingly more �‘advanced�’ problems. For example, they struggle with the question of alignment with third parties such as suppliers and contract manufacturers. They are also preoccupied with regulators�’ ability to handle QbD applications and the sufficiency of the interaction with the FDA in order to foster QbD.

BUSINESS CASE FOR QBD

As part of this project the team gathered preliminary data and insights on building the business case for QbD. The work is meant to provide a foundation on early answers and a recommended path forward to continue to build and understand the business case.

Our analysis shows a strong preliminary business case for QbD. Interviews debunked two commonly held beliefs surrounding the extra time and money required to execute QbD. Additionally, preliminary modeling indicates huge potential long term value for the industry as a whole, which could be as large as $30 billion incremental annual profit. Our analysis also surfaced key factors which must be in place within companies, as well as within the FDA, for this strong business case to hold true.

Debunking QbD myths

As a company thinks about executing QbD, many factors must be weighed and considered. Two factors that commonly work against QbD are the fear that QbD is very expensive and will drive costs up, and the fear that QbD will require a lot more time and analysis. Our interviews provided evidence that the cost to implement QbD is in fact minimal, and the increase in time, if at all, is negligible.

¶ The cost to implement QbD is minimal. Most people believe QbD leads to a marginal increase during set up �– mostly from procedure development, a change in human resources, as well as new analytical tools or knowledge management capabilities (see additional exhibit 1 in appendix). After this initial set up fee, most people feel there is no marginal cost, some interviewees even claimed that QbD drives development costs down. Some polled claimed that QbD has reduced their technical development costs by up to ~25% per program.

¶ QbD will not increase the timeline for development. Interviews indicated that QbD may add a negligible amount of time (~2 FTEs over 2 days) during the early development phase, however there is no effect on time spent in critical path, and time in tech transfer and scale up were often reduced. Although QbD many cause minimal increases in time upfront, many companies experienced time savings downstream.

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Exhibit 4: Conceptual timeline showing QbD development vs. traditional

Clinical development

Pre-proof of concept

Post-proof of concept Filing

Traditional technical development

Early dev Late dev Launch ready

Tech Transfer

Scale up

Technical development with QbD

+ 0 - 10% -10% - +10% - 10 - 0% - 10 - 0%

Early dev Late dev Launch ready

Tech Transfer

Scale up

[Conceptual picture of three timelines, vertically stacked. Three timelines are clinical development, traditional technical development, and technical development with QbD. Clinical development shows three stages – pre-proof of concept, post – proof of concepts and filing. Traditional technical development is below the clinical development and show 5 phases, Early development, Late development, tech transfer, scale up, and launch ready. Below is the 3rd timeline for technical development with QbD. This shows the same phases as the traditional technical development. The Early development phase shows a potential 0 – 10% increase in time for technical development with QbD. The late development phase shows a – 10% - +10% difference in time for the technical development with QbD. Tech transfer and scale up both show a potential 10% decrease in time for technical development with QbD.]

Potential benefits from QbD

Analysis identified many potential benefits from QbD �– some of which are quantifiable, and some of which are not. In terms of quantifiable benefits, value comes from four main areas �– a reduction of Cost of Goods Sold (COGS) and capital expense, increased technical development productivity, improved quality (and lower risk), and increased sales. These four combined could potentially provide $20 - $30 billion more profit to the industry.

¶ Reduction of COGS and capital expense. QbD allows improved planning, cycle time, yield and quality �–potentially driving down costs by as much as $15 �– $25 billion across the industry.

¶ Technical development productivity. Utilizing QbD techniques during the product development process (e.g., platforming, taking advantage of growing knowledge base) can lead to $4 �– $5 billion in savings.

¶ Improved quality and lower risk. Implementing QbD is really using �“good science�” which leads to an overall better, more reliable product. Savings from reduced risk of regulatory citation are estimated to be $0 - $2 billion.

¶ Increased sales. Products that utilize QbD have better launches and generally, will have better product design leading to fewer stock-outs. This can lead to $0 - $4 billion in increase sales.

