You are in the Consent Decree business now
In the normal course of business, a company should recognize warning signs prior to being subject to a CD. Increasingly, some
companies are leveraging and enhancing current risk management processes and procedures to monitor activities that are indicative
of underlying quality or compliance problems, and raising them to senior management's attention. For example, complaints from
employees or human resource activities regarding disagreements with superiors can have their origin in ethical issues associated
with manufacturing processes and procedures. By turning a blind eye to the problem, a company makes itself vulnerable to metastasizing
compliance and quality issues that could end with a major enforcement action. Identifying an issue is the first step toward
corrective action, and should be followed by an assessment of potential safety impacts and an evaluation of different options.
The impact of a CD is significant, and companies should keep in mind the collateral damage to the business.
When a company enters into a CD, its business environment is dramatically changed, virtually overnight. A common reaction
by senior executives is to try to manage the CD as a 'project' and keep the rest of the business operating as near to normal
as possible. But business as usual isn't likely to work. Remediation efforts under a CD typically last three to five years,
even if the "planned" remediation period is shorter. At the beginning of a CD period, it may be tempting to take advantage
of opportunities to manufacture product whenever they arise. But leadership should embrace the fact that without meeting a
CD's requirements, there may not be a business to run. Manufacturing in a relatively normal fashion may be possible, but selling
products is an entirely different matter. The decision to manufacture product at risk is a business decision that involves
business unit leaders, manufacturing personnel and QA/RA. Once the risk management aspects of production have been agreed
upon, these decisions need to be communicated to employees and contractors in all departments of the company. Management should
be clear about the manufacturing go-forward plan and how product disposition will be handled.
A new, compliant tomorrow
An enforcement action often signifies the need for real change in a company's culture and behaviors. Creating a culture that
respects and demands compliance from all functions within the business is crucial to long-term survival. Successfully doing
this may require:
» Establishing unquestionable direction and support for quality and compliance from the CEO level through written communications,
sufficient resourcing, and decision-making from product development through distribution.
» Placing compliance officers and QA executives in senior positions in the company with direct access and reporting authority
to the chief executive officer and the audit committee.
» Clearly defining what compliance means for every role in every function in the organization and communicating new expectations
» Holding the entire organization accountable for compliance and quality and reinforcing the desired, compliant behaviors
through appropriate incentives.
» Changing the focus of operations from a product release mindset to a high quality, compliant product release mindset.
» Ensuring that employees at all levels understand the value of compliance and embrace this is as a core attribute of their
culture and behavior.
» Evaluating the impact to compliance and quality when making business and operational decisions.
As we've noted, a comprehensive approach is needed to manage all aspects of the base business along with the remediation effort.
At the core of this is a strong focus on governance that is measureable and accountable for results. The governance structure
for the CD effort should bring together the right leaders with an appropriately defined scope of responsibilities. This focus
and clarity, along with goals aligned with leadership at all levels of the organization, both at the facility under CD and
the organization as a whole, can be crucial for success. Wedding remediation efforts with the base business to effectively
steer a company toward calmer waters requires careful coordination; compliance efforts are only as strong as the weakest link
in the chain of necessary components: planning; organization and people; communication; risk and sustainability. The integration
process and interdependencies between components is often an area where companies fail to place enough emphasis.
Planning: Prepare for the long haul
When it comes to managing a company through a CD, a failure to plan is a plan to fail. The "new reality" of a CD requires
planning and processes geared toward recognizing this inconvenient truth. Operating a manufacturing plant "full out" to meet
production targets, for example, without an equally intensive focus on quality, can make matters worse. Production plans and
targets —and the resulting sales and financial forecasts—should be adjusted to reflect this new environment.
Planning should extend to future quarters and years, not just the coming weeks and months. Extended horizons can lead to better
resource planning and capital budget pre-allocations; it doesn't pay to pick up the pieces only after they fall. Anticipate
unexpected expenses and build in allowances for the inevitable "gotcha" moments. Unfortunately, production planning and release
rates are often the first casualties of the new operating environment. Long-term lower output and longer release cycles can
be a difficult pill for executives to swallow, but other employees and stakeholders won't stomach unrealistic expectations.
Existing quality system processes and procedures, such as corrective and preventive actions (CAPA) or document review, often
aren't equipped to deal with the volume and stress of a CD. An increase in traffic can lead to gridlock. Also, breakdowns
in legacy quality systems may have played a role in the onset of an enforcement action. It's important to assess and modify
these processes to accommodate the increased workload and more stringent requirements.