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The QA Pharm

FDA Compliance

Quality Assurance: To Count the Cost—or Not?

The price of nonconformity should always be accounted

Published: Wednesday, August 18, 2010 - 14:15

One of the regulatory responsibilities of the quality control department is the release decision for drug batches into the market. When I was first given that responsibility early in my quality assurance (QA) career, it was impressed upon me to not count the cost of the batch when making that decision.

That was good advice. But looking back, I would have modified that admonition slightly to put the financial arm’s length of the QA role in a broader perspective.

For sure, QA must not allow the cost of the batch to influence its release decision. One needs to be objective and independent—no apples to polish, no axes to grind. Patients deserve no less. But QA needs to do more than call balls and strikes.

It was Philip Crosby, the ghost of gurus past, who said in his Quality Without Tears: The Art of Hassle-Free Management (McGraw-Hill, 1995) that the price of nonconformance (PONC) is the measurement of quality, not indexes.

Earlier this year, global biotechnology corporation, Genzyme, signed a consent decree agreeing to correct manufacturing quality violations at its Allston, Massachusetts, manufacturing facility and will turn over to the federal government $175 million in unlawful profits, according to a May 24 Food and Drug Administration news release. With the company’s reported manufacturing write-off of $21.9 million dollars in July and an additional write-off of $6.5 million dollars in August, along with an expected consent decree disgorgement fine of $175 million dollars (from Genzyme Reports Financial Results for Second Quarter of 2010)—and costs associated with third-party control and quality system and facility upgrades—we’re talking real money. Real PONC.

In the grand, cosmic, economic scheme of “pay now, or pay later,” an upfront investment in quality by design through qualified personnel, training, facility design, product development, technical transfer, process validation, supplier qualification, environmental monitoring, etc., has got to be the best dollar spent for any pharmaceutical company.

When something goes wrong, it’s always at the worst possible time and when the solution is at the highest possible cost. The most painful cost is the loss of patient and consumer confidence, and perhaps, the loss of a brand.

So, here is an admonition to the quality assurance professional:

Do not count the cost of the batch when making the batch release decision. Regardless of the lost standard and opportunity costs, to reject a batch when it is the right decision is not only the best ethical and moral decision, it is also the best financial decision for the company in the long run.

However, do count the cost of PONC. Picture yourself at the edge of the landfill tallying the cost of everything going into the pit.


Because behind every rejected raw material, component, bulk, or finished product; behind every stale item on “hold” taking up space in the “morgue” section of the warehouse; behind every inefficiency and “do over;” a frank or potential quality system failure and regulatory compliance problem lurks. Counting the PONC is an effective measure of the health and welfare of the quality management system, which is a QA responsibility.

So, in these economically difficult times, before your profit improvement committees launch suggestion boxes or start unscrewing half the light bulbs to save the company money, zero in on PONC, and begin to systematically reduce the budgeted line item known as “standard waste,” the planned product write-offs. It will be an effective, bottom-line and quality-improvement strategy.

So, the question is: Should QA count the cost, or not?

The answer is: Yes, they should and shouldn’t.



About The Author

The QA Pharm’s picture

The QA Pharm

The QA Pharm is a service of John Snyder & Co. Inc., provider of consulting services to FDA-regulated companies to build quality management systems and develop corrective actions that address regulatory compliance observations and communication strategies to protect against enforcement action. John E. Snyder worked at the lab bench, on the management board, and as an observer of the pharmaceutical industry for more than 30 years. His posts on The QA Pharm blog are straight talk about the challenges faced by company management and internal quality professionals. Synder is the author of Murder for Diversion (Jacob Blake Pharma Mystery Series Book 1).