• Melita Ball

May 6 2020 Blog Post

(Re) Designing a Quality Management System:

The Right Reasons Explained (continued)

Last week we discussed why it is so important for an emerging medical device company to plan and budget for the development of their Quality Management System. If you missed it, you can read it<<here>>.  This week we will continue to discuss the other great reasons to embark on this journey to either design or re-design your Quality Management System. 

A merger or acquisition:

This is the second most common reason companies need to redesign their existing quality management system but before they do that, there are some decisions to make. 

First, when two different companies come together as onethere are essentially three choices to choose from related to the QMS:

  1. Do nothing.Allowing the two companies to continue operating independently under separate QMS’s is certainly an option but most will say it’s not the best option.It is very costly and inefficient to maintain multiple Quality Management Systems within the same company.Most everything in this regulated industry comes down to the Quality Management System. Each QMS must have its own ISO certification and all the maintenance that comes with that.The “sister” companies are not treated as the same entity by regulators.This means that any materials, components, or products that are passed from one sister entity to the other, are seen as “purchased” products and must be managed as if they were being supplied by an external supplier.Those “suppliers” must be treated as suppliers and undergo supplier audits, issued supplier corrective actions, etc. Also, materials received must undergo receiving inspection because they are coming from an “outside” source. All of this adds significant maintenance costs for the company.Years ago, companies would maintain separate Quality Management Systems with the thought that it would reduce their regulatory scrutiny. The thinking was that if one QMS was in trouble with a regulator, it would limit their liability. This myth has been debunked many times as regulators caught on quickly and now, when there are significant issues found at one site, they deploy resources to every QMS under the control of an owning entity.

  2. Migrate.This is when one of the Quality Management Systems is chosen and the other entity migrates to it. In a merger or acquisition, the acquiring company is usually the one to force their own QMS onto the entity they are acquiring; however, in rare cases, it could go the other way.If an entity has a great QMS that has a history of good standing with regulators AND is already efficiently implemented so as not to add unnecessary overhead costs AND the cultures of the two companies are similar, then this can be a good solution. More often, companies choose this option because the perception is that it is “EASY.” The burning desire to hit the easy button is the worst reason to make this choice and will likely lead to huge culture clashes, significant problems with implementing the QMS, the inheritance of past compliance issues, the inheritance of massive inefficiencies, more scrutiny from the regulators, and potentially significant regulatory actions against the company … the EASY button is never easy. Choosing this option should only be selected after a thorough evaluation of the cultures and Quality Systems in the respective companies.If selected, a well thought out plan that includes culture change elements should be developed and adopted at the very highest levels of the organization.  Without C-Suite endorsement, consistent engagement, and follow-up, these projects have very poor success rates.

  3. New Design.If you’ve done your due diligence while evaluating option #2 and the conclusion is that the organizational structures and cultures are vastly different and/or the Quality Systems are inefficient, costly, fraught with regulatory risk, or have a history of compliance actions then it’s a great opportunity to look at a new QMS. Unfortunately, this is typically that last option considered by most medical device companies because the perception is that it is too hard or too costly or will take too long. This perception is usually formed based on past experiences of poorly implemented strategies that lead to confusion, inefficiencies, and poor success rates.The reality is that there are concrete and predicable reasons for failure that companies continue to repeat.If done well (we will talk a lot about that later in the series), however, renewing your QMS with a new design can not only be rewarding from a compliance point of view but can actually add money to the bottom line. A merger or acquisition is one of the best times to seize the opportunity to update, streamline, and build in efficiencies that weren’t there before.Think of it as spring cleaning for your QMS. The surprising part of all of it is that taking this route using a proven methodology can be less expensive, take less time & effort than option #2, and have extremely high success rates.

Consolidation of business units under one QMS:

This is the scenario where a company has chosen in the past to leave things alone as they acquire new businesses (see option #1 above).  They have operated this way for some time and have now experienced the pain, cost, and inefficiencies caused by this choice.  So, now, they are looking for options.  Certainly, they can look at option #2 above but only after they have performed their due diligence to ensure a better chance of success or they can look at option #3.  Option #3 provides the opportunity to pro-actively refresh, renew, and update their QMS based on new technology available and any new direction of thinking by external regulators.

