Corporate restructuring called for to alleviate persistent practice of lab shopping

By Hank Schultz

- Last updated on GMT

Related tags: Material, Management, Frank jaksch

The quality of botanical materials is determined by the quality of tests done on them, Jaksch said.
The quality of botanical materials is determined by the quality of tests done on them, Jaksch said.
Dry labbing and lab shopping are problems that persist in the dietary supplements industry, according to Frank Jaksch, CEO of ChromaDex.  It is still all too easy for a company to get the results it wants, he said at a recent conference.

Jaksch addressed attendees at the 13th Annual Oxford International Conference on the Science and Regulation of Botanicals in Oxford, MS last week.  Jaksch advocated for a basic shift in corporate structure to alleviate the abusive practices that have been exposed time and again but that continue to stain the industry’s quality and safety reputation.

Dry labbing and lab shopping are two sides of the same coin. In the first, the machines don’t get turned on at all; in the second, a company hunts around until it finds a lab that will give results that match its expectations. In both cases, the problems arise because of what Jaksch views as a skewed corporate culture.

Unburying the bodies

“Here at ChromaDex we have a unique perspective,”​ Jaksch said. “If you want to know where the bodies are buried, the best way is to go to a lab.”

Contract labs are an extension of the Good Manufacturing Practices compliance picture, Jaksch said. In order for a company to fully comply with GMPs, it needs to do multiple assays for identification and potency of botanical raw materials, and to look for microbiological, metals and other contamination and to assess the levels of residual solvents in extracts. But those tests are only as good as the lab that does them, he said. Assessing the quality of a lab’s work is something that should routine, but from Jaksch’s point of view it is still the exception rather than the rule.

“You should audit and inspect your lab before you use them. We have been audited in this way by only one company in the last ten years,”​ he said.

Poor business practices

Jaksch doesn’t excuse the labs that fulfil these expectations. But he said the true fault and responsibility lies within the structure of the companies taking in the raw materials that  enter into such relationships.

“When you analyze it, it is poor business practices that make lab shopping easy to happen,” ​Jaksch said. “Lab shopping will never stop unless you fix underlying business problems that are related to supply chain management practices.”

Jaksch said he has all too often seen companies structured in such a way that gives too much control to the purchasing department. Material flows from purchasing directly into manufacturing with price being paramount.  Any caveats raised by quality managers in this scenario are seen as a costly impediments to the process.

“Purchasing departments have too much control over raw material and vendor selection. You see that quality control is overridden by pressure from the purchasing group to get material to pass. Purchasing departments are incentivized based on cost savings; they fundamentally don’t care about the quality of the material,”​ Jaksch said.

Jaksch said that cost concerns can lead to a situation in which companies are buying from multiple vendors, exacerbiting the quality picture. It’s hard enough to fully qualify even one vendor, much less a group of them.

“We’ve seen that purchasing departments are shifting vendors constantly. They could be buying ginkgo, for example, from three different vendors. You need a system of qualifying vendors before you use them,”​ he said.

Proposed solution
To alleviate this situation, Jaksch advocates a system in which quality concerns are fully integrated into the purchasing loop, rather than being like a hall monitor in a school. Only material that will pass inspection is purchased in the first place, and the manufacturing cycle is scheduled accordingly. And, he said, these arrangements need teeth in the form of robust agreements with suppliers.

“We advocate two agreements, a quality agreement and a supply agreement. The analytical testing component should be built into the quality agreement.  It’s rare that we find that customers have these sorts of vendor agreements in place,” ​he said.

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