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Business Meeting

Mark Paxton, Chief Executive Officer at RX-360

Rx-360 is an international pharmaceutical supply chain consortium dedicated to protecting patient safety. Please explain Rx-360’s strategies, mission, and activities to our readers.

Rx-360’s mission is to promote patient safety by sharing information and developing processes to improve the integrity of healthcare supply chains and the quality of materials moving in those supply chains.

To meet this mission, Rx-360 has pioneered a joint audit program for upstream suppliers, downstream distributors and others that are engaged in moving materials and products in commerce that must be properly qualified by manufacturers. In doing so, we manage audits of raw materials and basic chemicals, packaging materials, excipients, active pharmaceutical ingredients, wholesalers and common carriers by multiple sponsors who are each blinded from each other. In this way, we can lower the cost of the audits to each sponsoring manufacturer while simultaneously reducing the increasing audit burden on their trading partners.

In addition to the joint audit program, we have developed multiple white papers covering best practices for securing the integrity over the entirety of supply chains. We do this through internal work groups that are comprised of subject matter experts from our member companies. They have done a terrific job covering a myriad of programs and at any given time, we may have up to 15 active work groups operating at various stages.

Your function and audit programs you offer are not only important for the patients but also for pharmaceutical companies as well. Can you explain about the benefits pharmaceutical companies would receive from working with Rx-360?

As noted above, the pharma companies benefit by sharing the costs of audits performed uncommon suppliers. They also are blinded from each other when they do so, so we can alleviate anti-competitive concerns that may otherwise exist. And since we use a single audit firm - British Standards Institution - the audits tend to be consistent and importantly, our footprint is global. We perform audits wherever the suppliers exist. In addition, once an audit report is finalized, we make them available for purchase by third-party firms that did not participate in the audit. Those revenues are then used to provide credits to the original sponsoring firms for that will offset the costs of future audits they need to perform - up to 100% of their original audit cost.

While there are clear benefits to finished product manufacturers, the benefits to the suppliers that are audited can be even more extensive. For suppliers that sell components and other materials to pharmaceutical and medical device companies, they are frequently under substantial pressure to allow audits to their customers as part of the customers’ required vendor qualification programs. For suppliers that have hundreds of customers at a given site, the burden of audit requests is truly unsustainable. Consequently, our joint audit program helps alleviate that burden.

Finally, under the new EU rules requiring manufacturers to qualify wholesalers and common carriers before distributing their products, those firms provide services to literally thousands of manufacturers. Therefore, they will absolutely require a joint audit firm like ours, along with a very robust licensing program to third parties, since they simply cannot and will not be able to withstand the avalanche of audit requests coming their way.

We see that Rx-360 has partnered with BSI Supply Chain Solutions to lead its international joint audit program. Why is international business important and what benefits will companies overseas gain from working with Rx-360? Also, how many members do you currently have globally?

First, let me address the membership question. Currently, Rx-360 has about 65 members in the EU, USA, China, Japan, and India. We are really hoping that companies in Korea will join us. Our members are generic, branded, small and large. They are finished product manufacturers and suppliers to those manufacturers. We also have a number of software and related companies that provide support services to all our manufacturing members. The goal is to do what we can to promote patient safety. Our membership fees are very small by trade association standards and it gives employees of both small and large members to participate equally so that solutions can be developed that are pragmatic and meet everyone’s needs - particularly the patients we are honored to serve.

Second, regarding the utilization of British Standards Institution (BSI) as a sole provider of audit services, they have a proven record on a global basis. They are well-known to regulatory authorities and, on the medical device side, are a notified body in the EU and are a third-party accredited audit firm by the US FDA Center for Devices and Radiological Health (CDRH) as part of CDRH’s Medical Device Single Audit Program (MDSAP). In those capacities, BSI serves as “co-regulators” and its practices are routinely subject to regulatory inspections. Hence, we have great confidence in their abilities. It’s also worth noting that BSI - the parent company of the BSI Supply Chain Solutions - is, like Rx-360 - a nonprofit, so they understand that aspect of our organization and what we are trying to do for the industry. That said, please also note that when Rx-360 initiated our pioneering joint audit program, we originally used many audit firms. The thought was the more competition the better for pricing. While the audit firms were all excellent, we found that the costs weren’t nearly as favorable to Rx-360, as many of those firms were regionally focused. Hence, we put out a Request for Proposals (RFPs) for our entire book of auditing business for a period of three years with the intent of at least getting consistency in our audit costs. BSI won that bid, and they have been a great partner.

