Evaluating China's Supply Chain - Pharmaceutical Technology

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Evaluating China's Supply Chain
Increased pharmaceutical trade creates new challenges for regulatory oversight.


Pharmaceutical Technology
pp. s30-s36


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Emerging markets are playing an increasingly important role in the strategy of pharmaceutical companies from both a revenue and supply perspective. Attendant to that increased globalization comes additional regulatory oversight and cooperation. The author highlights recent efforts by FDA to develop greater collaborative and innovative approaches in overseeing the pharmaceutical supply chain.

The increased globalization of the pharmaceutical industry is not only reflected in the rising importance of emerging markets to pharmaceutical companies’ bottom lines, but also in the supply chain for pharmaceutical ingredients. As overall trade, including pharmaceuticals, increases between the United States and other countries, regulatory agencies are tasked with overseeing an increasingly more expansive and complex supply chain.

Challenges of globalization
“Sweeping economic and technological changes have revolutionized international trade over the last several decades, creating a truly global marketplace for goods and services,” said Steven Solomon, associate director for global operations and policy in FDA’s Office of Global Regulatory Operations and Policy, in testimony before the Congressional–Executive Commission on China in May 2013. Solomon offered input on FDA’s work in ensuring global product safety and quality and the agency’s work in China (1). To illustrate the extent of globalization, Solomon offered certain key statistics. The number of FDA-regulated shipments (includes food, drugs, and other FDA-regulated products) has more than tripled from 8 million import entry lines per year a decade ago to 28 million entry lines in fiscal year (FY) 2012. In FY 2013, entry lines are anticipated to reach 34 million. The agency tracks import shipments using entry lines, which refer to each portion of a shipment that is listed as a separate item on an entry document. “As trade increases and US consumers continue to demand global products, FDA’s ability to ensure the safety and quality of these imported products will depend on its execution of a myriad of global engagement strategies,” he said. For pharmaceuticals, approximately 40% of finished drugs in the US comes from overseas, and approximately 80% of manufacturers of APIs are located outside the US (1).

The increased trade in FDA-regulated products, including pharmaceuticals, has obliged the agency to develop more collaborative and resourceful approaches with foreign counterparts. “FDA’s success in protecting the American public depends increasingly on its ability to reach beyond US borders and engage with its government regulatory counterparts in other nations, as well as with industry and regional and international organizations, to encourage the implementation of science-based standards to ensure the quality and safety of products before they reach our country,” said Solomon in his testimony. “FDA is working with its many partners to enhance responsibility and oversight for safety and quality throughout the supply chain” (1).

To address these challenges, FDA is using a variety of engagement strategies. Solomon noted that these efforts are in line with the 2012 US National Strategy for Global Supply Chain Security, which emphasizes a layered, risk-based approach for achieving global supply-chain systems that are secure, efficient, and resilient (1, 2). In 2011, FDA also released its report, Pathway to Global Product Safety and Quality, which outlines the agency’s strategy to transform itself from a predominantly domestically focused agency to one that is engaged in the complex, globalized regulatory environment (1, 3). Solomon further outlined some of those activities as they apply to international offices, risk-based monitoring of imported products, technical cooperation and capacity building, and new laws to increase FDA’s authority.

International offices and foreign posts. FDA’s international offices and posts are designed to build partnerships with foreign counterparts by providing enhanced opportunities for cooperation and capacity building. They also are designed to expand the agency’s knowledge base and provide a platform for inspection of foreign facilities. The agency has a permanent FDA presence in 12 foreign posts in nine countries with employees located in China, India, Latin America, Europe, the Middle East, and South Africa, noted Solomon (1).

Risk-based monitoring of imported products. Solomon also pointed to FDA’s strategy of using risk-based monitoring for imported products. “While FDA does not have sufficient resources to physically inspect all imported shipments, even if we had such resources, physically inspecting all imports would be neither practical nor strategic,” said Solomon. “However, the agency electronically screens all imports using an automated risk-based system to determine if shipments meet identified criteria for physical examination or other review,” he said (1). To enhance the agency’s ability to target high-risk products, FDA developed the Predictive Risk-based Evaluation for Dynamic Import Compliance Targeting (PREDICT). PREDICT is a screening system that uses intelligence from many sources, such as intrinsic product risks, past inspection results, intelligence data, and other information that would affect shipments, to provide the entry reviewer with risk scores on every import line. PREDICT uses information sources that include FDA and US Customs and Border Protection (CBP) data as well as data collected from foreign offices, foreign regulatory counterparts, other federal agencies, and US state counterparts. It also uses risk analyses received from agreements with academic institutions and international organizations (1).


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