Agency takes global approach to food and pharma supply chain protection.
By Eric Kulisch
The U.S. Food and Drug Administration, faced with an expanded mandate to ensure the public safety of food and pharmaceuticals, is developing a new strategy to deal with huge growth in consumption of foreign and domestically produced products without any increase in its enforcement budget.
Making sure imports meet U.S. safety standards is at the top of the agency’s agenda, but inspecting a large portion of shipments isn’t a viable option and random inspections leave too much room for error. Instead, the FDA is taking a page from Customs and Border Protection, targeting enforcement based on the risk profiles of shipments and developing partnerships with industry and other governments to extend its reach.
The FDA has worked closely with CBP since former President Bush created an import safety task force to address a series of contaminated or adulterated food from China and other countries in 2008. The FDA, for example, is one of the partners with staff detailed to the Commercial Targeting and Analysis Center for Import Safety to help Customs identify high-risk shipments at ports of entry.
The new direction is institutionalized in the Food Safety Modernization Act, which emphasizes holding industry accountable for implementing quality controls in their plants and distribution networks to prevent food contamination early in the supply chain instead of trying to check finished products for bacteria and other hazards in a manual and reactive way at the port of entry or sale. The law essentially establishes standards of care for food, from farm to table.
Howard Sklamberg, acting principal deputy associate commissioner for regulatory affairs, described for trade specialists at the American Association of Exporters and Importers’ June annual conference in Washington how globalization has dramatically changed the FDA’s mission.
The FDA, until recently, was organized to regulate the safety of domestic products even as the amount of food, drugs and medical devices sold in the United States from other countries exponentially grew in the past decade.
FDA-regulated products now account for about 10 percent of all imports to the United States.
The United States imports 40 percent of finished drugs, 80 percent of pharmaceutical ingredients used in domestically produced drugs, half of medical devices, and 15 percent of food consumed by Americans.
Within the food category, 80 percent of seafood, 20 percent of fresh vegetables and 50 percent of fresh fruit comes from abroad.
The FDA now has officials in 13 offices around the world and conducts many more inspections at the border, but doing its job efficiently is complicated by the volume of imports. FDA-regulated products originate from more than 150 countries and 280,000 foreign facilities, and are purchased by 130,000 importers. In 2011, 24 million shipments of food and medical products entered the United States and the FDA conducted 350,000 physical exams of shipments with a force of 692 investigators.
Overall, a quarter of the U.S. economy, not including tobacco, falls under the FDA’s jurisdiction.
Last year, the agency published a report spelling out how it intended to meet those challenges. The game plan includes forming global coalitions of regulators with governing bodies to coordinate international cooperation, establishing real-time data-sharing networks between foreign counterparts, beefing up intelligence gathering and analytical capabilities, and leveraging public and private third parties.
Collaboration is critical if the FDA is to protect health and safety without harming legitimate businesses, Sklamberg said. He envisioned a future in which the FDA coordinates audits of firms for food and drug safety with foreign authorities and states to avoid duplication.
“It would make no sense for the United States and the European Union to inspect the same medical products from the same firm a month apart looking for the same things, or for the FDA and states to inspect the same firm within the same time frame without talking to each other.
“If the foreign partner is doing an inspection that is as good as ours then we should use it instead of doing our own inspection” and wasting resources, he said.
The concept of shared responsibility strongly resembles the mutual recognition agreements in place between U.S. Customs and six foreign governments, including the European Union, for pre-checking the security practices of firms seeking better treatment for their goods at the border. CBP and its partners have established the necessary trust in each other’s standards so that when one side reviews a company for qualification into a trade-facilitation program, such as the Customs-Trade Partnership Against Terrorism (C-TPAT), the findings are accepted as valid by the other side for its own program.
CBP determined that its partners’ security protocols for validating trusted shippers was equivalent to its own after participating in joint visits and observing first-hand how reviews were conducted.
Similarly, the FDA is involved in a pilot program with the New Zealand Food Safety Authority to do a side-by-side comparison of their respective food safety systems. If their respective regimes are determined to be compatible, the two regulators may take advantage of each other’s work, the FDA said in a second report last spring.
Some food and pharmaceutical regulators in other countries have already begun to rely on the determinations of trusted foreign counterparts. Mexico last year announced it would treat reviews of medical devices conducted by the FDA as equivalent to reviews conducted by Mexican regulators, and Cost Rica announced its intention to do the same, according to the Pathway to Global Product Safety and Quality
Other jurisdictions have also created a tiered approach to facility inspections, adjusting the length and depth of the inspection based on the degree of risk associated with the particular facility, enabling those countries to quickly conduct a large number of inspections of low-risk sites.
