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4.2. The implications and benefits of QbD for the value chain

The resources and capabilities of the value chain functions are of strategic importance for the success of a company moving or remaining at the value creation frontier. Therefore, the primary value chain activities of R&D, Production, Marketing & Sales and Customer Services and supporting activities of a company’s infrastructure (information systems, human resources, material management,..), need to be optimised in line with the pursued strategy.

Implementing QbD will have implications on all value chain activities and in return, when fully implemented, all value chain functions will eventually benefit from it realising improved product utility and/or lower costs to build a competitive advantage.

Value chain activities Drivers for increased utility and lower costs54 Contribution to QbD Potential benefits resulting from QbD approach
R&D ↑ utility superior value proposition via product excellence and reliability

↓ costs increased efficiency for production of products and development of new products.

  • Process owner and main driver is CMC part of R&D
  • Bears majority of costs for QbD especially during early phases with high attrition rates (increased R&D expenditure and fixed capital for hardware & software tools)
  • Defines QTPP, CQAs, CMAs, CPPs, Design Space and initial Control Strategy
  • Improved drug products with superior efficacy, safety and compliance
  • More reliable planning of deliverables (e.g. for clinical supplies, transfer to operations)
  • More predictable timelines and success rates during development phases (mainly for CMC activities, but also GLP toxicity and clinical outcome)
  • More capable processes for transfer to production
  • Design Space supports continual improvement and regulatory flexibility
Production ↓ costs increased efficiency in production

↑ utility consistently producing reliable quality

  • Participates in QTPP, risk assessment and Control Strategy
  • Hand shake with R&D at transfer, i.e. = process owner thereafter
  • Uses Design Space
  • Applies Knowledge Management, Continual Improvement, Continuous Process Verification
  • Higher yields, less OOS or batch rejections
  • Opportunity to increase process capability and riding down the experience curve faster
  • Higher inventory turnover due to improved planning reliability
  • Improved contribution margin
  • Reliable product supply for marketing
Marketing & Sales ↑ utility higher value proposition
  • “Voice of the customer” in contributing to QTPP, CQAs and risk assessments
  • Part of Knowledge Management and Continual Improvement during product lifecycle
  • Increased customer satisfaction or even delight by higher value proposition for all customers (patients, health care providers, health authorities and health care systems)
  • More pricing options (more for much more applicable if patient benefits significantly from the new drug product)
  • Increased customer equity
Customer services ↑ utility higher value proposition for all customers

↓ costs less recalls, less filing of variations, and complaints; increased flexibility

  • Regulatory Affairs and Quality Assurance act as customer service units
  • Continuous participation and involvement in QbD activities throughout product lifecycle
  • Implementation and maintenance of PQS and QRM as enablers for QbD
  • Major stakes in validation verification and Continual Improvement
  • QA has oversight over quality of development
  • Regulatory affairs is interface to regulatory flexibility
  • Increased customer satisfaction or even delight by higher value proposition for health authorities and health care providers
  • Increased efficiency for production by obtained regulatory flexibility (Design Space)
  • Lower costs for testing (RTRT) and release of drug products
Human resources ↓ costs improved employee productivity
  • Incentives to promote adoption of and contribution to QbD
  • Provide relevant people skill sets
  • Lower costs for QbD, development and production through improved efficiency of people
  • Sustainability of achievements through motivation and workforce satisfaction
Information systems ↑ ↓ utility costs improved efficiency and effectiveness of other value chain activities
  • IT systems integrating multitude of isolated systems into corporate structure; this facilitates risk assessment and enables superior Knowledge Management and Continual Improvement
  • Integration of suppliers and contract manufacturing partners into QbD approach
  • Smooth transfer between stakeholders
  • Improved data acquisition and evaluation throughout lifecycle
  • Extraction of relevant data rather than multitude of information (enabler for Minimalism approach)
Materials management (logistics) ↑ costs increased efficiency
  • QbD affects entire supply chain from sourcing of raw materials, manufacturing of intermediates and final products, testing and release to distribution of products to all customers
  • Ensuring CQAs and integration of information throughout supply chain into Knowledge Management and Continual Improvement
  • Lower COGS through sourcing and distribution of materials in compliance with QRM and Design Space flexibility
  • Increased material turnover and resulting capital turnover rates
  • Benefitting from increased efficiency via applicability of JIT
Supplier and partner management ↑ ↓ utility costs improved efficiency and effectiveness of other value chain activities
  • They need to be fully integrated into the QbD approach
  • Harmonised QbD approach and tools at supplier level and all outsourcing partners are ideal
  • Joint QRM and risk assessments during development and throughout product lifecycle are essential
  • Suppliers’ CQAs for the raw materials translate into material attributes for the drug product’s CQAs
  • Reduced costs from raw materials or batch rejections help to improve contribution margin
  • Improved efficiency from reliable planning for supply and use of JIT approach
  • Superior value proposition from excellence can be achieved if reliable quality is provided for the complete supply chain
  • Increased flexibility and sustainable processes to lower overall COGS
Company’s infrastructure including top management ↑ ↓ utility costs improved efficiency and effectiveness of other value chain activities
  • Top management has an essential role to play in cascading the leadership and direction to senior management of the individual departments, so that the required changes can be integrated throughout all organizational processes.
  • “Improving PPD through QbD is primarily about execution, not approving higher levels of R&D investment.” “Delegating the task exclusively to the front line will not work.”55
  • Reduced timelines and costs for development and production of new products increase rate of innovation and competitive advantage
  • Improved efficiency and contribution margin increase gross margin and return on sales
  • Moving to the value creation frontier as a differentiator or cost leader and sustaining its position by becoming a broad differentiator
  • Improved customer satisfaction and customer equity increases market share and profit growth
  • Increased profitability of the company and shareholder value

Table 1: The potential benefit of QbD fort he primary and secondary supply chain activities

As seen from Table 1 the potential benefits for all value chain activities, if QbD benefits are utilised throughout the value chain, are contributing to a significant benefit for the whole company and its ultimate objective to maximise profit growth and sustain profitability. These benefits do no longer solely rely on the improvement of the quality of drug products as initially pursued by the QbD initiative. Instead they really do impact the efficiency and effectiveness at which an improved value proposition of the company’s products can be executed and how cost savings can be derived from doing so, thus generating a competitive advantage for the company.

However, these benefits or the extent at which they may be realised obviously are not granted but need to be realised by constantly evaluating the requirements and potential impacts - throughout the implementation and application of a QbD driven development approach.

 

54 Jones; Theory of Strategic Management; p 81-84: the value chain activities
55 Fuhr ; Why quality-by-design should be on the executive team’s agenda; 2009; p 195-203