THE WEINBERG GROUP INC. WASHINGTON NEW YORK SAN FRANCISCO BRUSSELS PARIS 1 GMP Compliance: Better to Start Now Presented by: Matthew R. Weinberg, CEO

2 CURRENT ENVIRONMENT CHALLENGING AND EVOLVING nRepeated inspection failures nIncreasing number of 483s nMultiple warning letters nConsent decrees nDisgorgement of profit nSystems-based approach

3 COMPLIANCE INVOLVES MULTIPLE PROCESSES nTraining and culture create the environment and mentality nQuality Assurance monitors the day-to-day and trend actions nFDA regulation mandates several distinct activities nInternal enforcement assures prescribed actions are completed

4 GMP ACTIONS OFTEN REACTIONARY nHistorical focus always after-the-fact nExpense focus creates little incentive for fore thinking nCompliance generally seen as production cost nViewed as lower priority within an organization

5 GMP COMPLIANCE OFTEN MISUNDERSTOOD nPerceived as a burden nCorporate view continues to be as an expense nTraditional view is a leash with little up side potential nRarely seen as a revenue-generating opportunity

6 CONSEQUENCES PAINFUL AND COSTLY nLoss of money qWarner-Lambert estimates $1B* qAbbott close to $1B and growing* qConsent decrees are long standing nLoss of time qApplication approvals qGetting new product to market nLoss of image qDamage to credibility *The Gold Sheet, Vol. 36, No. 6, June 2002

7 CORPORATE CHANGE REQUIRED nGMPs must be integrated into the process, not an additional component nProcess must evolve from one of police action to one of forethought nCorporate culture must change

8 CULTURE CHANGE DRAMATIC AND DIFFICULT nQuality function must be valued by management nIncrease visibility of quality unit nVisibly exhibit an intolerance for lack of compliance nQuality must be seen as a priority

9 PROACTIVE APPROACH NECESSARY nApproach regulations proactively n“It is often said at FDA that firms that are in compliance tend to stay in compliance, but once a firm gets out of compliance getting back into compliance is a very steep road to climb. Try to avoid that road.” – Daniel Troy, FDA Chief Counsel

10 FOCUS ON BUILDING THE RIGHT QUALITY SYSTEM nCreate a self-determining culture nMake regulatory mandates obvious and routine, not the focus nUse Quality Assurance as a cost-improvement methodology

11 PROACTIVE APPROACH TO INCREASING PROFITABILITY nApproach facilities’ inspections proactively qUse third parties qAssess all business operations qAct on things immediately nChange focus from compliance to improvement

12 DEMONSTRATE THAT COMPLIANCE IS SUBSET OF QUALITY nMake compliance a way of life nFocus on improvement nEnjoy savings from this change

13 DIFFICULTY IN CHANGING MINDSET nChange from compliance mentality challenging nVigilance must be maintained nAdaptation in outlying plants will take time

14 CHANGE BEGINS WITH STUDY AND THOUGHT nFirst step is to plan for change nPlan should include all elements of change process nFocus on instituting means of process improvement