IJuly 2012, significantly expanded FDA’s regulatory reach by incor- porating quality risk management oversight and controls into the agency’s cGMP authority. Under the new provisions in the law, if a finished-product manufacturer fails to establish oversight and controls related to raw materials, components and contract manufactured finished products, its distributed products are deemed
to be adulterated and the introduction of those products in interstate commerce is a prohibited act.
THE FDASIA AND LIABILITY
As a result, with the passage of FDASIA, finished-product manufacturers are now liable not just for their own cGMP violations,
but may also be liable for the cGMP violations committed by
their upstream suppliers and manufacturers. By expanding the
scope of potential cGMP liability, FDASIA places finished-product
manufacturers at a greater risk of being a target of investigation
or enforcement action carried out by the FDA or DOJ.
In order to avoid a government investigation or enforcement
action, we recommend the following actions:
• Establish and maintain an effective quality and compliance
• Develop and maintain high standards of quality and compliance
at every level of the organization.
• Ensure that properly qualified and trained employees comply
with all applicable FDA requirements.
• Maintain a strong audit program, with regularly scheduled internal audits and periodic audits by independent experts.
• Establish a comprehensive supplier management program. It
is likely that FDA will look to its well-established standards for
supply chain management for medical devices, which are set
forth in FDA’s quality system regulation for purchasing controls, to enforce requirements for drug manufacturers.
• Evaluate existing quality agreements in light of new legal requirements.
• Link the quality and compliance program to the company’s
corporate compliance program (which typically covers other
regulated areas, such as advertising and promotion and federal
health care program requirements).
DOJ and FDA will weigh the existence and effectiveness of a
company’s compliance program in deciding whether or not to
initiate an enforcement proceeding. The DOJ is required by its
own internal policy to consider a business organization’s “efforts
to implement an effective corporate compliance program or to
improve an existing one” in deciding whether to pursue criminal
charges. Therefore, the value in having a robust compliance program could save a company from being on the wrong end of a
criminal, civil or other administrative proceeding. ■
Feds turn attention to cGMP-related violations
In the past year, cGMPs have become the focus of considerable
attention in the legal community. In January, the Department
of Justice’s (DOJ) Deputy Assistant Attorney General for the
Consumer Protection Branch of the Civil Division said that enforcement of cGMPs would be one of DOJ’s “top areas of focus”
in 2013. In April, another senior Justice Department official
stated that cGMP False Claims Act cases could be “the next hot
thing.” One month later, DOJ announced that it had entered into
a $500 million dollar civil and criminal settlement with Ranbaxy
USA, Inc. (Ranbaxy), the U.S. subsidiary of the largest generic
drug manufacturer in India, Ranbaxy Laboratories Limited. To
date, this is the largest penalty ever imposed on a generic drug
company for cGMP-related violations.
Why have cGMPs become a top area of focus for DOJ, and
how can companies avoid being caught in the cross-hairs of a
government investigation or enforcement action? In this article,
we will discuss basic concepts of cGMPs, recent changes in the
law, the significance of those changes, and best practices for remaining in compliance.
The federal Food, Drug, and Cosmetic Act (FDCA) states,
among other things, that a drug is adulterated if it is not manufactured in compliance with cGMPs. Moreover, the introduction
of an adulterated product into interstate commerce is prohibited,
and the government is authorized to bring an enforcement action
in the event that a manufacturer introduces adulterated products
and fails to take appropriate corrective action.
FDA’s cGMP regulations for drugs establish minimum standards for cGMP compliance. In order to comply with cGMPs,
manufacturers are required to establish systems to control every
stage of the manufacturing process, including oversight and control of raw materials and components, design, processing, testing,
packaging and labeling, storage and distribution. If implemented
properly, these controls help assure the quality of products and
help prevent the release of nonconforming products.
Manufacturers with aging facilities and technology are not
meeting the requirement to remain “current” under cGMPs.
These companies are more likely to experience problems with
quality, and correcting those problems will be expensive if manufacturers have not invested appropriate resources over time.
In light of recent changes in the law, the failure to make appropriate investments and remain “current” could have significant
consequences for manufacturers. Specifically, the Food and Drug
Administration Safety and Innovation Act (FDASIA), enacted in
“The Next Hot Thing”?
■ By Cathy Burgess and Edward Kang, Alston & Bird