FDA and Justice Department Address Drug Quality Concerns

Published on: 
BioPharm International, BioPharm International-02-01-2012, Volume 25, Issue 2
Pages: 40–45

More collaboration and expanded oversight aim to compel manufacturers to follow GMPs.

The Department of Justice celebrated the end of 2011 by announcing billions of dollars in recoveries from False Claims Act cases, most of it from pharmaceutical companies. Of the more than $3 billion in settlements collected during the fiscal year that ended Sept. 30, 2011, nearly $2.2 billion came from pharma. At the top of the list was the $750 million paid by GlaxoSmithKline (GSK) to settle charges involving adulterated drugs and failure to meet strength, purity, or quality requirements at its Puerto Rico facility, evidently the first FCA settlement involving GMP violations reported by a whistleblower.

Jill Wechsler

These civil fraud cases represent only the tip of the iceberg in pharmaceutical industry compliance battles. The Justice Department also collected $1.3 billion in criminal fines and forfeitures for violations of FDA regulations. Some of that money may come from GSK, which also is negotiating with the feds to settle several investigations into marketing and pricing practices. Amgen agreed to pay $780 million in October 2011, related to promotion of its anemia drug Aranesp (darbepoetin). Merck recently announced a $1-billion settlement to resolve allegations about Vioxx (rofecoxib) marketing. And in January 2012, Johnson & Johnson said it would pay more than $1 billion to resolve state and federal lawsuits involving off-label marketing of its antipsychotic Risperdal (risperdone).

While most of the high-profile cases involve illegal marketing and pricing allegations, the government is also stepping up enforcement actions for failure to meet quality standards. In addition to the GSK Puerto Rican case, Indian drugmaker Ranbaxy Laboratories signed a consent decree with FDA in December, and agreed to pay up to $500 million to settle a three-year investigation into falsifying records and GMP violations, which shut down imports into the US.

"We demand accountability when companies' failures in drug manufacturing lead to products that materially differ from the strength, purity, or quality of what was required," stated Department of Justice Assistant Attorney General Tony West at the Pharmaceutical Regulatory and Compliance Congress in November 2011. He noted that the Obama administration's broader campaign against healthcare fraud, which was strengthened by the Affordable Care Act (ACA), has led to more than $8 billion in settlements, penalties, and fines since 2009.



West also emphasized the government's intent to prosecute individual industry executives, under the controversial Park legal doctrine, a policy that can hold corporate officers liable for company violations of FDA and other federal laws. Another enforcement strategy is to "exclude" company executives from doing business with government health programs such as Medicare and Medicaid, which basically prevents the targeted officer from holding any responsible drug industry position. Taking action against individual executives aims "to promote a culture of compliance by emphasizing deterrence," said West. The goverment wants to dispel the notion among manufacturers, he explained, that dealing with enforcement is "simply the cost of doing business." Instead, the government will levy judgments and penalties that "eliminate any benefit that may be obtained from engaging in unlawful conduct in the first place."

West and others similarly urge medical-products companies to establish effective safeguards against economic fraud, negligent production, and theft. He acknowledged that the government will never have enough resources to tackle every fraud and abuse case or to inspect every drug-production facility, especially the growing number of foreign operators that ship medical products to the US.

FDA officials agree. At the December 2011 enforcement conference sponsored by the Food and Drug Law Institute (FDLI), Howard Sklamberg, FDA deputy associate commissioner for regulatory affairs, pointed out that the agency can do only so much to monitor companies and enforce FDA rules, and that regulated firms must invest in quality systems to prevent violations internally and by suppliers and contractors. The role of the Office of Regulatory Affairs (ORA), Sklamberg explained, is to "help industry be responsible" through the development of standards and best practices.

This approach also calls for direct compliance oversight by corporate leaders, as illustrated by a November 2011 Warning Letter sent to Novartis CEO Joe Jimenez. The letter requested Jimenenez' personal involvement in addressing a long list of violations at facilities in North Carolina and Colorado, many uncorrected from previous citations. Jimenez promised company employees that "neither costs, nor service level will interfere" in the company's remediation plan; Novartis subsequently suspended production at another plant in Nebraska and recalled several products, a sign that the firm's manufacturing issues may be more widespread.

An increase in FDA Warning Letters and inspections, particularly to foreign facilities and to contract manufacturers, responds, in part, to continued criticism of FDA oversight of foreign manufacturers. The Government Accountability Office (GAO) complained in a September 2010 report that the agency still lagged in oversight of foreign facilities and needs better data on overseas facilities producing drugs for the US market.

ORA is addressing these issues by ramping up inspections and establishing a searchable public database of inspection reports, including conditions cited in FDA 483 reports and summary data by fiscal year. The field force is trying to be more efficient, replacing infamous inspector green notebooks with handheld computer devices to record findings during site visits. Foreign producers of APIs, such as China's Sichuan Pharmaceuticals, have received Warning Letters, and India's Synbiotics was blasted for denying access to an FDA investigator. Some manufacturers have been hit with even more stringent enforcement actions, such as bans on certain imports from Dr. Reddy's Mexican facility and from Yag-Mag Labs of India.

Inspections of API producers and generic-drug manufacturerss are slated to increase further under the proposed generic-drug user-fee program. The five-year goal is to conduct biennial GMP inspections of foreign manufacturers and, in the process, provide parity in oversight for domestic and foreign firms. If Congress approves the Generic Drug User Fee Act (GDUFA) this year, as expected, most of the estimated $300 million annual GDUFA revenues will come from manufacturing sites—14% from API manufacturers, and 56% from facilities producing finished dosage forms—and the rest from application fees. Preapproval inspections will continue as required by new applications, but may not be necessary for recently inspected sites with good compliance histories.


