FDA Watch 2: Inspection of cGMP Compliance

A friend from the pharma industry here in Manila commented on my article last week, Competition, sans coercion, will bring drug prices down . He wrote,

Hi Nonoy,

I fully agree with you that it is competition and not price control which can sustainably reduce drug prices. The government's role is to level the playing field so companies can compete. The problem now is there is no regulatory level playing-field. The FDA conducts cGMP audit and ensures compliance (which it should) among local drug manufacturers, but it does not even inspect facilities in other countries like India. I find this reckless... I have visited India to meet various companies and look at their facilities. A lot of Indian companies have excellent facilities, some with USFDA, UKMHRA and EMEA certifications even. However, these companies are also complaining because quite a number of companies which will never pass any cGMP inspection are able to register and sell their products in the Philippines. At the very least, the FDA should inspect those coming from non-PICS countries to ensure cGMP compliance and thus ensure a level playing field. To their credit, FDA has long wanted to conduct such audits, but for whatever reason they have been unable to do so. The FDA needs our support so they can perform their functions without fear.

As to GSK, I am happy with their current thrust of lowering their drug prices, but note that it was initially not voluntary for them (as with the rest of PHAP) as the threat of MRP was used against them. In any case, competition has become very stiff in the pharma industry, which is good and is what should be. The private sector continues to find ways to have products that are low in price but which do not compromise quality. As we have shown, it's doable. However, we are still waiting for government to do its part through PhilHealth. Everyone agrees that the next inflection point in pharma pricing is when PhilHealth uses its power (and money) as a third-party payor. It too is doable. All it takes is a firm resolve and working with stakeholders who can help them.

I thanked my friend for allowing me to post his comments, minus his name and affiliation. The mad rush for "cheaper medicines at all cost" can often backfire as we might be getting super-cheap but super-ineffective drugs. I read somewhere a comment that "the most expensive drugs are those that do not work or cannot cure."

My friend added that "Technically, it's not parallel importation as many of the products which have been allowed to enter without cGMP audits are already off-patent or not patented here at all. They're also not the brands owned by other companies."

So, what keeps the Food and Drugs Administration (FDA) from conducting wide compliance inspections of certificate of Good Manufacturing Practices (CGMP)?

I remember during the 3rd MeTA-Philippines Forum last January 2010, FDA Director, Dr. Nancy Tacandong, shared during the open forum that they wanted to implement bio-equivalence testing for many drugs, but they got a temporary restraining order (TRO) to implement such. Although she did not mention publicly the party/ies who requested the TRO, I assume those are the guys who are importing or locally manufacturing just anything cheap drugs which are most likely candidates to be either counterfeit or substandard.

I have repeatedly argued that to encourage more competition and hence, cheaper products -- medicines, food, cell phones, shoes, etc. -- government should respect market segmentation by competing players in each sector and sub-sector. Those players that produce really new and more useful products as a result of endless innovation and R&D, should be allowed to price their product at any level they wish. They have the right to recoup their huge investments, and they also have the right to commit business suicide if they price their new products too high so that only a few will buy. What is important is that consumers, the patients especially, should have lots of choices. From the most expensive to the cheapest drugs.

* See also FDA Watch 1: BFAD Strengthening Bill, May 06, 2009