Compliance in the pharma industry: Challenges and solutions

What is regulatory compliance in pharma?

Regulatory compliance means adhering to the legislation and regulations that apply to a company’s business. For a pharmaceutical manufacturer, this means complying with applicable laws enacted by a governing body and rules set forth by a regulating agency. Most countries differentiate between the two, with the difference between pharmaceutical legislation and pharmaceutical regulations described as follows:

“Legislation refers specifically to the creation of laws that are usually written in fairly general terms to meet present and possible future needs. They have language that enables the government to issue regulations based on the law. Passing new laws requires a lengthy process and involves a country’s legislative body.

Regulations are the rules established by an agency that interprets the laws to facilitate their practical implementation. They can be passed more quickly and simply than laws…Regulations have a way of expanding far beyond the size of the enabling law.”

To illustrate this example, consider the difference in the US between regulatory bodies like the FDA and laws that may change or update the way regulations are created or enforced. According to consulting firm PwC:

“In addition to the industry regulatory establishment (i.e., FDA, DHHS, EMEA, VA, and others), most major pharmaceutical and healthcare products companies are subject to the Security and Exchange Commission’s rules promulgated by the Sarbanes-Oxley (SOX) legislation. The intersection of SOX requirements and industry regulatory concerns is best understood within the context of the reporting and control mandates set forth under the SOX legislation’s Section 404. Industry-based regulatory compliance is highly relevant to the financial and operational control requirements described in Section 404 and thus creates additional impetus to align corporate compliance activities with multiple regulatory regimes.”

What is the purpose of regulation in the pharma industry?

Government regulation of pharmaceutical companies extends the timeline for new drug development, but these measures are enacted in the interest of public health. For instance, in the United States, the Food and Drug Administration or FDA regulations include extensive testing of new drugs to ensure product quality, safety, and efficacy, with the additional goal of minimizing side effects. Nearly all governments have a regulatory agency aimed at protecting citizens from harmful drugs and ensuring product quality. Besides the US FDA, these include EMA in the European Union, TGA in Australia, MHRA in the United Kingdom, and MCC in South Africa, to name a few.

The role of regulatory agencies

Regulatory agencies generally have two priorities: ensuring drug safety and effectiveness and facilitating access to medically useful drugs. But these goals are often at odds with one another, raising several important questions for regulators:

“The problem facing regulators is that efforts to achieve one goal may in fact reduce the chances of achieving the second goal. Stringent regulations designed to keep dangerous or ineffective drugs off the market may delay patient access to new medicines. Alternatively, efforts to improve drug access by lowering regulatory stringency and accelerating reviews could lead to the approval of some drugs that are either unsafe or ineffective.

The trade-off between safety and access is a central one in the regulation of new pharmaceuticals. The challenge for pharmaceutical regulators is balancing an interest for safety and efficacy with an interest for timely access. Finding the right balance, however, requires regulators to weigh the costs of unsafe or ineffective drugs against the costs of delay in the approval of beneficial drugs.”

How the pandemic altered the compliance picture

In 2020, the pharma industry – together with the government and other industries – sought ways to speed up the delivery of life-saving treatments and medical supplies. Regulatory processes were changed or paused as high demand and lockdown restrictions threatened the availability of critical supplies. Some regulatory changes from regulatory bodies worldwide included:

• Remote inspections for pharmaceutical facilities
• Reducing data requirements for clinical trials
• Issuing guidelines to maintain social distancing in trials or waiving the guidelines where warranted
• Lengthening the time period a prescription is valid
• Rolling reviews to accelerate emergency use authorization (EUA)
• Increased acceptance of decentralized trials and the benefits of hybrid clinical trials

While some of these adjustments returned to pre-pandemic standards, other pandemic-era shifts may be permanent. For example, the way companies and individuals communicate is much more tech-enabled, with patients, healthcare providers, and pharma organizations much more likely to engage online or via apps. This could expose companies to risk if digital communication channels are not secure. Pharma companies should ensure they communicate with patients, payers, and experts via secure platforms with built-in compliance features.

The increased use of technology, including artificial intelligence, will force further regulatory changes. According to Pharmaceutical Technology:

“Regulatory flexibility is not about dropping standards or compromising [good manufacturing practice] compliance, but rather improving synergies with better collaboration between regulators and manufacturing companies, while incorporating risk-based approaches. The future of quality in the pharmaceutical industry could be more innovative and efficient than ever, with digitalization and collaboration with regulatory agencies.”

What are the risks of regulatory non-compliance in pharma?

Regulatory non-compliance can profoundly impact a pharma company’s finances, reputation, and customers. But the world’s leading pharmaceutical manufacturers and firms must innovate efficiently while monitoring compliance risk mitigation and risk management. Therefore, most of the world’s leading drug manufacturers also face similar types of risks around regulatory compliance.

Regulatory implications for AI and ML in pharma

The FDA’s latest statement on AI and ML for drug development appears as follows:

FDA recognizes the increased use of AI/ML throughout the drug development life cycle and across a range of therapeutic areas. In fact, FDA has seen a significant increase in the number of drug and biologic application submissions using AI/ML components over the past few years, with more than 100 submissions reported in 2021. These submissions traverse the landscape of drug development — from drug discovery and clinical research to postmarket safety surveillance and advanced pharmaceutical manufacturing. 

Additionally, AI/ML is increasingly integrated in areas where FDA is actively engaged, including Digital Health Technologies (DHTs), and Real-World Data (RWD) analytics.

FDA is committed to ensuring that drugs are safe and effective while facilitating innovations in their development. As with any innovation, AI/ML creates opportunities and new and unique challenges. To meet these challenges, FDA has accelerated its efforts to create an agile regulatory ecosystem that can facilitate innovation while safeguarding public health.

As part of this effort, FDA’s Center for Drug Evaluation and Research (CDER), in collaboration with the Center for Biologics Evaluation and Research (CBER) and the Center for Devices and Radiological Health (CDRH), issued an initial discussion paper to communicate with a range of stakeholders and to explore relevant considerations for the use of AI/ML in the development of drugs and biological products. The agency will continue to solicit feedback as it advances regulatory science in this area.

AI/ML will undoubtedly play a critical role in drug development, and FDA plans to develop and adopt a flexible risk-based regulatory framework that promotes innovation and protects patient safety.

Drug companies will want to ensure their regulatory teams and advisors remain closely connected to the FDA’s latest guidance and thinking on the subject. Drug companies would also do well to closely evaluate the need – and plan accordingly – for additional resources capable of validating the safety of AI and ML technologies integrated into their programs, including addressing concerns of bias, and more stringent post-market surveillance requirements given the constant evolutionary nature of the technology.

As our colleagues at the Global Center for Medical Innovation (GCMI) have stated, “Like Good Manufacturing Practices (GMP) and Good Laboratory Practices (GLP), regulators will look closely at adherence to GMLP guidelines. How are you controlling the code? Who can make changes? What does your post market analysis look like? The agency’s 10 “Guiding Principles of Good Machine Learning Practice for Medical Device Development” can be found here.”

It is reasonable to expect distinction in AI and ML regulations and guidelines between some elements of pharma and device (though the blurred line in combination devices will likely lean closer to device regulations and guidelines than drugs once a clear distinction is made).