The generic-drug user-fee program also calls for FDA to use inspection information and reports from foreign regulatory authorities where appropriate, an approach championed by Sklamberg and others as a way to extend FDA's oversight capabilities. Several collaborative programs have been tested, and more are being implemented.

In December 2011, FDA and EMA announced a new GMP inspection initiative that calls for sharing information on drug-manufacturing inspections in their respective regions Under this program, which began last month, FDA will defer or waive routine GMP inspections of European facilities previously inspected by central or nationally authorized inspectorates, and EU member states will conduct fewer inspections in the US. While preapproval inspections will continue as needed, repeat GMP inspections may be avoided for manufacturers of less risky products, sites with few quality defects in the past, recently inspected facilities, and when there is an "urgent public health need," such as a drug shortage, that requires fast regulatory action. Both parties will keep track of the number of inspections deferred or waived and review the program after three years. Not only does the initiative aim to save resources for the regulators, but fewer inspections should reduce the compliance burden on manufacturers.

This new collaboration follows a successful joint inspection program for APIs, which involves FDA, EMA, and Australia's Therapeutic Goods Administration, along with specific EU member states. Launched as a pilot program in 2008, the initiative prevented many duplicate inspections of facilities and established a master list of API supply facilities, as outlined in a report issued in May 2011. Inspectors from the three regions shared information on more than 100 facility inspections, which helped identify weaknesses in manufacturer quality management systems and requested corrective actions. In some cases where inspection reports indicated satisfactory operations, a planned inspection involving the same API could be postponed or canceled. Participants also entered information from past inspections of more than 640 sites of mutual interest into a central database, thereby providing valuable information on site location, APIs produced, date and outcome of most recent inspection, and plans for future inspections by participating authorities.

The API pilot also involved a small number of joint inspections, which helped build confidence in each other's operations, but required considerable effort and time to organize and to evaluate. Now, the collaboration is expanding to include additional EU member states, and possibly more regions in the future. To further improve the program, participants hope to streamline management of the master list, devise a common inspection report format for joint inspections, and develop a common risk-based policy regarding re-inspection of sites located in third countries.

FDA and EMA are looking to extend the benefits of these joint regulatory efforts to streamline the review of manufacturing data in drug applications. In March 2011, the two agencies launched a collaborative review process for quality-by-design (QbD) components of new drug applications (NDAs), marketing authorization applications (MAAs), and supplements (referred to as variations in Europe). The two agencies hope to attract sponsors filing at the same time in both regions by striving for a consistent and efficient assessment of the quality/CMC sections of applications. Drug manufacturers also stand to benefit from joint early consultations that can yield harmonized advice; each agency, however, will issue its own review or report on the submission to meet domestic legal requirements.

This initiative builds on other FDA–EMA coordination efforts such as the joint inspection pilot for preapproval inspections for new drugs, which failed to gain strong support from the industry. In 2009, the regulators asked drug manufacturers planning simultaneous submissions in both regions to request joint preapproval inspections as a way to facilitate the application-review process. But only two joint inspections were performed, according to a report on EMA–FDA interactions issued by the agencies in June 2011. Observers note that the program was limited to drugs (not biologics), and that few companies planned simultaneous submissions. The new QbD review collaboration, which also excludes biologics, can provide joint preapproval inspections as part of the review process and appears to be attracting more interest from manufacturers.


Another forum for promoting collaboration and harmonization of drug inspection practices and GMP standards is the Pharmaceutical Inspection Cooperation Scheme (PIC/S), which FDA formally joined in January 2011, after a five-year vetting process. Founded in 1970 by 10 European countries, PIC/S now has 40 members around the world, with Slovenia being the latest addition. Japan and South Korea have applied for admission; the Philippines, Indonesia, Taiwan, Iran, and New Zealand are moving forward in the application process; and China and India are planning to apply.

Previously a sideline observer, FDA now can play an active role in PIC/S programs to train GMP inspectors, establish risk-based quality standards, and share "rapid alerts" on drug safety problems, explained Brenda Holman, head of ORA strategic initiatives, at the PDA/FDA conference last September. Holman described how FDA can help develop PIC/S guides for meeting GMPs for drugs, APIs, vaccines, blood and blood products, and biotechnology-derived drugs as part of international collaborations to provide more effective market surveillance on a global scale.

As with its members, PIC/S faces challenges in dealing with increased outsourcing by manufacturers and more complex biopharmaceutical supply chains, Holman noted. Regulators are dealing with this by teaming up for joint inspections to conserve resources as well as to build confidence in the operations of other regulatory bodies. PIC/S is encouraging inspection plans based on risk evaluation and is looking to expand into other relevant fields, such as oversight of good clinical practices and good distribution practices, the latter item reflecting growing supply-chain concerns.

Although PIC/S policies are not legally binding, information from fellow regulators on a previous site inspection may lead FDA to forego its own site visit, and other PIC/S members can avoid duplication by relying on FDA inspection reports. FDA also can gain information on how other inspectorates rank sites for risk and compliance status, future inspection schedules, and common practices involving the scope, format, and duration of site visits.

Jill Wechsler is BioPharm International's Washington editor, Chevy Chase, MD, 301.656.4634, jwechsler@advanstar.com.