Europe and the United States to Negotiate a Free-Trade Agreement

Discussions are underway as the pharmaceutical sector calls for greater consistency in the global monitoring of GMP compliance and quality testing of APIs and finished medicines.
Mar 02, 2013
Volume 37, Issue 3

Sean Milmo
Producers of APIs in both Europe and the United States are hoping that a European Union (EU)-US free-trade agreement would provide a platform for the creation of a system for the global monitoring of standards of GMP. The agreement aims to dismantle barriers of transatlantic trade, particularly nontariff measures (e.g., the provision of safety certificates or evidence of quality compliance) that have generated conflicting regulatory regimes. Negotiations are expected to start this year.

A study by the Dutch consultancy, Ecorys Nederland BV based in Rotterdam, funded by the European Commission (EC), estimated that an agreement could potentially reduce trading and investment costs in pharmaceuticals by 15.3% for US companies and by 9.5% for EU companies. The pharmaceutical sector in the EU and US hopes that, with this free-trade agreement, there would be greater consistency in areas such as regulations on GMP compliance as well as quality testing of APIs and finished medicines using pharmacopoeia standards. Once in operation, the agreement is expected to provide the pharmaceutical sector on both sides of the Atlantic with the basis for a robust system for GMP inspections of API plants throughout the world. These inspections could be done initially by joint teams of inspectors from the EU and the US, together with those from other developed countries such as Japan and Australia.

There are, however, signs that preliminary talks between EU and US officials are running into problems. The publication of a report by a high-level working group, given the task of recommending proposals to be discussed in the negotiations on the deal, has been delayed at least three times. Within the pharmaceutical sector itself, the EU has erected new nontariff barriers and taken measures considered to be inconsistent with international GMP standards, all of which are seen as possible obstacles to a successful outcome of the discussions.

Recently, the EU has been taking steps to strengthen checks on GMP compliance of imported pharmaceuticals while extending the scope of its GMP rules. This effort is reflected in the details of the Falsified Medicines Directive (FMD), an EU legislation aimed at combating counterfeit medicines that includes provisions for closer scrutiny of API quality. For example, a controversial section of the FMD's regulations stipulates that imports of active substances into the EU must be accompanied by written confirmation from the exporter's national regulatory authority that the plant manufacturing the API complies with GMP standards equivalent to those in the EU. This requirement is due to come into effect on July 1 this year; however, some countries will be exempted from it on the grounds that they have systems in place for regulating and monitoring GMP standards that are equivalent to those in the EU.

The US, through FDA, is one of several countries that has applied to be assessed for exemption from the need for providing written confirmations. "We do count on the EU to put every effort into completing its US assessment in a timely fashion to allow sustained US-made API importations and sustained EU-based medicines production using these imports," says Julie Marechal-Jamil, senior manager, quality and regulatory affairs at the European Generic Medicines Association (EGA), Brussels.

The FMD also confirms the EC's intention to extend GMP to the starting materials used in the manufacturing of APIs. For example, active substance manufacturers would be required to check out claims by suppliers about the sources of their starting materials. Some European pharmaceutical companies have protested that these new rules on starting materials exceed the EC's own GMP guidelines.

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