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"New Realities of Globalization -- Implications for Health, Medicine and the Role of the Regulator"


Speech by Margaret A. Hamburg, MD   
Commissioner of Food and Drugs
Medicines and Healthcare Products Regulatory Agency (MHRA) Annual Lecture 2014
London, England
March 6, 2014

Thank you Sir Gordon [Duff] for that kind introduction, and for inviting me to present this year’s lecture. I also want to thank Dr. Ian Hudson and his team at the MHRA. I am honored to be here, as I have a deep respect for MHRA and the leadership and service they have long provided—for the people of Great Britain and for so many others around the world. It was great to have the chance to spend time with the MHRA Executive team earlier today.

I have felt a very special kinship with MHRA over many years. In this regard, I must certainly recognize Sir Kent Woods and Sir Alasdair Breckenridge, who were in key leadership roles at MHRA when I became FDA commissioner almost five years ago. They have been wonderful mentors, friends and colleagues. I treasure the opportunity to have worked closely with them, as I also welcome the chance to now share in a strong and special partnership with Ian Hudson and Sir Gordon Duff. 

We are gathered this afternoon to address a topic of great—and growing—importance: globalization. We live in a dramatically transforming world with huge implications for health, medicine and the role of the regulator. I am delighted that we have such a distinguished group in attendance today, representing eminent leaders and thinkers from many sectors, including medicine, academia, industry, disease and patient groups, and government, including some of my fellow regulators for this is a topic that must concern us all and I look forward to the discussion and debate that will follow my remarks.

Frankly, this is an issue that keeps me up at night. While there are many benefits of globalization, there can be no doubt that with the increasing interconnectedness of the world comes new vulnerability to a range of serious, even catastrophic, health threats.

I have spent most of my career working on various aspects of these threats. Such things as: the emergence and spread of new microbes, or old ones in new and more dangerous forms due to the rise in antimicrobial resistance; the very real concern that capabilities in science and technology might be deliberately engineered to produce new and deadly pathogens or lead to inadvertent exposures or contaminated products; and, of course, the ways in which the globalization of travel and commerce creates new vulnerabilities, including to our food and medical products.

Speaking today as the Commissioner of a major regulatory agency, and in the context of this MHRA lecture, I want to focus on the new realities that globalization brings to medical product regulation—realities that are redrawing the path these products navigate to reach our homes, clinics and hospitals, and are redefining the scientific and research foundation of our product oversight. I hope to address the nature and scope of this challenge and some of the steps we must take—together—to help meet the unique public health needs of our globalized world, and thus better assure the health, safety and security of each of our nations and people all over the world.

Addressing the challenges of globalization was not something that I came to the FDA expecting to take on, but it has been a priority since the very beginning because the needs are so glaringly obvious…and urgent.

To my mind there are few things that will have as great an impact on public health as the fundamental shifts that are taking place as a result of several interrelated forces and broader world trends. The rise of global markets and supply chains has been rapid and profound.  Emerging markets and developing economies are gaining new prominence, and the increased flows of people, capital, information and goods across borders have realigned many roles, relationships and risks.

We live in a world where other countries increasingly produce—at least in part-- the food and medical products our consumers and patients use in their daily lives.  As the distinction between foreign and domestic products continues to blur and supply chains become more complex, the job of ensuring the safety and efficacy of food, drugs and medical devices becomes more challenging.

At every step in global supply chain networks -- from raw materials and other ingredients, to manufacture, storage, sale, and distribution -- there are opportunities for a product to be improperly formulated or packaged, contaminated, diverted, counterfeited, or adulterated. For so many countries, including my own, import volumes have increased exponentially and inspecting products at ports of entry is no longer adequate to ensure that our consumers have safe products. Rather, prevention of problems before they reach our borders requires strengthening quality and safety oversight in countries from which we import products, with benefits for consumers everywhere.  It also means strengthening the integrity of supply chains as products move through the system.  And there are additional, special concerns, especially in parts of the developing world, where anti-microbial resistance is accelerated by the growing prevalence of sub-standard and counterfeit medicines, undermining global health efforts and contributing to other global health threats.

In short, globalization has fundamentally altered the economic and security landscape and demands new ways for regulatory authorities and systems to fulfill their missions to ensure the safety and quality of the products they oversee. This comes at a time when many regulatory authorities are already struggling to keep up with:

  • The rapid advances in science and technology;
  • The growing complexity of medical products and product development;
  • Responsibilities that outstrip human and dollar resources;
  • Increased demands for public accountability and transparency in regulatory agency operations, spending and decision-making, including an often skeptical or frankly hostile attitude towards regulation; and
  • Growing economic and political pressure to cut public spending, including for regulatory oversight.

