Key Considerations for Senior Executives Related to Quality Culture

Peter Lindsay

Over many years, we have advised numerous companies facing critical quality and compliance issues. These situations have ranged from challenging regulatory inspections, US FDA Warning Letters, product recalls and field actions, to internal and government investigations. Inevitably, the question arises about the reasons for these challenges and ways to prevent them going forward. And if the underlying events themselves cannot be avoided, companies at least want to prevent their most problematic consequences. We have explored this question with companies, and typically have identified “quality culture” as a frequent contributing cause for the most problematic challenges. This article explores several practical points for senior pharmaceutical executives to consider as they seek to further understand and strengthen the “quality culture” within their organizations.

Regulators devote significant efforts to assessing quality culture

For many executives, past discussions about promoting a strong quality culture often focused on messaging to employees about the importance of quality and compliance. Companies conveyed these messages through employee meetings or written intranet messages or posters. More recently, these early efforts have been supplanted by more formal approaches to defining and measuring quality culture. For example, industry organizations like the ISPE has published a report focused on cultural excellence¹, and the PDA has initiated a Quality Culture Transformation Program with a self-assessment tool.

Nathan Sheers

These efforts by industry groups also reflect interest by regulatory authorities, including the US FDA, in assessing quality culture. For example, FDA’s new inspection protocols, which have not been released publicly, include questions related specifically to assessing quality culture. In addition, for a number of years FDA has funded research on quality metrics and initiated efforts to gather quality metrics from drug manufacturers. FDA’s own proposals have called for data related to, for example, lot acceptance rates or product quality complaint rates. These and other efforts have not yet fully matured, but they indicate that regulators’ interest in measuring quality culture and maturity are likely to continue.

Executives should be mindful of steps taken internally to respond to these initiatives about quality culture. Some data-driven approaches allow companies to receive benchmarking data that may be helpful in understanding how companies compare with their peers. Sitting by the sideline of these initiatives will likely result in efforts to play catch up later as regulatory and customer expectations increase. Management review meetings focused on quality issues are good opportunities to evaluate the company’s efforts in this area and determine the effectiveness of currently reported metrics and their completeness.

Consider how “tone from the top” is communicated

Discussions about quality culture inevitably turn at some point to the importance of “tone from the top.” This emphasis also comes from regulators, including FDA, which recognize that management plays a critical role in establishing direction and providing resources. This is one reason that FDA frequently addresses its Warning Letters to the company’s CEO. Establishing the right “tone” is important and raises a number of considerations–a few of which we discuss in this article.

First, even when senior management is firmly committed to the importance of quality and compliance, lower level of managers and other employees may not fully communicate that commitment effectively to their teams. It is vital that these managers understand how quality and compliance guidelines align with the company’s operational goals because problems often arise when employees perceive a conflict between the two. Senior managers should dedicate time to understanding how their teams are achieving their operational goals and what pressure points, if any, they place on the quality or compliance systems.

Another consideration for executives when assessing the effectiveness of “tone at the top” is to consider the working relationship between the Quality and Compliance functions and their operational or commercial counterparts. While it is common to have some variance between these functions, excessive or frequent tension may be an indication that managers or employees are not aligned on senior management’s priorities and their respective roles in achieving those goals. In organizations with more mature quality cultures, different functions tend to exhibit mutual respect and find ways to collaborate.

Finally, we have been in multiple meetings with FDA representatives where they have emphasized to companies the importance of having employees appreciate their role in developing and distributing products that affect public health. Senior executives play a critical role in helping their organizations see their activities from both a business and public health perspective and need to communicate that perspective to others effectively. Managers at all levels of the organization should look for opportunities to share with their teams the impact that their decisions and actions have on patients and how that should inform their activities.

Review internal reports regarding quality or compliance issues

Companies often receive internal reports alleging quality or related compliance issues. These reports may come through supervisors or through anonymous compliance hot lines. Compliance, Legal, and Quality functions frequently investigate these cases to determine the underlying facts and the impact, if any, to product quality or systems. These investigations need to be scoped carefully to address the specific allegations but also to consider whether the allegations might be indicative of broader issues. In some cases, investigations have failed to uncover quality culture shortcomings, including significant data integrity concerns. Executives need to review the investigation results and ensure that the investigation breadth and depth are appropriate.

Sometimes multiple reports might also indicate a need to look more expansively at issues related to culture and escalation of significant issues. Such trends may indicate a need to seek broader input from company personnel through a review that seeks to better understand any challenges to quality culture and escalation. Although self-evaluations and surveys can be useful, in some cases it may make sense to use experienced third parties that allow for meaningful dialogue and more open discussion.

Executives need to ensure that quality culture is always maturing

For optimal quality culture development, executives need a good sense of the company’s current state to ensure the company is always improving. Survey instruments and information can be helpful, but company leadership often has some visibility into the current state by considering broadly recent escalations or challenges. For example, consider the following questions:

• Is the company constantly responding to identified quality issues or is it identifying the issues more proactively?
• Do company employees hesitate to escalate significant issues or does the team look for opportunities to address issues effectively?
• Is the focus on meeting requirements or meaningful continuous improvement?
• Is compliance being driven by audits and hotline reports or through regular risk assessment and system metrics?
• Are quality and performance goals viewed together and used to inform and strengthen each other?

The answers to these questions may provide some insight into where the company is and where additional management focus may be useful. More importantly, they give leadership some sense as to where the organization is heading and whether its quality culture is maturing. And reactions to compliance or quality events that may have been acceptable in the past, may no longer reflect a sufficiently maturing system. As experience and expertise grows, expectations should follow.Eventually, systems should provide proactive, performance driven action that enables commercial and compliance successes in a controlled environment, rather than just sounding alarms that corrections are needed.

In conclusion, while quality culture has historically been difficult to measure, its importance is growing as the expectations of regulators and customers increase. In our work, we have seen frequently the costs incurred when quality culture and other quality system elements do not work effectively–expensive remediation activities, supply chain disruptions and potential shortages, damage to reputation, and diverted focus from other productive activities. The time is usually ripe for assessing where the company is in its efforts to develop, strengthen, and sustain a mature quality culture.

Reference

1. ISPE, Cultural Excellence Report (April 2017).

Peter Lindsay and Nathan Sheers, Partners, Paul Hastings LLP