“We see ourselves as a strategic and risk-based global industry oversight organization” trying to efficiently use its resources by tapping the capabilities of international and state partners, Sklamberg said.
“And I’m sorry to say we’re not that integrated, federal and state, in what FDA does. We’re trying to get there. But it is not always true that information is going to be shared,” he acknowledged.
The FDA should aspire to a system similar to the drivers’ license compact between 45 states and the District of Columbia for exchanging data about drivers and moving violations, Sklamberg said. The system allows tickets received in one state to be centrally recorded on one’s driving history in the license-issuing state and be visible to participating states and insurance companies. Creating an integrated platform for tracking driver behavior required resolving many issues, including how to interface with different computer systems and normalizing data from different forms police departments use to write tickets.
Drug cases are another example of good multi-government cooperation, Sklamberg said. State police will contact federal law enforcement agencies if they make a large drug bust. They, in turn, often will reach out to Interpol to find out where the drugs came from, who grew and manufactured them and who imported them. Agencies at all those levels will then contribute evidence and testimony at trial in order to obtain a conviction.
“The FDA is trying to play leapfrog” in terms of developing partnerships it never nurtured before, Sklamberg said.
New tools, partnerships and risk analysis technology are helping the agency combat counterfeit drugs, he said.
Drugs produced illegally to mimic a brand name product can contain harmful ingredients, have the wrong mix of ingredients, or have inert ingredients that can cause a reaction or worsen a patient’s condition, sometimes leading to death. Many fake drugs are produced overseas, sold over the Internet on Websites that look like legitimate pharmacies and are dispensed without a doctor’s expertise.
The international nature of the problem was highlighted by a recent case involving a Website hosted in New York that sold drugs clandestinely made in China and shipped to customers in the United States, with payments processed in The Netherlands, funds transferred to Cyprus then Hong Kong and finally to Israel, and a customer service call center in the Philippines, while the Website’s operators worked out of a yacht moored in Tel Aviv harbor.
One of the main challenges for FDA inspectors is how to detect fakes in fast-moving international parcels arriving at mail and express consignment facilities. Sklamberg said the FDA recently developed a hand-held device for detecting counterfeit pharmaceuticals that works by generating an intense single wavelength of light onto a sample and then analyzing the change in wavelengths as light is reflected, absorbed or otherwise altered by the type of drug and packaging. The fluorescence profile of suspect pills can be compared with the authentic product to identify any anomalies.
A photograph of the light spectrum can be captured and uploaded into the FDA’s document imaging system, which allows the information to be quickly shared within the organization. The system is much faster than opening packages, taking photographs and sending samples to a lab for analysis.
Better use of data mining to check suppliers, shipment history, prior compliance levels and other importer behavior is also necessary, the FDA official said.
The FDA this year has completed deployment of its Web-based PREDICT system to all districts in the country that handle imports, Sklamberg said. PREDICT analyzes factors such as the potential for a drug to be illegally copied and the history of the firm to find patterns that might not be noticeable by looking at an individual entry document. It produces a score letting inspectors know whether to initiate an inspection or expedite low-risk shipments — if full and accurate data has been entered by the importer or its agent. It replaces the admissibility screening function of OASIS, the FDA’s legacy system.
Each product is checked for a specific product code when unloaded and that code is transmitted to FDA headquarters, where the system is linked to hundreds of databases with product information, such as the manufacturer, country of origin, if the product has ever been subject to a recall, or been associated with a security risk.
Cooperation with the private sector is critical to enforcing safety laws because the FDA doesn’t have the manpower to police the entire food and pharmaceutical system around the clock, Sklamberg said. Last summer, Google settled a dispute with the FDA by agreeing to forfeit $500 million in revenues generated by online advertisements for prescription drugs sold by Canadian online pharmacies.
The Internet-search giant was already on notice that many online stores were accepting online consultations rather than doctors’ prescriptions before dispensing drugs. People who clicked on pop-up ads received a few cursory questions that if answered correctly would result in the sale being approved.
“Google knew that permitting the import of drugs not approved for distribution in the United States” was a public health issue, Sklamberg said. The company has put systems in place to prevent similar ads from appearing in its searches, he said.
Now, when there is a dangerous product in domestic distribution from overseas, the FDA immediately issues import alerts or conducts sampling at the border, alerts consumers about any domestic recall, alerts other governments who import from the same source, launches an investigation with the government in the origin country to determine who sold the product, and works with companies and trade associations to identify and correct the root cause of the problem, Sklamberg said of the FDA’s new response protocols.