Many regulators around the globe face additional concerns, as their systems are skeletal at best. They do not, and cannot, perform many basic functions.  In fact, for almost all regulatory authorities — big and small, established or fledgling-- greater commitment to regulatory systems at the senior political level is needed to redress unclear or missing legislative mandates and ensure adequate public funding.

It is with this backdrop that we are here today to explore ways to expand our regulatory reach through partnership, better information sharing and data collection, and a concerted leveraging of resources. 

When FDA was first established many decades ago, our regulated industries were predominantly local, the volume of imported products was low, and even the movement of goods across country was minimal. More often than not today, a drug or medical product that ends up on the shelves of an American drugstore or in our hospitals will come, at least in part, from some foreign source. Nearly 40 percent of finished drugs Americans consume today are made elsewhere, as are about 50 percent of all medical devices.  Approximately 80 percent of the manufacturers of active pharmaceutical ingredients used in the United States are located outside our borders.

Adding to this challenge is the changing dynamic of where these products are coming from —more than 150 countries – many with much less sophisticated regulatory systems than our own.   Import lines from emerging markets – including Mexico, India, China, and Thailand – increased faster between 2002 and 2009 than lines from developed markets. And we expect this disparity to continue to grow.  China and India, for instance, are each expected to see a more than 400 percent increase in their product exports between now and 2020, with China accounting for nearly 20 percent of all global product exports by that time.

China already has the largest number of foreign, FDA-registered, drug manufacturing establishments, followed by India. And China has the fourth highest volume of exports to the U.S. of medical equipment and is the leading supplier of sutures, sterile, surgical, and dental goods.

In addition to the growth in sheer volume of imports and foreign facilities, today’s complicated supply chain involves a web of sources and shippers, as well as repackagers and redistributors.  Innovations in transportation, refrigeration, and communication have made it increasingly easy to ship drugs, medical devices, and biologics over long distances.

So the world has changed. And the idea of a wholly domestically produced drug is a fast fading reality for regulators everywhere.  Make no mistake, these changes present enormous challenges, with increased potential for both safety and security problems. Today’s global supply chain poses greater risks to consumers because there are so many additional steps, potential vulnerabilities and questions to be asked including: Who has handled the product? How was it manufactured, packed, distributed, and stored? And who supplied the ingredients?

But in adjusting to these changes, the global regulatory community also has a tremendous opportunity.  The time is now for regulators to work together to create a stronger and safer system of medical products and, more broadly, to forge more comprehensive and collective public health responses to the new realities that virtually all countries face.  

It is a daunting challenge…but I think also, an exciting time. Certainly we cannot ignore this issue or simply respond, as some once did, by declaring, “I’m opposed to globalization.”  

So, recognizing these new realities of the medical products marketplace, one of my first priorities as Commissioner was to develop a strategy and action plan that would allow FDA to better and more comprehensively respond to globalization and import safety challenges.

This thinking was outlined in a report called the Pathway to Global Product Safety and Quality. The vision is one of an FDA transformed from a domestic agency operating in a globalized world into a truly global agency fully prepared for a complex regulatory environment that treats like risks in equivalent ways, regardless of geographic location, and that takes into account the risks across a product’s life cycle from production abroad to ongoing usage in the United States.  

It acknowledged that we had to change our operating model in important ways. We had to develop a meaningful presence overseas; and we reorganized to create a new directorate within FDA that would be responsible for both international operations and our field investigators who inspect facilities in the U.S. and overseas.

But most importantly, we had to better leverage our resources. We need alternative approaches that rely on enhanced intelligence, information and workload sharing with the help of regulatory partners; data-driven risk analytics; and allocation of resources achieved through public and private partnerships. And we need to strive for greater coordination and enforcement of regulatory standards across nations to ensure safety and quality regardless of where a product is produced.  We need not apply identical standards, but we all need to work together toward the common goals of product safety and quality.

And truly, this is what most every other national regulator also wants. What we really need for the future is a public health safety net for consumers around the world that is created, supported, and maintained by a global alliance of regulators.  Some of the work for this is already underway and has been for several years, as regulators around the world have begun to collaborate around the formation of an International Coalition of Medical Regulatory Authorities (ICMRA). 

While thinking is early at this stage, a coalition of this kind can be a high-level, strategic advocacy and leadership entity.  It can provide direction for a range of areas and actions that are common to many medical product regulators; identify areas for potential synergies to be made; and, wherever possible, leverage existing efforts to maximize global impact.  We must ask ourselves how we can weave our various efforts into a coherent and sustainable global system of governance, oversight and safety.

