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BIOCRAFT TOUTS SHORT FDA INSPECTION REPORT AND "FREE OF FRAUD" RECORD AS GROWING NUMBER OF FIRMS PASS FDA INSPECTION; ANOTHER FDA DINGELL HEARING

Executive Summary

Biocraft Laboratories received a one-page FDA inspection report on Sept. 19 and on Oct. 6, became one of the first generic firms to try to counter the tide of bad publicity with a press release announcing that FDA had found the firm "free of fraud." Biocraft asserted that "FDA has found absolutely no fraud or other impropriety by Biocraft after its inspection." President Harold Snyder said it is "unfortunate that reputable generic manufacturers such as Biocraft were unnecessarily brought under the cloud of the generic drug scandal." Snyder added that the inspection results "affirm the integrity of the company and its employees." A number of other generic drug firms similarly obtained reports of minor deviations from good manufacturing practice (GMP) regulations but overall received a relatively clean bill of health. Barr Laboratories, for example, said it received a six-line inspection report. Inspected by FDA as one of the 20 largest generic drug firms, Barr was cited for six observations involving minor GMP violations. Barr's inspection report is noteworthy because the firm is an in-house producer of its generics. The company's ads often carry the line: "If Barr doesn't make it, Barr doesn't sell it." Generic manufacturers Danbury and Ciba-Geigy subsidiary Cord reportedly received similar short and insignificant inspection results. A Cord spokesman noted that the company received a one-page report of minor GMP deviations to which it has already responded. Cord was inspected as one of the 20 largest generic houses. On Oct. 13, Lederle reported receiving a clean review of its generic facility. Following an Aug. 23-Sept. 21 inspection of its Pearl River, N.Y. plant, Lederle said "the FDA inspectors found no violations, and no FD-483 was issued." The form FD-483 list of adverse observations issued to Biocraft is noteworthy because of the attention paid to the firm's relationship with its outside contract labs. That is developing as one of the important sub-themes of FDA's investigations into the generic approval process. The FD-483 report contains six observations made during an Aug. 25-Sept. 19 inspection of three Biocraft manufacturing plants. The facilities are located in Paterson, Elmwood Park and Fairfield, N.J. Among the findings listed, the inspection report states that "a written procedure does not exist for the use of outside labs." The document also reports that "outside labs are not periodically challenged with spiked samples." Biocraft responded that it had audited its outside labs but would henceforth also "write a formal SOP for the use of outside laboratories." Although Biocraft said it has sent samples to more than one testing lab for double checking and has "gained confidence over the years" in its contract laboratories, it nonetheless will "periodically challenge their work with spiked samples." Although the FDA inspections are clearing a number of firms and assuring a source of supply for generic marketing firms, the allegations of scandal continue to dominate headlines and mass media. Bolar remains at the center of the publicity following its recall of nitrofurantion. While the story stays hot, Rep. Dingell's (D-Mich.) House Oversight Subcommittee is planning another in its series of hearings on the generic drug investigations. Tentatively scheduled for mid-November, the hearing is expected to feature FDA Commissioner Young, who will testify before the committee for the second time on the subject of the generic approvals. FDA appears to be in a slightly better pre-hearing position than at mid-summer. This time, it has the intensive inspection programs to report on as signs of its activity in the area. In fact, there are indications that Dingell's staff believe egregious violations of the process have been identified and represent a small minority of the generic drug industry and their products. However, the political fight over the image of FDA as a deregulator during the 1980's presumably remains open. Dingell could push that topic by expressing displeasure with agency efforts to revamp its approval process. The subcommittee has additional plans for the generic drug crisis. It hopes to publish a preliminary report on the investigations by January. With the Bolar story refusing to die, the subcommittee may hold the hearing that was canceled late last month. Further hearings, involving brandname companies like SmithKline Beecham (on the poor bioavailability of Dyazide) and Lilly (on the highly-publicized inspection report at Indianapolis), are also possible, though less likely. The National Association of Pharmaceutical Manufacturers met with FDA on Sept. 29 to discuss attendance by agency officials at the association's annual meetings. NAPM's Puerto Rico meeting and its subsidies to FDAers to attend the meeting were among the points-of-departure for the generic scandal. NAPM said FDA wants to resolve the issue and has asked for association records of the attendance and expenses for agency personnel from past meetings. The association added that it will follow any procedures established to ensure future FDA attendance. However, NAPM would rather not schedule its winter meetings in Washington, D.C. The issue was raised at a May 10 hearing on the generic drug investigations before the House Commerce/Oversight Subcommittee, when HHS Assistant Inspector General for Investigations Larry Morey criticized as "illegal gratuities" arrangements by which NAPM subsidized rooms and paid other expenses for FDA officials attending the meetings ("The Pink Sheet" May 15, p. 10). The association offered to make special arrangements so that hotels could provide reduced rates for government employees attending NAPM meetings; however, the agency has insisted that it must avoid the appearance of receiving any benefit from industry, directly or indirectly. NAPM noted that the new protocol will affect all private sector groups that invite FDAers to its out-of-town conferences. NAPM Chairman Ed Plymack (Kalipharma), President Arnold Goldfarb (Altana), General Counsel Milton Bass (NYC firm Bass and Ullman) and Executive Director Robert Milanese discussed the issue at FDA's Rockville offices. FDAers who attended were headed by Associate Commissioner for Management & Operations Sharon Holston Smith. The association has developed a number of proposals to address problems uncovered by the investigations. To avoid test product switches in which manufacturers send drugs not taken from production runs to contract labs for bioequivalence testing, NAPM is proposing that FDA inspectors obtain samples from production runs and deliver them to the testing facility. As an alternative, the association suggests, contract labs could retrieve the samples directly from production runs, or the companies could pay to have independent parties make the pick up and delivery of the samples. NAPM is also recommending that testing labs should not sign royalty or equity agreements with manufacturers. Such a restriction would remove the appearance of a conflict of interest. Although a flat fee might be expensive, it should be commensurate with the testing involved rather than the potential value of the test product's market, the association says.

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