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Executive Summary

Recommendations for strengthening FDA's generic drug approval system made by HHS' Office of the Inspector General are completed or being initiated, the Public Health Service told the IG. The IG recommendations made in August 1989 "either have been or are being implemented at this time," PHS said July 24. The PHS comments were made in response to the IG's May draft report: "Follow-up Review of the FDA's Generic Drug Approval Process". The follow-up review was performed from April 1, 1991 to Sept. 30, 1991. The IG made its initial recommendations in an Aug. 17, 1989 report called "Vulnerabilities in the FDA's Generic Drug Process," which was requested by then-FDA Commissioner Young and Rep. Dingell's (D-Mich.) House Energy & Commerce/Oversight Subcommittee following discovery of fraud and corruption in the generic drug review process ("The Pink Sheet" Aug. 28, 1989, p. 3). PHS said it is also "pleased to report that the commitments made by [Commissioner Kessler] in December 1991 to the Deputy Director, Office of Management and Budget have been fulfilled." The commitments were to: "(1) finalize new policies and procedures for the assignment of generic drug applications, (2) finalize a reference document to facilitate the chemistry review of [ANDAs], and (3) assess the concept and feasibility of a quality control review system." In the OIG's final follow-up report, dated Sept. 16, the IG said the Office of Generic Drug's (OGD) "method for assigning ANDAs to reviewers is basically the same as that used prior to the generic drug investigation, which allowed partiality to certain drug firms." The OIG recommends that FDA "modify the ANDA assignment method to remove the opportunity for branch chiefs to subjectively assign ANDAs to reviewers." The agency should also "revise the 'first-in, first-reviewed' policy to ensure that ANDAs that are received in the review branch first are reviewed first," the OIG's final report says. According to the IG, FDA had interpreted the policy to mean that ANDAs are to be reviewed in the order they are put in the reviewer's queue, not the order they are received in the review branch. The review policy "is unfair to drug firms...because one firm's ANDA, may be reviewed later since it may be assigned to a reviewer with a large backlog." In response to these recommendations, PHS said that a new policy for randomly assigning ANDAs was fully implemented on June 8, which provides for assignment "in the order in which they are received in the branch." PHS added that "the oldest applications in the branch queue are assigned to the next available reviewer, subject to limited exceptions." The OIG's follow-up review recommends that FDA "develop specific written guidelines for reviewing chemists on the proper way for an ANDA to be reviewed." OGD issued a draft chemistry reference document in December 1991, which indicates which parts of the FD&C Act and other documents relate to the different elements of a review. FDA said that it had to revise the draft to conform to the implementing regs of Title I of the Waxman/Hatch Act, which issued in April (see related item, T&G-13). The reference document was finalized and issued on Aug. 27, OGD said. The IG report also suggests that a quality control review system should be established "outside of OGD to ensure the propriety of individual ANDA reviews and the integrity of the ANDA review process." FDA "has implemented this recommendation," PHS countered. "In 1991, OGD assigned responsibility for performing quality control assessments of selected chemistry reviews to the Associate Director for Chemistry [Robert Jerussi, PhD]." In response to an IG suggestion that the quality control evaluation be separated from OGD, Jerussi was assigned from the generic drugs office to the Center for Drug Evaluation and Research, where "management will conduct an independent review of this individual's performance." PHS noted that "CDER is in the initial stages of developing a broader quality assurance function that will cover reviews performed of both ANDAs and [NDAs]." Since 1989, the HHS secretary has reported the lack of adequate internal controls in the generic drug approval process as a "material weakness" to the President and Congress under the Federal Managers' Financial Integrity Act of 1982. "While FDA has taken positive steps to address the serious deficiencies that constitute a material weakness disclosed in our August 1989 report and May 12, 1992 draft follow-up report, actions still remain to be taken to fully address this weakness," the IG report states. "Only one corrective action has been fully implemented -- the random assignment of applications," the IG report continues. Regarding the other two recommendations, "FDA is still in the process of implementing these actions," and therefore "HHS should continue to report the generic drug application review process as a material internal control weakness." PHS said it agrees that when the OIG report was prepared, the approval process "still had deficiencies," but that all of the recommendations and commitments now "have been fully implemented." Therefore, PHS "will notify the Departmental Management Oversight Council that appropriate actions have been taken to correct the material internal control weakness in this program area" and will ask that the process "be removed" from the list of internal control weaknesses. In the early part of 1992, the generic drug approval process was removed from OMB's "high risk" list ("The Pink Sheet" March 23, p. 6). Around the same time, CDER decided that new drug evaluation chemists would no longer be needed to conduct reviews of ANDAs. The reviewers had been assigned in October 1990 to help generic reviewers reduce the backlog of ANDAs. One indication that OGD's workload is more manageable is that generic chemists are now helping NDA chemists by reviewing manufacturing supplements pending in new drug evaluation. FDA has an overdue backlog of about 800 manufacturing supplements. Two generic chemists have been detailed to the Offices of Drug Evaluation to evaluate manufacturing supplements. Four other chemists at OGD also are reviewing supplements. OGD also has shortened the times of first review cycles for applications and major amendments to the pre-scandal levels of four months. According to OGD, median times for reviews of ANDAs, AADAs and major amendments that end in issuance of a "not approvable" letter have dropped from a high of about 14 months in late 1990 to four months as of the end of July. Excluded from this calculation are cycles starting with a minor amendment or ending in an approval letter. Complete reviews of applications can take two to three cycles. OGD attributes the improved review times to new management and to productivity initiatives, including the hiring of more chemists, better training of reviewers and improvement of policies and procedures.

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