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Exhibit 5: Potential sources of incremental profit from QbD2

24-35Total

0-4Increased sales

Improvedquality �–lower risk

0-2

Tech Dev productivity 4-5

Reduction of COGS and capitalexpense

15-25

USD billions

[Build-down vertical waterfall chart showing potential sources of incremental profit from QbD, as determined by McKinsey analysis. First bucket of potential incremental profit is from reduction of COGS and capital expense, $15 - $25 B. The second bucket of potential incremental profit is Tech Dev productivity, $4 - $5 B. The third bucket is improved quality – lower risk, $0 - $2 B. The fourth bucket is increased sales, $0 - $4 B. The fifth bucket is the total bucket, showing potential incremental profit of $24 - $35 B]

Additionally, QbD has potential to provide benefits that are more difficult to quantify. Improved public image, standardized definitions within a company, and best practice sharing were highlighted in interviews.

¶ Improved public image. Implementing QbD in development will lead to an overall increase in quality of product. As the public learns more about QbD and its positive implications for product quality, people will potentially trust companies that are �‘QbD users�’ more so than those that are not.

¶ Standardized definitions. Several interviewees indicated an unanticipated, but extremely valuable benefit in the standardization of definitions across their companies. In implementing QbD, a company must ensure that the entire operating model is aligned and that the same language is being used throughout the company.

¶ Sharing best practices. One company commented that �“since our redesign was global and we are all on the same system, everyone has access to the best practices �– if experts in Sweden develop something, we can roll it out immediately.�” Implementing QbD has enabled global best practice sharing.

2 McKinsey

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Critical factors to enable business case

Our analysis indicates that in order for companies to experience the most business benefits possible, two things must be in place. Companies must be aligned across the entire operating model to support QbD, and the FDA must ensure a high quality of review and deliver on the regulatory benefits many companies feel were �‘promised.�’

¶ Alignment across entire operating model. Companies that are seeing the most benefits from QbD have aligned their operating systems to QbD in a systematic and streamlined way. They have aligned across the three elements of the operating model �– technical / processes, management system, and culture and capabilities.

1. Technical Processes. Companies that are successful have the right tools and processes to execute on QbD. They have standard development processes built on QbD principles and may have standardized equipment across development and commercial manufacturing plants as well. They also have the data management systems in place to really make QbD work. Additionally, they participate in industry and regulatory thought groups.

2. Management system. Successful companies also have alignment to QbD among leadership �– �“executive sponsorship is crucial to making this work.�” Additionally, incentives must be aligned to support a connected operating model (e.g., R&D developers have interest in product throughout its lifecycle).

3. Culture and capabilities. The right talent with the appropriate capabilities needs to be in place for QbD to work. This is about ensuring a company has �“people with the smarts, motivation, and sponsorship to drive it forward.�” This can be ensured through talent acquisition, and capability and training programs. Beyond capabilities, the company culture needs to support QbD. All of the companies who are seeing tangible benefits believe QbD is �“a part of our culture.�”

¶ High quality of reviews and delivery of regulatory benefits. In order to allow companies to get value from the business case the FDA needs to ensure reviews are consistent and smart. Additionally, there needs to be delivery upon the �‘promised�’ regulatory benefits. Other potential steps the FDA can take to catalyze QbD adoption will be covered in the next section.

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Exhibit 6: Correlation between supporting mechanisms and level of adoption

[Chart listing 9 mechanisms to support QbD on the y-axis, and their alignment against stage of adoption (i.e., Novice, Pilot, Rollout, Fully implemented) on the x-axis. A dotted check mark under the stage of adoption and next to the mechanism indicates somewhat implemented, a full check mark under the stage of adoption and next to the mechanism indicated implemented.

