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U.S. Department of Health and Human Services

Animal & Veterinary

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FDA Veterinarian Newsletter May/June 2001 Volume XVI, No III

by Merton V. Smith, Ph.D., J.D.


Earlier this year the tables were turned on FDA. The Agency was on the receiving end of something that it usually only gives out—an audit of its quality assurance programs and procedures. For three weeks in March, representatives of the European Commission visited FDA at its Rockville headquarters offices and its Philadelphia and Kansas City field offices to observe how the Agency sets standards and monitors and enforces the pharmaceutical industry’s compliance with Good Manufacturing Practices (GMPs).

This audit was undertaken as part of the implementation of an international agreement between the U.S. and the European Union (EU) entitled "Annex on Pharmaceutical Good Manufacturing Practices of the Mutual Recognition Agreement" (MRA). This agreement was signed in 1998 and is now in the third year of its transition period. The U.S./EU MRA is one of the most significant international agreements that FDA has entered into—both in terms of extent of the commitments involved and the level of resources that will be necessary to complete the activities described in the agreement.

International Cooperation—Leveraging FDA’s Resources

These kinds of audit activities by foreign governments have not been limited just to FDA’s regulatory systems covering GMPs for pharmaceuticals shipped to Europe. Similar audits have been taking place with regard to seafood products that are exported to Canada and EU Member States, dairy and egg products that are exported to EU Member States, and medical devices that are exported to EU Member States. In addition to foreign government interest in FDA’s regulatory programs, FDA experts also have begun examining and assessing the programs of countries that export foods, drugs, biologics, and devices to the United States.

To better appreciate why FDA and its foreign government counterparts are taking such a keen interest in one another’s regulatory systems, it is useful to understand some of the legal and policy reasons that underlie these initiatives.

The primary driving force behind these cooperative activities has been the enormous increase in international trade and the need of governments to provide more assurance of the safety of imported products. The global market place for foods, drugs, biologics, and medical devices is not only a reality, but also a reality that is outpacing even our highest estimates. Because safety of imports cannot be achieved solely by surveillance at the borders, the situation demands increased cooperation and collaboration between FDA and its regulatory partners around the world.

Many of FDA’s international cooperative relationships with foreign governments have been formalized as international agreements. FDA believes that these cooperative activities, if properly structured, can be very effective in permitting it to have a high level of confidence in the accuracy and validity of inspectional and other regulatory information that is provided by foreign governments.

Such agreements are not a new idea for FDA. For more than fifty years the agency has participated in a number of regulatory cooperation agreements with other countries; and, at present, has more than fifty agreements with its counterparts in other countries. They have a variety of names, including "Memoranda of Understanding," "Memoranda of Cooperation," and "Cooperative Arrangements."

Authority for FDA to enter into these kinds of agreements comes from the Federal Food, Drug, and Cosmetic Act; particularly from the 1997 FDA Modernization Act amendments that require the agency to meet with representatives of other countries "to discuss methods and approaches to reduce the burden of regulation and harmonize regulatory requirements if the Secretary determines that such harmonization continues consumer protection consistent with the purposes of the Act." Furthermore, the 1997 Act requires FDA "to move toward the acceptance of mutual recognition agreements relating to the regulation of drugs, biological products, devices, foods, food additives, and color additives, and the regulation of good manufacturing practices, between the EU and the United States" and "to participate through appropriate processes with representatives of other countries to reduce the burden of regulation, harmonize regulatory requirements, and achieve appropriate reciprocal arrangements."

FDAMA also required that FDA develop a plan that establishes a framework for achieving mutual recognition of good manufacturing practices inspections. In May of 1998, FDA made its plan public. This plan specified that "....before accepting the procedures and activities, including enforcement methods, of foreign governments as equivalent to its own, FDA will seek assurance that such activities provide the same level of product quality, safety and efficacy that is provided under the FFDCA; the Fair Packaging and Labeling Act; the Public Health Service Act; and any other relevant law of the United States. FDA may find it necessary to confirm by on-site review or other appropriate means that the foreign government agency has the necessary authorities, product standards, capabilities, and infrastructure to successfully achieve the proposed terms of the MOU, and, therefore, that a determination of equivalence can be made.

