Inspection Fees Face Tough Road In Congress As PhRMA Remains Opposed

At user fee hearing, PhRMA’s Wheadon counters questions from Rep. Dingell, saying FDA already is receiving resources to conduct GMP inspections outside the U.S.

The Pharmaceutical Research and Manufacturers of America continues to support increased FDA resources for foreign inspections to level the playing field with domestic manufacturers, but is careful not to imply support of new fees to pay for foreign inspections.

User fees already pay for pre-approval inspections, which also count as a Good Manufacturing Practices inspection, David Wheadon, PhRMA’s senior vice president of scientific and regulatory affairs, said during a Feb. 1 hearing on the Prescription Drug User Fee Act reauthorization in the House Energy and Commerce Subcommittee on Health.

Rep. John Dingell, D-Mich., a chief sponsor of a supply chain security bill that at one time included fees for foreign inspections, pushed Wheadon to explain why PhRMA would not support inspection fees.

Wheadon suggested that an inspection fee as Dingell envisioned could be considered double-charging.

“When an inspector goes into a facility either domestic or foreign, they don’t only look at the product that’s under consideration for approval, they look at the system for that manufacturing establishment,” Wheadon said. “So the GMP inspection is carried out in the context of a pre-approval inspection.”

PhRMA supports allowing FDA to conduct facility inspections using a risk-based approach. The policy means the agency would focus on facilities presenting the most risk of problems when determining which facilities to visit.

But he also told Dingell that FDA’s existing authority and resources allow it some influence over foreign manufacturing sites.

“I think FDA has the ability to impact foreign manufacturers if they’re importing drugs into the U.S.,” Wheadon said.

PhRMA also supports FDA ensuring domestic and foreign inspections are conducted within regular intervals, according to written testimony.

The group did not suggest a minimum inspection frequency. Allan Coukell, director of medical programs for the Pew Health Group, suggested each plant be inspected at least every four or five years, according to written testimony.

PhRMA also in written testimony supported requiring facilities to register with FDA, which would create a single database of information on all facilities making products for the U.S. market (Also see "Supply Chain Security Issues To Emerge During Subcommittee Hearing On PDUFA" - Pink Sheet, 31 Jan, 2012.).

The Generic Precedent

Wheadon may have been put in the uncomfortable spotlight, but Dingell’s foreign inspection fee does not appear to have the momentum to be included in PDUFA.

GOP lawmakers, who control the House, typically do not broadly favor increasing fees on industry. A previous attempt to pass Dingell’s bill also saw the fee removed before the bill ultimately died.

Senators have hinted in previous hearings they may be interested in the fees, however (Also see "Inspection Fees For Drug, Ingredient Manufacturers Could End Up In PDUFA, Sen. Harkin Says" - Pink Sheet, 14 Sep, 2011.).

The brand industry remained largely silent last year when the subject of inspection fees emerged in the context of the generic drug user fee agreement.

That agreement, which is awaiting authorization from Congress along with a new user fee for biosimilars and renewals of PDUFA and the medical device user fee, includes a facility fee that in part will pay for more inspections of foreign manufacturers (Also see "Generic Facility Fee Unlikely To Be Charged Until A Few Months After GDUFA Implementation" - Pink Sheet, 19 Dec, 2011.).

It is possible the generic drug user fee agreement could allow Congress to test the concept. If FDA performs well and meets inspection benchmarks once it receives additional resources, members may try to add the program as part of brand user fees (Also see "Is Silence Golden For Brand Companies On Inspection Fees?" - Pink Sheet, 4 Apr, 2011.).

Extending FDA’s Reach, Not Fees

During the hearing, PhRMA and the Biotechnology Industry Organization focused on regulatory changes that would expand the agency’s reach, but exert less financial burden on industry.

PhRMA wants FDA to take more advantage of the resources of other regulators to meet its inspection burden, including using foreign inspection reports and third parties, when appropriate.

The agency already is working to expand its relationships with other regulators as part of a new globalization plan. FDA is envisioning world coalitions focused on singular issues that would involve several nations sharing information (Also see "FDA Envisions Many Regulatory Coalitions Dealing With Globalization Issues" - Pink Sheet, 26 Sep, 2011.).

Some drug developers also want the agency to become more active in elevating the regulatory capacity of emerging countries as well as improve its own policies for approving drugs primarily intended for emerging markets (Also see "Tropical Disease Development Partnerships Want More Help From FDA" - Pink Sheet, 13 Feb, 2012.).

BIO along with FDA pushed for a mandate to establish national traceability standards. FDA agreed, saying it is working to complete the standards in order to avoid a patchwork of state laws with varying requirements.

The standards are expected to be released soon (Also see "Track and Trace Standards Coming Shortly, FDA Says" - Pink Sheet, 2 Jan, 2012.).

Commissioner Margaret Hamburg also acknowledged during the hearing a national track and tracing system also could improve FDA’s responses to drug shortage problems.

Congress is expected to include drug shortage-related legislation in the PDUFA reauthorization. Several bills are pending that would increase the amount of communication and information made available to the public and practitioners, as well as competing manufacturers.

Some members also are circulating concepts that would adjust reimbursement policies to attract more producers of drugs who are the most prone to shortages ( (Also see "GOP Drug Shortage Strategy Pushes FDA Reform, Reimbursement Over Notification" - Pink Sheet, 13 Feb, 2012.)).

No Incentives To Cut Corners

Industry also cannot rely on FDA to root out all wrong-doing in the supply chain, Coukell said. He said companies should be responsible for assessing their own supply chains.

Coukell said in written testimony there should not be a reward to work without the necessary monitoring programs.

“We must make sure there is no incentive for the weaker actors to gain a competitive advantage by cutting corners,” he said. “An ideal system will reduce risks, reward companies with good quality systems, promote an even playing field and use taxpayer dollars efficiently.”

Congress likely will have to balance its requirements to ensure companies that already have extensive monitoring programs will not be overly burdened.

Geno Germano, Pfizer Inc. president and general manager of specialty care and oncology, told the health subcommittee that the company already has systems monitoring supply chains beginning with raw materials through acquisition by consumers. Other large pharma companies also likely have implemented similar internal supply controls and likely would not be enthusiastic about revamping them to suit congressional needs.

The answer from Congress may be simpler. Deborah Autor, deputy commissioner for global regulatory operations and policy, told the Senate Health, Education, Labor and Pensions Committee recently that legislating adoption of quality management systems will improve product safety.

Autor said a bill requiring drug manufacturers to know and control their supply chain would not be difficult to implement (Also see "FDA Wants Authority To Enforce Track-And-Trace System For Drugs" - Pink Sheet, 19 Sep, 2011.).