FDA and Justice Department Address Drug Quality Concerns - Pharmaceutical Technology

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FDA and Justice Department Address Drug Quality Concerns
More collaboration and expanded oversight aim to compel manufacturers to follow GMPs.


Pharmaceutical Technology
Volume 36, Issue 2, pp. 24-28


Jill Wechsler
The Department of Justice celebrated the end of 2011 by announcing billions of dollars in recoveries from False Claims Act cases, most of it from pharmaceutical companies. Of the more than $3 billion in settlements collected during the fiscal year that ended Sept. 30, 2011, nearly $2.2 billion came from pharma. At the top of the list was the $750 million paid by GlaxoSmithKline (GSK) to settle charges involving adulterated drugs and failure to meet strength, purity, or quality requirements at its Puerto Rico facility, evidently the first FCA settlement involving GMP violations reported by a whistleblower.

These civil fraud cases represent only the tip of the iceberg in pharmaceutical industry compliance battles. The Justice Department also collected $1.3 billion in criminal fines and forfeitures for violations of FDA regulations. Some of that money may come from GSK, which also is negotiating with the feds to settle several investigations into marketing and pricing practices. Amgen agreed to pay $780 million in October 2011, related to promotion of its anemia drug Aranesp (darbepoetin). Merck recently announced a $1-billion settlement to resolve allegations about Vioxx (rofecoxib) marketing. And in January 2012, Johnson & Johnson said it would pay more than $1 billion to resolve state and federal lawsuits involving off-label marketing of its antipsychotic Risperdal (risperdone).

While most of the high-profile cases involve illegal marketing and pricing allegations, the government is also stepping up enforcement actions for failure to meet quality standards. In addition to the GSK Puerto Rican case, Indian drugmaker Ranbaxy Laboratories signed a consent decree with FDA in December, and agreed to pay up to $500 million to settle a three-year investigation into falsifying records and GMP violations, which shut down imports into the US.

"We demand accountability when companies' failures in drug manufacturing lead to products that materially differ from the strength, purity, or quality of what was required," stated Department of Justice Assistant Attorney General Tony West at the Pharmaceutical Regulatory and Compliance Congress in November 2011. He noted that the Obama administration's broader campaign against healthcare fraud, which was strengthened by the Affordable Care Act (ACA), has led to more than $8 billion in settlements, penalties, and fines since 2009.

Promoting compliance

West also emphasized the government's intent to prosecute individual industry executives, under the controversial Park legal doctrine, a policy that can hold corporate officers liable for company violations of FDA and other federal laws. Another enforcement strategy is to "exclude" company executives from doing business with government health programs such as Medicare and Medicaid, which basically prevents the targeted officer from holding any responsible drug industry position. Taking action against individual executives aims "to promote a culture of compliance by emphasizing deterrence," said West. The goverment wants to dispel the notion among manufacturers, he explained, that dealing with enforcement is "simply the cost of doing business." Instead, the government will levy judgments and penalties that "eliminate any benefit that may be obtained from engaging in unlawful conduct in the first place."


CDER clarifies compliance operations
West and others similarly urge medical-products companies to establish effective safeguards against economic fraud, negligent production, and theft. He acknowledged that the government will never have enough resources to tackle every fraud and abuse case or to inspect every drug-production facility, especially the growing number of foreign operators that ship medical products to the US.

FDA officials agree. At the December enforcement conference sponsored by the Food and Drug Law Institute (FDLI), Howard Sklamberg, FDA deputy associate commissioner for regulatory affairs, pointed out that the agency can do only so much to monitor companies and enforce FDA rules, and that regulated firms must invest in quality systems to prevent violations internally and by suppliers and contractors. The role of the Office of Regulatory Affairs (ORA), Sklamberg explained, is to "help industry be responsible" through the development of standards and best practices.

This approach also calls for direct compliance oversight by corporate leaders, as illustrated by a November 2011 Warning Letter sent to Novartis CEO Joe Jimenez. The letter requested Jimenenez' personal involvement in addressing a long list of violations at facilities in North Carolina and Colorado, many uncorrected from previous citations. Jimenez promised company employees that "neither costs, nor service level will interfere" in the company's remediation plan; Novartis subsequently suspended production at another plant in Nebraska and recalled several products, a sign that the firm's manufacturing issues may be more widespread.

An increase in FDA Warning Letters and inspections, particularly to foreign facilities and to contract manufacturers, responds, in part, to continued criticism of FDA oversight of foreign manufacturers. The Government Accountability Office (GAO) complained in a September 2010 report that the agency still lagged in oversight of foreign facilities and needs better data on overseas facilities producing drugs for the US market.

ORA is addressing these issues by ramping up inspections and establishing a searchable public database of inspection reports, including conditions cited in FDA 483 reports and summary data by fiscal year. The field force is trying to be more efficient, replacing infamous inspector green notebooks with handheld computer devices to record findings during site visits. Foreign producers of APIs, such as China's Sichuan Pharmaceuticals, have received Warning Letters, and India's Synbiotics was blasted for denying access to an FDA investigator. Some manufacturers have been hit with even more stringent enforcement actions, such as bans on certain imports from Dr. Reddy's Mexican facility and from Yag-Mag Labs of India.

Inspections of API producers and generic-drug manufacturerss are slated to increase further under the proposed generic-drug user-fee program. The five-year goal is to conduct biennial GMP inspections of foreign manufacturers and, in the process, provide parity in oversight for domestic and foreign firms. If Congress approves the Generic Drug User Fee Act (GDUFA) this year, as expected, most of the estimated $300 million annual GDUFA revenues will come from manufacturing sites—14% from API manufacturers, and 56% from facilities producing finished dosage forms—and the rest from application fees. Preapproval inspections will continue as required by new applications, but may not be necessary for recently inspected sites with good compliance histories.


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