Novice Pilot RolloutFully implemented

Formal QbD pilot program / organization / special project

Standard development processes built upon QbDprinciples

QbD principles "built in" to our regular Regulatory CMC processes

Stage-gate process for CMC program review

Incentive alignment amongst development & manufacturing

Talent acquisition and management

Participation in industry / regulatory groups

Capability / training programs for personnel

Standardized equipment

Mechanisms to support QbD

ImplementedSomewhat implemented

Formal QbD pilot program / organization / special project – somewhat implemented for Pilot, implemented for Rollout

Standard development processes built upon QbD principles – somewhat implemented for Novice and Pilot, implemented for Rollout and Fully implemented

QbD principles "built in" to our regular Regulatory CMC processes – somewhat implemented for Rollout, implemented for Fully implemented

Stage-gate process for CMC program review – somewhat implemented for Pilot, implemented for Rollout and Fully implemented

Incentive alignment amongst development & manufacturing – implemented for Rollout and Fully implemented

Talent acquisition and management – implemented for Rollout and Fully implemented Participation in industry / regulatory groups – somewhat implemented for Novice, implemented

for Pilot, Rollout, and Fully implemented Capability / training programs for personnel – somewhat implemented for Pilot, implemented

for Rollout and Fully implemented Standardized equipment – somewhat implemented for Rollout, implemented for Fully implemented]

Potential next steps to continue building business case

Moving forward, there are many things that can be done to continue to build and substantiate the business case.

¶ Bring together industry leaders to share case examples �– encourage sharing of real, specific numbers

¶ Build library of business impacts from pilot and other QbD applications

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¶ Continue to invest in a deeper understanding of where value is coming from and what must be in place to achieve this value

This potentially could involve a project-by-project based analysis, building an understanding of baseline development performance and how that is different than when utilizing QbD (i.e., time and effort to develop and file by phase, technical transfer and scale up, process outcomes in terms of quality, cost and performance, one time costs)

One could bolster this analysis with an examination of the various operating systems and management infrastructures companies have in place to determine which have the greatest impact on the business case

IMPLICATIONS FOR FDA

Our research has highlighted many challenges to the implementation of QbD. These challenges indicate several areas that the FDA may consider addressing in order to speed QbD adoption. The actions the FDA can take become more tangible when applied to the segmentation of drug type and level of adoption.

Potential options to consider

We have identified several options the FDA can consider to enhance QbD adoption. These options fall into several areas �– FDA policy, internal FDA change management, and external change management.

¶ FDA Policy options

1. Define and codify incentives. Although the FDA may or may not believe there are benefits to further defining and codifying incentives, from our conversations with industry, it is clear many companies see this as a powerful way to incentivize QbD adoption. We recommend the FDA consider analysis to understand what such incentives could be (e.g., a faster review process, easier to change processes later on), and what benefits could come from adoption of these incentives.

2. Develop tangible guidance for QbD execution. Companies, especially in early stages of adoption, have identified confusion around what QbD means and how to actually execute as a huge challenge. They strongly believe they could benefit from more tangible guidance. Issues raised from the regulatory side against increased direction are around a fear of creating guidance too early, while things are still being �“figured out,�” as well as fear of being too prescriptive. Although there are valid concerns around the dissemination of more direction, it is a clear need within industry that the FDA is able to, and should meet.

3. Mandate. Some drug areas, for example several areas within the Generics industry (e.g., controlled and modified release drugs), have had numerous safety issues. For drugs such as these, where there is a public health risk due to lack of process understanding, mandating

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QbD is a reasonable option. As long as �‘first to file�’ exists in the Generics industry, there is a strong argument that unless the quality of scientific understanding is raised for all applications, companies will continue to �‘cut corners�’ to file as quickly as possible �– disadvantaging those companies that seek to gain a deeper scientific understanding, and potentially putting patient safety at risk.

¶ Internal FDA change management

1. Ensure consistency of review process in terms of scientific knowledge and quality of review. The desire for a consistent review process and well trained reviewers is unanimous throughout industry. The FDA is aware of this need and has been working to train and educate reviewers to prepare them to handle QbD applications. The FDA is also exploring utilizing teams of reviewers to handle applications rather than a single reviewer. The FDA should continue to pursue consistency in the quality of its reviews.

2. Harmonize the approach to QbD across the FDA. There is a need to harmonize QbD practices and requirements across FDA including OPS and associated functions e.g. compliance and inspectors. The current state where decisions around QbD are sometimes called into question or even overturned when areas subsequent to OPS review are involved has the chance of eroding or even stopping the momentum around QbD adoption in industry. FDA should present a unified approach to QbD regardless of the section of FDA that a company is interacting with at a particular time.