This plan is also in keeping with two World Trade Organization (WTO) Agreements that the U.S. Government has signed—the Agreement on the Application of Sanitary and Phytosanitary (SPS) Measures and the Agreement on Technical Barriers to Trade (TBT).

The SPS and TBT agreements encourage harmonization of regulatory standards as well as recognition of the results of conformity assessment procedures by other WTO member countries, even when such procedures are different, provided that they are satisfied that those procedures are equivalent. Equivalent regulatory systems need not be identical. Under the concept of equivalence, the regulatory system utilized by the exporting country may differ from that applied domestically by an importing country so long as the exporting country’s regulatory system achieves the importing country’s level of public health protection. Furthermore, under the SPS and TBT agreements, the burden of demonstrating that equivalence exists rests with the exporting country. The SPS and TBT agreements specify that the exporting country allow "reasonable access" to the importing country to inspect or carry out other procedures for evaluating equivalence. If the exporting country can demonstrate equivalence, the importing country "shall accept" the exporting country’s regulatory system as equivalent. The SPS and TBT agreements also encourage member countries to enter into negotiations with the aim of achieving bilateral and multilateral agreements for the mutual recognition of the results of conformity assessment procedures. Under these agreements, every finding of regulatory system equivalence between member countries is not required to result in a bilateral or multilateral agreement; but these agreements do require that member countries consult, if requested, with the potential goal of a mutual recognition agreement as a possibility.

In addition to the U.S./EU MRA, there are other international agreements that will play an important role in FDA’s regulatory programs. For example, the seafood Hazard Analysis Critical Control Points (HACCP) regulation that took effect in December 1997 provides an advantage to importers who facilitate the entry of products from countries that have agreements with FDA in the area of seafood safety and quality control. Specifically, under FDA’s HACCP regulation importers representing manufacturers located in countries that have entered into an international agreement with FDA covering HACCP equivalency are not required to provide FDA with verification that the manufacturers are using their HACCP plans. This regulatory provision has already generated many requests from foreign countries to enter into such agreements with FDA. FDA’s Office of Seafood indicates that there are already about 40 countries that are interested in HACCP equivalency agreements and has estimated that there are potentially up to 70 countries that may seek these agreements.

FDA knows that significant "up-front" costs will be required to develop the kind of international agreements that will provide FDA with the confidence that it needs to utilize information received by its regulatory counterparts around the world. These up-front costs include the resources needed to assess foreign regulatory systems but also the resources needed to prepare for and host foreign officials who are auditing FDA’s programs. FDA believes that these costs are well spent because well-crafted agreements can complement the agency’s important efforts in import surveillance and foreign inspection work for the areas covered. Such cooperative agreements can also permit the agency to redirect existing resources to higher priority areas.

Pharmaceutical GMP Annex of the U.S./EU MRA

The stated purpose of the Pharmaceutical GMP Annex is to "govern the exchange ...and normal endorsement... of official Good Manufacturing Practices (GMPs) inspection reports after a transition period aimed at determination of the equivalence of the regulatory systems of the Parties... ." To this end, the annex describes activities and processes that will occur during two distinct periods, the transition period (when equivalence assessments will be made) and the operational period (when pharmaceutical GMP inspection reports provided by equivalent exporting authorities will be normally endorsed by equivalent importing authorities). The products covered by the MRA are medicinal products for human or animal use, including intermediates and starting materials (under EU law) and drugs for human or animal use, biological products for human use, and active pharmaceutical ingredients (under U.S. law). Products (for example, dietary supplements) which otherwise fall into the above definitions but are not regulated by the authorities of both parties are not included. The following products are also not included: human blood, human plasma, human tissues and organs, and veterinary immunologicals. Other products are excluded during the transition period (but may be reconsidered for inclusion at the end of the transition period): human plasma derivatives, investigational medicinal products/new drugs, human radiopharmaceuticals and medical gases.

The MRA also describes the criteria that the regulatory authorities of the importing countries will apply to determine the equivalence of the regulatory systems of the exporting countries. Such equivalence determinations will include an assessment of the legal/regulatory authority, structure, and procedures; mechanisms to assure appropriate professional standards and avoidance of conflicts of interests; administration of regulatory authority; conduct of inspections; execution of regulatory enforcement actions to achieve corrections, actions intended to prevent future violations, and actions to remove violative products from the market; effective use of surveillance systems; and ability to verify the authenticity and completeness of critical data supporting an application such as that relating to scale-up capability and other essential information.

