The following writing represents my first deep dive into the generic drug industry. It is not all inclusive. Rather, it is a distillation of my notes from a large number of sources, which I compiled over three months. Some unique solutions are proposed prior to the conclusion. All footnotes have been converted to endnotes. Enjoy!
The use of generic drugs provides increased access and reduced costs for patients. These benefits are not supposed to be associated with the risk of reduced quality. Unfortunately, major concerns have surfaced regarding the quality of generic drugs since the beginning of the 21st century. Although the FDA is often viewed as the gold standard, the agency has faced tremendous challenges with the globalization of the drug supply chain. A major portion of the generic drugs and active pharmaceutical ingredients in the U.S. come from foreign countries. Facilities within China and India have faced great scrutiny for product quality issues over the past several years. Despite the globalization which has taken place, patients in the U.S. are still forced to rely heavily on a single agency. Patients look to the FDA for a guarantee of drug quality and efficacy. Given the demand of conducting foreign drug inspections and the recent discoveries of carcinogens in drug products by third-party labs, we must begin to look beyond the FDA. While the agency should remain as the leading regulator, it is time to encourage the involvement of third parties in the drug supply chain. Patients, health professionals, and third-party laboratories can improve ultimate outcomes.
- Generic Drug Requirements
- Current Good Manufacturing Practices
- FDA’s Oversight of Foreign Drug Manufacturers
- Frequency of Foreign Inspections
- The Foreign Inspection Process
- Reliance on the European Union
- Generic Drug Requirements
- Contemporary Problems
- Reverse Engineering
- Possible Solutions
- Transparent Labeling
- Encouraging Independent Testing
- Inspection Fees for Manufacturers
- Contemporary Problems
Generic drugs are better for consumers: they cost less and work identically to their brand equivalents. Right? This is a summary of an assumption that I have held for years. The three pillars of health care are cost, quality, and access. Throughout pharmacy school we were encouraged to pursue means that decreased costs and increased access for patients. Supporting the use of generic drugs fit our mission. Did we take quality for granted? The Food and Drug Administration (FDA) calls generic drugs “copies that one company makes of a brand-name drug.”[i] I, like many of my colleagues and patients, assumed that such a copy would provide equivalent safety and efficacy parameters to a brand-name original.
The globalization of our drug supply has forced professionals and patients to question the quality of prescription drug products. Shortly after the 21stcentury kicked off, the number of drug products imported into the United States had doubled.[ii] 2005 was the first year the FDA had more drug facilities to inspect abroad than it did within the United States.[iii] The FDA has been battling the logistical issues[iv] of inspecting and regulating these facilities ever since. In this time, extremely negative outcomes have resulted from the use of low-quality drug products.[v] Neither the FDA’s action nor inaction should be viewed as the root-cause of these events. Although the agency is often viewed as the “gold standard”, its resources are limited. Suggesting that the FDA increase their inspection frequency overseas is obvious, but not easily executed. As we begin the new decade, we must consider new solutions. Patients are demanding reductions in prescription drug costs, but that does not make it acceptable to compromise on quality.
This paper will be comprised of four sections: (1) An overview of the generic drug approval process with emphasis on bioequivalency and Current Good Manufacturing Practices; (2) the FDA’s oversight of foreign generic drug manufacturers; (3) contemporary systemic issues that may reveal gaps in our current process; and (4) possible solutions for filling these gaps.
