January 25, 2016

GMP Compliance Cost

The GMP compliance cost was calculated by the FDA when they drafted the Dietary Supplement Health and Education Act (DSHEA). The regulations for supplement GMPs in the Federal Register compliance contain estimated costs of compliance on small businesses depending on their size. They figured there would be a one time burden of 56,000 hours for all dietary supplement manufacturers to establish written procedures. They also figured that all companies would need to allow 930,000 hours for record keeping. They then used the total number of companies of different sizes to work out the economic impact on each type of company. We’ve created a general overview of the compliance process.

GMP Compliance Cost 

This table outlines the cost per establishment by size:

Number of

Employees

Annual Revenue Setup Costs* Annual Costs*
Small

Establishments

<20 Under $1 Million $26,000 $46,000
Medium

Establishments

20 – 500 $5 to $10 Million $20,000

$184,000

They FDA calculated that very small firms with less than 20 employees and annual revenue of under $1M should plan to spend about $26,000 to set up their compliance systems and about $46,000 to maintain them each year. Medium size establishments with 20 – 500 employees and $5M to $10M in annual revenue should plan to spend about $20,000 to set up their systems and about $184,000 each year to maintain them. The estimates took into account that medium size companies would already have most of the required systems in place whereas the small firms would be starting from scratch.

The high cost of compliance is due to the challenges of GMP manufacturing. Good Manufacturing Practices are complex with a wide array of regulatory requirements. There is a lot of time needed and typically a high cost to set up a quality system. After the system is established, there is a lot of documentation toe keep up with and there are often long cycle times for QA review and corrections. Initial training on GMPs and ongoing compliance to SOPs is time consuming. Fortunately, there are manufacturing execution systems with electronic batch records for GMP manufacturing system that have been built from the ground up to meet these challenges and to make GMP easy!

Differences in GMP Requirements

While the GMP regulations for supplements seem similar to regulations for drugs, there are some differences. The FDA issued the regulations for supplements and for pharmaceuticals in separate areas of the Federal Register. A big difference is that drugs have to be pre-approved before marketing, whereas dietary supplements do not. Another important difference is that drug testing must be done for all active components in a product, but there are exceptions available for dietary supplements. Also, equipment and analytical methods have to be fully validated for drugs, but only qualified for supplement products.

Electronic Manufacturing Execution Systems for GMP Compliance

Manufacturing execution systems and electronic batch record software can be used for GMP manufacturing of dietary supplements. These manufacturing software systems seamlessly incorporate all manufacturing processes in one place where they are web-based, all data is visible all the time to everyone via the cloud. They provide flexibility, speed and real-time access to information. There is one system available that uses built-in quality procedures and automated GMP compliance. This one can accelerate the startup of new GMP operations or allows rapid conversion from paper based manufacturing to an electronic cGMP manufacturing execution system.

There are many reasons that companies will want to adopt a manufacturing execution system with electronic batch records to replace their paper system. GMP manufacturing software can reduce the risk of GMP compliance issues. They allow you to use electronic documents and logs instead of paper. The system controls quality and compliance with multiple checks and processes built into the software. It is more efficient than manual systems because it can eliminate the redundant process and forms that occur in manual systems. It can help you reduce errors, omissions and deviations especially in the batch production records. Probably the most important advantage is that a transition to a manufacturing execution system can provide opportunities to reorganize and to update processes to make the whole plant work better. All of these benefits taken together will result in increased throughput and quality, and will reduce the cost of compliance.