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Thirst for outsourcing fuelling product recalls

By Kirsty Barnes , 15-Jan-2008

Product recalls in the UK due to health and safety concerns have shot up to their highest level, with the rise in outsourcing to China finger pointed for much of the blame.

In the past year, sourcing products from a "poorly controlled" Chinese manufacturing and supply chain has proved to have a "sting in its tail", according to London-based law firm Reynolds Porter Chamberlain (RPC) who recently released their annual report on the issue. The situation is concerning, especially considering that in the past year the majority of top tier pharma firms have pledged their resolve to increase outsourcing to Asia. In 2007, 192 product lines were recalled in the UK - a jump of 22 per cent over the 179 withdrawn in 2006. The firm's historical data reveals a clear upward trend, with 165 products recalled in 2005 and 143 the year prior to that. The figures refer to, but are not specific to, pharmaceutical products, among other products ranging from food and drink to personal care products and toys. Last year China admitted that almost a fifth of products - including fake human blood protein - made for domestic consumption were substandard and naturally some of the problem is filtering through to products for export. The British Commissioner of the European Union for Trade, Peter Mandelson, has said that around half the counterfeit goods found in the EU originate in China. "We have been warning for years of the risks in uncontrolled outsourcing to China and other developing countries," said Mark Kendall, Partner, of RPC. Many companies need the cost savings from outsourcing to China to drive their earnings but the statistics show that putting in place proper quality control procedures to protect their customers is easier said than done". In July last year, the largest counterfeit drugs conspiracy ever to be encountered in the UK was exposed following Operation Stormgrand, an investigation stretching back several years and culminating in the seizure of over £1.5m (€2.2m) of fake medicines. The men under investigation were part of the UK distribution arm of a global counterfeiting ring, with operations stretching from China, India and Pakistan to the Caribbean, the US and the UK. The counterfeiters focused on importing fake versions of Merck's hair loss product Propecia (finasteride), as well as the crème de la crème of the counterfeiter's catalogue, Pfizer's Viagra (sildenafil citrate) and Eli Lilly's Cialis (tadalafil). This particular group succeeded in importing millions of pounds' worth of bogus drugs from a network of manufacturing setups around the world, filtered for sale through licensed wholesalers to pharmacies in the UK, and through internet sites based in the UK and abroad. Despite this example, the good news for the pharmaceutical industry is that the number of drug and medical product recalls in the UK dipped last year, at 27, compared with 35 in 2006 and 30 in 2005, according to the RPC report. However, the number is still too high, as lives are being placed at risk with even one drug product recall, in addition to other health and safety implications. The problem is by no means isolated to products manufactured offshore. In December last year UK-based William Ransom & Son issued a voluntary recall of several products manufactured at its contract manufacturing facility in Witham, Essex. A routine inspection by the Medicine and Healthcare Products Regulatory Agency (MHRA) in November "found some evidence of deficiencies in the company's control and investigation of microbial contamination of the purified water supply used in the manufacture of certain products". The agency also suspended the company's manufacturing license for certain products for three months. Since the announcement of the recall in December, an independent expert review of procedures at the site has led the MHRA to conclude the company is no longer required to implement a recall, although the agency is still undergoing a review of other products manufactured at the facility and will re-inspect the plant with the view of reinstating the manufacturing license. But while no manufacturer is immune from a product recall, countries in Europe and the US do generally have stricter rules in place to ensure that drug APIs meet current good manufacturing practices (cGMP). In the US, for example, drug manufacturing plants are supposed to be inspected regularly (every two years). Indeed, this very issue is high on the radar of the two trade associations of the world's two largest pharma economies - Europe and the US - who have taken the unusual step of banding together to condemn their regulatory authorities for poor regulation of foreign active pharmaceutical ingredient (API) manufacturers. The Synthetic Organic Chemical Manufacturers Association (SOCMA) and the European Fine Chemicals Group (EFCG) are demanding that regulators increase their inspections of such foreign facilities. The US Food & Drug Administration (FDA) and the European Agency for the Evaluation of Medicinal Products (EMA) do not regularly inspect all foreign facilities manufacturing APIs serving them (generally only at intervals of five years or longer) and many foreign facilities have never been inspected at all, even though 75-80 per cent of all APIs used by EU and US drug manufacturers are imported, mainly from India and China, claim EFCG and SOCMA. Furthermore, 90 per cent of the inspections carried out by the FDA are pre-approval inspections, while only 10 per cent are for cGMP compliance purposes, according to Joe Acker, President of SOCMA. According to a 1999 FDA report, 242 manufacturers imported drug ingredients to the US without being inspected. Moreover, in a recently-released Government Accountability Office (GAO) audit report, China, which has the largest number of drug manufacturers eligible for FDA inspection (714) was earmarked for only 13 regulatory visits by the FDA in 2007, meaning only less than 2 per cent of the country's drug exporters will have had their facilities examined. In the European Union, the situation is equally alarming. There, the EU is unable to even account for the number of manufacturing facilities importing into the EU, without consideration to the number of inspections performed. The winds of change are blowing, with the first steps in tightening the safety controls on the pharmaceutical ingredients imported to the US from China being taken in December following months of negotiations between the regulatory bodies of the two countries. From now on, Chinese manufacturers that export to the US any of the APIs listed on a newly drawn up list are required to register with the Chinese drug regulators. Gentamicin sulphate (an antibiotic), atorvastatin (the API in Lipitor) and sildenafil (the API in Viagra), are among the big-name ingredients included on the list. The agreement is only a small step in the direction of a number of measures that need to be taken to secure the supply chain, but it will at least assist both China's State Food and Drug Administration (SFDA) and the FDA in more easily keeping track of and inspecting a larger number of manufacturers as to their regulatory compliance and hence ensure safer medicines. Europe, however, is yet to begin to really tackle the issue.


Meanwhile, as the globalisation spread continues to outpace the reach of the regulatory bodies, supply chains around the world remain exposed to a very real threat of infiltration of substandard medicines.

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