[Senate Hearing 112-866]
[From the U.S. Government Publishing Office]
S. Hrg. 112-866
SECURING THE PHARMACEUTICAL SUPPLY CHAIN
=======================================================================
HEARING
OF THE
COMMITTEE ON HEALTH, EDUCATION,
LABOR, AND PENSIONS
UNITED STATES SENATE
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
ON
EXAMINING SECURING THE PHARMACEUTICAL SUPPLY CHAIN, FOCUSING ON HOW THE
FOOD AND DRUG ADMINISTRATION FACES CHALLENGES OVERSEEING THE FOREIGN
DRUG MANUFACTURING SUPPLY CHAIN
__________
SEPTEMBER 14, 2011
__________
Printed for the use of the Committee on Health, Education, Labor, and
Pensions
Available via the World Wide Web: http://www.gpo.gov/fdsys/
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COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS
TOM HARKIN, Iowa, Chairman
BARBARA A. MIKULSKI, Maryland MICHAEL B. ENZI, Wyoming
JEFF BINGAMAN, New Mexico LAMAR ALEXANDER, Tennessee
PATTY MURRAY, Washington RICHARD BURR, North Carolina
BERNARD SANDERS (I), Vermont JOHNNY ISAKSON, Georgia
ROBERT P. CASEY, JR., Pennsylvania RAND PAUL, Kentucky
KAY R. HAGAN, North Carolina ORRIN G. HATCH, Utah
JEFF MERKLEY, Oregon JOHN McCAIN, Arizona
AL FRANKEN, Minnesota PAT ROBERTS, Kansas
MICHAEL F. BENNET, Colorado LISA MURKOWSKI, Alaska
SHELDON WHITEHOUSE, Rhode Island MARK KIRK, Illinois
RICHARD BLUMENTHAL, Connecticut
Daniel E. Smith, Staff Director
Pamela Smith, Deputy Staff Director
Frank Macchiarola, Republican Staff Director and Chief Counsel
(ii)
C O N T E N T S
__________
STATEMENTS
WEDNESDAY, SEPTEMBER 14, 2011
Page
Committee Members
Harkin, Hon. Tom, Chairman, Committee on Health, Education,
Labor, and Pensions, opening statement......................... 1
Enzi, Hon. Michael B., a U.S. Senator from the State of Wyoming.. 2
Bennet, Hon. Michael F., a U.S. Senator from the State of
Colorado....................................................... 14
Prepared statement........................................... 16
Roberts, Hon. Pat, a U.S. Senator from the State of Kansas....... 18
Franken, Hon. Al, a U.S. Senator from the State of Minnesota..... 20
Mikulski, Hon. Barbara A., a U.S. Senator from the State of
Maryland....................................................... 22
Whitehouse, Hon. Sheldon, a U.S. Senator from the State of Rhode
Island......................................................... 24
Blumenthal, Hon. Richard, a U.S. Senator from the State of
Connecticut.................................................... 25
Witness--Panel I
Autor, Deborah M., J.D., Esq., Deputy Commissioner for Global
Regulatory Operations and Policy, FDA, Silver Spring, MD....... 4
Prepared statement........................................... 7
Witnesses--Panel II
Crosse, Marcia, Ph.D., Director, Health Care, Government
Accountability Office, Washington, DC.......................... 29
Prepared statement........................................... 30
Martello, Kendra A., J.D., Assistant General Counsel, PhRMA,
Washington, DC................................................. 38
Prepared statement........................................... 40
Johnston, Gordon, Senior Advisor for Regulatory Sciences, GPhA,
Washington, DC................................................. 43
Prepared statement........................................... 45
VanTrieste, Martin, R.Ph., Past Chair, Rx-360, Thousand Oaks, CA. 50
Prepared statement........................................... 52
Coukell, Allan, BScPharm, Director of Medical Programs, Pew
Health Group, Washington, DC................................... 57
Prepared statement........................................... 59
ADDITIONAL MATERIAL
Statements, articles, publications, letters, etc.:
Heather Bresch, President, Mylan Inc......................... 74
Dale Carter, Chair, International Pharmaceutical Excipients
Council--Americas (IPEC--Americas)......................... 76
Keith Nalepka, Vice President, Business Development, Hi-G-
Tek, Inc................................................... 77
American Society of Health-System Pharmacists................ 78
National Community Pharmacists Association (NCPA)............ 82
Response of the Food and Drug Administration to questions of:
Senator Bennet........................................... 84
Senator Roberts.......................................... 87
Senator Kirk............................................. 89
(iii)
SECURING THE PHARMACEUTICAL SUPPLY CHAIN
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WEDNESDAY, SEPTEMBER 14, 2011
U.S. Senate,
Committee on Health, Education, Labor, and Pensions,
Washington, DC.
The committee met, pursuant to notice, at 10:02 a.m., in
Room SD-430, Dirksen Senate Office Building, Hon. Tom Harkin,
chairman of the committee, presiding.
Present: Senators Harkin, Mikulski, Franken, Bennet,
Whitehouse, Blumenthal, Enzi, and Roberts.
Opening Statement of Senator Harkin
The Chairman. Good morning. The Senate Committee on Health,
Education, Labor, and Pensions will come to order.
As part of our ongoing process to reauthorize the FDA user
fee legislation in this Congress, we've convened this hearing
to examine the safety and integrity of our pharmaceutical
supply chain. Few issues are more important to the health and
safety of Americans than the integrity of our drug supply.
In today's increasingly global economy, most of the key
ingredients used in the drugs prescribed by American doctors
and consumed by American families are produced overseas.
According to a GAO study, about 80 percent of the active
ingredients found in U.S. pharmaceutical products come from
abroad, and about 40 percent of the finished drugs come from
abroad.
This trend is projected to continue to increase with more
and more of our medicine cabinets being stocked with products
from countries like India and China who have less robust
regulatory systems than our own. Our challenge is to embrace
the promise of this increasingly global economy while still
making sure we protect American patients.
The profound interests at stake are highlighted for us by
tragic examples of American patients who have taken adulterated
drug products, such as the 150 U.S. patients who died in 2007
after taking the contaminated Heparin. Weaknesses in our
pharmaceutical supply chain not only affect the health of
American patients but also the health of American businesses.
By holding foreign actors to the same standards as those in the
United States we guarantee a level playing field. U.S.
companies that source and manufacture drugs in this country
should not be placed at a competitive disadvantage by foreign
firms that operate with less oversight and sell substandard
ingredients into this country at reduced prices.
When FDA's authorities were first designed and enacted, our
production methods were based here at home. FDA's primary
authorities to ensure the quality of our drugs--which was
strict oversight of domestic manufacturers coupled with the
ability to interdict illegal drugs at the border--were well-
suited to the manufacturing practices of that time in the late
1930s. But, again, that was nearly 100 years ago. We don't live
in the same world as we did then, and our drug safety controls
have failed to keep up with the changes in our economy and our
society.
FDA and Customs have tried to increase their vigilance to
keep pace with the increasingly global nature of our supply
chain. But FDA does not have the authority and flexibility it
needs to make sure that foreign facilities adhere to the same
quality standards as U.S. facilities. Some domestic companies
have tried to fill that gap by adopting robust quality control
practices that include inspecting their overseas suppliers.
Some have done it. Others have not. So the result is a supply
chain rife with gaps.
Last year, this committee took an important bipartisan step
to modernize our food safety system, giving FDA the tools
necessary to hold foreign food importers and producers to the
same safety standards as those in the United States. Now we
have to bring our drug supply system also into the 21st
Century.
This morning, we'll explore systemic concerns associated
with the drugs and drug ingredients imported into the United
States from abroad. We'll learn about the new challenges that
both the FDA and the American pharmaceutical companies face in
navigating the global economy. As we begin the critical
discussion on how to modernize our drug supply system, we'll
hear from several expert witnesses who approach this important
issue through a variety of perspectives.
I thank all of you for being here and look forward to your
testimonies. I look forward to continued bipartisan cooperation
with my colleague, Ranking Member Enzi, who has worked closely
with me on scheduling this hearing and who, himself, has
devoted considerable energy to examining this issue.
And now I would recognize Senator Enzi.
Statement of Senator Enzi
Senator Enzi. Thank you, Mr. Chairman.
In 2007 and 2008, dozens of patients died after receiving
Heparin, a widely-used blood thinner that had been contaminated
during manufacture in China. The number of drug products made
outside of the United States doubled from 2001 to 2008. This
trend will accelerate, creating potential risks to patients
from substandard and otherwise adulterated drugs.
Today's hearing will examine our increasingly global supply
chain and assess how effective agencies like the FDA have been
in protecting American consumers. The Government Accountability
Office has found that the FDA does not police the drug supply
chain effectively and recommended that the agency make several
specific policy changes to address these problems.
Unfortunately, FDA has failed to adequately respond to these
recommendations.
Some of these GAO recommendations have been outstanding
since the late 1990s. FDA has still not implemented them. In
part due to these failures and the corresponding risk to public
health, GAO has placed FDA on its high-risk watch list of
government programs. GAO has not called for sweeping
legislation to solve these problems. Instead, GAO calls for FDA
to administer its programs and manage its responsibilities more
effectively.
Following the HELP Committee's July hearing with
Commissioner Hamburg, I asked FDA a question for the record
concerning the progress it has made on the GAO's
recommendations. I still have not received a reply.
We all want to make sure FDA has the tools it needs to make
sure drugs are safe and effective. To do that, we need to
obtain the facts. It'll be hard for us to devise solutions if
FDA is not more forthcoming about the facts and more responsive
to Congress.
Having said that, I understand that legislation to improve
supply chain integrity is a top priority for Chairman Harkin
and Commissioner Hamburg. I look forward to working with them.
And let me suggest four principles to guide our work together.
Our first principle should be that we are as specific as
possible in identifying the problem we're trying to solve. One
good example of a specific problem is, under current law, FDA
must inspect domestic drug establishments every 2 years. But
the law is silent about how often FDA must inspect foreign drug
establishments. This means risky foreign establishments can
avoid FDA inspections, and American companies bear more
regulatory burden.
Heather Bresch, the CEO of Mylan, has championed a change
in law to level the playing field. I agree. FDA should be able
to target inspections globally based on risk.
Second principle--before making a new law, we should ask if
FDA is using its existing authorities effectively. For
instance, FDA promulgates current good manufacturing practices,
or GMPs, to tell companies how to manufacture drugs. Despite
all the obvious risks of globalization, FDA has not updated its
GMPs on point.
The Active Pharmaceutical Ingredient Guide was last
published in 1998, and the Quality Systems Approach Guidance
was last published in 2006. FDA published a GMP Questions and
Answers Guidance earlier this year, but it does not address the
globalization challenges we're discussing today. We need to
know why FDA hasn't updated its know-your-suppliers GMPs.
Third principle--we should develop solutions that actually
solve the problem. Some ideas sound good in speeches, are
politically dramatic, and make us feel like we're, ``doing
something.'' But they won't necessarily make a dent in the
real-world problem.
For instance, some stakeholders advocate giving FDA
mandatory recall authority for drugs. We can discuss that, but
I'm skeptical it will make a real difference. FDA already has
mandatory recall authority for medical devices and several
other types of products. But according to GAO and the Institute
of Medicine, FDA has only used its mandatory recall authority
for devices three times.
Examining the data, GAO found the average time it took FDA
to effectuate a Class I medical device recall--those posing the
greatest risk to consumers--was 516 days. Also, these recalls
were not always effective. There were situations where devices
that should have been recalled were implanted in patients,
causing several deaths and serious injuries. And, remember,
this is when the FDA already had mandatory recall authority.
Fourth principle--as we legislate, we should not over-
reach. For example, some stakeholders advocate for a complete
pedigree or track-and-trace system for the distribution of
drugs. A 2008 Accenture study pegged the cost of a full track-
and-trace system at up to $110,000 for an individual pharmacy.
Small, independent pharmacists in Wyoming are already under
intense pressure from cuts in Medicare Part D and Medicaid
reimbursement. They are small businesses and can't afford this
additional cost. Moreover, most counterfeit and substandard
drugs reach consumers through Internet sales, not retail
pharmacies. Track-and-trace could impose tremendous costs on
pharmacies but produce only a marginal effect.
Again, I look forward to working with Chairman Harkin on
all these issues. I have been a strong supporter of giving FDA
the tools it needs. For example, Senator Kennedy and I co-
sponsored a drug safety bill in 2007. The New England Journal
of Medicine said it was the most significant drug safety bill
in a half century.
I also helped with the FDA new food safety and tobacco
authorities. But right now, my concern is FDA over-regulating,
not under-regulating.
In closing, I want to acknowledge that FDA's witness today,
Deb Autor, only recently assumed her new position as deputy
commissioner. She inherited many challenges.
Deputy Commissioner, you deserve credit for taking on a
tough job, and I look forward to your testimony.
The Chairman. Thank you very much, Senator Enzi.
We have, basically, two panels. Our first panel will be
Deborah Autor. Ms. Autor is the Deputy Commissioner for Global
Regulatory Operations and Policy at the FDA. In this capacity,
she leads the FDA in ensuring the integrity of our
pharmaceutical supply chain and is responsible for imports,
inspections, and enforcement policy for all FDA-regulated
products. Ms. Autor also worked to secure our supply chain in
her previous position as the Director of the Office of
Compliance at FDA's Center for Drugs.
So welcome to the committee. Thank you for joining us
today, Ms. Autor. Your statement will be made a part of the
record in its entirety. If you could sum it up in 5 or 7
minutes, we'd certainly appreciate it so we can get into a
discussion. So please proceed.
STATEMENT OF DEBORAH M. AUTOR, J.D., ESQ., DEPUTY COMMISSIONER
FOR GLOBAL REGULATORY OPERATIONS AND POLICY, FDA, SILVER
SPRING, MD
Ms. Autor. Thank you. Good morning, Chairman Harkin and
members of the committee. I'm Deborah Autor, FDA's Deputy
Commissioner for Global Regulatory Operations and Policy. Thank
you for the opportunity to testify before you today about drug
safety and globalization.
Globalization has fundamentally altered drug manufacturing
and supply, greatly increasing the risks to American consumers.
And it demands a major change in the way FDA fulfills its
mission to promote and protect the health of the American
people.
Based on almost 20 years of professional experience, I have
witnessed the expanding gap between the globalization of
pharmaceutical manufacturing and FDA's antiquated domestically
focused statute. This gap presents an immediate and ever-
growing risk to the safety of the American drug supply. It
provides an opportunity for criminals to introduce dangerous,
adulterated, counterfeit, and stolen product into the supply
chain, at great risk to patients and at great cost to
pharmaceutical companies.
The facts show that threats to our supply chain are real.
Recent incidents of adulteration, counterfeiting, and cargo
theft could pose serious threats to public health. The
consequences throughout the world have been tragic.
In recent years, glycerin in fever medicine, cough syrup,
and teething products was adulterated with a highly toxic
solvent, diethylene glycol, resulting in the death of hundreds
of adults and children in Haiti, Panama, and Nigeria. And
members of this committee are well aware of the 2008 Heparin
contamination crisis. Heparin is a blood thinner used in every
hospital in this country. But a cheap Heparin imposter was
substituted for the real drug, leading to tragic deaths and
illnesses in the United States.
Similar to contaminated drugs, counterfeit drugs present
real risks. A counterfeit drug could be made up of a substance
that is toxic to patients or have little or no active
ingredient, harming patients who take it, thinking that they
are taking a life-saving or life-sustaining medication.
In 2003, over $20 million in counterfeit and illegally
imported Lipitor, a popular cholesterol lowering drug, was
dispensed to patients at pharmacies throughout the United
States. Even more frightening, the criminals mixed illegal
Lipitor with real Lipitor, presumably to avoid detection.
Although the counterfeit reached all parts of the country,
fortunately, we believe patient harm was minimal. Eventually,
we will not be so lucky.
Just last year, a counterfeit version of the approved OTC
weight loss drug, Alli, was sold over the Internet to U.S.
consumers. Instead of the approved active ingredient, it
contained high levels of a dangerous controlled substance,
placing consumers at great jeopardy.
Cargo thefts of prescription drugs also pose a significant
public health risk. In 2009 alone, at least 46 drug cargo
thefts occurred valued at a total of $184 million, a great
expense to pharmaceutical companies.
In March 2010, thieves broke into a warehouse and stole $75
million worth of prescription drug products, including
chemotherapy drugs, anti-depressants, and blood thinners. These
products have not yet been recovered, and we fear that they
could be distributed to U.S. consumers in spite of public
warnings.
In 2009, stolen insulin vials were reintroduced into the
drug supply and caused adverse events in patients. The stolen
insulin, which required refrigeration, lost its potency and did
not provide the needed glucose control for diabetics.
These are just some examples that illustrate the enormous
challenges that globalization presents to FDA, pharmaceutical
manufacturers, and the American public.
The drug supply chain is a complex path that medical
products travel from raw source materials to finished products
for consumers. At every stage in this process, opportunities
arise for the product to be contaminated, diverted,
counterfeited, or otherwise adulterated. The Internet presents
an additional layer of complexity by introducing more players
into the system and more opportunities for criminals to harm
patients.
FDA's role in addressing these threats is critical. FDA has
undertaken a wide range of activities to harmonize
international standards, to share scientific and technical
expertise with our fellow regulators, to provide training
around the world in crucial regulatory disciplines, and to
design innovative risk modeling systems. The agency took
aggressive action in the wake of the Heparin crisis to address
the vulnerabilities that the incident exposed, including
inspecting Heparin facilities and updating testing standards
for the drugs.
We acknowledge that there is room for improvement, and we
are doing all we can to address GAO's recommendations by
stepping up our efforts to address globalization. In June, FDA
published a special report, ``Pathway to Global Product Safety
and Quality,'' which lays out our global strategy and action
plan.
The agency is developing a new operating model that relies
on strengthened collaboration, improved information sharing and
gathering, data-driven risk analytics, and the smart allocation
of resources, leveraging the combined efforts of government,
industry, and public and private sector third parties. Toward
this goal, Commissioner Hamburg created a directorate focused
on grappling with these challenges and appointed me to head
that directorate.
Congress can help. Congress has the ability to align FDA
statutory framework with the shift in the global paradigm. When
President Franklin Delano Roosevelt established the modern FDA
in 1938, the percentage of medical products imported into the
United States was minimal.
Today the landscape is reversed. Nearly 40 percent of the
drugs Americans take are imported and nearly 80 percent of the
active pharmaceutical ingredients in those drugs are imported
from more than 150 countries, many with less sophisticated
manufacturing regulatory systems than our own. Only about one-
third of the drug manufacturing facilities that FDA wants to
inspect are in this country. The rest are spread around the
globe.
New statutory authorities, which I detail more fully in my
written testimony, can help to level the playing field between
domestic manufacturers and their foreign counterparts, increase
drug safety, and provide FDA with the information it needs to
most effectively and efficiently oversee the global supply
chain.
I appreciate your interest in this critical issue. I
apologize for running over. But I look forward to working with
you to address the challenges we face in protecting our
Nation's health in this globalized world.
[The prepared statement of Ms. Autor follows:]
Prepared Statement of Deborah M. Autor, J.D., Esq.
introduction
Good morning, Chairman Harkin and members of the committee. I am
Deborah Autor, Deputy Commissioner for Global Regulatory Operations and
Policy at the Food and Drug Administration (FDA or the Agency) in the
Department of Health and Human Services (HHS). Thank you for the
opportunity to discuss the safety of the American drug supply.
When President Franklin Delano Roosevelt established the modern FDA
in 1938, the percentage of medical products imported into the United
States was minimal. Today the landscape is reversed. Nearly 40 percent
of the drugs Americans take are made elsewhere, and about 80 percent of
active pharmaceutical ingredients (APIs) used in drugs manufactured in
the United States come from outside our borders--from more than 150
countries, many with less sophisticated manufacturing and regulatory
systems than our own. In addition to the sheer volume of imports and
foreign facilities, there has been an increase in the variety of
sources, shippers, methods of transportation and supply chain
complexity of imported products, and our current authorities have not
kept pace with the challenges of the current global marketplace.
Combined, these factors create great challenges to FDA and industry in
ensuring that all drugs are high quality and travel safely throughout
their complex supply chains. These factors also provide opportunities
for criminals to adulterate drugs for economic or other malevolent
reasons.
When we refer to the drug supply chain, we are talking about the
increasingly complex path that medical products travel, from raw source
materials to finished products for consumers. At every stage in this
process, opportunities arise for the product to be contaminated,
diverted, counterfeited, or otherwise adulterated. The Internet
presents an additional layer of complexity by introducing more players
into the system and more opportunities for criminals to reach
consumers. Our efforts to secure the supply chain both in the United
States and abroad include minimizing risks that arise anywhere along
the supply chain continuum, from sourcing a product's raw material,
ingredients, and components through the product's manufacture, storage,
transit, sale and distribution. A breach at any point in this continuum
could lead to dangerous and even deadly outcomes for consumers. Supply
chain safety threats also impact manufacturers' bottom lines due to
costs associated with both recalls and decreased public confidence.
As members of this committee well know, this threat is not purely
hypothetical. Recent incidents of adulteration, counterfeiting, and
cargo theft have posed serious threats to public health. The
consequences, throughout the world, have been tragic. In recent years,
glycerin in fever medicine, cough syrup, and teething products was
adulterated with the highly toxic solvent, diethylene glycol (DEG),
resulting in the deaths of adults and children in Panama, and children
in Haiti and Nigeria. Over the last 20 years, drug products containing
glycerin contaminated with DEG have caused an estimated 570 deaths
worldwide. Also in 2007, pet food adulterated with the industrial
chemical melamine and cyanuric acid sickened several thousand pets in
our country. The same contaminant was added to infant formula in China,
fatally poisoning six babies and making 300,000 others gravely ill.
Members of this committee are well aware of the 2008 heparin
contamination crisis that resulted in several deaths and cases of
serious illness.
Counterfeit drugs raise significant public health concerns, because
their safety and effectiveness is unknown. A counterfeited drug could
be made up of a substance that is toxic to patients. But even a non-
toxic counterfeit drug with a substitute or no active ingredient could
prove harmful to patients who take it, thinking that they are taking a
lifesaving or life-sustaining medication. In 2003, over $20 million in
illegally imported and counterfeit Lipitor, a popular cholesterol-
lowering drug, was distributed throughout the United States. The source
and manufacturing methods of the product were unknown and had the
potential to endanger patients.
Cargo thefts of prescription drugs also pose a significant public
health risk. In 2009 alone, an estimated 46 drug cargo thefts occurred,
valued at a total of $184 million. These incidents are concerning to
companies and consumers alike. Cargo thefts can cost drug manufacturers
millions of dollars. They can also put consumers at risk because the
stolen drugs may not have been stored or handled properly or may have
been tampered with while outside of the legitimate supply chain. In
March 2010, thieves broke into a warehouse and stole $75 million worth
of prescription drug products, including chemotherapy, antidepressants,
and blood-thinners. These products have not yet been recovered, and we
fear they could be distributed, in spite of public warning. In 2009,
stolen insulin was reintroduced into the drug supply and caused adverse
events in patients. The stolen insulin, which requires refrigeration,
lost its potency and did not provide the needed glucose control.
In our increasingly complex and globalized world, additional
authorities could be important tools to help support FDA's efforts to
protect the safety of imports and the health of our citizens. New
regulatory authorities may also help ensure that industry takes
principal responsibility for the security and integrity of their supply
chains and the quality control systems they use to produce medical
products for the American people. FDA's efforts are also critical to
ensuring product integrity. As such, we intend to further transform FDA
over the next decade from a predominantly domestically focused Agency,
operating in a globalized world, to an Agency fully prepared for a
regulatory environment in which product safety and quality know no
borders.
In June, FDA published a special report, ``Pathway to Global
Product Safety and Quality,'' our global strategy and action plan that
will allow us to more effectively oversee the quality, safety, and
efficacy of all products that reach U.S. consumers in the future. The
Agency is developing a new, more global operating model that relies on
strengthened collaboration, improved information sharing and gathering,
data-driven risk analytics, and the smart allocation of resources,
leveraging the combined efforts of government, industry, and public-
and private-sector third parties. Toward this goal, FDA Commissioner
Margaret Hamburg created a directorate focused on grappling with the
truly global nature of today's world--food and medical product
production and supply, as well as the science that undergirds the
products we regulate--so that FDA can move from being a regulator of
domestic products to one overseeing worldwide enterprises. She
appointed me as Deputy Commissioner for Global Regulatory Operations
and Policy to provide broad direction and support to FDA's Office of
Regulatory Affairs and Office of International Programs, with a
responsibility to address the challenges of globalization and import
safety a top priority in the years to come and to ensure that we fully
integrate our domestic and international programs to best promote and
protect the health of the public. I appreciate the opportunity to
testify before you in my new role and look forward to working together
to address the challenges we face in protecting our Nation's health in
this increasingly globalized world.
steps to secure our nation's drug supply chain
FDA has undertaken a wide range of activities aimed at addressing
the challenges and opportunities of globalization, including efforts to
harmonize scientifically rigorous standards internationally, to share
scientific and technical expertise with our fellow regulators, to
provide training around the world in crucial regulatory disciplines, to
strengthen detection, surveillance and assessment systems, and to
design innovative risk-modeling systems.
We now have permanent FDA overseas posts in Beijing, Shanghai, and
Guangzhou, China; New Delhi and Mumbai, India; San Jose, Costa Rica;
Mexico City, Mexico; Santiago, Chile; Brussels, Belgium; London,
England; and Parma, Italy. This year, we have opened posts in Amman,
Jordan and Pretoria, South Africa. These offices enable us to have a
regional presence around the world and serve as important hubs for
improved coordination with regulatory authorities and industry in other
nations. They also conduct and facilitate inspections and other on-the-
ground activities in foreign sites. We have more than 30 agreements
with foreign counterpart agencies to share inspection reports and other
non-public information that can help us make better decisions about the
quality and safety of foreign products.
When governments collaborate to strengthen safety standards, the
results are safer, higher-quality products and enhanced economic
development through a productive industry and a strong, reliable export
market. The arrangement is mutually beneficial. To a large extent, our
success or failure in this effort will be contingent on the
relationships we establish with our foreign partners. That is why we
are working closely with our sister regulatory authorities,
international and national organizations, and industry to leverage
resources to accomplish FDA's mission. Especially in the area of good
manufacturing practices for drugs, we already have agreed with major
foreign counterparts on some harmonized international standards. By
using the results of their inspections to assure us that their
manufacturing plants are adhering to our agreed standard, we free up
our inspectional resources to help ensure that such manufacturing
practices are being followed in other, higher risk parts of the world.
This also lessens the regulatory burden on industry, by allowing
companies to manufacture to a common standard and to undergo fewer
inspections by multiple authorities.
after heparin
The 2008 heparin contamination crisis is a case study in the
vulnerabilities of the global supply chain. Heparin is a widely used
injectable anticoagulant, derived from the mucosal tissue of pigs. In
early 2008, contaminated heparin from China was associated with an
increase in deaths in the United States. Whatever was contaminating
this imported heparin could not be identified by the tests used at the
time. After launching a far-ranging investigation, FDA scientists,
working closely with academia and industry, developed a test
methodology that identified a previously unknown contaminant in
Chinese-manufactured heparin. The contaminated heparin contained over-
sulfated chondroitin sulfate (OSCS), an intentionally added adulterant.
An outbreak of blue ear pig disease had killed off a large portion of
China's pig population, creating an incentive for criminals to seek an
alternative that mimicked the chemical makeup of heparin but,
tragically, proved dangerous to consumers.
FDA publicly referred to the heparin contamination crisis as a
``wake-up call.'' It was an alert not only for FDA, but also for U.S.
citizens, industry, and lawmakers about our dependence on a globalized
drug supply and the key vulnerabilities in our drug supply chain. FDA
has taken a number of significant steps to safeguard the U.S. supply of
this medically necessary drug. The Agency invested considerable
resources to inspect heparin manufacturing and testing facilities
related to the supply of heparin in the United States. Additionally,
the United States Pharmacopoeia, a standards-setting organization upon
which FDA relies, now calls for the testing of heparin to detect the
presence of OSCS, the contaminant that sickened patients in 2008. FDA
has also implemented heparin-specific import surveillance including an
import alert and multiple warning letters to ensure that adulterated
heparin does not enter our borders.
But our efforts have not stopped there. The heparin crisis was a
crime of opportunity, and we need to minimize these opportunities. We
are committed to putting preventive measures in place that will protect
American consumers from adulteration of all imported drugs. We combine
risk-based approaches with sound scientific evidence to protect the
public from adulterated and unsafe drugs. The Agency takes several
factors into account in determining whether a particular drug
ingredient may be at risk for adulteration. For example, when a drug
ingredient depends on raw materials that are particularly expensive,
criminals may have extra incentive to find a cheaper alternative to the
expensive ingredient. If the cheaper alternative can mimic the chemical
activity of the product and thereby go undetected by standard testing,
as was the case in the heparin and melamine incidents, the risk of
adulteration is higher. To date, FDA has systematically ranked more
than 1,000 APIs in order of their respective risk of adulteration,
based on a multi-factorial, risk-based model we developed. A subset of
these higher-risk ingredients is targeted for additional sampling and
special testing at the border. In addition, FDA is working to reduce
the risk that counterfeit or adulterated drug products reach consumers
in the U.S. market by developing standards for a track-and-trace system
that would enable the identification of these products and facilitate
efforts to recall them.
Through the creation of my position and other activities at the
Agency, we have made addressing the challenges of globalization a top
priority. To support this effort, FDA can benefit from new legislative
authorities that are, at a minimum, commensurate with those of its
major global counterparts.
drug safety authorities
In general, new regulatory authorities may help ensure that
industry takes principal responsibility for the security and integrity
of its supply chains and the quality control systems it uses to produce
drugs for the American people. In an era of globalization, new
authorities can help to level the playing field between domestic and
foreign manufacturers, ensure product safety and provide FDA with the
information it needs to protect consumers. Those authorities may
include:
Leveling the Playing Field
Refusal of product admission to the United States if
inspection of the manufacturing facility is delayed, limited, or
denied--this authority is critical to providing a strong incentive for
foreign facilities to allow FDA to perform inspections and to permit
FDA to exclude from domestic commerce products whose foreign
manufacturers or facilities try to avoid subjecting themselves to the
same requirements as domestic manufacturers and facilities. This
authority is not currently explicit in FDA's law for any product other
than foods.
Require information upon importation--the Agency can
refuse entry of an import that appears from examination of samples or
otherwise to be adulterated or misbranded, but FDA lacks authority to
require certification or other assurance of compliance with applicable
standards or requirements as a condition of importation, consistent
with FDA's standards and requirements for the domestic drug supply.
This is the opposite of the approach taken by many other countries,
which place the burden on the importer or product owner to prove that
its drug is compliant with country requirements.
Quality management systems--FDA currently works with
industry to ensure that individual companies have effective quality
management systems in place; however, additional statutory authority
could place greater responsibility on manufacturers to account for the
quality and provenance of the materials that go into their products.
This would level the playing field between the companies that work
diligently on their quality management systems to provide high quality
products, and those that do not.
While FDA does not seek to interfere with regulatory
authorities outside the United States, having express authority to
address threats to U.S. consumers, whenever and wherever they may
arise, is critical.
Increasing Drug Safety
Mandatory recall authority--while in most instances firms
eventually agree to voluntarily recall drugs that FDA believes pose a
risk, FDA lacks the authority to compel such recalls and critical time
can be lost in negotiations between FDA and a firm, leaving the public
exposed to potentially serious health risks. The Agency currently has
mandatory recall authority for medical devices, infant formula, and now
many other foods, but not for drugs.
Administrative destruction at the border--absent this
streamlined authority, FDA is often forced to return violative products
to their senders because the current process for destruction requires a
hearing, which is time-consuming and costly. Foreign drugs can then
find their way back to U.S. ports of entry several times, posing a
potential threat to consumers and wasting critical resources that could
be better spent identifying new threats. This authority would level the
playing field for those who produce compliant products, whether located
in the United States or abroad.
Administrative detention--while FDA has the authority to
administratively detain illegal foods and medical devices in U.S.
commerce, it does not have a similar authority for drugs. Currently, we
cannot immediately detain dangerous drug products when we find them.
Absent this immediate tool, consumers can be exposed to unnecessary
risks.
Enhanced criminal and civil penalties for foreign and
domestic suppliers--statutory changes could help to deter would-be
criminals from targeting drug products, and bring FDA's penalties in
line with those for other serious Federal health and safety violations.
Increasing Information
Modernization of drug registration and listing--revising
these statutory provisions may improve the timeliness, completeness,
and accuracy of FDA's current registration and listing information,
making sure FDA has accurate and up-to-date information about foreign
and domestic parties involved in medical product manufacture.
Notification to FDA--this authority would permit FDA to
require foreign and domestic companies to provide complete information
on threats such as counterfeiting, theft, non-compliance with
regulatory standards, mislabeling or misbranding, or other threats to
the security of the drug supply chain. Among other things, this would
allow FDA to better spot emerging risks and trends across companies and
then inform industry or take other proactive, preventive steps.
Unique facility identifier--the absence of a system of
unique drug facility identifiers, such as a D-U-N-S number, submitted
to FDA both as a condition of registration and import, makes it
difficult for FDA to properly follow threats up the supply chain and
makes it more difficult to get different systems, including at
different agencies, to properly cross-reference.
Authority to share certain non-public information with
other regulatory agencies and foreign governments--this authority would
allow FDA to share certain information that could lead to timely
identification, prevention, and resolution of emerging threats. Our
ability to form global coalitions of regulators will be hampered if we
cannot share critical information with our trusted partners.
Track and trace--requiring a cost-effective track-and-
trace system for all drug products throughout the supply chain would
improve the security and integrity of the drug supply and ensure
transparency and accountability of product manufacturing and
distribution, whether the product is manufactured domestically or
internationally.
In our increasingly complex and globalized world, these additional
authorities represent important tools to help support efforts to
protect the safety of imports and the health of our citizens.
conclusion
Given the challenges and threats posed by an increasingly
globalized marketplace, we must modernize our approach to drug safety.
We appreciate the comments of Chairman Harkin and Ranking Member Enzi
in July in support of including legislation in the reauthorization of
the Prescription Drug User Fee Act (PDUFA) to address the challenges of
globalization. We look forward to continuing to work together to
achieve our shared goal of protecting American consumers. I would be
happy to answer any questions.
The Chairman. Thank you very much, Ms. Autor. We'll start
with rounds of 5-minute questions.
From your testimony, Ms. Autor, it sounds like one
significant gap in our supply chain is FDA's limited ability to
inspect foreign producers. What can be done to inspect these
foreign facilities more frequently, given your limited
resources?
