Nielsen and England: FDA’s 1980s Approach to 21st Century Import Risk

The Agency has supply chain risk all wrong and needs to dramatically improve its IT infrastructure, say two former FDA experts.

By Paul Thomas, Managing Editor

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Anyone who cares about our nation’s drug importation policy has an opinion about what needs to be done to “fix” it. Two people who should really know are Carl Nielsen and Benjamin England, who worked together at FDA for 15 years and oversaw the drafting of the Agency's first Import Strategic Plan. Nielsen ended his government career as director of ORA’s Division of Import Operations and Policy, England as regulatory counsel to the Associate Commissioner for Regulatory Affairs.

Now on the “outside” — Nielsen as a private consultant, England as a partner with Rodriguez O'Donnell Ross Fuerst Gonzalez Williams & England P.C. — the two can better assess what’s wrong with our import system and what FDA must do to ensure the safety of drug shipments. The Agency needs to trust industry, they say, and it needs to shed its antiquated understanding of supply chain risk.

Pharmaceutical Manufacturing spoke with Nielsen and England recently to get their vision of a reformed FDA and a safer import system.

P.M.: What’s wrong with FDA’s approach to import safety?

B.E.: As a whole, FDA’s import program isn’t actually doing anything. It isn’t improving consumer confidence in the industry. Basically, what the FDA is doing is just operating on a transactional level. Before product is permitted into the country, there are a whole lot of transactions that happen — either commercial, regulatory, relating to tariffs and quotas, etc. The Agency just figures out if it wants to look at something or not based upon those transactions, or if it thinks that it has enough information to suspect that there’s a problem or not. If it does, it will engage in its administrative process.

The problem is that the resources are so slight in contrast to the volume that 98% of the time product just comes through. The information is transmitted, but it’s not information that means anything.

C.N.: Essentially what they’re trying to do is make a safety decision based upon an invoice.

B.E.: FDA is operating on the general risk associated with a product rather than the risk associated with that particular product in that particular container that came from that particular foreign manufacturer. Its approach is not specific until it finds a problem, and then it becomes ultra-specific. This becomes a nightmare for people who find themselves caught in this percentage of the 2% of shipments that FDA looks at.

This worked in the 1980s, because so much of what came in was bulk. FDA could always go to the domestic manufacturer and do a GMP [inspection]. It wasn’t as much of a threat. In that environment rose up counterfeit bulk drugs because there was so little scrutiny at the borders.

So, the Agency’s view of the problem arose out of this 1980s environment. It has still really never changed its paradigm, and here we are in 2006. But now, the majority of the products coming in are not just raw materials. You have a lot of finished products as well. GMP questions can only be answered at the foreign facility.

P.M.: Why weren’t you able to fix this approach?

B.E.: The government has a way of creating a rubber-band effect. You can make progress in an area, but the tension is so strong to stay the same that if you don’t maintain that pressure it will eventually snap back.

In a government setting, you have to make up your mind that you’re going to break the rubber band (or you’re going to kill yourself trying!), or you’re just going to go along with the pack and become a bureaucrat. The system is simply not designed to change itself, so there’s always a need for change agents.

In some circumstances, I think we broke the rubber band. In other circumstances, not. Consequently, a number of things have reverted back.

P.M.: What were you able to accomplish?

B.E.: We started to make some changes, especially after 9-11, and put together our Import Strategic Plan. We brought in people from all of the centers and internal stakeholders, the field, legal, legislative, we must have had up to 200 people at any time to identify how the Agency could better leverage resources to assess risk, and then focus on areas of true risk.

The key was to focus resources away from those areas where the risk had been mitigated already. A plan was put together to that end, and it has had some success. But the problem the FDA has always had is that it doesn’t know how to deal with industry very well. The people who know the most about their products are the people who make them, and FDA hasn’t allowed industry to participate in creating change.

P.M.: What is the Agency’s current thinking about the supply chain, and how does it need to look at supply chain risk differently?

B.E.: They generally get the idea of controlling risk in the supply chain. The problem is that supply chains can be as varied as the products in them. Visibility is the important thing. You have to be able to see into supply chains and track the product through to the market. A lot of this is out of FDA’s jurisdiction, and that’s part of the problem. FDA probably doesn’t have a whole lot of jurisdiction over the security element, even though it thinks it does.

The Agency needs to come to the realization that the majority of the industry has the same interest as the government does in securing the product in the supply chain. One of the government’s concerns is that the interests of the CFO and COO and others lie with the shareholders. That’s true, but the shareholder is damaged if the product is tampered with. There’s really not competing interest.

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