Myth #2: Proactively Remediating Bad Inspection Outcomes: What’s the benefit?

Let’s pick up where we left off with the prior blog: “Myth #1: Complying with Regulations and Product Specifications, Meets Requirements.” 

You just closed out a US FDA inspection with the issuance of a pretty stiff Form 483.  Whether you feel the observations are or are not fair, the words on the page include findings like: 

  • “The quality control unit lacks the responsibility and authority to . . . ” 
  • “Procedures designed to prevent microbiological contamination of drug products purporting to be sterile are not . . .” 
  • “Control procedures are not established which [monitor the output] [validate the performance] of those manufacturing processes that may be responsible for causing variability in the characteristics of in-process material and the drug product.  Specifically . . .” 

These are powerful examples, and dead giveaways, that your inspection is very likely to be classified as OAI (Official Action Indicated). We will save a deeper analysis of why for another day and another blog.  

Back to the subject at hand. The FDA currently prioritizes communication of OAI outcomes to firms within 90 days of closure of an inspection and delivery of Warning Letters within 180 days of inspection closeout. But what happens between and after those milestones? And what should be happening before an OAI letter shows up on your doorstep altogether?  This is where bold realism, compliance strategy, and financial planning come together.  

If you have good reason to believe your firm is headed toward an OAI letter, this reveals a few hard realities. First, if an OAI designation is given, at a minimum your pending applications will most likely be suspended for ongoing FDA review or approval until such time your site status is normalized through a VAI or NAI status designated via satisfactory FDA re-inspection. There are some edge cases where that may not be indicated, but for the sake of brevity, in general, that will be the case.  

Second, you must provide a response to the FDA showing that your firm understands the significance of the specific observations. Additionally, your firm will need to note an understanding of the likelihood of the presence of additional failures in similar or connected systems and control processes/procedures that the FDA did not specifically see but expect you to find independently.   

Third, you must provide a meaningful plan that is systemic and systematic in addressing the broadest scope of failures along with demonstrating to the FDA that your firm is willing, capable, and committed to addressing them. 

Finally, your plan has to achieve a complete and sustainable outcome in addressing these issues which results in a satisfactory FDA re-inspection of your facility.  

You may be wondering why the second hard reality is written in boldface type. Virtually every firm that receives a warning letter (WL), untitled letter (UL), complete response letter (CRL), and/or regulatory meeting request from the FDA, did not fully achieve the second point without some prompting from FDA.  

The preceding letters and requests are types of administrative actions the FDA can take to “encourage” companies to voluntarily comply, i.e., try again, only, seriously this time. And if you miss your second chance when responding to one of these administrative actions, what enforcement actions represent the next step in escalation? That would be enforcement actions like Import Alert or Consent Decree.   

So, what is the cost of missing out on the first bite at the apple, the 483 response? Or the second round, in responding to a CRL, WL, UL, etc.?  Consider the chart below, based on publicly disclosed examples of financial costs of remediation: 

So, if your company decides to respond narrowly to only the very specific observation examples FDA provides in the 483 (subparts a through n); waiting to see how upset FDA is and how hard they will push before committing to more extensive and more expensive corrections, you are risking finding yourself on the wrong side of this cost escalation curve. This is because the financial calculus involved at this stage of the game includes factors your firm may be missing. For example: 

  1. Market Impact: If your firm is OAI, it is very likely that open questions will exist regarding the impact of the lapses found regarding the safety, efficacy, and quality of products distributed into the U.S. market during the time the lacking controls were in place. A meaningful response considers the past, present, and future impact of gaps found. Delaying that work only puts more batches and products potentially at risk for costly market action. 
  1. Reputational Impact: Legal, financial, investor, and patient communities all have a stake in addressing the issues quickly and comprehensively.  
  1. Trustworthiness: The further down the enforcement pathway FDA goes, the less confidence FDA will have that your firm is ready and equipped to address the issues.  That means your firm may be “nudged” toward the expectation to use a qualified third-party expert to oversee the backward-looking investigation as well as current quality review processes and decision-making along with verification of closure for gaps found. All of this layering of resources, when coupled with more extensive capital and infrastructure improvements is what drives the escalation of direct remediation costs.  
  1. Time: the only thing that can’t be replaced. Loss of market share and commercial opportunities are fueled by ever-extending timeline estimates for when you can get your products approved. As compliance enforcement escalates, so does the timeline for resolving them.  

An interesting point to consider is that though the costs to remediate Hospira’s Rocky Mount, NC facility was high for a warning letter, the cost savings of avoiding a consent decree (which they were surely headed toward) almost certainly exceeded $500 million. Not only that, they managed to keep the site in business, delivering badly needed sterile medications to patients when the sector was struggling mightily with extensive drug shortages. 

The bottom line is to get the help needed, as soon as it becomes apparent that it may be needed. It is imperative to get to a full understanding of your firm’s gaps in standards, practices, processes, and organizational education/ capabilities before going too far down the escalation road.  The “wait and see” approach is almost always a costly one. 

Visit and discover how QxP positions your organization to maintain improvements long after our engagement ends.


QxP COO Brian Duncan’s experience in pharma quality spans more than 20 years, including many years at Sandoz and Novartis prior to joining QxP. 

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