Now, one of the things you mentioned in your written
testimony--that I think you're asking Congress for--is the
authority for the refusal of product admission to the United
States if inspection of the manufacturing facility is delayed,
limited, or denied. Is that one of the critical aspects of
this?
Let's be honest about things. I believe FDA needs more
personnel. I think FDA needs more money. But in the climate
around here, I doubt that that's going to happen.
So on the one hand, we want more safety. We want to level
the playing field. So you have offices right now--FDA has
offices in China and India and places like that. I don't know
how well they're staffed. I know the offices are there.
But speak to this--about inspections being delayed, about
pre-announcement of inspections--what good is it to do an
inspection if you have to announce it 2 or 3 weeks in advance--
and the ability of your offices overseas to conduct onsite
inspections unannounced. Is that the kind of authority that you
need from Congress?
Ms. Autor. Senator Harkin, you mentioned one authority in
particular that would be very useful, which is the ability of
FDA to refuse for import products from foreign facilities that
have refused to let FDA in to inspect or delayed or denied an
FDA inspection. It seems common sensical that if a company is
not a good enough player to actually let the agency in to see
how it's operating, those are not the products we want to come
to the American consumers.
But at the moment, the law is not clear on our authority to
do that. So that is very important.
With respect to being able to reach facilities overseas
more, that's obviously very important. And we recognize, in
this economy, our resources are going to continue to be an
issue.
Our offices overseas are helpful. We have at this point 13
posts around the world, and they do some inspections. They do
also a lot of work to collaborate and to work with our foreign
counterparts, so that is part of the answer. And they are more
likely than our U.S. inspectors to be able to make an
unannounced inspection.
But in foreign countries, in particular, in China, there's
a rule that we need to have a letter of invitation from the
company before we can enter the country to inspect. So it's
very difficult to do an unannounced inspection. And what that
means is that the playing field really is not level between the
foreign manufacturers and the domestic manufacturers.
With the domestic manufacturers, we can show up at their
door any day. They will usually let us in. If they don't, we
can go and get a warrant and get in. On the foreign side, it's
very hard to get there. When we get there, they may or may not
let us in. If they do not let us in, we do not have the
explicit authority to prevent the drugs from coming to U.S.
consumers.
The Chairman. So taking China as an example, then, you have
to have a letter of invitation from the company in order to be
able to inspect. Is that right?
Ms. Autor. In order to get the visa to come to China to
inspect. That's as I understand it.
The Chairman. I thought you have an office in China.
Ms. Autor. We do, and they do some inspections. They do
some.
The Chairman. But do they have to have a letter of
invitation?
Ms. Autor. I believe they do not. But I think it's not
realistic to think that FDA will ultimately have enough
personnel spread around the globe that we can see their
facilities at all times when we want to. What it means is that
we need to think creatively about how to assess the foreign----
The Chairman. So it's very clear that companies in China
that manufacture ingredients or the finished drugs can thwart
inspections, actually deny inspections, and still ship their
product to the United States.
Ms. Autor. They can. And another interesting thing about
our law is that it puts the burden on FDA to keep products out
of the country. So if a manufacturer offers something for
import, we have to show that something appears to be wrong with
it in order to keep it out of this country.
Now, in every other grown-up country that we know of, the
regulator has the authority to say, ``If you want your product
to come in, you must show us that your product is good.'' For
us, we must show that it's bad. And when you think about that
in the context of a globalized world where there are so many
manufacturers we do not see, it's simply not a reasonable
burden.
We simply think that manufacturers should be required to
show some minimal standards that their product is approved,
that it complies with good manufacturing practices in order to
be able to access U.S. markets. And that will also level the
playing field between the manufacturers who want to do it right
and the manufacturers who don't.
The Chairman. I have one followup question. My time has
expired. So I'll recognize Senator Enzi.
Senator Enzi. Thank you, Mr. Chairman.
The FDA still hasn't responded to my sole question for the
record from our July hearing with the commissioner. I asked for
a status report on the implementation of the GAO supply chain
recommendations. I'll have several questions today that I'm
sure I won't have time to ask.
Will you commit today to work with the committee in a more
timely and responsive manner?
Ms. Autor. Absolutely, Senator Enzi. I do understand that
you have questions for the record pending related to our GAO
recommendations, that those questions came in in August, and we
are working very hard to respond to them. We want to make sure
we get the technical facts right before we send them to you.
And when we respond, you will see that we have continued to
make serious progress against the challenges and the issues
that GAO has pointed out.
Senator Enzi. Good. FDA promulgates current and good
manufacturing practices, or GMPs, to tell companies how to
manufacture drugs. Given the risks of globalization, why hasn't
the FDA updated its know-your-suppliers GMPs?
Ms. Autor. There are some opportunities we have to update
our standards under current law. And we will try to do so if
Congress does not update the law. But updating the requirements
through regulation is a lengthy, uncertain, expensive process
for the taxpayers, essentially litigious, with an unclear
outcome.
So the GAO, I think, has said that it's urgent for these
issues to be resolved. I think if Congress believes these
issues are also urgent, then Congress can help to resolve them
quickly through legislation.
Senator Enzi. Even if we do legislation, won't you still
have to go through the regulatory process with it?
Ms. Autor. I think that depends on what the legislation
says. I think there are some things which you may be able to do
immediately through legislation, which would change the
paradigm, which would bring manufacturers up to a higher level
or level the playing field between the good players and the bad
players, between the domestic ones and the international ones.
There's some things where we would have to do regulations
afterwards.
But to get our statute up to a modern, globalized world--I
think that's something that Congress could be able to do
quickly.
Senator Enzi. Since we should be working on that quickly, I
hope you would get the specific things to us so that we can do
that and perhaps avoid the regulation route, although I think
there's a big hesitancy to do anything too specific by a group
of people that don't work on it on a daily basis.
So GAO found that 83 percent of the time, FDA does not
target foreign drug inspections on the basis of risk. FDA's
``Pathway to Global Product Safety and Quality'' reported
earlier this year said the agency is building intelligence,
surveillance, and risk assessment programs to fix this problem.
To what extent have you implemented these programs?
Ms. Autor. Well, the ``Pathway to Global Product Safety and
Quality'' report was issued in June, and part of implementing
that report is my new position in the new directorate, and I
assumed my job on July 31. So I haven't had a tremendous amount
of time to establish global coalitions and global data systems
yet, but we are thinking very hard about how we can do that.
As you pointed out, the ``Pathway'' report talks about
global data systems, advanced risk analytics, as well as global
coalitions of regulators and reliance on public and private
third parties. And we believe that this is the way for FDA to
do the best it can within today's current challenges.
We have some history in collaborating with our foreign
regulators, for example, on drug inspections with Europe and on
active pharmaceutical ingredients with Australia and Europe. So
there are steps we've taken in the past which lead us to this
path, and we are serious about implementing it right now. And
I'm doing my best to get it started, and I haven't done so over
the past 6 weeks.
Senator Enzi. I appreciate your efforts on that. The GAO
says that FDA does not have adequate information systems to
detect overseas supply chain risks. In 2009, FDA started
migrating out of a paper-based system called DRLS into an
electronic system called E-LIST.
According to GAO, FDA says it can't tell whether the system
change has helped solve the problem or made it worse. What is
the status of that system migration?
Ms. Autor. We have implemented an electronic registration
and listing system, and I think it's been very helpful. It has
eliminated some of the possibility for human error when we
literally had people typing in what they received on forms in
the mail. So that's a major improvement bringing us into this
century, I believe. And it has helped us to establish
consistency in our records, because we don't have that error.
We are also doing other things which we think can help with
our data systems. For example, we are working with Dun and
Bradstreet on a unique facility identifier. And one thing that
you could think about legislatively is requiring facilities to
have a unique identifier, such as the D-U-N-S number, because
having a unique facility identifier for drug manufacturers
greatly helps FDA's ability to have a clear inventory. We don't
have the possibility of typographical errors in addresses.
We have Dun and Bradstreet's database of millions of
corporate entities to verify our information. We can work
together with our foreign counterparts, because we can use the
same consistent numbering system and compare our records.
There's a great deal we have done in implementing the
electronic system, and there's a great deal we can do to
improve that, especially with some help from Congress.
Senator Enzi. I'd raise a few more questions, but my time
has expired.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Enzi.
Now, in order of arrival, Senator Bennet, then Senator
Roberts, then Senator Franken.
Senator Bennet.
Statement of Senator Bennet
Senator Bennet. Thank you, Mr. Chairman, and the Ranking
Member for holding this very important hearing.
As I travel around the State, I hear a lot about
regulation. People are asking all the time about regulation.
Sometimes people say, ``We should get rid of all that,'' and
sometimes people have a different point of view.
If there was ever a case that screamed out for a bipartisan
approach to get us into, as Ms. Autor was just talking about,
the 21st Century, it is this case, because there are twin
objectives, I think, that we need to accomplish somehow as we
go forward here. One is to recognize that 80 percent, as you
said, of our active ingredients are now produced overseas and
are largely unregulated, and we don't know what's going on
there, which is a shock to Coloradans when they hear that, just
as it's a shock when they hear that the GPS in their car is
more advanced than the ones in our airplanes because of our
inability to deal with the FAA bill.
The other piece is that we have got to figure out, as we're
doing this, how to create a competitive biosciences industry
here in the United States, one that we can rely on in the 21st
Century to create jobs in places like Colorado. And I
appreciate very much that Commissioner Hamburg came out to
Colorado to have a conversation with our bioscience community
and to work collaboratively with them.
I'm interested to hear a little bit, generally, about how
you see the globalization of our drug supply fitting into the
overall effort to remove regulatory barriers and to inspire
innovation right here in the United States.
Ms. Autor. Sure. Thank you, Senator Bennet. I would say
right now that the incentives are not really there for
innovation in quality. And what we hope that Congress will look
at is quality management systems which will improve innovation
and quality, foster innovation and quality. Right now, because
the playing field is unlevel, it does not reward companies who
want to do it right, who want to find innovative ways to do it
right.
And I should point out, by the way, that doing it right
does not necessarily cost more. We have one company, for
example, who committed to their quality side of the house, to
making sure their manufacturing was right. And so they spent
$100 million less than they had intended to spend on quality.
Conversely, companies who don't do it right or companies
that run into problems can lose an awful lot of money. In the
Heparin crisis, Baxter lost $30 million in sales and $4.7
billion in market capitalization. Recently, we had recalls of
injectable products because there was glass shearing off inside
the vials. So there were glass lamellae in the vials, which
obviously can't be injected into patients. Industry spent
probably $250 million recalling those products.
So that's money that they're spending on cleaning up
quality issues rather than investing in new products and being
innovative. So we think actually that leveling the playing
field and putting in place a modern system can help a great
deal in innovation and competitiveness.
Senator Bennet. And one of the things I hear all the time
from the folks in our State that are in this field is that
other countries also are having to grapple with this question
as well and are modernizing their regulatory agencies to deal
with it, being more responsive than they've historically been.
And I wonder if you could talk in that context a little bit
about something else you mentioned in your testimony, which was
the harmonization of the international regime.
Are there ways that we can rely on others to help us do
this work, and others rely on us to help us do this work? How
do we make sure that we've got a global regulatory system that
can actually manage this problem?
Ms. Autor. By all means. And the ``Pathway to Global
Product Safety and Quality'' report, I think, makes crystal
clear FDA's recognition that we simply can't do it alone and
that we need to work together with our counterparts, that we
need to form global coalitions of regulators. To some extent,
that means harmonizing standards. To some extent, it means
simply being able to rely on each other.
And this has great benefits for industry as well. It leads
to fewer inspections, streamlined requirements, and if we're
able to reach more companies around the world, it effectively
minimizes what we have now, which is a competitive advantage of
noncompliance.
Companies who choose to skirt the law can do so beyond
regulators' reach and thereby make more money by doing it
poorly. Working together with our counterparts, harmonizing and
collaborating, is a way that we can level that playing field
and we can improve quality overall.
Senator Bennet. And that, I think, is one of the reasons
why the good actors in this world want these statutes updated
and want this regulatory regime updated, because if there's a
bad actor, it hurts everybody in the entire industry and our
patients as well.
Thank you for your testimony.
[The prepared statement of Senator Bennet follows.]
Prepared Statement of Senator Bennet
Mr. Chairman, it's been more than 70 years since the laws
governing the Nation's pharmaceutical industry were updated.
The year was 1938. Franklin D. Roosevelt was president, gas
cost 10 cents a gallon, and the average price for a new home
was $3,900.
A lot has changed. Unfortunately, the country's drug safety
laws haven't. Many regulations are woefully, and dangerously,
outmoded, in the face of an increasingly globalized and opaque
supply chain that is vulnerable to theft and criminal activity.
So buyer beware.
The blood thinner heparin, for example, used in your local
hospital, may originate from pig intestines stored on the floor
of a grimy factory in a remote region of China. Diabetes
patients may be oblivious to the fact that their insulin--which
requires refrigeration--may have been stolen by a street gang,
left out in the heat, then sold back into the market.
In 1938, drug manufacturers were easily checked for quality
and safety. The lines of commerce consisted mostly of the 48
contiguous States. Regulators were able to inspect drug
manufacturers every 2 years or show up unannounced to verify
ingredients with relative ease.
Today, up to 80 percent of all drug ingredients are
manufactured in countries like China or India. In some cases,
drug makers buy ingredients from foreign suppliers without
actually knowing who those suppliers are. As a result, products
show up on our shelves that do not meet basic U.S. safety
standards--and put American families at risk.
Three years ago, for example, contaminated heparin led to
hundreds of illnesses and several deaths. The contaminant was
traced to a filthy, uninspected and infested factory in China.
We should consider as an issue of national security the
path pharmaceuticals take before and once they enter our
country. Hundreds of different hands distribute and repackage
drugs before they appear on our pharmacy shelves and in our
hospitals. Our system's lack of transparency makes it almost
impossible to know who is actually handling our medicine.
You can get more data from a barcode on a gallon of milk
than you can from a bottle of aspirin two aisles over. We need
a system to ensure that drugs can be tracked like a FedEx
package--to help us more easily spot counterfeits or detect
stolen or recalled products.
Accountability must stretch across the entire supply
chain--all the way to distribution.
Right now, each State has different laws for tracking
drugs. Compare that to airport security. If every major U.S.
airport had different airport security processes, with some
easier to flout, imagine which one a terrorist would prefer.
A comprehensive, practical approach will increase safety,
help efficient interstate commerce and minimize inconsistencies
among the current patchwork of State requirements.
I introduced the Drug Safety and Accountability Act last
year, to increase both industry and regulatory controls to
ensure drug safety and protect patients. It would require more
accountability of drug company ingredients across the entire
supply chain. It also requires that the Food and Drug
Administration fix its inadequate monitoring systems on
manufacturing sites here and abroad, while giving the agency
authority to order a drug recall--a power that 94 percent of
Americans want the agency to have.
The FDA needs resources to improve accountability and
quality. To its credit, industry has been willing to consider
user fees--whether domestic or international--so that the
agency can do the number and scope of inspections that we need.
Equally important, we need to increase penalties for those
who game the system. Right now, you get higher penalties for
illegally copying a DVD than for counterfeiting drugs.
Criminals who once specialized in dealing illegal narcotics are
now gravitating toward counterfeiting pharmaceutical drugs--
because penalties are so much weaker.
As Congress begins to consider FDA reauthorization, it must
work across party lines to address these supply-chain
shortcomings.
A strong drug supply and distribution chain that protects
U.S. consumers should not be a partisan issue. It is a matter
of competitiveness, national security and consumer safety.
Thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you very much, Senator Bennet.
And I want to note again for the record that Senator Bennet
has introduced legislation on this last year.
I was reading it over in preparing for this hearing today,
and I thought you made one point in your remarks on introducing
the bill that we get more information from the barcode on a
gallon of milk than we do on----
Senator Bennet. Right.
The Chairman [continuing]. Anything we get from the drugs
that we get. I thought that really kind of capsulized it.
Senator Roberts.
Statement of Senator Roberts
Senator Roberts. Well, thank you, Mr. Chairman. And I echo
the comments of my colleague and friend from Colorado.
I'm still somewhat confused, which is a state that I walk
around in a lot, and I don't know exactly what you want in
terms of new authority. Could you clarify that for me? Does the
FDA really need new authorities to inspect the foreign
facilities, or are you simply asking for more funds, or both? I
mean, there's a difference between a need and a want, and in
the climate we're in, it's extremely difficult in regards to
funding. But authority may be the answer. And Senator Enzi
really posed that question, so my question is just a repeat of
his.
Ms. Autor. Sure. Well, just to clarify, we're not talking
about new authorities to allow us to inspect foreign
facilities, per se. What we're talking about is new authorities
in light of the fact that our pharmaceutical supply chain has
globalized. So, for example, as I said, right now, if a foreign
facility refuses to let us inspect--and we need to let their
products in. Globalization has greatly increased--or it may
need to--the law is unclear as to whether we can keep their
products out simply because they refused inspection.
Globalization has greatly increased the challenges for the
agency, greatly increased the opportunities for counterfeiting,
contamination, drug diversion----
Senator Roberts. Yes, ma'am. I understand that. But do you
want new authority or not?
Ms. Autor. Yes, sir.
Senator Roberts. You do want authority?
Ms. Autor. Yes, sir, and I'm talking about----
Senator Roberts. And you will respond to Senator Enzi and
the Chairman's specific questions. OK. We got that down. Thank
you. I didn't mean to interrupt you, and I apologize.
Can you really provide the committee with a full and
complete list of all the foreign drug establishments that are
involved in the U.S. drug supply chain? Is that possible?
Ms. Autor. If you want the long list, we could try to do
that. I think that we do have lists of the facilities who offer
products for import to the United States.
Senator Roberts. Right.
Ms. Autor. And lists of the foreign facilities that
register with us, which is a requirement.
Senator Roberts. Well, that would really help, I think, in
understanding the breadth of the current problem. You've
outlined a serious situation.
Last year, stolen insulin managed to make its way back onto
the pharmacy shelves and reached patients. As you know, this is
a heat sensitive product that will not work if improperly
stored. I don't know how this deception was possible. There is
no comprehensive national system, apparently, to track and
authenticate packages of drugs as they travel from the
manufacturer to the wholesaler to the pharmacy.
What steps can the FDA take to help the transparency of the
drug distribution? And do you need any authority or an
additional mandate to do that?
Ms. Autor. Yes, sir. As you pointed out, products are able
to infiltrate the legitimate supply chain at this time,
including products like the stolen Levemir insulin.
Senator Roberts. Right.
Ms. Autor. What we would need to rectify that would be a
requirement for a track-and-trace system, a system which
allowed manufacturers and pharmacies to know who had touched
the drug between the time it was manufactured and the time it
reached the pharmacy. Right now, under the law, we are required
to come up with a national standard, but the law does not say
that that standard is enforceable, or that it's a violation of
the law not to comply with the standard, or that that law will
pre-empt the requirements of the States.
And the risk is right now, in fact, that what will happen
is the 50 States will each put in separate requirements leading
to a patchwork which will be very difficult for industry----
Senator Roberts. Yes, that would be a hodge-podge for sure.
But you do have a plan for the transparency, in fact, if you
had the authority and you had the funds to do it. Where are you
with that?
Ms. Autor. We are working on a track-and-trace standard. We
don't have the authority to make it enforceable. We do have the
standard to put it out there and to hope that people follow it.
Senator Roberts. I see. OK. I'm going to touch on what the
Senator from Colorado said. Like the Senator from Colorado and
like the Chairman and like Senator Enzi, everywhere I go,
people say, ``What on earth are you doing passing regulations
that are crazy and are about to put me out of business? What
are you guys doing? '' I always reply and say, ``I'm an us guy,
not a you guy.'' And then I try to trace the regulation back
that doesn't make much sense.
When it finally reaches downstream--we were talking about
upstream, but now this is downstream--and it's in every
conceivable business that is essential to the committee. Let's
talk about the pharmacists.
The pharmacists today in my State do not serve Medicare
patients because of all of the regulations with PPACA and the
new healthcare law, and also competitive bidding, and they
can't sell durable medical equipment, and they can't do this or
that. And some of them are going out of business because of the
regulatory overkill.
I want to know about the potential cost to the individual
pharmacist, especially in rural and small town America, if we
implement a full track-and-trace program. Somebody's got to pay
for this, and the consumer usually does, and then it--well,
until it gets to the consumer--it goes to the pharmacist. So
I'm worried about the small town pharmacy. You won't have a
problem with any kind of drug if you don't have a pharmacist to
distribute it in a local town, because they won't get any.
Ms. Autor. Yes. Sir, we fully understand that, and we
understand the concerns about pharmacies, about the economic
impact of a track-and-trace system. And we are committed to
trying to come up with the best system we can, balancing the
need to protect public health with the need to be able to allow
businesses to remain economically viable. We are trying to do
that.
We held a public meeting. We had the docket open so we
could collect comments. We are considering those comments and
trying to come up with the best model that allows us to have
the maximum impact with a minimum burden.
I would point out in 2009, we had $184 million in drug
cargo thefts. So that is an economic loss to the industry and
to the pharmaceutical community, which ultimately gets passed
on to consumers and probably the pharmacies as well as a cost.
So we need to come up with a system that works best, balancing
all of those interests.
Senator Roberts. So you do have a cost-benefit yardstick in
your closet. I appreciate it. Thank you.
I'm over time, Mr. Chairman. Pardon me.
The Chairman. Thank you, Senator.
Senator Franken.
Statement of Senator Franken
Senator Franken. Thank you, Mr. Chairman, and thank you and
the Ranking Member for this very important hearing.
Let me ask about the Heparin. That came from China and
Baxter was the--distributed it here in this country? Is that
right?
Ms. Autor. Virtually all Heparin in this country comes from
China because it takes one pig to make one vial of Heparin.
And, frankly, there are a lot of pigs in China to be able to
make the Heparin, so most of the Heparin in this country comes
from China. In that case, we traced the contaminated Heparin
back to China, and then it was distributed through Baxter and
other companies in the United States.
Senator Franken. Can you comment on whether FDA has
considered requiring manufacturers, as opposed to the FDA, to
hold sub-suppliers and others further down the chain
accountable? That would, I think, put the responsibility on the
Baxters of this world to say, ``Look, you know, I've got to
check the drugs I'm distributing.''
Ms. Autor. Yes, by all means. And, in fact, when we've
talked about quality systems and something that Congress might
want to look at, one of the things we talked about is the
manufacturer should have adequate control over their suppliers
and over their supply chain. And right now, a lot of good
companies do that. But the problem is that there are companies
that do not, and what we need to do is raise the floor so that
we have consistent quality throughout.
But, by all means, the idea is that manufacturers are best
placed to be able to ensure the quality of their products. They
know what the risks are associated with those products. They
can make sure that they've thought about the vulnerabilities.
They can make sure that they have audited the suppliers. By all
means, I think it's not something that the agency could even
realistically do. It's for manufacturers to do. But it's
something that needs to be clear in the law that they need to
do that.
Senator Franken. Can the FDA inform the public of which
companies are doing it and which ones aren't?
Ms. Autor. One thing that the FDA does now, which we
started doing recently, is we post our inspectional outcomes
for manufacturers. So we think that's one thing that helps to
bring a little bit of transparency to who's doing it right and
who isn't. I think that's the most helpful kind of thing we can
do.
But, again, to have a system which, in light of
globalization, requires all manufacturers to do it right in the
first place is very helpful, because consumers often don't get
a choice about which drug they take. They go to the pharmacy
and they give them what they get. So the importance is to make
sure that when the drugs get there, they are the adequate
quality for consumers.
Senator Franken. Yes, but, I mean, the pharmacist would be
the one, I would think, that would be looking at what
manufacturers are doing, the inspection of the subcontractors,
and then the pharmacist would be more inclined to take the
product of the companies that are acting in good faith.
Ms. Autor. Perhaps, if they have that flexibility, they
would do that. But more important, I think, is to make sure
that the manufacturers do it right in the first place.
Senator Franken. How do you do that?
Ms. Autor. I think you make sure to put in place a
statutory scheme which levels the playing field between the
good guys and the bad guys, puts enough requirements in place
to do that. Also, the other things that Congress could think
about are things that would enhance product safety, like a
mandatory recall system, like increased criminal penalties
relating to adulterating drugs, and also things that increase
information.
So FDA's best role in the circumstance, I think, is to be
able to look across industry to see emerging risks. But right
now, for example, if a company has a counterfeiting incident or
a cargo theft or contamination, in most cases they're not
required to tell us. So we may not only be able to immediately
jump in on that issue to protect the public health and
investigate, but if it's something which other parts of the
industry know about, we cannot tell them if we're not alerted.
There are situations where companies have voluntarily told
us, ``We have a problem. There's a contamination of our
inactive ingredients,'' and we've said to other companies,
``You need to be on the lookout with respect to this inactive
ingredient so that you can protect yourselves.'' But absent a
statutory scheme, we can't consistently play that role, which I
think is the best role for us.
Senator Franken. Let me ask about your ability to inspect
foreign subcontractors. Is there anything in our trade laws, in
our trade policies, where we can enforce that? In other words,
if you're going to be selling your drugs and your ingredients
of drugs here in the United States, we insist that we be able
to inspect your factories. Can that be in part of our trade
policy and the World Trade Organization's policies?
Ms. Autor. As far as I know, that's not something that's
likely to happen. I'm not a trade expert, but the challenge, I
think, is that imposing barriers to trade is very difficult
through those kinds of organizations.
But what we're talking about differently is the ability to,
under the Federal Food, Drug, and Cosmetic Act, under FDA's
act, say, ``If you have refused, delayed, or denied inspection,
then your product won't come in.'' And that, by the way, is an
authority the Congress put in place recently for food safety.
So it's something that can be easily done through our act. The
same thing, saying to companies, ``You need to show something
that's good about your product if you want to come into the
United States'' rather than making FDA show there's something
bad about it, is a way to very quickly change the paradigm to
keep up with globalization in a way that is really imperative.
Senator Franken. OK. Thank you.
Thank you, Mr. Chairman.
The Chairman. Thanks, Senator.
Senator Mikulski.
Statement of Senator Mikulski
Senator Mikulski. Thank you, Mr. Chairman.
Ms. Autor, I'm so glad to see you. Know that being here at
this hearing, I've got several hats, one of which, of course,
is a Senator from Maryland in which FDA is headquartered. And
we're so proud of the work you do under the difficult
circumstances, funding, and contradictory requirements that
you're given.
But I'm also here as a member of the Intelligence
Committee, and I'm also here as the appropriator for the
Commerce Justice Department, meaning Justice work, because I
believe that adulterated drugs coming into this country is
criminal. I think it's a form of murder. You cannot rely on
blood thinners the way members of my own family have, be a
diabetic and rely on prescription drugs, and not know that
which you are ingesting in your body could be the very thing
that kills you rather than the very thing that saves you from a
stroke, a heart attack, or a diabetic coma.
So we've got to get real. We've got to get serious, and we
have to have a sense of urgency. That's not laying it on FDA.
That's laying it on us. We throw zillions at DOD to protect the
homeland, to fight them over there so they don't kill us here.
We've got to have that same attitude toward those that are
adulterating drugs over there, quite frankly, so they don't
kill us here.
Now, your background is terrific. You're a trial lawyer.
You worked at the Justice Department. You have an incredible
background in working with Federal law enforcement.
My question to you is, what are we going to do to create
this sense of alarm, alarm, a red alert, going to the edge of
our chair, DEFCON 3, because this is a growing problem. This is
not exaggerated hyperbole for CNN for me. This is a compelling
need when we look at the number of people who take prescription
drugs, in which we are now so vulnerable and which are usual
and customary drugs, particularly the issue of blood thinner.
Now, I don't know about those Chinese pigs. OK? I don't
know if they're communist pigs. I don't know if they're
capitalist pigs, and I don't know if they're clean pigs in
order to do this. But what I do know is that right now, all
over the United States of America, there are a million--over a
million people taking some form of blood thinner, that depends
on Heparin and then to Warfarin.
So my question to you is are we moving with that sense of
urgency? Has this been escalated to a homeland security issue?
Is this the top of anyone's agenda? Because this is as
important as protecting our borders as we do from anything else
illegal or threatening coming into our country.
Ms. Autor. Thank you for that question. I really appreciate
it. And I really do share your sense of urgency. I worry about
products like this, which, frankly, cross our border every day.
This is counterfeit Tamiflu and counterfeit Lipitor, and you're
welcome to look at it if you'd like. They look very, very
similar, and they come into this country.
And one important thing that your question gets to, Senator
Mikulski, is the fact that the risk to the pharmaceutical
supply chain is not simply from people who are out to make a
buck. There is a risk from people who have much more malevolent
motivations, and I think we need to be aware of that.
And so I do everything I can to reach global facilities, to
change what we're doing at the agency, to be more proactive, to
be more creative, to collaborate. But there are things which
are not currently in the law, like requiring manufacturers--
clearly requiring manufacturers to update their test standards
to look for vulnerabilities.
Senator Mikulski. Especially making criminal charges,
exactly.
Ms. Autor. Yes.
Senator Mikulski. I mean, really, we've got to do some out-
of-the-box thinking here. It's not are you for regs or against
regs, you know. We are for smart regulation.
Ms. Autor. I completely agree. And with respect to another
crisis like Heparin or something worse, it's not a matter of
if. It's a matter of when.
Senator Mikulski. Now, let's talk about FDA, Justice, and
the Department of Homeland Security. Do they feel that this has
this heightened urgency? And has this been moved up the chain
of command while we're looking at the supply chain of drugs and
counterfeit drugs?
Ms. Autor. That's a very interesting question. I can't
speak for them. I'm not sure I could answer that question
sitting here today. But I'd be happy to answer that for you.
Senator Mikulski. Well, you know what? I just wanted our
committee to know this. Senator Whitehouse is on the Intel
Committee. So is Senator Roberts. We see the growing nexus
between organized crime, international organized crime, and the
corruption of public officials, overlooking any other kinds of
collaborative enforcement. So I don't want to do complicated
foreign policy here, but I think we need to look at it.
I know my time is up. I had a chance to talk with Interpol
this summer and do extensive conversations about their digital
databases and what they see as a growing problem. This is an
international problem, so it is not only for us. Whatever we
feel about harmonization or not and the EU and all of that, the
fact is that for any of us who value safety and efficacy, this
is, I think--has to be elevated to a national security,
homeland security, and criminal level. I look forward to
talking with my colleagues so that we approach it that way, so
that the American people know that if they take it, it will be
OK.
Thank you.
The Chairman. Senator Mikulski, thank you very much. I just
want to follow up. Our witness from the Pew Charitable Trust
will be testifying later--Mr. Coukell. And his testimony I read
last night said that this incident--he's talking about the
Heparin incident, Senator Mikulski--said that the Heparin
incident resulted in 150 deaths. But to this day, no one in any
country has yet been held accountable.
Is that a fact, Ms. Autor? Can you verify that or not? I'm
just reading from what someone's going to testify here shortly
that said that no one has yet been held accountable in any
country.
Ms. Autor. With respect to Heparin, we did conduct a
criminal investigation in China but, ultimately, were not able
to bring that to fruition at this point with a--finding a
culpable individual. One thing I would say about Heparin,
though, is it's a crime of opportunity. It was a crime of
opportunity. So even catching the person who did that wouldn't
solve the problem. What we need to do is work to minimize the
opportunities for something like that to happen again.
The Chairman. Thank you very much.
Senator Whitehouse.
Statement of Senator Whitehouse
Senator Whitehouse. Thank you, Chairman.
Ms. Autor, you said about inspecting overseas facilities
that manufacture product for American consumers that you--I
think you used the phrase, may not be able to prevent the
importation of a drug manufactured in a facility that refused
inspection. What are the dimensions of that question, that you
may not be able to? Why is that an uncertain proposition, and
what are the--sort of, from a lawyer's point of view--what are
the weasel words around that proposition that define it a
little bit more clearly?
Ms. Autor. Sure. The way the law works right now is we have
to show that the product appears to be adulterated, misbranded,
or unapproved in order to keep it out of the country. Again,
the burden is on us, and that is our standard.
So the argument we have to make is that because they
refused inspection or delayed or limited our inspection, that
means that their products appear to be adulterated or
misbranded or unapproved. That's an argument we can make. It's
not as clear in the law as it could be, especially if Congress
wants to clearly say, ``We recognize that there are a lot of
global facilities out there, and we want to level the playing
field and make sure that we assure the quality of the products
being imported.''
Senator Whitehouse. So it's a largely fact-based
determination, case by case----
Ms. Autor. Right.
Senator Whitehouse [continuing]. With you evaluating
whether you'll be able to succeed and----
Ms. Autor. Exactly. We have to--in every situation, at a
minimum, we would have to say, ``Here are the facts. This is
the facility. Here's where we tried to contact them. Here's
what we did''--as opposed to simply saying, ``They didn't let
us in.'' Clearly, if they didn't let us in, we shouldn't let
them in.
Senator Whitehouse. You indicated that you thought that the
smartest and simplest way to go about this would be to allow
the American companies to police this themselves with adequate
supply chain assurance policies. You said that most of the
bigger companies had adequate, good supply chain assurance
policies, but there were some players that did not.
What is your authority to regulate the supply chain
assurance policies as a target that is, in effect, a proxy for
your ultimate determination, which is whether or not the drug
is safe? Can you actually say to American industries, ``We want
to review your supply chain assurance policy. If you don't have
one that we think is up to snuff, then you're in violation,''
and force behavior that way? Do you have that regulatory
authority?
Ms. Autor. That authority is not as clear as it could be
under the law. That is something that Congress could clarify.
At this point, we can look to putting out regulations on that,
but that's a lengthy, uncertain, potentially litigious, and
very costly process for the American people.
Senator Whitehouse. How close have you come in the past?
Can you think of any examples of regulations that you have done
that oversee an internal process questioning the company as a
means of determining whether the ultimate product is safe? Or
would this be venturing into completely new territory?
Ms. Autor. We have good manufacturing practice regulations
in place which do some of that. But those were written in 1978
before the real explosion of global manufacturing. So they
don't get to that as clearly as they could. And so it's not new
territory, but it's something that Congress, I think, could
deal with much more quickly if you share our urgency about this
problem.
Senator Whitehouse. OK. Thank you very much.
Thank you, Mr. Chairman.
The Chairman. Senator Blumenthal.
Statement of Senator Blumenthal
Senator Blumenthal. Thank you, Mr. Chairman, and thank you
for holding this hearing on this very important topic.
