FDA Faces Internal Changes and Challenges

February 2, 2011
Jill Wechsler
Pharmaceutical Technology
Volume 35, Issue 2

Food-safety, transparency, and counterfeit-drug growth will tax agency resources.

One of the last acts of the 111th US Congress was to approve sweeping food-safety legislation. The new law provides FDA with more authority to recall and monitor food products, boosts its inspection force, and increases its ability to halt unsafe imports. But the law may be the last piece of legislation to expand the agency's authority and resources for some time. With Republicans now holding a majority in the House of Representatives and gaining clout in the Senate, Congress is talking about severe federal budget cuts and curbs on government regulators. New Republican committee chairs in the House are preparing to grill Obama administration officials about the high cost of healthcare reform and antibusiness regulatory policies. A clear target is the slow-down in new drug approvals at FDA and the agency's difficulties in keeping violative products off the market.

Jill Wechsler

In fact, there's strong speculation that Republicans won't provide the $1.4 billion over five years (part of the approved food-safety bill) needed to hire some 2000 additional FDA inspectors to expand the agency's oversight of food growers and processors. Even without a budget increase, the new legislation authorizes FDA to mandate recalls, require food companies to assess risks, and establish new rules for food importers. But it's unlikely that a similar drug-safety measure sponsored by House Democrats will gain traction on Capitol Hill in the coming year. Former House Energy & Commerce Committee Chairman John Dingell (D-MI) has long backed legislation that gives FDA additional enforcement tools over drugs, including mandatory recall authority, more stiff civil and criminal penalties, and authority to subpoena manufacturer records. As with the food safety-bill, Dingell's measure would increase foreign and domestic inspections, strengthen import controls, and enhance plant registration requirements. The best chance of action won't arise until 2012 when Congress has to enact legislation to renew the prescription-drug user-fee program.

Probing FDA

Meanwhile, FDA and other federal regulatory agencies face a hostile Congress. The new chairman of the House Committee on Oversight and Government Reform, Darrell Issa (R-CA), considers FDA a "broken bureaucracy" according to his website, and has included the agency on his investigation hit-list. Issa was highly critical of agency officials and pharma executives at hearings before his committee last year on delays in drug recalls by Johnson & Johnson's (J&J) McNeil Consumer Products unit. Now as panel chairman, Issa plans to hold FDA officials accountable for such regulatory lapses. In December 2010, Issa sent FDA Commissioner Margaret Hamburg a letter questioning the agency's oversight of a J&J contract manufacturer—and of contract drug-manufacturing practices in general. Issa also will have an eye on how FDA implements the new food-safety law and its growing involvement in tobacco regulation. The agency's Office of Criminal Investigations (OCI) may draw scrutiny following strong criticism last year by Congress' Government Accountability Office (GAO).

Similarly, House Energy and Commerce (E&C) Committee Chairman Fred Upton (R-MI) plans to probe the costs and impact of the administration's healthcare reform legislation, along with what he calls on his website "job-killing regulations" that block technological innovation and wasteful programs that warrant budget cuts. FDA programs and policies will be fodder for the E&C health subcommittee, which is headed by Reps. Joe Pitts (R-PA) and Mike Burgess (R-TX). In addition, the E&C subcommittee on oversight and investigations, now under Chairman Cliff Stearns (R-FL), may continue to analyze drug regulatory problems, such as FDA's handling of heparin contamination and its failure to adequately monitor foreign drug production.

In Washington this month

Deputy departs

At last year's House Oversight Committee hearings on J&J's manufacturing problems and recalls, FDA was represented by Principal Deputy Commissioner Joshua Sharfstein. He won plaudits for having command of the issues and for answering questions directly, a performance that benefited from earlier experience on Capitol Hill as an aide to Rep. Henry Waxman (D-CA). Now someone else at FDA will have to fill the hot seat at Congressional hearings following Sharfstein's surprise departure from the agency last month.

Sharfstein was lured away by an offer to head Maryland's health department, a move that capitalizes on his public health roots as Baltimore's health commissioner before coming to FDA. In moving to the state agency, Sharfstein will manage a $7-billion budget—which is much bigger than FDA's. He also will be involved with implementing the many healthcare-reform programs and policies that require state involvement, including an expansion in Medicaid and formation of new health insurance exchanges.

