September 1, 2008 (Vol. 28, No. 15)

Will It Truly Overcome Safety Concerns or Is It Just Window Dressing?

This October the FDA plans to open an office at the U.S. embassy in Beijing in an effort to implement a cost-effective, prevention-based approach to risk management. The U.S. Department of State has already approved the placement of eight FDA personnel and five foreign nationals. Chinese authorization is, however, still pending.

FDA’s decision comes hard on the heels of notable safety issues involving contaminated heparin, pet food, and toothpaste. One may wonder, though, whether the planned office is merely window-dressing to satisfy a China-leery public or a concerted effort to improve the safety of Chinese drugs. The answer, China-watchers conceded, is probably a bit of both.

China, traditionally, has been loathe to acknowledge errors or bad news. Note the reactions to recent disasters, avian flu outbreaks, and the violence in Tibet. Typical responses have been to deny the event, delay reporting, or minimize the numbers of those affected.

Countering that, of course, is the action taken to discipline the head of the China’s FDA, found guilty of bribery and allowing unsafe drugs to enter the market. He was executed. Such recourse, even in China, was considered severe. It was taken with the attitude that he had caused significant damage to China’s international reputation in addition to causing the death of several people within the country.

The Chinese government points to that as an indication of its sincerity in wanting to build a world-class biopharmaceutical industry and regulatory environment.

The FDA isn’t picking on China, as some Chinese vendors at “BIO 2008” assumed. Instead, the agency is trying to maximize foreign medical product preapproval inspections. The agency is also working to establish a close collaboration with India, another burgeoning pharmaceutical supplier.

Improving Inspections

“Each year, the FDA performs hundreds of foreign preapproval inspections that assess data in applications and a firm’s cGMP compliance,” according to Janet Woodcock, M.D., director of the Center for Drug Evaluation and Research. Those inspections evaluate manufacturing facilities’ capabilities to produce safe, high-quality products. Last year, the FDA conducted 332 such inspections, up from 260 in 2004. The goal for 2009 is 500.

These inspections—and the interest in China—is part of the FDA’s “Beyond Our Borders Initiative.” The program calls for greater sharing, use of competent authority inspection reports and third-party certification, as well as increased FDA inspections.

“The goal is to ensure that imported drug products are safe and effective and meet all applicable FDA standards prior to reaching U.S. ports of entry,” Dr. Woodcock explained. This will improve upon the old snapshot approach that occurred at the U.S. border.

China was chosen as the site of the first branch office of the FDA because it is the largest exporter of pharmaceuticals and the third largest exporter in general to the U.S. An FDA office there would “improve our ability to inspect facilities in China and foster greater interactions between FDA staff and Chinese manufacturers to help ensure that products shipped to the U.S. meet FDA standards for safety and manufacturing quality,” Dr. Woodcock testified May 1 before the U.S. House of Representatives’ Committee on Energy and Commerce’s Subcommittee on Health.

Lack of Government Control

“It’s more than lip service, and the issue is complex,” pointed out George T. Haley, Ph.D, author of the Chinese Tao of Business and business professor at the University of New Haven. “People don’t really understand the way things work in China. We think there’s a central government, but that government is finding it impossible to control anything in the provinces.”

That lack of control is causing China to “let go of the small and hold the large,” Dr. Haley elaborated. Therefore the small and medium-sized businesses that constitute much of the API industry are regulated by municipal or provincial governments. This has led to discrepancies because the supply chain is fragmented.

“Look at the pet food scandal,” Dr. Haley remarked. “The company responsible was being protected by the local government. The central government found it impossible to track the problem because the company, officially, had closed.

“The offending company was discovered by a reporter who talked with a taxi driver who talked with a trucker who spoke of deliveries that were still being made to the closed plant.” Obtaining such information is one of the presumed goals of FDA’s anticipated presence in China.

Another challenge for China is its historical lack of a rigorous pharmaceutical regulatory environment. “There’s never been a preclinical submission process in China,” reported Chris Perkin, president of preclinical services for Canada and China at Charles River Labs ( The reason is that until recently, most Chinese medications were based upon natural products, according to Perkin.

Because meticulous regulatory guidance has been absent in China, biopharma companies operating there today often find it necessary to train key staff members in the West. That helps ensure that the rigors of GLP and GMP environments are understood and increases the likelihood that the necessary steps will be taken to ensure that the final product is as per the FDA’s requirements.

“China has a reform movement and a version of the FDA—the Sino FDA—that is working with the U.S. to adopt similar regulatory controls,” Dr. Haley noted. The Sino FDA is in its infancy but is poised for rapid growth.

Currently, it is allowing itself to be guided by the standards accepted by industrialized nations. The SinoFDA is requesting training and guidance. “The FDA has conducted training courses since at least 2004,” according Perkin. For the time-being, therefore, the FDA has some influence in shaping China’s pharmaceutical regulatory policy as it strives to attain world-class standards.

Streamlining Manufacturing

“The FDA’s presence is driven by manufacturing issues,” Perkin stated. At “BIO 2008” Tony Chen, partner at the Shanghai office of international law firm Jones Day, said “The FDA’s increased presence will help Chinese pharmaceutical companies speed up the process of getting their standards synchronized with those of the U.S.”

The presence of the FDA is also expected “to allow Chinese companies to better understand pharmaceutical quality issues from the U.S. perspective, improving the quality of submissions to the FDA,” said Warren P. Levy, Ph.D., president and CEO of Unigene.

Libing Yu, with Shanghai-based CRO Alputon, agreed. “This should make it an easier transition for Chinese companies wanting to get into the U.S. and other Western markets.” API companies are getting ready to get certification from the FDA to export formulations to other companies that will sell it for them.

“China is very big in the active pharmaceutical ingredient market so they appreciate the enhanced value of getting into the formulation business,” Chen said. “Many times, API companies have scientists on staff with experience to develop drugs or formulations for the Western market. Many have trained in the West.”

There’s more to this move than merely the ability to advise and inspect, though. Scott Gottlieb, M.D., FDA deputy commissioner from 1990 to 1997, suggested that the emphasis isn’t particularly on inspections as it is “to have enough people to tap local sources of information to get information to flow back” to better manage manufacturing risks.

At the present time, if problems do occur in the plant, there’s no way to know about them unless the company or supplier contacts the FDA for input. Consequently, opportunities that could help regulators remediate situations before they reach crisis proportions.

“The agency doesn’t have enough reliable information” to accurately target the risks, Dr. Gottleib added. He also pointed out that the issue isn’t just with China but with India and South America as well.

Challenges for FDA

Building its pharmaceutical industry with the advice of the FDA is in China’s economic interest, pointed out pointed out Gregory V. Page, Ph.D., managing director of healthcare, disputes, compliance, and investigation for Navigant Consulting. He believes, though, that adding a few FDA staff members in China won’t make any difference to the agency.

The reason, Dr. Page explained, is because the FDA has no enforcement authority on foreign soil. “We are not going to police the world for the pharmaceutical industry.” So, regardless of the Chinese FDA office, if suppliers don’t control their products adequately, the pharmaceutical partner will be held liable.

Although there probably will be a real benefit from opening an office in China, it’s also likely that the move is at least partially to satisfy the American public, commented Dr. Page. “The FDA is a political organization so it’s being reactive to government mandates and is responding to public pressure.”

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