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Reaching Common Ground, Globally

Regulatory oversight doesn't mirror the shifts taking place in drug ingredient manufacturing

by Ann M. Thayer
January 28, 2008 | A version of this story appeared in Volume 86, Issue 4

Verified Products
Credit: Dr. Reddy's Laboratories
Dr. Reddy's Laboratories is the first company to have U.S. Pharmacopeia certify its pharmaceutical ingredients.
Credit: Dr. Reddy's Laboratories
Dr. Reddy's Laboratories is the first company to have U.S. Pharmacopeia certify its pharmaceutical ingredients.


Reaching Common Ground, Globally

GOVERNMENT DATA SHOW that 80% of active pharmaceutical ingredients (APIs) and 40% of finished drugs sold in the U.S. come from foreign sources. It's not surprising then that more than three-quarters of the world's top 40 fine chemicals manufacturers have headquarters outside the U.S. And the balance is tipping eastward, thanks to the growing number of Chinese and Indian companies making intermediates, APIs, and generic drugs.

The Food & Drug Administration knows pretty well what products are coming across U.S. borders, but it is much less certain about who's producing them or how well. Whether for safety or business reasons, trade groups that represent Western chemical companies see FDA's uncertainty as a problem.

FDA databases list anywhere from 3,000 to 6,800 foreign firms that ship drugs to the U.S. As many as 714 of these are in China, only 13 of which FDA inspected in 2007, and 410 are in India, where FDA checked only 65. In general, Europe's record for imports and foreign inspection statistics are similar.

According to industry consultant Peter Saxon, who advises companies in China and elsewhere on FDA compliance, about 70 Chinese factories are approved by FDA for making APIs used in prescription products and are exporting to the U.S. and Europe. He believes it would be impossible for someone to ship material for prescription products without FDA approval, largely because of the paperwork and controls that are in place.

Another 600 or so Chinese plants could be making drug ingredients, he says, "but the discrepancy comes from the fact that there are many materials made—such as caffeine, aspirin, and ibuprofen—none of which are prescription products. One must understand that FDA doesn't inspect these producers anywhere in the world, not in the U.S. or Europe or China."

FDA data indicate that the agency inspects only about 7% of foreign API plants each year; 88% of the inspections are before a product is approved rather than for routine operational surveillance. In contrast, 97% of U.S. facilities are inspected every two years, with 78% being routine checks and 22% for preapproval purposes. Saxon says the 70 or so facilities in China come up for inspection every three years under the current inspection system, but they may be inspected more or less frequently on the basis of risk, as is done in the U.S.

Western producers see this discrepancy as unfair. "We want to see an increased number of foreign inspections or at least a shorter period of time between foreign inspections," says Lynne Jones Batshon, executive director of the Bulk Pharmaceuticals Task Force, an affiliate organization of the Synthetic Organic Chemical Manufacturers Association (SOCMA). "Foreign facilities need to be held to the same standards." This includes surprise inspections as an incentive to stay in compliance.

For several years, SOCMA and the European Fine Chemicals Group (EFCG), a sector group within the European Chemical Industry Council, have been calling for a level playing field. The groups assert that companies not complying with international good manufacturing practices (GMP) enjoy unfair competitive advantages over those that do comply. They also say there are few, if any, deterrents or sanctions for not complying.

In early 2006, EFCG and SOCMA sent FDA a citizen's petition asking the agency to rank foreign and domestic firms together in its risk-based approach for deciding which ones to inspect. They also requested that FDA consider that simply being a foreign facility is a significant risk factor. And as a surrogate for GMP inspections, they suggested setting up a program to monitor the impurity profiles of over-the-counter drugs such as aspirin for patterns indicative of underlying manufacturing problems.

Although Batshon says FDA has yet to provide any substantive response, as it is required to do, the petition kicked off other actions, including a recent congressional hearing (C&EN, Nov. 26, 2007, page 38). Public outcry over counterfeit drugs and contaminated food has also helped put the spotlight on GMP compliance in drug ingredient manufacture.

Trade groups have been able to point to recent problems with Chinese APIs. For example, in 2007 FDA sent warning letters for GMP violations and denied entry of APIs from two companies, Kunshan Chemical & Pharmaceutical (letter) and Northeast General Pharmaceutical (letter). And U.K. regulators recalled amoxicillin produced by KDL Biotech in India after a plant inspection.

EFCG says the European Union is waking up to the need for additional enforcement. In 2007, EU authorities suspended several certificates of suitability, most of which were held by Indian and Chinese companies or by brokers. EU regulators also launched the EudraGMP database in May to exchange information on GMP compliance and coordinate inspections among national authorities.

Still, the general sense is that regulators have been caught off guard by the rapid rise in pharmaceutical ingredient production in Asia. It would take decades for FDA to inspect all the foreign facilities many believe should be checked. EFCG and SOCMA would like to see improved inspection programs but realize resources are limited.

ONE POSSIBLE REMEDY is user fees for inspections. Another solution might be mutual recognition agreements with other countries or with third-party inspectors. "We're open to any option that will allow for more frequent, equivalent inspections," Batshon says.

In late 2006, U.S. Pharmacopeia (USP), the pharmaceutical standards-setting organization in the U.S., launched its Pharmaceutical Ingredient Verification Program (PIVP) to certify the quality of APIs and excipients. "Our intention is to complement, not compete with, the regulatory bodies around the globe," says V. Srini Srinivasan, USP's vice president for verification programs. In the past two years, USP opened offices and labs in India and China.

When an ingredient carries a USP verification mark, "it's an assurance that it has undergone a very thorough investigation by a competent third-party certification body," Srinivasan says. USP hopes to partner with regulators around the world to address gaps in facility and product inspections. For example, Srinivasan notes, developing countries with few regulatory controls might find the certification useful.

PIVP has three elements: a GMP audit against international guidelines, a manufacturing and quality-control document review, and lab testing of product samples. A postcertification stage includes surveillance testing and requests for follow-up information. USP charges fees that largely cover its costs. Manufacturers receive a certificate of standards compliance and can display the USP mark on their shipping containers, labels, and other documents.

The first company to sign on was India's Dr. Reddy's Laboratories, which had four APIs verified in late 2007. Interest in the voluntary program from both small and large companies has been picking up, Srinivasan says. Other companies participating as of mid-January include BASF, Evonik Industries, International Specialty Products, and Malladi Drugs & Pharmaceuticals.

USP's program carries no legal or regulatory weight. Finished drug manufacturers are still responsible for the quality and safety of their products and for auditing their suppliers. Skeptics suggest that people will continue to buy from low-cost suppliers, especially for over-the-counter drug ingredients, whether products are certified or not.

The ingredient quality problem is exacerbated by the complexity of the pharmaceutical ingredient supply chain, interested parties say. Products are bought, sold, and resold—sometimes fraudulently—by brokers. As a result, the source of products often can't be traced and a lack of regulatory oversight may increase the risks. For its part, China has new GMP regulations and says it will increase plant inspections.

The trade groups haven't tackled supply-chain problems, Batshon admits. "But if we had confidence that the sources of intermediates or APIs, no matter how many parties they are going through, were reliable based on inspections, then we would have less concern over the supply-chain issue."

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