White Paper –
Does Joint Auditing Work? A Look into the Rx-360 Pilot Program

Tom Beil, Vice President of Quality & Regulatory Affairs, and Rx-360 Board Member

Rx-360, an international pharmaceutical and biotech industry supply chain consortium, has set up a program of joint audits. The goal of this project is to expand audit coverage and reduce duplicated audit efforts. SAFC recently took part in a pilot audit program.

Here we discuss how the joint audits work and what the advantages are for both pharmaceutical companies and their suppliers.

Are Joint Audits a Solution?
Addressing Concerns
Next Steps

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Rx-360 was set up in 2009 in response to a number of supply chain failures that led to patient deaths and to address concerns about how these failures might be prevented. Its aim is to create and monitor a global quality system that sets industry expectations and regulations to assure patient safety by enhancing product quality and authenticity throughout the supply chain.

Supplier audits are an essential tool in this process in order to establish a safe and reliable supply chain. A supplier audit involves one or two auditors spending two or three days at a supplier’s site digging into all aspects of their manufacturing operations, from processes and equipment through to training and paperwork. These audits are a time consuming and expensive business for both sides. A customer may have dozens to hundreds of suppliers, all of whom they want to audit. Conversely, the supplier may have two or three different customers wanting to perform audits of the same aspect of their business every week. For example, supplier SAFC hosted more than 200 customer audits in 2010 and more than 250 in 2011.

Are Joint Audits a Solution?

Often, a majority of the questions that customers want answered through an audit are the same. So, would it be possible to set up a system where independent audits are carried out on behalf of many different companies, reducing the time and cost for all concerned? Rx-360 believed it was, and in response set up a pilot program to test the feasibility of carrying out joint audits.

The proposed process was for a third party contract organization to go into a supplier facility and carry out a thorough audit of its processes and procedures. The precise nature of these checks will vary depending on the nature of the product being sourced and on the GMP standards for that product. For instance, the GMP standards for an API are higher than those required for an excipient so the standards are in turn more stringent than those for key raw materials. Rx-360 tested this process through a Pilot Program in 2011.

It does not mean the customer cannot or will not carry out further supplier audits. However, it does mean that a majority of the required confirmatory questions have already been answered. Therefore, the end-user can focus on aspects that are specific to their business, while building relationships with the suppliers and solving any problems that might arise. They might have a very specific use for a material that requires specialist checks, or be concerned about an individual aspect of the supplier’s business. Any supplementary audits like this will be shorter and less expensive, and put less pressure on customers and suppliers alike.

There has been a significant degree of early buy-in from suppliers and pharma companies, both large and small. Approximately 50 companies are already members of Rx-360, with over 20 organizations who are observers and have involvement from senior level personnel within those companies. The pilot program contributed to this buy-in by demonstrating that it was possible to meet companies’ confidentiality requirements. It has also served to allow companies to tweak their internal systems and procedures to a more standardized approach that ensures that they will be able to use an Rx-360 audit report.

Addressing Concerns

There was concern that antitrust authorities might not consider the idea of joint audits acceptable. This has been addressed by vetting the US FTC, which has said that if the principles outlined are followed, the process will meet the US antitrust requirements. Similarly, Rx-360 has been working with regulatory bodies around the world to ensure that the joint audits carried out by third parties meet their requirements.

Two SAFC sites were included in the pilot program: St Louis, Missouri in the United States and Buchs, Switzerland in Europe. When the auditors visited, they were equipped with checklists to audit three types of products used in the pharmaceutical industry: active pharmaceutical ingredients (APIs), excipients and critical raw materials.

While checklists already existed for APIs and excipients, a new checklist needed to be devised for raw materials. SAFC was involved in the process for developing this with the guidelines for the audits themselves being drawn up by committees of Rx-360 members, and designed to cover the key points commonly covered by companies in their own audits.


The audits were found by the participants to be very thorough and the third party audit teams both professional and experienced. There were a few suggestions about how the audits might be improved, which is the whole point of going through a pilot program. This gives the opportunity to iron out any wrinkles ahead of a mass roll-out.

While reviewing the process, potential downsides were also identified. If an Rx-360 audit turns out badly, it can be detrimental to a company because the whole industry will know about it. Audited companies also need to be sure they can trust the audit process itself, and that sensitive information will be kept confidential. This latter point is addressed by the secretariat duties being carried out by Rx-360’s lawyers, who are very careful to keep all names involved confidential.

In the end, these concerns are considered minor when set against the significant potential upsides of joint auditing. Through this program, Pharma and Biopharma companies will spend less time carrying out routine audits and suppliers will have fewer visits, both of which will free up resources. These savings should also allow a greater number of companies to be audited, with the hope that this wider coverage will help ensure that major pharmaceutical supply chain failures do not happen in the future.

Next Steps

Rx-360 will be moving forward with an evaluation of the audit schedule for all members, and will provide this information to potential suppliers in order to minimize audits through joint auditing. The consortium is also working to build an infrastructure and process for the joint auditing program to broaden participation within the biopharmaceutical industry and make the program self-sustaining. Rx-360 will continue to share their findings with the industry as they continue to grow and build the joint auditing program.

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