At FDA, Sharfstein helped to engineer a get-tough compliance policy designed to eliminate perceptions that FDA had become too cozy with industry. This stronger enforcement stance has produced more Warning Letters that cite manufacturing and marketing violations and more criminal investigations, trends that are likely to continue. He also was involved in strengthening FDA's medical-device regulatory process, a high-profile exercise that is still ongoing, and he was a strong advocate for ensuring drug safety and establishing tight curbs on the use of more risky medicines, such as GlaxoSmithKline's diabetes drug Avandia (rosiglitazone).

Hamburg is using Sharfstein's departure as an opportunity to re-examine the agency's top management structure. Previous commissioners have tried various senior-staff arrangements, with deputy commissioners, chiefs of staff, and special assistants, and Hamburg may move away from the current one-deputy plan.

Counselor to the Commissioner John Taylor is filling Sharfstein's shoes while the commissioner weighs her options, and he is expected to assume a more visible role at the agency in the future. Taylor has had a long career at FDA in legal, enforcement, and regulatory affairs positions under several FDA commissioners during both Democratic and Republican administrations. He rose to be associate commissioner for regulatory affairs from 2002 to 2005 and then served brief stints at Abbott Laboratories and with the Biotechnology Industry Organization. Taylor returned to FDA in 2009 to be Hamburg's top legal advisor, and the commissioner might well prefer to have such a seasoned enforcement official represent FDA before Congressional committees probing enforcement and safety issues.

More transparency

One of Sharfstein's last activities at FDA was to unveil the third phase of the agency's transparency initiative, a program he headed as chair of the agency's Transparency Task Force. Launched in June 2009, the initiative first created an FDA Basics webpage that presents general information on agency operations and public health policies. Next came an FDA-TRACK program to provide the public with measures of the performance and accomplishments of agency offices and regulatory activities.

This latest segment of the project aims to provide regulated companies with useful information on FDA policies and procedures. Some of this will be on the agency's newly launched FDA Industy Basics webpage. In addition, FDA intends to post more information on key staffers and meeting presentations, provide a system to answer industry questions quickly, and clarify agency review processes as well as its system for developing new guidances and regulations. FDA also seeks comments on several draft proposals that are more complex and difficult, such as whether to set specific timelines for guidance development and how to handle sponsor requests to appeal agency decisions.

More significant for industry is FDA's rejection of two other transparency initiative proposals. The agency decided it will not issue binding advisory opinions on the legality of certain marketing and information practices by companies, as sought by industry, similar to practices of the HHS inspector general and the Federal Trade Commission. FDA says that, instead, it will continue to provide advice on whether promotional pieces for drugs meet regulatory standards prior to dissemination, but retain the right to change its opinion later on. Issuing binding advisory opinions "may place inappropriate restrictions on FDA's ability to respond to emerging issues to best protect and promote the public health," the agency stated in its January 2011 report, "Improving Transparency to Regulated Industry."

FDA also will not commit to notifying companies before publicly disclosing information about the safety of a regulated product. The agency will try to discuss emerging quality problems with the manufacturer, and the Center for Drug Evaluation and Research (CDER) will aim to notify sponsors at least 24 hours in advance of plans to post drug-safety information. However, FDA may post information about a safety issue before consulting with the manufacturer if it feels it is necessary to do so to protect public health.

Sharfstein is leaving FDA without resolving the most contentious disclosure proposals issued in its phase-two transparency report, which was issued in May 2010 (see Pharmaceutical Technology's July 2010 Washington Report column). Specifically, the transparency task force continues to evaluate dozens of comments on whether FDA should make public a broad range of confidential regulatory information, such as when a manufacturer files an investigational application and whether such an application is put on hold, withdrawn, or terminated. A key issue is whether to disclose when a company submits a market application for a new drug, biologic, generic drug or medical device, or when that application is withdrawn or abandoned by the sponsor at a later date. Also in question is whether the agency should make public refuse-to-file or complete response letters. FDA is considering expanded disclosure of information from adverse-event reports, evaluations of imports, plant inspection reports, and product recalls as well.

These issues raise "very interesting legal issues" as well as additional resource requirements, Sharfstein explained at his last FDA media briefing. Agency teams are assessing multiple comments on these proposals, and the review is "on track," but resolution is not expected anytime soon.

