Updates: FDASIA and Drug Supply Chain Compliance Matters

July 8, 2013Mujadala Abdul-Majid

If you tuned into the recent 3E webinar, FDASIA and the Pharma Supply Chain, you will recall that I gave an overview of the Act’s eleven Titles with an emphasis on provisions affecting drug shortages and supply chain management. In that presentation, I also alluded to an increase in the FDA’s attention to quality oversight for drug manufacturing. Here, I reiterate that point and provide some additional updates and context surrounding the Agency’s increasing attention to quality oversight in light of a progressively global manufacturing environment.

Supplier Controls Become a Part of cGMP through FDASIA

To recap the point made in the webinar, the Food and Drug Administration Safety Innovation Act (FDASIA) introduces for the first time a legal requirement for manufacturers to be accountable for their suppliers as a part of current Good Manufacturing Practice (cGMP).  As background, the FDA is tasked with ensuring the quality of drug products by carefully monitoring drug manufacturers’ compliance with its cGMP regulations.  The cGMP regulations for drugs contain minimum requirements for the methods, facilities, and controls used in manufacturing, processing, and packing of a drug product. Under Section 711 of FDASIA, cGMPs now include “managing the risk and establishing the safety of raw materials, materials used in the manufacturing of drugs, and finished drug products.” Thus, suppliers become part of the Quality Management System.

Senator Tom Harkin (D-IA), a sponsor of FDASIA, stated the following regarding the legislative intent behind the bill: “The FDA will have the authority and the wherewithal to go back up the [supply] chain to where these drugs come from. [Senator Bennett] was the first one to point out to me at the committee hearing that I think about 80 percent of all of the ingredients that go into our drugs in this country come from outside this country, but we had no real idea on where and how, and now we can insist on good manufacturing practices.”

Source: Senator Harkin (IA), “Food and Drug Administration Safety and Innovation Act.” 158 Congressional Record S.3503 (May 23, 2012).

FDA Draft Guidance Issued Regarding Quality Agreements for Contract Manufacturing

Pursuant to FDASIA’s implementation, the FDA issued a draft guidance, prepared by the Office of Manufacturing and Product Quality in the Center for Drug Evaluation and Research, to describe the agency’s best practice recommendations for defining, establishing, and documenting the relationship between drug owners and their contract manufacturers of Active Pharmaceutical Ingredients, finished drug products, biological products, and combination products. The guidance describes elements to include in a Quality Agreement to delineate responsibilities and ensure drug quality, safety, and efficacy.

In the draft guidance issued on May 24, 2013, the agency delineates the elements of a Quality Agreement between the “Owner” of a drug (the party that introduces the drug into interstate commerce) and “Contracted Facilities” (outside entities performing manufacturing operations). Manufacturing operations include but are not limited to: (1) formulation; (2) fill and finish; (3) chemical synthesis; (4) cell culture and fermentation, including biological products; (5) analytical testing and other laboratory services; and (6) packaging and labeling.

According to the guidance, most Quality Agreements should contain the following basic sections:

  • Purpose/scope
  • Terms (including effective date and termination clause)
  • Dispute resolution
  • Responsibilities, including communication mechanisms and contacts
  • Change controls and revisions

The guidance addresses the last two sections, responsibilities and change controls, which are critical from a Current Good Manufacturing Practice (CGMP) perspective. The section on responsibilities should address whether the Owner or Contracted Facility (or both) will handle specific activities related to: Quality Unit responsibilities; facilities and equipment; materials management; product-specific terms; laboratory controls; and documentation. The section on change controls encompasses changes made by subcontractors of a Contracted Facility and addresses the notification and documentation processes.

This guidance may signal the Agency’s increased involvement with the oversight of the integrity of the drug supply by clarifying CGMP expectations in a manner that serves to strengthen quality issues that arise with subcontracting that could lead to manufacturing disruptions. With respect to contract manufacturing, both Owners and Contracted Facilities must work together to establish and maintain quality oversight of contracted manufacturing operations and the materials produced under contracted manufacturing arrangements. When a final version of the guidance is available, Owners will need review the agreements they have with Contracted Facilities to ensure they are aligned with draft guidance. With knowledge that the FDA does not always issue finalized versions of its guidance documents, more vigilant Owners may begin reviewing such agreements now.

