3PARL Consortium Set Up to Address Supply Chain Audit Integrity

Increasingly close collaboration between audit firms and suppliers brings a concomitant challenge of impartiality. Impartiality is crucial to ensure that supply chain audit is accurate and reliable. To address this risk, Rephine and Eurofins Healthcare came together to create the Third-Party Audit Report Library (3PARL) consortium. In this Q&A, Adam Sherlock, CEO of Rephine sat down with us at EPM HQ to explain more about how the consortium will ensure the integrity and impartiality of the audit process.

Q: What triggered the decision to set up the 3PARL consortium?

Adam Sherlock: In the dynamic world of the pharmaceutical industry, the relationship between pharmaceutical companies, third-party audit firms, and suppliers is undergoing an interesting evolution. This evolution brings with it both benefits and potential risks.

Initially, the relationship between the pharmaceutical company and the audit firm was the focal point. But over time, we've seen a marked shift in this focus towards the supplier. This shift offers several advantages. Third-party audit firms, by building closer relationships with suppliers, can reduce the number of audits a supplier has to undergo. This leads to greater efficiency and, when suppliers provide the reports of third-party firms to pharmaceutical companies, the audit process becomes quicker. Essentially, it results in a more beneficial collaboration for all parties involved.

However, not everything that glitters is gold. This close collaboration between the audit firm and the supplier also has its downsides. One such challenge is impartiality. When the relationship becomes too intimate, issues of integrity arise. Impartiality is crucial to ensure that the audit is accurate and reliable. Uncertainties around integrity and impartiality add risk to the supply chain through compromises in quality of the service being performed and the final reports which are delivered, upon which assurance and compliance are based.

To address this systemic risk, Rephine and Eurofins Healthcare came together to create the 3PARL consortium, as a vehicle to define and adhere to a set of standard ethical behaviours, which provide industry stakeholders with confidence in the performance of this scope of services and the quality of the resulting reports.

Q: What are you expecting the consortium to achieve?

Adam Sherlock: We plan to define a charter, to review and iteratively enhance the initial code of conduct, to meet regularly to chart the course of the consortium, and to engage manufacturers, trade associations and other key stakeholders as appropriate, to ensure our message is heard, understood and reflects the needs of the industry.

Q: Rephine and Eurofins Healthcare are the founders of this consortium. What support are you expecting from the industry?

Adam Sherlock: The benefit to a service provider of being a member of the 3PARL consortium is that the quality of the performance of their services will be seen to be of a consistently high quality, delivered ethically, with integrity and impartiality, fairly, according to a consistent and transparent code of conduct, to which all members have agreed to adhere and be bound.

We plan to extend our membership beyond the founding collaborators, We are in discussions with a number of other important, well-known providers in this niche. In addition, we invite providers in the sector to apply to join the consortium.

Q: Who will ratify this benchmark?

Adam Sherlock: At this stage there is no external independent ratification or certification required. The code of conduct is defined and monitored by the consortium members themselves. We expect and hope that in future, once the value of the work of the consortium has been demonstrated and is acknowledged by the industry, that some form of external ratification or certification may be possible.

All audits conducted by members of the consortium are performed by either their own internal staff or by independent auditors who have been qualified by the consortium member through a standard selection process, endorsed by the consortium.

While this new approach certainly brings with it benefits in terms of efficiency and collaboration, it's essential that measures are put in place to ensure that the integrity and impartiality of the audit process are not compromised.

Q: Who will carry out the audits?

Adam Sherlock: Each organisation which becomes a member of the consortium retains its independence and continues to actively compete commercially with the other members of the consortium, but crucially, does so on the same level playing field.

For customers and manufacturers, by choosing to contract with a 3PARL consortium member, they are assured of the consistent performance of the service they need, enabling them to make their choice of whom to use based on the most important and relevant specific criteria for their requirements. There is no commercial relationship between any members of the consortium – it is not a commercial endeavour in any way.

Q: What has feedback from the industry been so far on setting up the consortium?

Adam Sherlock: The response to the announcement of the 3PARL consortium has been extremely positive across the whole life sciences product manufacturing supply chain. It is seen as a strong statement of intent on the part of the larger, professional service providers to create a standard operating model for the sector.

Q: What can we expect to see from the consortium in the future?

Adam Sherlock: In the mid to long term, the goal of the consortium is to define professional standards for the performance of the scope of services covered by the group and to be able to certify and accredit members.There is also a clear ambition to lead the sector in terms of training, education and career development for professionals wishing to become auditors or those wanting to enhance their current credentials.