And to support this broader vision, a number of collaborative mechanisms already exist.  For example, the International Conference on Harmonisation (ICH), the Pharmaceutical Inspection Cooperation Scheme (PIC/S), the newly created International Pharmaceutical Regulators Forum (IPRF), and the Asia Pacific Economic Cooperation’s (APEC) Pharmaceutical Product Supply Chain, reflect leadership and expertise in standards development and the harmonization of good regulatory practices.  Development of science-based standards and harmonized practices and approaches are an essential underpinning of any strategic direction by regulators.  And indeed some of these existing mechanisms can be effective operational components and connectors in the implementation of any global coalition’s strategic direction.

The global reality of today calls for us to explore new ways to collaborate, especially if regulators are to stay ahead of the curve, which is essential for public health but also for our countries’ economic growth, expanded market access, and national and economic security.  It also calls for new ways in which to ensure the safety and quality of products along the supply chain, and to be especially well-prepared to coordinate future responses across affected countries and regions. 

A part of leveraging efforts is building needed regulatory capacity.  Strengthening regulatory capacity in the developing world can reap tremendous benefits for strengthened health systems and health care coverage, and for the fundamental health and quality of life of individuals and communities in those countries.  Equally important, regulatory systems can contribute to strengthening national economic development, stronger, more stable industry, and expanded access to needed markets.  Historically, investments in development assistance – neither health nor economic development – have really recognized the role of regulatory system strengthening. We must work together to change this, for it is crucial to both.

Again, these challenges require us to think and act in new ways.  I’m pleased to report that the 2014 World Health Assembly will be engaging around an unprecedented number of regulatory-driven resolutions – from biosimilars to regulatory system strengthening.  This provides all of us – including industry – an unprecedented opportunity to work at national and sub-regional levels, and with multilateral organizations, like the World Health Organization, in raising much needed awareness and appreciation around the essentialness of regulatory systems for public health, economic viability, and strong governments. 

The advantages of globalization are real, and as regulators we must work to catalyze these.  Consumers can benefit greatly from global sourcing of products. Certainly, in the United States, health professionals and their patients can draw on drugs and medical devices developed anywhere in the world, assuming they have been approved for use in the U.S.

And therein lies the challenge -- ensuring that these medical products hold up to U.S. standards – or to the standards of any other country to which they are being exported. For instance, I recently visited India, which plays a particularly important role as a supplier to the U.S of drugs and medical supplies. India is, in fact, the second largest supplier of over-the-counter and prescription drugs to the United States. 

During my visit, I had a number of meetings with senior government officials who oversee the country’s health-related matters as well as the export of foods and medical products to the U.S. and more than 200 countries around the world. We had very productive discussions about how we could work together to ensure that the quality of the products manufactured in India and exported to the United States meet American standards.

One way we do this is through the inspections we conduct in India. And some of our inspections of pharmaceutical companies in India have been done in concert with MHRA inspections, and have been of enormous value.

But, inspections are not, and cannot be, the only answer. For one thing, as the magnitude of the global supply chain continues to expand and diversify, the budgets of our regulatory agencies do not keep pace. Moreover, even if we had the money, we could never have enough people to inspect every facility on a regular basis all around the world. So it becomes even more essential that we look to other ways to oversee these products.

Obviously, manufacturers themselves must embrace the need for quality. This is fundamental. Quality matters for health and safety, and for a company it should be a given as their business practice. It is how people develop trust and confidence in a product and how a company builds a brand. But companies must feel responsible and accountable, always. Quality must be built into products from start to finish and must be a focus of all activities. That was one of my key messages in my conversations with manufacturers in India.

It also requires supporting and strengthening the regulatory systems in India and other countries. While in India, I was pleased that our agencies signed the first-ever Statement of Intent that will improve our lines of communication and strengthen our efforts to collectively work together so that we can help ensure that the products being exported from India are safe and of high quality.

Another important message I needed to convey during my visit to India came in response to recent actions FDA had taken against a number of manufacturers there.. 

There were some in India who questioned whether these actions – and even my visit to the country – were part of an effort to “target” Indian companies.  But as I explained, this is not about targeting any one country. All of the actions we have taken there – and for that matter, enforcement and regulatory activities we undertake in any country, including our own – are part of our regulatory framework., For any company who sells their product in the U.S., we inspect and take appropriate actions, measured against our regulatory standards and requirements.

Most companies want to comply, but there is another concern that I want to mention. This is the growing opportunities for intentionally adulterated, counterfeited or otherwise falsified medical products to infiltrate the legitimate medical products supply, which signal an alarming trend.

