The catch-up game

The truth is out. Drug regulators are not doing enough to keep up with inspection of foreign manufacturing facilities that supply 75%–80% of APIs and finished dosage forms to US and EU markets, according to pharmaceutical trade bodies Synthetic Organic Chemical Manufacturers Association (SOCMA) and the European Fine Chemicals Group (EFCG).

Both agencies say FDA and EU must act fast to get the situation back on track, but they will have a tough time ahead as there are many issues that must be resolved before it turns in their favour. For now, illegal traders and brokers hold the reins to the Asian API market.

The API environment has evolved with time and regulators are finding it difficult to keep up with its development. Now, they have to deal with a highly regulated and upstreamed environment that is spurred by global demand and the constant call to keep healthcare costs to a minimum. Inevitably, the current situation has forced pharmaceutical companies to purchase APIs at rock bottom prices and, very often, these APIs have escaped inspection. Globalization has also given rise to a chain of potential problems including contamination, mislabelling and the substitution of substances, which increases the risk to patients worldwide.

Perhaps putting a reliable regulatory system in place is the first step to gain control of the situation? Yes, that can work. The EFCG is defining a new regulatory approach to foster innovation in API manufacture and to maintain or improve the safety of medicines. It has also come up with a colourful palette of recommendations including separating authorization of APIs, a shift to on-site inspections instead of post-approved documents, and introducing the concept of 'Quality by Design' which will enhance process understanding and strict process control.

Meanwhile, FDA is also rolling up its sleeves to look into its databases that contain inadequate information on the number of facilities under inspection, as highlighted in a recent Government Accountability Office (GAO) audit report by the US authorities. It is also asking for US$247 million to improve and build new IT systems in the 2008 budget.

Ultimately, the key to gaining control of the situation is regular inspection and strict enforcement of rules to stamp out any trace of illegal trading and counterfeiting. Unfortunately, both regulators have yet to fulfil their side of the bargain. For instance, FDA failed to show records for two-thirds of its 3250 inspections, and has only visited 7% of the total number of foreign drug manufacturers every year. The agency also seems to go easy on foreign facilities; giving them ample notice before inspection every 5 years, compared with surprise inspection for domestic facilities that occur every 2 years.

Joseph Acker, president of SOCMA, says: "FDA should rank domestic and foreign facilities together, based on the risk that products from each facility pose to the American consumer, and classify 'foreign facilities' as a significant risk in its risk-based inspection programme."

Similarly, the EU is also lagging behind the inspection game because it bases inspections on proximity rather than risk factor. On average, it visits 30–50 Asian plants annually. Its regulatory system also appears to be obsolete as many of the regulations and procedures cannot be used for the current API market.

cGMP seems to be the best solution for the API market in the long run. "More frequent inspections and a greater enforcement of FDA regulations in companies importing into the US would provide a greater level of safety for the US consumer," says Acker. "This can only be gained by a greater adoption of GMP standards already in place for APIs shipped into the US."

Recognizing FDA as the frontrunner in developing cGMP standards, the EFCG has recommended a rewards programme that certifies compliant firms with mechanisms that ensure less intervention and faster approvals, and punishes noncompliant ones.

Undoubtedly, GMP compliance has massive support from governments and agencies alike. Recently, China's State Food and Drug Administration (SFDA) endorsed new GMP standards to redeem its damaged reputation in the pharmaceutical market. Besides awarding certification to drug makers with zero flaws, it has also revised and expanded the technical requirements for personnel qualification, production processes, quality control and validation documentation to ensure quality standards. However, GMP compliance remains an unpopular option for pharmaceutical companies as it is inflexible and sets them back with additional 25% site operating costs, but this practice will, with time, reap good returns for firms in terms of market share. Acker believes that: "Asian companies will have a better opportunity to emerge as industry leaders if they adopt GMP as quality determines a company's ability to compete."

He also adds: "Many Asian firms who are looking to improve their global competitive edge welcome the opportunity to be measured against US standards, and the opportunity for inspections not only enables them to better understand and achieve acceptable industry quality standards, but also represents additional marketing power in a highly competitive arena."