Global API Inspections

By Tony Scott, European Fine Chemicals Group | January 22, 2013

Can Mutual Recognition Agreements ensure safety?

The European Fine Chemicals Group (EFCG) is proposing a global harmonization of the rules and regulations governing the manufacture of active pharmaceutical ingredients (APIs) to level the worldwide playing field and ensure that the quality of APIs and medicines containing them meet the high standard (ICH Q7) recognized by the developed economies. This should be achieved via mandatory inspections of all global API manufacturers via a Mutual Recognition Agreement (MRA) approach, managed by the National Regulatory Authorities in order to share scarce inspection resources and to avoid the present duplication.

This message is at the core of the latest EFCG position paper,1 which is aimed at all stakeholders in the global API supply chain, including the regulators, and previewed during their October press conference at the 2012 CPhI exhibition in Madrid. It was repeated in their recent joint response2 (with the Active Pharmaceutical Ingredients Committee (APIC) and the U.S.-based Society of Chemical Manufacturers and Affiliates (SOCMA)) to the EU-U.S. Public Consultation on the future of EU-U.S. trade and economic relations, which provides proposals for the EU-U.S. High Level Working Group on Jobs and Growth and to the EU-U.S. High Level Regulatory Cooperation Forum.

EFCG believes that the new EU Falsified Medicines Directive (2011/62/EU), designed to minimize counterfeit medicines entering the EU market, does not adequately address the API quality issues and that in reality it does little to improve upon the present Directive (2001/83/EC) with regard to patient safety. Evidence of illegal API manufacturing activity in Asia since 2003 is given in the paper.

Over the past decade, driven by the need of national health services for cheaper medicines, the market for generic APIs has increased dramatically. Today, about 70% of all APIs consumed in Europe are imported from China and India, where factories are rarely inspected for compliance with EU standards by EU authorities.

This has led certain unregulated API manufacturers in developing countries, especially in China and India, to compete aggressively in the market with ~30% lower prices due to lower labor costs and non-compliance with local environmental and safety regulations, for an API quality often less than the required EU standard (ICH Q7). Such products can be harmful to health, as they may contain unknown impurities or foreign contaminants that can provoke side effects or adverse reactions, e.g., Chinese heparin in the USA that caused >100 deaths were due to a deliberately included and undeclared impurity: OSCS.

This situation is of concern to both the EU scientific and medical community for public health reasons and to those EU API manufacturers facing unfair competition in the legal supply chain.
It is difficult for an EU customer to trace the real manufacturer of the API, because the manufacturer that initially made and certified the product often now uses another, lower cost, uncertified API manufacturer to supply them for export to the EU.

The recent EU Directive4 designed to minimize counterfeit and sub-standard medicines entering the EU market, does not adequately address the API quality issue. For example, it allows for preparations and medicines containing APIs to be imported into the EU without checking whether the API manufacturer is compliant with the Directive, as is required for the API per se.

There is much supporting evidence from the last 10 years of cases of illegal API activity and the need for stronger enforcement of national and international laws.

Current Situation
The EU Directive (2001/83/EC)3 presently in force for medicines intended for human use cannot ensure that APIs used in EU medicines are GMP-compliant as required, as neither mandatory inspections nor traceability of the API to its original manufacturing site are required. The most recent Directive (2011/62/EU4 — also known as the Falsified Medicines Directive or FMD) covering human medicines, published on July 1, 2011, is to be fully implemented by the EU Member States by July 2, 2013. Like Directive 2001/83/EC, it does not require at the outset that suppliers of APIs to the EU must have been inspected by a competent authority for GMP compliance to at least EU standards, or the traceability of the manufacturing sites that produce APIs sold in the EU. Instead, the responsibility to verify compliance remains with the EU Manufacturing Authorisation Holder (MAH) either auditing the supplier itself or via a third party.

There is a big difference in the quality of an audit and an inspection performed by a national authority. The date of an audit and its limited scope has to be pre-agreed with the supplier but an inspection date is imposed on a supplier and the inspector can demand to see everything. Often smaller European medicine manufacturers do not have adequate qualification, experience or resources to conduct API audits abroad, and sometimes Qualified Persons (QPs) employed by MAHs are trapped in the conflict between their company’s ethics and its financial objectives.

