STATEMENT OF
DENNIS E. BAKER
ASSOCIATE COMMISSIONER FOR REGULATORY AFFAIRS
FOOD AND DRUG ADMINISTRATION
BEFORE THE
SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS
COMMITTEE ON COMMERCE
UNITED STATES HOUSE OF REPRESENTATIVES
JUNE 8, 2000
Good morning, Mr. Chairman, and Members of the Committee. I am Dennis E. Baker, Associate Commissioner for Regulatory Affairs (ACRA) at the United States (U.S.) Food and Drug Administration (FDA or the Agency). With me today is my colleague, John M. Taylor, Acting Director, Office of Compliance, Center for Drug Evaluation and Research (CDER). I am pleased to come before the Committee to discuss your concerns about imported counterfeit bulk drugs and the Agency's actions designed to protect the American public from the possible risks that such drugs may pose.
It is important to note that the overall quality of drug products in this country is very high. However, FDA takes very seriously allegations regarding the counterfeiting or adulteration of drug products. We recognize that more can be done to quantify the scope of the problem counterfeit bulk drugs may pose in the U.S. market, and strengthen our regulatory or enforcement activity, when warranted. In this testimony, I will describe efforts the Agency has taken to ensure that imported bulk drugs meet the requirements of the Federal Food, Drug, and Cosmetic (FD&C) Act . "Bulk drugs" are active or inactive ingredients used in the manufacture of finished dosage drug products. While safety issues clearly apply to all products that are classified as bulk drugs, at the Committee's request, this testimony will generally focus on issues related to the importation from foreign sources of active pharmaceutical ingredients (APIs), which was the subject of Chairman Bliley's May 8, 2000, letter to the Agency.
It is important to distinguish between counterfeit drug products and products that are contaminated or otherwise improperly manufactured. While each of these conditions may pose a threat to public health, counterfeiting is a quite different, and much more rare, occurrence in the drug manufacturing industry. The FD&C Act states that a counterfeit drug is:
"A drug which, or the container or labeling of which, without authorization, bears the trademark, trade name, or other identifying mark, imprint, or device, or any likeness thereof, of a drug manufacturer, processor, packer, or distributor other than the person or persons who in fact manufactured, processed, packed, or distributed such drug and which thereby falsely purports or is represented to be the product of, or to have been packed or distributed by, such other drug manufacturer, processor, packer, or distributor."
More simply stated, a drug that identifies itself as the product of a drug manufacturer, processor, packer, or distributor other than the actual manufacturer, processor, packer, or distributor of such drug is counterfeit under the FD&C Act. This definition applies to active pharmaceutical ingredients, intermediate pharmaceuticals, and finished dosage forms that are deliberately and fraudulently mislabeled or misbranded with respect to their identity and source. Counterfeiting can apply to innovator or generic products.
Counterfeit APIs pose a real or potential health hazard because their manufacturer is often unknown. The fact that the manufacturer is unknown means that there is no product history. Therefore, the safety and efficacy of the product cannot be assured, the impurity profile is unknown and the age, storage, manufacturing environment, and/or the synthesis of the product cannot be determined. Moreover, the failure to have a product history means that the results of research and development and the clinical trials done by legitimate pharmaceutical product manufacturers are negated.
The participants in illegal counterfeiting activity may include manufacturers of API pharmaceuticals, manufacturers and repackers who relabel and substitute API products in the distribution chain, importers, brokers, domestic agents, and purchasing agents either acting alone or in concert with a corporate unit. There are certain products that especially lend themselves to counterfeiting. In general, very expensive chemicals that are purchased in small quantities or less expensive chemicals that are purchased in very large quantities are particularly vulnerable to counterfeiting.
I. The Regulation of Active Pharmaceutical Ingredients
FDA is responsible for the safety and quality of domestic and imported pharmaceutical products. Specifically, FDA's CDER establishes standards for the safety, effectiveness and manufacture of prescription and over-the-counter (OTC) drugs. In addition, FDA's human drug program applies premarket review, postmarket surveillance, education, research and other strategies to ensure that all drug products are safe and effective and that information on the proper uses of the drug products is available to all users.