However, opinions are split on whether or not the OPS should have a uniform approach to QbD across its three offices. Since the offices deal with such different products, it may be impossible, and potentially harmful to try and assign a single approach. At the same time, completely different approaches can be very confusing. The FDA should establish one clear, broad definition of QbD to be utilized by OPS. Each office can then tailor that broad definition with an approach that is best suited to its drug type.

¶ External change management

1. Change the method of communication. Industry almost universally asked for more frequent, �“no risk�” dialogs with the FDA. The companies who participated in the pilot programs felt they benefited from the increased, and often less formal communications. There are feelings that �“no risk�” dialogs are impossible, as the FDA needs to protect public safety and cannot afford to offer any immunity areas. There is also a fear that anything said by the agency, even if in a �‘casual�’ conversation, could be taken as �‘official opinion.�’ Additionally, more meetings would put an even greater resource constraint on the FDA. Despite the constraints for the FDA, there needs to be a reassessment of the FDA�’s interaction with industry. A system should be crafted that allows for more dialogs in a manner comfortable to both FDA and industry.

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2. Create more buy-in by disseminating case examples. Industry has made a clear call for real, tangible examples of what the FDA has actually approved or rejected and why. However, there are legal barriers for the FDA in disclosing this information. The FDA can work with companies who have had successful applications, to develop more understandable examples, with which both sides (industry and the FDA) are comfortable sharing publically. Additionally, the FDA can continue to disseminate findings and tips on successfully navigating challenges as they work with companies.

3. Improve international harmonization. There are questions around whether or not the FDA is responsible for addressing international harmonization of QbD acceptance. This is an area worth at least examining as the FDA is currently one of the biggest proponents of QbD and the lack of international harmonization is one of the biggest challenges raised by companies. The FDA should continue to seek opportunities to work with other regulatory bodies (e.g., joint reviews). The FDA should work to ensure alignment on what QbD means, what�’s required and how regulatory flexibility can be granted.

4. Utilize a 3rd party model as a means of catalyzing and standardizing QbD within industry. There is a call for more substantial direction from and interaction with the FDA. Clearly this is putting a great resource strain on the agency. One way to alleviate this strain would be to promote the use of a 3rd party model as a means for further education and QbD development.

Implications for different drug types

¶ New Drugs: Rapidly drive adoption. New drugs manufacturers are the most mature in terms of their adoption of QbD. There is potential for the FDA to continue to push more New Drug companies to adopt QbD, utilizing learnings from other companies�’ success (i.e., real case examples) to help facilitate understanding and adoption. Although, we have not heard strong anecdotal case for QbD changing the patient safety for New Drugs, it seems this is an appropriate area to provide incentives for adoption.

¶ Generics: Consider mandate or policy change. In the generics arena there have been a number of examples where rushing to file and a lack of process and product understanding has led to serious patient safety issues. Although this has yet to be codified �– if it was codified and accepted by the health community �– there may be a good argument to make QbD a mandate for some types of Generic filings. Even if full blown QbD is not made a mandate, there is potential to make the process understanding required within applications more detailed, and to make some of the �‘optional�’ parts of QBR mandatory.

¶ Biologics: Do not give up on QbD. Although many manufacturers site QbD as being impossible, especially with upstream processes �– our interviews indicate this is not true. Many biologics manufacturers are applying QbD to downstream processes with great results. These manufacturers believe that QbD is even more important for Biologics as the molecules are more complex, a deeper understanding will lead to better product. There is no reason why

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QbD should not apply to biologics. The FDA should continue to be patient, disseminate success stories, and hold forums concerning QbD for Biologics companies. Over time, the case for QbD for biologics will become increasingly clear.

Implications for different levels of adoption

¶ Novice: Ensure understanding. The FDA should ensure Novice�’s understand what QbD really means, and what the potential benefits are. There is potential to distribute more case examples and ensure codification of benefits is clear. There is also potential to invite novices to workshops or a �‘QbD Academy�’ where the basics are covered and the FDA can train �‘ambassadors�’ to bring a more nuanced understanding of QbD back to their company.