Fighting fakes

In his position as a key advisor to Commissioner Hamburg, John Taylor heads FDA's emergency, counterterrorism, and crisis-management activities, which involves him in efforts to combat drug counterfeiting and adulteration. In December 2010, Taylor represented the agency at a White House forum on intellectual-property (IP) theft organized by the Office of Intellectual Property Enforcement in the Office of Management and Budget. Attorney General Eric Holder headed a list of top administration officials voicing concern that IP theft has serious economic consequences for firms seeking to market legitimate goods, while also threatening the health and safety of consumers. Holder highlighted Justice Department efforts to step up enforcement of pharmaceutical IP cases, such as the successful prosecution of sellers of fake cancer medications and a conviction in Houston, Texas, for selling counterfeit drugs manufactured in China that contained a substance used to manufacture sheet rock.

Fake medicines appear to be a growing problem. At the White House forum, Tom Kubic, president of the Pharmaceutical Security Institute (PSI), reported on data documenting a 700% increase in counterfeit-drug incidence worldwide from 2002 to 2009. Halting the sale of counterfeit drugs is particularly difficult because it's relatively easy to make these products, explained John Clark, vice-president of global security at Pfizer during the forum. All it takes is a large garage, an air compressor, and some kind of blender, Clark noted. It's more difficult to obtain a good tablet press, he added, but fraudulent operators manage to do that as well.

One strategy for combating distribution of knock-off medicines is to crack down on unregulated online pharmacy websites. The Alliance for Safe Online Pharmacies is tackling this problem, as is a new nonprofit organization targeting illegal Internet pharmacies. The coalition is supported by leading Internet commerce companies, such as Google, Microsoft, Yahoo!, MasterCard, Visa, and American Express, and will establish and maintain a registry of legitimate online pharmacies as one way to distinguish them from unethical operators.

One aim of the White House meeting was to build support in the business community for an Anti-Counterfeiting Trade Agreement (ACTA) that is being negotiated with the European Union, Japan, Canada, Switzerland, and other industrialized nations. Even though counterfeit drugs are a growing problem at home, the US situation pales in comparison to the spread of fake medicines in developing nations. As much as 25% of the global drug market may be counterfeit, according to the World Health Organization, and sales of phony medicines add up to some $75 billion per year. Despite objections that the pact might stymie access to lower-cost generic drugs and biosimilars, a final agreement is expected this year.

A primary challenge in blocking counterfeit drugs is to convince the public that knock-off products that appear similar to genuine drugs may be unsafe or ineffective. "Many consumers don't take this as a serious threat to public health," observed Carmen Catizone, president of the National Association of Boards of Pharmacies. No one will take action until "they see dead bodies," he said.

This situation, however, may change as evidence emerges of more fatalities linked to counterfeit drugs. Widely prevalent counterfeit malaria treatments have been implicated in the deaths of thousands of people abroad. Taylor cited a rise in seizures among epilepsy patients, which turned out were related to a counterfeit active ingredient in a widely used treatment. "We see our job as preventing death and harm," Taylor explained during the White House forum. Yet, he noted that alerting the public to the dangers of counterfeit medicines raises the prospect that some patients may get nervous and stop legitimate treatment.

To ensure the safety of imports and drug-supply lines, FDA is developing a risk-ranking system for imported active pharmaceutical ingredients to target more risky products for additional sampling and testing at borders. The agency also is establishing standards for track-and-trace systems that can distinguish genuine from counterfeit products. An internal Counterfeit Working Group is coordinating anticounterfeiting efforts across the agency, while CDER has established a Drug Integrity and Security Program in its Office of Compliance to focus on counterfeiting, diversion, cargo theft, and other supply-chain threats.

FDA may enhance its oversight of global drug manufacturing further through its new membership in the Pharmaceutical Inspection Co-operation Scheme (PIC/S) (see page 83 for full story). The decision to admit FDA to the coalition, which became effective last month, comes just in time for Commissioner Hamburg to deliver a keynote address to a symposium in Geneva next May celebrating PIC/S's 40th anniversary.

Jill Wechsler is Pharmaceutical Technology's Washington editor, 7715 Rocton Ave., Chevy Chase, MD 20815, tel. 301.656.4634, jwechsler@advanstar.com.