QUMAS Compliance Room

Travel Update: QUMAS Booth at SIFMA-CL in Orlando, Florida

2008-03-27T15:42:33Z

If you are attending SIFMA-CL next week, come by and say hello. I will be in attendance and will be thrilled to speak with you. We will be in Booth #17.

For more information about QUMAS participation at SIFMA-CL Annual Seminar. go to http://www.qumas.com/news-events/pr-031708.asp

Is SOX The Answer To All Things?

2008-03-27T14:43:00Z

Last week, I had the honor and pleasure of attending a seminar in New York where former Congressman Michael Oxley was the keynote speaker.

I guess you never quite lose the ability to be star struck even as you grow out of your adolescence. So I prepared well. Before I left the office to go to the seminar, I printed the first page of the Sarbanes-Oxley Act of 2002 and carefully chose my seat in the front, on the aisle so I could rush to get his autograph as soon as I could!

I now have the prized possession of an original autographed copy of the Sarbanes-Oxley Act of 2002 :)

Anyway, one of the questions asked of Mr. Oxley, expectedly, was about the possibility of a SOX-like legislation in response to the subprime mortgage crisis. The response by Mr. Oxley, to paraphrase, was that no real crime had been committed. Unlike the accounting misdeeds at Enron, Worldcom, etc. there was no apparent fraud here. However, the pressure on regulators and the Congress to get to the bottom of it is very strong. To me, that means someone’s got to pay.

The audience was reminded of the Glass-Steagall Act whose repeal and replacement by the Gramm-Leach-Bliley Act has come under fire. I have been reading about it and find it quite interesting. I encourage you to read some of these if only to get some context and perspective on the people and events leading up to the current state of the market.

The Glass-Steagall Act
The Gramm-Leach-Bliley Act
The Man behind GLBA

Do we need the Glass-Steagall Act back? Do we need another SOX? What do you think?

O Brother, Where Wert Thou?

2008-03-11T15:11:36Z

Funny how news stories from the recent past conjure up new streams of consciousness.

I just came across this article (from November 2007) and the comment by Morten Friis, CRO at Royal Bank of Canada, struck a chord. The CRO’s role is clearly in the limelight today just as the CCO role was with the mutual fund market timing scandal and the CFO role was in the wake of Enron and Sarbanes-Oxley.

(The article is at http://www.reuters.com/article/marketsNews/idUKN1360046120071113?rpc=44)

Morten Friis said one difficulty in risk management is preparing for unknown risks.

But was the subprime mortgage crisis an “unknown” risk? Evidence clearly shows that it was anything but unknown.

Apart from the systemic failures to detect and prevent conflicts of interest within lender organizations, the risk of defaults on subprime mortgages was clearly an “ignored” risk.

The risk of subprime mortgage defaults is a very well known risk. One that was consciously underestimated (at best) or ignored (at worst) at the height of the housing market boom. Sure, there were risk assessments done. Sure, the board was aware of its oversight responsibilities. But compensation structures were counter to risk management objectives. It allowed executives to unduly expose the organizations under their management to the worst-case scenario whose end, frighteningly, is not yet in sight.

Anyway, Morten Friis makes a very interesting follow up point: “You have to be prepared for the unexpected.”

And how exactly do you do that? The answer lies at the very core of how organizations are built – ultimately of people, by people, for people. Individuals that all have very raw and personal motivations and fears.

The traditional role of the CRO must, therefore, evolve to one that becomes the steward of promoting a risk aware culture that exists as a whole instead of in disjointed pockets. It goes beyond the science of market and credit risk. It extends into the human mind.

This culture must extend into every corner of the organization – from how products are manufactured, marketed, sold, and serviced to how compensation is structured and aligned to risk management objectives at every level.

With this culture in place and the systems to nourish it, the organization as a whole will march in lock step with its strategic objectives and approved risk appetites.

Let’s face it – you can never be prepared enough for the unexpected. But you can be prepared in how you respond to an unexpected event. That is what Chief Risk Officers do.

Now that my home is worth less than what I paid despite my excellent credit and prime mortgage, I have to ask, “O Brother, Where Wert Thou?”

2008 - The Year of the eCTD

2008-01-14T12:00:00Z

The New Year is now upon us, and with the New Year comes a number of new requirements as well as misunderstandings regarding these new requirements. Everyone in the Regulatory Affairs area of Life Sciences has heard about the new initiative that started on January 1, 2008 pertaining to the FDA’s requirement for eCTD.

There are a number of misconceptions regarding this requirement. Firstly, the requirement for filling applications in eCTD format only applies to the CDER (Center for Disease Evaluation and Research) Division of the FDA, for IND and NDA applications. The eCTD requirement does not apply to the biologics (CBER) or medical device (CDRH) divisions of FDA. CBER and CDRH are still accepting other types of electronic submissions, as well as of course paper.

Now if you are a Pharmaceutical company, the January 1, 2008 requirement doesn’t mean that if you are not ready for eCTD you can’t file an application. What it does mean is that you should contact your primary reviewer at FDA and discuss your options regarding submitting a paper eCTD or other agreed upon paper format, as no other electronic submission format will be accepted except for eCTD. Are you eCTD ready?

Risk Management: Importance of Labeling

2008-01-08T18:10:00Z

In 2007, the importance of drug labeling in the safety of patients has received national attention. The tabloids as well as well respected news programs covered in detail an incident involving the newborn twins of Hollywood actor Dennis Quaid. The Quaid twins were victims of an accidental overdosing by medical staff of Cedars-Sinai Hospital, in Santa Monica, CA.

According to different media sources, the Quaid newborns were mistakenly given 10,000 units of Heparin (an anti-coagulant administered via IV to prevent blood clots) instead of the correct 10 units, resulting in both babies being brought to the neo-natal intensive care unit (NICU). Thankfully the twins recovered and are now out of the hospital. These types of incidents are not as rare as we would like to believe, which highlights the importance of labeling.

With this particular scenario, this accidental overdose could have been prevented in multiple ways, either by the hospital and/or by the product manufacturer. The two primary reasons believed to be the cause of the mix up are the obvious mistake by the medical staff who administered the drug from the wrong dose vials. In addition, a certain level of blame has fallen on the manufacturer of Heparin due to the disturbing similarity of size and color of both the containers and labels of both the 10 unit and 10,000 unit vials.

Recently the Food and Drug Administration launched an initiative called RiskMAP (which stands for Risk Minimization Action Plan) in which companies must include a plan for how they plan on addressing risks to patients with regard to use of their product. These risks involve a number of different areas such as accidental or even intentional overdosing as one area of the action plan. In an effort to reduce these types of incidents, the manufacturer of Heparin has begun packaging the stronger dose of Heparin vials with a bright red warning label. Another example of a RiskMAP may be educational materials for doctors and patients as well as a prescreening test in order to insure that the patient can safely take a product. Not all products require a RiskMAP, however, those that do must have a self-documented action plan even before the product is approved.