Recent incidents of this kind have caused serious threats to health, with tragic consequences around the world. I’m sure that you are aware of some of these episodes-- from contaminated heparin (the blood-thinning drug), to counterfeit  Avastin (a cancer treatment),  to children’s cough syrup containing ethylene glycol, a well-known poison. Such adulterated medical products may contain too much, too little, or the wrong active ingredient, and could contain toxic ingredients. They prevent patients from getting the real medical products that they need and for antibiotics, they can also increase the likelihood of drug resistance, which is a serious and growing concern for us all.

Counterfeit and substandard drugs are a particularly significant threat in the developing world. Though numbers are hard to substantiate and estimates vary, studies in some countries suggest that between 30 and 50 percent of certain available drugs are actually counterfeit. 

This is a grave concern, and it raises broader issues about the responsible stewardship of health resources as well as public health. We invest considerably in health care systems--our own and those in less well served countries of the world. But if the medicines and other medical products they have are falsified, the risks are high and can undermine these important expenditures for health.

And there are other dangers as well. While many of these illicit activities have an economic basis, we cannot ignore the danger today of potential acts of terror that capitalize on the vulnerability of our medical product oversight and the supply chain. And another related risk we must consider comes as a result of global sourcing for some products: the danger that a hostile nation or serious geopolitical or even environmental or natural threats could limit availability of critical medical products manufactured in a given nation or region.

Consider, for a moment, if one country was the predominant manufacturer of a critical vaccine needed during a pandemic or a drug needed for a serious chronic condition or an intravenous anesthetic in short supply….the impact on public health could be profound.

In short, globalization has multiplied the scale of our responsibility. How do we ensure that medical products and their components are high quality and travel securely through their complex supply chains? 

At FDA, we think it means that we must have more than just a presence around the world – though we surely must strengthen and extend that. It means engaging internationally with our counterpart regulatory authorities and with the industries we regulate in a multinational fashion. Only in this way will we be able to ensure the integrity of the global supply chain and that the products making their way through that chain meet the standards we guarantee for consumers in our countries, no matter where they are made.

FDA has made significant progress in building our knowledge base about the global landscape in which we regulate products and in fostering the needed institutional linkages and regulatory capacity to ensure meaningful work. For example, FDA now has established a permanent presence overseas in 12 foreign posts, from Beijing to New Delhi, from San Jose to Santiago. These offices are helping FDA build strong partnerships with our foreign regulatory counterparts and industry by providing enhanced opportunities for cooperation and capacity building. They also provide a platform for inspection of foreign facilities.

We also are successfully implementing several significant new authorities provided by Congress that will help ensure the safety of imported products. In 2012, Congress passed the Food and Drug Administration Safety and Innovation Act (FDASIA), which included some important provisions designed to improve the safety and integrity of imported drugs sold in the United States. Some of the provisions are pointedly aimed at FDA’s inspectional activities overseas and our relationships with foreign regulatory authorities.

For example, the law requires foreign and domestic companies to provide complete information on threats to the security of the drug supply chain and improves current registration and listing information, making sure FDA has accurate and up-to-date information about foreign and domestic manufacturers.

The new law also increases FDA’s ability to partner with foreign regulatory authorities to leverage resources through increased information-sharing and recognition of foreign inspections.  FDA is exploring the use of these authorities to build and strengthen our regulatory capacity and that of our trading partners.

The good news is we are not starting from scratch. We now have more than 60 agreements with foreign counterparts to share certain information in inspection reports and other non-public information that can help us make better decisions about the safety of foreign products. So if, for instance, our British counterparts share with us critical information about their inspections of certain factories in China, or Egypt or Thailand, we can use that information and not re-inspect those same facilities behind them, but rather use our resources to inspect elsewhere -- places that otherwise none of us would have seen.

And we are also increasing the actual inspections we conduct in cooperation with other countries. I mentioned the simultaneous inspections we conducted in India with MHRA; we have also worked with the EU and Canada to conduct inspections of facilities in countries that supply active pharmaceutical ingredients and finished drugs, resulting in several firms being placed under import alert.

This type of collaboration not only increases our investigative power, but allows investigators to share inspectional techniques and learn from each other. The outcome is more than the sum of individual efforts.

These collaborative arrangements are extremely productive and FDA traditionally has had close cooperation with a series of regulatory partners via bilateral agree¬ments, including of course, MHRA. Yet today, the demands of globalization require a broader and more com¬prehensive model to achieve the change and security required.

In this regard, I also want to mention another aspect of the regulators evolving role when it comes to global health and security.