The Food Safety Modernization Act (FSMA) signed by President Obama in January 2011 ushered in sweeping reforms of food safety laws and expanded the FDA’s authority. Officials say it will take several years to put all the provisions in place. How quickly the law can be fully implemented will largely depend on whether Congress beefs up funding for the FDA, which has consistently been asked to increase enforcement while seeing its budget reduced over many years. So far, the FDA is behind schedule to meet most of the law’s deadlines for final regulations involving imports.
The FDA’s staff will require extensive training to carry out new duties and need to conduct extensive outreach explaining the new regulations because there are so many companies that previously weren’t under the FDA’s jurisdiction and are now covered by the law.
Key provisions in the law include:
- For the first time making importers responsible for verifying their foreign suppliers have adequate preventive controls in place to ensure that the food they produce meets U.S. safety levels.
- Establishing a Voluntary Qualified Importer Program (VQIP) that provides for expedited review of foods from participating importers. Eligibility is limited to companies that use third-party certified facilities that adhere to best practices such as bacteria testing and using temperature-controlled equipment. The program is to be funded by user fees.
- Establishing a program through which accredited third parties can certify that foreign food facilities comply with U.S. food safety standards.
- Giving the FDA authority to require that high-risk imported food be accompanied by a credible third-party certification or other assurances of compliance as a condition for entry into the United States.
The law requires risk-based inspections and for the first time spells out how frequently facilities should be inspected, gives the FDA new authority to access corporate records, order recalls and work with companies to take immediate preventive action to deal with an imminent hazard rather than waiting to go to court.
Congress emphasized when the FDA sets up new regulations it must take into account differences among importers and types of food.
The Foreign Supplier Verification and VQIP bear similarities to C-TPAT, a voluntary supply chain security program under which importers promise to follow pre-approved security plans to ensure shipment integrity and must get their suppliers to adhere to the plan. In exchange for having strong internal controls participating importers are promised reduced Customs inspection levels, the ability to get their cargo moved to the front of the line if there is a random inspection, and other benefits. The FDA is working with CBP and the Department of Homeland Security to develop the two programs.
VQIP members will get their risk scores adjusted downward, resulting in a decreased probability that their products will be pulled for sampling by FDA inspectors. Samples will only be collected for cause. Members can be booted from the program if the required fees aren’t paid, applications are falsified or a company doesn’t comply with the rules.
Ultimately, the new regime makes industry accountable for self-policing commerce, with the FDA checking to make sure companies have the necessary systems in place to do so.
But the FDA does not have the resources to meet many of the timetables in the FSMA, according to the Pathway
At current rates, it would take an estimated nine years for the FDA to inspect every high-priority, foreign pharmaceutical facility just once, it said. In 2009, agency inspections of overseas drug manufacturing plants increased to 424 from 333 in 2007.
In fiscal year 2011, the FDA inspected 995 foreign food facilities, according to its second annual report on how it’s meeting FSMA requirements that was delivered to Congress in August. The FDA said poor data prevented it from knowing which foreign facilities were inspected and whether they were from the high-risk or low-risk category, but added it should have its systems corrected this year.
The FSMA directs the agency to inspect at least 600 foreign food facilities by the end of fiscal year 2012 and double the number of inspections each of the next five years. The FDA said it might be able to attain the goal in the first year, but “it would be impossible for FDA to complete 19,200 foreign food inspections in year six without a substantial increase in resources or a complete overhaul in the way it operates.”
The law also orders the FDA, along with the Department of Agriculture and state agencies, to establish pilot projects to evaluate methods and technologies for tracking and tracing foods and to create a rule for companies to keep records of the chain of custody for high-risk foods.
FDA Commissioner Margaret Hamburg has asked Congress to authorize new user fees on industry to help pay for the new mandates, including a new food facility registration fee to raise $220 million and a fee to raise $5.6 million for increased surveillance of commodities at express courier hubs.
The FDA sought a $10 million budget increase in fiscal year 2013 to strengthen oversight of products from China. The number of shipments of FDA-regulated products from China increased 62 percent from fiscal year 2007 to 2011. The money will enable the FDA to increase the number of inspectors in China to 16 and add three U.S.-based analysts, expand facility inspections in China to include labs where clinical trials are conducted and to conduct follow-up inspections of food and medical facilities, and educate Chinese regulators and businesses about FDA requirements through workshops and seminars, Hamburg testified before a House panel in February.