The Healthcare Hub

GHX provides a wide range of perspectives on how greater collaboration and visibility across the supply chain can improve both clinical and financial performance in healthcare.

Tuesday, June 21, 2011

FDA Takes on the World: Sees Value in Partnerships in an Era of Globalization

The FDA held a call this week for the media and other interested parties on what it calls the Pathway to Global Product Safety and Quality. The new strategy is designed to help the agency ensure the quality and safety of medical and food products in an era of increasing globalization. While I welcome comments and perspectives on the strategy, two of the core themes appear to make a lot of sense to me: one is a need for greater cooperation and coordination among global regulators, and the second is a recognition of the importance of leveraging public and private partnerships.

The commissioner of Food and Drugs, Dr. Margaret Hamburg, noted that about half of the medical devices and 40 percent of the pharmaceuticals regulated by the FDA come from overseas and that percentage is expected to continue to grow. As the FDA stated in the executive summary of a report on the new strategy, the “FDA does not – nor will it- have the resources to adequately keep pace with the pressures of globalization.” In today’s call, the FDA noted that globalization is also putting increasing pressure on manufacturers that are often subject to multiple, redundant inspections from different regulatory bodies. For both reasons, and then some, the FDA plans to work more closely with its regulatory counterparts around the world to share information and streamline the process of regulation, and I would hope, of being regulated.

The other area that made sense was the discussion of the value of partnerships. Sharon Mayl, J.D., senior advisor for Foods Policy, referenced the recently passed Food Safety Modernization Act and what she called its “explicit recognition of the importance of partnerships – both public and private- to the success of building a new food safety system.” John Taylor, acting principal deputy commissioner of Food and Drugs, added that the FDA would like Congress to provide new authority in the medical products realm to update its regulatory constructs to work better in a more globalized world. One area Taylor referenced was track and trace, which I hope the FDA sees as an opportunity for a collaborative approach.

Admittedly, GHX has a bias toward industry collaboration, which has worked well in automating the procurement process in healthcare. By working together, manufacturers, distributors, healthcare providers and group purchasing organizations have created a trading exchange where they can connect and transact business electronically for a lower cost than if they were to go it alone. For example, GHX has found that , without an exchange, hospitals and healthcare systems have to spend an average $705 for each supplier they connect to on their own through a direct EDI connection; the cost of sending a purchase order or receiving an electronic invoice through GHX is also, on average, less expensive than via direct EDI. We believe a similar collaborative approach makes sense for track and trace, and we hope to have a prototype ready for trading partners to test before the end of the year. Margot Drees, director, corporate strategy at GHX, talked about the project in a recent article in Pharmaceutical Commerce:

“Our goal is to leverage the expertise we have in handling e-commerce that’s been demonstrated already, and to potentially save the entire industry—manufacturers, wholesalers and providers alike—some of the cost of implementing a track-and-trace solution partially or individually….Regulators are still grappling with identifying what is possibleand acceptable to the industry, and this could be a model for how we can all move forward.”

You can listen to the FDA call in its entirety through midnight Eastern time on June 28, 2011 by calling 1-866-514-4419 from the US or Canada; international callers can dial 1-203-369-2018. Take a listen and let me know what you think.

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Karen Conway

Vice President, Healthcare Value