¶ Pilot: Help with internal issues. As companies begin piloting QbD, they face many internal issues, including internal misalignment, and limited knowledge of QbD techniques. There is potential for the FDA to disseminate �‘best practices�’ or a more tangible �‘how-to�’ guide. There is also potential to hold seminars / workshops where more experienced QbD companies discuss the challenges they faced in implementation and lessons learned. Additionally, more casual interaction with companies in a collaborative manner will be crucial as they develop QbD programs.

¶ Rollout: Work through external issues. Companies in the rollout phase have usually begun to work out their internal issues, and are more focused on external challenges. It will be crucial to improve the interaction with companies to be more open. Companies at this phase of adoption are looking for how to have a more collaborative role with the FDA in making the QbD application process run smoothly. Additionally, it will be very important for the reviews to be consistent and of a high quality.

¶ Fully implemented: Collaborate. There is potential for the FDA to work with companies at a very mature state of adoption to build case studies and share best practices. The FDA can facilitate industry leader forums where companies debate some of the more complicated issues facing QbD, such as what is means for suppliers and contract manufacturers.

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APPENDIX

Comprehensive data mining efforts

¶ List of articles examined for this project

Avellanet, John, �“Why Quality by Design? An Executive�’s Guide to the FDA�’s Quality by Design.�” Cerulean Associates, March, 2008.

Fuhr, Ted, Michele Holocomb and Paul Rutten. �“Why 'Quality by Design' should be on the pharma CEO's agenda�” March 2009, McKinsey & Co. Operations Extranet.

Ginsberg, Peter L., Sandeep Bhatia, and Rachel L. McMinn, �“The road ahead for biologics manufacturing.�” January 2002.

McKinsey White Paper: �“Transforming to the Desired state of cGMPs for the 21st Century.�”

Neway, Justin. �“How to Make the Business Case for Quality by Design.�” BioPharm, December, 2008.

Paskeit, Diane M., �“QbD and Parentals: Strategies for assessment of leachable in parental drugs.” Contract Pharma, April, 2009, http://www.contractpharma.com/articles/2009/04/qbd8200and-parenterals.

Pickett, Joseph, �“CMC pilot program succeeding in integrating concepts of QbD.�” Inspection Monitor, February, 2007, http://www.entrepreneur.com/tradejournals/article/159645395.html.

Quality by Design is Essential in the New U.S. Regulatory Environment, Aegis Analytical Corporation, www.aegiscorp.com.

Rathore, Anurag. �“Roadmap for implementation of quality by design (QbD) for biotechnology products.�” August, 2009.

Snee, Ronald D., Philipple Cini, Jason Kamm, and Chester Meyers, �“Quality by Design: Shortening the Path to Acceptance.�” Pharmaceutical Processing. Tunnell Consulting, http://www.pharmpro.com/ShowPR.aspx?PUBCODE=021&ACCT=0000100&ISSUE=0802&RELTYPE=PR&ORIGRELTYPE=ATO&PRODCODE=0000&PRODLETT=Y&CommonCount=0.

Snee, Ronald D., �“Quality by design: Four years and three myths later.�” Pharmaceutical processing, February 1, 2009, http://www.pharmpro.com/ShowPR~PUBCODE~021~ACCT~0015856~ISSUE~0902~RELTYPE~PR~ORIGRELTYPE~ATO~PRODCODE~4315~PRODLETT~A.html.

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Somma, Russ, �“How Quality by Design Is Changing Drug Development: Without QbD thinking, sponsors�’ attempts to address FDA �“complete response�” letters may be doomed.�” SommaTech Consulting, http://www.pharmaqbd.com/node/90.

Somma, Russ and Andre A. Signore. �“Embracing Quality by Design: Applying concepts can help CMOs Create Value,” http://www.ipsdb.com/pdf/insight/EmbracingQualitybyDesign_ApplyingQbDconceptscanhelpCMOscreatevalue.pdf.