Thank you for being here today and for your good work. You
referred just a few minutes ago to a crime of opportunity in
Heparin. And I want to talk about what creates opportunities
for crime, in fact, exponentially increasing crime in theft or
illegal importation. And in my view, one of the main
contributors--one of the main circumstances that creates that
opportunity is the acute shortages of certain drugs in this
country arising from a variety of circumstances and problems,
one of them being termination of the legitimate supply, but
also others being the gray market.
The gray markets that have been documented in this country
for certain drugs literally are threatening our health. The
gray markets are playing Russian roulette with patients lives,
and shortages of drugs around the country mean that hospitals
are unable to meet the demand for workhorse medicines.
I'm using that phrase because it's been used to me by
hospital administrators, doctors, emergency room physicians--
workhorse medicines that provide basic anesthesia, cancer
treatment--these are not exotic or unusual drugs. Often they
are generics where the profit motive has dissipated or
disappeared, and so shortages occur, or the result of hoarding.
And as you are aware, I'm sure, in April 2011 Premier
Healthcare Alliance asked its pharmacy support team to review
the incidence of gray market offers, and they found overall
1,745 examples of gray market offers recorded in 42 acute care
hospitals with an average markup of 650 percent. So the impacts
are not only on health. They are on safety and on cost.
Healthcare delivery is increasingly costly because of the gray
markets and shortages that are the result of defects in the
current supply chain.
So all of that said, I wonder if you could address what
steps can be taken. And there is a group of Senators, myself
included, working to combat the acute shortages of certain
drugs. What can FDA do under its existing authority?
Ms. Autor. Sure. Thank you for the question. That's a lot
of different issues. Let me speak to one thing first, which is
what creates the opportunities for things like the Heparin
crisis. And that's really more players involved in the drug
supply chain, greater volume of products imported, greater
number of firms involved, greater complexity of supply chain,
greater complexity of the products, further and further foreign
manufacturers. So that's with respect to Heparin.
With respect to shortages, that is really a complex
economic problem, I believe, primarily. There are fewer
manufacturers who have consolidated their drug manufacturing to
fewer facilities, fewer lines, for products for which the
economics are not great because they're not very highly priced
products anymore. They have not fully invested in the quality
of those products.
The agency takes the problem very seriously. We are doing
what we can to prevent it. Last year, for example, when we were
notified of shortages early, we were able to prevent 38
different shortages because we were told early. We could work
with the manufacturers to see if the products were good enough
to go to patients, to work with creative solutions, like, for
example, if a product had metal shavings in injectable
products, at one point, we worked with the company to send a
filter so that the product could still be used in patients.
We are also working toward having a public meeting with
stakeholders to talk about this. But it really is a
multifaceted problem that requires a multifaceted solution and
all of the stakeholders to step up to the plate.
With respect to gray market, that's a real concern.
Shortages create an incentive and an opportunity for people to,
at best, charge an awful lot for these products, at worse,
introduce counterfeit or contaminated products. One of the
things that would really help with that, frankly, is a track-
and-trace system, because the pharmacies and hospitals would be
able to know if this product being offered to them from these
new sources at high prices was, in fact, legitimate product,
because they would know everybody who had touched it throughout
the supply chain.
Senator Blumenthal. My time has expired. I would welcome an
opportunity to follow up with you and your staff on this issue,
particularly as to those 38 instances that you mentioned and
what we can learn from them and maybe the others where there
was no action and what we can learn from them as well.
Does the FDA need additional authority for track-and-trace?
Ms. Autor. Yes. We would need additional authority to make
it clear that we can promulgate enforceable standards for
track-and-trace, also to require manufacturers to notify us of
shortages. Right now, the authority on that is limited. So if
we know about shortages, we can try to prevent them. It's not--
we can't always do it, but at least knowing about them in
advance helps us to deal with the problem.
Senator Blumenthal. Track-and-trace wouldn't be a solution
to shortages.
Ms. Autor. It would not be a solution to shortages, but it
would be something to address some of the public health risks
associated with shortages.
Senator Blumenthal. Thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you very much.
We have to get on to our second panel, but I just briefly
wanted to ask one question, Ms. Autor, and that is, most of the
testimony and most of the discussion today has to do with
prescription drugs. Could you just briefly address yourself to
the over-the-counter drug supply? Do the same problems accrue
there? And also to the use of excipients--that's a word that I
didn't know about until I got into this area--the inactive
ingredients, which, going clear back to the 1930s, ethylene
glycol, was one of those. Can you address the risks both to the
over-the-counter drug supply and also to the inactive
ingredients that go into drugs and the problem that you may see
in both those areas?
Ms. Autor. Yes, by all means. One of the ways I tend to
look at the pharmaceutical supply--because I've been working in
this area for so long--is to think about sort of the innovative
products, the generic products, the over-the-counter products,
and the components. All of them present similar but different
challenges.
For example, I would say the generics industry, by talking
to us about a user fee package, I think, has recognized some of
the challenges inherent with generic drugs and with respect to
our ability to police the supply chain in general. Over-the-
counter drugs present a challenge because most of them are done
through a monograph system, essentially a cook book system for
a price, that don't require in those cases affirmative FDA
approval.
If they follow our rules for what has to be in there and
how they're labeled, etc, then they can come on the market.
That means that there's a greater opportunity for firms to
introduce products without us knowing. And those products could
go straight from, frankly, a facility in China we've never seen
to a pharmacy in any State.
So that is a real challenge, and that's why we talk about
really needing to understand the global supply chain and really
needing to put in, in particular, authorities at the border to
stop those products and say, ``Show us there's something right
about your products before they come in.''
Excipients also present a real challenge. Those are
inactive ingredients, essentially. And as you pointed out,
diethylene glycol is one that's led to 570 deaths worldwide in
the last 20 years and 100 deaths in this country in 1937,
leading to passage of FDA's law. So there's a huge number of
excipients out there, and they're used in a lot of different
products. The same thing used in drugs might also be used in
foods.
So that's why we talk about the need for manufacturers to
be responsible for policing their supply chain, because it will
never be the case, frankly, that FDA can go to all those
facilities and assure they're doing everything right. It has to
be incumbent upon a manufacturer who's selling pharmaceuticals
that people rely on to save their lives to go and make sure
that their components are satisfactory.
The Chairman. Thank you very much, Ms. Autor. We have
Senators that want to submit some questions in writing to you.
Thank you very much for being here and thanks for your
testimony.
Ms. Autor. Thank you.
The Chairman. Now we'll call our second panel up. I'll
introduce them as they take their places at the table. First,
starting from my left, we have Dr. Marcia Crosse, Director of
Health Care for the GAO, Government Accountability Office.
She's been at GAO since 1983, so she comes to us today with
significant experience in evaluating public health issues. Her
work focuses, in particular, on evaluating areas such as
biomedical research, product safety, and pharmaceutical
regulations.
Next we have Ms. Kendra Martello, the assistant general
counsel for the Pharmaceutical Research and Manufacturers of
America, otherwise we know as PhRMA.
And we appreciate your being here.
Next is Mr. Gordon Johnston, senior advisor for Regulatory
Sciences at the Generic Pharmaceutical Association. He has
worked in the pharmaceutical industry for the past 25 years,
and was formerly the Deputy Director of the FDA's Office of
Generic Drugs.
We thank you for being here.
Mr. Martin VanTrieste--I hope I pronounced that correctly--
senior vice president of Quality at Amgen and past chair of the
Rx-360, a pharmaceutical supply chain consortium. As a past
chair of Rx-360, Mr. VanTrieste led industry members in
creating objectives to better share information regarding
counterfeit and adulterated materials in the pharmaceutical
supply chain.
We thank you for being here.
And last is Allan Coukell. Did I pronounce that right?
Mr. Coukell. Coukell, sir. Thank you.
The Chairman. Allan Coukell, the director of medical
programs at the Pew Health Group. He oversees Pew's initiatives
related to pharmaceutical supply chain safety. In July, the Pew
released an interesting report that shed new light on the
weaknesses and gaps in our pharmaceutical supply chain.
And we thank you for being here.
All of your testimonies will be made a part of the record
in their entirety. And I'll go from left to right and ask if
you can sum up in 5 to 7 minutes. I appreciate it.
We'll start with you, Dr. Crosse.
STATEMENT OF MARCIA CROSSE, Ph.D., DIRECTOR, HEALTH CARE,
GOVERNMENT ACCOUNTABILITY OFFICE, WASHINGTON, DC
Ms. Crosse. Thank you, Mr. Chairman, Ranking Member Enzi,
and members of the committee. I'm pleased to be here today to
discuss FDA's oversight of the drug supply chain.
Over the past several years, GAO has issued a number of
reports on the challenges we identified in FDA's oversight of
drugs that are manufactured in other countries for the U.S.
market. While FDA is making progress, we have concerns about
the agency's use of information and the pace at which it is
implementing changes.
Globalization has placed new demands on FDA as the
pharmaceutical industry has increasingly relied on global
supply chains in which each manufacturing step may be
outsourced to foreign establishments. In examining these
issues, we have particularly focused on the challenges for FDA
in inspecting these facilities, the limitations on FDA's
knowledge and information about these facilities, and the steps
FDA is taking to improve its oversight of the supply chain.
Inspections of foreign drug manufacturers are an important
element of oversight. As we've heard, FDA is far from achieving
foreign inspection rates comparable to domestic inspection
rates where the agency is required to conduct inspections every
2 years.
To frame this with some numbers, in 2008, we reported that
it would take FDA about 13 years to inspect the foreign
establishments that were then on its inventory. Since that
time, FDA has been increasing the number of foreign inspections
it performs, reducing the estimated time to inspect all
establishments to about 9 years. However, while the agency is
trying to catch up, it's facing a continually growing number of
foreign facilities.
In addition, although FDA has been working to develop risk
information to help it prioritize its foreign inspections, the
risks of the products being manufactured have not been the real
drivers of which facilities are inspected. Rather, foreign
establishments have generally only been inspected when they
have been named on an application for a new drug.
Conducting inspections abroad also continues to pose unique
challenges for the agency. For example, FDA cannot require
foreign manufacturers to allow it to inspect their facilities,
and logistical issues preclude FDA from conducting unannounced
inspections as it does for domestic establishments.
In addition to the challenges of conducting inspections, we
previously reported that FDA lacked complete and accurate
information about these facilities, information critical to
understanding the supply chain. FDA databases contain incorrect
information, and the agency still does not have an accurate
list of the foreign establishments manufacturing drugs for the
U.S. market. This hampers FDA's ability to make inspection
decisions and adequately oversee shipments arriving at our
ports.
The contaminated Heparin crisis provides a useful case
study of some of the problems FDA is facing, including
facilities that had never been inspected, mix-ups in FDA's
databases, outdated testing standards, questions about
manufacturers' validation of their supply chains, delays in
gaining entry because of visa requirements, FDA's inability to
require cooperation by foreign facilities, difficulties tracing
contaminated supplies to end products including medical
devices, and difficulties in recalling products thought to be
contaminated.
Given the difficulties that FDA has faced in overseeing the
supply chain and recognizing that more inspections alone are
not sufficient to meet the challenges posed by globalization,
the agency has begun to implement other initiatives to improve
its oversight. As we've heard today, FDA established new
offices overseas and has taken other positive steps, such as
collaborating and exchanging information with foreign
governments and developing systems that would assist its
oversight of products at the border.
FDA should be credited for its recent actions which
represent important initial steps toward addressing these
challenges. However, as the agency has acknowledged, there are
additional steps that it still needs to take.
We have previously made recommendations to address some
challenges such as poor information and planning, and the
agency has identified additional authorities that could provide
it with necessary enforcement tools. In light of the growing
dependence upon drugs manufactured abroad and the potential for
harm, FDA needs to act quickly to implement changes across a
range of activities in order to better assure the safety and
availability of drugs for the U.S. market.
Mr. Chairman, Ranking Member Enzi, this concludes my
prepared remarks. I'd be happy to answer any questions that you
or other members of the committee may have.
[The prepared statement of Dr. Crosse follows:]
Prepared Statement of Marcia Crosse, Ph.D.
summary
highlights--why gao did this study
Globalization has placed increasing demands on the Food and Drug
Administration (FDA) in ensuring the safety and effectiveness of drugs
marketed in the United States. The pharmaceutical industry has
increasingly relied on global supply chains in which each manufacturing
step may be outsourced to foreign establishments. As part of its
efforts, FDA may conduct inspections of foreign drug manufacturing
establishments, but there are concerns that the complexity of the drug
manufacturing supply chain and the volume of imported drugs has created
regulatory challenges for FDA. FDA has begun taking steps to address
some of these concerns, such as the establishment of overseas offices.
This statement discusses (1) FDA's inspection of foreign drug
manufacturing establishments, (2) the information FDA has on these
establishments, and (3) recent FDA initiatives to improve its oversight
of the supply chain. The statement presents findings based primarily on
GAO reports since 2008 related to FDA's oversight of the supply chain.
These reports include Food and Drug Administration: Overseas Offices
Have Taken Steps to Help Ensure Import Safety, but More Long-Term
Planning Is Needed (GAO-10-960, Sept. 30, 2010) and Drug Safety: FDA
Has Conducted More Foreign Inspections and Begun to Improve Its
Information on Foreign Establishments, but More Progress Is Needed
(GAO-10-961, Sept. 30, 2010). GAO supplemented this prior work with
updated information obtained from FDA in August and September 2011.
Drug Safety--FDA Faces Challenges Overseeing the Foreign Drug
Manufacturing Supply Chain
what gao found
Inspections of foreign drug manufacturers are an important element
of FDA's oversight of the supply chain, but GAO's prior work showed
that FDA conducts relatively few such inspections. In 2008, GAO
reported that in fiscal year 2007 FDA inspected 8 percent of foreign
establishments subject to inspection and estimated that, at that rate,
it would take FDA about 13 years to inspect all such establishments.
GAO recommended that FDA increase the number of foreign inspections it
conducts at a frequency comparable to domestic establishments with
similar characteristics. FDA subsequently increased the number of
foreign establishment inspections. FDA's inspection efforts in fiscal
year 2009 represent a 27 percent increase in the number of inspections
it conducted, when compared to fiscal year 2007--424 and 333
inspections, respectively. However, FDA officials acknowledged that FDA
is far from achieving foreign drug inspection rates comparable to
domestic inspection rates--the agency inspected 1,015 domestic
establishments in fiscal year 2009. Also, the types of inspections FDA
conducts generally do not include all parts of the drug supply chain.
Conducting inspections abroad also continues to pose unique challenges
for the agency. For example, FDA faces limits on its ability to require
foreign establishments to allow it to inspect their facilities.
Furthermore, logistical issues preclude FDA from conducting unannounced
inspections, as it does for domestic establishments.
GAO previously reported that FDA lacked complete and accurate
information on foreign drug manufacturing establishments--information
critical to understanding the supply chain. In 2008, GAO reported that
FDA databases contained incorrect information about foreign
establishments and did not contain an accurate count of foreign
establishments manufacturing drugs for the U.S. market. FDA's lack of
information hampers its ability to inspect foreign establishments. GAO
recommended that FDA address these deficiencies. FDA has taken steps to
do so, but has not yet fully addressed GAO's concerns.
Given the difficulties that FDA has faced in inspecting and
obtaining information on foreign drug manufacturers, and recognizing
that more inspections alone are not sufficient to meet the challenges
posed by globalization, the agency has begun to implement other
initiatives to improve its oversight of the drug supply chain. FDA's
overseas offices have engaged in a variety of activities to help ensure
the safety of imported products, such as training foreign stakeholders
to help enhance their understanding of FDA regulations. GAO recommended
that FDA enhance its strategic and workforce planning, which FDA agreed
it would do. FDA has also taken other positive steps, such as
developing initiatives that would assist its oversight of products at
the border, although these are not yet fully implemented. Finally, FDA
officials identified statutory changes that FDA believes it needs to
help improve its oversight of drugs manufactured in foreign
establishments. For example, in place of the current requirement that
FDA inspect domestic establishments every 2 years, officials indicated
the agency would benefit from a risk-based inspection process with
flexibility to determine the frequency with which both foreign and
domestic establishments are inspected. In light of the growing
dependence upon drugs manufactured abroad and the potential for harm,
FDA needs to act quickly to implement changes across a range of
activities in order to better assure the safety and availability of
drugs for the U.S. market.
______
Chairman Harkin, Ranking Member Enzi, and members of the committee,
I am pleased to be here today to discuss the Food and Drug
Administration's (FDA) oversight of the Nation's drug supply chain.\1\
Globalization has placed increasing demands on FDA, which is
responsible for the oversight of drugs marketed in the United States,
regardless of whether they are manufactured in foreign or domestic
establishments.\2\ While Americans once used drugs that were mostly
manufactured domestically, this is no longer the case. According to
FDA, the number of drug products manufactured at foreign establishments
has more than doubled since 2002, with China and India accounting for
the greatest shares of this growth. In addition, the pharmaceutical
industry has increasingly relied on global supply chains in which each
manufacturing step may be outsourced to foreign establishments. The
complexity of the drug supply chain, the volume of imported drugs, and
the number of foreign establishments producing these drugs have created
regulatory challenges for FDA. The danger associated with an insecure
supply chain was highlighted in January 2008, when FDA responded to a
crisis involving the contamination of the active pharmaceutical
ingredient (API) used to manufacture heparin,\3\ a medication used to
prevent and treat blood clots. The contaminated heparin, which was
associated with numerous adverse events--including deaths--came from a
facility in China. During its investigation, FDA determined that some
manufacturers were not adequately safeguarding their heparin supply
chains.\4\
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\1\ Drugs are defined to include, among other things, articles
intended for use in the diagnosis, cure, mitigation, treatment, or
prevention of disease, and include components of those articles. 21
U.S.C. Sec. 321(g)(1)(B), (D).
\2\ FDA regulations define manufacturing to include the
manufacture, preparation, propagation, compounding, or processing of a
drug. 21 CFR Sec. 207.3(a)(8) (2011). In addition, FDA regulations
define an establishment as a place of business under one management at
one general physical location. 21 CFR Sec. 207.3(a)(7) (2011). Drug
manufacturers may have more than one establishment.
\3\ An API includes any component of a drug that is intended to
provide pharmacological activity or other direct effect in the
diagnosis, cure, mitigation, treatment, or prevention of disease. See
21 CFR Sec. 210.3(b)(7) (2011). In this statement, we refer both to
drug products--drugs in their finished dosage form--and to APIs as
``drugs.''
\4\ The heparin supply chain starts with a raw source material,
primarily derived from the intestines of pigs, that is processed into
crude heparin. Thousands of small pig farms in Chinese villages extract
and process pig intestines in small workshops called casing facilities.
Consolidators collect different batches of heparin from various
workshops and sell these batches to manufacturers, who further refine
the crude heparin into heparin API, the active ingredient used in
heparin drug products and heparin containing devices. More than half of
the finished heparin products in the United States and globally are
made from Chinese-sourced materials.
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In recent years we have reported on several aspects of FDA's
ability to protect Americans from unsafe and ineffective drugs entering
our supply chain.\5\ Amidst growing concerns with the increasing
demands placed on the agency, including its ability to ensure the
quality of drugs manufactured overseas, we added FDA's oversight of
medical products to our High-Risk Series.\6\ FDA has acknowledged that
globalization has fundamentally changed the environment for regulating
pharmaceutical products and the agency has begun taking steps to
address some of these concerns, such as the establishment of overseas
offices.\7\
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\5\ See the Related GAO Products page at the end of this statement.
\6\ GAO, High-Risk Series: An Update, GAO-11-278 (Washington, DC:
February 2011). We first added FDA's oversight of medical products to
our High-Risk Series in January 2009.
\7\ In late 2008 and early 2009, FDA established overseas offices
comprised of staff covering particular countries or regions. FDA has
staff located overseas in Beijing, Shanghai, and Guangzhou, China; New
Delhi and Mumbai, India; San Jose, Costa Rica; Mexico City, Mexico; and
Santiago, Chile. In June 2011, FDA also located staff in Amman, Jordan
and Pretoria, South Africa.
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My remarks today will focus primarily on information collected for
several reports we issued since 2008 that specifically cite concerns we
identified related to FDA's oversight of the manufacturing side of the
supply chain for drugs produced by overseas establishments for
marketing in the United States.\8\ Specifically, I will discuss (1)
FDA's inspections of foreign drug manufacturing establishments, which
are intended to assure that the safety and quality of drugs are not
jeopardized by poor manufacturing practices; (2) the information FDA
has on these establishments; and (3) recent FDA initiatives to improve
its oversight of the supply chain.
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\8\ GAO, Drug Safety: Better Data Management and More Inspections
Are Needed to Strengthen FDA's Foreign Drug Inspection Program, GAO-08-
970 (Washington, DC: Sept. 22, 2008); GAO, Food and Drug
Administration: Overseas Offices Have Taken Steps to Help Ensure Import
Safety, but More Long-Term Planning Is Needed, GAO-10-960 (Washington,
DC: Sept. 30, 2010); GAO, Drug Safety: FDA Has Conducted More Foreign
Inspections and Begun to Improve Its Information on Foreign
Establishments, but More Progress Is Needed, GAO-10-961 (Washington,
DC: Sept. 30, 2010); and GAO, Food and Drug Administration: Response to
Heparin Contamination Helped Protect Public Health; Controls That Were
Needed for Working With External Entities Were Recently Added, GAO-11-
95 (Washington, DC: Oct. 29, 2010).
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For our work reviewing FDA's inspections of foreign drug
manufacturing establishments, we obtained and analyzed FDA data on
foreign and domestic drug manufacturing establishment inspections
conducted from fiscal years 2007 to 2009. We also examined methods used
by FDA to select establishments for inspection. For our work examining
how FDA responded to the heparin crisis, we reviewed actions FDA took
during the crisis period, which FDA defined as January 2008 through May
2008. We also interviewed FDA officials and drug manufacturers and
reviewed FDA documents, such as inspection reports and internally
produced summaries (e.g., a time line of events related to the crisis).
For our work reviewing the information FDA has on foreign drug
manufacturing establishments, we obtained data from FDA's registration
database on the number of establishments registered to market their
drugs in the United States.\9\ We also obtained data from FDA's import
database on the number of establishments that have manufactured drugs
that were shipped to the United States.\10\ We reviewed FDA's
initiatives for improving the accuracy of the agency's data on foreign
establishments contained in these databases, which are both used to
manage the foreign drug inspection program.
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\9\ Domestic and foreign establishments that manufacture drugs for
the U.S. market are required to register annually with FDA. 21 U.S.C.
Sec. 360(b), (i)(1).
\10\ FDA's import database contains information on drugs and other
FDA-regulated products offered for entry into the United States,
including information on the establishment that manufactured the drug.
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For our work reviewing recent FDA initiatives intended to improve
the agency's oversight of foreign drug manufacturing establishments, we
reviewed documentation and interviewed FDA officials from each of FDA's
five overseas offices to learn about their activities, challenges,
accomplishments, and strategic and workforce planning. For three of the
overseas offices--China, India, and Latin America--we interviewed
office staff and others, such as officials from FDA's foreign
regulatory counterparts, during on-site visits in February and March
2010. We also reviewed documents related to the agency's efforts to
augment its existing information on foreign drug establishments, such
as information obtained from foreign regulatory authorities. We
supplemented that prior work with updated information that we received
from FDA in August and September 2011.
We conducted the work for the performance audits on which this
statement is based from September 2007 to September 2008, June 2009 to
September 2010, and from August to September 2011 for selected updates.
Our work was conducted in accordance with generally accepted government
auditing standards. Those standards require that we plan and perform
the audit to obtain sufficient, appropriate evidence to provide a
reasonable basis for our findings and conclusions based on our audit
objectives. We believe that the evidence obtained provides a reasonable
basis for our findings and conclusions based on our audit objectives.
background
As part of its efforts to ensure the safety and quality of imported
drugs, FDA may conduct inspections of foreign establishments
manufacturing drugs, including APIs, that are imported into the United
States. FDA relies on these establishment inspections to determine
compliance with current good manufacturing practice regulations
(GMP).\11\ The purpose of these inspections is to ensure that foreign
establishments meet the same requirements as domestic establishments to
ensure the quality, purity, potency, safety, and efficacy of drugs
marketed in the United States.
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\11\ GMPs provide a framework for a manufacturer to follow to
produce safe, pure, and high-quality drugs. See 21 CFR pts. 210, 211
(2011). See also International Conference on Harmonisation of Technical
Requirements for Registration of Pharmaceuticals for Human Use, ICH
Harmonised Tripartite Guideline: Good Manufacturing Practice Guide for
Active Pharmaceutical Ingredients Q7 (Geneva, Switzerland: Nov. 10,
2000).
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Requirements governing FDA's inspection of foreign and domestic
establishments differ. Specifically, FDA is required to inspect every 2
years those domestic establishments that manufacture drugs in the
United States, but there is no comparable requirement for inspecting
foreign establishments that market their drugs in the United
States.\12\ However, drugs manufactured by foreign establishments that
are offered for import may be refused entry to the United States if FDA
determines-- through the inspection of an establishment, a physical
examination of drugs when they are offered for import at a point of
entry, or otherwise--that there is sufficient evidence of a violation
of applicable laws or regulations.\13\
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\12\ See 21 U.S.C. Sec. 360(h), (i)(3).
\13\ See 21 U.S.C. Sec. 381(a).
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FDA conducts two primary types of drug manufacturing establishment
inspections. Preapproval inspections of domestic and foreign
establishments may be conducted before FDA will approve a new drug to
be marketed in the United States. In addition, FDA conducts GMP
inspections at establishments manufacturing drugs already marketed in
the United States to determine ongoing compliance with laws and
regulations.
fda conducts relatively few inspections of foreign drug establishments
Although inspections of foreign drug manufacturing establishments--
which are intended to assure that the safety and quality of drugs are
not jeopardized by poor manufacturing practices--are an important
element of FDA's oversight of the supply chain, our previous work has
shown that FDA conducts relatively few inspections of the
establishments that it considers subject to inspection. Specifically,
in our 2008 report, we estimated that FDA inspected 8 percent of such
foreign drug establishments in fiscal year 2007. At this rate, we
estimated that it would take FDA about 13 years to inspect all foreign
establishments the agency considers subject to inspection. In 2010, we
reported that FDA had increased its inspection efforts in fiscal year
2009. We estimated that FDA inspected 11 percent of foreign
establishments subject to inspection and it would take FDA about 9
years to inspect all such establishments at this rate. FDA's inspection
efforts in fiscal year 2009 represent a 27 percent increase in the
number of inspections the agency conducted when compared to fiscal year
2007--424 and 333 inspections, respectively \14\ In contrast, FDA
conducts more inspections of domestic establishments and the agency
inspects these establishments more frequently. For example, in fiscal
year 2009, FDA conducted 1,015 domestic inspections, inspecting
approximately 40 percent of domestic establishments. We estimated that
at this rate FDA inspects domestic establishments approximately once
every 2.5 years. To address these discrepancies, we recommended that
FDA conduct more inspections to ensure that foreign establishments
manufacturing drugs currently marketed in the United States are
inspected at a frequency comparable to domestic establishments with
similar characteristics.\15\ FDA agreed that the agency should be
conducting more foreign inspections, but FDA officials have since
acknowledged that the agency is far from achieving foreign drug
inspection rates comparable to domestic inspection rates and, without
significant increases to its inspectional capacity, the agency's
ability to close this gap is highly unlikely.\16\
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\14\ FDA attributes this increase in fiscal year 2009 foreign drug
inspections to staffing changes--the creation of a drug inspection
cadre and the placement of investigators overseas--and increased
resources dedicated to these types of inspections.
\15\ See GAO-08-970.
\16\ We noted in our September 2010 report that, in response to our
inquiries and those of congressional staff, FDA had undertaken a review
to determine the appropriate inspection frequency for foreign and
domestic drug establishments. However, as of September 2011, this
review had not been completed.
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In addition to conducting few foreign drug manufacturing
inspections, the types of inspections FDA conducts generally do not
include all parts of the drug supply chain. For example, FDA officials
told us during our review of the contaminated heparin crisis that the
agency typically does not inspect manufacturers of source material
\17\--which are not required to be listed on applications to market
drugs in the United States--and generally limits its inspections to
manufacturers of the finished product and APIs. Furthermore, once FDA
conducts an inspection of a foreign drug manufacturer, it is unlikely
that the agency will inspect it again, as the majority of the foreign
inspections FDA conducts are to inform decisions about the approval of
new drugs before they are marketed for sale in the United States.
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\17\ For example, in the case of the heparin supply chain, the
source material is primarily derived from the intestines of pigs, which
is processed into the crude heparin that is refined into heparin API.
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Despite increases in foreign drug establishment inspections in
recent years, FDA continues to face unique challenges conducting
inspections abroad. Specifically, as we identified in our 2008 report
on FDA's foreign drug inspections, FDA continues to experience
challenges related to limits on the agency's ability to require foreign
establishments to allow the agency to inspect their facilities.\18\ For
example, while inspecting establishments in China during the heparin
crisis, Chinese crude heparin consolidators refused to provide FDA full
access during inspections--in particular, one consolidator refused to
let FDA inspectors walk through its laboratory and refused FDA access
to its records. As a result, FDA officials said they focused on the
manufacturers' responsibilities to ensure that these establishments
could trace their crude heparin back to qualified suppliers that
produce an uncontaminated product and requested that manufacturers
conduct their own investigations of any heparin products for which they
received complaints or that did not meet specifications. Furthermore,
FDA faces other challenges conducting foreign inspections, such as
logistical issues that necessitate the agency notifying the
manufacturer of the agency's intention to inspect the establishment in
advance. In contrast to domestic inspections which are conducted
without prior notice, FDA contacts foreign manufacturers prior to
inspection to ensure that the appropriate personnel are present and
that the establishment is manufacturing its product during the time of
the inspection. In some cases, FDA must obtain permission from the
foreign government of the country in which an establishment is located
in order to conduct an inspection. FDA officials report that
inspections may be conducted several months after an establishment has
been notified of FDA's intent to conduct an inspection due to the need
to obtain visas and other delays. As a result of such advance notice,
FDA staff conducting inspections may not observe an accurate picture of
the manufacturer's day-to-day operations.
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\18\ See GAO-08-970.
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fda lacks complete information on foreign drug establishments
Our previous reports indicated that FDA has experienced challenges
maintaining complete information on foreign drug manufacturing
establishments. This lack of information, which is critical to
understanding the supply chain, hampers the agency's ability to inspect
foreign establishments. In 2008, we reported that FDA did not maintain
a list of foreign drug establishments subject to inspection, but rather
the agency relied on information from their drug establishment
registration and import databases to help select establishments for
inspection.\19\ However, we found that these databases contained
incorrect information about foreign establishments and did not contain
an accurate count of foreign establishments manufacturing drugs for the
U.S. market. For example, in our 2008 report, we identified that for
fiscal year 2007, FDA's registration database contained information on
approximately 3,000 foreign drug establishments that registered with
FDA to market drugs in the United States, while the import database
contained information on about 6,800 foreign establishments that
offered drugs for import into the United States.\20\ Some of the
inaccuracies in the registration database reflected the fact that,
despite being registered, some foreign establishments did not actually
manufacture drugs for the U.S. market.\21\ Additionally, the inaccurate
count of establishments in the import database was the result of
unreliable manufacturer identification numbers generated by customs
brokers when a drug is offered for import.\22\ As a result of these
inaccuracies, FDA did not know how many foreign establishments were
subject to inspection. To address these inaccuracies, we recommended
that FDA enforce the requirement that establishments manufacturing
drugs for the U.S. market update their registration annually and
establish mechanisms for verifying information provided by the
establishment at the time of registration.
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\19\ See GAO-08-970.
\20\ In our 2010 report, we indicated that, in fiscal year 2009,
FDA's import database contained information for about 7,000 foreign
establishments, compared with the approximately 3,200 foreign drug
establishments that were registered with FDA in that year. See GAO-10-
961.
\21\ Such establishments may have gone out of business, but not
informed FDA, or the establishments may not actually ship drugs to the
United States. Some foreign establishments may register with FDA, but
never ship drugs to the United States. FDA officials told us that such
foreign establishments may register because, in foreign markets,
registration may erroneously convey an ``approval'' or endorsement by
FDA.
\22\ As we reported in 2010, the algorithm used by customs brokers
to assign the manufacturer identification number does not provide for a
number that is reliably reproduced or inherently unique. Consequently,
according to FDA officials, multiple records may be created for a
single establishment, resulting in an inflated count of the number of
establishments. See GAO-10-961.
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Since then, FDA has taken steps to address these deficiencies and
improve the information it receives from both the registration and
import databases, though these efforts have not yet fully addressed the
concerns we raised in 2008. For example, in June 2009, FDA began
requiring all drug establishments marketing their products in the
United States to submit their annual registration and listing
information electronically, rather than submitting the information on
paper forms to be entered into the registration database. FDA indicated
that, as of September 2011, the implementation of this requirement has
eliminated the human error that has been associated with the
transcription of information from paper forms to electronic files. As
part of electronic registration, FDA has also requested that each
establishment provide a unique identification number--a Dun and
Bradstreet Data Universal Numbering System (D-U-N-S) Number \23\--as a
way to help avoid duplications and errors in FDA's data systems.\24\ In
addition, in September 2011, FDA officials reported that the agency had
begun to take steps to enforce its annual registration requirement.
They indicated that FDA will now conduct outreach to establishments
that have not submitted an annual registration to confirm that they are
no longer producing drugs for the U.S. market or to ensure they
register, as required, if they are continuing to manufacture drugs for
the U.S. market. They said that if an establishment does not respond to
FDA's outreach, it is to be removed from the registration database. To
further address concerns with the import database, FDA has an
initiative underway to eliminate duplicate information by taking steps
to identify and remove all duplicate drug establishment records from
existing import data over the next few years.
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\23\ The D-U-N-S Number is a unique nine-digit sequence recognized
as the Federal Government's universal standard for identifying and
keeping track of business entities. Submitting the site-specific number
for an entity would provide, by reference to the number, certain
business information for that entity that is otherwise required for
drug establishment registration.
\24\ Additionally, FDA, in conjunction with 20 of the nearly 50
Federal agencies involved in the oversight of products imported into
the United States, supports efforts for Customs and Border Protection--
which control the implementation of this proposal--to adopt unique
establishment identifiers for all establishments whose products,
including drugs, are imported into the United States.
