Episode 1: Interview with Martin Van Trieste, CEO of Civica Rx
Host Jim Fries, CEO of Rx-360, speaks to Martin Van Trieste, president and CEO of Civica Rx in the first episode of the Patient Safety Podcast. Covering topics such as the origin story of Rx-360 and the podcast’s mission to protect patient safety by sharing information, the two industry leaders explore relevant issues in the pharmaceutical ecosystem.
Listen in on Van Trieste and Fries’ conversation about security in the global supply chain. Find out why criminals exploit the pharmaceutical industry—and how ensuring patient safety in the creation and distribution of pharmaceuticals requires executives, suppliers, and distributors to work collaboratively and proactively.
Thank you to Rx-360: https://rx-360.org/
Thank you to our guest Martin Van Trieste: https://www.linkedin.com/in/mvantrieste/
Read the Interview:
Jim: Hi everybody. This is Jim Fries, president, CEO, Rx-360. I’m super excited for you to join us today with our really inaugural podcast and really what we want this podcast to be all about is to really, you know, provide awareness and education about the Rx-360 mission. Um, whether it’s pharmaceutical supply chain security, the quality of its materials, and really most importantly patient safety.
What I’m most excited about is not only welcoming the people that have been around Rx-360 for years, that you’ve been part of the consortium that you’ve been active, but also our first timers, for some of you, this may be the first time that you you’ve ever been exposed to Rx-360. So I wanted to welcome you.
We look forward to interacting and, and again, always we’re here for the industry. Most importantly, we’re here to protect that supply chain when it comes to pharmaceutical products. Now with that mindset and really kind of, our foundational mission at the, at the front of our brain right now, I want to welcome our very first guest to our, our podcast.
So Martin Van Trieste , I really want to be able to welcome you to the, to the podcast, but really from an introduction standpoint, Martin is currently the president and CEO of Civica Rx, which, you know, Martin, at some point here, I’ll give you an opportunity to talk a little bit about what you’re up to now. Martin is the former chief quality officer at Amgen.
He is in my mind, one of the world’s authorities when it comes to material quality in the pharmaceutical industry, the security of the supply chain, the integrity of the supply chain and really understands it from a government standpoint, from a regulatory standpoint and really from a roll up the sleeves and doing it standpoint.
So with that Martin, I’m going to welcome you. Um, thanks so much for being with us here today, and I’d love to be able to start off with a real simple question. You’re special at Rx-360, because you were one of the key cogs, if not the key cog in starting the consortium back in 2009.
I have heard the story probably from a hundred different people on, on how the consortium started, but I don’t think I’ve ever actually really heard it directly from you. In a few minutes, could you tell us from your perspective, what led to it, how we started, and why you got excited about it?
Martin: Yeah, it all goes back to 2007 and 2008 around the Chinese heparin adulteration.
And this refers to the Heparin adulteration incidents that occurred in the United States in 2008 and a US pharmaceutical company, subcontracted the creation of a precursor chemical for heparin and, uh, that was being manufactured in China. And then, then that subcontractor got um, kind of got in trouble by using precursors from other Chinese companies that were intentionally adulterated.
And that, that intentional adulteration was for an economic gain. And then the US pharmaceutical company, you know, they received the material, they tested the material, it tested like Heparin, it passed all the tests. Then they sold this adulterated Heparin into the US market unknowingly, which wound up killing 81 people and led to 785 serious injuries.
And of course this caught the attention of the media, the US food drug administration, and led to numerous lawsuits. So as these events were unfolding, I said to myself, I said, uh, did that company just miss something? Or our quality systems designed to catch intentional adulteration. And I came to the conclusion that, you know, the pharmaceutical company involved was very unfortunate and I happened to be very fortunate that didn’t happen to me at my company.
So I pulled together a bunch of thought leaders in the pharmaceutical industry. From the quality perspective, we talked to Dr. Janet Woodcock at the FDA. And she basically said, you know, this is industry’s challenge. You need to figure out how to fix this. And I strongly suggest that you guys work together to do it, Because we all realize that we are fortunate it didn’t happen to us, but we all realize that, by ourselves, we could not combat the criminal activity that was entering into the pharmaceutical supply chain and that we had to work together. And so those thought leaders came from Abbott laboratories, Glaxo Smith Kline, AstraZeneca, Pfizer, Amgen. We had suppliers involved from like, um, SAFC, so a bunch of people involved to get together and say, how can we work together? How can we do this?
When we, when we concluded those discussions we, we all said we needed to work collaboratively to really fight against these unethical players and even criminals that are entering into the pharmaceutical supply chain. And so we said, how are we going to do that? And we first said, well, best thing is to share best practices.