Spurgeon, Tom. �“Quality by design in Solid Dosage Processes: How will QbD impact manufacturing?” http://www.ipsdb.com/pdf/insight/EmbracingQualitybyDesign_ApplyingQbDconceptscanhelpCMOscreatevalue.pdf.

¶ Conferences / Presentations

�“Implementation of Quality by Design in New Product Development,�” GSK, Peter Watmough (senior development scientist), Laura Morris (process development engineer).

Peri, Prasad, �“Quality by Design (QbD) Approaches for Orally inhaled and Nasal Drug Products (OINDPs) in the USA.�” Office of New Drug Quality Assessment (ONDQA), OPS, CDER. RDD Europe 2007.

PhARMA perspective conference: �“Potential barriers to QbD implementation.�” September, 2009.

�“Sandoz: Pioneering Global development of Biosimilars,�” Bio Super Session, June 17th, 2008, Freidrich Nachtmann, PhD. Head of Biotech Corporations, Sandoz GmbH.

Somma, Russ. Using Quality by Design (QbD) in Designing Efficient, FDA Compliant Pharmaceutical Manufacturing Processes and Facilities: What is the Impact? SommaTech, LLC.

Winkle, Helen. �“Evolution of the Global Regulatory Environment: A Practical Approach to Change,�” PDA / FDA Joint Regulatory Conference: Implementing Quality by design. September, 2007.

Yu, Lawrence. �“Pharmaceutical Quality by Design: Regulatory Perspectives.�”

Additional quotes supporting challenges

Internal Misalignment: Disconnect between leadership and middle management �– �“People are at different stages within different functions in terms of figuring

out how to do things �– leadership agrees with the general mantra, but the groups that need to execute don�’t understand how to deliver�”

�– �“Middle management understands QbD �– but the lower or higher into the organization you get there are misunderstandings�”

�– We have pockets and silos of QbD going on but are not united overall�” Internal Misalignment: Misalignment horizontally across the organization

�– �“R&D is 100% incentivized on the quantity of filings they get�”

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�– �“The biggest challenge is getting alignment within a company to support �– many players need to be involved for this to be executed successfully�”

�– �“The groups that stand to get the most benefit from QbD are not the same that bear the brunt of the (perceived) risks and costs�”

�– �“There is no �‘credit�’ for helping out with these issues [understanding biologics CQAs] and so the progress is slow�”

Internal Misalignment: Culture of conservatism �– �“We need to ensure everyone understands the paradigm shift �– today the best

CMC strategy is to not show all your cards�” �– �“Smart people get into a company and are trained to do things a certain way �–

they get stuck �– we have to open people�’s minds back up to understand QbD�” �– �“There is a resistance to eliminating QC resources�” �– �“People believe development is an art form and ask, �‘how can you make a

platform out of an art form?�’�” �– �“We have a history of playing by the old rules�”

Internal Misalignment: The amount of change required within company is not feasible

�– �“Adoption of QbD will require remodeling of the entire operating model �– it�’s a huge change�”

�– �“In order to get the benefits from this we would have to totally redesign our entire development process �– QbD is not enough of a priority to do that�”

�– �“For this to work it�’s more than just QbD �– you need lean alignment, 6 sigma, and an organizational culture element�”

�– �“We needed to restructure manufacturing and development to recognize the multi-functionality necessity to support these initiatives�”

�– �“Significant change is required at manufacturing site when you implement QbD�”

�– �“Although it�’s now implemented, this new radical approach [redesigning development program] took a while to get an embed and get real acceptance�”

Internal Misalignment: QbD remains low on the priority list �– �“When a manager looks at the list of things he needs to do, QbD

implementation is not high up there�” �– �“Unless this is a mandate from above, there is no reason to do this before

something else�” Lack of belief in business case

�– �“Planning for a QbD filing requires a huge investment of time and effort early in development, before you even know if the product will make it to launch�”

�– �“There is a lot of uncertainty over timing of and investment requirements for QbD implementation�”

�– �“Re-usability of knowledge gained on one product in support of another is uncertain�”

�– �“I�’m not sure QbD will have any benefits that will truly change the safety / efficacy of a drug�”