Among other things, a generic drug application must show: (1) the generic is pharmaceutically equivalent to the brand; (2) the manufacturer is capable of making the generic correctly and consistently; (3) the active ingredient is the same as that of the brand; (4) the right amount of active ingredient gets to the place in the body where it has effect; and (5) the inactive ingredients of the drug are safe.[vi] As evidence, generic drug companies are often required to provide data from trials involving human volunteers. A generic is pharmaceutically equivalent if it is the same type of product (e.g. tablet) and it uses the same time release technology (e.g. extended release).[vii] To prove capabilities regarding consistency, a generic drug manufacturer must “provide evidence that each step of the manufacturing process will produce the same result each time.”[viii]
Unlike a brand-name drug, which requires proof of safety and efficacy, generic drug approval only requires proof that the generic behaves similarly in the body as the brand-name product. This is referred to as bioequivalence. It is critical that a generic drug company can prove its product will “behave the same way in patients as its brand-name counterpart.”[ix] “Patients should be able to take the brand drug product on one day and the generic drug on another day and still receive the same treatment effect.”[x] According to the Federal Food, Drug, and Cosmetic Act (FD&C Act), a generic drug is bioequivalent to a listed drug if: “[T]he product’s rate and extent of absorption . . . do not indicate a significant difference from the reference [drug’s] rate and extent of absorption.[xi]
The FDA has stated that “the focus of bioequivalence studies is on the release of the drug substance from the drug product into the systemic circulation” for most products.[xii] An applicant must use “the most accurate, sensitive, and reproducible approach available.”[xiii] To do this, most companies test the generic product on a few dozen healthy volunteers.[xiv] The concentration of the drug is measured in the blood and a bioequivalence curve is produced.[xv] Multiple measurements are collected from this curve: the maximum concentration (Tmax), peak concentration (Cmax), and area under the curve (AUC).[xvi] In order to achieve bioequivalence, the generic drug’s concentration must fall within a certain range of the brand’s concentration curve. The FDA requires companies to use a statistical formula in order to prove that the generic drug’s concentration does not fall below 80 percent or exceed 125 percent of the brand’s concentration.[xvii] The formula requires a 90 percent confidence interval to ensure that less than 20 percent of samples fall outside this range.[xviii] Proving that a generic is bioequivalent does not guard against the variability that will accompany future batches when the drug is produced on a commercial scale. “The only remedy for this variability is for [manufacturers] to adhere scrupulously to good manufacturing practices and create real-time records of each drug-making step.”[xix]
Current Good Manufacturing Practices (CGMPs) exist to ensure that the quality of pharmaceuticals is maintained in each batch produced.[xx] CGMPs are enforced by the FDA. Adherence to these regulations “assures the identity, strength, quality, and purity of drug products by requiring that manufacturers of medications adequately control manufacturing operations.”[xxi] CGMPs include: “establishing strong quality management systems, obtaining appropriate quality raw materials, establishing robust operating procedures, detecting and investigating product quality deviations, and maintaining reliable testing laboratories.”[xxii]
The FDA’s primary method of enforcing CGMPs is by conducting facility inspections. The FDA also relies on reports regarding defective drug products from the public and the industry.[xxiii] If a company violates CGMP requirements, the FDA has a multitude of options to ensure cooperation: recalls, seizure and injunctions, halting imports, etc.[xxiv]
There are over 20,000 prescription drug products approved for marketing.[xxv] It is well known that a large portion of these products are manufactured outside the United States. The FDA is responsible for approving and inspecting these manufacturing facilities: regardless of being domestic or foreign.[xxvi] In 2018, the five countries with the most drug manufacturing sites were the United States, India, China, South Korea, and Germany.[xxvii]
There are 3,647 FDA-registered human drug facilities in the United States.[xxviii] There are 4,159 FDA-registered human drug facilities outside of the United States.[xxix] However, nearly 60% of total inspections have occurred at domestic facilities for the past three fiscal years.[xxx] At the start of this decade, domestic inspections made up nearly 80% of total inspections.[xxxi]
