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7.01.2010

Manufacturers, FDA Seek to Secure Supply Chains


Jill Wechsler
Manufacturers, FDA Seek to Secure Supply Chains
International outsourcing and rising theft spur regulatory action and manufacturer oversight.
Increased globalization in the production and sourcing of drugs and biologics, along with more intense public scrutiny of drug quality and safety, is raising alarm at the US Food and Drug Administration and within the industry. Counterfeiting rings are producing and selling drug knock-offs that can make people sick. Criminals are stealing genuine medicines from trucks and warehouses, raising the risk that consumers may receive out-of-date or corrupted products.

One report describes a $14 billion black market for counterfeit medicines in Europe and estimates that 50–90% of drugs bought online are fake. The problem is much more serious in developing nations—the United Nations calculates that more than $500 billion in counterfeit drugs are traded each year throughout the world. The deteriorating situation threatens to erode manufacturer revenues, as well as public confidence in the FDA's ability to protect patients.

TARGETED OVERSIGHT


In response, the FDA is overhauling its oversight of imports and strengthening drug identification requirements. The US now receives some 20 million shipments of food, drugs, and other regulated products, up from about 6 million a decade ago, and about 80% of active pharmaceutical ingredients come from overseas. "Globalization has fundamentally altered our market landscape," stated FDA Commissioner Margaret Hamburg at the Center for Strategic and International Studies in February. Addressing global supply chain safety, she asserted, "is one of my highest priorities for the FDA."

However, Hamburg and others acknowledge that the FDA only has the capacity to inspect a tiny fraction of imports and few foreign drug manufacturing establishments each year. The agency has established offices in China, India, and other regions to increase its international presence, but they are not staffed for much on-the-ground oversight.

Thus, the FDA has launched the Predictive Risk-based Evaluation for Dynamic Import Compliance Targeting (PREDICT) information system to target its oversight of imports to more risky food and drug products. PREDICT ranks import shipments based on the nature of the product and past compliance experience of a producer or shipper, among other factors. Those products with high-risk scores will be targeted for inspection, while more innocuous items will move though customs more rapidly. The FDA is implementing PREDICT first for foods and examining what changes may be needed for it to work for drugs and biologics.

The agency also has proposed a secure supply chain pilot to provide "green lane" processing for drug imports from companies with validated security practices. Although announced more than a year ago, the FDA still is working out the details with the US Customs and Border Protection (CBP) agency for using CBP's Customs-Trade Partnership Against Terrorism (C-TPAT) program, which offers priority processing for products from companies with secure supply chains.

More authority from Congress to detain and destroy illegal imports would further strengthen the FDA's programs. The House approved food import safety legislation last November, but the bill has been stuck in the Senate for several months. Action on the food bill would set the stage for approval of a drug import measure that also may support more plant inspections and establish a uniform electronic pedigree system.

INDUSTRY VIGILANCE

Because of its limited resources, the FDA has been urging manufacturers to assume greater responsibility for ensuring the quality and safety of their products at all points in the supply chain. At a PDA/FDA Pharmaceutical Supply Chain Workshop in Bethesda, MD, in April, Janet Woodcock, director of the Center for Drug Evaluation and Research, called on industry to "up the ante on vigilance" and to devise real solutions to supply chain problems. Modern track-and-trace technology should be linked to programs for qualifying suppliers and for monitoring global conditions, she said. Woodcock also urged robust security measures to deal with criminal activity, plus networks for communicating within the industry and with the FDA on these issues.

Although increased outsourcing by manufacturers may appear to reduce production costs, Woodcock advised that such approaches might generate hidden expenditures. Suppliers with weak track records may require more extensive due diligence and monitoring. And doing business in countries with weak regulatory systems may open the door to counterfeiting. It's the manufacturer's responsibility to ensure the reliability of suppliers, she emphasized, especially in times of ingredient shortages or political upheavals that can disrupt production. Otherwise, the FDA may look to stiffen supplier audit requirements and to expand good manufacturing practices for starting materials.

In an April letter to trade associations for manufacturers, wholesalers and pharmacists, the FDA advised companies to establish action plans to quickly assess and communicate about situations that raise public health risks, such as when diabetes patients became ill following treatment with stolen insulin that had lost effectiveness because of faulty storage. The agency has established a cargo theft web site (on http://www.fda.gov/) that cites some 20 incidents in the last year involving insulin, drugs, and other products. These actions are part of the FDA's campaign to heighten public awareness about the dangers of drug theft and diversion, and to spur manufacturers to improve warehouse and supply chain security.




One industry initiative is the Rx-360 consortium, which provides a forum for companies to share information on supply problems and to develop standards and best practices for supplier audits. This group of some 40 manufacturers and suppliers recently launched a shared-audit pilot program, explained Amgen Senior Vice President Martin van Trieste at the PDA workshop. Such collaboration has been limited, though, by fears that exchanging audit information could violate US antitrust laws. The group is looking for advice from the Justice Department on parameters for sharing audit reports legally.

Another FDA priority is to develop standards and validated technologies to better secure the drug supply chain, as required by the FDA Amendments Act of 2007 (FDAAA). The FDA issued guidance in March that establishes a standardized numerical identifier (SNI) for prescription drug packages. The standard uses a serialized national drug code combined with a unique serial number to identify individual drug packages, but does not require expiration date or lot or batch numbers, a choice made to reduce the SNI's complexity. Certain biologics that do not use NDC numbers, such as blood and blood components and minimally manipulated human cells, tissues, and cellular products, can have an SNI based on other recognized standards such as ISBT 128.

The drug package SNI is a first step in developing a uniform system for tracking and tracing pharmaceuticals through the product life cycle. Almost daily, technology vendors are announcing new tracking and authentication methods that can verify product movement and quality through the supply chain. Companies also are developing tools and best practices for dealing with suppliers, such as scorecards with standardized data and nomenclature, as well as templates for supplier quality agreements.


A parallel initiative is for manufacturers to clarify policies and terms for disqualifying suppliers who fail to maintain secure supply chains. Unfortunately, changing the source of active ingredient or components for licensed drugs and biologics requires prior approval by FDA, which can take months. Manufacturers often opt to continue working with problem suppliers rather than to go through the supplement process, but that appears to be changing with increased focus on product quality.

Efforts to curb the import of counterfeit and adulterated medical products could be undermined, though, by continued pressure to permit reimportation of low-cost drugs from other countries. Senator Byron Dorgan (D-SD) and Montana Governor Brian Schweitzer have requested federal permission to import drugs from Canada for these two northern states, but the FDA maintains that such a program could facilitate drug diversion and counterfeiting. At a Senate budget hearing in March, Commissioner Hamburg told Dorgan that there are "genuine safety concerns" about drugs imported outside the regulated supply chain. But some politicians and consumers dismiss these claims as an industry ploy to keep out cheaper competition.

Jill Wechsler is BioPharm International's Washington editor, Chevy Chase, MD, 301.656.4634, jwechsler@advanstar.com

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