OIG Report: FDA Has Made Progress on Oversight/Inspections of Manufacturers of Generic Drugs

This post was written by Deb McCurdy.

Yesterday the OIG posted a report entitled “FDA Has Made Progress on Oversight and Inspections of Manufacturers of Generic Drugs” in response to a Congressional request expressing concerns about the safety and quality of generic drugs produced by foreign manufacturers. Key findings from the report include the following:

  • FDA increased its preapproval inspections of manufacturers of generic drugs by 60% between 2011 and 2013, but it did not conduct all of the preapproval inspections requested by its own generic drug application reviewers during this time period.
  • FDA conducted surveillance inspections in 2013 of all generic manufacturers that it had identified as high risk.
  • FDA reported progress towards achieving parity in inspections of foreign and domestic manufacturers of generic drugs and ensuring compliance with generic manufacturer registration, as illustrated by this table detailing the distribution of generic manufacturers and surveillance inspections in FY 2013:
Source: OIG analysis of FDA FACTS data and FDA database of manufacturers of generic drugs, FY 2013.
Country or Region Number of Manufacturers Number of Surveillance Inspections


624 (41%) 180 (31%) 


396 (26%)  126 (21%) 


45 (3%) 20 (3%) 


46 (3%)  11 (2%) 

United States

403 (27%)  252 (43%) 


1,514  589 
  • FDA has created certain policies and procedures to request manufacturer records in lieu or in advance of an inspection, but it has not yet used these procedures.

In response to its findings, the OIG recommends that FDA:

  • Conduct outstanding preapproval inspections of manufacturers of generic drugs, where appropriate, which the OIG observes could lead to more timely approval of these drugs.
  • Ensure compliance with the requirement for manufacturers of generic drugs to register with FDA, since the OIG believes a complete and up-to-date registration database would facilitate implementation of the FDA’s plans for conducting inspections.
  • Use its authority to request records in lieu or in advance of an inspection, which OIG states could increase FDA's capacity for inspections and free up staff time during the onsite portion of the inspection.

FDA concurred with these recommendations. The full report is available here.

U.S. Congressional Committees Address Drug And Device Approval

As mentioned on our Health Industry Washington Watch blog, committees in both the House of Representatives and Senate last week addressed the speed at which medical innovations are approved and available for patient use. The House Energy and Commerce Committee’s “21st Century Cures Act” discussion draft, released on January 27, 2015, is a wide-reaching bill that includes provisions regarding drug and device approval, clinical trials, Medicare coverage, and drug safety, among others. The Senate Health, Education, Labor and Pensions Committee’s “Innovation for Healthier Americans: Identifying Opportunities for Meaningful Reform to Our Nation’s Medical Product Discovery and Development” report, released on January 29, 2015, poses questions about effective targeting of government resources, the Food and Drug Administration approval process, clinical trial requirements, public-private partnerships, biomedical research, and U.S. regulations vs. international regulations.

Feedback is being accepted on both the House draft bill and the Senate report. There is no specified deadline for comments on the House draft; comments on the Senate report are due by February 23, 2015.

To read Debra McCurdy’s entire post, click here.

Drug Disposal Ordinance: Supreme Court Writ Filed

This post was written by Gary Jeffrey and Charlene Chen.

On December 29, 2014, the Pharmaceutical Research and Manufacturers of America (“PhRMA”), the Biotechnology Industry Organization (“BIO”), and the Generic Pharmaceutical Association (“GPhA”) jointly filed a Petition for a Writ of Certiorari (Case No. 14-751) with the United States Supreme Court, asking for review of a case with widespread implications for pharmaceutical manufacturers and distributors throughout the nation. The Writ seeks reversal of the Ninth Circuit’s decision, PhRMA v. County of Alameda, No. 13-16833, 2014 WL 414407 (9th Cir. Sept. 30, 2014), which affirmed the constitutionality – under the dormant Commerce Clause – of Alameda County’s Safe Drug Disposal Ordinance, enacted in July 2012.

As previously reported here, the Ordinance requires pharmaceutical manufacturers – who sell or distribute their products in Alameda County – to initiate a “take-back” program for the collection and disposal of unused drugs. Any such manufacturer, regardless of its geographic location, would be obligated to create and maintain secured drug “disposal kiosks” in the county, promote the program to the public through “educational and outreach materials, and physically dispose of the unused drugs at medical waste facilities. The companies are responsible for collecting not only their own pharmaceuticals, but also any company’s unused drugs, including controlled substances. The county has not attempted to conceal its motivations in enacting these regulations. The Ordinance’s stated purpose is to shift costs away from local agencies and taxpayers to outsiders.

