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A Conversation with Sam DeMarco
owner of Compliance Team, Inc.

Many of us dream of owning our own business. For an insight on this topic, we would like to introduce our readers to someone who successfully accomplished this goal. 

The following is an interview with entrepreneur and business owner, Sam DeMarco. Sam's company is Compliance Team, Inc. (www.complianceteaminc.com). Compliance Team provides technical compliance pharmaceutical consulting services to both large and small major pharmaceutical corporations and small businesses throughout the country. 

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Sam, many of our readers have, at one time or another, considered starting a business. What was your inspiration for starting your Compliance Team?

For 8 years, I worked as an employee for Baxter Healthcare Laboratories. During that time, I had to deliver technical solutions to people inside Baxter, and I often thought that I could offer exceptional value as a service provider to other companies throughout the pharmaceutical industry by starting my own business. 

When I left Baxter to join a recently formed consulting company as one of their first employees. Over time, I observed significant gaps between standard and best-in-class service offerings as a consequence of the the management style and business operating model of the owners of this company. It was then that I knew it was time for me to start my own company because I could offer a better business model.

How did you identify the type of business you wanted to start?

Inside the pharmaceutical industry, around 1994, the need for "validation services" was just beginning. I saw the opportunity to get involved at the pioneering stage of this new type of service firm trend and joined the small start up company that I mentioned previously. 8-1/2 years later, I truly felt that I could do a better job serving customers if I was the owner and leader of my own business. 

Specifically, what services does your company offer? 

Basically, Compliance Team offers technical professionals to help pharmaceutical companies comply with FDA regulations. There are many different types of services we offer to accomplish this. The services include Commissioning and Qualification, Equipment Validation, Facilities Validation and Process Control Validation. We also assist with FDA Inspection Planning, non-compliance remediation projects, and Quality System Audits to name a few.

What does the FDA require compliance on? 

The FDA requires pharmaceutical companies to be in compliance with what is called Good Manufacturing Practices, or GMPs. Basically these are regulations that define how companies meet and demonstrate that they have quality control of their facilities, equipment and processes. In other words, GMP insures that they are capable of producing a quality product. The FDA's main objective is to make sure that the products coming out of these manufacturing facilities are consistent, safe and of the highest quality. Our role is to help companies demonstrate compliance through good documentation by writing protocols and testing their systems.

You say the compliance issue has emerged over the last few years. How has it changed? Obviously the FDA has been involved for many years. What has changed that opened this market for you?

Twenty years ago there was a lot of deficiency in the industry relative to meeting FDA expectations. There was significant regulatory deviation or non-compliance. To improve this situation, the industry and the FDA worked together to create "best practice" guidelines. 

For individual companies, this requires them to document the current state of their business as well as the testing results of their equipment and processes. By documenting the verification of the proper operation of these systems, they validate that everything is performing as expected. So it was after many years of the FDA citing deficiencies by manufacturers, that the manufacturers finally said, "The way to demonstrate that we are in compliance, or are trying to achieve compliance, is to have a way of measuring and reporting on process and manufacturing results". That's when validation documentation services basically became a need for the industry.

What steps did you take to formalize the business plan and begin operation?

Initially, I documented the entire plan for the business. I started writing the plan probably a year, to a year and a half, before I actually took it to a bank as a prerequisite to securing a loan. They looked very carefully at this plan, and the result was them issuing a line of credit to carry the cash flow of the business during its startup period.

What components were in that business plan?

In addition to an Executive Summary, it featured a breakdown of the financials, profit and loss expectation projections for three years, cash flow needs for the start up, balance sheets, a management plan, organizational structure, description of the demand for services and a competitive environment analysis. It was a 70 or 80 page document defining the risks and potential rewards associated with forming, managing and growing the business. 

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