According to the FDA, “Surveillance inspections[xxxii] are one of the fundamental ways that the FDA monitors conformance to CGMP requirements and identifies quality problems and adverse trends at facilities so that the FDA can develop strategies to mitigate them.”[xxxiii] The FDA Office of Surveillance (OS) is responsible for coordinating such inspections.[xxxiv] OS focuses on CGMPs and product quality.[xxxv] The FDA has abandoned its goal of inspecting manufacturing sites every two years.[xxxvi] Today, the agency utilizes a risk-based model.[xxxvii] This model stems from the Food and Drug Administration Safety and Innovation Act (FDASIA).[xxxviii] The FDA incorporates requirements from section 705 of the FDASIA into its in-house algorithm.[xxxix] The algorithm allows the FDA to prioritize facility inspections annually.[xl] A facility may be “prioritized” for various reasons: including a negative inspection history or manufacturing high-risk products.[xli] In addition to domestic data, the FDA now incorporates data from the European Union.[xlii]
Given the hurdles associated with foreign inspections, the FDA has pursued alternative approaches in recent years. The Mutual Recognition Agreement (MRA) was signed between the United States and the European Union in November, 2017.[xliii] This agreement enables the FDA to “rely on the inspectional findings of EU member states in a European facility that will export to the U.S.”[xliv] Similarly, “an EU nation may accept the FDA’s inspectional findings at a U.S. facility that exports to a nation in the EU.”[xlv] The capability to rely on inspection findings from other regulatory agencies stems from the FDASIA.[xlvi] Today, the FDA may rely on inspection findings from 28 EU member states.[xlvii] Each of these states has a different regulatory authority.[xlviii] The FDA determined that it may rely on findings from these agencies based on their ability to meet requirements under the Compliance Assessment Program.[xlix] The MRA is currently utilized for surveillance inspections within U.S. and EU borders.[l] Although the program currently applies to a broad range of human drug products, the FDA has stated that it will re-evaluate expansions of the program’s scope in the future. Specifically, the FDA will determine if CGMP inspections of facilities manufacturing vaccines and plasma-derived products should be added to the program’s scope.[li]
Angiotensin II receptor blockers (ARBs) represent one class of anti-hypertensive medications. ARBs are commonly prescribed. This class of medication includes generic drugs such as valsartan, losartan, and irbesartan. During summer 2018, the FDA received reports that some generic versions of ARBs contained nitrosamine impurities.[lii] Nitrosamine impurities are probable human carcinogens.[liii] Two examples of these impurities are N-Nitrosodimethylamine (NDMA) and N-Nitrosodiethylamine (NDEA).[liv] The FDA has stated that no level of nitrosamines will be tolerated in our drug supply.[lv] The FDA attributed the generation of such carcinogens to the presence of “specific chemicals and reaction conditions” during the manufacturing of the drugs active pharmaceutical ingredients (API).[lvi] The discovery of such impurities resulted in large-scale recalls. These recalls created tremendous confusion for patients as the recalls were only identifiable by manufacturer and lot number. Unfortunately, most patients are unaware of their product’s lot number and there is no requirement for such data to be stored in a pharmacy’s database.
During the summer of 2019, initial reports were sent to the FDA regarding the presence of NDMA in Zantac and its generic products (ranitidine).[lvii] All versions of the drug were found to be unstable, which made it possible for these products to degrade to NDMA.[lviii] Pharmacies and grocery stores began pulling the products from their shelves even though the FDA found issue with tests being utilized by the reporting party.[lix] The FDA issued guidance[lx] for proper testing procedures and encouraged manufacturers to conduct their own tests.[lxi] The FDA encouraged companies to recall their products if NDMA levels were above the acceptable daily quantities (96 nanograms per day).[lxii] In addition, the FDA performed its own analysis of ranitidine products and found NDMA in every sample tested.[lxiii] On December 4, 2019, the FDA requested that all manufacturers of ranitidine products expand their testing for NDMA to include all lots of medication before making them available to consumers.[lxiv] The FDA also expanded this requirement to a product similar to ranitidine: nizatidine.[lxv] Zantac has been on the market for decades and was previously prescribed more than 15 million times per year.[lxvi]
Ranbaxy USA Inc. was a generic drug manufacturer in Indian. It’s parent company, Ranbaxy Laboratories Limited, was officially acquired by Sun Pharmaceutical Industries Ltd. in 2015. Although Ranbaxy’s history has become more well known, the company’s fraudulent acts flew under the radar for many years. On May 13, 2013, Ranbaxy pleaded guilty to seven felony charges.[lxvii] The settlement included a total payment of $500 million to resolve criminal and civil False Claims Act liability.[lxviii] This was a case of blatant fraud, not manufacturing errors or overlooked issues. However, Ranbaxy highlights some of the systemic issues associated with the globalization of our drug supply.