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recent fda initiatives to improve oversight of the supply chain
Given the difficulties that FDA has faced in inspecting and
obtaining information on foreign drug manufacturers, and recognizing
that more inspections alone are not sufficient to meet the challenges
posed by globalization, the agency has begun to explore other
initiatives to improve its oversight of the drug supply chain. We
reported that FDA's overseas offices had engaged in a variety of
activities to help ensure the safety of imported products. These
included establishing relationships with foreign regulators, industry,
and U.S. agencies overseas; gathering information about regulated
products to assist with decisionmaking; and, in China and India,
conducting inspections of foreign establishments.\25\ Although we noted
that the impact of the offices on the safety of imported products was
not yet clear, FDA staff, foreign regulators, and others pointed to
several immediate benefits, such as building relationships. However,
they also described challenges related to some of their collaborations
with domestic FDA offices and the potential for increasing demands that
could lead to an unmanageable workload. We reported that FDA was in the
process of long-term strategic planning for the overseas offices, but
had not developed a long-term workforce plan to help ensure that it is
prepared to address potential overseas office staffing challenges, such
as recruiting and retaining skilled staff. We recommended that FDA
enhance its strategic planning and develop a workforce plan to help
recruit and retain overseas staff and FDA concurred with our
recommendations. In September 2011, FDA indicated that it had developed
a 2011 to 2015 strategic plan and was in the process of updating it,
and it had initiated a workforce planning process.
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\25\ We also reported that FDA overseas officials had started to
provide training, responses to queries, and other assistance to foreign
stakeholders to help them improve their regulatory systems and better
understand FDA regulations.
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FDA has also implemented collaborative efforts with foreign
regulatory authorities to exchange information about planned
inspections as well as the results of completed inspections. In
December 2008, FDA, along with its counterpart regulatory authorities
of the European Union and Australia, initiated a pilot program under
which the three regulators share their preliminary plans for and
results of inspections of API manufacturing establishments in other
countries. For example, FDA could receive the results of inspections
conducted by these regulatory bodies and then determine if regulatory
action or a followup inspection is necessary. FDA contends that
prospectively sharing this information could allow these regulatory
bodies to more efficiently use their resources by minimizing the
overlap in their inspection plans. According to agency officials, the
agency had used inspection reports from the other regulators to improve
its knowledge of a small number of API manufacturing establishments,
most of which had not been inspected in the last 3 years, but that it
was interested in inspecting due to a pending drug application.
FDA has also taken other steps to improve the information that the
agency maintains on foreign establishments shipping drugs to the United
States. In August 2008, FDA contracted with two external organizations
to implement the Foreign Registration Verification Program. Through
this program, contractors conduct site visits to verify the existence
of foreign establishments that are registered with FDA and confirm that
they manufacture the products that are recorded in U.S. import
records.\26\ According to FDA officials, establishments that are new to
the U.S. market or are importing products not typically manufactured at
the same establishment are considered candidates for the verification
program.\27\ For example, FDA officials told us about an establishment
that was selected for the program because, according to agency records,
it was offering for import into the United States pickles and an API--
two products not normally manufactured at the same establishment. As of
September 2011, the contractors had visited 142 foreign drug
establishments located in Asia, Australia, Africa, Canada, and Europe,
27 of which did not appear to exist at the address provided by the
establishments at the time of registration.\28\ According to FDA, the
agency uses the information obtained from the contractors as screening
criteria to target drug products from those establishments for review
at the border.\29\
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\26\ According to FDA officials, the Foreign Registration
Verification Program covers establishments manufacturing all FDA-
regulated products.
\27\ To select establishments for the Foreign Registration
Verification Program, FDA uses information from its import database to
determine the products that establishments are shipping to the United
States and to identify establishments that are importing a variety of
products.
\28\ According to FDA, the agency has engaged contractors to
conduct at least 125 more such visits of foreign drug manufacturing
establishments during the coming year.
\29\ In our 2010 report, we noted that FDA had taken action against
two of the establishments that appeared not to exist by deactivating
their registration and alerting FDA import staff so that they could
detain any products offered for import by these establishments, thus
preventing these products from being imported into the United States.
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FDA is also developing initiatives that would assist its oversight
of products at the border. For example, FDA is in the process of
establishing its Predictive Risk-based Evaluation for Dynamic Import
Compliance Targeting (PREDICT) import screening system. The system is
intended to automatically score each entry based on a range of risk
factors and identify high-risk items for review. FDA piloted this
system on seafood products in the summer of 2007. FDA determined that
the system expedited the entry of lower-risk products, while
identifying a higher rate of violations among products that were tested
when they were offered for import. The agency planned to have the
system implemented in all locations and for all FDA-regulated products
by June 2011, although its deployment has been delayed. According to
FDA, full deployment of PREDICT is currently slated for December 2011.
FDA also identified statutory changes that would help improve its
oversight of drugs manufactured in foreign establishments. These
include authority to (1) suspend or cancel drug establishment
registrations to address concerns, including inaccurate or out-of-date
information; (2) require drug establishments to use a unique
establishment identifier; and (3) implement a risk-based inspection
process, with flexibility to determine the frequency with which both
foreign and domestic establishments are inspected, in place of the
current requirement that FDA inspect domestic establishments every 2
years.
concluding observations
Globalization has fundamentally altered the drug supply chain and
created regulatory challenges for FDA. In our prior reports we
identified several concerns that demonstrate the regulatory
difficulties that FDA faces conducting inspections of, and maintaining
accurate information about, foreign drug establishments. While
inspections provide FDA with critical information, we recognize that
inspections alone are not sufficient to meet all the challenges of
globalization. FDA should be credited for recent actions, such as
collaborating with and exchanging information on drug establishments
with foreign governments, that represent important initial steps toward
addressing these challenges. However, as the agency has acknowledged,
there are additional steps that it still needs to take. We have
previously made recommendations to address some challenges, such as
poor information and planning, and the agency has identified additional
authorities that could provide it with necessary enforcement tools. In
light of the growing dependence upon drugs manufactured abroad and the
potential for harm, FDA needs to act quickly to implement changes
across a range of activities in order to better assure the safety and
availability of drugs for the U.S. market.
Chairman Harkin, Ranking Member Enzi, and members of the committee,
this concludes my prepared statement. I would be pleased to respond to
any questions you may have at this time.
Related GAO Products
High-Risk Series: An Update. GAO-11-278. Washington, DC: February
2011.
Food and Drug Administration: Response to Heparin Contamination
Helped Protect Public Health; Controls That Were Needed for Working
With External Entities Were Recently Added. GAO-11-95. Washington, DC:
October 29, 2010.
Drug Safety: FDA Has Conducted More Foreign Inspections and Begun
to Improve Its Information on Foreign Establishments, but More Progress
Is Needed. GAO-10-961. Washington, DC: September 30, 2010.
Food and Drug Administration: Overseas Offices Have Taken Steps to
Help Ensure Import Safety, but More Long-term Planning Is Needed. GAO-
10-960. Washington, DC: September 30, 2010.
Food and Drug Administration: FDA Faces Challenges Meeting Its
Growing Medical Product Responsibilities and Should Develop Complete
Estimates of Its Resource Needs. GAO-09-581. Washington, DC: June 19,
2009.
High-Risk Series: An Update. GAO-09-271. Washington, DC: January
2009.
Drug Safety: Better Data Management and More Inspections Are Needed
to Strengthen FDA's Foreign Drug Inspection Program. GAO-08-970.
Washington, DC: September 22, 2008.
Medical Devices: FDA Faces Challenges in Conducting Inspections of
Foreign Manufacturing Establishments. GAO-08-780T. Washington, DC: May
14, 2008.
Drug Safety: Preliminary Findings Suggest Recent FDA Initiatives
Have Potential, but Do Not Fully Address Weaknesses in Its Foreign Drug
Inspection Program. GAO-08-701T. Washington, DC: April 22, 2008.
Medical Devices: Challenges for FDA in Conducting Manufacturer
Inspections. GAO-08-428T. Washington, DC: January 29, 2008.
Drug Safety: Preliminary Findings Suggest Weaknesses in FDA's
Program for Inspecting Foreign Drug Manufacturers. GAO-08-224T.
Washington, DC: November 1, 2007.
Food and Drug Administration: Improvements Needed in the Foreign
Drug Inspection Program. GAO/HEHS-98-21. Washington, DC: March 17,
1998.
The Chairman. Thank you very much, Dr. Crosse.
Dr. Martello, welcome and please proceed.
STATEMENT OF KENDRA A. MARTELLO, J.D., ASSISTANT GENERAL
COUNSEL, PhRMA, WASHINGTON, DC
Ms. Martello. Thank you very much. Mr. Chair, Ranking
Member, and members of the committee, my name is Kendra
Martello, Assistant General Counsel at the Pharmaceutical
Research and Manufacturers of America, or PhRMA. Our members
represent America's leading biopharmaceutical research
companies.
Last year, industry-wide research investment was greater
than $67 billion, a record. Our companies invest on average
more than a billion dollars over 10 to 15 years to research and
develop a new medicine. Additionally, our companies provide,
directly and indirectly, millions of stable, high-paying jobs
for American workers, jobs that can help fuel our Nation's
economic recovery.
I'm pleased to offer this testimony today on securing the
pharmaceutical supply chain. We appreciate the committee's
longstanding interest in this issue and want to acknowledge, in
particular, the commitment of the Chairman, Ranking Member, and
Senator Bennet to considering solutions to these important
issues.
My remarks today will focus on four key points. First,
patient safety is of primary importance. Patients trust that
the medicines they take meet high standards set by the Food and
Drug Administration, no matter where they're made. And PhRMA
member companies are committed to improving the lives of
patients and to producing high-quality, safe, and effective
drug products.
Second, the U.S. drug review, approval, and oversight
system is the gold standard worldwide. It's this comprehensive
regulatory system coupled with our closed distribution system--
closed by Congress in the mid-1980s--that helps provide the
high level of product quality, safety, and integrity that we
enjoy today. No one aspect of the system in isolation is
responsible for protecting our secure supply chain.
In addition to the requirement to obtain approval of a new
drug application before a new drug can be sold, manufacturers
must also follow current good manufacturing practices. These
regulations recognize that testing and inspections alone cannot
ensure the quality of a product. These NDA and GMP requirements
apply to all new drugs sold in the United States, no matter
where they're made, and GMPs apply to all components of the
finished drug, including active pharmaceutical ingredients, no
matter where they're sourced.
Third, supply chain security is a shared responsibility.
Even with our comprehensive regulatory system, the
globalization of pharmaceutical supply chains presents new
challenges that require us to be adaptive and flexible.
Everybody has a role to play. Every manufacturer, whether brand
or generic, OTC, or component--recognizing that nearly 80
percent of the drugs dispensed in the United States are for
generic medicines--and every importer and distributor has a
role to play in the safety and the security of the drug supply
chain.
We all must work together, and PhRMA and its member
companies are committed to doing our part. To the extent that
an entity, whether a finished product or a bulk ingredient
manufacturer or another entity in the supply chain, circumvents
established requirements, they place patients at risk and
disadvantage those who strive to comply.
Fourth, as we consider challenges presented by
globalization, we believe any new authorities must be grounded
in sound science and driven by risk. Risk-based approaches to
regulation are not new and, in fact, are widely accepted by
both industry and FDA. For example, we support giving FDA the
flexibility to prioritize inspections based on risk. Reliance
on certain risk factors such as compliance history and time
since last inspection will enable the agency to efficiently and
effectively target its resources to the benefit of patients.
We also encourage giving FDA the discretion to rely on
satisfactory inspection results from foreign countries with
comparable drug regulatory systems or to use accredited third
parties to conduct some inspections. This would in no way take
the place of FDA inspections. Rather, it would allow the agency
the flexibility to leverage the work of other competent
authorities and maximize its own resources, all without
limiting in any way its ability to inspect a particular
facility.
We also believe that those who produce components and
products destined for sale in the United States should register
with FDA. This will help provide transparency to those who
supply products and components sold here and will help FDA
develop a risk-based inspection approach.
In conclusion, our comprehensive regulatory and closed
distribution system helps provide assurances in the safety,
quality, and integrity of the new drug products sold here in
the United States. Patients rely on this system to safeguard
the medicines they need to improve their health and sustain
their lives.
The challenges of globalization present new opportunities
to discuss how best to strengthen our existing supply chain.
But they also remind us how critically important it is to
maintain this existing closed distribution system. PhRMA member
companies are committed to doing our part and to working with
the committee, Members of Congress, and other stakeholders on
this important issue.
Thank you.
[The prepared statement of Dr. Martello follows:]
Prepared Statement of Kendra A. Martello, J.D.
summary
PhRMA represents the country's leading research-based
pharmaceutical and biotechnology companies that are devoted to
inventing new, life-saving medicines that help patients live longer,
healthier, and more productive lives.
The regulatory system that governs the development, approval,
marketing, and surveillance of new drugs and biologics in the United
States is the most complex and comprehensive in the world. In addition
to the requirement to obtain FDA approval of a New Drug Application
(NDA) before a new drug may be sold in the United States, manufacturers
of pharmaceuticals sold legally in the United States must also comply
with the ``gold standard'' of quality manufacturing--FDA's current Good
Manufacturing Practice (cGMP) regulations. These regulations apply to
all new prescription drugs approved for sale in the United States,
wherever they are made and extend to all components of a finished drug
product, including active pharmaceutical ingredients (APIs), without
regard to where those ingredients are sourced. In addition, America's
prescription drug distribution system is a closed system. Coupled with
the comprehensive regulatory requirements and oversight of the FDA, our
closed distribution system provides assurance regarding the quality,
safety and integrity of the products lawfully sold in the United
States, and helps minimize the possibility of a consumer receiving a
counterfeit drug.
As the committee considers the issue of securing the pharmaceutical
supply chain, we are pleased to provide the following preliminary
comments, and look forward to an ongoing dialogue on these important
issues.
PhRMA believes that all foreign establishments manufacturing
prescription drug products or components destined for import into the
United States must register with FDA and list their products, to the
extent they are not already required to do so under current law.
PhRMA supports granting FDA discretion to set routine inspection
intervals for foreign and domestic facilities according to risk. This
will enhance the FDA's ability to target its inspection resources
efficiently and effectively.
Congress should consider allowing FDA to rely on the inspection
results of other foreign regulatory bodies with similarly robust drug
regulatory oversight systems or to use accredited third parties to
conduct some foreign inspections (such as inspections of facilities
considered moderate to low risk, based on appropriate criteria). This
will provide FDA with the flexibility to leverage the work of foreign
regulatory bodies and maximize its resources, all without foreclosing
its ability to inspect any facility.
As we consider whether new authorities are needed to help
strengthen our existing prescription drug supply chain, we must also
consider the appropriateness of including new burdens on the import of
materials for use in preclinical and clinical investigations.
______
Mr. Chairman, Ranking Member and distinguished members of the
committee, I am pleased to testify today on the issue of ``Securing the
Pharmaceutical Supply Chain.'' My name is Kendra Martello, Assistant
General Counsel at the Pharmaceutical Research and Manufacturers of
America (PhRMA). PhRMA represents the country's leading research-based
pharmaceutical and biotechnology companies that are devoted to
inventing new, life-saving medicines that help patients live longer,
healthier, and more productive lives. In 2010, America's
biopharmaceutical research companies invested more than $67 billion in
the research and development of new medicines.
Biopharmaceutical research and development is a complex, risky and
uncertain undertaking. On average, the time to develop a new medicine
is 10-15 years, at a cost of over $1.2 billion. Moreover, our companies
provide--directly and indirectly--millions of stable, high-paying jobs
for American workers. These jobs can help fuel our Nation's economic
recovery. Accordingly, FDA's regulation of new medicines should not
stifle innovation in the biopharmaceutical sector.
i. fda oversight of prescription drug manufacturing
America's patients trust that the medicines they take meet the high
standards set by the Food and Drug Administration (FDA) for safety and
efficacy and are not substandard or counterfeit, and they rely on our
comprehensive drug regulatory system to help ensure that is the case.
America's research-based biopharmaceutical companies also depend on a
safe, secure prescription drug supply chain.
The regulatory system that governs the development, approval,
marketing, and surveillance of new drugs and biologics in the United
States is the most complex and comprehensive in the world. FDA
regulates virtually every stage in the life of a prescription medicine
sold in the United States, from pre-clinical testing of investigational
compounds in animals and human clinical trials before a medicine is
sold, to manufacturing, labeling, packaging, and advertising, to
monitoring actual experience with the drug after its approval. Further,
FDA receives information about shipments of imported goods into the
United States, and has developed a risk-based information system to
help facilitate the targeting of certain shipments for further
examination at U.S. ports of entry.\1\
---------------------------------------------------------------------------
\1\ See Statement of Margaret A. Hamburg, M.D., Commissioner of
Food and Drugs, Before the Subcommittee on Oversight & Investigations,
Committee on Energy & Commerce, ``Import Safety: Status of FDA's
Screening Efforts at the Border,'' April 13, 2011.
---------------------------------------------------------------------------
In addition to the requirement to obtain FDA approval of a New Drug
Application (NDA) or a Biologics License Application (BLA) before a new
drug may be sold in the United States, manufacturers of pharmaceuticals
sold legally in the United States must also comply with the ``gold
standard'' of quality manufacturing--FDA's current Good Manufacturing
Practice (cGMP) regulations.\2\ These regulations apply to all new
prescription drugs approved for sale in the United States, wherever
they are made, and extend to all components of a finished drug product,
including active pharmaceutical ingredients (APIs), without regard to
where those ingredients are sourced. FDA's cGMP regulations are based
on the fundamental quality assurance principle that quality, safety and
effectiveness ``cannot be inspected or tested into a finished
product,'' but instead must be designed and built into a product.\3\ It
is well-established that inspections alone cannot be relied upon to
ensure product quality and integrity, but that quality systems are also
vital to ensuring the product meets established specifications and
requirements.\4\ The quality systems approach to manufacturing drug
products is embodied in the cGMP regulations.
---------------------------------------------------------------------------
\2\ Under current law, a drug is adulterated if the methods used
in, or the facilities or controls used for, manufacturing a drug
product do not conform to cGMPs, and FDA regulations and guidance
provide additional clarification regarding the expectations of cGMPs in
drug product manufacturing. 21 U.S.C. Sec. 351(a)(2)(B).
\3\ 61 Fed. Reg. 20104, 20105 (May 3, 1996).
\4\ See generally 21 CFR Parts 210 and 211.
---------------------------------------------------------------------------
Thus, while FDA inspections are an important part of FDA's
regulatory authority and oversight, and PhRMA member companies are
routinely inspected, the cGMPs represent a comprehensive, systems-based
approach requiring a company to build quality directly into the entire
manufacturing operation, in order to ensure that the process itself is
under control and therefore will consistently produce a drug product
that meets designated specifications. Further, the word ``current'' in
front of the phrase ``good manufacturing practice'' in the FDCA
recognizes and appreciates that these manufacturing standards are and
must be flexible and adaptive to accommodate different types of
products and advances in science and manufacturing technologies.
Currently, in addition to the requirement that API must be
manufactured in accordance with cGMPs, manufacturers are also required
to ensure that representative samples of each shipment of each lot of a
drug component are tested or examined ``for conformity with all
appropriate written specifications for purity, strength, and quality.''
\5\ Any lot that does not meet such specifications must be rejected by
the manufacturer and may not be used.\6\
---------------------------------------------------------------------------
\5\ 21 CFR Sec. 211.84(d)(2).
\6\ 21 CFR Sec. 211.84(e).
---------------------------------------------------------------------------
Finally, the Prescription Drug Marketing Act of 1987 (PDMA) is a
critical piece of consumer legislation passed as a result of
congressional investigations into the integrity of the drug
distribution system that existed at the time. The PDMA created the
closed prescription drug distribution system in place today, meaning
that products that have circulated overseas may not lawfully be sold in
the United States, unless they have remained under the control of the
original manufacturer. Coupled with the comprehensive regulatory
requirements and oversight of the FDA, our closed distribution system
provides assurance regarding the quality, safety and integrity of the
products lawfully sold in the United States, and helps minimize the
possibility of a consumer receiving a counterfeit drug.
ii. preliminary ideas to strengthen supply chain integrity
Even with FDA's comprehensive regulatory system, increasing
globalization of pharmaceutical supply chains presents challenges that
require biopharmaceutical companies and the FDA to be more adaptive and
flexible in the review and oversight of entities located around the
world.
FDA should use its powerful existing enforcement authorities to
take action against violative products and to promote accountability
among regulated entities--enforcement authority that the FDA under the
current Administration has made a priority to exercise when warranted.
In short, supply chain security is the responsibility of all parties
involved in the distribution of medicines to American patients. We
appreciate the committee's long-standing commitment to these issues. As
the committee considers the issue of securing the pharmaceutical supply
chain, we are pleased to provide the following preliminary comments,
and look forward to an ongoing dialogue on these important issues.
A. Registration of Foreign Facilities
PhRMA believes that all foreign establishments manufacturing
prescription drug products or components destined for import into the
United States must register with FDA and list their products, to the
extent they are not already required to do so under current law. By
requiring such facilities to register, the FDA will be able to
establish a single database that will contain information on all
facilities that manufacture products or components of products that are
sold in the U.S. Prior Congressional testimony and Government
Accountability Office reports suggest that such information appears in
several different formats and databases managed by FDA, and, therefore,
it is not easily accessible or usable by Agency personnel. A single,
standardized database would, among other things, allow the FDA to help
ensure that all facilities subject to inspection are identified, that
FDA inspections can be prioritized, and that routine inspections occur
at appropriate intervals. FDA Commissioner Hamburg has also expressed
support for modernizing the Agency's registration and listing
function.\7\
---------------------------------------------------------------------------
\7\ See Statement of Margaret A. Hamburg, M.D., Commissioner of
Food and Drugs, Before the Subcommittee on Oversight & Investigations,
Committee on Energy & Commerce, ``Import Safety: Status of FDA's
Screening Efforts at the Border,'' April 13, 2011.
---------------------------------------------------------------------------
B. Enhancements to FDA's Inspection Regime
i. Risk-Based Inspection Intervals
PhRMA supports granting FDA discretion to set routine inspection
intervals for foreign and domestic facilities according to risk. The
use of risk-based approaches to regulation, and in particular, to cGMP
inspections is not a new concept.\8\ We support providing FDA with the
flexibility to prioritize inspections of foreign establishments based
on the risks they present, and believe relying on set criteria such as
compliance history, time since last inspection, and volume and type of
products produced, will enhance the FDA's ability to target its
inspection resources efficiently and effectively.
---------------------------------------------------------------------------
\8\ See e.g., ``FDA Guidance: Risk-Based Method for Prioritizing
GMP Inspections of Pharmaceutical Manufacturing Sites--A Pilot Risk
Ranking Model,'' (Sept. 2004).
---------------------------------------------------------------------------
ii. Increase Foreign cGMP Inspections
We also recognize that while FDA has broad authority to conduct
inspections of domestic and foreign facilities, it currently conducts
limited numbers of cGMP inspections of foreign facilities, including
API manufacturers. Therefore, we recommend that FDA generally increase
its cGMP inspections of foreign facilities, including API
manufacturers, to help ensure that cGMPs are being followed. The
targeting of these increased foreign inspections should be accomplished
by utilizing the risk-based approach described above.
iii. Foreign Inspection Reports/Accredited Third Parties
In recognition of the fact that the Agency does not have unlimited
resources and in order to help ensure that foreign inspections occur on
a more regular basis, Congress should consider allowing FDA to rely on
the inspection results of other foreign regulatory bodies with
similarly robust drug regulatory oversight systems or to use accredited
third parties to conduct some foreign inspections (such as inspections
of facilities considered moderate to low risk, based on appropriate
criteria). These inspections would not take the place of FDA
inspections, which are a necessary and important part of the Agency's
mandate; however, they would provide FDA with the flexibility to
leverage the work of foreign regulatory bodies and maximize its
resources, all without foreclosing its ability to inspect any facility.
FDA recently acknowledged and embraced the concept of relying on
``public and private third parties to conduct audits and other
oversight activities on behalf of FDA.'' \9\ FDA intends to quickly
``establish the framework and approach for capturing this
opportunity.'' \10\
---------------------------------------------------------------------------
\9\ ``Pathway to Global Product Safety and Quality: Special
Report,'' Food and Drug Administration, (July 7, 2011), at 31,
available at: .
\10\ Id.
---------------------------------------------------------------------------
iv. Exemption for Materials Intended for Research Use
As we consider whether new authorities are needed to help
strengthen our existing prescription drug supply chain, we must also
consider the appropriateness of including new burdens on the import of
materials for use in preclinical and clinical investigations. The
continued, uninterrupted access to clinical trial materials, including
APIs, is essential to ensure that vital research into innovative, life-
saving and life-enhancing new treatments is not hindered in any way.
Materials and articles used in pre-clinical research and development
activities are never consumed by humans, but instead are used in
laboratory testing as scientists try to understand how the test article
works and its safety profile. The FDA requires reports of non-clinical
laboratory testing and the submission of detailed information in a
range of areas in order to justify the study of a candidate drug in
humans, and materials used in the pre-clinical research and development
process are not studied in humans. Further, investigational drugs and
drug components imported for use under an Investigational New Drug
(IND) application are subject to strict FDA regulation and oversight at
all times and must be manufactured according to cGMPs, including
appropriate standards for testing and quality control.
Thus, we strongly encourage the inclusion of an exemption for
drugs, API, and other materials intended for use in clinical trials
that comply with other FDA requirements relating to the proper use of
investigational material, including labeling and import of
investigational products and materials for use in U.S.-based clinical
trials under an IND application filed with the FDA into any new
provisions related to securing our pharmaceutical supply chain.
Including these investigational products and materials in any new
provisions could potentially be duplicative of existing requirements.
Additionally, exempting investigational materials, drugs, and drug
components used for pre-clinical and clinical research from any new
provision could help ensure that the development of new medicines is
not delayed or hindered and that clinical trials and research and
development continue to occur in the United States--thus helping ensure
that related jobs stay in the United States as well.
iii. conclusion
We commend the committee for its focus on and commitment to the
issue of securing the pharmaceutical supply chain. We recognize the
importance of ensuring that the regulatory system in place today for
prescription drugs continues to remain the best and the safest in the
world. We cannot underemphasize the potential that exists for unsafe
and potentially dangerous counterfeit drugs to enter the United States
should Congress act to open our borders to more expansive prescription
drug importation proposals. These proposals would allow non-U.S.-
approved drug products to be sold on U.S. pharmacy shelves next to FDA-
approved drug products that have undergone our rigorous testing, review
and approval process and put American patients at risk, and the FDA
agrees.\11\
---------------------------------------------------------------------------
\11\ See e.g. FDA Home Page: ``Importing Prescription Drugs,''
.
---------------------------------------------------------------------------
Our system of prescription drug supply chain security today is
very, very good, but even good systems can be improved upon. We look
forward to continuing to work with the committee, FDA, and other
stakeholders on these important issues. Thank you for the opportunity
to testify today and I welcome any questions you may have.
The Chairman. Thank you very much, Dr. Martello.
And now we'll turn to Mr. Gordon Johnston with the Generic
Pharmaceutical Association.
Welcome and please proceed, Mr. Johnston.
STATEMENT OF GORDON JOHNSTON, SENIOR ADVISOR FOR REGULATORY
SCIENCES, GPhA, WASHINGTON, DC
Mr. Johnston. Good morning, Chairman Harkin, Ranking Member
Enzi, and members of the committee. Thank you for asking me to
participate in this timely and important hearing. I am Gordon
Johnston, senior advisor for regulatory sciences at the Generic
Pharmaceutical Association, or GPhA.
GPhA represents the manufacturers and distributors of
generic pharmaceuticals and active ingredients. Generic
pharmaceuticals now fill 78 percent of all prescriptions
dispensed in the United States but consume just 25 percent of
the Nation's total drug expenditure.
Prior to joining GPhA, I served in the U.S. Public Health
Service and in 1987 was assigned to the Food and Drug
Administration and became the Deputy Director of the Office of
Generic Drugs in 1994.
Securing the Nation's pharmaceutical supply chain is of
vital importance to GPhA and our member companies. We also have
a keen interest in a level, competitive, and accountable
playing field among all participants in the U.S. pharmaceutical
supply chain. We commend the committee for your focus on
ensuring the safety of America's pharmaceutical supply, brand
and generic.
GPhA is committed to doing everything possible to work with
Congress and the FDA to promote a vigorous and rigorous
oversight of the Nation's drug supply. As the committee begins
to take a closer look at this important issue, it's critical to
understand the fundamental underpinnings of the current system
and acknowledge the global dynamics of our pharmaceutical
supply here in the United States.
First, as my colleague at PhRMA mentioned, I certainly want
to make it clear that the U.S. drug supply is the safest in the
world. However, we recognize that globalization has added new
and complex challenges to continue to assure this safety.
The pharmaceutical marketplace that FDA oversees in today's
global age, however, looks drastically different than it did in
1938 when Congress passed the statute, and that's the Federal
Food, Drug, and Cosmetic Act. As mentioned previously, today,
nearly 40 percent of all prescription drugs dispensed in the
United States are manufactured outside of the country, and
nearly 80 percent of the ingredients used in these drugs are
manufactured abroad.
According to FDA estimates, the number of drug products
made outside of the United States doubled between 2001 and
2008. Unfortunately, this growth has outpaced the law's reach
as well as the funds needed to allow FDA to hold all
participants to the same high-quality standards.
The act of 1938 requires American drug manufacturers to
undergo surveillance inspections at least every 2 years to
confirm that these facilities are complying with good
manufacturing standards. However, the act does not impose the
same biennial GMP inspection requirement on foreign facilities.
Further, this disparity in the degree of oversight
experienced by domestic versus foreign facilities reduces
American competitiveness by creating an uneven playing field
while at the same time creates opportunity for threats to the
U.S. drug supply. Also, delays in foreign inspections slow the
approval of products that serve unmet medical needs such as
those facing drug shortages.
To paraphrase the recent statements by HHS Secretary
Kathleen Sebelius and FDA, HHS and FDA are looking to Congress
to modernize its antiquated authorities so that FDA's legal
tools can keep pace with globalization. GPhA is in agreement
with the Secretary and FDA that it's essential to modernize the
laws governing the U.S. supply chain.
As noted in my opening remarks, the responsibility of
ensuring safety is a shared one that rests with all of us in
industry and not just FDA. As my colleagues at Pew noted in
their recent report, it's also critical that manufacturers
continue to go beyond GMPs and assure that their supplier
qualification tools are used, using risk- based assessment to
assure the quality and integrity of suppliers abroad. Such
practices which are intended to prevent potential contamination
and adulteration should also be supplemented by a Federal
pedigree tracking system with uniform standards across all
States as opposed to a patchwork of random State-enforced
regulations.
Even with these significant efforts in place, however, the
generic industry has realized that more needs to be done.
That's why the industry stepped up to the plate and is now
finalizing a generic drug user fee program with FDA. One of the
main goals of this user fee program is to hold all generic
players, foreign and domestic, to the same GMP inspection
standards and enhance FDA's ability to identify, track, and
register all contributors involved in the generic drugs in the
United States.
In conclusion, Mr. Chairman, GPhA stands ready to support
Congress and FDA in strengthening its oversight, updating the
law, and investing more resources to ensure that the United
States continues to be a leader in the world when it comes to
safety and also maintaining the American industry's
competitiveness.
I thank you for this time and would be happy to address any
questions from the committee as we move forward.
[The prepared statement of Mr. Johnston follows:]
Prepared Statement of Gordon Johnston
summary
I am Gordon Johnston, Senior Advisor for Regulatory Sciences at the
Generic Pharmaceutical Association, which represents the manufacturers
and distributors of finished dose generic pharmaceuticals,
manufacturers and distributors of bulk pharmaceutical chemicals and
suppliers of other goods and services to the generic industry. Given
that more than 78 percent of all prescription drugs dispensed in this
country are generic drugs, GPhA has a keen interest in making sure the
supply chain is safe for consumers. We also have a keen interest in a
level, competitive and accountable playing field among all participants
in the U.S. supply chain.
Today, nearly 40 percent of all prescription drugs dispensed in the
United States are manufactured outside of the country and nearly 80
percent of the ingredients in our drugs are manufactured abroad. With a
mission to protect and promote the public health, the Food and Drug
Administration is charged with ensuring the safety of all medicine sold
in the United States no matter where these products are made. According
to FDA estimates, the number of drug products made outside of the
United States doubled from 2001 to 2008.
One of the most critical ways FDA ensures continued compliance with
the high quality standards required of prescription drugs sold in the
United States is by conducting on-site inspections of facilities where
drugs are manufactured. FDA's guiding statute, the Federal Food, Drug
and Cosmetic Act of 1938 (``FDCA''), requires American manufacturers to
undergo a surveillance inspection every 2 years to ensure that these
facilities are complying with these high quality standards known as
good manufacturing practices (``GMP''). However, the FDCA does not
impose the same surveillance inspection requirement on foreign
facilities. According to FDA, foreign facilities have grown by 185
percent, while at the same time FDA inspection rates have decreased by
nearly 57 percent. Meanwhile, according to the Government
Accountability Office, the FDA inspected just 11 percent of the 3,765
foreign establishments in its database in 2009.
Unfortunately, this global growth has outpaced the reach of the
FDCA, which was written nearly seven decades ago when the U.S. drug
supply was domestic and not the global one that it is today. In the
recent words of the FDA, the agency is ``looking to Congress to
modernize its antiquated authorities so that FDA's legal tools keep
pace with globalization.''
Even though these global challenges impact the entire
pharmaceutical industry, brand or generic, the generic drug industry
has stepped up to help provide FDA with additional resources to address
the challenges caused by the global drug supply and the increase in FDA
workload. The industry has been working closely with FDA to finalize
negotiations on a generic drug user fee program to help the FDA obtain
additional resources to ensure all participants in the U.S. generic
drug system, whether U.S.-based or foreign, comply with U.S.-strict
quality standards and make certain Americans get more timely access to
low-cost, high-quality generic drugs. The generic drug user fee program
being finalized now recognizes that while providing earlier access to
effective medicines is critical (the key aim of all other existing user
fee programs), an equally important pillar of FDA's mission is ensuring
drug safety. In addition, it is also critical that we as manufacturers
continue to go beyond current GMP standards in our own facilities to
ensure appropriate supplier qualification, through risk-based
assessments, quality agreements and physical audits, where appropriate.
By working together as an industry to share the results of these
audits, as well as new technologies, we can further develop harmonized
standards and best practices to ensure that all stakeholders in the
pharmaceutical supply chain are utilizing the most current and
effective methods for providing patients with safe and effective
medications.
While these efforts provide an excellent framework for industry to
help support the growing global needs of FDA and to level the playing
field between foreign and domestic facilities through inspection
parity, they do not completely solve the problem. To globalize FDA's
authority, eliminate the inspection disparity and better ensure the
safety of the global supply chain, it is paramount that a bill is
introduced to expand FDA's authorities to achieve its mission in this
global age.
