U.S. FDA Considers Using Third-Party Inspectors to Enhance Global Reach

U.S. FDA is talking about adding an outsourced inspectorate to help it police the globally outsourced pharmaceutical manufacturing industry.

This use of third-party inspectors would dovetail with a nascent global alliance of drug regulatory agencies that share inspection plans and results to more effectively and efficiently assure drug manufacturing quality (Also see "‘Global Allegiance’ of Inspectorates Emerging" - Pink Sheet, 1 Nov, 2010.).

The emerging alliance's risk-based approach enables inspectorates to rely on the findings of counterparts in other countries without first having to harmonize their GMP regulations, which would take decades, at best.

FDA, the European Medicines Agency and Australia's Therapeutic Goods Administration piloted this approach for inspections of active pharmaceutical ingredient manufacturers in third countries to such good effect that they have agreed to make it standard practice. FDA and EMA are piloting it for inspections of drug product manufacturers as well (Also see "FDA-EMA-TGA Joint Inspection Program To Be Permanent; Other Collaborations Expand" - Pink Sheet, 21 Mar, 2011.).

But better coordination among inspectorates is not enough to solve the challenge of globalization, FDA officials say. The inspectorates will also need to grow.

FDA's idea of adding third-party inspectors comes as Congress and drug makers demonstrate a limited willingness to finance expansion of FDA's in-house inspectorate, even though there are far more foreign facilities requiring inspection than FDA is capable of inspecting.

The idea of contracting with foreign inspectorates and laid-off pharmaceutical executives to extend the agency's global reach is not as foreign as it might appear at first brush. FDA has a long history of contracting with state regulatory agencies, mainly for food inspections, and more recently has piloted an international contract inspection program for devices. Those programs could serve as models for third-party pharmaceutical inspections.

FDA officials shared their thinking about third-party inspections last month at the Pew Charitable Trust's "After Heparin" roundtable in Washington.

The roundtable was a forum the non-governmental organization used to help develop a consensus on appropriate legislative responses to the compromised quality, economically motivated adulteration and counterfeiting that have accompanied the globalization of the pharmaceutical industry.

Congress has been trying to address these issues ever since scores of Americans died in 2008 upon receiving heparin anticoagulant that someone in China had adulterated with chondroitin sulfate.

The FDA Food Safety Modernization Act, which became law Jan. 4, includes a number of measures to protect food from similar threats, driven in part by the deadly contamination in 2007 of pet food in the U.S. and infant formula in China with melamine, a type of plastic that can mimic protein in compendial tests.

Congress will likely soon consider similar legislation to protect drugs and devices from such threats, typified by the heparin incident (Also see "Heparin Adulteration Triggered Pharmaceutical Identity Crisis" - Pink Sheet, 1 Dec, 2008.).

Most Foreign Facilities Remain Uninspected

At the Pew roundtable, the General Accountability Office's Marcia Crosse called attention to some of the congressional watchdog agency's recent findings on FDA's foreign inspection program.

Crosse, who is GAO's healthcare director, said a September 2010 GAO study concluded that "of the facilities that FDA thinks it's supposed to inspect, more than half of them may never have been inspected by FDA - and almost half of those are in India and China."

Crosse said the shortfall could be partly due to inaccuracies in FDA's data. Regardless, she said, "There were 920 establishments that FDA thinks it should be inspecting in China. Eighty-eight percent of those may never have been inspected. .... India, 502, 64% may never have been inspected. In total overseas, 64% of the establishments may never have been inspected; 10% domestically, which I find very interesting, may never have been inspected, according to FDA's own data. And again, we don't know how much of this is problems with the database."

The GAO report was the latest in a series on weaknesses in FDA's foreign inspection program that goes back more than a decade.

The report indicates that FDA's foreign inspections have increased, but so too have foreign facilities requiring inspection. In fiscal year 2009, FDA conducted 424 foreign inspections, 27% more than in fiscal 2007. But during that two-year period, the number of foreign establishments in its inventory increased by 16% to 3,765.

Budgetary Resources Would Fall Short

FDA has been devoting an increasing amount of resources to foreign inspections, GAO said. Funding increased from $10 million in fiscal 2007 to $12 million in fiscal 2008 and $41 million in fiscal 2009. FDA told GAO it was planning further increases to $42 million in fiscal 2010 and $50 million in fiscal 2011.