The strategies employed by FDA include:
FDA's human drug program also disseminates timely and accurate product information to the medical community and the public regarding new drugs and their uses, identifies drugs with the potential for abuse, and makes recommendations to the Drug Enforcement Administration (DEA) for drug classification and control.
Foreign manufactured drugs imported into the U. S. - both bulk and finished products - fit into the Agency's regulatory framework through new and generic drug evaluations, drug quality assurance, inspections, postmarketing surveillance and adverse drug event reporting programs.
New Drug Evaluation/Generic Drug Evaluation
The goal of the new and generic drug approval process is to ensure that 1) new drugs brought to market are safe and effective as labeled for their intended use, and 2) generic drugs approved for marketing are safe, effective, and manufactured in a way that ensures their continued safety, efficacy, and bioequivalence. Personnel from the Office of Regulatory Affairs (ORA), sometimes accompanied by chemistry or other professional staff from CDER, conduct pre-approval and post-approval inspections of the facilities manufacturing drug products that are identified by drug sponsors in their applications.
FDA's Pre-approval Inspections Program (PAI) provides for the investigator to verify the accuracy and authenticity of data submitted by firms in support of the approval of their new or abbreviated new drug applications and to assess the firm's compliance with current good manufacturing practices (cGMP). The program covers both domestic and foreign manufacturers of both finished dosage form products and APIs.
A drug manufacturer is responsible for testing and validating the safety, purity and consistency of the APIs it uses in the manufacture of its products. In fact, all such manufacturers are required to disclose the source of their APIs in their applications, and both domestic and foreign API manufacturers must be in compliance with cGMPs prior to the approval of those applications. Drug Master Files (DMFs) are established to allow producers of active ingredients and other formulation materials to submit confidential commercial information directly to FDA. Therefore, these bulk drug inspections are considered to be pre-approval inspections and include inspectional verification of the information submitted to the DMF by the bulk drug manufacturer. The DMF contains manufacturing information pertinent to the formulation material. It is referenced by an applicant for a finished dosage form and is considered part of the application.
Foreign and domestic bulk manufacturers are reevaluated periodically for cGMP compliance, either during pre-approval inspections for a different product, or by a routine drug process cGMP inspection under the API program.
Drug Quality Assurance Program
Without proper process validation and control, marketed drugs may be deficient in many ways such as being subpotent, superpotent, or contaminated with other drugs or microorganisms. CDER is responsible for conducting postmarketing assurance monitoring of the overall manufacturing quality of drugs and maintaining drug establishment registration and drug products listing. In conjunction with ORA, CDER must also ensure that the manufacturing, processing, packing, and holding of drugs are such that the highest quality products will be marketed.
FDA inspections and product analyses are conducted to ensure that firms are validating their manufacturing processes. Comprehensive cGMP evaluations of drug products or dosage form are conducted. These inspections include domestic and foreign API and finished dosage form manufacturers.
In addition, CDER initiates drug sampling surveys that involve the collection and analysis of imported bulk drug substances and finished products that are then analyzed by Agency field labs for quality and forensic laboratories for evidence of counterfeiting. Selection of drug products for FDA sampling and testing under the Drug Product Survey Program is based on the following criteria: therapeutic significance; emerging problems; impurities; stability concerns; results of previous drug surveys; economic importance; and compliance history of the firm. Foreign active pharmaceutical ingredients have been added as sampling/testing targets. CDER strives to obtain voluntary support from the pharmaceutical industry whenever possible, informing firms of problems with their products or manufacturing processes so that correction may be made as expeditiously as possible, but takes regulatory action when necessary to effect the required changes.
Postmarketing Surveillance and Epidemiology
FDA employs other surveillance programs, including drug listing review of imports and the Drug Quality Reporting System under MedWatch. ORA is establishing a library of authentic bulk drug substances to use in investigations to identify counterfeit drugs.