Best thing is when we find a problem that we share with each other. So there’s kind of like an official alert system. So if it happens over there, make sure it’s not happening to you. And then, clearly, we wanted to make sure that we could share our audits of our suppliers. So that we would not focus on suppliers who are GMP compliant and living up to the standards, we all said that we could focus on suppliers who are having trouble or even looking for those criminal activities.
And when I think about it, you know, at that particular time, we were starting to see things in the pharmaceutical supply chain up in the active ingredients part, and even in the precursor chemicals that we had never seen before. Adulteration, substandard materials, counterfeiting, and then even things like a natural disaster and a nuclear accident, all had negative impact on our supply chains.
So with that is how we pulled the group together and United to try to fix and solve some of these problems.
Jim: Awesome. Thank you so much. And, and it is interesting. All the, when I, when I sit back and I talk to members at Rx-360 all the time, it’s wonderful to hear how many people have, have recollections of those early days.
And what’s neat to hear, and this just goes to show you how impactful it was Martin, the story doesn’t change. Everybody almost tells the same exact story of, of how it started. And to me, that’s a validation number, one of how impactful, the idea was, of a consortium, and number two, that it still holds strength today, which is really neat.
Now, given that though, you talked about 2007, 2008 with the adulteration of, uh, of, of Heparin, you know, 2009. Rx-360 really gets up and running. Here we are now in what’s called 2022. And, and really we’re talking about a 13, 14 year span. What’s changed? And you know, because, listen, I’ve been, I’ve been here at Rx-360 now for four years and in my mind it’s changing every day.
But when you think about those 13, 14 years, what’s changed on how things were back then to where we are today?
Martin: Um, clearly, you know, the pharmaceutical industry has become a global industry, right? We have global supply chains with many, many links in the supply chain that go all around the world. Some of that’s related to being closer to your customers in foreign countries, and other parts of it is to save on taxes or on labor and get the lowest possible price.
So we have to realize when we’re chasing labor, and price, we’re also looking for countries that have less regulatory systems than we do, and that could be OSHA, the EPA or GMP. And so when you run to, go to those countries that have a much more lax regulatory process, you need to increase your awareness, right?
Because you have to realize. All right, I’m getting a benefit of the price, but I need to do some more work to make sure that benefit is safe and creates patient safety. And since the start of Rx-360, we’ve seen several laws go into effect in the United States and globally, we see increased regulations around the supply chain, and this has all been passed, you know, in the last 10, 11 years.
Rx-360 has done a really great job of raising awareness of things like cargo theft. They develop voluntary standards, which result in improvements. I used to say, I wake up every morning thinking on how to improve the supply chain security and the quality systems around the supply chain, knowing that criminals and unethical players were working harder every day to get around those systems.
So the lessons should be from the last 10 years is that we’ve made progress, but we can never take our eye off the ball and we need to stay diligent, and not get complacent. And so to me, regulations help, legislation helps, but it’s us collaborating together, right? Makes us stronger against those criminal enterprises.
Jim: Yeah. And I don’t disagree. One of the things you, you had mentioned that the mindset of waking up in the morning and thinking about the security, the supply chain, the quality of the materials. That’s what, one of the things that has absolutely blown me away in my time with Rx-360 is looking at our members and they do that.
It, it, they, they literally live that mission every day in their, what I refer to as their day job. Right? And, and what I think is, is hidden sometimes, which may be, you know, again, this podcast will help some folks, is the idea of patient safety. And, and I don’t think everybody that’s out there, because it was the pharmaceutical community for as large as it is, it’s actually still very small when you think of all the patients that are out there. And I don’t think that the, the, the patient walking down the street thinks about all those things that go into making sure that the drug that they pick up at their local pharmacy is safe. So I appreciate those things.
And when you look at those two main cogs that you just talked about, Martin supply chain security and quality. I talked to a lot of people sometimes. And I think that one of the mistakes that maybe the industry makes sometimes is that we separate those two things out sometimes. But when I look at it, whether it’s departmental within organizations or whatever it might be, but my thought looking at it from, you know, I guess if you want to say an insider slash outsider, there’s such an intertwining of those two things. Could you talk a little bit about how you think that quality and supply chain security really do intersect? They’re not separate.
Martin: Yeah. I, I totally agree with your premise. They do intersect and they shouldn’t be treated separately.
And I, I just go back to an unethical player and criminals need to have motive, the means, and opportunity to commit a crime. And I think it’s sad for me to say that these two organizations that we talk about supplier, you know, security and quality aren’t integrated seamlessly, and sometimes they’re opposed to each other.
