On July 2, the Falsified Medicines Directive (FMD) went into full force: All APIs imported into the EU must be accompanied by written confirmations of quality by the regulatory body from the country of origin, have a valid EU GMP certificate (for shortage cases only) or come from a country listed by the EU Commission.  So far, the only countries to have been granted "equivalency status" are the U.S., Switzerland, Australia and Japan. According to Rx-360, applications from Singapore and Israel "have been declined pending changes in their GMPs to adequately address APIs that are exported rather than manufactured into drug product in domestically." Other countries, including China, India and Canada have begun providing the necessary written confirmations.

The goal of the directive is to increase the safety of pharmaceutical products, particularly generic APIs, being imported into the EU; however, many within the industry have voiced concern that implementation will be difficult. The UK Medicines and Healthcare products Regulatory Agency (MHRA) has already announced plans to let drugmakers import APIs that lack written confirmation of quality if there is a danger of a shortage.

"The National Health Authorities in Europe have become dependent on low cost generic APIs sourced in third countries to meet patient needs and to maintain budgetary control," said Tony Scott, adviser to the European Fine Chemicals Group (EFCG). "As such, they will want to ensure that every possibility of continuing supply of these medicines is allowed,"

He expressed understanding for the concerns of the pharma industry and its associations, but he added that many companies in the generics business in Europe were well aware that they were risking their continuity of supply if they didn't have another supplier, ideally in Europe.

'Think Of Heparin'

Another weak point in the legislation is that only bulk APIs are covered; if an API is mixed with a second substance or if it is not the final API but the crude or moist "pre-API", it then becomes exempt. The EFCG said they wrote to the Commission regarding this loophole. Scott said the Commission said in those cases, the substances would be analyzed to make sure it is in line with specifications. This was a red flag for the EFCG.

"Think of the heparin case," Scott said.

In 2008, The U.S. FDA recalled several batches of the anticoagulant injectable due to contamination of the raw heparin stock imported from China.

"You couldn't fully analyze it because you didn't know what you were analyzing for," he said. "And the unregistered substance you didn't know you were analyzing for was killing people."

FDA scientists were only able to identify what they called a "previously unknown contaminant" - oversulfated chondroitin sulfate -in the tainted heparin after an extensive investigation. The FDA said the adulteration was intentional in order to maintain supply during a shortage of raw heparin in China and to reduce the cost of production.

As many as 81 deaths were reported in the U.S. between January and May 2008; the tainted blood thinner was also found in 11 other countries, including Denmark, France, Germany, Italy and the Netherlands. While European deaths were not documented, it remains unclear if patients died from the use of tainted heparin here.

Joint Inspections Still A Rarity

What remains unchanged in the directive is the burden of responsibility to verify compliance. That still lies with the EU Marketing Authorization Holder auditing the supplier themselves or via a third party; the FMD does not require mandatory inspections of all global API manufacturers or the traceability of manufacturing sites that produce APIs intended for sale within the EU.

In a recent position paper, the EFCG pointed out the difference in the quality of an audit and an inspection performed by a national authority, such as the U.S. Food and Drug Administration. The supplier has to agree to both the date and scope of an audit, whereas the timing of an inspection is up to the discretion of the national authority, and the supplier must offer access to all records and all areas of the site.

 "Many small European medicine manufacturers do not have adequate qualification, experience or resources to conduct API audits abroad," the group wrote. "In addition, Qualified Persons (QPs) are often in conflict between their company's ethics and its financial objectives."

 The EFCG has also criticized the European Commission for basing the FMD on false information; Scott said they wrongly assumed there were 15,000-20,000 API manufacturers importing into the EU, therefore arguing that there were too many facilities to physically inspect.

"They're now proven to themselves that it's not that many," Scott said. "There are about 1,600 maximum. If every member state of the EU and certain other countries with EU-equivalent standards shared the responsibility of inspecting facilities, then it wouldn't be a burden, and it could be done at a relatively low cost. But presently, as the FMD is the new law, there is not a political will."

Under the proposed EU-U.S. Free Trade Agreement, which includes a chapter on pharmaceuticals, regulatory agencies will have to align industry standards for pharmaceuticals; pharma associations on both sides of the Atlantic recognize that a Mutual Recognition Agreement (MRA) covering inspections is a prerequisite for ensuring the safety of imported APIs. The idea itself is not new; a pilot program for joint inspections by the U.S. FDA, the European Commission and the EMA ran successfully from 2009-2010. A continuing cooperation between the FDA and the EMA was confirmed at the beginning of 2012, but the joint inspection program is limited to a few sites. The EFCG, the American Society of Chemical Manufacturers and Affiliates (SOCMA) and the Active Pharmaceutical Ingredients Committee (APIC) submitted a proposal to the EU-U.S. High Level Working Group for Jobs and Growth and to the High Level Regulatory Cooperation Forum in October 2012 regarding the importance of mutual recognition and securing an MRA.

"Mutual recognition would save an enormous amount of time and money," Scott said.  

Outlook

Who are the winners under the directive?

"The winners ought to be the patients," Scott said. "But there's no guarantee of that."

Implementation and enforcement of the directive within the EU member states remains a concern for the EFCG. In its position paper, the group argued that the majority of current suppliers in third countries will need a long time to get their API manufacturing standards on par with the EU's.

"And until they do," the group stated, "the risk control mechanisms to protect the EU public - a written confirmation and/or an audit by a Marketing Authorization Holder - are less reliable than that provided by an inspection by an EU or equivalent authority."

Scott said that the FMD should, with strong regulatory enforcement, make it more difficult for companies whose sole strategy is to "make profit by cheating the system."

There is need for tough, prompt and expensive sanctions for individuals, producers and client companies for deliberate non-compliance or counterfeiting, Scott said. Such sanctions should include product recalls, withdrawal of marketing authorizations, seizure of profits, debarring of individuals, blacklisting of companies and prison terms for guilty management, he said.