II. Foreign Inspection Working Group
The continuing increase in international trade has turned the world into a global marketplace. The number of API and finished drug products manufactured abroad for the U.S. market is growing. It has been reported that as much as 80 percent of the APIs used to manufacture and produce prescription drugs in this country is imported from other countries. Therefore, over the last decade, FDA has substantially increased its worldwide inspectional and import monitoring operations, but the rapid expansion of the world market will continue to challenge our ability to direct appropriate levels of resources and operations to the foreign arena. FDA must continually recalculate its enforcement tools to ensure that the American public is protected from adulterated and unsafe products entering the U.S. market.
To keep pace, FDA has stepped up its inspectional and import-monitoring activities since the early 1990s, however, the Agency recognized that it needed to do more. In 1995, the FDA formed a Foreign Inspection Working Group (FIWG), comprised of representatives from all parts of the Agency, in an effort to evaluate the Agency's current foreign inspection program and related import product monitoring. The working group devoted months to understanding and identifying FDA's strengths and weaknesses in its foreign inspection program. The FIWG issued a summary report in June 1997. This evaluation cuts across Agency program areas, however, I will focus on the drug program and how it relates to bulk drugs, the findings, and the Agency's subsequent actions over the past three years.
Inspection Planning
Prior to Fiscal Year (FY) 1997, FDA's foreign inspection program in large part focused on pre-approval inspections. In the early 1990s, foreign inspections resulted in a higher percentage of foreign manufacturers with significant GMP problems relative to domestic facilities. These findings indicated a need for more post-approval surveillance coverage to help assure that imported drug products are produced in accordance with cGMPs.
CDER addressed this issue by structuring its foreign post-approval inspection scheduling using a risk-based strategy that allows it to more effectively utilize limited resources. Specifically, assignments are still primarily application driven, in that all foreign inspections of firms that are part of an application are conducted during the course of the application review. Additional post-marketing surveillance inspections are scheduled based on risk as assigned by a four-tiered system:
The tiered system has had the beneficial effect of focusing our limited resources on the firms that pose the highest risk to the American consumer. We have maintained a level of inspecting about 250 foreign firms per year for cGMP compliance and pre-approval acceptance. The inspections performed have been in the Tier I and Tier II categories.
The negative consequence, however, is that by continually emphasizing these high-risk firms we are not able to get to the Tier III and Tier IV firms, thereby lengthening the gap between inspections. CDER has recognized this problem and has identified and provided to ORA a priority list of 24 firms in China and 32 firms in India that have not been inspected but, according to the Operational and Administrative System for Import Support (OASIS) data, have shipped product in the last two years into the U.S. ORA is working these firms into inspection planning as resources permit and travel plans make opportunities available. For example, inspections of these priority firms can be added to pre-approval inspection trips.
Official Establishment Inventory
The Agency's Official Establishment Inventory (OEI) is a compilation of firms FDA has inspected, firms that have shipped products to the U.S., as indicated by the OASIS database, and firms that have listed as part of the Agency's drug listing program. FDA has completed evaluations of entry data from OASIS and is using this information to supplement the inventory of firms in the OEI. This is an ongoing process. FDA recognizes that there are weaknesses in this data, due in part to the fact that the OASIS system is user-driven. The Agency is using broker evaluations in part to increase the integrity of the submitted data and eventually included in the OEI.
The Agency is hindered by not having a complete list of foreign facilities manufacturing drug products for the U.S. market. This finding indicates a need to improve the Agency's information database on foreign firms exporting drug products to the U.S. The Food and Drug Administration Modernization Act (FDAMA) of 1997, requires the registration of foreign establishments. Once we have completed the rulemaking process and put the technology in place to implement this requirement, the Agency will have available to it a comprehensive listing of foreign establishments exporting drugs to the U.S.
Having a complete OEI, however, is only one step. We also must have the information technology to be able to more fully utilize the data we already have to the Agency's benefit. Therefore, FDA has begun a process of upgrading its hardware and software systems to move beyond the fragmented and independent systems of the past into an integrated information environment where data is more readily available and more easily manipulated to provide information and analyses that has not been possible before.
