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ACI’s Legal, Quality, Regulatory, and Compliance Forum on current Good Manufacturing Practices

Douglas B. Farquhar, Director

Hyman, Phelps & McNamara PC

Washington, D.C.

International Inspections and Their Undesirable Consequences

January 23-24, 2014

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HYMAN, PHELPS & MCNAMARA, P.C.

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Adverse Regulatory Consequences from cGMP Inspections

• Warning Letters

• Publicity

• Import Detentions

• Withdrawal of Drug Approvals

• Drug Application Review Holds

• “Forced” Recalls

• Application Integrity Policy

• Seizures

• Consent Decrees

• Injunctions

• Debarment/Exclusion

• Criminal Prosecution

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Most cGMP Warning Letters for Human Drugs Issued to Foreign Companies

12 Warning Letters issued for human drug cGMP violations in last six months of 2013

8 of those Warning Letters issued based on inspections of drug

manufacturing facilities in foreign countries (6 in India) 3 of those Warning Letters issued to plants in Continental U.S.,

one for plant in Puerto Rico

-- FDA Warning Letters issued July 1, 2013 through December 31, 2013 for drug cGMP violations and posted on FDA website

as of January 16, 2014, excluding compounding pharmacies

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Warning Letters Issued after Foreign Inspections (sample)

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FDA International Inspectional Focus

• FDA Officials have said 80 percent of drugs distributed in U.S. are either manufactured outside U.S. or manufactured using an Active Pharmaceutical Ingredient from foreign countries

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FDA Inspection Force in India “The US Food and Drug Administration (USFDA) is increasing its inspections of facilities of drug makers in India, the second largest provider of finished dose products to the US, to ensure compliance of approved manufacturing norms. “The US health regulator, which has been cracking the whip against many Indian pharmaceutical firms, including Ranbaxy Laboratories and Wockhardt, is also recruiting and training additional drugs investigators in India. “‘In March 2013, the (US) FDA received approval from the Indian government to add seven additional drugs investigators in India. We are currently recruiting and training staff for these positions,’ a spokesperson for USFDA, Christopher C Kelly, said in an emailed response. “USFDA's presence in India is being increased to 19 from 12 American staff based in-country, including 10 dedicated specifically to medical products. Other staff include foods and devices inspectors, and policy analysts.”

Source: http://businesstoday.intoday.in/story/usfda-increases-inspections-of-drug-facilities-in-india/1/198862.html

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Import Alerts – Statute • 21 U.S. Code §381. Imports and exports

• (a) The Secretary of the Treasury [meaning Customs] shall deliver to the Secretary of Health and Human Services [meaning FDA] . . . samples of . . . drugs, devices. . . and cosmetics which are being imported or offered for import into the United States, giving notice thereof to the owner or consignee, who may appear before the Secretary of Health and Human Services and have the right to introduce testimony. The Secretary of Health and Human Services shall furnish to the Secretary of the Treasury a list of establishments registered pursuant to subsection (i) of section 360 or section 387e(h) of this title and shall request that if any drugs, devices, or tobacco products manufactured, prepared, propagated, compounded, or processed in an establishment not so registered are imported or offered for import into the United States, samples of such drugs, devices, or tobacco products be delivered to the Secretary of Health and Human Services, with notice of such delivery to the owner or consignee, who may appear before the Secretary of Health and Human Services and have the right to introduce testimony.

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Import Alerts – Statute

• 21 U.S. Code §381. Imports and exports (cont.)

• (a) . . . If it appears from the examination of such samples or otherwise that (1) such article has been manufactured, processed, or packed under insanitary conditions or, in the case of a device, the methods used in, or the facilities or controls used for, the manufacture, packing, storage, or installation of the device do not conform to the requirements of section 360j(f) of this title, or (2) such article is forbidden or restricted in sale in the country in which it was produced or from which it was exported, or (3) such article is adulterated, misbranded, or in violation of section 355 of this title, or prohibited from introduction or delivery for introduction into interstate commerce under section 331(ll) of this title, or (4) the recordkeeping requirements under section 2223 of this title (other than the requirements under subsection (f) of such section) have not been complied with regarding such article, then such article shall be refused admission, except as provided in subsection (b) of this section.

