Vendor Audits: A Complex Process

By Rob Wright, Chief Editor, Life Science Leader
Follow Me On Twitter @RfwrightLSL

By  Rob Wright

Back in March, a reader wrote to me about my article “Buttoning Down the Pharma Supply Chain” in the February issue. We had an email dialogue, and I blogged about it (see “Reader Responds: Vendor Audits Are A Waste”). I recently received an email from Norm Klein, principal at Core Results, who was one of the folks I originally interviewed for the article. I like his response, and I asked for his permission to post it in response to the previously mentioned blog.

Interviewee Responds to Reader
“It is unfortunate to think that he has performed over 300 audits that he views as being of no value. I would agree with his view that quality audits alone are not the answer to supply chain issues. However, as noted in your article, audits are only part of a larger process to be put in place to ensure the integrity of the supply chain. Certainly, an audit is a necessary part of initially vetting a potential supplier; whether this is done with internally trained auditors or an outside service being a particular company decision based on their own capabilities and priorities. Part of the supplier selection should be developing a comfort level so the supplier fully understands the quality process, will have the integrity to adhere to it, and have the wherewithal to deal with failure to comply. Thom’s suggestions for post receiving testing of materials and verification that CofA’s are accurate are good ones that should be part of the process. My point, though, is that identifying out of compliance material after it has been received is expensive since the company has incurred all the production and shipping costs, plus the cost to return or dispose of the defective materials, as well as inventory costs to cover potential rejections. Rather, independent testing at or close to the source may be more cost-effective. All in all, I believe Thom’s comments are not wrong, but that the “process” is much more complex than, as he says, ‘sending quality auditors hither and yon.’”

Why Not Try the K.I.S.S. Principle?
For what it is worth, I see part of the problem being the extent to which the regulations are overly convoluted. I don’t see this as a problem at the FDA, but its parent organization, the U.S. government, which could benefit from implementation of the K.I.S.S. (keep it simple stupid) principle. As I was putting this together on tax day, I thought I would share a quote from another branch of the U.S. government, the IRS. From Douglas H. Shulman, commissioner of the IRS, “Every year, the IRS works hard to make the process of filing your taxes as quick and easy as possible.” I took a few minutes to scroll through the form and found this gem, “If the penalty is more than the overpayment on line 73, enter -0- on lines 74a and 75. Then subtract line 73 from line 77 and enter the result on line 76.” I just reaffirmed by decision to have my taxes completed by a CPA this year. The issue of vendor audits is complex and made more so by the FDA attempting to issue comprehensive guidance to cover nearly every possible contingency with little appreciable benefit.