EU Audits Under the Pharmaceutical GMP Annex of the MRA

On March 7, Inspector Muireann Lydon of the Irish Medicines Board and Inspector Sabine Atzor of the German Department of Medicinal Products on behalf of the European Commission began their audit of FDA by being briefed by representatives of CDER, CBER, CVM, ORA, and OC at the Parklawn Building. The headquarters agenda included more detailed descriptions by program managers at MPN I, MPN II, Woodmont, Piccard, and Crabbs Branch locations covering FDA’s quality management system, program guidance for both pre-approval inspections and post-approval inspections, emergencies workplan, field laboratories, recalls, regulatory policy, legal actions, imports, investigator training, quality reports, product surveillance, manufacturing site registration, product listing, export certificates, GMP case review and program support, and, for biologics, lot release and Team Biologics inspection planning, conducting, reporting, and case processing.

The auditors then moved on to Philadelphia and Kansas City where they were joined by three EU inspectors: Elena Casaus Lara and Christina Gomez, both of the Spanish Ministry of Health, Division of Medicinal Safety, and Jorg Neuhaus of the German Department of Medicinal Products. In these locations they examined FDA’s field programs and activities in the Central Region Regional Office, the Philadelphia District Office, and the Kansas City District Office. The EU auditors also accompanied FDA investigators on two evaluation inspections of pharmaceutical manufacturers: Over-the-Counter liquid and tableted products for human use produced at a Johnson & Johnson Merck Consumer Pharmaceuticals Co. manufacturing site in Lancaster, Pennsylvania and sterile hospital products produced at an Abbott Laboratories site in McPherson, Kansas. These field activities concluded on March 30. While FDA will not know how it performed in the eyes of the EU until a final assessment report is issued, those FDAers that participated believed that the Headquarters, District Offices, and Regional Office were well-prepared and did an excellent job in describing FDA’s pharmaceutical GMP-related regulatory programs and how they operate. It was also believed that FDA inspection teams performed well and did a good job in representing the field and the agency. The FDA teams followed their planned inspectional outline closely and were open and communicative both with the firms and with the EU auditors. As appropriate for an audit process, the EU representatives did not participate in the inspectional process other than to ask questions for clarification or to look at documentation.

Final Thoughts

Some have suggested that international equivalence assessments and harmonization efforts will ultimately lower the bar for safety standards of foods, drugs, and devices. On the contrary, FDA believes that focussed, open, and frank discussion by experienced experts about how best to structure regulatory controls to protect the public health will result in quite the opposite effect—that is, it will raise the safety bar. Indeed, one of the greatest benefits for FDA in implementing equivalence-based international agreements such as the U.S./EU MRA is the open and frank discussion between public health regulatory partners about how they both can more effectively perform their jobs. Experience has shown FDA that these kinds of discussions provide a cross-fertilization of ideas that raise regulatory standards and procedures on both sides.

FDA is pleased that the EU auditors are looking closely at the U.S. regulatory system and are attempting to identify areas where the Agency can improve. FDA values the fact that the Commission has chosen experienced and competent inspectors from well-respected EU Member States to perform the audits of FDA’s system. These inspectors and others working for the European Commission also have been examining how the EU Member State regulatory systems are performing to assure that manufacturers operating in those countries meet GMP requirements. The Commission has been looking at the regulatory systems and controls of some of its other major trading partners as well, including Canada, Japan, Australia, and New Zealand.

These pharmaceutical GMP assessments will continue with future visits by EU auditors. Of course, FDA will be very interested in the final evaluations when these EU audits are concluded. FDA plans to begin its on-site assessments of the EU and EU Member State pharmaceutical GMP regulatory systems as soon as it further evaluates the documentation that has been received from the EU that describes these systems. Initial on-site audits of the EU and its Member States will probably begin this summer.

Dr. Smith is Associate Director, International Agreements, Office of International Programs in the Office of the Deputy Commissioner for International and Constituent Relations. During February-March 2001, Dr. Smith was on detail to the Office of the Director, CVM where he was responsible for the Center’s international programs.