Petitioners question the Ninth Circuit’s “unqualified endorsement of local laws requiring interstate producers to enter the locality, to perform an uncompensated local public service at the expense of the instate market,” and remark that its holding “sharply conflicts” with U.S. Supreme Court precedent. The filing emphasizes that “[w]hile the dormant Commerce Clause provides states with broad leeway to regulate interstate products to protect local residents, it imposes a virtually per se prohibition against leveraging the local presence of products to coerce interstate producers to enrich local residents at the expense of non-local businesses and consumers.” The Writ argues that the Ordinance is worse than an interstate tariff because the increased costs are not borne primarily by local consumers, “but by non-local consumers, and interstate producers are not only burdened financially, but are forced to engage in a new business in a new location—disposal of unused medicines in Alameda.”

Since the Ordinance allows for manufacturers to form drug disposal groups to meet the requirements, and because of the arbitrary nature of the poorly written regulations, the economic costs of such programs are not yet known with any precision. However, the Petitioners correctly point out it will be expensive. According to court findings, a county program will cost $530,000 to $1.2 million annually to operate. Of course, that amount would need to be multiplied by the number of other counties passing similar regulations.

Thus, the decision could have far-reaching consequences, and Petitioners caution against the economic “balkanizing” effect of the Ordinance. Out-of-state producers of any product may be “affirmatively obligated” to enter every county where their product is sold to dispose of the product once a consumer elects to discard it. Further, this type of decision-making could easily encompass various industries, not just prescription pharmaceuticals. For example, non-resident newspaper publishers could be forced to operate local paper-recycling centers; automotive manufacturers could be commanded to establish local scrap-metal depositories; brewers and vintners could be obligated to establish local glass-recycling facilities.

Meanwhile, efforts to expand the number of counties with such “take-back” ordinances continue in California and Washington state. San Francisco and Seattle (King County, Washington) have enacted regulations similar to the Alameda County Safe Drug Disposal Ordinance. The California counties of Sonoma and Turlock are currently considering the adoption of similar ordinances. On October 30, 2014, California Senator Hannah-Beth Jackson (representing Santa Barbara and parts of Ventura County) sent a letter to every county in the state, noting the Ninth Circuit’s decision and encouraging similar programs statewide.

In Washington, King County’s Secure Medicine Return Regulations were also challenged by the Petitioners in conjunction with the Consumer Healthcare Products Association, but the lawsuit is stalled at the moment. According to an order from the Court, the matter “is stayed until such time as the Alameda County plaintiffs exhaust United States Supreme Court review or until the time for seeking such review has lapsed.” According to the Supreme Court case docket, a response to the Writ is due January 28, 2015. We will be watching closely to see if the Supreme Court accepts this challenge to address the nation’s first ordinance that obligates non-residents of a county to fund its drug disposal program.

County Ordinances Place Responsibility for Collection of Unwanted Pharmaceuticals on Manufacturers

The Alameda County (CA) Safe Drug Disposal Ordinance (Alameda County Code Chapter 6.53, §§ 6.53.010-6.53.120) is one of several county-wide regulations across the United States to enforce the establishment of and/or participation in Product Stewardship Plans on the part of pharmaceutical manufacturers, with the ultimate goal of collecting unwanted drugs for purposes of disposal. The Alameda County Ordinance consists of two components: the establishment and maintenance of secured drug “disposal kiosks” at multiple locations around the county, and the creation and dissemination of “outreach” materials to make consumers and retailers aware of the program and locations of the kiosks. Reed Smith attorneys Gary Jeffrey and Charlene Chen discuss these ordinances – particularly the one enacted in Alameda County – in “Counties Seek To Implement Drug Disposal Ordinances.” While Gary and Charlene commend the goal of safe drug disposal, they criticize the Alameda County Ordinance as being “ill-conceived and arbitrary,” citing the lack of regulation for county officials to enforce the Ordinance, as well as other potential issues such as environmental effects and worker health and safety.

To read the client alert, click here.

FDA Takes First Step to Overhaul OTC Drug Review Process

As mentioned on our Health Industry Washington Watch blog, the Food and Drug Administration (FDA) has announced that it will hold a public hearing on March 25 and 26, 2014 to receive input on the current processes for reviewing over-the-counter (OTC) drugs. In the announcement, the FDA concedes that the current OTC drug review “needs a critical examination at this juncture to examine whether and how to modernize its processes and regulatory framework.” This hearing will be a major step in FDA’s long-standing plan to overhaul the OTC drug system. To read the entire post, click here.

