Thanks for the Warning Letter: Part II 5 Focus Areas for the C-Suite

[Editor’s Note: Part I appeared in the November/December issue .]

In my old U.S. FDA role, I would see companies terminate multiple quality and manufacturing heads shortly after receiving a warning letter and profess this action a big part of their overall remediation solution. But the CEO always remained unchanged. Why? While some of the terminations may have truly been warranted, I find it hard to believe that this was the case in every organization, especially since the CEO and his C-suite reports were never touched.

Based on my previous experience, I believe that an organization’s quality culture is a huge piece of the solution. The CEO needs to be involved, invested and knowledgeable on the importance of quality. The best CEOs I worked with when I was at the Agency learned to understand the importance of quality.

Unfortunately, many CEOs neglect manufacturing quality until a warning letter is issued. The quality and manufacturing people I have spoken with found it frustrating that things did not improve until this point.

So, what can be done?

In my experience, I have repeatedly come across five things that need to be addressed in order for organizations to avoid a warning letter. I argue that these five items are part of the overall solution that will help companies improve, maintain and sustain robust pharmaceutical quality systems. Are they the only things? Absolutely not! Still, I think they comprise parts of a sustainable solution.

1. Budgets and Staffing

In my time, I saw budgets and staffing shoot up when companies experienced large compliance troubles. Sometimes, I even wondered if money trees grew outside of aseptic manufacturing facilities, because when a warning letter was sent, resources came pouring into the site to resolve the cited issues. Now, why did it have to take a warning letter for the site to get the necessary resources?

One of my old Agency colleagues recounted how this exact situation occurred at a company a few years back. Here, the Agency invited the company’s CEO and quality and operational leaders in for a regulatory meeting. These meetings are usually (but not always) a step in the process FDA uses as an attempt to gain voluntary compliance before moving on to more rigorous actions.

It was a tough meeting. The Agency laid out the issues they had been observing at the company, bluntly explaining that the issues needed prompt correction, otherwise FDA would be forced to move into the next phase of compliance action.

A few months after the meeting, my colleague ran into the company’s quality head at a conference and the quality head enthusiastically thanked him for a great regulatory meeting. Not knowing if the quality head was being sarcastic, my colleague asked someone else from the same firm. This second person affirmed the sincerity of the sentiment, explaining that for years the quality head had been requesting additional budgetary resources to improve their quality system but were always shot down. Following the regulatory meeting, the company entered their annual budget cycle and the quality head sought a modest increase.

Instead, the CEO tripled his budget.

Why do C-suite leaders need to experience this nightmarish scenario to finally act on the quality problems facing their organization? Some argue that the quality head did not know how to speak the same language as the other C-suite leaders. Others might say the quality head failed to adequately explain the situation. Still, others may argue he sugarcoated the facts. All of this could be true, but the bottom line is that the most senior leaders in the organization did not have their hands on the pulse of the organization, and it resulted in a bad situation for the company.

2. Conflicting Performance Objectives and Bonuses

Major compliance issues can arise when a performance objective tied to an annual bonus conflicts with elements of a robust pharmaceutical quality system. For example, deviations are not necessarily a bad thing. In fact, they are a sign of a healthy quality system. But in terms of performance bonuses, I have seen manufacturing sites with performance objectives tied to the number of deviations experienced over the year. A certain number of deviations equaled a negative review. What do you think happened? Deviations were not reported. Site management either tried to deal with the deviation outside the quality system or just brushed it under the rug.

3. Silos

Breaking down silos is another key to sustainable quality. Efficient intraorganizational communications are critical for a business to thrive. The same goes for robust organizational quality systems. Remember, quality is not the responsibility of the quality department. It is the responsibility of every unit, every person and every leader in the organization. Communicating between departments, units and people is critical. If there are silos within the quality system, problems can be missed, buried or not fully addressed, creating inefficiencies that cost additional money. Breaking down silos is not a one-time event. Silos form and reform repeatedly. Think about how often companies reorganize, sometimes even under the guise of breaking down silos. Then, after the reorg is finished and the new units start to normalize, the silos reform.

4. Trust and Transparency

Trust and transparency are two crucial attributes that must be addressed. If different organizational units do not trust each other, or people do not trust their leadership or what their leaders profess, it can stifle quality progress. Think about it at a basic human level. If you do not trust someone, what do you do? You probably shutdown and avoid sharing much with the other person. This is similar in an organizational setting. People go into self-preservation mode and communication ceases. In a lot of the whistleblower cases I reviewed at FDA, trust and transparency were some of the underlying issues.

5. Avoiding Compliance Rollercoasters

One last cautionary note: Quality sustainability means staying off the compliance rollercoaster. I have witnessed companies make huge strides in improving quality across the board and eventually getting their warning letter lifted. These remediations took considerable time and money. Consultants were involved, numerous steering committees organized, and massive amounts of progress reports generated for multiple levels of leadership—all serving as a resource drain that could have been avoided. One company even told me that by sending them a warning letter, I cost them a billion dollars. My response? They cost themselves a billion dollars, all a result of poor quality.

The companies I have watched ride the compliance rollercoaster usually sustain their quality progress for a few years, but eventually things settle down. The CEO and C-suite execs no longer see massive deviations, recalls, etc. Instead, they see the budgetary expenditures necessary for maintaining a robust quality system. Backtracking begins. I have even heard stories of companies chipping away at the quality and operation’s budgets bit-by-bit because they believe the extra internal resources were only a temporary fix. Cost reductions lead to staff attrition and positions are not backfilled. Then, there are further cuts quality units. Naturally, after a few years, quality problems rear their ugly heads again. Why? People are what make the system work. Without qualified people working in the quality system, things start to breakdown. Compliance issues pop up again and another warning letter is issued. The cycle begins anew.

Quality problems get fixed (up the roller coaster hill) and then the company has a period of sustainable quality (they level off and maybe go up/improve some more) and then they cascade back down after reducing their resources and quality becomes a sustainability risk. We need to continue working to avoid the compliance rollercoaster. It costs our industry too much and we fail to serve our patients.

In closing, I do not claim to have any of the solutions to these problems. My goal here is to raise these issues for future consideration, discussion and debate. Additionally, we need to keep beating the drum of robust quality systems and overall quality. Without them, patients will not benefit from the life-saving and life-sustaining products we produce.

I want to close with one last quote from another famous quality guru, Philip Crosby. His famous saying was “quality is free.” This does not mean to avoid investing in quality. Rather, after investing and continually funding quality, it pays for itself. In fact, the entire quote reads: “quality is free. It’s not a gift, but it’s free.” What costs money are the nonquality things—all the actions that involve not doing jobs right the first time.”