The Agency recognizes while we have made great strides in improving our information technology, we still do not have systems that can effectively and efficiently communicate across the Agency, or readily provide field staff with critical information they need. FDA is implementing the upgrade of our information technology systems to utilize wide area network (WAN) technology, which will support the availability of much more information to inspection officers. We are evaluating both the technology, as well as the cost, or further integrating our various sources of data into unified databases.
The OASIS system uses information input by filers (Custom House Brokers and importing firms) to facilitate the screening and/or inspection of imported products that are subject to FDA regulation. OASIS began as a pilot program in the Seattle District in 1992. It interfaced with the U.S. Customs Service Automated Commercial System (ACS), screened entries (using ACS) and provided the initial operational support to FDA users. The interface with ACS and the screening subset of the system (known as EEPS) was implemented nationally by June 1995, and use of the OASIS system by industry became mandatory in December 1996. The baseline of the current version of OASIS with full basic operational functionality was implemented nationally by October 1997. The system has undergone continuous improvement of operational support. A major change in September 1999, moved screening from ACS to OASIS and expanded screening to cover all data elements.
As a user-driven system, OASIS depends upon import brokers to provide complete and accurate information. While the OASIS system provides the majority of the information it was designed to provide, it only contains 2 years worth of data, and does not electronically interface with other systems which contain additional information which would be of value to our field staff.
One of FDA's major upgrades in information technology is the establishment over the last year of the Field Accomplishment and Tracking System (FACTS), which performs a number of functions, including the ability to request, manage and report on inspections and other field assignments such as sample collections and analyses, and compliance cases. FACTS incorporates data from the Compliance Status Information System (COMSTAT) system, described below, as well as OASIS, and will eventually provide the resident environment for the foreign OEI. We also are actively working on integrating the Establishment Evaluation System (EES), which provides information on inspection requests and outcomes to compliance officers, drug reviewers and field personnel, with the FACTS database.
COMSTAT provides the compliance status of foreign manufacturers based on the results of cGMP inspections. COMSTAT data is shared with other Federal agencies and foreign inspectorates to ensure that pharmaceutical products purchased or cleared for import meet acceptable standards. Ideally, this data should be readily available to FDA's import inspectors making admissibility decisions. COMSTAT does not include the drug listing identification number FDA assigns to each manufacturer in the Drug Listing database, which lists the products of drug firms registered with CDER. FDA is pursuing the linkage of information in the Drug Listing database with COMSTAT so that we can easily match foreign manufacturers who have "listed" with their compliance status. The Drug Listing database also does not interface with OASIS, which would assist import officers by automatically comparing manufacturers and listed pharmaceutical products to products offered for importation, and this is another area where we are working on establishing a linkage.
Finally, we are also actively working on connecting the current EES with the import data available in OASIS, as described more fully later with regard to a pilot project in our Philadelphia District.
Import Alerts
FDA has identified the need to establish enhanced procedures to better assure that an import alert notice for a product or company will, in fact, prevent the violative products from reaching the U.S. consumer. We have begun this process by making import alerts available to interested parties on FDA's Internet site.
International Information Exchange
The Agency needs to strengthen and improve communication with the public health and regulatory components of foreign governments. FDA foreign inspections are "pre-announced," because FDA must obtain permission to enter the foreign country. Therefore, it is difficult for FDA to assure that the firm is operating under normal conditions during the inspection.
Establishing strong relationships with the foreign governments will facilitate both access to the country and a fair and frank exchange of information regarding the regulatory status of facilities in that country. The Agency has negotiated a Mutual Recognition Agreement (MRA) with the European Union. This agreement involves an upfront investment of resources on the part of FDA that should result in expanded inspectional coverage of foreign firms by foreign inspectional body counterparts. On a parallel track, FDA has a number of Memoranda of Understanding (MOUs) with foreign countries to obtain inspectional information that will supplement what FDA is already doing.