The safety of our Nation's pharmaceutical supply is only as good as
our weakest link, and the responsibility rests on all of us. GPhA
encourages Congress and our counterparts throughout the pharmaceutical
industry to work together to ensure FDA is equipped to keep our
consumers safe in a 21st century global drug supply environment.
______
Good morning Chairman Harkin, Ranking Member Enzi and members of
the Senate Committee on Health, Education, Labor, and Pensions. Thank
you for asking me to participate in this very timely and important
hearing.
I am Gordon Johnston, Senior Advisor for Regulatory Sciences at the
Generic Pharmaceutical Association. GPhA represents the manufacturers
and distributors of finished dose generic pharmaceuticals,
manufacturers and distributors of bulk pharmaceutical chemicals and
suppliers of other goods and services to the generic industry. Generic
pharmaceuticals now fill 78 percent of all prescriptions dispensed in
the United States, but consume just 25 percent of the total drug
spending.
According to an analysis by IMS Health, the world's leading data
source for pharmaceutical sales, the use of FDA-approved generic drugs
in place of their brand counterparts saved U.S. consumers, patients and
the health care system more than $824 billion over the past decade--
$137 billion in 2009 alone--which equates to $1 billion in savings
every 3 days.
Prior to joining GPhA, I was with the U.S. Public Health Service,
where I served in a number of pharmacist and health care management
positions. In 1987, I was assigned to the Food and Drug Administration
and, in 1994, became the Deputy Director of the FDA's Office of Generic
Drugs (OGD). While at the FDA, my duties required that I interfaced
with a number of foreign governments on drug safety and regulatory
standards.
introduction
I would like to make two brief points in my testimony today, before
providing comments on securing the pharmaceutical supply chain.
First, we commend the committee for your focus on ensuring the
safety of America's pharmaceutical supply--brand and generic. For
nearly a quarter of a century America's generic drug industry has been
developing, manufacturing and marketing generic versions of brand-name
prescription drugs. Last year, approximately 78 percent of the more
than 3 billion new and renewal prescriptions dispensed in the United
States were filled with generics, saving patients and consumers
billions of dollars. We are committed to doing everything possible to
work with Congress and the FDA to ensure that adequate oversight of the
Nation's drug supply is in place to ensure its safety.
Second, the generic pharmaceutical industry is among the most
highly regulated in the world, with strict rules governing the
development, manufacture, approval, packaging, marketing and post-
marketing surveillance of prescription drugs by the FDA. These
stringent regulations apply equally to all pharmaceutical products--
brand or generic, approved by the FDA.
Securing the Nation's pharmaceutical supply chain is of vital
importance to the Generic Pharmaceutical Association and to our member
companies. Given that more than 78 percent of all prescription drugs
dispensed in this country are generic drugs, we have a keen interest in
making sure the supply chain is safe for American consumers who rely on
our medicines. We also have a keen interest in a level, competitive and
accountable playing field among all participants in the U.S.
pharmaceutical supply chain.
current landscape
As the committee begins to look closer at this important issue, it
is critical to understand the fundamental underpinnings of the current
system that ensures drug safety in our country and acknowledge the
global dynamics of our current branded and generic pharmaceutical
supply here in the United States.
While much of the responsibility of ensuring safe drugs rests with
industry, the FDA plays a critical role in making sure all players
participating in the pharmaceutical supply chain meet FDA's rigorous
standards, including compliance with current Good Manufacturing
Practices (``GMP''). With a mission to protect and promote the public
health, the FDA is charged by Congress to ensure the safety, efficacy
and security of the U.S. drug supply and to address threats to public
health.
background on fda's authority
FDA's authority to carry out this responsibility originated some
seven decades ago when President Franklin Roosevelt signed into law the
Federal Food, Drug and Cosmetic Act of 1938 following the death of more
than 100 people as a result of ingesting Elixir Sulfanilamide, which
contained the deadly poison diethylene glycol. In an effort to avoid
future tragedies, this landmark legislation of 1938 became the
foundation on which the FDA oversees our Nation's pharmaceutical supply
today. Among other authorities, this law authorized FDA to demand
evidence of safety and conduct facility inspections, two critical
authorities of the world's most robust drug authority.
the problem
The pharmaceutical marketplace FDA oversees in today's global age,
however, looks drastically different than it did in 1938 when FDA's
guiding statute was enacted. And several unfortunate tragedies in the
pharmaceutical world since 1938 have prompted further enhancements to
FDA's authority under the FDCA to ensure the agency is equipped to
carry out its mission of protecting the public health. A few pivotal
events have led to an enhancement of FDA's original 1938 authority
since the law's original passage. This included the thalidomide tragedy
in Europe, which strengthened the rules for drug safety and required
manufacturers to prove their drugs' effectiveness in the United States
in 1962. In 1976, additional amendments were made to apply safety and
effectiveness safeguards to new devices following a U.S. Senate finding
that faulty medical devices had caused 10,000 injuries, including 731
fatalities.
Unfortunately, as this committee is aware, the United States
experienced another tragedy recently when tainted brand Heparin was
distributed in the United States, leading to 81 deaths and shedding
additional light on some notable shortcomings of the 1938 law, which
makes it more difficult for FDA to carry out its mission in the now
very globalized U.S. pharmaceutical supply chain. FDA traced the
adulteration of the Heparin product to a manufacturing facility in
China, which the agency had never inspected. As globalization of drug
supply increases, so do concerns about drug safety and demands to
preserve the stringent quality standards Americans deserve, regardless
of where their medicines are produced.
Today, nearly 40 percent of all prescription drugs dispensed in the
United States are manufactured outside of the country, and nearly 80
percent of the ingredients in our drugs are manufactured abroad. The
Food and Drug Administration is charged with ensuring the safety of all
medicine sold in the United States no matter where these products are
made. According to FDA estimates, the number of drug products made
outside of the United States doubled from 2001 to 2008. The growth in
the number of facilities requiring FDA oversight has grown
substantially, particularly in foreign facilities that supply the U.S.
marketplace. In 2010, nearly 20 million shipments of food, drugs and
cosmetics arrived at U.S. ports of entry. A decade earlier, that number
was closer to 6 million and, a decade before, just a fraction of that
figure. Unfortunately, this growth has outpaced the law's reach as well
as the funds needed to allow FDA to hold all participants in the
pharmaceutical supply chain to the same high quality standards.
more foreign inspections needed
One of the most critical ways FDA ensures continued compliance with
the high quality standards required of prescription drugs sold in the
United States is conducting on-site inspections of facilities where
drugs are manufactured. These important surveillance inspections ensure
that facilities are continuing to meet their obligation of producing
safe products in accordance with a rigorous set of standards known as
Good Manufacturing Practices, or GMP, and serve as a critical tool of
ensuring continued safety and GMP compliance--separate and distinct
from other supply chain controls.
The FDCA of 1938 requires American manufacturers associated with
pharmaceutical production to undergo a surveillance inspection every 2
years to ensure that these facilities are complying with strict GMP
standards. However, the FDCA does not impose the same biennial GMP
inspection requirement on foreign facilities. According to FDA, foreign
facilities have grown by 185 percent, while at the same time FDA
inspection rates have decreased by nearly 57 percent. Meanwhile, the
FDA inspected just 11 percent of the 3,765 foreign establishments in
its database in 2009, according to the Government Accountability
Office.
This disparity in the degree of oversight experienced by domestic
versus foreign facilities reduces American competitiveness by creating
an uneven playing field, while at the same time threatening the safety
of the U.S. drug supply.
This disparity in inspections between foreign and domestic
facilities is also causing notable delays in introducing new
prescription drugs to consumers, including delays in approving products
that serve an unmet medical need or offer a more affordable alternative
in the case of generic drugs. This is because new product approvals,
such as those facing drug shortages, require an inspection history of
the relevant manufacturing facility and, given the number of facilities
awaiting inspection, many of the facilities producing new drugs are
waiting to be inspected.
the solution
FDA does indeed need, in the words of Health and Human Services
Secretary Kathleen Sebelius, ``additional tools from Congress to move
its oversight capabilities into the 21st century.'' And more recently,
the agency noted that it is ``looking to Congress to modernize its
antiquated authorities so that FDA's legal tools keep pace with
globalization.''
GPhA is in agreement with FDA on this matter. Without modernization
of the law governing the U.S. drug supply and increased authority and
resources to carry out FDA's oversight of today's complex and global
drug supply, the significant challenges facing the U.S. pharmaceutical
marketplace will continue and likely compound. Earlier this year, the
President signed into law legislation intended to globalize FDA to help
protect the Nation's food supply and equip the agency to carry out its
twin mission of ensuring food safety in an increasingly globalized food
supply. When it comes to drugs, however, FDA still operates in
accordance with the FDCA of 1938, the scope and provisions of which are
largely domestic. This law needs to be globalized to ensure FDA is
equipped for the global age and to ensure competitiveness.
GPhA is pleased the committee is holding this hearing to begin
efforts to equip FDA with the necessary legal authority and tools to
carry out its critical public health mission in the globalized U.S.
pharmaceutical marketplace.
Ensuring that all contributors to the U.S. drug system, both
foreign and domestic, are held to the same quality standard is a
critical issue for the entire pharmaceutical industry--brand and
generic alike. Amending the FDCA of 1938 and, in particular, ensuring
foreign facilities are held to the same standards as U.S. facilities,
will improve quality, consistency and availability within the drug
supply chain and create a level playing field, allowing U.S.
pharmaceutical manufacturers to be more competitive. These important
updates to the law will not only result in a safer drug supply with
consistent oversight for all players in the U.S. system, the changes
will also help reduce approval times of new drugs undergoing FDA review
and help expedite the availability of new medicine.
GPhA further supports a ``risk-based'' model for inspections that
prioritizes inspections according to a company's safety and compliance
track record. This system would ensure that questionable or problematic
facilities receive a comprehensive review and evaluation sooner, rather
than later, or not at all as is the case under the current system.
Facilities with strong records of compliance and positive inspections
would be placed further down on the inspection schedule, allowing the
agency to prioritize its immediate attention on companies that have
never had an inspection or that have a history of compliance issues.
generic drug industry steps up to help address this industry-wide issue
As I noted in my opening remarks, the responsibility of ensuring
safety is a shared one that rests with all of us in industry, though,
not just the FDA.
I am proud to say that the generic drug industry has been a leader
in this area, developing supply-chain security measures independently
and with the FDA to provide the necessary oversight to maintain the
Nation's drug supply.
For example, one new initiative is the FDA's border control policy,
which is being developed in an attempt to cut the number of poor
standard medicines that enter the supply chain from outside the United
States. The new initiative, which is called PREDICT--Predictive Risk-
based Evaluation for Dynamic Import Compliance Targeting--will be a
border-based scheme that assesses drugs at the point of import.
Barcodes on cases of medicines will be scanned at the U.S. borders and
linked to a central database. The results will be able to tell the FDA
agents at the border whether or not the producer has a license to ship
and sell their drugs in the United States. If the products do not meet
FDA compliance they will not be allowed into the country.
The pharmaceutical industry also provides multiple layers of
testing and oversight to build in quality and supply chain security
from the ground up. Suppliers of inactive and active ingredients are
carefully evaluated to assess their facilities, manufacturing
capabilities and supply chain practices and controls. These initiatives
provide the foundation of drug product quality, as well as taking all
necessary steps to help eliminate potential contamination or
adulteration in the shipment channels. Next, manufacturers test the
incoming raw materials for quality, purity and potency in accordance
with FDA-approved analytical methods. These testing methods are
designed to assure that all raw materials meet their predetermined
quality attributes. Finished dosage form manufacturers have
sophisticated testing procedures during the manufacturing process and
for the final product, which are all intended to assure that the
product received by patients meets all standards for quality, purity
and potency.
As drug products are shipped to wholesalers, pharmacies or other
intermediaries, the pharmaceutical industry utilizes multiple forms of
controls within the supply chain to mitigate the potential risk of
contamination or adulteration. Careful planning of drug shipments,
along with strict supply chain custody and controls, are part of the
advanced logistical operations that provide accountability and
oversight of the products before they ever reach a patient's hands. By
following these standards, manufacturers are able to determine any
deviation from a product's predetermined shipment and custody program,
and stop problems before they occur.
As my colleagues at Pew noted in their recent report, it is also
critical that we as manufacturers continue to go beyond current GMP
standards in our own facilities to ensure appropriate supplier
qualification, through risk-based assessments, quality agreements and
physical audits, where appropriate. By working together as an industry
to share the results of these audits, as well as new technologies, we
can further develop harmonized standards and best practices to ensure
that all stakeholders in the pharmaceutical supply chain are utilizing
the most current and effective methods for providing patients with safe
and effective medications.
landmark user fee program will provide additional resources
Even with these significant efforts in place, however, the generic
pharmaceutical industry has realized that more needs to be done. That
is why the industry, which accounts for 78 percent of all prescription
drugs dispensed in the United States, has stepped up to the plate to
help provide FDA with resources to address the challenges caused by the
global drug supply and the increase in the FDA's workload. The industry
has been working closely with FDA to negotiate a generic drug user fee
program to help the agency obtain additional resources in this global
age to ensure all participants in the U.S.-generic drug system, whether
U.S.-based or foreign, comply with all U.S.-strict quality standards
and to make certain Americans get timely access to low-cost, high-
quality generic drugs.
The generic drug user fee program being finalized now with FDA
recognizes that while providing earlier access to effective medicines
is critical--and the key aim of all other existing user fee programs--
an equally important pillar of FDA's mission is ensuring drug safety.
The overall goal is to hold all players, foreign or domestic,
contributing to the U.S. generic drug system to the same GMP inspection
standards, while expediting access to more affordable, high-quality
generic drugs; and, enhancing FDA's ability to identify, track and
require the registration of all contributors involved in each generic
drug product sold in the United States. Final recommendations are
expected to be submitted to Congress in January 2012.
While the generic drug user fee program provides an excellent
framework for industry to help support the growing global needs of FDA
and to level the playing field between foreign and domestic facilities
through inspection parity, it does not completely solve the problem,
nor does it have the reach of the entire pharmaceutical industry. To
globalize FDA's authority, eliminate the inspection disparity and
better ensure the safety of the global supply chain, it is paramount
that a bill is introduced to expand FDA's authorities to achieve its
mission in this global age.
The safety of our Nation's pharmaceutical supply is only as good as
our weakest link, and the responsibility rests upon all of us. GPhA
encourages Congress and our counterparts throughout the pharmaceutical
industry to work together to ensure FDA is equipped to keep our
consumers safe in a 21st century global drug supply environment.
federal pedigree standard should replace state-by-state patchwork
Finally, as we look at the broader issue, GPhA also recommends that
Congress adopt a Federal pedigree system with uniform standards across
all States, as opposed to a patchwork of more state-enforced
regulations that are starting to arise in the absence of Federal
leadership mandating one uniform standard. Given that products are
distributed throughout interstate commerce and across all States lines,
having what could potentially be a 50-state patchwork of different
standards will be a mess without a Federal mandate setting a
reasonable, uniform standard. The challenge to implementation will be
to ensure that the technology is reasonable and feasible in light of
numerous economic, technical and logistical factors so that the end
product does not result in an increase to consumer and payer cost.
conclusion
In conclusion, Mr. Chairman, the Generic Pharmaceutical Association
stands ready to support Congress and the FDA in strengthening its
oversight, updating the law and investing more resources to ensure we
continue to lead the world in safety while maintaining competitiveness.
Thank you. I would be happy to address any questions of the
committee.
The Chairman. Thank you very much, Mr. Johnston.
Now we'll turn to Mr. VanTrieste.
Welcome and please proceed, Mr. VanTrieste.
STATEMENT OF MARTIN VAN TRIESTE, R.Ph., PAST CHAIR,
RX-360, THOUSAND OAKS, CA
Mr. VanTrieste. Chairman Harkin, Ranking Member Enzi, and
members of the committee, thank you for the opportunity to
testify today. My name is Martin VanTrieste, and I am the
senior vice president of Quality at Amgen, a leading
biotechnology company. In addition, I am the founder, past
chair, and director of Rx-360, and it's on behalf of Rx-360
that I testify here today.
Rx-360 was founded in 2009 in direct response to the
economically motivated adulteration of Heparin with the mission
to enhance the security and quality of the pharmaceutical
supply chain. Our membership has quickly grown to over 65
member companies, including most of the large pharmaceuticals,
biotechnology, and generic drug manufacturers, along with our
key suppliers.
This industry is extensively regulated by the FDA in a
variety of ways, including through compliance with good
manufacturing practices, or GMPs. However, economically
motivated adulteration and counterfeiting are not GMP issues.
GMPs keep honest people honest but do little to prevent
unethical players or criminals to exploit the complexities of
the supply chain.
Let me give you an example where a lack of transparency in
the supply chain was able to be exploited which is outlined in
a chart I have submitted to the committee and is up here on the
easel. Glycerin is an inactive ingredient used in many
pharmaceuticals. In this case, the government of Panama
unknowingly purchased adulterated glycerin to be used in cough
syrup which resulted in at least 67 deaths.
An investigation into this tragedy revealed several
breakdowns in the supply chain which were hidden from the
manufacturer purchasing the ingredient. As illustrated in Box
1, the problem began in China at the Taixing Glycerin Factory
which produced a technical substitute for glycerin which was
not pure glycerin at all but actually contained antifreeze
which is three times cheaper than glycerin.
This factory was never inspected by the Chinese FDI, and as
Boxes 2, 3, and 4 describe, a series of brokers and traders
moved the material through the supply chain, changing the name
of the material, the manufacturing site, the expiration date of
the product, and never performed any tests. This adulterated
glycerin was then used to manufacture cough medicine, leading
to fatal consequences.
Learning from this example, if the manufacturer of the
cough syrup knew that they were really purchasing antifreeze,
these fatalities would have been prevented. And this is why
transparency of the supply chain is so important.
Rx-360 members recognize that we are responsible for our
suppliers and the supply chains and must address the challenges
associated with the global supply chain. In our short period of
existence, we have implemented many solutions in four key
areas. These include conducting and sharing of detailed audits
of our suppliers, developing technologies to prevent and detect
adulterations, implementing best practices for industry, and
conducting active surveillance and issuing supply chain
securities for our members.
All these efforts are intended to be key pieces of a
proactive attempt to eliminate security gaps in the supply
chain. The FDA is full of good people doing a tough job, and we
intend these activities to be complementary of their extensive
work in this area.
As policymakers look at ways to improve the integrity of
the supply chain, it is important that any legislative or
regulatory proposals are carefully considered, such as adding
to the complexity of the supply chain, creating unintended drug
shortages, and adding significant costs to the healthcare
system. As you examine these issues, I have a few points for
consideration.
First, some issues are related to the fact that ingredient
suppliers don't always disclose the actual manufacturing site
of those ingredients to drug manufacturers. This was the issue
in the glycerin example I discussed earlier. By requiring a
disclosure to the drug manufacturer, we can ensure enhanced
oversight of our suppliers.
Second, there are many foreign suppliers who register with
the FDA but have no intention of distributing product within
the United States. They use this registration to convey some
sense of FDA approval and undermining the integrity of the
registration system.
Other points that are worth considering include increased
FDA inspections of foreign manufacturers, using investigators
who are specifically trained in fraud detection, allowing the
use of qualified third-party inspectors, and increased criminal
penalties for knowingly engaging in economic adulteration and
counterfeiting.
In conclusion, on behalf of Rx-360, I thank the committee
for its examination of this issue. I appreciate Senator
Bennet's work in this area and the interest of Chairman Harkin
and Ranking Member Enzi in finding solutions to these complex
issues. Rx-360 stands ready to assist the committee as they
continue to work on this important issue.
Thank you.
[The prepared statement of Mr. VanTrieste follows:]
Prepared Statement of Martin VanTrieste, R.Ph.
summary
Management of the biopharmaceutical supply chain has become one of
the top public health concerns with respect to consumer safety. The
globalization of distribution for drug raw materials, components and
finished products has introduced many complications. This has resulted
in unethical players along the supply chain introducing counterfeited,
adulterated and contaminated materials, often with tragic consequences.
The biopharmaceutical industry is extensively regulated by the FDA
in a variety of ways, including through compliance with Good
Manufacturing Practices (cGMP). However, economically motivated
adulteration and counterfeiting are not a GMP compliance issue. GMP's
keep the honest people honest but do little to prevent unethical
players or criminals from exploiting the supply chain.
Given these challenges, leaders in quality from the
biopharmaceutical industry came together to proactively find solutions.
The result was the formation of a consortium called Rx-360 in June
2009. The purpose of Rx-360 is to enhance the security of the
pharmaceutical supply chain by (1) Adopting standards and best
practices; (2) Developing and implementing technology (3) Conducting
surveillance; and (4) Sharing supplier audit information.
Rx-360 has accomplished much in its short period of existence. It
recently announced positive results from an audit pilot program which
allowed audits of a supplier to be shared with the Rx-360 membership.
In effect, this method reduces the number of audits that a supplier
must host and that a biopharmaceutical firm must conduct themselves,
all while providing more information on a particular supplier than
previous audits have been able to.
Additionally, the consortium is undertaking the following
activities: (1) Rx-360 has adopted, or is in the final stages of
adopting, numerous standards and best practices to secure the supply
chain which many firms have implemented; (2) Rx-360 has developed an
analytical technique that is used by our members to detect potentially
economically motivated adulteration in response to raw material
shortage; and (3) Rx-360 conducts active surveillance to regularly
alert its membership regarding potential supply chain issues so that
companies and suppliers can implement preventative corrective measures.
Rx-360 appreciates that policymakers are examining ways to improve
supply chain security, to compliment these initiatives already
underway, and would like to be a resource as you examine these issues
going forward. However, it is important that any legislative or
regulatory proposals are carefully considered so as to ensure that
there are no unintended consequences, such as adding complexity to an
already complex system, unintentionally creating drug shortages, and
adding significant cost to the health care system.
As you examine these issues some points for consideration which
could improve supply chain security include: (1) Requiring ingredient
suppliers to disclose their actual manufacturing site to manufacturers;
(2) FDA registration of only those foreign ingredient manufacturing
sites whose products are used in the United States and pay a nominal
fee; (3) FDA inspection of foreign ingredient manufacturing sites using
a risk-based approach where the cost of the inspection is paid for by
the manufacturer; and (4) Increased criminal penalties for those
involved in economically motivated adulteration or counterfeiting of
pharmaceuticals.
Rx-360 thanks the committee for examining these complex issues and
we stand ready to assist you as we work towards our common goal of
protecting patients.
______
introduction
Chairman Harkin, Ranking Member Enzi and members of the committee,
thank you for the opportunity to testify today. My name is Martin
VanTrieste and I am the senior vice-president of Quality at Amgen, one
of the world's leading health care biotechnology companies. We are
headquartered in Thousand Oaks, CA and have a significant presence in
Asia, Europe and North America, with research, manufacturing,
distribution and sales facilities worldwide. Amgen has more than 17,000
employees.
While I bring with me today my experience at Amgen ensuring supply
chain security and quality, my testimony today is on behalf of Rx-360,
a consortium developed by volunteers from the Pharmaceutical and
Biotech industries which includes their suppliers.
Management of the biopharmaceutical supply chain has become one of
the top public health concerns with respect to consumer safety. The
globalization of distribution for drug raw materials, components, and
finished products has introduced many complications that to date have
yet to be fully resolved. Unethical players and noncompliant companies
along the supply chain can intentionally introduce counterfeited,
adulterated and contaminated materials, often with tragic consequences.
Some of these recent tragic events have been well publicized and
include:
1. Adulterated glycerin with diethylene glycol (antifreeze) used to
manufacture cough syrup has led to 67 deaths in Panama and 103 deaths
in Haiti (mostly children).
2. Adulterated Heparin with hypersulfated chondroitin sulfate led
to 81 deaths in the United States and Europe.
3. Adulterated milk with melamine has led to contaminated infant
formula causing kidney stones and deaths of infants in China.
4. Adulterated glycerin with diethylene glycol used to manufacture
teething gel has led to over 40 infant deaths in Nigeria.
The biopharmaceutical industry is extensively regulated by the FDA
in a variety of ways, including through compliance with Good
Manufacturing Practices (cGMP). However, economically motivated
adulteration, like that listed above, is not a Good Manufacturing
Practice compliance issue. Good Manufacturing Practices keep the honest
people honest but does little to prevent unethical players or criminals
from exploiting complexities in the supply chain.
We must realize that it's not a matter of if economically motivated
adulteration will happen again, but when and where it will happen.
Given this challenge, leaders in quality from the biopharmaceutical
industry came together to find solutions to this problem. We recognized
that our standard Quality Systems and Good Manufacturing Practices
would not be sufficient to detect such illicit activity. We also
quickly recognized that no one company could adequately address this
very complex global problem facing our industry, and therefore we
needed to collaborate. It is a holistic approach coordinated between
industry, regulators and policymakers that is the most effective and
efficient manner to deal with this global complex problem. These
discussions lead to the formation of a consortium called Rx-360.
rx-360 history and mission
The formation of Rx-360 was a direct response to the heparin crisis
and a call to action by Dr. Janet Woodcock, Director of the Food and
Drug Administration's Center for Drug Evaluation and Research, during
her keynote address at the first Parenteral Drug Association--FDA
Supply Chain Conference. During the fall and winter of 2008, a few
quality thought leaders in the biopharmaceutical industry took up this
call to action and met to discuss the events around the economically
motivated adulteration of heparin. We quickly realized as a group that
unethical players and criminals had entered into the biopharmaceutical
supply chain in an unprecedented manner that had not previously been
seen in the United States and Western Europe.
Our consortium was incorporated in June 2009 with six member
biopharmaceutical companies as founding members. This membership has
quickly grown to over 65 member organizations, including most of the
large Pharmaceutical, Biotechnology and Generic drug manufacturers
along with many key suppliers. Rx-360 membership is open to branded and
generic biopharmaceutical companies, their suppliers, professional
organizations and regulatory agencies.
The purpose of Rx-360 is to enhance the security of the
biopharmaceutical supply chain and to assure the quality and
authenticity of the products moving through that supply chain. The
individuals developing this concept are working in the best interest of
patients. We are a non-profit organization with the mission to create
and monitor a global quality system that meets the expectations of
industry and regulators and that assures patient safety by guaranteeing
product quality and authenticity throughout the supply chain.
Broadly speaking, Rx-360 focuses on four areas to secure the supply
chain and to assure the quality of materials throughout the supply
chain. These four areas are:
1. Adopting standards and best practices;
2. Technology development and implementation;
3. Surveillance around events that could lead to supply chain
threats; and
4. Sharing supplier audits.
Rx-360 members recognize that we are responsible for our suppliers
and supply chains and have a responsibility to tackle head-on the
challenges associated with a global supply chain. With that in mind,
Rx-360 member companies have implemented company-specific and
collaborative-based initiatives to help further assure a secure supply
chain in the interest of product quality and ultimately, patient
safety.
problems associated with a global supply chain
Globalization is impacting most industries and the
biopharmaceutical industry is no exception. On the positive side, it
has enabled our industry to enter markets all over the world and
provide life-saving medicines to millions of patients. With the
benefits of globalization, however, come significant challenges and
responsibilities. One of those challenges is ensuring the authenticity
and quality of materials moving through the supply chain.
Several highly publicized events have highlighted a weakness in the
biopharmaceutical supply chain. Significant harm to patients, including
death, has been associated with these events. These incidents have led
to a loud and swift reaction from the public, biopharmaceutical
companies, health authorities and policymakers. These events have shown
us how unethical players and criminals have entered into the supply
chain, introducing counterfeited, adulterated and contaminated
materials, often with tragic consequences.
I have had the opportunity to present on supply chain security at
many global conferences with other experts in the field, including
representatives from foreign and domestic regulatory agencies. As I
conduct my research for these presentations, it can become increasingly
unsettling and overwhelming how complex the issues are and the
potential problems that exist.
I quickly realized that the challenges presented by a very complex,
global supply chain, which spans numerous regions of the world and many
regulatory jurisdictions, are too vast to take on at one time or with
one solution. It was clear to me that there is no magic solution for
these issues, but that working together, the industry, its suppliers,
regulators and policymakers can improve the safety of the supply chain.
what rx-360 has accomplished to date
These issues and their resolution are of extreme importance to Rx-
360 and its members, and are the reason that the organization was
founded by dedicated quality experts looking for solutions. Patient
safety is not a competitive advantage, and the members of Rx-360 are
looking at novel ways to improve the system and have already
accomplished a great deal in our short time of existence. Examples of
this include:
Shared Audits: Rx-360 is working to implement two shared
audit programs; a joint audit program and a shared audit program, which
will allow the collection and sharing of audit information of suppliers
so that this information can be leveraged across all members of the
consortium.
The Board of Rx-360 recently announced positive results from its
shared audit pilot program. In the pilot, the biopharmaceutical company
which sponsors the audit and the audited supplier agreed to share
redacted audit reports which were uploaded into the Rx-360 database for
all members to share. From this pilot program the following benefits
were found:
Shared audits provide a broader, more thorough
``picture'' of quality culture and performance;
Existing reports can be used to identify and pre-
screen new suppliers; and
Potential savings with evaluation of reports/
responses to reduce supplier audit frequency/length, or audit
scope.
Joint audits: Joint audits are designed to increase the
effectiveness of each audit by collecting and analyzing more
information while reducing the audit burden on suppliers and
biopharmaceutical companies. Rx-360 uses qualified third-party auditors
to conduct joint supplier audits on behalf of the consortium's members.
All auditors are provided the same high-quality training by Rx-360,
which ensures that each audit is effective, efficient, and consistent
throughout the supplier base.
Once complete, the audit report is placed into an electronic
database where Rx-360 members are provided access to the report, in
lieu of conducting an on-site audit themselves. This sharing reduces
the number of audits that a supplier must host and that a
biopharmaceutical firm must conduct itself. This will reduce the
overall audit burden to suppliers and biopharmaceutical drug product
manufacturers, and provides more information on a particular supplier
than previous audits have been able to provide. One additional benefit
is that any savings can be re-invested in process and quality system
improvements.
One of the Rx-360 supplier members estimates that it costs them
$20,000 to host a customer audit, and they receive multiple customer
audits a year to host. By having these joint audits, suppliers can save
resources and money and apply these savings toward making improvements
and not just hosting audits. Most suppliers would agree to allow Rx-360
auditors to spend more time auditing for a shared audit than they would
allow an individual biopharmaceutical company.
The joint audit scheme is in the pilot phase, which is planned to
be completed by the end of November 2011.
Rx-360 is moving forward towards formally implementing these audit
programs and we expect this to be a significant step in improving the
ability to ensure supplier quality in a global environment.
Adoption of Standards and Best Practices: Rx-360 has
adopted, or is in the final stages of adopting, numerous standards and
best practices designed to help secure the supply chain and the
security of the materials throughout the supply chain. For example, Rx-
360 recently published a points-to-consider document on how to improve
security of biopharmaceutical shipments and prevent cargo theft. This
information was presented to FDA at a workshop and will allow industry
to utilize these techniques to help prevent cargo theft. Many firms
have implemented, or are in the process of implementing, these best
practices.
Development of Detection Techniques: Rx-360 has developed
an analytical technique to detect potentially economically motivated
adulteration in response to raw material shortage. We have learned that
shortages provide an opportunity for criminals and unethical players in
the supply chain to exploit. As an example, once Rx-360 became aware of
an acetylnitrile shortage, a key raw material used in active ingredient
manufacturing, we rapidly informed our members so they could secure
inventory and then developed a method that was provided to everyone and
anyone to detect if their raw materials were adulterated for economic
gains.
Membership Alerts: Rx-360 regularly alerts its membership
regarding potential supply chain issues so that companies and suppliers
can implement preventative and corrective measures to quickly avoid
issues which have been discovered. These alerts help put members on
notice regarding potential problems and also serve to rapidly gather
the appropriate experts to respond to known supply chain threats in
order to protect patients. For example, in the midst of the Japanese
tsunami and nuclear accident, Rx-360 assembled a panel of experts to
evaluate the impact on the supply chain and recommend best practices to
the biopharmaceutical industry in order to assure the safe distribution
of drug products in Japan and how to assure that raw materials and drug
product produced in Japan would not have adverse patient consequences.
a statement of support for fda
Rx-360 is supportive of the FDA's efforts to address economically
motivated adulteration, counterfeits, substandard medicines and the
Agency's efforts to help ensure the supply chain remains secure. We
believe a strong, well-funded FDA is critical to the health and safety
of the American public, both for the purposes of helping to assure the
safety, effectiveness and availability of medicines and to help ensure
continued access to innovative new therapies for American patients. As
such, Rx-360 is supportive of efforts to provide adequate resources to
the FDA so that the Agency can enhance its inspection efforts abroad
and ensure a safe, secure supply chain.
points to consider in any legislative/regulatory effort to improve
supply chain security
Rx-360 appreciates that policymakers are examining ways to improve
supply chain security and would like to be a resource as you examine
these issues going forward. As I mentioned earlier in my testimony, we
think that we face a complex, global problem that needs a holistic
solution requiring industry, regulatory authorities and policymakers
working collaboratively to attack the problem. However, it is important
that any legislative or regulatory proposals are carefully considered
so as to ensure that there are no unintended consequences, such as
adding complexity to an already complex system, unintentionally
creating drug shortages, and adding significant cost to the health care
system.
The biopharmaceutical supply chain is a complex and global
endeavor, and Rx-360 is an example of what can be done when
stakeholders work together to address solutions. As you examine these
issues some points for consideration which could improve supply chain
security include:
Ingredient suppliers should disclose the actual
manufacturing site to the drug product manufacturer: There are many
potential links in a global supply chain where a series of brokers and
distributors could be involved. If we try to learn from the
contaminated glycerin events in Panama we must recognize that one
contributing factor is that the drug product manufacturer in Panama had
no idea that the glycerin they were purchasing was sourced from China
since at least three distributors or brokers did not disclose the
location of the manufacturing site. As such the drug product
manufacturer did not have the opportunity to audit the ingredient
manufacturer and had to depend on the Quality Systems of several
foreign intermediaries that did not act in an ethical manner. See
attached chart of events leading up to contaminated glycerin.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Foreign ingredient manufacturing sites should be
registered with the FDA and only those whose products are actually used
in the United States and pay a nominal fee should be allowed to
maintain registration: This will assure that the FDA has an accurate
data set to be used for oversight. There are many suppliers who have no
intention to distribute product within the United States but use an FDA
registration to convey a sense of FDA approval to non-U.S.-based
manufacturers. This behavior only adds misleading data to any FDA
database and makes it harder for FDA to achieve their objectives.