The new FMD4 stipulates rules for the importation of APIs that require either a written confirmation from the national competent authority of the exporting country that the APIs  manufactured there are compliant with GMP at least equivalent to EU standards, or if the exporting country is on an approved list of non-EU countries that have been assessed by the EU to ensure they meet EU manufacturing standards, or exceptionally, and where necessary, to ensure the availability of key medicinal products, when a non-EU API factory manufacturing for export has been inspected by an EU Member State and was found to be compliant with EU manufacturing standards.

These new rules raise doubts about the quality of future API imports to the EU from developing third countries on which the EU is already heavily reliant. Most current suppliers in such third countries will take a very long time to achieve EU standards of API manufacturing and, until they do, the risk control mechanisms to protect the EU public — a written confirmation and/or an audit by a Marketing Authorisation Holder — are less reliable than that provided by an inspection by an EU (or equivalent) authority.

For example, as long as China and India are not on the list of the third countries with an EU-confirmed equivalent regulatory system, export will depend on the written confirmation issued by a local authority within China or India.

EFCG believes that the written confirmation does not constitute the best solution to ensure GMP compliance of APIs imported and to guarantee patient safety into the EU for two reasons:
  • How can such confirmations be issued by the local authorities of third countries who do not themselves fulfill the prerequisites to be included on the list of equivalent countries?
  • DG SANCO’s Q&A document5 states that the written confirmation may be valid for an unlimited period of time, may be issued by a “responsible person” and is not controlled or registered at goods entry into the EU, and is not even checked for authenticity.
The Q&A document does not include a requirement on the qualification or level of the “responsible person” at the issuing local authority (Q22). Therefore, while the written confirmation is intended to contribute to patient safety, in reality it is most unlikely to do so in the near future.

The new FMD, therefore, accepts the continued risk to EU citizens as the normal situation, adopting the safe solution only as an exception, to be used when there is a lack of key medicines. Considering patient safety as prime, EFCG assumes that this decision was taken for cost reasons based on a wrong assumption of the number of API factories to be inspected — 15,000 to 20,000 rather than the lower, real figure of fewer than 1,000 — and, consequentially, an overestimation of the inspection resources required to ensure compliance. Had the lower figure been used and if those global regulatory authorities operating at EU standards could agree to share the inspection load via Mutual Recognition Agreements (MRA) and not to duplicate inspections (as is the present situation), then mandatory inspections by competent authorities — the safe solution — could have formed the basis of the FMD.

As a possible consequence of the FMD on third country manufacturers, concerns are being expressed about the likely shortage in Europe of key medicines, their APIs and intermediates. As European manufacturers were the prime source of such products before the advent of low-cost producers in emerging markets forced them to close their production facilities, EFCG believes many have the ability to re-open them to deal with any shortages that may arise. For such replacement of non-EU sources, accelerated regulatory approvals of supplier changes should be considered by EU regulators as needed.

Mandatory Inspections and Mutual Recognition Agreements
Since 2004, EFCG has been consistent in its call for mandatory inspections by competent authorities of all global API sites for the reasons given above. Such global harmonization would level the playing field and significantly reduce the competitiveness gap among all API manufacturers.

To improve the prospects for mandatory inspections, it will be necessary for the on-going, co-operative, international regulatory agencies’ API “pilot inspections” programs to result in MRAs.

The major co-operative program was the two-year International API inspection Pilot Program (2008-2010) involving EMA, five EU Member States (France, Germany, Italy, Ireland, UK), the European Directorate of the Quality of Medicines and Healthcare (EDQM), the U.S. Food and Drug Administration (FDA) and the Australian Therapeutic Goods Administration (TGA). Its objective was to inspect those API manufacturing sites outside the participating countries, to share information and to make some joint inspections. Its final report6 dated June 16, 2011, stated that 1,110 sites were inspected, some by multiple authorities, of which 642 sites were placed in a Master List, including 538 sites listed by the five EU authorities, viz., EMA (119), EDQM (202), Germany (104), UK (53), France (44), Italy (11) and Ireland (5).