Sampling
Evidence of product quality problems has not been identified during current surveillance sampling activity. We will continue to target high-risk drug products for sampling.
III. Counterfeit Drug Initiative
In 1995, the Agency began a closer examination of the issue of counterfeit drugs. For just over 2 years a cross-cutting group reviewed both the Agency's knowledge of the extent of counterfeiting and the adequacy of the systems in place to handle it when it occurred. While the work of this group is certainly related to the work of the FIWG as described above, the findings and observations were specific to counterfeit drugs.
Meetings with Representatives from Foreign Governments and Industry
The Agency has and continues to strengthen its international collaborative efforts with other inspectorates outside the MRA process. We have given priority to Canada, Australia, and Mexico for more development and have worked with Latin American countries on educational efforts, for example, the University of Puerto Rico project. These efforts also include a semiannual scientific exchange meeting with representatives from the United Kingdom, Germany, Canada, Australia, and the Netherlands.
The Agency has met with pharmaceutical industry representatives from innovator and generic drug companies to discuss the importance of sharing information that they may have regarding counterfeit drug products. Discussions are held regarding the most productive ways to enhance cooperation by exchanging information and providing assistance during future investigations. Companies that produce high demand products that tend to be counterfeited often do not elaborate on the actions they are taking to combat the counterfeiting problem. While such secrecy is understandable, sharing such information would create efficiencies for both the Agency and the industry in efforts to combat counterfeiting.
In addition, in 1997, the Office of Criminal Investigations (OCI) began to coordinate international efforts aimed at identifying, investigating, and prosecuting pharmaceutical crime through liaison with international efforts that had been formed by the Forensic Chemistry Center. In 1998, OCI formally established a liaison with its international counterparts within the Medicines Control Agency (MCA) in the United Kingdom, and the German National Police, Bundeskriminalamt (BKA). This collaborative effort of sharing criminal intelligence has now grown into the Permanent Forum on International Pharmaceutical Crime (PFIFC). This working group is an international enforcement forum aimed at exchanging intelligence and ideas to foster mutual cooperation in combating pharmaceutical crime. The following countries have representatives on this forum: USA, United Kingdom, the Republic of Ireland, Northern Ireland, Spain, Germany, Canada, Singapore, Brazil, Belgium, South Africa, the World Health Organization, and the World Customs Organization. The PFIPC meets once a year and facilitates ongoing dialogue among member nations throughout the year.
Postmarket Sampling of Imported Products
As we noted above, a key element of post-marketing surveillance is the Drug Product Surveillance program. While this program provides the Agency with valuable information about the quality of drugs marketed in this country through sampling and analysis of imported and domestic drug products, the volume of imports dictates that only a small fraction of the entries are examined.
That said, there is concern that the current sampling strategy is not using the Agency's resources most effectively. Increased sampling and testing of foreign produced bulk pharmaceutical chemicals and finished dosage forms have revealed very few problems. Two changes have been made to our sampling strategy as a means to address these concerns.
Increased Training for FDA Import Inspectors
FDA inspectors and investigators need accessible information to help them determine the authenticity of pharmaceutical products. The Agency recognizes the need to provide training to investigators and inspectors on conducting effective API inspections while providing specific information on issues involving counterfeit and unapproved sources of drugs as well as poor cGMP compliance. Intensive training sessions will be conducted in July 2000, with U.S. Customs Service officers collaborating with FDA to provide the training. These sessions will focus on U.S. Customs Service laws and regulations, enforcement techniques that can be used at U.S. ports of entry, and a U.S. Customs Service strategic problem solving-program that targets willful violators. While not totally focused on bulk drug imports, this additional training will be highly applicable to field activity in this area.
Drug Listing
The Drug Registration and Listing System provides information on foreign pharmaceutical manufacturers, based on the statutory requirement that they list the drug products that they ship into the U.S. However, anyone can obtain a drug labeler code and therefore submit a drug listing form. The drug listing does not ensure that authentic sources or authentic material as described in NDAs is in fact being offered for admission.