Source: Draft Guidance – Contract Manufacturing Arrangements for Drugs: Quality Agreements

Establishment of Office of Pharmaceutical Quality

The FDA is spearheading a number of new initiatives to combat these problems concerning drug shortages and drug quality, including establishing an Office of Pharmaceutical Quality.  In February 2013, at a meeting with the Generic Pharmaceutical Association in Florida, Margaret Hamburg said that improving drug quality will be one of the agency’s highest priorities this year along with a renewed emphasis on GMPs. This reorganization will move the Office of Generic Drugs’ chemistry divisions into the new Office of Pharmaceutical Quality which would oversee drug quality throughout the product lifecycle. The new office would assume some functions currently under the Office of Pharmaceutical Science (OPS) and the Office of Manufacturing and Product Quality (OPMQ).

In a letter issued on CDER staff on Friday September 7, 2012 regarding the reorganization, CDER director, Janet Woodcock states: “Quality is the underpinning of everything we do, and it is imperative that we have a drug quality program as robust as those programs we presently have for drug efficacy and drug safety . . . We must be strategic and have systems in place to identify and respond to quality issues before they become problems. This is especially critical due to the global nature of drug manufacturing and the sourcing of raw materials outside of the US.”

Additional Risks Associated with Quality Manufacturing: False Claims Act Liability

If a drug company does not establish adequate controls over raw materials and components, its products may be deemed “adulterated.”  As background, the federal Food, Drug and Cosmetic Act (FDCA) prohibits the introduction of any adulterated drug into interstate commerce.   Under the FDCA, a drug is adulterated if the methods used in, or the facilities or controls used for, its manufacturing, processing, packing, or holding do not conform to, or are not operated or administered in conformity with, cGMP regulations.   This assures that a drug meets the requirements as to safety and has the identity and strength, and meets the quality and purity characteristics, which the drug purports or is represented to possess.

In May 2013, the U.S. subsidiary of a large, Indian generic pharmaceutical company pleaded guilty to three felony FDCA counts, and four felony counts of knowingly making material false statements to the FDA based on the manufacturing of generic drugs at its facilities India.  Under the plea agreement, the company will pay a criminal fine of $130 million, and forfeit an additional $20 million. As a part f the settlement agreement, the drug manufacturer acknowledged significant cGMP deviations in the manufacture of certain active pharmaceutical ingredients (APIs) and finished products.  The company also acknowledged that they were informed of cGMP violations by consultants it hired to conduct audits at their facilities. Those cGMP violations resulted in the introduction into interstate commerce of some adulterated drugs.

“The FDA expects that companies will comply with the cGMP requirements mandated by law so that consumers can be assured that their medical products are safe and pure,” said John Roth, director of the FDA’s Office of Criminal Investigations in a Department of Justice press release.

Source: DOJ Press Release, May 13, 2013

3E Recommendations

In conclusion, the FDA has its eye on the oversight of quality standards in an increasingly global drug supply chain. What may have been deemed a gold standard for supplier controls will become the threshold standard for compliance.  It is highly likely that during an inspection, FDA investigators will give closer scrutiny to supply chain management.  It would be prudent to expend some time at this juncture to:

  • Establish strong company management systems
  • Identify and assess risks in your supply chain
  • Design and implement a strategy to respond to identified risks
  • Carry out an independent third-party audit of your due quality oversight measures

Companies that fail to appear vigilant in ensuring that their products are compliant with cGMP regulations may not only risk product quality and market exclusion, but may also be inviting whistleblower actions that invoke costly government investigations.

FDA Public Meeting Regarding Implementation of FDASIA’s Drug Supply Chain Provisions

In addition, the FDA is holding a meeting to seek public input regarding the implementation of Title VII’s drug supply chain provisions under FDASIA. This meeting will focus on the development of new Good Importing Practice (GIP) guidelines.  In case you are interested in participating or attending, that meeting will be held on July 12, 2013, from 9:00 a.m. to 5:00 p.m. at FDA’s White Oak Campus (10903 New Hampshire Ave., Building 31, the Great Room (Rm. 1503), Silver Spring, MD).  Advance registration is required.