Recently, the regulatory agencies themselves have confirmed that the number of API manufacturing sites worldwide is in a range of 500-900, viz., the Pilot Programme report indicates 642 sites, the FDA GDUFA document states 861 sites (147 U.S. and 714 non-U.S.), and on the basis of the EU Marketing Authorizations, there are approximately 500 global sites.

The Joint FDA-EMA Inspection Program, launched in January 2012, confirmed the continuing agency cooperation (except TGA). While post-authorization surveillance inspections will profit from this cooperation, nothing will change for pre-authorization/pre-approval inspections. A revision of the cooperation is foreseen in the program’s third year. The EU inspection priorities are sterile APIs, biotech APIs, TSE-risk APIs, or similar. Older, generic, high volume APIs are of low/no priority.

The pilot project initiative fully supports EFCG’s consistent call for mandatory GMP inspections of non-EU manufacturers in developing countries to help ensure the safety of medicines, the health of EU citizens, and to level the global API manufacturing playing field.

Encouragingly, the document Enhancing GMP inspection cooperation between the EMA and FDA7, confirms their continued cooperation and considers the need to avoid duplicate inspections and to optimize the available resources. Such a path could lead to the possibility of mandatory inspections similar in practice to the FDA’s Generic Drug User Fee Amendment (GDUFA) project, which aims to guarantee citizens’ safety for the use of generic drugs and to guarantee to the global manufacturing industry supplying the U.S. market more certain and faster timing for inspections and dossier registration.

Assuming 860 global API manufacturing sites were to be inspected once in three years by 33 inspection authorities — 27 from the EU, along with the U.S., Australia, Japan, Switzerland, New Zealand, Canada — to the same standard (ICH Q7) and that they are all willing and able to share the inspection outcomes, then approximately eight sites need be inspected each year by each inspection authority. If the cost per inspection were 10,000€ per site, the overall three-year cost would be lower than 3€ million. These financial resources could be obtained either from participating companies that wish to sell their APIs to the EU market (similar to GDUFA), should it not be possible to realize them from national budgets.

The overall conclusion is that the implementation of mandatory inspections, ideally via an MRA approach, is a relatively small price to pay to guarantee the quality of API meets the EU standard, irrespective of its global source, for the benefit of the health of the EU citizen and of the EU API manufacturing industry. 

  1. To harmonize the rules in order to guarantee the safety of pharmaceutical products and the citizen’s health: why are mandatory inspections needed? see www.efcg.cefic.org/publications
  2. Public consultation on the future of EU-U.S. trade and economic relations. Proposals for the EU-U.S. High Level Working Group (HLWG) for Jobs and Growth and the High Level Regulatory Cooperation Forum (HLRCF): October 2012. see www.efcg.cefic.org/publications
  3. http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2001:311:0067:0128:en:PDF
  4. http://ec.europa.eu/health/files/eudralex/vol-1/dir_2011_62/dir_2011_62_en.pdf
  5. http://ec.europa.eu/health/files/gmp/2012_06_04_qas.pdf
  6. http://www.ema.europa.eu/docs/en_GB/document_library/Report/2011/07/WC500108655.pdf
  7. http://www.ema.europa.eu/docs/en_GB/document_library/Other/2011/12/WC500118766.pdf

Tony Scott is adviser to the European Fine Chemicals Group (EFCG). EFCG is a sector group within Cefic, the Brussels-based European Chemical Industry Council, and represents more than 40 EU fine chemical manufacturers and trade bodies, most of which are involved in the global pharmaceutical supply chain. EFCG can be found at www.efcg.cefic.org. Mr. Scott would like to acknowledge the following people for their assistance in preparing this article: Dr. Gian Mario Baccalini, president, Bulk & Pharma Development Srl, Italy, Dr. Heinz Sieger, chief executive officer of CU Chemie Uetikon, Germany, and Dr. Rainer Fendt, head Global Regulatory & GMP Compliance Pharma, BASF Germany. Mr. Scott can be reached at tscott42@btinternet.org.