However, the GAO report said, "FDA officials acknowledged that the agency is far from achieving foreign inspection rates comparable to domestic inspection rates and, without significantly increased inspectional capacity, its ability to close this gap is highly unlikely."

In the years since the heparin incident, House and Senate committees have several times proposed legislation requiring drug manufacturers to pay for surveillance inspections of foreign facilities.

Because the FD&C Act does not require surveillance inspections abroad, FDA rarely conducts them except when revisiting foreign sites to conduct preapproval inspections, which drug makers finance through user fees.

Guy Villax, representing Europe's active pharmaceutical ingredient manufacturers, and Brant Zell, representing U.S. API makers, both told the Pew roundtable they favor paying inspection fees, which could help level the playing field in their competition against Asian API manufacturers.

It appears unlikely, however, that funding for foreign surveillance inspections will find its way into the fifth five-year reauthorization of the Prescription Drug User Fee Act, which Congress is expected to approve before PDUFA IV expires at the end of fiscal 2012.

Neither the Pharmaceutical Research and Manufacturers of America nor the Biotechnology Industry Association has promoted the idea in PDUFA V negotiations. BIO refuses to comment on the inspection fee concept. PhRMA says it hasn't taken a position on such fees and would rather talk about its support for risk-based inspections and criminal penalties for counterfeiters (Also see "Is Silence Golden For Brand Companies On Inspection Fees?" - Pink Sheet, 4 Apr, 2011.).

Brand manufacturers don't face head-to-head competition except from makers of unauthorized generics and counterfeit drugs.

John Taylor, FDA's acting principal deputy commissioner, was not especially forthcoming on whether he thought Congress might impose fees for inspections. He told the Pew roundtable that "the idea of using user fees for inspections in the context of some of the legislative proposals that are being viewed now is something that is still being discussed and on the table, and that's about as much as I can say."

Deborah Autor, director of the Office of Compliance in FDA's center for drugs, later that day observed that the agency is better able to get work done when it's funded by user fees. "Government budgets being what they are ... funding can be somewhat unpredictable, and that is a challenge for a regulator who wants to do a good job."

On Forming A Contract Inspectorate

Given the lack of certainty that Congress or drug makers will fully fund the foreign inspection ramp-up FDA believes it needs, the agency is exploring the potential of contracting out some of the work at less cost than it could do it in-house.

"When I am talking about working with third parties, I am by no means suggesting that FDA in any way is abrogating our role," clarified FDA's John Taylor in his remarks at the Pew roundtable. "What I am saying is that others can complement and supplement the work that we're already doing."

He emphasized safeguards the agency would put in place. "To have approved public and private third parties conduct inspections and other oversight activities, FDA will establish a review and audit infrastructure in order to verify the integrity of the information that it receives from third parties, and to assure that it can rapidly take thorough enforcement activities where relevant."

With the help of these public and private third parties, FDA will be able to address more public health risks, and gain the flexibility "to quickly shift its attention to the most pressing dangers as they arise," he said.

Asked to elaborate on FDA's plans for third-party inspections, Taylor stressed that it's largely conceptual at this point, but that the agency would look at working with anyone who is involved in the supply chain. "It can be a regulatory partner ... it can be industry, it can be pharmacists, it can be anyone who as a part of their daily job has a role in collecting information about the movement of the product, about the quality of the product, and it's those third parties that we hope to work with and tap into in order to leverage our limited resources."

Prabir Basu, executive director of the National Institute of Pharmaceutical Technology and Education, asserted that it is imperative for FDA to make sure all foreign facilities are inspected.

Basu suggested a source of third parties that could provide FDA with the manpower to do it: "There are so many qualified pharmaceutical employees that have been laid off by these pharmaceutical companies. They can be trained and certified by the FDA to act as inspectors."

Noting that FDA has a certification program it uses internally, Friedman said, "If we were going to start to entertain ideas for third-party [inspectors], which we certainly are thinking about right now, that would be a parallel type of program or similar program that we'd use to certify the contractors or others."

- Bowman Cox ([email protected])

[Editor's note: This article is excerpted from a longer story that appeared in the April 2011 issue of 'The Gold Sheet.' ]