And that just creates the opportunities for these criminals to exploit. Right? And to make a profit. So clearly I think we all have to work harder as leaders in the pharmaceutical industry to cooperate within the company to make sure our missions are aligned and that one should trust the other. Right?
And what I mean by that is if, if corporate security finds out about a counterfeit, they don’t want to necessarily tell the quality unit about it because they come from law enforcement, right? And law enforcement wants to keep that information as close as possible so they don’t, they, they don’t ruin or taint a potential legal case.
So we have to build that trust so that people know that that’s not what we’re going to do from a quality unit that we want to work together to make the improvements in our quality systems to, to detect those things earlier in the process. And so clearly. I think that has to change, right? I don’t think we’ve made enough progress there, and I think we still have to do a lot of work becoming one united against those criminals.
Jim: Yeah. And I think I, I don’t disagree and that’s one of the things that I see every day is that one of the things I like to say about Rx-360 and our members and really the industry as a whole is, we are best practice oriented, but it’s, it’s how proactive we are with those best practice ideas.
You know, you can, you can say your best practice oriented, but if you’re not taking those ideas and actually operationalizing them, they’re just ideas. And, and when you think about, could you live and breathe this every day, is what what are some of those ideas that you think the industry, you know, you had just mentioned a couple right now, but what else might there be that, you know, you look at, even if it’s like pie in the sky type of thing, what do what do we really have to start thinking about when it comes to long term?
In regards to staying one step ahead of the bad guys as you said.
Martin: Yeah, well, maybe it’s just a half a step ahead of the bad guys. It always amazes me when they catch and break up these criminal organizations, the people who were involved, how smart they are, right? They have sometimes two or three PhDs. Right?
So they’re using the same kind of resources that we use. Uh, the same kind of knowledge base that we use, and they just doing it for a different reason, for the pure sense of financial reward bar none, you know bar who cares who gets hurt, even the patient, and we do it the other way around, right? We do it for, we’re going to do what’s in the best interest of patients, we’re going to focus on patient safety, and if we do that right, we’ll make money.
I also think that we still need to bring more people together, right? We need to encourage more suppliers, service providers, bio companies, pharma companies, med device companies, to get together and be part of Rx-360. We need to work collaboratively to eliminate those opportunities.
We’ve got to go after those unethical players and those criminals. Whose intent is not to do the patient well, right? It’s only to make money. And so that’s one thing we keep focusing on. Bringing people together, bring them into the room. I think two, I don’t think we need legislative or regulatory fixes at this point in time, because I think when you have the basic building blocks in place, it’s basically surveillance.
How do we do better in surveillance? Detect them earlier. And we, when we detect them, share them broadly, right? People are always embarrassed to say that they missed a supplier who’s not doing things right. So I’m not going to share it, or that’s a trade secret that I use that supplier in such and such location.
But, you know, we all use the same suppliers. We all have the supply chain networks. And so if you find a supplier that’s cheating, there’s probably 10 other pharmaceutical companies that use that same supplier that are getting cheated at too. And so sharing that information, creating those surveillance networks, I think is critical. And we need to keep focusing and developing them into a much more robust system that’s more broad and more global in nature.
Jim: Thank you. This just popped into my head as you were talking there. So focusing now a little bit, just kind of pivoting slightly to the quality aspect of pharma and the quality of the materials and that type of thing. We know that, you know, going back as far as we can remember, there’s always been that component in the pharma industry of auditing our suppliers. Making sure that what they’re doing from a manufacturing process, from, you know, everything from data integrity, to even how they’re shipping and logistics and stuff like that, all that we really need to pay attention to, and we have these formalized auditing processes at pharmaceutical companies around the world.
When you look at the auditing world and the focus that’s been paid on that auditing process, how has that improved over the years? What’s different today when in auditing that was different, you know, that was in place, you know, 14 years ago during the Heparin situation?
Martin: Yeah. I would say, you know, the industry is not doing everything the same way, right? But clearly, best practices. When you’re, when you’re going and you think there’s something not right with the supplier or it’s the first time you use a supplier, especially those in foreign countries that are far away, is clearly not just to do a quality audit, right? It’s to do a forensic audit.
And what I mean by a forensic audit is that, are they actually doing the work that they say they’re doing? Are they actually making the product in that plant that they’re showing you? We call that a show factory. It’s nice and shiny and it’s brand new. Are they actually making the product in that show factory, or are they making it in a shadow factory, right? And just putting the label of the show factory. So you’ve got to do forensic audits. You’ve got to say, “okay, they make one ton of this material, right?” Well, show me that you’re using enough water in this particular plant to make one ton of this material. You know, show me all the details of the raw materials, the electricity you’re using, right?