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Import Alerts

http://www.accessdata.fda.gov/cms_ia/countrylist.html

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Import Alerts (continued)

• Countries with most import alerts: • Canada 65

• China 78

• France 31

• Germany 36

• Hong Kong 60

• India 48

• Indonesia 30

• Italy 33

• Japan 40

• Korea (South) 36

• Mexico 67

• Spain 32

• Taiwan 45

• Thailand 47

• Vietnam 31

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Import Detentions and Destruction – FDASIA

From www.FDALawBlog.net summary of provisions of Food and Drug

Administration Safety and Innovation Act (FDASIA):

FDASIA grants FDA the authority to destroy, without the opportunity for export, any drug that is

refused admission into the U.S. (i.e., counterfeit or adulterated imported drug products) that has not

been brought into compliance and that is valued at less than or equal to $2,500 (the amount of which

may be amended by regulation issued by the Department of Treasury). See id. § 801(a), as amended by

FDASIA § 708(a). FDA must issue regulations by July 9, 2014 that address the appropriate due process

available to the owner, including the introduction of testimony. See FDC Act § 801, as amended by

FDASIA § 708(b). In addition to FDA’s current authority to detain a device or tobacco product found

during an inspection that FDA believes is adulterated or misbranded, FDASIA permits FDA to detain

for a reasonable period drug products that the Agency believes are adulterated or misbranded based on

an inspection. See id. § 304(g), as amended by FDASIA § 709. FDA must promulgate regulations by

July 9, 2014 to implement administrative detention authority of drugs.

http://www.hpm.com/pdf/blog/FDASIA-HP&MSummary&Analysis.pdf

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From www.FDALawBlog.net summary of provisions of Food and Drug

Administration Safety and Innovation Act (FDASIA):

FDASIA creates a new standard of admission for drug products intended to be imported into the U.S.

This new standard will permit FDA to take a risk-based approach to screening imported drug

products. As a condition of granting admission, FDA may require the importer to submit certain

information electronically demonstrating the drug’s compliance with the FDC Act. See FDC Act §

801(r)(1), as amended by FDASIA § 713(2). Information requirements may be satisfied, at FDA’s

discretion, through an inspection conducted by or representations made by a foreign government that

has standards and practices determined appropriate by FDA, or by any other appropriate

documentation. See id. § 801(r)(3), as amended by FDASIA § 713(2). By January 9, 2014, FDA is

required to adopt final regulations implementing these standards.

http://www.hpm.com/pdf/blog/FDASIA-HP&MSummary&Analysis.pdf

Import Detentions and Destruction – FDASIA

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Criminal Prosecution

• Violation of FDCA, including

failure to keep appropriate

records or file reports

• False statements to federal

agent

• Mail fraud/Wire fraud

• Obstruction of agency

investigation

• Conspiracy

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Criminal Prosecution – Example

http://www.justice.gov/opa/pr/2013/May/13-civ-542.html

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Criminal Prosecution – Example

http://www.justice.gov/opa/pr/2013/May/13-civ-542.html

Ranbaxy USA acknowledged that FDA’s inspection of the Paonta

Sahib facility in 2006 found incomplete testing records and an

inadequate program to assess the stability characteristics of drugs.

Under the FDCA, a drug is adulterated if the methods used in,

or the facilities or controls used for, its manufacturing,

processing, packing, or holding do not conform to, or are not

operated or administered in conformity with, current Good

Manufacturing Practice (cGMP) regulations.

Ranbaxy also acknowledged that the FDA’s 2006 and 2008

inspections of the Dewas facility found the same issues with

incomplete testing records and an inadequate stability

program, as well as significant cGMP deviations in the

manufacture of certain active pharmaceutical ingredients and

finished products.

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FDCA Criminal Penalties

• Section 303(a) (21 U.S.C. §333(a)):

• (1) Any person who violates a provision of section

301 shall be imprisoned for not more than one year

or fined not more than $1,000, or both.

• (2) Notwithstanding the provisions of paragraph (1)

of this section, if any person commits such a violation

after a conviction of him under this section has

become final, or commits such a violation with the

intent to defraud or mislead, such person shall be

imprisoned for not more than three years or fined

not more than $10,000 or both.

• Fines increased pursuant to18 U.S.C. §3571

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Further questions? Please contact:

Douglas B. Farquhar, Director

Hyman, Phelps & McNamara, PC

202-737-9624

dbf@hpm.com

HYMAN, PHELPS & MCNAMARA, P.C.