It is a truism that threats to health anywhere are threats to individuals everywhere. Infectious diseases know no boundaries. Recent outbreaks of avian influenza in China and of Middle East Respiratory Syndrome captured global attention and spurred preparedness efforts in the United States and around the world. A few years ago, the Centers for Disease Control and Prevention (CDC) reported that, for the first time, cases of dengue, the most common mosquito-borne viral disease causing 50 to 100 million infections and 25,000 deaths each year around the world, were identified in Florida residents who had not traveled overseas. 

For too many threats, we do not yet have the drugs, vaccines or diagnostics that are so vital if we are to effectively detect, treat or prevent disease. But as regulators, we must play an essential role in helping to advance the necessary biomedical product innovation to deliver the products that people need and to make sure that they are as safe and effective and high quality as possible. We must bring the best possible science to bear. And one specific area of science – regulatory science – can help provide the tools needed to speed both the development of new products and the more effective and efficient review of these products for safety, efficacy, quality and performance. Good science and smart regulatory decision-making enables us to more quickly bridge the gap between scientific discovery, good ideas, and meaningful medical products for real world use.

Indeed, regulatory science and regulation, when done right, should pave the way for  meaningful and lasting innovation for the public good. That’s why regulatory agencies like the FDA and MHRA not only must work to support the ongoing development and availability of safe, effective and high quality medical products, but also we must partner with others to more fully understand the areas of unmet medical care and public health needs that must be addressed. We also need to work with multinational organizations such as the WHO, development agencies, and NGOs to provide technical expertise, training and tools to regulatory systems in low and middle income countries to make a difference in global health.

There are plenty of models of this kind of collaboration. One extraordinary example that some of you may be familiar with produced MenAfriVac. It’s a vaccine developed by Indian Serum Institute with the Meningitis Vaccine Project and a consortium of international partners to wipe out the meningococcal meningitis in sub-Saharan Africa. That disease has taken a tragic toll there that can be measured in human, social, and economic losses. FDA scientists played a critical role in developing the conjugation technology needed to manufacture an effective vaccine at an affordable cost. Since 2010 more than 100 million people have been vaccinated; we can only imagine how many lives have been saved.  

Another program to which FDA contributes that has made a real difference in global health is the Presidents Emergency Program for Aids Relief (PEPFAR) program.  FDA grants what is called “tentative approval” for a drug when FDA has found that a drug product has met all required manufacturing quality, clinical safety, and efficacy requirements, but it cannot be approved for marketing in the U.S. at that time because of existing patents and/or marketing exclusivity. Under these circumstances, the product, although not permitted then to be marketed in the U.S., is eligible for purchase outside the U.S. through the PEPFAR program.

As of today, the FDA has tentatively approved 166 products that are eligible to be used in the PEPFAR program, a major contribution to the 6.7 million people worldwide on antiretroviral treatment with PEPFAR support.  And there have been many cascading benefits, including UN procurement agencies and the Global Fund to Fight AIDS, TB and Malaria also relying on the FDA tentative approval product list for HIV/AIDS therapies they purchase. 

There are many other efforts underway to support and collaborate with regulatory systems across the globe, and yet more partnership and leadership is needed.   

In closing, I want to return to FDA’s report, Pathway to Global Products and Safety, which laid out our vision for a global future. One section of the report – titled “Ten Years From Now, The World Will Be Very Different Than it is Today” – discussed the macro trends that will lead to a dramatic increase in the global flow of goods, a greater government role in healthcare worldwide, and even more competition for global resources. Undoubtedly, in countries around the world, the pressure to reduce costs and increase productivity will lead companies to continue to move manufacturing activities to new and different locations, looking for cheaper sites and global supply chains to reduce production costs.

Simply put, more globalization means that we will have to continue to evolve to meet these new demands. The pathway is clear. There is much work to do, but we can take comfort in the knowledge that we have significantly strengthened our ability to respond to these challenges and know where and how we must do more.

The changes we confront today allow us – one might even say force us – to build a stronger model for public health by addressing not just the challenges to production of safer and more effective medical products and the integrity of the supply chain, but also important under-addressed global health and development needs.

During one of my meetings in India, a high ranking leader of the Indian pharmaceutical industry made the comment that “good regulators make good companies.” I was pleased that she and others in her group appreciated how smart regulation can shape, support, and strengthen product development and manufacturing processes to help ensure continuous quality and better products.

But in thinking about her comment, I realized that in this age of globalization, it would be even better – and entirely possible – to broaden her statement to say that good and smart regulators make good companies and build strong and healthy nations.

These are no simple solutions to the global challenges we face. But I am confident, working with all of you and our broad international coalition we can continue our successful efforts to develop effective solutions and to build a safe, flexible, and strong future that benefits the health of people in both our nations and around the world.

Thank you