FDA should inspect foreign ingredient manufacturing sites
using a risk-based approach and those foreign ingredient manufacturers
should pay the cost of FDA inspections: The Food, Drug and Cosmetic Act
requires the FDA to inspect domestic manufacturers every 2 years, but
has no such mandate to inspect foreign manufacturers with such
frequency. For over 40 years, overseas manufacturers have had
unfettered access to the largest biopharmaceutical market in the world
with very little regulatory oversight or inspections. This inspection
gap between domestic and foreign inspections should be made up quickly,
and funded by the sites external to the United States. According to the
recent PEW report, at the current FDA inspection rate, it will take
more than 13 years to inspect the sites outside the United States, and
that more than 80 percent of the drugs consumed in the United States
are now manufactured outside the United States.
Today, U.S. manufacturers who are inspected by many foreign
regulatory agencies pay for the cost of these inspections. By requiring
foreign manufacturers to cover the cost of FDA inspections, this will
assure that the FDA will have adequate funding for inspections and
experienced investigators. It would also have adequate funding to
assure that the appropriate numbers of investigators participate in a
foreign inspection and that the length of the inspection is appropriate
to provide adequate oversight. Inspection fees should also provide
adequate funding so that FDA Investigators are not asked to bear
unreasonable hardships when making travel and lodging arrangements.
Also, given resource constraints, perhaps FDA and Congress could
consider allowing qualified third-party inspectors to inspect these
foreign facilities.
Increased criminal penalties for economically motivated
adulteration and counterfeiting: Today, a criminal can make
astronomical profits by knowingly engaging in economically motivated
adulterating or counterfeiting a biopharmaceutical ingredient or drug
product, with little chance of getting arrested and even if they are
arrested the criminal penalties are small compared to the crime. FDA
and other enforcement authorities should make this a focus for
enforcement and criminal penalties should be increased to reflect the
gravity of the crime and the life-threatening risks to patients, like
those that have been proposed in recent legislative proposals.
We also believe that during FDA overseas GMP inspections,
particularly of biopharmaceutical ingredient manufacturers, that these
inspections should also focus on good distribution practices and the
authenticity of data submitted to the FDA. For example, there are
unintended threats, such as improper handling of drugs and raw
materials, especially if temperature-sensitive, that can compromise the
efficacy and safety of drugs and pose just as serious of an implication
to patient safety.
Based on results from risk assessments or suspicious reports from
the field, the FDA should also consider deploying specially trained
forensic and criminal investigators that can detect fraud, the use of
``show'' and ``shadow'' factories, and the potential for economic
adulteration, since these skills are vastly different from the skills
needed for a routine cGMP inspection.
FDA should also consider whether to monitor or provide special
scrutiny to products or ingredients in short supply since these
situations may provide additional incentives and opportunities for
unethical players to engage in economically motivated adulteration of
products.
conclusion
On behalf of Rx-360, I thank the committee for taking on these
complex issues in order to protect patients. I am encouraged by the
collaboration of all stakeholders working together to address this
complex issue. Rx-360 members are dedicated to protecting patients by
securing the biopharmaceutical supply chain. This dedication is
demonstrated everyday by their and their employee's contributions
leading to the remarkable success of Rx-360 in a relatively short
period of time. We stand ready to assist the committee as they continue
their work on this important issue.
The Chairman. Thank you very much, Mr. VanTrieste.
And now, Mr. Coukell, if you'll summarize, we appreciate
it.
STATEMENT OF ALLAN COUKELL, BScPharm, DIRECTOR OF MEDICAL
PROGRAMS, PEW HEALTH GROUP, WASHINGTON, DC
Mr. Coukell. Thank you, Mr. Chairman, Ranking Member Enzi,
and members of the committee. Thank you for the opportunity to
testify. My name is Allan Coukell. I'm a pharmacist and
director of medical programs in the Pew Health Group.
We recently released a report called ``After Heparin:
Protecting Consumers from the Risks of Substandard and
Counterfeit Drugs.'' * Our chief findings are consistent with
what you've heard from previous speakers. Pharmaceutical
manufacturing is now globalized and increasingly outsourced,
and to ensure safety, both the FDA and manufacturers must
adjust.
---------------------------------------------------------------------------
* The ``After Heparin: Protecting Consumers from the Risks of
Substandard and Counterfeit Drugs Report may be found at http://
www.pewtrusts.org/uploadedfiles/www.pewtrustsorg/Reports/Health/
Pew_Heparin_Final_HR.pdf.
---------------------------------------------------------------------------
The Pew report is based on published studies and documents
and dozens of interviews with experts as well as a 2-day
conference that included regulators and a broad representation
from industry. We outlined a series of case studies to
illustrate the kind of rare but potentially very serious risks
we face. We identified systemic problems and practical
solutions.
We called the report ``After Heparin'' both because Heparin
was a wake-up call for industry and regulators and because it
so clearly shows many of the failings of our current system.
For example, the U.S. manufacturer in that case failed to
perform a timely audit of its Chinese supplier. The FDA
approved the supplier without an inspection, partly because an
agency database confused two different facilities. The standard
test for Heparin then in use was outdated and not designed to
detect a contaminant. There were significant manufacturing
quality issues.
And even after the fact, neither the FDA nor the
manufacturer was ever able to gain complete access to that
upstream supply chain, hindered in part by lack of cooperation
from Chinese authorities. Unless you think this is ancient
history, I point out that just last month, the FDA issued a
warning letter to yet another Heparin facility in China for
failing to adequately evaluate suppliers or perform testing.
Others today have stressed the need for increased foreign
inspections. It's an area where there's a good deal of
consensus, and I'd be happy to expand on what we see as key
changes to ensure safety and a level playing field. Speakers
have also mentioned the need for manufacturers themselves to
ensure quality, and that's crucial.
One speaker at our conference last year was Philippe Andre,
a China-based pharmaceutical auditor whose business involves
visiting manufacturing facilities in Asia on behalf of United
States and European companies. I'd like to show a photo that he
shared with us. You can see here--this is a facility in China.
And just by the rusted pipes and the broken windows, you know
this is not using good manufacturing practices.
Of course, there are very good facilities in China. This
just wasn't one of them. But it is the start of the supply
chain for a western company.
Sometimes substandard facilities sell to so-called show
factories, high-quality facilities that sell products they
didn't actually make. And in Mr. Andre's experience, American
and European companies are misinformed about the identity of
all or part of their supply chain more than a third of the
time.
Our report examines a number of other case studies
including where manufacturers falsified or concealed records.
And we note the risk of U.S. patients receiving counterfeit or
stolen products that penetrate our domestic distribution
system.
Mr. VanTrieste has just reiterated--let me reiterate the
diethylene glycol poisoning, where the toxic material moved
from a manufacturer in China to another broker in China, to a
broker in Europe, to a broker in another part of the world.
Each time the label is changed and replaced with a new,
inaccurate label, and each time the history of the product is
destroyed.
Indeed, it was poisoning with this exact same substance
that led Congress to pass the Food, Drug, and Cosmetic Act in
1938. The patients who died in the Panama example were largely
children. And we must ensure that the FDCA reflects today's
reality.
The necessary steps are practical, feasible, and crucial.
Many have been included in previous bipartisan legislation
before this committee and in Senator Bennet's bill introduced
last year. I've mentioned inspections and the need that
manufacturers better assess their suppliers, and they're
accountable for doing so.
We also need to ensure that testing standards are updated
and that the FDA has the tools it needs. For example, many
people are surprised to learn that the FDA can't order the
recall of a drug product if it's adulterated. They can do it
for medical devices and for food, and they should have that
authority for drugs. If they have it, it's less likely they'll
need to use it. Done well, a regulatory scheme will reward the
good players and ensure that the bad actors don't create a race
to the bottom.
In conclusion, let me say that Americans support these
sorts of changes. Pew commissioned a poll last year which found
that likely voters are concerned with drugs from developing
countries. And across the political spectrum, they
overwhelmingly favor many of the provisions I've outlined. As
Congress did 70 years ago, we urge you today to act to ensure
safety. We shouldn't wait for another tragedy.
Thank you.
[The prepared statement of Mr. Coukell follows:]
Prepared Statement of Allan Coukell, BScPharm
summary
A major focus of the Pew Health Group is identifying ways to
address risks to the U.S. pharmaceutical supply chain. In March of this
year, we hosted a 2-day conference that included representatives of
brand and generic pharmaceutical manufacturers, active drug ingredient
makers, major and secondary pharmaceutical wholesalers, chain and
independent pharmacies, consumer and health professional organizations,
the U.S. Food and Drug Administration (FDA) and State regulators, and
independent supply chain experts. The convening was structured around a
discussion draft of a white paper entitled ``After Heparin: Protecting
Consumers from the Risks of Substandard and Counterfeit Drugs,'' which
was shared with conference participants in advance. The final report
was issued on July 12.
The presenters at our meeting explained that while the vast
majority of drugs in our pharmacies and medicine cabinets are not
counterfeit or adulterated, pharmaceutical manufacturing has changed
dramatically in recent years, becoming increasingly globalized and
outsourced. This creates new risks which were dramatically illustrated
not long ago with the intentional adulteration of the common blood-
thinning drug, heparin.
Despite globalization of manufacturing, FDA oversight is largely
domestically focused. The Food, Drug and Cosmetic Act (FDCA) requires
inspections of U.S. plants every 2 years, but specifies no inspection
frequency for foreign plants. The FDA lacks the resources to inspect
foreign sites with any meaningful regularity. The Government
Accountability Office (GAO) has also found that FDA foreign inspections
are shorter than inspections of U.S. plants and, unlike inspections at
U.S. facilities, are pre-announced, because of cost and resource
considerations.
Poor adherence to quality standards has been observed both in the
United States and abroad, but the shift of manufacturing to low-cost
environments with reduced oversight creates an increased risk.
According to one estimate, ignoring Good Manufacturing Practices (GMPs)
can save up to 25 percent of a factory's operating costs. The
expectation of inspections is an incentive for compliance with quality
standards. Compliance failures may be the result of poor performance,
or they may be deliberate.
Additional legislative changes are now needed to give the FDA the
tools it needs and to ensure that every manufacturer is held to the
highest standard. Pew prioritizes the following reforms:
1. Pharmaceutical companies must have comprehensive systems in
place to assess risk and ensure the quality and safety of their
manufacturing supply chains.
2. Overseas inspections by FDA must be significantly increased.
3. FDA authority and enforcement gaps must be addressed.
4. Improve the information flow to FDA.
______
Chairman Harkin, Ranking Member Enzi and members of the HELP
Committee, thank you for the opportunity to testify about the essential
steps Congress must take to protect Americans and ensure the integrity
of our drug supply.
The Pew Charitable Trusts is driven by the power of knowledge to
solve today's most challenging problems. Pew applies a rigorous,
analytical approach to improve public policy, inform the public and
stimulate civic life. Based on research and critical analysis, the Pew
Health Group seeks to improve the health and well-being of all
Americans.
A major focus of the Pew Health Group is identifying ways to
improve the safety of the U.S. pharmaceutical supply chain. In July of
this year, we released a report entitled ``After Heparin: Protecting
Consumers from the Risks of Substandard and Counterfeit Drugs.'' \1\
The report, which underwent extensive external review, was based upon
information from regulatory and public documents, peer-reviewed journal
articles and interviews with dozens of supply chain experts from
numerous perspectives. It was informed by a 2-day conference we hosted
earlier this year that included representatives of brand and generic
pharmaceutical manufacturers, active drug ingredient makers, major and
secondary pharmaceutical wholesalers, chain and independent pharmacies,
consumer and health professional organizations, the U.S. Food and Drug
Administration (FDA), State regulators and independent supply chain
experts. I am including the report as part of my testimony.
The key message is that pharmaceutical manufacturing has changed
dramatically over the past decade. While the vast majority of drugs in
American pharmacies and medicine cabinets are not counterfeit or
adulterated, increasing globalization and reliance on outsourced
manufacturing creates new risks, including the risk of deliberate
tampering or counterfeiting of ingredients as well as the risk of
inadequate safety or quality controls in a manufacturing environment
that is largely outside the scrutiny of the FDA. Along with some
serious recent safety problems, we have recently seen shortages of
important medicines, in part due to manufacturing quality problems.
We are encouraged by ongoing Generic Drug User Fee discussions and
press reports that generic drug companies and active ingredient makers
have agreed to pay fees that will enable the FDA to conduct more
inspections of overseas manufacturing facilities. Indeed, at our recent
public meeting, these sectors emphasized the importance of stepping up
to ensure stronger oversight of their products. There is no doubt that
this step, if taken, would move us closer to a system that better
protects the health of American patients.
However, the problem of pharmaceutical supply chain safety is not
confined to generic drugs. As FDA officials and other experts have
emphasized, this is an issue for all drugs, brand and generic alike. It
is essential that Congress ensure that we have a system that enables
FDA, in conjunction with other regulators and third parties, to inspect
all high-risk overseas facilities. Further, increasing FDA's oversight
capacity, while critical, is only one of several necessary steps that
Congress must take to ensure safety. Our analysis of supply chain risks
has identified the need to ensure stronger baseline quality management
standards for industry, and the need to update FDA tools and
authorities that will allow the Agency to operate effectively in the
21st Century environment.
heparin
The contamination of the blood thinner heparin dramatically
illustrates the risks we face. In late 2007, health authorities at the
U.S. Centers for Disease Control and Prevention (CDC) and the FDA began
receiving reports of unexpected allergic-type reactions in patients
undergoing dialysis.\2\ The events were subsequently linked to heparin,
a widely used blood thinner.\3\ Additional analysis led to the
identification of an adulterant that standard tests were unable to
detect.\4\ Heparin was made by an American company, but the heparin
active ingredient had been sourced from a Chinese factory, which in
turn relied upon a network of small suppliers. The FDA and others
believe that persons in China added the cheaper adulterant to crude
heparin to cut costs.\5\ \6\ The toxic material eventually reached at
least 11 countries. Based on an estimated three tons of product, this
substitution has been estimated to have yielded $1 million to $3
million in gains for the individual or company that sold it.\7\ The FDA
received reports of deaths and serious injuries associated with use of
heparin.\8\
While failure to detect the contaminant during manufacture was a
key factor, the case also illustrated other systemic problems,
including \9\ \10\ \11\:
An absence of timely supplier audits and FDA inspections,
Limits and errors in the FDA database of manufacturing
facilities,
The discovery of manufacturing quality issues, including
poor control of incoming raw materials, and
The fact that--even in the period after the deaths--
neither the manufacturer nor the FDA was able to gain complete access
to the upstream supply chain.
This incident represents a clear breach of the security of the U.S.
pharmaceutical supply. To this day, no one in any country has yet been
held accountable. Nor has Congress acted to update the statutes that
govern drug manufacturing. Numerous experts have asserted that, absent
changes to the system, another such event is inevitable.
Indeed, as recently as last month, the FDA issued a warning letter
to a Chinese manufacturer of heparin for failure to conduct adequate
quality control, failure to evaluate raw ingredients, test each batch
of incoming material and failure to adequately assess suppliers.
Although the firm in question was supplying the U.S. market, it was not
registered with the FDA, as required under law.\12\
globalization/outsourcing
Heparin is far from the only pharmaceutical that is produced
outside the United States for American consumers. The number of U.S.
drugs and ingredients made at non-U.S. sites has doubled since
2001.\13\ An estimated 40 percent of all finished pharmaceuticals,\14\
and 80 percent of the active ingredients and bulk chemicals in U.S.
drugs, are now sourced by industry from foreign countries,\15\ and up
to half are purchased from plants in India and China.\16\ The United
States is the No. 1 destination for Chinese pharmaceutical raw material
exports.\17\
A recent survey of pharmaceutical industry executives determined
that 70 percent had key suppliers in China and close to 60 percent in
India. About half of those surveyed were from companies with annual
revenues of $1 billion or more. Ninety-four percent of those surveyed
saw their greatest supply chain risk as raw materials sourced outside
the United States.
Despite globalization of manufacturing, FDA oversight is largely
domestically focused. The Food, Drug and Cosmetic Act (FDCA) requires
inspections of U.S. plants every 2 years, but specifies no inspection
frequency for foreign plants.\18\ The FDA lacks the resources to
inspect foreign sites with any meaningful regularity.\19\ The
Government Accountability Office (GAO) has also found that FDA foreign
inspections are shorter than inspections of U.S. plants and, unlike
inspections at U.S. facilities, are pre-announced, because of cost and
resource considerations.\20\
quality/compliance
In the case of heparin, it appears that criminals deliberately
introduced a substandard active ingredient into the supply chain. At
other times, consumers may be at risk because of failures by
manufacturers to comply with quality standards. Poor adherence to
quality standards has been observed both in the United States and
abroad, but the shift of manufacturing to low-cost environments with
reduced oversight creates an increased risk. According to one estimate,
ignoring Good Manufacturing Practices (GMPs) can save up to 25 percent
of a factory's operating costs.\21\ The expectation of inspections is
an incentive for compliance with quality standards.
Compliance failures may be the result of poor performance, or they
may be deliberate. One Chinese company was found to have exported
heparin to the United States that they claimed to have made at their
own factory, but was in fact made entirely at two external plants.\22\
The FDA has said that some of this heparin may have contained the same
contaminant associated with the deaths in 2007 and 2008.\23\
Falsification of manufacturing location poses risks to patients,
because regulators cannot ensure a product's quality without knowing
the conditions of its manufacture.
In 2008, an Indian manufacturer was cited by the FDA for alleged
falsification of stability testing records and use of active
ingredients made at unapproved sites, according to a Department of
Justice subpoena motion.\24\ \25\ In 2010, another Indian manufacturer
was found to have falsified batch manufacturing records for an anti-
platelet medicine. EU inspectors discovered at least 70 batch-
manufacturing records in the plant's waste yard. All of the records had
been re-written, and in some cases original entries had been
changed.\26\
In Panama in 2006, dozens of people died after taking a cough
medicine that had been made with diethylene glycol,\27\ \28\ a sweet-
tasting, but poisonous solvent.\29\ It had been wrongly labeled in
China and passed through a series of Chinese and European brokers, who
repeatedly re-labeled it, presumably without performing independent
tests. The same problem has occurred with products in Africa, Haiti and
India, and has been identified in consumer products in this country as
recently as 2007.\30\ Students of FDA history will know that diethylene
glycol poisoning in the United States in 1937 was the disaster that
lead directly to the enactment of the FDCA.\31\ It is now time to
update that statute for 21st century manufacturing.
gaps and solutions
At the Pew convening in March, we heard clearly that real risks
exist, and that the system can--and must--be improved. We heard that
serious limitations to FDA's oversight of foreign plants making drugs
and ingredients for the United States must be remedied. Representatives
from several drug manufacturing groups agreed to back new industry fees
to cover additional foreign inspections.
Experts also called for industry audits of every supplier and sub-
supplier. Some companies already have best practices in place, but it
is important that every company have robust systems to ensure the
safety and quality of its upstream supply chain.
Some steps can be taken now. The FDA has opened offices in India,
China, and other countries, and is pursuing changes to standards to
improve supply chain oversight. The agency is also implementing a new
risk-based screening system for imports to speed the clearance of low-
risk shipments and increase the predictive efficacy for identifying and
targeting high-risk imports. In addition, FDA has entered into more
than 30 agreements with regulatory bodies in different countries to
share some inspectional and other non-public information.\32\ Finally,
this June, the FDA released an important strategy paper outlining its
intent to form a global consortium of regulators and to increase the
agency's reliance on third-party sources of information.
Many individual companies have also taken steps, and as mentioned,
the focus on increasing FDA oversight capacity in the current GDUFA
negotiation process is an important move forward. Nevertheless,
additional legislative changes are now needed to give the FDA the tools
it needs and to ensure that every manufacturer, whether generic or
brand, is held to the highest standard. Pew prioritizes the following
reforms:
1. Pharmaceutical companies must have comprehensive systems in
place to assess risk and ensure the quality and safety of their
manufacturing supply chains. Companies must audit suppliers on-site
prior to engagement and institute supplier quality agreements. Company
management must be held accountable for implementing these systems.
While the FDA already has the authority to establish ``current good
manufacturing practices,'' or cGMPs, these regulations do not extend to
the assurance of quality at ingredient suppliers. The FDA has issued
guidance explaining how a quality systems approach complements GMPs.
Legislation should require companies to develop such quality systems,
but must allow for companies and FDA to update standards and practices
in keeping with advances over time.
2. Overseas inspections by FDA must be significantly increased.
Inspections do not guarantee quality, but the reasonable expectation of
inspections is an incentive for compliance with quality standards. We
can and should ensure that inspection frequencies domestically and
internationally are meaningful for both generic and brand companies.
The FDA has recently expressed its intention to increase its reliance
on third-party sources of information, particularly inspections by
other regulators, to supplement FDA's own ability to conduct
inspections. This is a necessary step to preserve the integrity of the
U.S. drug supply, but the agency also needs additional resources to
conduct overseas inspections. As noted above, the proposed user fee
agreement with the generic industry and active ingredient makers to
help fund inspections will be extremely helpful. Congress should ensure
that FDA is able to provide effective oversight on the basis of a risk-
assessment, regardless of whether the facility is covered by a user fee
agreement.
3. FDA authority and enforcement gaps must be addressed: FDA
authorities and enforcement tools are often inadequate to properly
regulate the pharmaceutical industry, particularly overseas. FDA does
not currently have the authority to mandate a drug recall, nor may it
halt product distribution (it can do both for medical devices) and must
instead go through the courts to request a seizure.\33\ In addition to
mandatory recall authority for drugs, the FDA needs the authority to
subpoena documents and witnesses, and an improved set of enforcement
tools such as civil penalties for violations of the FDCA. Granting
subpoena power to Federal agencies is not uncommon--at least 355 such
authorities have been granted to other executive branch entities.
4. Improve the information flow to FDA: Drug companies are not
currently required to inform FDA of many types of quality or safety
issues that could present risks to U.S. patients, such as suspected
counterfeiting or theft. Industry whistleblowers wishing to bring
information to FDA are not currently covered by specific whistleblower
protections. FDA is also limited in its ability to share information
protected under the trade secrets provision of the Freedom of
Information Act (FOIA) with other government agencies, which can hamper
international investigations, and should be given clear authority to do
so. This reform would also facilitate the sharing of inspectional
information between FDA and its counterpart agencies.
protect american consumers
The public expects that FDA will ensure that the drugs they take
every day are safe from contamination and, at the same time, there is
increasing concern about the safety of imported drugs. A poll
commissioned by The Pew Charitable Trusts found that Americans are
concerned about the safety of drugs from developing countries.\34\ And
Americans across the political spectrum overwhelmingly support giving
FDA increased authority in order to protect the domestic drug supply.
For example, 86 percent of respondents supported inspecting foreign
facilities every 2 years; 94 percent supported mandatory recall
authority for the FDA. We can avoid future tragedies by adopting
policies that are supported by drug manufacturers, health
professionals, and the vast number of Americans who take medicines such
as prescription and over the counter drugs at their peril. Congress
should act now.
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Safety-Poll-Findings-2.pdf.
The Chairman. Thank you very much, Mr. Coukell, and we'll
begin a round of 5-minute questions.
Starting with Dr. Crosse, in the past, you reported that
FDA databases--and I heard this from others here too--had
contained incorrect information about foreign drug
establishments. What's the reason for this, and is this still
the case, that they contain incorrect information?
Ms. Crosse. It is still the case. There are several
reasons. You heard Ms. Autor speak about a paper-based
registration system that previously existed. Now, FDA has gone
to an electronic system which has reduced certain errors of
data entry, but they still don't have in place a requirement
for any sort of unique identifier for a facility.
They ask companies now with this electronic registration
that they submit a unique identifier, a Dun and Bradstreet D-U-
N-S number, that they can enter into the system. They cannot
require companies to submit that, and while many are complying,
perhaps some of the ones you'd most want to have information
about may not be complying with that.
But, nevertheless, you continue to have other systems that
are populating FDA databases with incorrect information. When
shipments arrive at the border, the Customs and Border
Protection has a data system that does not use a unique
identifier, and that then sends incorrect information to FDA.
The Chairman. So this is a question for all of you. Should
we have a requirement that any finished drug, any ingredient or
excipient that is manufactured in a foreign country that comes
to this country have a bar code attached to it at all levels?
Now, we know that they very seldom--they don't go directly from
a small plant like that to some pharmacy in the United States.
They go through different brokers here, in Spain, as you
pointed out, and Canada and other places like that.
Should we require that every one of those three that I
mentioned--that they have a bar code attached to it so that it
can be immediately traceable back to its origin, back to the
very plant where it started? Is that possible to do, and should
we do it?
Dr. Crosse.
Ms. Crosse. I'm not sure about the feasibility of that. I
think until you get data systems aligned between Customs and
Border Protection and FDA, you may still have problems with
inaccurate information showing up from one agency to another.
The Chairman. Well, I'm just asking if that one plant has
to put on--no matter what it is, they have to put on a bar
code, and that has to follow that all the way through to the
final purchaser.
Dr. Martello, is that possible?
Ms. Martello. I can't speak to electronic--to the
feasibility of that. My sense is that would be a significant
cost and complexity added to the distribution system that may
be challenging for folks to comply with. I think we do have a
strong--very strong system today, and we should look for
opportunities to make that stronger. But I worry about the cost
and complexity of such a system with so many independent actors
in the supply chain.
The Chairman. OK. I'm just asking for a simple bar code at
every step of the way.
Mr. Johnston, what do you think? Is that possible?
Mr. Johnston. Well, GPhA members looked at bar codes for
track-and-trace purposes in the United States.
The Chairman. Exactly.
Mr. Johnston. And doing it domestically, we've seen the
feasibility, I think, as being probable, because you can
utilize integrated technologies, and we can have manufacturers,
pharmacists, wholesalers on the same page. Some of the
challenges are, when you get into international regions,
finding this harmonization so that the same bar code, the same
readers, the same technologies all apply.
So when it comes to the international scope, I think
there's issues there that would have to be looked at to make
sure that the viability of a bar code applied in China would be
read all the way through the system and that data would be
available to the end user. So there's challenges there.
The Chairman. Mr. VanTrieste.
Mr. VanTrieste. Well, I think the use of bar codes is
definitely possible. We see it in supermarkets. I think the
complexity comes in with the integration of this data from a
worldwide perspective and how long that would take to be
actually implemented.
I think you can get to the end result you need by requiring
everybody in that supply chain to tell the final person who's
going to use that raw material--the pharmaceutical
manufacturer--who that original manufacturer was. The
pharmaceutical manufacturer can then provide the oversight of
the entire supply chain once they know it. If we don't know it,
then we know we've got a problem. So I think just requiring
that transparency and disclosure will get to where you want to
go much faster.
The Chairman. Mr. Coukell.
Mr. Coukell. I agree. I think the underlying principle here
is that manufacturers need to know their complete supply chain.
They need to have confidence that the quality standards are in
place and that the FDA has to be able to get access to that
data if they need it. We need a way for everybody to be on the
same page about which facilities we're talking about. Whether
it's a bar code or some other means, I think, matters less.
The Chairman. Thank you all very much.
Senator Enzi.
Senator Enzi. Thank you, Mr. Chairman.
Mr. VanTrieste, your testimony suggests that poorly
designed supply chain reforms could exacerbate drug shortage
problems. Could you elaborate a little bit?
Mr. VanTrieste. Yes, of course. As we all talked earlier
about, if we increase regulation, certain players who are in
the business today may decide to get out of the business. They
might be the only supplier of a key ingredient for a critical
medicine to treat patients.
So any legislation that we do, I think we have to give the
secretary some latitude to prevent those suppliers from exiting
the market and give them enforcement discretion on where to
apply the regulations, because we don't want to see people exit
the market who are sole suppliers.
Senator Enzi. Thank you.
Dr. Crosse, what's wrong with the FDA's drug supply chain
information systems, and what does the FDA need to do to fix
them?
Ms. Crosse. Well, there are several problems. They have a
long history of poor information technology systems, and
they're in a process now of trying to upgrade those systems
across the board, across the entire agency. That's taking
several years, and it's encountered many difficulties in trying
to integrate what had been a number of different freestanding
systems that weren't compatible.
I mentioned just a moment ago one of the problems is that
some of the key information they get comes from another agency,
from Customs and Border Protection, which is not providing
accurate information in many instances because of the way
certain identifiers are generated in that system. FDA has been
taking some steps to try to verify information that they have.
They've actually hired contractors to go now and look at
certain suspect facilities to see if they're actually located
where they've told FDA that they are. And they've found a
number of facilities that are not at the locations that they've
reported. But it's taking FDA a very long time to try to go
through and make up time on these systems, and they still don't
all talk to one another.
Senator Enzi. Thank you.
Dr. Martello, can you give us an overview of your member
companies' quality control systems? Do they customarily audit
or inspect their suppliers?
Ms. Martello. Thank you for that question. The quality
systems approach is really embodied in the current good
manufacturing practice regulations, and our companies take
great steps to comply with those. The GMP regulations require
that each facility have in place a quality control unit that's
responsible for all aspects of the manufacture of a drug
product, for all control of all incoming ingredients, and
periodic testing throughout the process. And taken with the new
drug approval requirements, the cGMP requirements in our closed
distribution system help provide assurances that the medicines
that patients take are safe and have the identity and the
quality that they are purported to represent.
Senator Enzi. Thank you.
Mr. Coukell, Pew supports mandatory recall authority for
drugs. How many times has a drug manufacturer refused FDA's
request to conduct a voluntary recall?
Mr. Coukell. Thank you for the question, Senator. I can
give you an example, in 2008 when the FDA had to go to court to
get some contaminated Heparin off the market. I think the
bigger concern is not the refusal, but if public health is at
risk, the time it would take if the FDA does have to go to
court. It's the kind of authority that, if they have it, I
think it will bring everybody to a consensus much more quickly
about whether a voluntary recall is necessary.
Senator Enzi. If a manufacturer refuses to conduct a
voluntary recall, how does making it mandatory help?
Mr. Coukell. I presume that there would be some sanction
involved for refusing to do a mandatory recall.
Senator Enzi. Mr. Johnston, the law requires FDA to inspect
domestic drug establishments every 2 years. But the law is
silent about how FDA must inspect foreign establishments. Can
you elaborate on the need to level the playing field?
Mr. Johnston. Thank you, Senator Enzi. There's two
components, I think, to answering that question, the first
being the parity, that foreign establishments should be
inspected at the same level, intensity, and frequency as
domestic facilities. There's a substantial cost for inspections
to drug companies.
And I might use the example of companies sitting in
Philadelphia or New Jersey. They have FDA visiting each month
or every other month. And it takes resources, time, personnel
to accommodate these inspections.
The contrast is foreign inspections, when companies or
facilities are visited on a 3-, 4-, or 5-year basis. There's
additional cost to the American industry and, more importantly,
to the public health. By having equivalents in terms of
inspections, FDA has the opportunity to evaluate these foreign
facilities, determine if there are any GMP or quality problems,
supply chain issues, and have those addressed in a timely
basis. So bringing comparability into inspection requirements,
we believe, is a very important component of supply chain
security.
Senator Enzi. Thank you, and my time has expired. I have
questions I'll submit.
The Chairman. Thank you, Senator Enzi.
Senator Franken.
Senator Franken. Thank you. I'll try to be fast because I
know Senator Bennet has to get out of here and I have to
preside in a few minutes.
Dr. Martello, as we heard from Mr. Johnston, the generic
pharmaceutical companies are working with the FDA to do their
fair share and provide the FDA with additional resources to
increase foreign inspection and capacity. While I realize that
the brand name companies don't occupy as much of the market as
the generics do, would your member companies be willing to
contribute to securing the supply chain through increased user
fees?
Ms. Martello. Thanks very much for that question. I think
it's important to recognize that since 1992, the PDUFA user
fees--prescription drug user fees that we're looking to
reauthorize next year actually have supported preapproval
inspections since their inception in 1992. And as the GAO has
reported, the majority of facility inspections that are
conducted are both preapproval and GMP inspections combined. So
our industry is really committed to this issue and has
supported inspections in the form of the user fees as a portion
of that since 1992.
We also think and we recognize that, frankly, there will
never be enough resources for the agency to get to all the
places that they need to get. And so that's why we believe that
using a risk-based approach for FDA to target facilities for
inspection and really focus on the areas of highest risk will
help do a great deal. You could couple that with reliance on
third parties, again, whether it be accredited third parties or
foreign regulatory authorities with competent regulatory
systems.
Using those things together, we can expand the reach of the
FDA and help them do their job by focusing on the areas of
highest risk and really increasing the number of facilities
that the FDA is visiting on a routine basis.
Senator Franken. I guess I didn't totally understand your
answer.
Mr. Johnston, do the generics put more resources into the
supply chain, helping FDA with the supply chain?
Mr. Johnston. Thank you. The user fee proposal that FDA is
considering--and I think we've reached agreement on--doesn't
specify how many of the resources go into inspections. However,
there are performance goals that will certainly drive the
utilization of the resources toward inspections. And, as we
heard, 80 percent of the incoming materials are foreign and 40
percent of the products. FDA will dedicate probably 40 or 50
percent of the user fee resources from the generic industry
toward inspections and support for those inspections.
Senator Franken. And, I guess, Dr. Martello, I was asking
are you willing to put in more toward that end?
Ms. Martello. User fees have gone to support preapproval
inspections since their inception in 1992. The PDUFA----
Senator Franken. Preapproval inspections--what do you----
Ms. Martello. Preapproval--when a company files a new drug
approval application, the FDA has the discretion to go and
inspect--the preapproval inspection----
Senator Franken. OK. I'm not talking about preapproval. I'm
talking about supply chain, foreign supply chain.
Ms. Martello. Many times, as the GAO has found, a
preapproval inspection is coupled with a good manufacturing
practice inspection. So the facilities that are filing new drug
approval applications with the agency are getting those
inspections on a regular basis, and they are supported through
the user fees in the Prescription Drug User Fee Act provision.
Senator Franken. OK. Would PhRMA be willing to put more in
to do that, to secure the foreign supply chain? I think that's
what I've been asking you, and I don't quite feel like I'm
getting a real answer. I feel like I'm getting a circular kind
of answer.
Ms. Martello. Across the board, the Prescription Drug User
Fee Act and the agreement that was just released increases
resources for FDA to conduct the necessary reviews of new drug
approval applications.
Senator Franken. Well, that's new drug approval.
Ms. Martello. And with that, a portion of that is targeted
for inspections.
Senator Franken. What about existing drugs?
Ms. Martello. Our companies do our fair share to try to----
Senator Franken. Would you do more?
Ms. Martello. I think we'd be happy to engage in
conversations around that. We think giving the FDA the
opportunity to use risk to drive the intervals at which they
inspect facilities will help expand their reach and help them
maximize and use their resources efficiently, because we know
that resources are not unlimited.
