In our mid-2018 compliance review, we look at inspection challenges
faced by companies across the world. In the first half of this year,
manufacturing compliance challenges dominated headlines. But we also saw
shortcomings at major pharmaceutical companies like Pfizer, Bayer
and Akorn
generate news.
While China, India and the US continued to be the top three countries
where regulators uncovered compliance issues, this year has also seen the FDA
take action against many South Korean companies. The European authorities found
concerns in India, Taiwan, Italy and Spain. However, there were no
non-compliance reports issued to firms in China until the end of June 2018.
While data-integrity violations and a failure to thoroughly
investigate deviations continued to remain a major concern for inspectors, this
year the real concern emanated from the supply of product to market (which had
the potential to impact product quality or patient safety).
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China: API with a cancerous impurity, vaccine scandal and data-integrity
woes
The most recent regulatory non-compliance issue pertains to the
European Medicines Agency (EMA) raising concern over the active pharmaceutical
ingredient (API) valsartan supplied by China’s Zhejiang Huahai Pharmaceuticals.
The concern was the impurity — nitrosodimethylamine (or NDMA) — detected by the company in their valsartan API. NDMA is
classified as a probable human carcinogen and its presence was unexpected as it was not detected by routine tests carried out by
Zhejiang Huahai.
Zhejiang Huahai sold over US$ 50 million of
the API in 2017 and supplies to most major manufacturers producing valsartan
medicines available in the EU and United States.
While a review is underway, national
authorities across the EU, US and Asia are recalling medicines containing
valsartan supplied by Zhejiang Huahai.
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Vaccine scandal: A major vaccination scandal has sparked off a huge outcry in China as vaccine
maker Changsheng Biotechnology was found to have falsified production data for
its rabies vaccine.
Changchun
Changsheng Bio-tech Co, in Changchun, reported serious irregularities, including fabricating
production records in the manufacture of rabies vaccines for human use, during
an inspection by the State Drug Administration, China FDA said in a statement.
Although there has been no evidence of harm
from the vaccine, the firm has been ordered to halt production and recall
rabies vaccines. And Chinese Premier Li Keqiang has urged severe punishment for the people involved, saying the incident had “crossed a moral line”.
Data-integrity violations: This year, the FDA also posted
the warning letter issued to Henan Lihua Pharmaceutical in China, a company that produces steroid APIs
like hydrocortisone and prednisone.
The warning letter
highlighted data integrity concerns that landed Henan on FDA’s import alert list in March 2018.
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During the inspection, the FDA investigator observed numerous blank batch manufacturing records in an open cabinet in the firm’s manufacturing workshop office.
Among these was multiple blank, product release forms marked with a red quality assurance release stamp stating ‘Permitted to Leave [the] Factory’.
The FDA also posted a warning letter issued to Jilin Shulan Synthetic Pharmaceutical, a manufacturer of caffeine API in China. The letter revealed
flagrant data-integrity violations.
Another warning letter was
issued by the FDA to API manufacturer Lijiang Yinghua Biochemical and Pharmaceutical, following
an October 2017 inspection.
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United States: Drug shortages due to Pfizer’s manufacturing problems
Drug
major Pfizer’s production problems continued to make headlines this year. An article in Fortune put the blame on Pfizer’s much-touted US$ 17 billion acquisition of Hospira in 2015 for turning the United States’ chronic drug shortage into a full-blown crisis.
According to the article, as of May 11 this year, Pfizer — which is the world’s largest maker of sterile injectable drugs — had 370 products that are depleted or in limited supply, 102 of which the company has indicated will not be available until 2019.
“The simple answer to why America currently has so many shortages of generic sterile injectable drugs: America’s leading manufacturer of generic sterile injectable drugs hasn’t been making them,” the article said.
Mylan’s flagship product EpiPen is also likely to face shortages due to problems at Pfizer. Although Mylan owns the rights to the EpiPen, it subcontracts manufacturing of the auto-injector to Meridian Medical Technologies, a division of Pfizer.
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While Mylan is putting pressure on Pfizer
to do more to tackle shortages of this life-saving medicine, Pfizer has
struggled to meet demand for the EpiPen and the FDA had put the medicine on its
official shortages list.