�– �“We have some drugs for which the increased flexibility would not be helpful�” �– �“We need to build out scenic understanding �– this requires many resources,

many people, many hours, and many expensive studies�” �– �“This costs more because it really is around making more and more batches �–

amount of analytical testing�” Lack of technology to execute: Insufficient solution for controlling variability of

raw materials

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�– �“QbD does not address raw materials �– that�’s the biggest cause of variability for us�”

�– �“A robust raw material management system needs to be in place to facilitate QbD implementation�… Critical raw materials significantly impact product quality and should therefore be thoroughly characterized�”3

�– �“We need a better understanding of excipients, what are their properties? Their functionalities?�”

Lack of technology to execute: Limited understanding of implications of quality attributes

�– �“You will never know enough about your materials and process to be able to change as you go through�”

�– �“This is a really big problem for large molecules, we are just not very clear about what aspects are doing what�”

�– �“We just don�’t understand the biological significance of CQAs �– there is misplaced confidence in being able to figure this out�”

�– �“Vaccines will be an issue, we have always built consistency into the process without knowledge of what was going on, we need better technology to get there�”

Lack of technology to execute: Knowledge of QbD techniques limited �– �“In order to make some of the new types of measurements we will need to

develop new skill sets and get new technology�” �– �“Developing the technical tools and standardized processes necessary was a

big challenge�” Lack of technology to execute: Difficulty with data management

�– �“In order to make some of the new types of measurements we will need to develop new skill sets and get new technology�”

�– �“There is a challenge monitoring a product in late development to understand how a process is playing out since there is such a huge volume of information�”

�– �“We will need more statisticians with different skill sets and more education to be able to handle all this new data�”

�– �“For older products we are having difficulty with knowledge management, the data could be stuck on someone�’s hard drive somewhere�”

Alignment with 3rd parties �– �“It will be difficult figuring out the best way to provide guidance for outside

partners �– heavily engineer vs. brute force �… it will be more complicated to bring them along since all resources are not under complete control�”

�– �“QbD is a space to redefine relationships with suppliers �– hopefully it will give more freedom in terms of changing suppliers�”

�– �“Suppliers come more into play as we think about sources of variability�” Inconsistency of treatment of QbD across FDA

�– �“The FDA is not aligned, the only thing they are aligned on is where you file�” �– �“Although a number of people in the FDA are supportive of QbD �– this is not

consistent�” �– �“ONDQA has a very philosophical definition based on scientific proof �“4

3 Rathore, �“Roadmap�” 4 McKinsey White Paper: Transforming to the Desired state of cGMPs for the 21st Century

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�– �“Office of Generic Drugs has taken a more pragmatic approach and provided an explicit, required process for submitting via Question based Review (QbR)�” 5

�– �“We had trouble with a recent drug where we put all the appropriate controls in place, passing our own bio-equivalency tests, then, the bio-equivalence department asked us to change our method since that was not what they typically see�”

�– �“We got all the way to the end and then the biopharma side overturned what the reviewers had already approved. This was a major blow.�”

�– �“There are many different opinions within the FDA on how to apply QbD to solution, we came to an understanding with chem group that was overturned by biopharm group at the end�”

�– �“There is a big disparity between center and field. We worked with the center on QbD filing, then in an inspection the inspector didn�’t know what QbD meant�”

Lack of tangible guidance for industry �– �“The QbD lingo is cutting edge and sexy �– but there is very little information

out there about how to actually do it on the ground�” �– �“FDA has not explained what is expected from a QbD file that has to be

proven clinically�” �– �“We understand what you are asking for broadly, but there are hundreds of

variables �– there�’s got to be an end in mind �– a tangible one we can deliver on�”

�– �“The path the FDA would like us to take to get here is not clear�” �– �“We know DOE is not sufficient anymore �– we need more but it�’s unclear

how to invest�” �– �“We don�’t trust that the FDA will actually accept this filing in a consistent

manner�” Regulators not prepared to handle QbD applications

�– �“The FDA needs to increase the depth of expertise of reviewers and inspectors in the various approaches to quality by design, for example chemometrics, engineering and modeling�”

