Indian pharma and the ongoing scrutiny of FDA foreign inspections

Chris Ward addresses the scrutiny of FDA foreign inspections and examines the consequences of such inspections.

The US FDA has as its core mission the far-reaching responsibility to protect the health of Americans by ensuring the safety of the products it regulates. To fulfill this responsibility the FDA has, in America, an arsenal of enforcement and even prosecutorial powers that it lacks in foreign countries.

In the past decade the demands on the FDA's capacity and resources have soared. The globalization of supply chains for both food and drugs has stretched to the limit the capacity of the FDA to ensure the safety and the quality of foreign sourced products.

The foreign sourcing of active pharmaceutical ingredients (APIs) is now estimated to be as high as 70 percent. The supply of domestically produced finished pharmaceutical products depends on the quality and safety of imported APIs.

It is estimated that 20 percent of all generic drugs consumed by Americans are sourced from India. This means that in excess of US $10 billion in drugs from India pharmaceutical manufactures were sold in the US in 2012.

Concern over both the capacity and the resources of the FDA to guarantee the safety of foreign drug products prescribed for American patients has been growing for a number of years.

As early as 2006, the Institute of Medicine's report Future of Drug Safety concluded that the FDA lacked the funding resources necessary to fulfill its mission. In 2010 the Government Accounting Office, (GAO) raised concerns on the increasing reliance on foreign suppliers and noted that the FDA had inspected only 8 percent of foreign production facilities.

The ability of the FDA to inspect facilities and enforce its regulations is dramatically different in foreign countries compared to domestic inspection and enforcement.

The first difference is the overall capacity of the FDA to inspect. In 2009 the FDA conducted over a thousand domestic inspections compared with 400 foreign inspections. On average, a domestic production facility is inspected once every 2 years while foreign production facilities are inspected on average once in every 8 years.

Secondly, until recently foreign suppliers were given up to 3 months prior notice of a pending inspection whereas a domestic facility with a clean record could expect to receive 3 to 4 days notice.

Thirdly, foreign inspection would last for 4 days while a domestic inspection could go on for weeks, even months.

But the biggest difference is that a U.S. inspection is based on investigations of violations to the FD&C Act, where foreign inspections can only determine if the company is in compliance or not. The FDA has no right to prosecute a foreign company if they violate the U.S. laws

Public concern in America over the FDA's capacity to effectively regulate foreign drug supplies reached a tipping point in 2013. Extensive media coverage of cancer drug shortages because of supply chain problems, sub standard medicines entering the country and the highly publicized FDA actions in response to Ranbaxy's problems in supplying one of the most heavily prescribed generic drugs in America have increased the pressure on the FDA to find better ways to more effectively protect the interest of the American consuming public within the limited financial resources that are available.

In response the FDA has taken a number of steps to fulfill its responsibilities to American consumers.

• It has increased the number of inspectors that are available for foreign assignment.

• It has overcome restrictions on its inspector's access to foreign production facilities by issuing a guidance " that any drug processed, packed or held in a facility that denies , delays , limits, or refuses entry or inspection will be deemed an "adulterated" product

• Most dramatically, it has put companies that are found to be out of compliance with the FDA Good Manufacturing Practices on an Import Alert. The Import Alert allows the FDA to Detain Without Physical Examination (DWPE) all shipments being imported into the USA. This regulatory action is being done without forewarning, i.e. the issuance of a warning letter.

The impacts on some major Indian manufacturers have been enormous, effectively shutting out their products from the US market. But it is worth noting that many other well-established Indian manufacturers have had few issues with compliance and continue to be unimpeded suppliers to the U.S. market. Lest anyone think that the FDA targets Indian companies, one of the first companies to be hit with an import alert was Apotex, the Canadian generic giant, which in 2009 was under an import alert for nearly nine months at a estimated cost of over US $500 million in lost sales. Read more about this in an excellent article by Alan Schwartz.

The intent of these actions is clear: to protect American patients. But although these actions advance U.S. consumer protection by ensuring product compliance with U.S. standards, they are not without negative consequences in the U.S. marketplace. While the FDA has stepped up its foreign inspection and enforcement staff, there has not been a commensurate increase in compliance support. Hence it may take companies months to have warning letters and sanctions lifted. This causes havoc for domestic US manufacturers who depend on foreign supplies.

"The regulation of foreign drugs is primarily an issue of safety but increasingly it is also becoming an issue of cost to the tax-paying American public."

The regulation of foreign drugs is primarily an issue of safety but increasingly it is also becoming an issue of cost to the tax-paying American public. To meet the FDA's growing financial burden of inspections and enforcement, perhaps the best solution is to increase user fees that are currently levied by the FDA for product review and approval.

Ultimately, the best solution for foreign manufacturers, both in developed and developing countries, is to bring their own drug regulation and manufacturing processes up to recognized world standards. Europe, Canada, the United States and many other countries are well down the path to international harmonization of regulatory standards. But the Government of India is far from having a drug regulation and oversight system that approaches world standards

Contrary to the wistful notion that India is the "drugstore of the developing world", the reality is that India's pharmaceutical companies derive the bulk of their revenues from the U.S. The U.S. market for Indian generics is U.S. $10 billion and growing. But, ironically, India's inability to move forward with world-class regulation may already be driving some of its best indigenous pharmaceutical manufacturers to build their production facilities outside of India.

About the author:

Christopher Ward is Senior Partner, World Health Advocacy, a health policy and communications consultancy based in Hamilton, Canada, and Washington DC. USA. Ward served for many years in elected office in Canada. In the Ontario Legislature he served as Parliamentary Assistant to the Minister of Health and was responsible for carrying the legislation that established the Ontario Drug Benefit Program, which remains the largest publicly funded drug plan in Canada. Subsequent to his service in the Ministry of Health he became Minister of Education and later Government House Leader. From 2008 to early 2013 Ward was responsible for international stakeholder outreach programs at PhRMA in Washington DC. Chris Ward is currently a Board Member of The Cameron Institute.

How can the FDA's growing financial burden of inspections and enforcement be met?