China Life Sciences and Health Industry Client Briefing - November 2012 (December 13, 2012)

This post was written by Jay J. Yan, Hugh T. Scogin, Jr., John J. Tan, Mao Rong, Katherine Yang, May Wong, Amy Yin and Gordon B. Schatz.

Reed Smith’s China Life Sciences and Health Industry Client Briefing provides a summary of the monthly news and legal developments relating to China's Pharmaceutical, Medical Device, and Life Sciences/ Health Care Industries.

Some important developments during November include:

  • Priorities, Practical Tips and Lessons Learned from Reed Smith’s China Device Regulatory Briefing on December 4, 2012
  • Drug Firms Pursue Joint R&D
  • Drug Makers and the Unpredictability of Drug Development; New Draft Regulations on Stem Cell Industry to be Issued
  • SFDA Approval concerning Drug Registration and Appraisal Reform on Pilot Basis in Guangdong Food and Drug Administration
  • MOH Stresses Monitoring Medical Costs in New Announcement; PRC to Allocate RMB 27.26 Billion to Support Public Health Services for 2013
  • Nestlé in Chinese Medicine Deal with Li Ka-Shing's Firm

To read the full briefing by Reed Smith China team members, click here.

Life Sciences Health Industry China Briefing - December 2011 (January 12, 2012)

This post was written by Jay Yan, Mao Rong, Zack Dong, Gordon Schatz, and Katherine Yang.

Reed Smith’s Life Sciences Health Industry China Briefing provides a summary of the monthly news and legal developments relating to China's Pharmaceutical, Medical Device, and Life Sciences/ Health Care Industries.

Some important developments during December include:

  • SFDA Issues Catalogue of Class II Medical Devices Exempted from Submitting Clinical Trial Materials
  • SFDA Issues Notice Concerning Circulation of Guiding Principles of Phase I Clinical Trial Management of Drugs
  • SFDA Issues Notice on Soliciting Comments on Revisions of the Good Supply Practice for Pharmaceutical Products
  • China Adopts Drug Safety Plan: All Drugs to be Qualified by 2015
  • NDRC Issues Rules on Drug Price Parity to Prevent Disguised Price Hikes
  • Guangdong Issues Drug Price Adjustment Program: 307 Western Drugs’ Price have a 22 percent Reduction in Average
  • Shenzhen Public Hospitals to Revoke Drug Price Addition by the End of 2012

To read the full briefing by Reed Smith China team members, click here.

Food and Drug Law Institute's Upcoming US-China Food and Drug Law Conference in Beijing, China

The Food and Drug Law Institute (FDLI) has an interesting upcoming conference on June 13-14 in Beijing, China that will address current legal, regulatory and economic issues regarding food, cosmetics, dietary supplements, pharmaceuticals and medical devices in China and the United States. Speakers are top government officials and internationally renowned experts who will discuss the issues in both countries.  They include Dr. Margaret A. Hamburg (Commissioner of Food and Drugs, US Food and Drug Administration), Wu Zhen (Deputy Commissioner of China's State Food and Drug Administration), Ralph Tyler (Chief Counsel, US Food and Drug Administration), Rosemary Gallant (Principal Commercial Officer Beijing, US Embassy Beijing, Commercial Section), Ding Jianhua (Deputy Director-General, Department of International Cooperation, SFDA), Wang Lanming (Supervisor-General, Department of Medical Devices Supervision, SFDA), Lin Wei (Deputy Director-General, Bureau of Import-Export Food Safety, AQSIQ) and Jinjing Zhang (Deputy Director General, Department of Food Licensing, SFDA).  Reed Smith partner Gordon Schatz will be speaking on the panel "Innovation and Access: Key Success Factors in China."

Upcoming Hearing on Draft Dingell/Waxman Drug Safety Legislation

On September 30, the House Energy and Commerce Committee is holding a hearing on draft drug safety legislation (per energycommerce.house.gov, witness list not yet available). The legislation, which was drafted by Reps. John Dingell, Henry Waxman, Frank Pallone, and Bart Stupak, requires parity between foreign and domestic drug facility inspections, increases the number of pre-approval drug inspections, prohibits the entry of drugs into the United States lacking documentation of safety, requires manufacturers to ensure the safety of their supply chain, and grants FDA authority to mandate recalls of unsafe drugs. For background information on the draft legislation (including the text), see energycommerce.house.gov.

UPDATE:  This hearing has been postponed, and no new date has yet been announced.

House Energy & Commerce Drug Safety Hearing Set for March 10

As reported by our sister site, Health Industry Washington Watch, on Wednesday the House Energy and Commerce Health Subcommittee will hold a hearing entitled, "Drug Safety: An Update from the FDA." At the hearing, the FDA will detail its current challenges and successes in the area of drug safety. Joshua M. Sharfstein, M.D., FDA Principal Deputy Commissioner, is slated to testify.

