Manufacturers, FDA Seek to Secure Supply Chains

International outsourcing and rising theft spur regulatory action and manufacturer oversight.
Jun 01, 2010
Volume 23, Issue 6

Jill Wechsler
Increased globalization in the production and sourcing of drugs and biologics, along with more intense public scrutiny of drug quality and safety, is raising alarm at the US Food and Drug Administration and within the industry. Counterfeiting rings are producing and selling drug knock-offs that can make people sick. Criminals are stealing genuine medicines from trucks and warehouses, raising the risk that consumers may receive out-of-date or corrupted products.

One report describes a $14 billion black market for counterfeit medicines in Europe and estimates that 50–90% of drugs bought online are fake. The problem is much more serious in developing nations—the United Nations calculates that more than $500 billion in counterfeit drugs are traded each year throughout the world. The deteriorating situation threatens to erode manufacturer revenues, as well as public confidence in the FDA's ability to protect patients.


In response, the FDA is overhauling its oversight of imports and strengthening drug identification requirements. The US now receives some 20 million shipments of food, drugs, and other regulated products, up from about 6 million a decade ago, and about 80% of active pharmaceutical ingredients come from overseas. "Globalization has fundamentally altered our market landscape," stated FDA Commissioner Margaret Hamburg at the Center for Strategic and International Studies in February. Addressing global supply chain safety, she asserted, "is one of my highest priorities for the FDA."

However, Hamburg and others acknowledge that the FDA only has the capacity to inspect a tiny fraction of imports and few foreign drug manufacturing establishments each year. The agency has established offices in China, India, and other regions to increase its international presence, but they are not staffed for much on-the-ground oversight.

Thus, the FDA has launched the Predictive Risk-based Evaluation for Dynamic Import Compliance Targeting (PREDICT) information system to target its oversight of imports to more risky food and drug products. PREDICT ranks import shipments based on the nature of the product and past compliance experience of a producer or shipper, among other factors. Those products with high-risk scores will be targeted for inspection, while more innocuous items will move though customs more rapidly. The FDA is implementing PREDICT first for foods and examining what changes may be needed for it to work for drugs and biologics.

The agency also has proposed a secure supply chain pilot to provide "green lane" processing for drug imports from companies with validated security practices. Although announced more than a year ago, the FDA still is working out the details with the US Customs and Border Protection (CBP) agency for using CBP's Customs-Trade Partnership Against Terrorism (C-TPAT) program, which offers priority processing for products from companies with secure supply chains.

More authority from Congress to detain and destroy illegal imports would further strengthen the FDA's programs. The House approved food import safety legislation last November, but the bill has been stuck in the Senate for several months. Action on the food bill would set the stage for approval of a drug import measure that also may support more plant inspections and establish a uniform electronic pedigree system.


Because of its limited resources, the FDA has been urging manufacturers to assume greater responsibility for ensuring the quality and safety of their products at all points in the supply chain. At a PDA/FDA Pharmaceutical Supply Chain Workshop in Bethesda, MD, in April, Janet Woodcock, director of the Center for Drug Evaluation and Research, called on industry to "up the ante on vigilance" and to devise real solutions to supply chain problems. Modern track-and-trace technology should be linked to programs for qualifying suppliers and for monitoring global conditions, she said. Woodcock also urged robust security measures to deal with criminal activity, plus networks for communicating within the industry and with the FDA on these issues.

Although increased outsourcing by manufacturers may appear to reduce production costs, Woodcock advised that such approaches might generate hidden expenditures. Suppliers with weak track records may require more extensive due diligence and monitoring. And doing business in countries with weak regulatory systems may open the door to counterfeiting. It's the manufacturer's responsibility to ensure the reliability of suppliers, she emphasized, especially in times of ingredient shortages or political upheavals that can disrupt production. Otherwise, the FDA may look to stiffen supplier audit requirements and to expand good manufacturing practices for starting materials.

In an April letter to trade associations for manufacturers, wholesalers and pharmacists, the FDA advised companies to establish action plans to quickly assess and communicate about situations that raise public health risks, such as when diabetes patients became ill following treatment with stolen insulin that had lost effectiveness because of faulty storage. The agency has established a cargo theft web site (on that cites some 20 incidents in the last year involving insulin, drugs, and other products. These actions are part of the FDA's campaign to heighten public awareness about the dangers of drug theft and diversion, and to spur manufacturers to improve warehouse and supply chain security.

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