WASHINGTON, D.C. – In the wake of a new report that revealed more than 80 percent of the active ingredients for drugs sold in the United States are made abroad, U.S. Sen. Sherrod Brown (D-OH) called on the Food and Drug Administration (FDA) to tighten oversight on U.S. Pharmaceutical companies that import active ingredients for drugs manufactured domestically. The report follows previous calls Brown made in 2008 for the FDA to study pharmaceutical outsourcing, after a FDA official acknowledged that American drug companies outsource operations to take advantage of weak drug safety standards abroad. Brown previously introduced legislation to mandate a country-of-origin labeling requirement for pharmaceuticals.

“When drug companies outsource pharmaceutical ingredients, they also outsource drug safety standards,” Brown said. “It’s simply unacceptable to allow drug companies to skirt existing regulations by importing ingredients from countries with lax safety standards. Drug company profits cannot come at the expense of consumer safety. Pharmaceutical companies must be able to guarantee the safety of their products and trace the origin of their ingredients.”

The report found that more than 80 percent of the active ingredients for drugs sold in the United States are made abroad — mostly in plants that are rarely inspected by the FDA In the report, the FDA cites a Government Accountability Office (GAO) recommendation to increase foreign inspections.  The report also notes, however, that given current staffing and funding levels, it would take the FDA nine years to perform one inspection at each foreign-based “high-priority” pharmaceutical facility and 13 years to inspect all foreign-based pharmaceutical manufacturing plants.   

The report highlights the need for an alternative model for carrying out FDA oversight activities composed of four core building blocks: global coalitions of regulators; development of a global data information system for the exchange of real-time information and resources; expanded intelligence gathering and risk analytics capabilities; and allocation of agency resources based on risk. In Brown’s letter to FDA Commissioner Margaret Hamburg, Brown requested specific information on the allocation of FDA resources based on risk, expanded intelligence gathering, and the development of a global data-information system and foreign-government cooperation with FDA investigations.

Scope of the Problem

In 2007, 149 Americans died after taking tainted Heparin, a widely used blood thinner – including at least three individuals from Toledo. It was later revealed that the contaminant derived from pig intestines produced in “largely unregulated” Chinese workshops.

Brown began collecting information in 2008 on the growing number of drug companies that take advantage of cheap labor and weak safety standards outside the U.S. to manufacture pharmaceuticals later used in American hospitals and households. According to a Pfizer representative who testified before the Senate Committee on Health, Education, Labor and Pensions (HELP) in April 2008, Pfizer outsources the manufacturing of 17 percent of its drug ingredients. At the same hearing, an FDA official acknowledged that American drug companies outsource operations due to cost factors and the existence of weaker drug safety standards abroad. In a separate interview conducted earlier in 2008, Merck’s Senior Vice President of Global Procurement, Richard Spoor, noted that the company is “moving in the direction of externally sourcing approximately 35 percent of the overall manufacture of active pharmaceutical ingredients, intermediates, formulated pharmaceuticals, sterile products, vaccines, and packaging by 2010.”  He went on to say that, “this would represent a two-fold increase over what we currently source from external manufacturers.”

Brown’s Work to Ensure Safety of Prescription Drugs

Brown sent letters to Pfizer and Merck asking for them to explain the safety implications of their outsourcing practices and the implications of their reliance on global outsourcing for the manufacture of pharmaceutical ingredients and finished products. Brown also called on the FDA to evaluate how it safeguards the American public from drug products containing contaminated, outsourced ingredients.

Brown is a leading voice in Congress on the need to protect Americans from unsafe food and drug products. In 2008, he introduced the Transparency in Drug Labeling Act (S. 3633), which would require country-of-origin labeling for both active and inactive ingredients on all pharmaceuticals, both prescription and over-the-counter. These new drug labels would list all the countries that played a role in the manufacturing of ingredients for the drug. As the first Ohioan to serve on the Senate Agriculture Committee in over 40 years, Brown successfully fought to include mandatory Country of Origin Labeling for meat and produce in the 2008 Farm Bill. In 2008, he introduced The Food Tracking Improvement Act (S. 3422), which would authorize $40 million over three years for a national traceability system for all food under FDA jurisdiction. He also authored legislation that would give the federal government new authority to recall tainted meats, vegetables, and other food products. This legislation, The Safe and Fair Enforcement and Recall for (SAFER) Meat, Poultry, and Food Act, would give the FDA and the USDA the authority to mandate recalls of the foods under their respective jurisdictions.

Full text of the letter is below.

June 23, 2011
Dr. Margaret Hamburg
Commissioner
Food and Drug Administration
10903 New Hampshire Avenue
Building 32, Room 2346
Silver Spring, MD 20993


Dear Commissioner Hamburg:

I am writing in regards to the Food and Drug Administration’s (FDA) recent special report, “Pathway to Global Product Safety and Quality.”  I would first like to commend you and your agency for compiling an in-depth report examining the serious problems facing the United States due to the importation of FDA-regulated products – in particular active pharmaceutical ingredients (APIs).   