At the time, the FDA aimed to inspect every facility making drugs for the United States market roughly every two years.[lxix] However, “the FDA’s actual rate of inspections overseas was closer to once a decade.”[lxx] Among other things, the distance between the FDA and India provided Ranbaxy an opportunity to operate with less scrutiny. In addition, the element of surprise was non-existent for facilities scheduled for inspection in India. FDA inspectors were required to announce their intentions to inspect in order to get visas and maintain transparency with foreign governments.[lxxi]
In addition to logistical issues, the FDA often has to face cultural differences. Veterans of the India’s pharmaceutical industry often use the term “jugaad” to refer to their practices.[lxxii] Multiple interpretations exist, but one often surfaces: “get it done at all costs.”[lxxiii] Jagdish Dore[lxxiv]describes this approach as “bending the rules, breaking the rules, and finding shortcuts – and in some cases, outright misdemeanors.”[lxxv] Following Ranbaxy, the FDA made plans to help facilities in India change this dangerous approach. Initially, FDA leadership intended to increase the number of inspectors assigned to facilities in India.[lxxvi] However, the India staff fell from twelve in 2013 to four in 2017.[lxxvii] At the beginning of 2019, eight FDA employees were stationed at the India office, including two drug inspectors.[lxxviii] Most recently, the FDA has largely abandoned its effort.
Many people have a flawed perception regarding generic drugs and their entry into the market. It is commonly believed that a brand-name drug is developed and protected by patents, and a generic drug company gets the “recipe” after the patents expire.[lxxix] However, it may or may not be surprising to learn that the process is actually much more competitive. Generic drug manufacturers dedicate tremendous time and money in an attempt to bring their products to market before the brand patents expire. Most generic drugs “come to market not with the help from brand-name drug companies, but in spite of their efforts to stop them.”[lxxx] This is often done via paragraph IV certification.[lxxxi] It is the drug development process lurking behind this litigation that poses problems. This process is often called reverse engineering.
The roots of this process stem from changes by the Indian government in the 1970s.[lxxxii] The government was aggravated with the cost of drugs manufactured by foreign firms.[lxxxiii] Therefore, it altered its patent laws to protect the drug manufacturing process, rather than the drug itself.[lxxxiv] According to Bloomberg, this meant:
open season on any major brand-name drugmakers’ products, so long as the legions of highly trained scientists being pumped out of India’s research institutes could find a different method for synthesizing them. By the time India opted back into the international patent system in 2005, the country had developed so much capacity for cheaply producing copycat drugs.
Reverse engineering often begins when a generic drug company “zeroes in on a molecule, and its scientists figure out how it operates in the body.”[lxxxv] The next steps include a legal analysis of the brand’s patent protections and the synthesis of the active ingredient in the laboratory.[lxxxvi] In addition, excipients will be added to complete the generic formulation.[lxxxvii] These excipients may be different from the those used in the brand-name product.
Patients are normally unaware of the origin-related details associated with their drug products. These details include the country in which their prescription drugs were manufactured, the manufacturer’s name, and the product’s lot number. Health professionals may be able to provide the location or manufacturer after skimming the product’s original label and package insert. Finding the lot number may entail more guesswork. For example, a pharmacist is only capable of reviewing lot numbers for products currently in stock. If a patient picked up a prescription recently, the pharmacist’s guess is more likely to be accurate. However, if new stock bottles were placed on the pharmacy shelves, it is possible that those products came from different lots. Obtaining the origin of API is more challenging yet. This information is not listed on stock bottles and may require a call to the drug manufacturer directly.
Increased transparency could elevate patient-awareness and aid professionals in tracking efficacy. For example, if patients are stating that their medication is “not working”, a pharmacist or physician will be able to track treatment-related trends. Efficacy issues stemming from certain manufacturers or countries may be discovered through observation. In addition, recalls could be communicated more effectively if origin-details become more transparent. Recalls are issued based on the manufacturer’s name and specific lot numbers. However, neither a patient nor a health professional often knows the lot number for a prescription that was sold. This information is not listed on prescription labels nor is it saved within most pharmacy databases.
The FDCA should be amended to require origin information on prescription labeling. The requirement would include three criteria: (1) the drug manufacturer’s name; (2) country of origin; and (3) product’s lot number. Currently, this information is only available on the original prescription bottle (stock bottle), which does not reach the patient. In addition to tracking trends and aiding with recalls, this requirement will enable the patient to become more involved in her treatment and it will strengthen communication between patients and professionals.
The FDA cannot test every prescription tablet on the market. Therefore, the agency largely relies on data provided by the drug manufacturers. For example, a manufacturer will provide safety and efficacy data from clinical trials when seeking approval from the FDA.[lxxxviii] Or a manufacturer may provide bioequivalency data when submitting an Abbreviated New Drug Application (ANDA). The FDA must rely on this data as it does not have the time nor the resources necessary to test each product independently. The FDA often conducts its own testing after issues have been reported.[lxxxix] Therefore, patients and professionals have largely relied on these two forces (manufacturers and the FDA) to ensure that the drugs within our markets are safe and effective. There has been very little involvement in the process by independent parties. However, the value of involvement by such parties has been demonstrated by a pharmacy[xc] in Connecticut.