The issuance of a significant Warning Letter or Consent Decree:

These scenarios are sometimes considered wake-up calls to companies that something isn’t

quite right with their QMS.  Most often we see that the QMS has either beenneglected over time or has spun out of control into so much complexity that it’s not effective for the business.  Both of these have unfortunate and predictable outcomes.  With Warning Letters, we often see companies scrambling to put together a patchwork plan to address the specific items listed in the Warning Letter without taking the opportunity to look at root causes and addressing the underlying reasons for the failures with the FDA.  Most of the time this leads to a “your response is not adequate …” from the FDA.  With Consent Decrees, companies are typically forced to review and update most, if not all, of their QMS.  Now, the company MUST redesign their QMS but they are not allowed the luxury of doing it on their own timeline and on their own terms.  This is a preventable outcome if companies employ well thought out strategies for capitalizing on other naturally occurring business events to renew and update their QMS on a regular basis.

Turnover of Executive Leadership for the company:

Sometimes, a new CEO can drive positive change in significant ways.  Prior to consulting, when I was still working as an employee in this industry, I had the unique and rare opportunity to be hired by such an individual.  He firmly took the helm, clearly understood the business and value to investors of ensuring the company’s QMS was not just working but was performing at an elite level.  Once he reviewed the dismal state of the QMS, he hired me for the sole purpose of designing and implementing a new global QMS.  The resulting QMS was not only developed and implemented in record time and under budget but also was simple, easy to understand and navigate by employees.  This QMS received high praise from all regulators who inspected or audited it (including the FDA).  Over the years, I have honed what I learned back then and added lessons from the many QMS implementations since then.  But one thing has not changed.  If the CEO truly understands the value to the business of a high performing QMS, s/he will drive it through the organization and the project’s success will be all but guaranteed.

Internal Audits and Management Reviews determining that the QMS is not effective:

This scenario is rare but does occur occasionally.  I say rare because the reality is that most companies aren’t honest enough with themselves about the true effectiveness of their QMS.  The clear goal during management reviews is somehow being able to state that the QMS is still effective and, therefore, just fine the way it is.  It is my passionate belief that companies would experience less external compliance actions against them if they were better prepared to have the tough and honest discussions on a regular basis about the accumulated effect of the incremental tweaks that always happen over a period of time.  More on that later. Business drivers to become more efficient and leaner: This one usually ends up being a back door to the QMS getting a makeover but still a great reason for a change.  Many times, companies find themselves with a massive IT department that maintains lots of very expensive software applications that are cobbled together to manage various aspects of the Quality Management System.  We typically call these applications and computer systems GxP-relevant and, as such, must be validated for their intended use, maintained in a validated state over time, and must meet the requirements for electronic records and electronic signatures (if deployed).  More often than not we see two things … (a) legacy technology still being minimally maintained due to a perception that it’s too difficult to validate and (b) full QMS systems deployed for only one QMS activity even though the system is fully capable to handle many QMS processes.  Sooner or later (most often later) someone notices that the company has deployed, validated, and spends lots of money every year to maintain multiple systems where they could use one or two.  Wow! What a great reason to redesign the QMS to work within a single platform that employs all the great advancements we’ve seen over the last 8 years.  Not only will it save the company massive amounts of money, it will increase efficiencies and drive better compliance because it is simpler for employees to perform their jobs.  While this is exciting and great news, the unfortunate reality is that IT departments often stand in the way of the company making this decision because they have massive budgets (and turf) to defend.  This is another reason why the CEO should absolutely be involved in making these decisions and taking the helm to drive the QMS to an optimal level of performance. Significant changes to regulations and standards that affect the Quality Management System: Last but not least, significant changes to regulations and standards often call upon companies to evaluate the changes needed to their Quality Management Systems based on new requirements.  The most recent requirement for companies to transition to the new euMDR or euIVDR is a good example.  These new European Union regulations are driving a number of companies to make changes to some of their QMS elements and some companies are using it as an opportunity to update and renew their entire QMS. Now that we’ve covered some of the right reasons to consider making a change to a new or re-designed Quality Management System and talked through some challenges associated with making the right choice, next week we will dive into some of the lessons I have learned over the years and some predictable pitfalls to avoid. As always, thanks for reading!  Stay safe and be well! Thoughts? Please comment below …


Melita Ball

CEO and Principal Consultant

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