Witness: FDA Lenient on Foreign Drug Manufacturing Violations

"We identified filthy unregistered 'shadow' facilities that would funnel their drugs through modern and clean registered sites, which we refer to as the 'show' facility," according to written testimony from Peter Baker, who spoke this week at the Committee on Aging hearing on generic drug supply chains.

In follow-up questions, Baker explained that on-site inspectors would recognize that the volume of exports reported on Customs paperwork couldn't come out of the plant they were visiting. The FDA inspectors would come back at midnight to see if there were trucks bringing more product to the show facility.

Domestic inspections are always unannounced, but the FDA used to always have pre-scheduled inspections overseas. Once they started a pilot program of unannounced inspections, Baker said, those visits found four times the violations that pre-planned visits did.

"What we found was terrifying. This testimony only addresses the tip of a massive iceberg," Baker said in his written testimony. "The inspection force was under resourced, so an approval of 20 or more different drugs would be made as long as the investigator looked at one and found it to be acceptable. We were fooled by low costs and false promises."

Baker said warning letters just result in the same company shifting production to another site, and even if there's an import alert, drugs that are in shortage are carved out. After two years, a pre-planned inspection can get the violating factory re-certified.

"We are addicted to these sites," said Baker, president of Live Oak Quality Assurance in Austin, Texas.

He said the FDA action should be much stiffer. "If you're caught breaking the law, you should be prohibited shipping product to the U.S.," he said.

He said, like in the EU, there should be independent third-party testing of every batch of every product that comes from a country with no regulation.

"There are world-class manufacturing sites all around the world, including in unregulated markets, but they struggle to survive," he said, because wholesale buyers don't want to pay the extra money needed for higher standards.

He said the FDA needs more money, including for more logistics support, and independent translators.

"It is not feasible or practical to conduct all foreign inspections unannounced. A risk-based approach is the most realistic solution," he said in his written testimony. "The FDA has made great progress to increase the number of unannounced inspections they are conducting, but they need additional resources to be directed to expand on unannounced inspections."

Senate Committee on Aging Chairman Rick Scott, R-Fla., asked Baker if he is confident in the quality of drugs coming from China and India. Baker replied that for sites he's inspected, he's confident, but "for the majority, I would say no."

Scott focused on the fact that 75% of essential drugs are made overseas, and that much of the chemicals that are used to make active pharmaceutical ingredients, as well as a lot of APIs used by Indian drugmakers, are from China.

"While Communist China and India have dominated the market, American manufacturing has just withered away," he said.

Exiger, a supply chain management software firm which published "A Bitter Pill: America’s Dangerous Dependence on China-Made Pharmaceuticals," also was represented on the witness panel. CEO Brandon Daniels said his group is trying to trace supply chains back to key starting materials, and, in a few months, will have a better estimate of how many U.S. generic drugs contain KSM from China. He estimated it is 20% to 40%.

Scott asked if foreign drug manufacturers are complying with the Ugyhur Forced Labor Prevention Act.

Daniels replied, "I do not believe we are conducting significant or thorough investigations in this pharmaceutical space. At the beginning of the year, there was a significant drop in detentions, which would indicate a lower volume of enforcement. Those have since rebounded."

Scott closed the hearing by saying, "I hope the new head of the FDA will take this seriously and I hope we'll see change."