Valisure claims to be the “pharmacy that checks.”[xci] The company is the first analytical pharmacy in America.[xcii] Specifically, it is an FDA and DEA-registered analytical laboratory, tied to an online pharmacy.[xciii] Valisure “chemically tests every batch of every medication and supplement” they sell.[xciv] This is the “third party facility” that the FDA has referenced numerous times in public announcements regarding NDMA and ranitidine.[xcv] Valisure was also involved with the discovery of nitrosamines in ARBs.
Independent testing should be encouraged. Such testing should be offered in addition to FDA’s oversight, not in place of it. Although our health systems are already overly complex, the benefits of adding testing facilities outweigh any negative consequences. Pharmacists, physicians, and other health professionals are liaisons between manufacturers and patients. These professionals, which offer direct patient care, are in a prime position to conduct independent testing. Pharmacies, in particular, are ideal for independent testing. These facilities handle a tremendous amount of prescription drugs and have the capability of testing batch orders of any given product. In addition, pharmacies are largely disconnected from manufacturers and most pharmacists do not have prescribing authority. Therefore, it is unlikely that a pharmacist will feel conflicted to analyze certain products more leniently.
The main question that will likely be raised in opposition will involve costs. Operating such an independent facility will not be cheap. However, initially businesses could view the costs as an investment in a competitive advantage. For example, Valisure is currently the only pharmacy conducting such testing. Patients are gaining tremendous interest in their services because Valisure offers an additional layer of safety to its customers. Patients are usually disconnected from the system that produces and regulates their prescriptions. However, patients do see news reports often regarding drug contaminants and industry flaws. Operating as an ally to such patients is certain to serve as a competitive advantage for the business.
If the third-party sector does become more involved with independent testing, incentives may be required in the future. These will not be explored in this paper, but they may include federal funding or grants. It is also possible that independent testing would become nearly unanimous and facilities lacking such capabilities would fail to survive.
It would not be proper to establish additional agreements with foreign countries comparable to the agreement established with the EU. Reliance on other countries to uphold the FDA’s inspection standards imposes tremendous risk. However, it also is not feasible to recommend that the FDA simply increase its inspection frequency in countries such as China and India. Foreign inspections are costly[xcvi] and present logistical challenges. However, an increase in foreign inspections may be feasible if an alternative cost source was created. A mandatory fee should be considered for new drug manufacturers and those that require inspection due to a high-risk rating from previous shortcomings.
The mandatory fee would cover the cost the FDA incurs for the foreign inspection. Only new manufacturers and those triggering reinspection due to high-risk ratings would have to pay the fee. It is common practice for a new manufacturer to pay several registration fees. Imposing the cost of inspection on new manufacturers would not be outside ordinary practices. In addition, imposing such a fee on manufacturers that “earned” a high-risk rating would not go without support. The fee would serve as an additional deterrent: encouraging manufacturers to meet CGMPs and prevent prompt reinspection. Facilities that earn a high-risk rating for manufacturing drugs with a narrow therapeutic index (i.e. more “dangerous”) should not face this reinspection fee.
There are potential drawbacks to imposing such fees on manufacturers. First, the fees may be passed on to ultimate consumers. Drug prices may be increased in order to compensate for the additional fee. Second, new manufacturers may aim to avoid FDA registration because of the fee. This would further increase the number of unregistered foreign facilities shipping drug products. Third, foreign governments may not issue visas as willingly for FDA inspectors. This is a requirement to conduct foreign inspections and relations with foreign countries may be weakened if such fees are imposed.
Generic drugs may lack the identical equivalence to brand drugs that many health professionals and patients believe they possess. The issue does not fall on generic drugs specifically, but rather the manufacturing process and regulation of such products. The globalization of the drug supply system has presented tremendous challenges for the FDA. In addition, drug impurity and quality issues continue to surface. The FDA should remain as our gold standard for safety and efficacy. However, it is time to look beyond the FDA for assistance.