To begin to address the weaknesses in the current system, a pilot program was initiated in the Philadelphia District to provide import inspectors with access to additional databases. Using CDER's EES, which tracks drug applications, inspectors increase the probability of confirming authentic sourcing of APIs. The pilot was set-up in cooperation with CDER, who donated a stand-alone computer to provide the import inspector access to the EES and IND databases and other inspection databases. The system allows inspectors to retrieve additional important data in about three to four minutes on any API entry.
The Philadelphia District Office is a relatively small API importing area compared to New York or Los Angeles. Nonetheless, this pilot has enabled Philadelphia to verify information on API entries on-line, and has resulted in approximately 50 less telephone calls to CDER seeking this information. Based on the success of this pilot program, the Agency is planning to expand this pilot program in stages until it provides nationwide EES access to all import inspectors.
Enhancing Analytical and Forensic Methodology to Analyze APIs
It has been observed that counterfeiters are becoming more sophisticated with respect to the counterfeiting of labeling, containers, seals, and documents. Therefore, to detect counterfeit APIs it will be necessary to conduct forensic analysis of the API. The FCC continues to improve its ability to detect counterfeit APIs by enhancing its expertise, forensic methodologies, and instrumentation. Numerous APIs have been collected and chemically fingerprinted. Last year, based in part on these types of analyses, special targeted inspections were conducted in China, which resulted in one firm being placed on import alert and warning letters being issued to two others.
Develop a Strategy for Inspection of U.S. Import Agents and Brokers
The Agency is currently inspecting these facilities on a "for cause" basis in response to leads it receives about specific importers. A proposal to begin inspecting these facilities on a routine basis is in the FY 2001 workplan.In addition, FDA has already established a broker/filer evaluation program to audit the integrity of data submitted by customs brokers. These programs have encouraged import filer compliance, and FDA is hopeful that planned enhancements to these programs will provide additional intelligence and subsequently increase enforcement actions in the areas of counterfeit and unapproved drugs.
Targeted Collection and Testing of Selected Imported APIs
As described above in the discussion of FIWG actions, despite increased sampling and testing of foreign produced bulk pharmaceutical chemicals and finished dosage forms, very few problems have been detected. Changes have been made to our sampling strategy as a means to address these concerns.
Import Alerts
The sheer volume of imported products precludes the Agency from physically examining every entry into the U. S. Therefore, other tools must be used to help control the entry of products where historical data suggests products are likely to be violative. One approach the Agency has taken is to use Import Alerts as a means to disseminate information to interested parties regarding problems with imported products. Import alerts have been made available on FDA's website. These alerts can be used to identify problem commodities, problem shippers, or problem importers, in addition to providing guidance for import coverage. An alert may cover an individual manufacturer, supplier or a particular product from an entire country. As a follow-up to an inspection, import alerts may also issue where it is determined that a manufacturer is in violation of cGMPs and the firm's status is determined to require ceasing distribution in the U. S. These products can be detained without physical examination or analysis because there is a violation of the FD&C Act.
The counterfeit drug initiative working group was disbanded last year. While counterfeit drugs continue to be an issue of concern, it was determined there was no specific need for a Commissioner's Office initiative and that ORA and the Centers are the appropriate components to manage the potential for counterfeit products as part of their on-going workload.
IV. Challenges
Building and maintaining a strong the regulatory framework and tools to address the entries from foreign countries is complex, and the Agency needs to have the flexibility to change as the global market changes. A healthy regulatory and enforcement system requires significant staff and resources, staff expertise, scientific methodologies and the tools to conduct testing, information systems, and access to information via established networks with both other countries and the industry.
While FDA has done much in the past few years to address both the general challenges in having a strong and viable foreign inspection program and the specific tools needed to combat counterfeit drugs, clearly more can be done. We look forward to working with you as we continue to strive to provide the protection the American public expects and deserves.
I would be happy to answer any questions you might have.