In September last year, the FDA had
issued a warning letter to Meridian
Medical Technologies over serious component and product failures that had
been associated with patient deaths.
Pfizer’s
troubles are far from over as an FDA inspection of an ex-Hospira sterile
manufacturing facility in India resulted in the issuance of a 32 page Form 483. The
same facility was issued a warning letter by the FDA in 2013.
Germany: FDA highlights contamination, data-integrity concerns at Bayer facility
In a shocking warning letter issued
by the FDA to Bayer Pharma’s finished pharmaceuticals manufacturing facility
located in Leverkusen, Germany, investigators found compliance shortcomings
ranging from concerns over data-integrity to serious product contamination
problems.
While reviewing a drug product manufacturing
operation, FDA investigators found residue on equipment which seemed most
likely from a drug product that had been previously processed in the same room.
When Bayer tested the samples of the tablets being produced to “assess the potential of cross-contamination”, the testing confirmed contamination of the previously processed product inside the tablets which resulted in a recall of several lots of drug products.
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Before the FDA inspection, Bayer had started its own data-remediation program to discontinue the practice of using “test” injections during testing. However, when the FDA investigators performed their own inspection, they found unreported data from in-process tablet weight checks. Bayer’s staff had programmed their in-process weight checker not to report values that varied more than a specified amount from the tablet target weight.
The inspection was held between January 12 and
20, 2017, and responses submitted to the FDA in May and August 2017
failed to address the concerns of the agency.
Fresenius aborted US$ 4.3
billion takeover of Akorn: ‘Blatant fraud’ or buyer’s remorse?
This year also saw German healthcare group
Fresenius abandon its US$ 4.3 billion takeover of US generic drugmaker Akorn over
data-integrity concerns.
Illinois-based Akorn filed a lawsuit in the
Delaware Chancery Court asking that Fresenius be required to “fulfill its obligations” under the buyout agreement.
In a court filing made public, Fresenius alleged that its investigation uncovered “blatant fraud at the very top level of Akorn’s executive team, stunning evidence of blatant and pervasive data integrity violations.”
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Akorn’s lawsuit acknowledged it investigated the possible submission of falsified data and
fired an executive who was involved.
Fresenius claims the executive involved in the fraud wasn’t fired. Instead, he was suspended and given a consulting position with a US$ 250,000 salary. The executive, whose name is redacted from the court filings, stands to receive a payout if the merger is consummated.
The most significant instance
of a data integrity issue involves an ANDA for the drug product azithromycin that was pending with the FDA, which Akorn had submitted
on December 21, 2012.
The court will decide if the data-integrity concerns are truly legitimate or being blown out of proportion by Fresenius, who may be suffering from buyer’s remorse and wants to exit the deal.
The court agreed to put Akorn’s case on fast track and the trial is currently underway.
South Korea: Teva’s potential blockbuster gets delayed due to problems at Celltrion
As Korea emerges as a force
to reckon with in the emerging world of biosimilars, the USFDA's issuance of a warning letter to Celltrion (a major manufacturer of biosimilars that has also partnered
with Pfizer for commercialization in the United States) came as a major
setback.
In an inspection conducted by
the FDA from May 22 to June 2, 2017, the investigators raised concerns over
multiple poor aseptic practices during the set-up and filling operations.
The warning letter highlights
an example where during the aseptic filling of vials, an operator used
restricted access barrier system (RABS) to remove a jammed stopper by reaching
over exposed sterile stoppers
in the stopper bowl. The RABS disrupted the unidirectional airflow over the
stopper bowl, creating a risk for microbial contamination.
After the operator removed
the jammed stopper, the filling line was restarted, but the affected stoppers
were not cleared.
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At Celltrion, the FDA
raised concern over 140 complaints received between October 2015 to May 2017,
which were identified to have occurred because of vial stoppers.
The deficiencies at Celltrion impacted Teva as the Korean company is the main API supplier for Teva’s migraine drug fremanezumab.
Teva confirmed that the USFDA had extended the goal date of the
Biologics License Application (BLA) for fremanezumab. The Prescription Drug
User Fee Act (PDUFA) action date for fremanezumab is currently set
for September 16, 2018.