Three potential improvements exist. First, transparent labeling may invite involvement from patients and health professionals. This may enhance the detection of drug quality issues and will aid with recalls. Second, independent testing, especially within pharmacies, may offer a competitive advantage to businesses and provide additional protection to patients. Third, imposing fees on manufacturers would decrease costs incurred by the FDA to conduct foreign inspections. Such fees may also serve as a deterrent from committing CGMP violations. There is no easy fix or one-size solution. However, that does not mean that the gaps in our system cannot be filled.
Thank you for reading! Comments and feedback are always welcome. Nothing in this article or on this website serves as legal advice or a legal service. I am a law student, not a practicing attorney.
[ii] Katherine Eban, Bottle of Lies: The Inside Story of the Generic Drug Boom 2 (2019).
[iii] Id. (discussing data from the Pew Research Center).
[iv] Id. at 3 (discussing visa requirements and pre-inspection notifications).
[vi] Approval Process, supra note 1.
[xi] Federal Food, Drug, and Cosmetic Act, 21 C.F.R. § 320.23(b) (2019).
[xiv] See, e.g., Eban, supra note 2, at 97.
[xvii] Eban, supra note 2, at 98.
[xxvi] Federal Food, Drug, and Cosmetic Act, 21 C.F.R. § 374 (2019).
[xxvii] Report on the State of Pharmaceutical Quality: Assuring quality medicines are available for the American public, United States Food and Drug Administration, https://bit.ly/2tgzrPt (last visited Nov. 28, 2019)[hereinafter Pharmaceutical Quality].
[xxviii] Fact Sheet, supra note 25.
[xxxi] Id. (viewing data for the years 2010, 2011, and 2012).
[xxxiii] Pharmaceutical Quality, supra note 27, at 4.
[xxxix] Pharmaceutical Online, supra note 34.
[xliv] Anna K. Abram, Ensuring Patient Safety and Drug Manufacturing Quality Through Partnership with European Union Regulators, United States Food and Drug Administration, https://bit.ly/2PlcumW (last updated July 11, 2019)[hereinafter Ensuring Safety]
[xlv] Eban, supra note 2, at 98.
[xlvi] FDASIA, supra note 38.
[xlvii] Ensuring Safety, supra note 44.
[xlviii] Facts About CGMPs, supra note 20.
[xlix] United States – European Union Amended Sectoral Annex For Pharmaceutical Good Manufacturing Practices (GMPs), Office of the United States Trade Representative, https://bit.ly/34lW6qm (last visited Nov. 22, 2019).
[l] Ensuring Safety, supra note 44.
[lii] FDA Statement on the FDA’s ongoing investigation into valsartan and ARB class impurities and the agency’s steps to address the root causes of the safety issues, United States Food and Drug Administration(Jan. 15, 2019), https://bit.ly/2PhwJlm.
[lx] Liquid Chromatography – High Resolution Mass Spectrometry (LC-HRMS) Method for the Determination of NDMA in Ranitidine Drug Substance and Drug Product, United States Food and Drug Administration (Sept. 13, 2019), https://bit.ly/2Pl5Blr.
[lxi] Updates, supra note 58.
[lxiv] Updates, supra note 58.
[lxix] Eban, supra note 2, at 131.
[lxxi] Eban, supra note 2, at 3.
[lxxv] Bending Rules, supra note 69 (quoting Jagdish Dore).
[lxxvi] Bending Rules, supra note 69.
[lxxix] Eban, supra note 2, at 96.
[lxxxi] Eban, supra note 2, at 19.
[lxxxii] Bending Rules, supra note 69.
[lxxxv] Eban, supra note 2, at 97.
[lxxxix] As illustrated in the ranitidine example following Valisure’s reports to the FDA.
[xcv] See, e.g., Statement on new testing results, including low levels of impurities in ranitidine drugs, United States Food and Drug Administration (Nov. 1, 2019), https://bit.ly/2rIMKaX (referring to Valisure’s scientists as “third party scientists”).
[xcvi] Drug Safety: Better Data Management and More Inspections Are Needed to Strengthen FDA’s Foreign Drug Inspection Program, United States Government Accountability Office (Sept. 2008), https://bit.ly/2YKyMBm (noting the average foreign inspection cost as $41,000-$44,000 in 2008).