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by Daniel Harris,
Market Research Associate
Last Updated: December 9, 2016


Pharmaceutical manufacturers must contend with the conflicting requirements for complying with regulations from up to a half dozen federal agencies—with the need to maintain security, particularly during the development and testing phases. While large, multi-billion dollar firms dominate the headlines, there are still a large number of smaller firms that make either a single pharmaceutical, ingredients for other manufacturers or specialize in medications with expired patents.

The three biggest issues facing pharmaceutical manufacturers are inventory management (for both ingredients and products), production management/quality assurance and regulatory compliance. Ingredients and products are often controlled substances and must be secured. In addition, both types of substances can have a limited shelf life. Not only must the shipping be documented, but disposal must be secure, documented and non-polluting. Even manufacturing start-up is regulated for some compounds.

New and updated pharmaceutical manufacturing systems should support the FDA’s process analytical technology (PAT) initiative. Production management must include recipe scaling for different batch sizes. Batch tracking, again for both ingredients and products, is mandated as part of recall management. Fulfillment systems must address both the security and shipping labeling aspects, both of which are stricter than general fulfillment systems.

Accounts receivable is standard except that the sums involved can be in the millions of dollars and for some products the customers must be positively identified. Payroll and personnel are standard, as are general ledger and accounts payable. Pharmaceutical manufacturing operations that are part of a parent firm are likely to be using part of an organizational enterprise resource planning (ERP) system. Small and medium firms may use stand-alone accounting modules but are more likely to use manufacturing-specific systems. Most manufacturers use premises-based systems, but security is more of a driver than is cost.

Common Features of Pharmaceutical Manufacturing Software

Pharmaceutical manufacturers should examine the following functions while considering their unique requirements:

Formulation management and batch sizing The system should include formulation management, including ingredient substitution and batch scaling. Advanced systems can size batches to quantities of ingredients in stock. The system should provide for formulations of different strengths.
Available to promise, capable to promise Available to promise (ATP) and capable to promise (CTP) are measures of manufacturing capacity. The system should calculate the ATP and CTP for any stock item, accounting for ingredients on hand and any work in process.
Lot tracing and recall management Each lot must be identified and tracked. The ingredients of each batch must be tied to their individual batch number as well.
Recall management Recalls are initiated for two reasons. First, a problem in the process causes a product to become tainted or contaminated. Second, an ingredient is tainted or contaminated. In either case, the system needs to identify all of the affected batches and the customers that received those batches.
Hazard Analysis Critical Control Points (HACCP) compliance The system should support reporting for Hazard Analysis Critical Control Points (HACCP), in accordance with HACCP Principle 7: “Establish record-keeping and documentation procedures.”
FDA compliance The FDA is empowered to regulate standard and homeopathic pharmaceuticals; the standards for labeling are similar but have unique differences. The system should correctly label standard and homeopathic products as necessary.
Drug Enforcement Agency (DEA) compliance If the pharmaceutical manufacturer makes products or uses ingredients regulated under the Controlled Substances Act, it is subject to oversight from the DEA. The system should document compliance with the act and have access to a current database of controlled substances, regulated chemicals and analogues.
Environmental Protection Agency (EPA) compliance If the pharmaceutical manufacturer makes or uses products listed under the Toxic Substance Control Act, the substance may be regulated by the EPA. The system should maintain all compliant records as well as preparing a pre-manufacture notice before a new compound is created.
Quality assurance The system should support quality assurance (QA) testing. The protocols should be documented and implemented through the system. The QA system should randomly identify samples for testing and compare test results against norms. Advanced systems will feature dashboards that will alertadministrators to problems with quality.
Process analytical technology support The system should identify critical process parameters and define their affect on critical quality attributes as part of quality assurance testing.
Code of Federal Regulations 21 Part 11 compliance Strictly speaking, no software package can be 21 CFR Part 11 compliant because the rule stipulates administrative and procedural controls as well as technical implementation for electronic and hybrid record keeping. However, it can support 21 CFR Part 11 by completely implementing the technical requirements.
Current Good Manufacturing Practice (cGMP) compliance cGMP compliance is required for many regulatory agencies at the state and federal levels as well as for insurance purposes. The system should produce required compliance reports.
Yield variances The system should track actual yield versus expected yield for each batch. The system should report excessive variance based on user-defined thresholds and indicate if variances are so large that regulating agencies should be notified.
Packing & drumming The inventory system must be able to value and price items in different container sizes. It must also identify or generate suitable labels for containers.
Inventory storage planning Some pharmaceuticals require a specific storage environment. The inventory system and receiving systems should notify workers about any special requirements.
Expiration tracking Both pharmaceutical ingredients and pharmaceutical products can have limited shelf lives. The system needs to track expired and close-to-end-of-life inventory.
Shipping Many pharmaceuticals have restrictions on shipping either via USPS or common carrier. In some cases, the contents of a package may not be listed on outside labeling. The system should identify any special requirements and produce appropriate shipping labels.

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