Senator Franken. Thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Franken.
Senator Bennet.
Senator Bennet. Thank you, Mr. Chairman. And, again, I
really want to thank you for holding this hearing. This is an
issue that I've been working on ever since I got here, and now
I know why. The testimony, I think, has been excellent today,
and I'm familiar with the work that everybody here has done.
I find remarkable the degree of consensus around a lot of
the issues that we face, and I think it reflects how big the
gap is between a statute that was written in 1938 and the world
as we're living in it today--the changes that are accelerating
because of the strengthened global economy that we face. And
this lack of an update--or our lack of a regulatory regime that
reflects reality is bad for our consumers and it's bad for our
business, and I think that's why we need to be urgent in fixing
it.
It's been remarkable to read some of the polling data
around us, and then the mandatory recall suggestion, for
example--first of all, everybody thinks the FDA already has
that. They don't. Ninety-four percent of the American people
support it, and they believe that when they walk into their
grocery store or their pharmacy that their drug has been likely
produced in the United States. That's not true.
And they believe that somebody has looked at it to make
sure that it's safe. That's not true, either. In fact, what
we've learned from the testimony today is that even if we
discover that there's a problem, it's hard to track it down to
the source in China. So there's a lot of work to do here, and
whatever I can do to help you with it, I want to do.
I'd like to ask Mr. Coukell first and then let anybody else
from the panel answer--I just have one question. Pew has done
some great work on this ``After Heparin'' report that you
talked about. I think it's very important. And in that report,
it made the observation that compliance with internal quality
systems and regulations can represent up to 25 percent of a
finished drug manufacturer's operating costs.
And at the same time, as we heard from Ms. Crosse at GAO,
it would take FDA 9 years to inspect the foreign facilities. So
you begin to add this stuff together and ask yourself about an
American manufacturer here who's following good manufacturing
practices and still can expect a surprise inspection every 2
years from the FDA--maybe more frequently than that--versus a
foreign firm that will never be inspected or may never be
inspected, doesn't have to follow any of these practices, and
on top of everything else, when they are inspected, as we heard
in the testimony of the first panel, they're given warning that
the inspectors are coming.
Mr. Coukell, what do you think the three or four most
important things are that we can do to level this playing field
and make sure that we are protecting both the safety of our
citizens, which is the most important thing, and also the
playing field for American business which is a vitally
important part of our economy?
Mr. Coukell. Senator, thank you for the question and for
your continued commitment to this issue and this area. I think
you make a very important point. So the good actors, whether
they be in the United States or outside the United States, are
spending time and resources to make sure that their
manufacturing is sterile, consistent, and predictable and high
quality.
And so if you have somebody out there who is tempted to cut
corners and not do things to a high standard, and there's no
chance that anyone is going to show up and hold them to the
high standard, then they can do that. And so that does create
an uneven playing field.
So we absolutely need a system where we take the existing
inspection or resources and deploy them in a way that the
highest risk facilities, wherever they are, are getting
inspected and that we're taking steps to make sure that finite
resources are stretched so that we aren't inspecting the same
facilities that the Europeans are inspecting twice in a year,
when someone out there is not getting inspected, where we're
relying on additional sources of information, and where the
manufacturers themselves are providing better documentation
when they're taking all the right steps.
And, again, if you're an importer, and you have something
coming into the country, it costs you money if it sits there in
the Customs. Meanwhile, the FDA is dealing with--how do we
screen all the stuff that's coming in? So if we have a system
where the FDA can say, ``Yes, they're showing us that this is
good quality stuff. Let's get it in the country''--meanwhile,
they can focus on the bad actors--that benefits everybody.
Senator Bennet. I just have one second left. Does anybody
feel compelled?
Mr. VanTrieste. I think, Senator, the one other thing--you
talk about leveling the playing field. When I'm inspected by a
foreign entity, even the Europeans, I have to pay for that
inspection. So why aren't ingredient manufacturers in foreign
countries who get FDA inspections required to pay for those
inspections to help justify the resources needed to do that?
Senator Bennet. Thank you.
Thanks, Mr. Chairman. Well, I would say I'm sorry Senator
Mikulski has left, because in the spirit of what she said, I
couldn't agree with her more. And I think it would be
surprising--several of you talked about enforcement too, which
I would add to the list. I mean, the idea that the penalty for
counterfeiting drugs is lower than the penalty for
counterfeiting a DVD, for example, Mr. Chairman. It just
doesn't make any sense to anybody that's living in Colorado and
it shouldn't.
Those are the kinds of common sense things that I think we
could fix if we get the chance to do it. So thank you for your
leadership.
The Chairman. And thank you also for your leadership,
Senator Bennet.
Thank you all for being here. I'll just close by saying
that this committee is committed, I think, on a bipartisan
basis to move ahead in this area. I don't know that we have
crystallized exactly what it is that we want to do. We are
seeking information from all of the players in the field out
there, from the companies, pharma, generics, FDA, others, to
come up with the best formula that we want to put in the PDUFA
reauthorization next year.
Again, I just simply need to know why it is that we can't
have a system that doesn't cost a lot. It'll cost something. I
understand that. But I think indications are that consumers are
willing to pay a little bit more for heightened security of the
products they're buying--in this case, drugs--to ensure that
inspections are held and that companies are held to the highest
standards of good manufacturing practices, that there's a
transparency to the system.
Mr. VanTrieste, if your research staff could go back and
find out where that Heparin came from, which you've done--and
yet I hear from Mr. Coukell that no one has ever been held
accountable. So, obviously, there's a way of traceability. We
need to know--everybody along that line needs to be held
accountable. Everybody along the line needs to be held
accountable. And the only way you can be held accountable is to
know who you are at every step of the way.
That's my question on the bar codes or some other similar
situation like that, that we can do that. An interesting point,
I think, was raised--I forget who raised it--about coordination
with other countries, Europe and others, so that, No. 1, we can
assure that manufacturing facilities in supplier countries are
inspected. We want to ensure that they're inspected, but we
don't want to be duplicative. We don't want one country that
inspects it, then another country, then another country. We
want to make sure that we have some coordination with other
countries in that process.
While I support mandatory recall, that's sort of after the
fact. It's fine to have that, but it seems to me that we want
to get in front of that so that if there's any indication at
all that we can go right back to the source and correct that at
the source as soon as possible and to have penalties.
It just boggles my mind that we have some data and
information that companies that have supplied dangerous
products in this country, they leave that building and they
move across the street or they move to another community and
they open up a facility, but we have no traceability whatsoever
as to who they are. And yet they can continue to sell their
products.
So traceability, the enforcement of good manufacturing
practices, more of a general agreement among countries on
inspections, and making sure that--as you said, Mr. VanTrieste,
if you're inspected, you've got to pay for it because you're
shipping to other countries, European countries. Well, it seems
to me this--again, if they want to ship to this country, they
should, No. 1, allow inspections, and as you've pointed out and
I think Ms. Autor pointed out and Dr. Crosse, a lot of times
these are delayed. They're put off. They're put off. They're
put off for year after year after year.
And the third thing is that I'm very much leaning toward
this idea of more of a risk assessment. In other words, there
are companies that have good manufacturing practices. They've
been in business for some time, and yet we, by law, say they've
got to be inspected every 2 years. Maybe they don't need it.
Maybe we need to use that personnel to go after the plants that
haven't been good actors or new plants that haven't been
inspected at all.
So these are all the things that this committee is going to
be looking at. We appreciate all your testimonies, and we would
appreciate any further input, advice, or consultation you have
with us as we proceed on this. I'm committed to doing this
sometime next year, because we have to reauthorize PDUFA. And
we didn't get into medical devices--but PDUFA, anyway--and the
medical device user fee act.
And keep in mind--is there a fee? Is there something that
should be attached to a product, an ingredient, or a finished
product, that would go for only one purpose and that is to FDA
for inspections and enforcement? If you have thoughts on that,
please submit them to the committee.
Well, without further--thanks again. I appreciate you all
being here. I thought it was a great hearing. And, believe me,
we'll be having more. So I request that the record be kept open
for 10 days to allow Senators to submit statements and
questions for the record. And with that, the committee will
stand adjourned.
Thank you very much.
[Additional material follows.]
ADDITIONAL MATERIAL
Prepared Statement of Heather Bresch, President, Mylan Inc.
As the largest global generics company headquartered in the United
States, Mylan Inc. (``Mylan'') appreciates the opportunity to submit
comments to the Senate Health, Education, Labor, and Pensions Committee
as part of the committee's hearing entitled, Securing the
Pharmaceutical Supply Chain on September 14, 2011. Ensuring the safety
of our Nation's pharmaceutical supply is of critical importance to all
Americans and to Mylan, and we thank Chairman Harkin, Ranking Member
Enzi and the committee for holding this hearing on such an important
topic.
Our company was founded 50 years ago in a small town in West
Virginia, and since that time has established one of the industry's
broadest and highest quality pharmaceutical product portfolios and now
serves as the largest global generics company in the world
headquartered in the United States. Today, 1 out of every 11
prescriptions dispensed in the United States, brand or generic, is a
Mylan product, and we are proud of the investments we make in all of
our facilities around the world to deliver high quality products and
more affordable access to patients.
As president of the 3d largest global generics company in the
world, I have a strong interest in making sure the competitive playing
field in the United States is level and that all facilities supplying
the U.S. pharmaceutical market are subject to the same high quality
standards. As a mother of four, I want to know that no matter what
medicine I give my children, each product, branded or generic, meets
one high quality standard regardless of whether the medicine is made
inside the United States or outside its borders.
Over the last 4 years, Mylan has gone from a U.S.-based company to
a global one, and we now deliver products to customers in more than 150
countries and territories around the world. In operating multiple
facilities around the globe, we've discovered that FDA is governed by
an outdated law written in 1938 that has not been updated to equip the
FDA with the authority it needs to oversee the now globalized U.S.
pharmaceutical supply chain. We've also realized that FDA resources
have not kept pace with the significant increase in workload and the
increase in the number of foreign facilities supplying the U.S.
marketplace. The end result is an unlevel playing field and
inconsistent application of quality standards for pharmaceutical
products sold in the United States. For these reasons, Mylan urges
Congress to introduce a bill to update the Federal Food, Drug and
Cosmetic Act of 1938 (the ``FDCA'') to equip the FDA in carrying out
its mission in the globalized U.S. pharmaceutical marketplace. Further,
we urge Congress to ensure a level playing field for all players
participating in the U.S. pharmaceutical supply regardless of their
location.
As this committee heard from FDA and others during the September
14, 2011 hearing, the FDCA, which is the key law that gives FDA
authority to demand evidence of safety and conduct facility
inspections, does not take into account the global nature of today's
U.S. pharmaceutical marketplace. FDCA is written as if all participants
in the drug supply are domestic based. As the committee also learned,
FDA estimates that up to 40 percent of finished drugs consumed by U.S.
patients are manufactured abroad and 80 percent of the active
ingredients and bulk chemicals used in drugs come from foreign
countries.
With a mission to protect and promote public health, FDA has a
critical responsibility to ensure the safety, efficacy and security of
the U.S. drug supply. Fulfilling this responsibility today is much more
challenging than it was in 1938 when the FDCA was enacted. Back then,
most of the pharmaceutical products consumed in the United States were
produced in the United States. Now, a substantial proportion of those
products come from abroad, yet FDA's governing statute still presumes
the domestic 1938 landscape.
In particular, the FDCA requires American manufacturers associated
with pharmaceutical production to undergo a surveillance inspection at
least every 2 years to ensure that these facilities are complying with
a rigorous set of standards known as Good Manufacturing Practices
(GMP). These extensive on-site inspections conducted by FDA serve as an
important mechanism for FDA to ensure facilities are continuing to meet
GMP standards. However, the FDCA does not impose the same biennial GMP
inspection requirement on foreign facilities. Instead, the law written
in 1938 is silent when it comes to foreign manufacturers. Meantime, FDA
estimates that foreign facilities supplying the U.S. pharmaceutical
marketplace have grown by 185 percent from 2001-8, while at the same
time FDA facility inspection rates have decreased nearly 57 percent.\1\
According to a 2010 Government Accountability Office (GAO) report, FDA
inspected just 11 percent of the 3,765 foreign establishments in its
database in 2009.\2\ As a result, the average FDA ex-U.S. facility
inspection occurs every 9 years compared to every 2 years for U.S.-
based facilities, according to the 2010 report by GAO. According to
GAO, some FDA-registered facilities whose drugs are imported into the
United States may have never had a GMP inspection.
---------------------------------------------------------------------------
\1\ Deborah M. Autor, Esq, Director, Office of Compliance, Center
for Drug Evaluation and Research, FDA, Ensuring the Safety, Efficacy,
and Quality of Drugs, Pew Roundtable on Ensuring the Safety of the U.S.
Drug Supply, March 14-14, 2011.
\2\ U.S. Government Accountability Office. Drug Safety: FDA Has
Conducted More Foreign Inspections and Begun to Improve Its Information
on Foreign Establishments, but More Progress Is Needed (Publication No.
GAO-10-961). (September 2010)
---------------------------------------------------------------------------
unlevel playing field impacts manufacturer competitiveness
The disparity in the degree of oversight experienced by domestic
versus foreign facilities reduces American competitiveness by creating
an unlevel playing field as compliance with quality systems and
regulations are estimated to make up approximately 25 percent of a drug
manufacturer's operating costs.\3\ Mandating FDA risk-based biennial
GMP inspections of all facilities, foreign and domestic, will improve
quality and create a level playing field, allowing U.S. pharmaceutical
manufacturers to be more competitive. Leveling the playing field
through inspection parity will also benefit foreign facilities and
first time entrants who are currently experiencing delays in gaining
approval for new products due to a lack of inspection history and a
significant gap in FDA resources to address the substantial growth in
foreign facilities supporting the U.S. pharmaceutical supply.
---------------------------------------------------------------------------
\3\ After Heparin: Protecting Consumers from the Risk of
Substandard and Counterfeit Drugs at 27. Pew Health Group Report (July
2011). According to the Pew Report, ``Adherence to GMPs is critical,
yet also costly. Compliance with internal quality systems and
regulations can represent up to 25 percent of a finished drug
manufacturer's operating costs. To offer more competitive pricing and
gain market share, some plants may be tempted to forgo expensive
quality standards. Regulatory oversight provides an incentive to ensure
rigorous adherence to standards.''
---------------------------------------------------------------------------
imperiled drug safety
In addition to an unlevel playing field for manufacturers, the
glaring disparity between FDA's oversight of foreign facilities versus
U.S.-based facilities places the Nation's drug supply at risk. As the
committee discussed during the September 14 hearing, a telling example
involved tainted Heparin distributed in the United States a few years
ago. FDA traced the adulteration of the brand product to a
manufacturing facility in China, which the agency had never inspected.
While FDA inspections alone are not the only way FDA ensures safe
products, FDA has indicated that routine GMP surveillance inspections
are one of the most effective ways to detect noncompliance with GMP
standards on the front end to prevent recalls, market disruptions, as
well as risks to patient safety.
supplemental resources for fda
As the Generic Pharmaceutical Association noted in its remarks
before this committee, the generic drug industry, which accounts for 75
percent of all prescription drugs dispensed in the United States, has
stepped up to help provide FDA with additional resources to address the
challenges caused by the global drug supply and the increase in FDA
workload. Even though the historical focus of user fees has primarily
been on getting products approved in a timely fashion, given the global
challenges of today, the generic industry took the opportunity during
its generic user fees negotiations with FDA to incorporate the concepts
necessary to help globalize the agency.\4\ Following the final review
by the Department of Health and Human Services and the Office of
Management and Budget, Congress should be receiving the detailed goals
letter and legislative language (including fee structure) agreed upon
by industry and FDA.
---------------------------------------------------------------------------
\4\ These negotiations were scheduled by FDA to coincide with the
upcoming 2012 congressional reauthorizations of the Prescription Drug
User Fee Act and the Medical Device User Fee Act.
---------------------------------------------------------------------------
conclusion
In summary, Mylan commends the Chairman, the Ranking Member and
this committee for its commitment to addressing this important issue.
We are encouraged by the committee's statements and urge you to move
forward with introducing legislation to amend the FDCA in order to
equip FDA with the authority and scope it needs to carry out its
important public health mission of ensuring the safety of today's
globalized U.S. drug supply. These important changes to the FDCA will
not only result in a safer drug supply with consistent oversight for
all players in the U.S. drug system, foreign and domestic, the changes
will also help reduce approval times of new drugs undergoing FDA review
and expedite the availability of new medicine into the marketplace.
This is a particularly important result given that drug shortages are
increasingly occurring in the United States due in part to weak links
in the supply chain. Also of significance to this committee and many
others, these changes will level the playing field for manufacturers,
increase competitiveness, and reverse the current incentive in place to
move manufacturing abroad.
Prepared Statement of Dale Carter, Chair, International Pharmaceutical
Excipients Council--Americas (IPEC--Americas)
Chairman Tom Harkin, Ranking Member Michael Enzi, and members of
the Senate Health, Education, Labor, and Pensions Committee, as the
chair of the International Pharmaceutical Excipients Council--Americas
(IPEC-Americas), I, on behalf of IPEC-Americas, appreciate this
opportunity to submit written testimony and thank you for the
leadership you have displayed in addressing the crucial need to secure
the pharmaceutical supply chain.
IPEC-Americas helped create a federation of four independent
regional industry associations, with the others headquartered in Europe
(IPEC Europe), Japan (JPEC) and China (IPEC China). Our goal is to
ensure current Good Manufacturing Practices (cGMP) to meet high quality
standards for excipients, more commonly known as the inactive
pharmaceutical ingredients. IPEC Federation members include over 300
national and multinational excipient makers and users, including
chemical companies, pharmaceutical manufacturers, and food companies.
These members include over 60 U.S. companies that belong to IPEC-
Americas and other members of the Global IPEC Federation.
Each regional association focuses its attention on the applicable
law, regulations, science, and business practices of its region of the
globe. The four associations work together on excipient safety and
public health issues, in connection with international trade matters,
and to achieve harmonization of regulatory standards and pharmacopoeial
monographs.
We are also the premier source for regulatory and guidance
documents critical to the excipient industry; offer training and
consulting services to ensure regulatory compliance worldwide; and
provide awards to encourage research and education in excipients. Our
guidance documents have been adopted and relied upon by various
regulatory bodies and standard setting organizations, including the
Food and Drug Administration (FDA) and the United States Pharmacopeia.
While attention to the pharmaceutical supply chain has generally
been focused on active pharmaceutical ingredients (APIs), we were
pleased to note an interest in the supply chain of pharmaceutical
excipients in your September 14, 2011 hearing. As was noted by Chairman
Harkin and Deborah Autor, Deputy Commissioner for Global Regulatory
Operations and Policy at the FDA, it was the death of 100 people from
an adulterating excipient, diethylene glycol, that led to the enactment
of the Federal Food, Drug and Cosmetics Act (FFDCA) in 1938. Yet, as
was also noted, 570 people have died from the same substance in the
past 20 years worldwide. As recently as 2009, more than 80 infants died
from adulterated teething syrup contaminated by diethylene glycol in
Nigeria. These are no small threats to the United States as the
pharmaceutical supply chain becomes more and more globalized.
Commissioner Autor noted a number of safeguards with which IPEC
agrees and which should apply to both APIs and excipients: enacting
legislation that gives the FDA the authority to refuse the importation
of drugs into the United States if a facility does not allow itself to
be inspected; requiring proof that a product is ``good'' to enter the
United States, rather than FDA having to find something wrong; leveling
the playing field by providing requirements and incentives for all
companies to follow the rules; and ensuring that manufacturers have
adequate control over the supply chain.
IPEC fully supports each and every one of these goals and has
drafted legislation to do so. Our proposal would direct the FDA to
recognize accredited third-party auditors to certify that
manufacturers, distributors and importers of excipients meet safety
standards that are in compliance with the FFDCA. The legislation would
also call for the establishment of qualification standards for third-
party auditors and certifiers who have the necessary expertise and
training in auditing techniques. IPEC has been working with FDA to
develop appropriate third-party audit requirements for excipients. This
effort is integral to IPEC's 20-year effort to develop and maintain
high industry standards for excipient safety and quality.
To give real teeth to the FDA, IPEC's proposal would mandate that
individuals or companies not be allowed to import into the United
States a drug or excipient used in the manufacture of a drug if the
product or ingredient was manufactured or produced outside of the
United States by an entity which has not been certified by the FDA or
by an FDA-recognized third-party auditor.
IPEC is a ``coalition of the willing''--member companies who want
to ensure the safety and efficacy of excipients and have put mechanisms
in place to do so. However, there are actors out there who are not as
willing and present a serious threat to the security of the excipients
supply chain. Our proposal would require that companies follow cGMP and
therefore prove that the excipient products are ``good.'' This in turn
would level the playing field, requiring that all companies be
compliant, rewarding good products with entry into the United States
and turning away those that are not.
Third-party auditing and certification also addresses the need for
manufacturers to have adequate control over their suppliers and the
supply chain, which, as Commissioner Autor noted, is necessary because
the FDA simply does not have the resources to monitor all
manufacturers, users, and distributors of excipients. Third-party
certification, which would be funded by companies wishing to import
into the United States, would provide those resources in a mechanism
that is revenue-
neutral to the Federal Government.
In short, the proposal would provide the same powers to FDA that
Congress recently provided the agency as it relates to contaminated
food, but that it still lacks for drugs: the power to keep contaminated
or adulterated products or ingredients from reaching the pharmaceutical
production process.
We ask that the committee and the full Congress adopt our proposal
for a third-party auditing and certification process to ensure the
safety of U.S. citizens.
Prepared Statement of Keith Nalepka, Vice President,
Business Development, Hi-G-Tek, Inc.
the need for an actively monitored and secured pharmaceutical
supply chain
Chairman Harkin, Ranking Member Enzi, and members of the committee,
with a growing interest among thieves to target high value
pharmaceuticals and biologics there needs to be a change in the way
industry approaches supply chain security and monitoring. There
continues to be a direct correlation between these thefts and
counterfeit production as well as an increase in stolen product being
shipped and sold in developing countries and also re-entering the U.S.
supply chain.
The pharma supply chain is incredibly complex, with products being
sent through multiple touch points. The adoption of passive RF1D, bar
coding of all types, e-pedigree and others does nothing to actively
secure or monitor the supply chain. Thieves are long gone with the
stolen goods and are becoming increasingly adept at reproducing all of
these passive tags for re-entry into the supply chain or producing
incredible look-alike products used internationally. They provide no
data that can be used to repair a defective supply chain or increase
security.
The FDA is in the process of making swift changes in the pharma
supply chain. The recent problems with the heparin and acetaminophen
supply chain catastrophes have drawn attention to areas in the supply
chain that arc vulnerable. Slow recalls can no longer be tolerated, and
chain of custody documentation will become an absolute necessity.
The solution can be found by monitoring shipments actively, in real
time. The successful documentation of temperature, light exposure,
humidity, open/close, tilt, and package tampering with sensors needs to
become a best practice. Being able to intervene midstream with a
package in transit that is experiencing a temperature excursion could
save efficacy and patients in the long run. Being able to see in real
time a potential theft by the tripping of a sensor could provide added
security and visibility into the supply chain. Lastly, being able to
collect these biometric data points and put them in document form that
can show chain of custody down to the package level would he invaluable
when an FDA audit occurs. Being able to initiate a recall in real time
also provides added patient safety. Having this biometric data would
provide the ability to fix areas in the supply chain that may be common
avenues for temperature excursions, theft, etc. Without active data
it's much more difficult to take action.
Prepared Statement of the American Society of Health-System Pharmacists
The American Society of Health-System Pharmacists (ASHP)
respectfully submits the following statement for the record to the
Senate Health, Education, Labor, and Pensions Committee hearing on
Securing the Pharmaceutical Supply Chain.
As the national professional association representing over 35,000
pharmacists who practice in hospitals and health systems, ASHP can
offer unique and vital feedback on this important health care issue.
Pharmacists in hospitals and health systems are experts in medication
use who serve on interdisciplinary patient-care teams. They work with
physicians, nurses, and other health care professionals to ensure that
medicines are used safely, effectively, and in a cost-conscious manner.
For more than 60 years, ASHP has helped pharmacists who practice in
hospitals and health systems improve medication use and enhance patient
outcomes. This includes working with patients to help them access the
medications they need and to use them safely and effectively.
Pharmacists are the frontline caregivers in our medication use
system. Given the number and complexity of medications administered to
patients today, it is critical that our pharmaceutical supply chain be
secure and consistent. As manufacturing of pharmaceuticals becomes more
global in scope, we must ensure that products and raw materials are
pure and unadulterated. ASHP has adopted policies (attached) dealing
with supply chain integrity and FDA's authority on recalls.
Furthermore, as demand increases for life saving medications and
manufacturing processes become larger and more complex, we must ensure
that capacity exists to provide adequate supplies of medications,
especially those critical to patient care. For the last 10 years, ASHP
has been tracking shortages of prescription medications and a
disturbing trend has emerged. Since 2006, the number of drug shortages
has nearly tripled, with no end in sight. In 2010 alone, there were 211
drug shortages, and that trend is expected to continue in 2011 as the
number has already reached 200 shortages and may well exceed the 2010
number. While the causes of drug shortages are multifactorial, the
quality and integrity of foreign ingredients and manufacturing have
been a contributing factor. The attached policy on drug shortages was
adopted in June by ASHP's House of Delegates. ASHP is committed to
working with Congress, FDA and other supply chain members to address
and hopefully reverse this alarming trend.
drug shortages
Shortages of prescription drugs in the United States have gained
increasing attention in recent years due to the scope and severity of
the drugs in short supply. The majority of these shortages occur in
drugs that are generic injectables, often administered in a hospital or
clinic setting. The shortages have been occurring for anti-cancer
drugs, anesthetics, pain, and nutritional drugs, all of which play
crucial roles in the care of patients. The result of drug shortages is
that caregivers must scramble to find the drug, or use an alternative
if one is available. Many caregivers have expressed concern that even
if a therapeutic alternative exists, it is likely an older drug which
may have more severe side effects or negatively interact with other
medications the patient is taking. Further, drug shortages have caused
widespread fear among caregivers who are deeply concerned that care
could be delayed, rationed, or is provided in a suboptimal manner to
stretch doses and preserve scarce supplies.
According to a study conducted in partnership between ASHP and the
University of Michigan Health System, labor costs associated with
managing drug shortages have an estimated annual impact of $216 million
nationally, and more than 90 percent of respondents agreed that drug
shortages were associated with an increased burden and increased costs
today compared to 2 years ago.
Causes of drug shortages are many and complex. Manufacturing issues
that lead to drug shortages include product quality issues that result
in production halts or recalls, product discontinuations, and
unavailability of active pharmaceutical ingredients (APIs) or other raw
materials. Secondary shortages--or shortages that occur based on shifts
in market demand caused by an initial shortage of another drug--are
also common. Other contributing causes to drug shortages include
quality issues that arise from the ever-increasing reliance on foreign
ingredient and manufacturing sources and a lack of FDA resources to
expedite approval of supplemental new drug applications and conduct
foreign inspections. While not a cause of drug shortages, just-in-time
inventory practices by product distributors and practice sites have
removed the buffer previously provided by larger inventories and
resulted in an immediate impact of drug shortages on patient care.
While information on the root cause of each drug shortage is not
always publicly available, the cause of most shortages can be traced
back to aspects of the manufacturing process. These manufacturing
issues are compounded by substantial industry consolidation over the
last few years that has resulted in fewer manufacturers producing
critical drugs. When one manufacturer experiences a production
interruption, other companies must ramp up production of their product
to meet market needs. This increased production is sometimes, but not
always, possible. In the case of sole-source drugs, this situation
almost instantly results in a shortage situation.
ASHP continues to work with FDA, other health care provider groups
and members of the supply chain to address the issue. However, we also
believe Congress can help us as well. ASHP supports bipartisan
legislation (S. 296, H.R. 2245) that would require drug manufacturers
to notify the Agency when they experience an interruption in the
production of a drug product potentially resulting in a shortage
situation. According to FDA, in 2010 the Agency was able to avoid 38
drug shortages when they were made aware of production interruptions
ahead of time. However, we believe other steps can be taken as well,
for example, require confidential notification of the disruption in
supply of single source active pharmaceutical ingredients (API),
require manufacturers to develop continuity of supply plans, establish
incentives for manufacturers to remain or re-enter the market, and urge
FDA to develop expedited approval pathways for pre-1938 (unapproved)
drugs. Finally, ASHP believes that FDA must have adequate resources
devoted to alleviating and preventing drug shortages.
notification system
Under current law, manufacturers are not required to report to FDA
when they experience an interruption in the production of their
products, unless that drug is deemed medically necessary by the agency.
The same holds true for manufacturer plans to discontinue a product.
Even in cases where the drug is deemed medically necessary and
reporting is required, FDA has no enforcement mechanism to penalize a
drug maker for failing to report these problems. This information could
be extremely useful to FDA in the case of drugs with multiple suppliers
where the agency could urge alternate suppliers to step up production
of a product to offset the decrease in supply due to the interruption
or discontinuation of the initial product. In some instances, FDA is
not told there is a problem, or the nature of the problem. This
information could be useful in determining the duration and severity of
the interruption and may allow the agency to implement countermeasures
to help ensure supply. By FDA's own account, in 2010 the agency was
able to avoid 38 drug shortages when this type of notification was made
available.
The importance of notification is highlighted by quality concerns
associated with the increased globalization of pharmaceutical
manufacturing. A number of drug shortages can be traced back to quality
concerns with foreign-produced APIs. An extreme example was the heparin
contamination that occurred in 2007, which resulted in a recall, and
subsequent product shortage that was immediate and continued for an
extended duration of time. While FDA has increased foreign inspections,
it still lacks the resources necessary to fully address this issue.
Therefore, drug shortages precipitated by recalls caused by substandard
APIs will continue and likely increase.
Legislation (S. 296/H.R. 2245) in Congress would mandate that
companies notify FDA of the interruption in production of any product 6
months in advance, or as soon as possible in the event of an unplanned
stoppage. Manufacturers that fail to report this information would be
subject to civil monetary penalties. This early warning system would
allow the agency to communicate more effectively with manufacturers and
others in the supply chain to plan for pending supply interruption. The
early warning system should be the cornerstone of congressional action
to address drug shortages.
confidential notification for single-source api
In addition, information that can make drugs vulnerable to
shortages, such as a single API source, is also frequently unknown
beyond the manufacturer. This information is, and should be considered
proprietary, but this lack of transparency hinders the development of
contingency plans for vulnerable drugs. A requirement that
manufacturers notify FDA when there is a single source of API may help
the Agency work with manufacturers to identify backup sources should
supply issues arise.
continuity of supply plans
Related to the reporting or an early warning system, FDA could work
with manufacturers to develop continuity of supply plans. The current
lack of transparency acts as a significant barrier to this type of
collaboration. With increased information exchange, contingency plans
could be developed that include countermeasures such as manufacturing
redundancies or backup supplies; more effective communication among
FDA, manufacturers and others in the supply chain; and finally,
development of plans that utilize production capabilities of other
manufacturers either here in the United States or abroad to ensure
availability of a drug in short supply.
In 2010, FDA worked with APP Pharmaceuticals to help alleviate a
shortage of propofol, a widely used anesthetic preferred by
anesthesiologists because of its excellent safety profile compared to
other available drugs. By enabling the company to work with its German
counterpart to import the drug, FDA was able to substantially improve
product availability after the shortage occurred. Using this example,
if an acceptable foreign alternative could be identified before a
shortage occurs through establishment of continuity of supply plans for
vulnerable drugs, then importation could be expedited and the negative
impact of a specific shortage on patient care could be minimized or
averted. Importation represents an extreme example of contingency
planning. In its simplest form, manufacturing strategies that include
collaborating with other manufacturers, establishing back-up suppliers
of raw materials and APIs, and creating alternative production
capabilities that can be used as countermeasures would be a significant
step forward to combating drug shortages. Contingency planning by
companies producing drugs critical to patient care must be a standard
of practice. S. 296/H.R. 2245 support the development of contingency
plans for drugs that are vulnerable to shortages.
incentives
Further, shortages are occurring overwhelmingly among generic
injectable drugs, where production processes tend to be more complex
than their solid dosage counterparts. Low margins for these expired
patent products coupled with complex manufacturing processes may lead
some manufacturers to abandon production of these drugs altogether in
favor of products with higher profit margins, thus reducing the number
of potential suppliers of products critical to patient care. A way to
offset this problem may be to explore incentives to encourage
manufacturers to either stay in the market or enter the market with a
new product line. There are several ways this could potentially be
accomplished: (1) explore tax incentives for manufacturers to produce a
drug in short supply or one deemed ``vulnerable'' to a shortage; (2)
grant temporary exclusivity for a new product line of a drug in
shortage or deemed ``vulnerable'' to one; (3) if a generic user fee
program is created within the next reauthorization of the Prescription
Drug User Fee Act (PDUFA), FDA could explore reduced user fees for
drugs in short supply or deemed ``vulnerable.''
require development of an expedited approval pathway for pre-1938 drugs
FDA must find a way to abbreviate and prioritize approval processes
for existing therapies that are unapproved, but widely used and
essential for patient care. For these drugs, the agency should work
with manufacturers to fast track their approval for the U.S. market,
especially in cases where the potential exists for those drugs to fall
in short supply. Barriers to manufacturing and marketing these drugs
must be minimized in order to foster production and availability of
these drugs.
conclusion
Unfortunately, there is no single solution that can prevent the
occurrence of all drug shortages. The complexity of manufacturing
processes, the requirement for safe and high-quality products, and
globalization of the pharmaceutical supply chain all contribute to
fluctuating product supplies that may never be entirely eliminated.
However, there are critical steps that Congress, FDA and other
stakeholders can implement to ensure that patient care remains
available and safe. While the adjustments and compromises required from
all stakeholders are difficult, the need for change is critical. First
and foremost is the need for increased communication and transparency.
ASHP, along with several other stakeholder groups has been working
collaboratively with Congress and supply chain stakeholders to develop
solutions to the drug shortage problem. As indicated before, there is
legislation in both houses of Congress as well as broad bipartisan
support in the Senate for action. Passage of legislation that provides
additional authority to FDA is a step in the right direction. In the
long term, FDA will require additional resources to best address this
and other issues that impact the quality and safety of drugs.
