International Trade Issues Threaten Global Pharma Operations

The Trump Administration has proposed to create more jobs in the United States by pressuring manufacturers to reduce overseas production and to shift operations back home. This poses serious problems for pharmaceutical manufacturers around the world, as the US imports approximately 50% of finished drugs from Europe, Asia, and other regions. Moreover, up to 90% of APIs for US production of finished dosage forms come from overseas, largely from China and India, according to FDA. A tax on such imports, as has been proposed, would be devastating to both US and European-based companies, raising costs that would undermine efforts to lower prices for prescription drugs.

At the same time, Trump’s ban on travel and immigration from several Muslim countries ignited a firestorm among high tech firms, educators, and the biomedical research community. Even though the courts rejected the policy, US companies advised workers to minimize overseas travel, while meeting organizers looked to shift programs from the US to avoid entry problems. Although leading pharma manufacturers sidestepped the issue, more than 150 biotech executives, academics, and venture capital leaders voiced strong objections to the restrictions in a letter published in Nature Biotech(1). The signers state that the travel ban “has compromised years of investment” in the vital US biotech industry as it raises the sense that “America is no longer welcoming of any immigrants.” 

The corporate annual meeting season brought these issues to the fore. Novo Nordisk CEO Lars Fruergaard Jorgensen lowered his earnings forecast for 2017, noting a “volatile” market situation in the US and concerns about a 20% border tax on imports (2).  

Overseas inspection challenges

The rise in imports of both APIs and finished drugs has focused attention on FDA efforts to ensure the quality and safety of foreign-made medical products. FDA conducted more foreign inspections of drug establishments in 2015 than of domestic facilities, and that trend appears to be continuing, as FDA uncoverers foreign operations with unsanitary manufacturing conditions and inadequate documentation of operations to ensure adherence to GMPs.

“Globalization has complicated FDA’s oversight of drugs marketed in the US,” according to the Government Accountability Office (GAO) in its latest report on continuing shortcomings in the agency’s overseas offices and foreign inspection programs (3). FDA still has not inspected nearly 1000 of 3000 foreign establishments in its data base, GAO said, nor does it have sufficient information on the roles and value of its foreign offices in China, Europe, India, and Latin America. The analysts note persistent high staff vacancy rates in its foreign offices, and continued reliance on US-based investigators under FDA’s Office of Regional Affairs (ORA) to visit facilities listed in market applications for new drugs.

One response is for FDA to rely more on inspection reports from competent regulatory authorities in Europe, Japan, Canada, Australia, and other nations with well-established drug inspection and compliance programs. FDA officials and colleagues from the EU and other inspectorates have been examining and evaluating each other’s inspection procedures and capabilities for several years and hope to finalize agreements that would reduce the need to send investigators to facilities already inspected by local authorities.

Inspection overhaul

Just how the new administration deals with global pharmaceutical production issues is unclear. At the White House meeting with pharma executives several weeks ago, President Trump promised to speed up processes for approving drug production plants as one way to accelerate approvals of new drugs (4).

One opportunity is to implement a proposal for a major reorganization of ORA’s 5000-person field inspection force, which involves adopting a commodity-based, vertically integrated inspection program with specialized inspection cadres for drugs, biologics, medical devices, food, and other regulated products. While the agency’s current plan is to “stand up” this much-anticipated Program Alignment (PA) initiative by May 15, a new FDA commissioner and other top staffers most likely will want to reassess such a major organizational change.

This reorganization initiative was announced in 2014, and FDA centers issued PA Action Plans in 2015 to implement the extensive changes involved. The plan is for ORA to maintain 20 district offices across the US, with some concentrating on certain product areas, such as food or drugs, and additional specialists covering other areas. It also will incorporate a more automated and streamlined program for examining and vetting imports of regulated products, which have mushroomed in recent years. The initiative emphasizes the need for specialized, highly trained investigators able to identify and respond effectively to “questionable conditions.”

ORA has named senior-level program directors at FDA headquarters in Maryland to oversee operations for six main product areas: food, biologics, drugs, medical devices, bioresearch monitoring (BIMO), and tobacco, plus operations involving imports and ORA laboratories. Ginette Michaud is program director for biologics, which includes blood products, tissues, vaccines, and other products overseen by the Center for Biologics Evaluation and Research (CBER). Alonza Cruse is pharmaceutical quality program director and leads PA collaboration efforts for drugs regulated by the Center for Drug Evaluation and Research (CDER) and the Center for Veterinary Medicine. Additional program directors head similar efforts to coordinate inspections for medical devices, tobacco products, and animal and human food, along with bioresearch monitoring for all medical products. Each district office will have a director, plus program managers to head inspection cadres at that location. ORA plans to roll out more details and organizational information over the coming weeks, explained Michaud at the WCBP Symposium sponsored by CASSS in Washington, DC in January.

A key goal of the PAG reorganization is to enhance communications and collaboration between field inspectors and center product specialists. CDER’s Office of Process and Facilities (OPF) in the Office of Product Quality (OPQ) works closely with ORA pharmaceutical inspectors to provide an integrated quality assessment from a preapproval inspection. OPF has three groups of specialists to assess information in new drug applications on facilities, processes, and microbiology. Data in an application can facilitate an inspection, while inspection information can support application review, commented David Doleski, OPF deputy director, at the WCBP symposium. OPF also is developing a New Inspection Protocol to standardize and define elements that enable scoring and comparison of drug facility inspections. This initiative will expand to cover more inspections and manufacturers.

OPQ’s Office of Surveillance similarly collaborates with ORA on GMP inspections at plants. Staffers review inspection reports and other data, including a facility’s inspection history and type of products produced, to help determine the need and timing and extent of a surveillance inspection.

References

1. B. Hugget, “US immigration order strikes against biotech,” Nature Biotechnology blog, Feb. 7, 2017.
2. T. Staton, “Novo CEO Cites ‘Volatile’ Environment, US Politics in Cut to 2017 Growth Prospects,” Fierce Pharma, Feb. 2, 2017. 
3. GAO, Report to the Committee on Energy and Commerce, Drug Safety, FDA Has Improved Its Foreign Drug Inspection Program, but Needs to Assess the Effectiveness and Staffing of Its Foreign Offices, December 2016.
4. R. Hernandez, “President Trump Meets with Pharma Manufacturers,” PharmTech.com, Jan. 31, 2017.