New Postings on the Reed Smith Health Industry Washington Watch Blog

The Reed Smith Health Industry Washington Watch blog has been updated to discuss a variety of health policy developments, including the following:


Commentary: FDA's New Good Reprint Practice Rule

This post was written by Areta L. Kupchyk, James M. Wood and Kevin M. Madagan.

FDA's Good Reprint Practice (GRP) Guidance went into effect in January 2009. The GRP Guidance establishes criteria that FDA will now use to determine whether the distribution of medical or scientific reprints and reference texts about off-label uses of a drug or device would constitute impermissible promotional activity under the Food, Drug and Cosmetic Act.

Read Reed Smith’s full commentary analyzing the GRP Guidance, which includes a Good Reprint Practice Checklist.

Good Reprint Practices

The FDA published a notice on January 13, 2009 announcing a final guidance document entitled “Good Reprint Practices for the Distribution of Medical Journal Articles and Medical or Scientific Reference Publications on Unapproved New Uses of Approved Drugs and Approved or Cleared Medical Devices.” The guidance, which finalizes a February 20, 2008 draft policy, is intended to provide manufacturers with the agency's views on permissible distribution by a company's sales representatives of medical journal articles and scientific or medical reference publications that discuss unapproved new uses for FDA-approved drugs or biologics or FDA-approved or cleared medical devices to healthcare professionals. As with the 2008 draft guidance, the final version notes the need to balance the law’s prohibition on distributing or promoting “unapproved uses of approved drugs and approved or cleared medical devices” with the “important public policy” of providing information that “may even constitute a medically recognized standard of care.” The FDA concludes that the touchstone for lawful dissemination of literature about unapproved uses is that the publications “are truthful and non-misleading.” To meet this standard, the FDA final guidance lists “principles of Good Reprint Practices” that include criteria for determining the type of publication and the manner in which the publication can be distributed. Although the final guidance closely tracks the draft guidance, it has some important clarifications, including revisions to the Good Reprint Practices and a specific reference encouraging manufacturers to seek approvals and clearance for new indications and intended uses for medical products.   A Reed Smith analysis of the final guidance is available here.

Secure Supply Chain Pilot Program

The FDA published a notice January 15, 2009 announcing the launch of a voluntary Secure Supply Chain pilot program to help promote the safety of imported drugs and active pharmaceutical ingredients (APIs). According to the FDA, the program would enable the FDA to focus its resources on imported drugs that fall outside the program and that pose a risk of being adulterated, misbranded, or unapproved, while increasing the likelihood of expedited entry for specific finished drug products and APIs into the U.S. that meet the pilot’s criteria. The FDA plans to select 100 applicants to participate in the program, and each applicant may designate up to five drugs for selection in the pilot program. To qualify, applicants will need to meet the pilot's criteria, including a requirement that they maintain control over the drugs from the time of manufacture through entry into the U.S.  The FDA will accept comments on the program through March 16, 2009.

Good Importer Practices Draft Guidance

On January 13, 2009, the FDA announced on behalf of the Interagency Working Group on Import Safety the availability of draft guidance on “Good Importer Practices.”  The draft guidance document provides general recommendations to importers on possible practices and procedures they may follow to increase the likelihood the products they import (including drugs) comply with applicable U.S. safety and security requirements. Comments will be accepted through April 13, 2009. 

Standardized Numerical Identification for Prescription Drug Packages

The FDA has released draft guidance on Standards for Securing the Drug Supply Chain – Standardized Numerical Identification for Prescription Drug Packages,” which recommends standards industry should use for the identification of individual packages containing prescription drugs under the FDAAA. The standards are designed to facilitate adoption of a uniform electronic track and trace system for prescription drugs to further improve their safety and security. The FDA is soliciting comments on certain aspects of the guidance, as detailed in a January 16, 2009 notice. Comments will be accepted until April 16, 2009.

Submission of Laboratory Packages by Accredited Laboratories

On January 16, 2009, the FDA published a notice announcing Draft Guidance for Industry on Submission of Laboratory Packages by Accredited Laboratories,” which is intended to enhance the quality and reliability of test results submitted by importers to demonstrate that their products meet the FDA's requirements. The guidance advises importers how to use accredited laboratories and makes recommendations about the quality and type of test data that these laboratories should produce to support test results submitted to the FDA. According to an FDA press release, the guidance also is intended to reduce the likelihood that an importer will submit only favorable test results to the FDA. Comments on the draft will be accepted through April 16, 2009.