______
Attachment
ASHP Policy Position 0907--Pharmaceutical Product and Supply Chain
Integrity
Source: Council on Public Policy
To encourage the Food and Drug Administration (FDA) and relevant
State authorities to take the steps necessary to ensure that (1) all
drug products entering the supply chain are thoroughly inspected and
tested to establish that they have not been adulterated or misbranded
and (2) patients will not receive improperly labeled and packaged,
deteriorated, outdated, counterfeit, adulterated, or unapproved drug
products; further,
To encourage FDA and relevant State authorities to develop and
implement regulations to (1) restrict or prohibit licensed drug
distributors (drug wholesalers, repackagers, and manufacturers) from
purchasing legend drugs from unlicensed entities and (2) ensure
accurate documentation at any point in the distribution chain of the
original source of drug products and chain of custody from the
manufacturer to the pharmacy; further,
To advocate the establishment of meaningful penalties for companies
that violate current good manufacturing practices (cGMPs) intended to
ensure the quality, identity, strength, and purity of their marketed
drug product(s) and raw materials; further,
To urge Congress and State legislatures to provide adequate
funding, or authority to impose user fees, to accomplish these
objectives.
This policy supersedes ASHP policy 0722.
ASHP Policy Position 1003--FDA Authority on Recalls
Source: Council on Public Policy
To strongly encourage the Food and Drug Administration (FDA) to
develop a standard recall notification process and format to be used by
all manufacturers to facilitate the timely removal of recalled drugs;
further,
To advocate that such notification should (1) come from a single
source, (2) clearly identify the recalled product, (3) explain why the
product is being recalled, (4) provide a way to report having the
recalled product, (5) give instructions on what to do with the recalled
product, and (6) be provided concurrently to all entities in the supply
chain; further,
To advocate that the FDA be given the authority to order mandatory
recalls of medications; further,
To urge the FDA to require drug manufacturers and the computer
software industry to provide bar codes and data fields for lot number,
expiration date, and other necessary and appropriate information on all
medication packaging, including unit dose, unit-of-use, and injectable
drug packaging, in order to facilitate compliance with recalls or
withdrawals and to prevent the administration of recalled products to
patients; further,
To urge the FDA to encourage postmarketing reporting of adverse
events and product quality issues to enhance the recall system.
ASHP Policy Position 1118--DRUG PRODUCT SHORTAGES
Source: Council on Public Policy
To advocate that the Food and Drug Administration (FDA) have the
authority to require manufacturers to report drug product shortages and
the reason(s) for the shortage, and to make that information available
to the public; further,
To strongly encourage the FDA to consider, in its definition of
``medically necessary'' drug products, the patient safety risks created
by use of alternate drug products during a shortage; further,
To support government-sponsored incentives for manufacturers to
maintain an adequate supply of medically necessary drug products;
further,
To advocate laws and regulations that would (1) require
pharmaceutical manufacturers to notify the appropriate government body
at least 12 months in advance of voluntarily discontinuing a drug
product, (2) provide effective sanctions for manufacturers that do not
comply with this mandate, and (3) require prompt public disclosure of a
notification to voluntarily discontinue a drug product; further,
To encourage the appropriate government body to seek the
cooperation of manufacturers in maintaining the supply of a drug
product after being informed of a voluntary decision to discontinue
that product.
This policy supersedes ASHP policy 0319.
Prepared Statement of the National Community Pharmacists Association
(NCPA)
Dear Chairman Harkin, Ranking Member Enzi and members of the
committee, NCPA welcomes this opportunity to provide input and
suggestions to the committee regarding the pressing issue of securing
the pharmaceutical supply chain. The National Community Pharmacists
Association (NCPA) represents America's community pharmacists,
including the owners of more than 23,000 community pharmacies, pharmacy
franchises and chains. Together, these small business entities employ
over 300,000 full-time employees and dispense nearly half of the
Nation's retail prescription medicines.
Although we believe that the pharmaceutical supply chain in the
United States is largely safe and secure, there are a number of
different approaches or tactics that could be employed to provide
further confirmation of integrity. One approach would be increased
oversight or security measures to deter pharmaceutical cargo theft.
NCPA is encouraged to note that Federal legislation has been introduced
by Senator Charles Schumer, S. 1002, the Safe Doses Act, that would
expand the penalties for pharmaceutical cargo theft. Implementing a
track-and-trace system for pharmaceuticals is also a concept that has
been discussed. NCPA continues to feel that track-and-trace
technologies still remain largely unproven and potentially economically
infeasible for the independent community pharmacy industry at this
time. Given our position in the pharmaceutical supply chain and as
health care providers, we want to share with you our ideas to further
secure the supply chain.
national, uniform federal license standards for wholesale distributors
and logistics providers
As part of any track-and-trace system or perhaps as a stand-alone
program, NCPA recommends that the U.S. Government set national, uniform
Federal license standards for wholesale distributors and logistics
providers (3PLs). At the present time, wholesale distributors are
licensed at the State level, which has resulted in a patchwork of
conflicting requirements of varying rigor. By setting a high bar for
wholesale distributors nationwide, the Federal Government could further
safeguard the supply chain by making sure that only appropriately
credentialed and legitimate entities are able to participate in the
drug distribution aspect of the pharmaceutical supply chain. This new
Federal standard would pre-empt the existing State requirements
although the individual States could still certify compliance with the
Federal standards and could register Federal licenses for an
appropriate fee.
possible risk-based approach/initial implementation only down
to wholesaler level
NCPA recommends that if a track-and-trace system were to be
required for the U.S. pharmaceutical supply chain, Federal policymakers
may wish to consider utilizing a risk-based approach to determine the
scope of products to be included in any track-and-trace system, at
least at the outset of any program. Possible approaches that could be
utilized could focus efforts on certain controlled substances or
pharmaceuticals that are high dollar/high volume products. Also in this
way, the system could be tested and further refined prior to the
possible expansion to other products as well. Another incremental
approach that would ease the burden on the entire supply chain would be
to have any track-and-trace system initially applicable only down to
the wholesaler level. Wholesalers would have the necessary product
information and would be able to track what products were delivered to
each pharmacy. There are only a few thousand wholesalers compared to
over 60,000 retail pharmacies.
incentivize adoption
In order to incentivize the voluntary adoption of track-and-trace
technology, and if such a system were to be mandated for all
participants, NCPA contends that Federal grants must be made available
to smaller supply chain participants--like independent pharmacies--so
that these small businesses are able to implement and maintain track-
and-trace systems. In 2008, Accenture conducted a study that estimated
the first year start up costs to implement a track-and-trace system
would total approximately $110K per pharmacy.
Some of the participants in the February 2011 FDA public workshop,
Determining the System Attributes for the Tracking and Tracing of
Prescription Drugs, cited the fact that a number of supply chain
participants should be able to realize several value-added features of
a track-and-trace system in terms of financial and brand protection
benefit or in terms of potential theft reduction and inventory
optimization. It should be noted that any operational benefits from
track-and-trace systems may not be evenly distributed among larger
multi-unit corporations and small businesses. Larger corporate entities
involved in the supply chain--namely manufacturers, wholesalers and
chain pharmacies--would likely realize value-added benefits that a
track-and-trace system could bring to their overall business practices.
However, for the majority of independent pharmacy owners, the cost of
implementing a track-and-trace system would likely exceed any possible
ancillary benefits like inventory management or theft reduction.
interoperability
Ensuring interoperability between the systems used by all
participants in the supply chain is essential to the success of any
track-and-trace program. Use of the standardized numerical identifier
should avert some of the problems or inevitable snags that may occur
when attempting to connect or ensure communication between varying
manufacturers and distributors. Although the creation of a standardized
numerical identifier should assist in paving the way for
interoperability, much work remains to be done.
NCPA has concerns that at the beginning or advent of any track-and-
trace program, pharmacies may be forced to use more than one set of
technologies (hardware/software) in order to comply. This would
inevitably add to the financial burden with which many independent
pharmacies will be dealing. Some FDA workshop participants pointed out
that in other industries, interoperability has only been realized when
dealt with through government regulation--and NCPA feels that there may
be some validity to considering this option in this instance.
It has been noted or suggested that some of the smaller supply
chain participants may be able to rely on the systems or track-and-
trace solutions of the larger participants. The most-likely scenario
may entail an independent pharmacy relying on the track-and-trace
system and network capabilities of their wholesale distributor. It is
important to note that the cost to the pharmacy could vary greatly
based on such an arrangement. Questions related to ownership of a
pharmacy's data generated by the operation of the track-and-trace
system would invariably arise. Additionally, this situation could
become complicated in situations in which a pharmacy may need to switch
their wholesaler for any reason. In order for this type of arrangement
to be mutually beneficial to both wholesaler and pharmacy, more
detailed discussions as to the roles and responsibilities of both
parties would need to be discussed in greater detail.
authentication
NCPA would like to point out that there must be consensus around
the definition of authentication--and at which point in the supply
chain such authentication should occur. In the past, many participants
in the supply chain have raised the issue of the inherent distinction
between track and trace. In order to track, supply chain participant
would only need verification that the serialized number is indeed
valid. In order to trace, a supply chain participant would need to be
able to actually access and verify all of the prior transactions.
If it were determined that all supply chain participants must do
both--track and trace--pharmacies, which serve as the last stop in the
supply chain, would have a potentially greater burden than other supply
chain participants if they were required to actually authenticate or
trace the entire distribution history of each product. Several workshop
participants raised the point that perhaps only certain products or
classes of products with the greatest risk of being counterfeited
should be subject to tracing requirements. Also, other participants
suggested that FDA or regulators would be the only entities that would
have an actual need for a full distribution history. If access to the
entire distribution history were limited to FDA or other regulators,
this may also alleviate some of the concern expressed by a number of
entities who are understandably concerned about supply chain partners
having access to their proprietary data.
Another issue that would need to be determined with regard to
authentication would be standard operating procedures that would be
employed in the event that a product could not be authenticated. NCPA
questions which participant (sender, recipient or system) would have to
ultimately bear the cost of the product in the event a product could
not be authenticated and then subsequently sold. Pharmacies would need
to know whether they could return such products back to upstream
trading partners or if they would be forced to assume the cost of such
unsalable items. Also, there needs to be clear protocol surrounding the
reporting of such an event.
inference
Inference is one facet of the track-and-trace process that would
greatly ease the time and labor costs for distributors and chain
pharmacies but would not necessarily be available for independent
pharmacies. Inference allows distributors to read a case or pallet of
product and then infer that a certain set of serial numbers exists
within that case or pallet. This same process could easily be employed
by the chain pharmacy corporations that receive products from the
manufacturer at a chain pharmacy warehouse. However, independent
pharmacies typically do not receive products in case or pallet form
from a dedicated warehouse and, therefore, could be forced to
individually or manually scan each bottle or serial number as it
arrives in the pharmacy. This would be extremely time consuming and
would necessitate an increase in labor costs for independent pharmacy
owners. NCPA recommends that as part of any discussions surrounding a
proposed track-and-trace system, efforts to pilot inference at the tote
level must be considered.
NCPA strongly recommends pilot projects be pursued for any track-
and-trace system in order to adequately identify and work through the
complexities and substantial costs surrounding such a system, and that
all supply chain participants be involved in any proposed pilot
program.
conclusion
NCPA appreciates the opportunity to submit these comments as the
committee discusses the issue of securing the pharmaceutical supply
chain. The committee may wish to examine a variety of approaches to
this multi-faceted issue including efforts to deter pharmaceutical
cargo theft, implementing national uniform Federal licensure standards
for wholesale distributors and potentially the use of some form of
track and trace technology for pharmaceuticals. Thank you for your
consideration.
______
Department of Health & Human Services,
Food and Drug Administration,
Silver Spring, MD 20993,
February 9, 2012.
Hon. Tom Harkin, Chairman,
Committee on Health, Education, Labor, and Pensions,
U.S. Senate,
Washington, DC 20510.
Dear Mr. Chairman: Thank you for providing the opportunity for the
Food and Drug Administration (FDA or the Agency) to testify at the
September 14, 2011, hearing before the Committee on Health, Education,
Labor, and Pensions entitled ``Securing the Pharmaceutical Supply
Chain.'' This letter provides responses for the record to questions
posed by certain members of the committee.
If you have further questions, please let us know.
Sincerely.
Michele Mitul for Jeanne Ireland,
Assistant Commissioner for Legislation.
______
Response of the Food and Drug Administration to Questions of Senator
Bennet, Senator Roberts, and Senator Kirk
senator bennet
Question 1. The Institute for Safe Medication practices found in a
survey of 1,800 health care practitioners that 52 percent of hospitals
and pharmacists in the survey reported using ``gray market'' suppliers
in order to secure medicines during a time of drug shortage. Do you
think that a system that enables FDA to know where drugs are in the
distribution chain could be helpful in addressing this challenge?
Answer 1. The gray market that emerges when drug shortages occur
takes advantage of the vulnerability of health care institutions and
pharmacies that are desperately seeking to fill the voids left by drug
shortages. A robust track-and-trace system will help protect consumers
from threats posed by illegal or substandard products, which may result
from a drug shortage situation, in addition to providing accountability
and transparency within the supply chain. A track-and-trace or uniform
pedigree system will not solve the shortage, but it can help provide
assurances that a drug being offered for sale is from the legitimate
supply chain and is authentic.
Particularly helpful to ward against gray market products arising
in drug shortage situations would be an expansion of existing law,
which requires sole manufacturers to notify FDA of a discontinuance of
certain drug products. The Administration has endorsed legislation that
would require all manufacturers to provide notice to FDA of any issue
that may lead to a disruption in supply of a drug product and that
would provide explicit authority to enforce such reporting through
civil money penalties. Expansion of the current notification provision
would help FDA prevent drug shortages and be on the lookout for
counterfeit products that arise in shortage situations. Moreover, the
addition of enforcement authority and penalty provisions would enable
FDA to ensure that it receives timely information related to potential
drug shortages and would serve as a strong incentive for manufacturers
to comply.
Question 2. Does FDA receive information at the border when drugs
come in through United States' land or sea ports about whether a drug
is FDA compliant? And if the drug appears tainted or physically
damaged, what options does FDA have to destroy the product? How does
this compare to the system that other countries have in place?
Answer 2. Currently, FDA is only authorized to refuse admission of
drugs that appear to be adulterated, misbranded, or unapproved. Unlike
with foods, FDA is not currently authorized to require the submission
of drug information as a condition of entry or refuse admission based
solely on the failure of an importer to provide the required
information. Clear authority to require information, and to refuse
admission if such information is not provided, would improve FDA's
ability to monitor imported products for compliance with applicable
laws. The success of FDA's electronic review system is linked to the
quality of data that importers and entry filers submit for the entry of
their products. This information would not only enable FDA to better
target higher-risk products, it would also minimize delays by allowing
for increased use of electronic screening.
Currently FDA only has the authority to issue a ``notice of refusal
of admission'' for noncompliant, drug-related imports. Upon issuance of
the ``notice of refusal of admission,'' FDA must turn over authority to
the U.S. Customs and Border Protection (CBP), which may require either
exportation or destruction of the non-compliant import under the Tariff
Act, 19 U.S.C. 1595. Currently, FDA needs to seek Department of Justice
(DOJ) support for seeking a seizure of packages of low or no-declared
value, and packages without return addresses, or packages that were
returned and simply rerouted to the United States. FDA supports
allowing CBP to destroy products in violation of FDA regulations that
are valued at $2,000 or less or that pose a reasonable probability of
causing a significant adverse health effect, with an opportunity for a
hearing to be held after destruction in order to (1) avoid the re-
introduction of violative products; (2) lessen the Agency's burden and
expenditure on low-value, highly unsafe products; (3) decrease the
number of intentionally misdeclared low-value shipments avoiding
commercial shipper oversight. Absent these authorities, FDA is often
forced to store, or when there is a return address return, violative
products to their senders because the current process for destruction
requires a hearing, which is time-consuming and costly. Such violative
drugs can find their way back to U.S. ports of entry several times,
posing a potential threat to consumers and wasting critical resources
that could be better spent identifying new threats. This ineffective
process produces a revolving door for violative drugs.
In January 2011, FDA collected information about various aspects of
drug safety from regulatory authorities in Australia, Canada, India,
Israel, Japan, New Zealand, the People's Republic of China, South
Africa, Switzerland, and the European Medicines Agency. In response to
questions about whether the regulatory authorities require
documentation for the admissibility of imported pharmaceuticals, and
whether they have the ability to prohibit the importation of
pharmaceuticals, the Agency received a variety of answers. Generally,
all had requirements for documentation as a condition of entry, with
the exception of the European Medicines Agency, because it is a review
authority and regulatory compliance is left to the European Member
States. For example, Australia requires that imported drugs have to be
on the Australian Register of Therapeutic Goods. By contrast, Health
Canada inspectors and Canadian Border Services officers can require
persons who import a pharmaceutical product to provide sufficient
evidence to show that the drugs are being imported in compliance with
the Food and Drugs Act and its Regulations, and other relevant
legislation, such as the Controlled Drugs and Substances Act.
Question 3. GAO has been critical of FDA having some inaccurate and
duplicate information in its databases. FDA has proposed having a
unique identifier for all establishments that are importing drugs into
the United States. It is my understanding that Customs and Border
Protection control the implementation of this unique identifier. Would
giving FDA this authority to implement a unique identifier for
establishments help FDA get rid of some of this inaccurate data? What
will happen going forward if FDA continues not to have this authority?
Answer 3. FDA strongly supports having a unique facility identifier
(UFI), such as a Dun and Bradsheet D-U-N-S number, associated with each
facility and supports a statutory requirement requiring submission of a
UFI as a condition of registration and as a condition of import, for
several reasons. First to be aware of entities in the global supply
chain and to conduct appropriate inspections, FDA depends upon a number
of electronic systems. Some of the databases upon which FDA relies
include: Field Accomplishments and Compliance Tracking System or FACTS
(inspection tracking database), Document Archiving, Reporting and
Regulatory Tracking System or DARRTS (applications database),
Establishment Evaluation System or EES (application inspection
database), and Operational and Administrative System for Import Support
or OASIS (imports database).\1\ Currently, establishments may be
identified by different names and addresses in different systems.
Requiring establishments to provide UFIs during the registration and
importation processes will enable FDA to more easily cross-reference
information about the establishments and their products in these
various databases. In addition, if FDA is authorized to require
submission of a UFI, and chooses to use an existing external identifier
system such as D-U-N-S, it can leverage private data sources or data
from other countries that already make use of these identifiers to help
cross-check its data.
---------------------------------------------------------------------------
\1\ These databases were not developed to be compatible with one
another and, initially, had functions that were completely separate.
After years in operation, it is now apparent that the ability of these
databases to interface and share information with one another would be
very useful. Unfortunately, it is nearly impossible to retrofit systems
like these to make them compatible. The best way to make them interface
is by establishing some shared data standards, like UFI.
---------------------------------------------------------------------------
Second, to be aware of entities in the global supply chain and
conduct appropriate inspections, FDA also has to be able to distinguish
between different facilities that are often easily confused. UFIs play
an important role in FDA being able to do so in a timely manner. One
typical scenario in which UFIs are critical to FDA is when the Agency
identifies a facility in China that it believes requires inspection.
Many Chinese facilities have names that are difficult to differentiate
in FDA databases, in part because it is common in China for the name of
the facility to begin with the name of the city in which the facility
is located. Having UFIs associated with such establishments enables FDA
to more easily distinguish among them.
Third, existing Facility Establishment Identifiers (FEIs) have not
been effective. In addition to recommending the submission of D-U-N-S
Numbers, for many years FDA also has been assigning FEI numbers.
However, as with D-U-N-S Numbers, there is no requirement that these
numbers be submitted to FDA, and the Agency has been generating them on
its own. This has led to a situation where multiple FEI numbers may
have been assigned to a single establishment. This situation has
created confusion both within FDA and industry.
Giving FDA the authority to require submission of true,
independent, and interoperable UFIs at registration and importation
would help ensure the accuracy of our databases and better enable FDA
to ensure proper import targeting and enforcement of our import alerts.
This authority also better enables FDA to prevent potentially unsafe
products from entering U.S. commerce.
Specifically regarding UFIs and importation, CPB collaborates and
enforces laws associated with multiple U.S. government agencies and,
therefore, would presumably want to seek uniform agreement among the
stakeholder agencies regarding what the UFI should be. CBP currently
requires a Manufacture Identification (MID) number, but that is not a
true, independent, interoperative UFI. If the MID number is entered
incorrectly, the system will create a new FEI number in FDA's database,
thereby associating multiple FEB and MID numbers to, in actuality, one
specific firm. This process has led to FDA's databases containing
inaccurate information, as noted by the Government Accountability
Office (GAO).
Currently, FDA does not have explicit statutory authority to
require the submission of UFIs. In May 2009, FDA issued guidance
requesting that establishment owners and operators submit D-U-N-S
Numbers. Some registrants are providing this information, but not all.
For those who do not comply with FDA's request, the Agency seeks to
obtain the number on its own. However, this process imposes a burden to
FDA, and we are not always successful in obtaining the correct number.
Absent explicit statutory authority to require UFIs, the Agency cannot
obtain the information it needs to make its databases fully
operational.
Question 4. Ms. Autor explained in her testimony that in many other
countries the burden of proof is on the companies to prove that their
drug is compliant with the regulatory standard of the country they are
trying to enter. She noted that in the United States the opposite is
the case--the burden of proof is on the FDA to prove that a drug is not
compliant. Can FDA point to other countries that they are aware of that
place the burden of proof on the manufacturer?
Ms. Autor's testimony was in the context of ``Securing the
Pharmaceutical Supply Chain'' and, specifically, requesting a
certification or other assurance of compliance with applicable
standards or requirements as a condition of importation. Ms. Autor said
in part that other countries place the burden on the importer or
product owner to prove that its drug is compliant with country
requirements. In the United States, FDA has the burden of showing an
``appearance'' of a violation to detain and refuse an imported product.
Most countries require drug manufacturing sites to be licensed
before product can be distributed in their countries. Canadian and
European Union (EU) regulators, for example, issue an establishment (or
site) license only after a Current Good Manufacturing Practice (CGMP)
inspection finds the establishment compliant. Under the Federal Food,
Drug, and Cosmetic Act (FD&C Act or the Act), drugs that are subject to
premarket approval must pass a CGMP inspection to be approved. However,
many over-the-counter (OTC) drugs sold in the United States are
marketed under the OTC monograph system, rather than under individual
approved product applications, and therefore, are not subject to CGMP
inspection prior to distribution under this authority. For these OTC
monograph drugs, there is no other provision in the Act requiring a
passing CGMP inspection prior to distribution. Unlike the Canadian and
EU establishment or site licensure requirements described above, the
establishment registration provisions of section 510 of the FD&C Act do
not require that a firm pass inspection before it is duly registered.
Further, because section 510 of the FD&C Act requires only that an
establishment's owner/operator ``immediately register'' the
establishment upon commencing manufacturing (see 510(c) and (i)), even
upon receipt of a new registration, it will take FDA some time to
conduct an inspection.
As noted above, other countries can require persons who import a
pharmaceutical product to provide sufficient evidence to show that the
drugs are being imported in compliance with their drug laws. Because
FDA may not have inspected a facility, or may not have inspected it
recently, this kind of authority would be very useful.
Additionally, some countries, like the EU Member States, also have
a batch recontrol provision, requiring batch retesting before entry is
permitted for certain countries of origin. FDA has no comparable
requirement for most human drug products.
senator roberts
Question 1. I have been on record raising concerns with additional
government regulations in a time when companies and individuals are
already overburdened with red tape. Some are suggesting that a sweeping
statutory change is needed to promote safety and jobs. I am skeptical
of this opinion. So instead I'll ask, what improvements to the upstream
supply chain integrity, and addressing the problems therein, are
currently within FDA authority and how are you utilizing these current
authorities to better ensure safety and effectiveness of drugs for
American consumers?
Answer 1. FDA has undertaken a wide range of activities aimed at
addressing the challenges of globalization. The rapidly changing global
environment, and a desire to move from a posture of intercepting
harmful products to anticipating and preventing the arrival of such
goods, has prompted FDA leadership to develop a strategy for addressing
the challenges of globalization entitled ``Pathway to Global Product
Safety and Quality.'' To achieve this transformation, FDA is developing
an international operating model that relies on enhanced intelligence,
information sharing, data-driven risk analytics, and the smart
allocation of resources through partnerships.
The new approach rests on four core building blocks:
FDA, in close partnership with its foreign counterparts,
will assemble global coalitions of regulators dedicated to building and
strengthening the product safety net around the world.
With these coalitions, FDA intends to develop a global
data information system and network in which regulators worldwide can
regularly and proactively share real-time information and resources
across markets.
FDA will continue to expand its capabilities in
intelligence gathering and use, with an increased focus on risk
analytics and thoroughly modernized information technology (IT)
capabilities.
FDA will effectively allocate Agency resources based on
risk, and leveraging the combined efforts of government, industry, and
public- and private-sector third parties.
The essence of this strategy marries creative international
coalitions with cutting-edge investigative tools to continue to provide
the consistently high level of safety and quality assurance the public
expects--and deserves. FDA will continue to partner with other Federal
agencies, the States, and nations across the world. It will also look
to Congress to modernize its antiquated authorities so that FDA's legal
tools keep pace with globalization.
Question 2. I believe that the statute is silent on how often
foreign drug establishments must be inspected, so I guess my question
is, does FDA really need new authorities to inspect foreign facilities?
Because there is a difference between a need and a want.
Answer 2. You are correct that the statute is silent on how often
foreign drug establishments must be inspected. The statute does require
that domestic drug inspections be inspected every 2 years. FDA does not
need new authority to conduct foreign inspections, however, new
authority would be required to change the biennial inspection
requirement for domestic drug manufacturers to an inspectional
frequency based on risk, regardless of facility location. Such
authority would ideally enable FDA to adjust inspection frequencies
based on risk factors like the nature of the drug, the processing and
control methods, and the availability of other credible information
about the establishment from other reliable sources, including other
governmental and non-governmental inspecting or auditing organizations,
and to use its limited resources most effectively.
Question 3. The FDA committed to providing the committee with a
full and complete list of all foreign drug establishments that are
involved in the U.S. drug supply chain. Please provide that list.
Answer 3. FDA provided this information via e-mail to your staff on
October 18, 2011.
Question 4a. Drug counterfeiting, theft and diversion are a serious
public health issue and a bottom line issue for industry as well. Just
last year stolen insulin managed to make its way back onto legitimate
pharmacy shelves and reached patients. This is a heat-sensitive product
that will not work if improperly stored. How was this deception
possible? Right now there is no comprehensive national system to track
and authenticate packages of drugs as they travel from the manufacturer
to wholesaler to pharmacy.
Answer 4a. Stolen or diverted drugs are a public health concern for
the very reason you have described, as we cannot be certain that these
products have been stored or handled properly once they have left the
legitimate supply chain. Loss of potency or integrity cannot
necessarily be detected by physical examination with the naked eye, but
may only be determined by laboratory analysis of potency and integrity.
The lack of a comprehensive national system to track and authenticate
packages of drugs as they travel from the manufacturer to wholesaler to
pharmacy is the reason such diversion and reentry can occur.
Question 4b. What steps can the FDA take to help increase security
and transparency of drug distribution?
Answer 4b. To further improve the security of the drug supply, FDA
supports a comprehensive national track-and-trace system and continues
its work to develop standards for identification, authentication,
validation, and track and trace for prescription drugs, as directed by
section 505D of the FD&C Act. A robust track-and-trace system will help
protect consumers from threats posed by illegal or substandard
products, in addition to providing accountability and transparency of
the supply chain. An initial step of FDA's track-and-trace standards
development included issuance of a final guidance to industry entitled
Guidance for Industry: Standards for Securing the Drug Supply Chain--
Standardized Numerical Identification (SNI) for Prescription Drug
Packages (See March 29, 2010, Federal Register (75 FR 15440)),
describing the Agency's recommendation for unique identification of
prescription drugs at the package level. In addition, in February 2011,
FDA held a public workshop, which explored approaches for achieving an
effective and feasible track-and-trace system for finished prescription
drug products. Comments from supply chain stakeholders are being
considered as we develop the standards for the validation,
authentication, and tracking and tracing of prescription drugs to
enhance the security of the drug supply chain against counterfeit,
diverted, and other substandard drugs.
Question 4c. Does the FDA need additional authorities or a
statutory mandate to ensure drug traceability becomes a reality?
Answer 4c. We are working on developing standards for a national,
interoperable track-and-trace system in the United States. However,
even with standards developed, additional authority would be helpful to
require a cost-effective track-and-trace system for all products
throughout supply chain.
Question 5. What are the potential costs to individual pharmacies
if we implement a full track-and-trace program?
Answer 5. Because the design of a track-and-trace system has not
been determined by Congress, it is challenging to estimate the costs to
individual pharmacies to implement; the cost would depend on the
characteristics of the particular track-and-trace system that is
eventually required; for example, limiting track-and-trace requirements
to receipt by the pharmacy, rather than to the point of sale to the
patient, would lower costs. We are sensitive to the costs that
pharmacies might have to incur to implement and maintain such a system
and are mindful of that as we develop the standards. Because track and
trace is being done for products in other industries, the equipment and
technology appears to be readily available and, therefore, the costs
may have decreased since these reports were issued and continue to
decrease as the technology advances and becomes more widely used.
senator kirk
Question 1a. Earlier this year, FDA asked for input from
stakeholders on beneficial system attributes for the tracking and
tracing of prescription drugs. But this is only a preliminary step.
What is the current status of FDA's efforts to standardize tracking and
tracing requirements for the pharmaceutical supply chain, and how will
``promising technologies'' be incorporated into the new standards?
Answer 1a. During FDA's February 2011 public workshop titled
``Determination of System Attributes for the Tracking and Tracing of
Prescription Drugs,'' approaches for achieving an effective and
feasible track-and-trace system for finished prescription drugs were
explored. Following the workshop, FDA published a Federal Register
Notice and opened a public docket to solicit feedback from supply chain
stakeholders. The comment period was extended to allow for stakeholders
to consider the workshop summary. The comments have been reviewed and
considered as we continue to develop the remaining standards for
authentication, validation, and track and trace.
The Agency has reviewed and considered current and promising
technologies as it develops these standards. Some technologies can be
considered as on-product or standalone technologies that provide a
method to identify or authenticate a product through visual assessment
or specific analytical methods. These technologies can be applied
directly on the package (i.e., holograms, tamper-evident packaging) or
directly on or in the dosage form (i.e., nanotechnological component or
chemical taggant). Other technologies to consider include those that
can be used to enable identification, validation, authentication, and
track and trace of prescription drugs, such as data carriers, scanners,
serialization software, traceability software, data management
software, and analytical software. The level of availability, adoption,
and interoperability of each of these technologies is being considered
as we develop the standards. The standards will likely entail several
of these technologies to achieve an effective and feasible track-and-
trace system for prescription drugs. However, as you note, industry
will not be required to adopt FDA standards if the Agency is not given
authority to do so.
Question 1b. In addition, has FDA done any benchmarking with other
Federal agencies to ascertain how those agencies are dealing with
comparable policy objectives? For example, though different in nature,
the Department of Defense is engaged in evaluating and/or deploying a
variety of initiatives and technologies related to the tracking and
tracing of high priority, high security items similar in importance and
sensitivity to the protection of the pharmaceutical supply chain. What
initiatives and technologies being considered or deployed by other
Federal agencies such as DOD are you evaluating and benchmarking
relative to securing the Nation's pharmaceutical supply chain?
Answer 1b. Yes, FDA has done benchmarking with other Federal
agencies, including the Department. of Defense, U.S. Postal Service,
Federal Aviation Administration, and National Aeronautics and Space
Administration, to learn about their systems and technologies used to
conduct tracking and tracing of supplies, mail, airplane parts, or
aerospace parts, respectively. While this benchmarking was useful, we
learned that no single system, model, or technology currently employed
could be applied directly to the track-and-trace system that the Agency
envisions for prescription drugs, in part due to differing supply chain
and distribution models, and the entities involved. This benchmarking
was conducted as part of our research to gain insight on technologies
used or under consideration and systems or processes used to manage the
tracking and tracing capability.
Question 2. For a prescription drug track-and-trace system to be
efficient and effective, it should be electronic rather than paper-
based. An electronic system can incorporate human-readable elements on
labels or tags. With today's technology, a barcode--in particular, a 2-
D bar code--can incorporate a great deal of information accurately and
be read easily and inexpensively. RFID technology can capture even more
information and be read even more easily, since the RFID tag does not
need to be in the line of sight of the reader. Updated information can
easily be added as prescription drugs move through the supply chain.
Serialization software can uniquely identify individual packages or
groups of packages (e.g., pallets).
Furthermore, an electronic system may benefit from the existing,
internationally-recognized technical standards, such as those issued by
GS1, to facilitate interoperability along supply chains that may extend
beyond our borders. GS1 standards can also address FDA's stated concern
regarding the absence of a system of unique drug facility identifiers.
To what extent has FDA considered the use of a partial or end-to-end
electronic track-and-trace system for prescription drugs, and will that
system be compatible with, or conform to recognized international
standards?
Answer 2. FDA agrees that a fully electronic track-and-trace system
is desirable to allow for interoperability and efficiency in processing
data exchange between all supply chain participants. FDA also
encourages accountability and transparency of all supply chain
participants to improve the security of the drug supply and level the
responsibility across the supply chain. As noted above, various
technologies are being considered as we develop the standards for
validation, authentication, and tracking and tracing, and the standards
will likely entail several technologies to achieve an effective and
feasible track-and-trace system, for prescription drugs. At the
February 2011 public workshop, FDA shared the following as potential
attributes of a track-and-trace system also under consideration:
Ability to capture the unique identification of a product
and the status of the product.
Ability to ensure interoperability to enable supply chain
participants to securely capture, store, and exchange track-and-trace
data accurately and efficiently.
Ability to authenticate the unique identifier SNI and
entire distribution history of each product.
Ability to create an electronic pedigree at any point
during the movement of the product through the supply chain.
Ability to enable appropriate access to track-and-trace
data necessary to achieve system goals.
Ability to ensure security of data and systems from
falsification, malicious attacks, and breaches.
Ability to ensure confidential commercial information is
protected.
Ability to ensure that patient privacy is maintained.
While we are aware of track-and-trace models that include some and
not all members of the supply chain, FDA believes these partial models
leave potential vulnerabilities in the supply chain and do not provide
sufficiently enhanced security. In addition, counterfeit or other
substandard drugs can enter anywhere in the supply chain. For these
reasons, FDA believes that all members of the supply chain need to be
participating in the track-and-trace system.
FDA intends to harmonize its standards development with
international consensus standards to the extent practicable, as we have
done with our Guidance for Industry for the Standardized Numerical
Identification (SNI) for Prescription Drug Packages (March 2010).
[Whereupon, at 12:07 p.m., the hearing was adjourned.]