Current Good Manufacturing Practices: Drug and Biologics

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ACI’s 23rd FDA Boot Camp

Joy Liu

Partner

Ropes & Gray LLP

Current Good Manufacturing Practices: Drugs and Biologics

Kirsten Mayer

Partner

Ropes & Gray LLP

September 18 - 19, 2014

Tweeting about this conference?

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cGMPs: Overview

• Under the Federal Food, Drug, and Cosmetic Act (FDCA), drugs and biologics are required to be manufactured in accordance with current good manufacturing practices (cGMP) • A drug is “adulterated” if found not be manufactured according to

cGMP 21 USC 501(a)(2)(b)

• The purpose of cGMP is to prevent product defects by controlling the manner of production

• Most FDA inspections focus on GMP compliance

• Many voluntary product recalls result from weaknesses in GMPs

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FDA’s GMP Philosophy

• Quality, safety, and effectiveness must be designed and built into a product

• Quality cannot be inspected or tested into a product

• Processes must be “sustainable”

• Capable of self-correction by identifying “root cause” of deviations, and capable of evolution due to technological changes

• “Closed Loop system” should be used to evaluate weaknesses, identify root causes, identify corrective and preventive actions

• Quality is a reflection of corporate culture and commitment to compliance

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Substantive Drug cGMP Areas

• Organization & Personnel • Buildings &

Facilities • Equipment • Containers, Closures,

& Components • Production & Process

Control 4

• Packaging & Labeling Control

• Holding & Distribution

• Laboratory Controls

• Records & Reports

• Returned Drug Products

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Sources of Drug GMPs

• How does FDA determine what’s “current” GMP? • FDA determines cGMP “based on its experience with the

manufacture of drugs through inspectional and compliance activities; upon knowledge gained from reviewing [NDAs, BLAs, and other submissions]; and upon consideration of comments from interested persons received in response to proposals to amend CGMP regulations.”

• Although practices must be “current,” they need not be widely prevalent • “Congress did not require that a majority or any other percentage

of manufacturers already be following the proposed mandated practices, as long as it was a current good manufacturing practice in the industry, i.e., that it had been shown to be both feasible and valuable in assuring drug quality.”

Source: 43 Fed. Reg. 45018 (1978)

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Sources of Drug GMPs

• Guidance Documents • FDA draft and final guidances

• ICH or other guidances adopted by FDA

• Other FDA Pronouncements • 483s, Establishment Inspection Reports, Warning Letters, Injunctions

• Recall information

• FDA statements at meetings/seminars/workshops, including published proceedings

• FDA's Compliance Program Guidance Manual

• FDA's Compliance Policy Guides Manual

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FDA Inspection Triggers

• Routine GMP inspection

• New product launch

• "For cause" inspection

• Previous violative inspection

• Recall

• Consumer complaints

• Competitor complaints

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What FDA May Do During Inspections • Enter at reasonable times

• Inspect within reasonable limits and in a reasonable manner, "upon presenting appropriate credentials and a written notice to the owner"

• Access, copy, and verify any FDA-required records or documentation

• Ask to see documents or places that FDA is not authorized to review, hoping that access and review will be permitted "voluntarily“

• For drugs, require documents be provided in advance of or in lieu of physical inspection

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Typical Inspection Activities

• Document review, employee interviews, questions and answers

• Observations of operations

• Daily inspection reports and investigator debriefs

• Efforts to resolve potential GMP observations

• "Annotation" of 483s

• Presentation of 483 and "discussion with management"

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Top 5 Drug cGMP Problem Areas

• Investigating and correcting discrepancies or defects (21 CFR 211.192)

• Micro-controls for sterile & non-sterile (21 CFR 211.113)

• Stability program (21 CFR 211.166(a))

• Process design & qualification (validation) (21 CFR

211.100(a))

• Establishing and following sound tests and sampling plans (21 CFR 211.160)

10 Alicia Mozzachio, Branch Chief, DIDQ, OMPQ, OC, CDER, “Understanding cGMPs – What Attorneys Need to Know” FDLI Conference (July 15, 2014)

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Potential Consequences of cGMP Violations • FDA Form 483

• Regulatory meetings

• Recall

• Untitled or Warning Letter

• Voluntary shutdown

• Import refusal

• Administrative Detention

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• Consent Decree of Permanent Injunction

• Product Seizure

• Withholds for pending applications

• Withdraw approved applications

• Criminal prosecution

• False Claims Act

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Timing of Warning Letters

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Globalization: Massive Shift to Foreign Suppliers • Massive supply shift for FDA-regulated products

• 650% increase between 1990-2005

• More than 150 exporting countries

• More than 300 U.S. ports of entry

• ~80% of drug ingredients are of foreign origin

• Increased sourcing from developing countries

• China and India are largest sources of drug ingredients

• Pharmaceutical imports from China more than doubled from 2002-2007, to $698 million

• Pharmaceutical imports from India increased 2,400% from 1996-2006

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Globalization: Growth in Foreign Establishment Warning Letters

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Factors FDA Considers When Evaluating Cases • What is the nature/extent of the problem?

• Are issues recurrent or isolated?

• Is the firm non-compliant or totally out of control?

• Are multiple systems involved (e.g., lack of SOPs, data integrity issues, lack of supplier qualification, release of out of specification drugs)?

• Are issues related to poor quality structure, deficient process design, or deficient product quality?

15 Adapted from Carmelo Rosa, Director, DIDQ, OMPQ, OC, CDER, “Understanding cGMPs – What Attorneys Need to Know” FDLI Conference (July 15, 2014)

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Factors FDA Considers When Evaluating Cases • How was the issue identified?