Go in and really look at that forensically. Compare laboratory test results, the laboratory notebooks, the raw data to make sure it’s not been fudged or made up, right? So I think that has to be part of the future audits is more of that forensic type of work. And, uh, so we’ve got the quality piece down, but how can we do better on the forensic side?
And it’s a completely different skillset. When I go and send auditors to a new supplier, potentially in a place where I’m suspecting there might be some fraudulent activity, I send some quality people, and I send some forensic people. It’s a completely different skill set, right? And they’ve uncovered things, right?
They’ve uncovered things and past positions where we found the shadow and a show factory, and we reported it to the FDA, and the FDA took action on it pretty quickly once they verified it. So, clearly I think that’s an important thing to add to the system is those forensic audits.
Jim: Martin, when you look at the idea of supply chain security in the pharmaceutical world and quality, as we talked about, you just talked about forensic audits versus quality audits and that type of thing.
From me sitting in my seat, I see the industry, not only doing a really good job in those areas, but they’re also always looking to expand and improve in those areas. When you look at what industry is doing, how do you view the role that that you know, because let’s face it supply chain security and quality issues, challenges, opportunities are throughout the world, it’s just not the domestic Us. So when you look at regulatory agencies throughout the world, where do you think that they play a role here in this? And is there enough interaction between those agencies worldwide and the pharma community to make a difference?
Martin: Well, I think you have to understand the culture of a country to help you understand the regulatory agency and how they operate. I think you have to understand the country’s culture, the culture in that agency, and what their mission is. So for example, you know, if you go to China, especially 10 years ago, the Chinese version of the FDA, they didn’t do inspections on plants that only exported API to the United States.
They felt that was the US FDA’s responsibility and the drug manufacturers responsibility. They only did inspections within their country, for the product that was being distributed in their country. That was one thing that people would be really surprised to know, maybe even today. Two they’re there to protect the image of China, right?
So one, they don’t want people dying all over the world because that tarnishes the image, but they don’t want to be shutting suppliers down either because of quality problems or security problems or criminal behavior, because that’ll tarnish the Chinese pharmaceutical industries’ reputation.
So China, their FDA has a mission that’s a little different than ours. You need to understand that when you’re working with them, right? And once you understand someone’s culture and what their mission is and what they’re trying to do, you can develop a way of working with them, but you have to understand that. And I think that’s far too often when we send auditors to foreign countries, we miss the fact that culture is important, right? And we think everyone thinks like we do here in the US every FDA is like our FDA. And if you make those assumptions, you’re going to fail. I guarantee it.
Jim: Yeah, you’re right. You’re absolutely right. Martin, really, from a standpoint of kind of putting a bow on our conversation here, being able to look at how Rx-360 has played a role in everything that you brought up today for me is incredibly exciting because it gives me ideas, right?
It gives me ideas on how we can continue to work with our membership and really drive our mission worldwide. If you had a wish for Rx-360 for the next 13 years, what would it be? What would you like to see the consortium grow? I mean, you were there day one. You’re kind of here now, when you look at 10 years down the road, what’s your radar say, “hey, Rx-360 needs to be ready for this?”
Martin: Uh, I think a couple things, right? So, you know, the audit program, right? Can clearly be more, could grow a lot more, right? And we know that we know that company cultures prevent people from using Rx-360 audits. Because they think everybody, you know, they’re special and everybody else is different and they don’t understand in reality it’s an audit.
And so to me, I still think there’s lots of opportunities to grow there, um, and grow in the surveillance space where people are more open to share the issues. So those things I think are more important. It’s growth. I think the other thing is, you know, someday Rx-360 will gain a reputation where you can set real standards. Not voluntary standards. I think that’s important.
And I think that the organization’s done a good job at that. I’ll tell you two good stories. When cargo theft was running rampant through the world, Rx-360 developed a set of best practices, and firms that implemented those best practices eliminated cargo theft.
So clearly, there’s proof when you bring smart people together, share the best ideas, create a voluntary standard, people follow it, it has a value, it has a benefit. It works. And we didn’t just bring people in from the pharmaceutical industry when we developed that standard. We brought law enforcement into those conversations at Rx-360.
And the other one I think about all the time was, we talk about natural disasters and I talked about a nuclear accident. If we go back and think about the nuclear accident, you know, Japan had a major earthquake that caused a tsunami. That melted down a nuclear power plant that had this amazing amount of radiation escape.