�– �“High turnover seems to be an especially big problem�” �– �“Reviewers who come out of industry fall back to what their organization used

to do�” �– �“Dealing with reviewers who don�’t fully support this or understand this really

slows us down a lot�” �– �“How can we be comfortable that the recipient of our file will understand?�” �– �“You never know what feedback you are going to get these days, it�’s a very

inconsistent interface�” �– �“There is a disconnect between compliance and field groups, we often get

different feedback�” �– �“FDA is not leveraging the data we are giving �– reviewers are green and don�’t

understand the processes�” �– �“Regulators have different expectations and ask different questions for smaller

companies than bigger companies�”

5 McKinsey White Paper: Transforming to the Desired state of cGMPs for the 21st Century

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�– �“Not everyone at FDA understands, they need more education and development of CMC staff�… I�’ve seen conflicts within the FDA �– especially with post approval, once you get approval �– gap in terms of level of understanding�”

The way promised regulatory benefits is currently being shared does not inspire confidence

�– �“There is a questionable payback �– it is unclear how much regulatory flexibility will actually be given�”

�– �“The lack of clarity makes it harder for us internally and increases skepticism and reliance on the internal business case�”

�– �“FDA has still not shown us the flexibility we can get from this�” �– �“At the end of the day it is still unclear whether the FDA will actually back

these filings�” �– �“It is a challenge to understand what the agency actually wants, and what sort

of flexibility it will provide�” �– �“People are wary �– is this really going to come to pass?�” �– �“What we really need are for the regulatory benefits and flexibility that have

been promised to be codified, delivered and then realized�” �– �“We started this because we were promised regulatory benefits �– not we can�’t

even talk about them �– its�’ like they have amnesia�” �– �“We do need more clarity on short term apparent return on investment vs. real

ROI�” �– �“FDA needs to show business benefits�” �– �“There is a lack of clear regulatory incentives; without it you are giving an

advantage to someone who just seeks approval at the minimalist cost and hurting companies who take a holistic approach�”

Misalignment of international regulatory bodies �– �“Duplication of industry resources to satisfy international markets that are not

willing to accept the content of a QbD filing submitted to the FDA�” �– �“Lack of clarity on how QbD and associated flexible regulatory approaches

will be received by countries outside of ICH�” �– �“Beyond FDA �– who else will accept this filing?�” �– �“Since there is no global harmonization, why move away from traditional

filing?�” �– �“It is much more difficult in secondary markets �– it takes longer to review

because they ask a lot of questions several times�” �– �“We are very concerned about the response to this outside the US and Europe.

We sell products in 75 countries, most are not a part of the ICH�” �– �“This is an FDA initiative, the rest of the world is watching and waiting�” �– �“We managed a joint FDA �– EMEA audit �– there were too many people with

differing opinions and in different places with QbD�” �– �“You have the Japanese saying you are doing QbD so we want this stuff, you

have Europeans saying we want this other stuff�” �– �“Japan�’s structure of submission documents, is so that you can�’t apply for

flexibility on formulation�” Current interaction with companies is not conducive to QbD

�– �“There needs to be a different way to interact, may even be joint teams doing parallel reviews together�”

�– �“Historically, there is not a lot of comfort talking with the FDA�”

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Confidential �– Page 29

�– �“This needs to be more of a collaborative process �– it should be a mutual education activity�”

�– �“Pilots asked a lot of tough questions, there were several difficult interactions. When we are treated with suspicion, it does not feel like collaboration�”

�– �“There is a feeling that the FDA has yet to act on any feedback that the industry has been giving�”

�– �“It would be helpful if we could make changes without writing a PhD thesis every time�”

Additional Exhibits

Additional Exhibit 1: Correlation between supporting mechanisms and level of adoption

Cost drivers

Process / procedure development

Human resources (e.g., new human resources, trainings)

Infrastructure (e.g., analytical tools)

Knowledge management capabilities

Projected total cost to implement

$100 �– $200 K

$0 - $200 K

< $200 K

$0 - $200K

Total < $1 MM