Finally, in addressing the importance of international business and working with Rx-360, it is most noteworthy that our mission is to protect patients by ensuring quality of medical products and the integrity of the healthcare supply chains in which those products move. Our supply chains - from raw materials to manufacturing to patients - are complex and global. There is no single national regulatory authority that can regulate these supply chains. It is therefore up to us, as industry partners, to do the right thing by ensuring that our patients, whether in the USA, Korea, Africa, or anywhere else, are getting the quality medicines that they and their healthcare providers expect. If we, operating collectively as “industry”, don’t deliver on the promise of quality medicines and devices to patients - wherever they may be - then who will, and what are the consequences to our businesses? All I can say is that if you sell snake oil to a consumer, that consumer isn’t coming back, but maybe a government will, and neither are going to be favorable conditions for our businesses in the long run. So let’s get rid of that behavior, and let’s get rid of it across the globe by being an inclusive, quality-driven organization that readily shares best practices with the rest of industry for patients’ benefit.

As a CEO of Rx-360, what do you think is the most important issue in the healthcare industry?

Global delivery of medicines and devices that are KNOWN to be safe and effective. Healthcare providers expect that when they prescribe a therapeutic intervention to a patient, then it will work as expected. They neither know or care where it was manufactured. If that intervention doesn’t work, they will try another one. The fact that the first intervention didn’t work because of quality-related problems because it was substandard or even counterfeited, is not usually on their radar. They expect - and rightly so - that medical product regulatory authorities are doing their jobs. However, as noted above, globalization has negatively impacted all patients, including me and your readers. While the benefits of globalization still exceed the costs, we can’t tell that to the cancer patient that received counterfeit Avastin in the USA, or to the large numbers of pregnant women in Ghana who received ergometrine to induce labor for medically necessary reasons, yet when tested using statistically significant samples, there was little amount of active ingredient in either the injectable or tablet dosage forms, if detected at all.

You are working with a variety of leaders in healthcare related industries including pharmaceuticals. What would you say are the top three priority assets or skill sets needed for companies to be successful in the global healthcare industry?

Number one, remember that healthcare providers and patients are your consumers. Number two, please never forget number one. Number three, please never forget number two. Simple, right?

WKMJ has readers from over 10 countries globally. Please share your final words or thoughts with our readers.

I don’t want to cause sensationalist concerns here. But manufacturers of medicines and devices are in the business of helping patients. If that is not your business’s primary concern, then exit this industry. For those that focus on patients, the rewards - financial and otherwise - will be there. In conducting yourself accordingly, please understand that your patients no longer exist in your country alone. Your patients exist everywhere across the globe. There is someone, somewhere, buying your medicine and sending it somewhere else - often to places that you never even consider as part of your market. Those patients do not need to be victimized just because they aren’t. Be diligent in your manufacturing and distribution practices, and know that if you do, you are really helping someone in dire need. And if you need support, Rx-360 is here and we can help.

December 5, 2016

Mark Paxton

Chief Executive Officer, Rx-360

Mark Paxton is the first CEO of RX-360, Prior to joining RX-360, he served as a Regulatory Counsel in the FDA CDER Office of Compliance where he was responsible for assisting in the development of supply chain security policies, both domestically and internationally. Before joining FDA, Mr. Paxton served as Associate Vice-President, International Regulatory Affairs at the Pharmaceutical Research and Manufacturers of America (“PhRMA”). In that capacity, he established a number of on-going dialogs and work programs with drug regulatory authorities throughout, Japan, China, East Asia, India, Europe and Latin America. Mr. Paxton is also a regulatory attorney by education, experience, and training, and prior to joining PhRMA, he was in private practice in Lexington, Kentucky where he focused his practice on food and drug law. He received his B.S. (1991) and M.S. (1993) degrees in Economics from the University of Kentucky, and his J.D. from the University of Dayton School of Law in 1998.


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