• Internal audit finding

• Informant/whistleblower

• Reaction from firm as it learned inspection was about to begin

• “Confession” during an inspection

• Investigator during an inspection


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Factors FDA Considers When Evaluating Cases • What did the firm do about the issue?

• Initiated a CAPA, conducted a risk assessment

• Ceased production

• Conducted a recall

• Hired reliable outside counsel/consultants to independently assess their systems

• Self-reported to regulatory authorities


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Factors FDA Considers When Evaluating Cases • Other factors

• Were attempts made to correct successful?

• What is the likelihood that issues will be corrected?

• What are the types and amounts of products impacted?

• Any information from other sources suggesting that the product poses a serious risk (e.g., international regulatory authority)?

• Was there a refusal for the inspection or records, or unreasonable delay during the inspection?


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Additional Enforcement: Consent Decrees, DOJ Investigations, FCA Litigation

• Consent Decrees of Permanent Injunction • FDA may seek an injunction or consent decree

• DOJ Investigations • DOJ – Consumer Protection Branch investigates potential criminal

or civil violations of law

• False Claims Act Litigation • Internal or external whistleblowers may initiate action

• DOJ and/or state AGs may intervene to litigate impact on government health care programs

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Injunctions/Consent Decrees

• Generally, purpose is to stop or prevent a violation of law, and to correct the conditions that caused violation to occur • Evaluation includes: seriousness of offense, actual/potential

impact of offense on public, whether other actions could be as effective or more effective, need for prompt judicial action, history (if any) of prior violations

• Recent examples include: • Dakota Labs (2013)

• Ben Venue (2013)

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Injunctions/Consent Decrees: Recent Examples • Dakota Laboratories (South Dakota)

• Sterile eye drops

• Three inspections over three years; DOJ alleged repeated failure to remediate

• Issues related to procedures for preventing contamination, failure to investigate discrepancies, insufficient control over environment, sterility testing, among other things

• Consent decree imposed detailed requirements that must be satisfied before defendant may engage in business of manufacturing drugs again

• Ben Venue Laboratories (Ohio) • Consent decree requires retention of outside experts to evaluate

compliance with GMP requirements, report to FDA and monitor remediation; to evaluate QA/QC organization, including whether personnel are adequate in number and qualifications; to audit annually manufacturing and quality operations

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DOJ Investigations

• DOJ does not get involved in every GMP matter, but drug safety is a top priority

• DOJ Guidelines identify several factors that prosecutors should take into account when evaluating whether to prosecute a corporation, including

• Nature and seriousness of misconduct; pervasiveness of wrongdoing, including complicity of management; and history, if any, of similar misconduct

• Self-disclosure and willingness to cooperate in the investigation • Existence and effectiveness of pre-existing compliance program • Remedial actions, including efforts to implement or improve

compliance, replace responsible management, and discipline or terminate wrongdoers

• Collateral consequences; and adequacy of alternate remedies, including prosecution of individuals or civil/regulatory action in lieu of prosecution

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DOJ Investigations

• For GMP matters, DOJ-CPB has said its evaluation of company conduct will include both the processes and the people at the company who are involved in GMP compliance

• Focusing on the people, questions a company should think about include: • Do your people have the right training and expertise to recognize problems

that can arise?

• Do your people have the right incentives to see, report and fix problems?

• Are your key people satisfied and engaged, or are they departing?

• Do your people and policies work well together, or do processes rely on unrealistic expectations?

• Does the company have good visibility into how its people and processes are doing – for example through independent or external audits or assessments

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DOJ Investigations: Significant Settlements

• Ranbaxy (2013) - $500m • Led by USAO - D. Maryland

• Felony conviction and criminal fine/forfeiture of $150 million

• Civil settlement resolving FCA and certain other exposure for $350 million

• Issues included incomplete testing records, inadequate stability program, significant cGMP deviations in manufacture of certain active ingredients and finished products, outside audit recommendations not followed, failure to timely file field alerts, making false statements to FDA in certain Annual Reports

• Settlement followed a 2012 injunction prohibiting importation into the US of products produced at two facilities

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FCA Litigation

• Federal False Claims Act prohibits, inter alia, submitting or causing the submission of a false claim for payment by the US • The FCA is a “qui tam” statute – a private citizen with evidence of

a violation of the Act (whistleblower) – may file a complaint under seal in federal court, and litigate the case on behalf of the government if the government chooses not to get involved

• The FCA provides for treble damages and mandatory penalties for violations

• The Ranbaxy investigation, as well as GSK-Cidra in 2010 included FCA complaints filed by relators • Ranbaxy whistleblower/relator received $48.6 million from federal

share of civil settlement

• Majority of states have enacted state FCAs modeled on the federal FCA

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FCA Litigation

• US ex rel Rostholder v. Omnicare • Former employee filed complaint in D. Maryland alleging

defendant’s claims for payment by Medicare/Medicaid for drugs it had repackaged in violation of certain FDA safety regulations were false

• US declined to intervene

• Complaint was dismissed by the Court at the earliest stage (at motion to dismiss); relator is pursuing appeal

• Key takeaway: Regulatory violations – including those involving GMP – do not necessarily trigger FCA liability

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Corporate Integrity Agreement Obligations? • With more DOJ involvement in GMP matters, and more

FCA litigation, will HHS-OIG take on a more significant oversight role in GMP through CIAs?

• GSK’s CIA (2012) included Appendix with provisions relating to GMP and the company’s manufacturing and supply organization • Board oversight, including Board resolution related to

implementation of effective compliance

• Written code of conduct; policies and procedures

• Training, including Board training

• Certain reporting requirements

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Questions?

Joy Liu Ropes & Gray LLP

202-508-4691 [email protected]

Kirsten Mayer Ropes & Gray LLP

617-951-7753 [email protected]

Current Good Manufacturing Practices: Drug and Biologics

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