As stated in the report, a startling 80 percent of APIs were imported into the United States in 1998 alone.  And it appears this trend has continued.   During a Senate HELP Committee hearing in 2008, Pfizer testified that it outsourced 17 percent of the company’s active ingredients and drug product manufacturing and hoped to double that number to 35 percent by 2010.  Presumably, other leading pharmaceutical companies are following suit.  With this dramatic increase in foreign manufacturing comes an increased public health concern, as evidenced by the 2008 heparin tragedy.

In 2008, tainted heparin killed over 100 people – including at least three people from Toledo, Ohio – and caused at least 785 severe allergic reactions.  According to news reports, the contaminated heparin likely came from facilities in China, facilities that had not been inspected by the FDA, or by the drug’s manufacturer, Baxter International.   At the time, Baxter produced approximately 50 percent of the heparin sold the United States.    According to a 2008 GAO report, the FDA was never able to determine with certainty the original source of the contamination.   This is alone is cause for concern. If the source of the contamination cannot be positively identified, how can the FDA ensure a similar tragedy will not occur again?

In the light of the heparin crisis and the potential for the its recurrence, the “Pathway to Global Product Safety and Quality” report has significantly more importance.  In the report, the FDA cites a Government Accountability Office (GAO) recommendation to increase foreign inspections.  However, the report also notes that given current staffing and funding levels, it would take the FDA nine years to perform one inspection at each foreign-based “high-priority” pharmaceutical facility and 13 years to inspect all foreign-based pharmaceutical manufacturing plants.   

Recognizing these constraints, the report highlights the need for an alternative model for carrying out FDA oversight activities.  The four core building blocks for this new model are: global coalitions of regulators; development of a global data information system for the exchange of real-time information and resources; expanded intelligence gathering and risk analytics capabilities; and allocation of agency resources based on risk.

While I applaud your agency for these efforts, I also have some additional question and concerns that are not addressed in the report.  As you look to develop international coalitions and strengthen partnerships with foreign nations, it is imperative that high-export nations – such as China, India, and Mexico – be included in these efforts.  China has the largest number of foreign FDA-registered drug manufactures, followed closely by India.  And both countries are likely to increase their overall exports by 400% in the next ten years.  Most worrisome, however, is that China and India have higher than average import refusal rates, and it has been widely reported that the Chinese government does not always cooperate with FDA investigations.   In that context, please provide the following information:   

•    What steps can your agency take to ensure that key exporters are not only included in the coalitions, but also abide by the resulting comparability and information sharing standards?  
•    How often are FDA inspectors denied access to a foreign pharmaceutical or API facilities either by the company or government officials?
•    Does your agency have the authority to refuse entry into the United States of pharmaceutical products or APIs from foreign entities if the FDA has been denied access to manufacturing facilities?  If it does not have such authority, is further legislation necessary?
•    As discussed above, China accounts for a high number of pharmaceutical imports, as well as a high number of import refusals.  What role do import refusals from China – and other countries – play in the in the drug shortage crisis in the United States? Specifically, what percentage of drug shortages result from imported refusals as compared to consolidation of pharmaceutical companies, economic decisions of a company to cease production, and problems in manufacturing?     
•    The report also notes that some countries, including Mexico and Costa Rica, consider the FDA seal of approval equivalent to approval from their respective oversight agencies.  What countries does the FDA believe have stringent enough regulations to be equivalent to FDA-approval?

In examining the other core building blocks for your new global model, I have some questions with regard to allocation of agency resources based on risk, expanded intelligence gathering, and the development of a global data-information system.  
•    Which APIs or pharmaceutical products are at the greatest risk for adulteration or counterfeiting?
•    Are the pharmaceutical companies that manufacture these products or utilize these APIs aware of these risks and what oversight activities do these companies perform themselves at contracted facilities?
•    Your efforts to create IT tools that will enable you to quickly identify potential risks is a necessary step in monitoring imports in an increasing globalized world.  However, a recent New York Times article noted that a computerized alert system started by the FDA in 2001 has yet to be completed.  What is the FDA’s timeframe for expanding its intelligence gathering capabilities?  
•    The report states that the FDA may be unable to fully and completely share data across the coalition due to legal restrictions.  What restrictions are currently in place and what sort of legislative change is necessary to facilitate the FDA’s exchange of information with foreign counterparts?   

From a budgetary perspective, the report asserts that the average cost to inspect a foreign facility is twice what it costs to inspect a domestic facility ($52,000 vs. $23,000).  While the FDA has a responsibility to ensure food, drugs, and medical devices are safe for the American people, Congress has a responsibility to ensure government resources are used wisely.  To that end, I would be interested in your views on the following:
•    Assessing companies that chose to move their operations overseas a fee equal to the difference between the agency’s cost to inspect a domestic versus foreign facility.  It is inequitable for pharmaceutical companies to take advantage of cheaper labor and manufacturing costs overseas at the expense of your agency and the American taxpayer.  
•    Assessing fees on all pharmaceutical and API manufacturing facilities in order to offset the cost of more frequent inspections.
•    Assessing fees on companies responsible for contaminated, counterfeit, or recalled pharmaceuticals or APIs.

I again commend the FDA for its frank and honest review.  I look forward to continuing this discussion and working with you to improve the safety of our nation’s pharmaceutical supply.

Sincerely,

Sherrod Brown
United States Senator

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