And we had customers in that region of Japan. We had Japanese pharmaceutical companies that stored product in that area. We had suppliers who made active ingredients and precursors in that area. So how are we going to deal with that? Well, you know, the FDA was trying to figure it out. The MRHA was trying to figure it out, the European Union was, and they’re all trying to figure it out all by themselves.
We brought all the experts together at Rx-360 like the next day. And they included, not just the quality people, but the scientists in the companies. We brought in our environmental health and safety people. We brought in nuclear experts from the US Navy to ask about what we should worry about, how we should do it?
We brought in everybody around the table. I think in 12 days, we created a voluntary standard, that the regulators looked at and they said, we’re not even close to this yet. And they just adopted what Rx-360 put down on paper as a voluntary standard. That’s where I want Rx-360 to be in the future. To be that nimble, to be that quick, that the regulators aren’t going to come up with the solution. That we, in the industry, come up with the solution and they endorse it.
Jim: Thank you very much.
I like that roadmap. So thank you. Um, so Martin, in the few minutes that we have left, one of the burning things on my brain is tell me a little bit about what you’re doing now. I know I watched from afar, Civica Rx, but I’d love to hear your, uh, your story, your mission, and what you have going on.
Martin: Yeah. So, uh, I retired from Amgen in 2016, and I was going to go along my merry way. Travel the world with my wife and enjoy life. Go and play a lot of golf and go sailing in the ocean. And, uh, about two years into retirement, I got a phone call from a gentleman who is the chief strategic officer at Intermountain Healthcare about creating a generic drug company that’s a nonprofit.
And so the idea was interesting and we talked through it. And the original idea was high priced generic drugs. You know, let’s go fix high priced generic drugs, where there’s not competition and bring more competition to the market and lower the price. And I kind of said, you know, that’s a good mission, but it’s not something I’m really passionate about, I mean, it just doesn’t float my boat.
I said, but look, there are so many drug shortages in the industry, right. That are making hospitals, very inefficient. Hospitals are struggling to find alternatives. The alternatives they find are not as effective or as economical as the original drug on shortage.
And sometimes it leads to really bad patient consequences through medication errors. There are reports of deaths due to drug shortage. And so let’s put a company together that will do that. And we agreed that that was what we were going to go after. So Civica started doing and solving drug shortages for our members.
So we’re a consortium, or a cooperative, I guess would be a better name for it. And we have 55 large health systems, part of Civica, along with the Department of Defense and Veterans Affairs. That represents over one third of the hospital beds in the United States. So a pretty significant piece of the market.
And today, we bring 65 drugs to the marketplace for our members to have available to them. And so they agree to buy a certain quantity of these drugs. We then guarantee that we’re going to have inventory. We keep strategic stockpile for ourselves. Of those 65 drugs, 13 of them were used during the pandemic to treat patients with COVID, to support them. For example, you know, neuromuscular blockers to relax your airways to stick in a trachea tube. Pain medications to prevent the pain from having that trachea tube. Sedation agents, antibiotics, uh, steroids. So we brought those drugs to the market that were on shortage. On any given day, there’s over 200 drugs on the FDA’s drug shortage list, right?
So it’s a scourge that hurts patients. And so Civica started for one purpose. It’s the only purpose of the company – to do what’s in the best interest of patients. And we’ve been so successful. We don’t measure ourselves by how much sales we have. We measure ourselves by how many patients we touch. So as of today, we’ve touched over 24 million patients.
Martin: Right? And that’s a company that’s only three years old, you know. And when I’m asked, how did you do so much in such a short period of time from my colleagues, who’ve worked in big pharma, their entire lives, I said, “Our mission is very compelling. We hire very talented, passionate individuals who believe in the mission and we have no bureaucracy because we’re a small startup company.”
It’s amazing what you can do when all those things line up. So now that we’ve been so successful in the hospital market, fixing drug shortages, we have been approached by large payers in the United States, that work on an outpatient model to go after those high price generic drugs where there’s not adequate competition. And we’re now entering that outpatient market or what you would call the retail market.
Jim: Tremendous. That’s awesome to hear Martin and I’m looking forward to continuing to follow Civica over the next 10 years. So, uh, so with that, I’m going to thank Martin for joining us here today for our audience, that’s, you know, again, long time Rx-360 members or people that are first time, um, please we’re here for the industry. We look forward to many, many more of these podcasts and, uh, our mission again, patient safety. We want the patients to be taken care of when they look at their pharmaceutical products. So again, that’s what Rx-360 is here for. Martin. Thank you very much. And we look forward to our next session.
Martin: Great to see you, Jim.
Jim: Thank you.
Martin: Bye bye.