The Celltrion warning letter
was followed by an announcement by the US-based Evolus that a USFDA pre-approval inspection of Daewoong Pharmaceutical’s plant in South Korea, where a botox biosimilar is being produced, resulted in 10 observations.
Back in 2013, Daewoong had inked a
contract with Evolus to export DWP-450 (a botulinum neurotoxin candidate),
which was expected to be released in the US market around 2017-18.
While Daewoong said it expects “no significant further actions”, Evolus’ SEC filing highlights that “any failure to adequately resolve the FDA’s observations at the Daewoong facility would likely cause FDA approval of DWP-450 to be delayed or denied”.
In May, the FDA declined to approve Evolus’ Botox rival citing deficiencies related to the chemistry and manufacturing of its potential treatment for frown lines.
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India: Data-integrity
violations, invalidation of OOS results continue
Alkem has ‘no quality control unit’: After eight days of inspecting Alkem Laboratories’ finished formulation facility in India in March 2018, the FDA investigators concluded — “there is no quality control unit”.
Alkem’s head of quality control (QC) and quality assurance (QA) confirmed out-of-specification (OOS) results for the assay for a batch of tablets. However, the company did not recall the product, which was distributed in the US market.
Less than three weeks before the inspection, the “firm’s QC department deleted two-thousand one hundred one (2,101) files” on its computer network.
Alembic invalidated OOS results: In the seven days that the FDA investigator — Jessica L Pressley — spent at
Alembic Pharmaceuticals’ oral solid dosage manufacturing facility in Tajpura, Gujarat, she uncovered that the firm invalidated 131 of the 140 OOS results (an invalidation rate of 94 percent) for products marketed in the US.
The firm attributed the invalidation to
analyst errors. In 2017, the invalidation rate was 91 percent.
The Form 483 shares a concern that the “OOS results that were invalidated by the firm’s QC unit were without rationale and supporting documentation.”
Alchymars falsified lab data: A September 2017 inspection by the USFDA at Alchymars ICM SM Private Limited in India uncovered that the firm “was falsifying laboratory data”. During the inspection, the FDA investigator found that an analyst reported far fewer colony-forming units (CFU) in a water sample than those observed on the plate by the investigator.
The FDA raised serious concerns as Alchymars uses the water to manufacture
APIs intended for use in sterile injectable dosage form drug products.
Alchymars is part of a group of companies and the factory is controlled by Trifarma in Italy, a
company which was cited
by the FDA for data-integrity violations in 2014.
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Our view
This year, concerns over pharmaceutical
manufacturing spread beyond China, India and the United States as data
integrity issues also emerged in Japan and Australia.
In Taiwan, the failure to establish an
adequate system for monitoring environmental conditions in aseptic processing
areas was a problem uncovered by both the FDA and EU inspectors.
A firm in France released an over-the-counter
(OTC) drug product without testing if the active ingredients conformed to
specifications.
PharmaCompass’ review of the observations indicates that as inspectors start adopting a more standardized approach towards inspections, the problems they uncover across countries are along similar lines.
At PharmaCompass, we believe that a
review of our Mid-Year Non-Compliances in
2018 will provide you with the
insights necessary to prepare and insulate your business from the concerns
raised during regulatory inspections.
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Impressions: 9234
As 2016 draws to a close, we look at some recent cases of (alleged) drug
price-fixing and examines its implications on a fast-changing global
pharmaceutical industry.
Last week, federal prosecutors in the US unsealed criminal information against Jeffrey
Glazer, the former CEO and founder of Heritage
Pharmaceuticals — a generic drug maker which was sold to India’s Emcure
Pharmaceuticals in 2011.
This way, Heritage Pharmaceuticals became the base of Emcure’s US operations. It generates several hundred million dollars of annual revenue, according to IMS Health data.
Federal prosecutors have also filed criminal information against Heritage’s former president, Jason Malek, who is Glazer’s brother-in-law.
Interesting, Emcure was placed on the US Food and Drug Administration’s (FDA) import alert list last year. The warning letter posted earlier this year unveiled data integrity violations, thereby making
it a part of the list of Indian companies facing compliance troubles. The
Heritage Pharmaceutical case only compounds the troubles for Emcure.
The ring leader of price manipulation
Following the federal criminal investigation, 20 states in the US filed a lawsuit against Mylan, Teva and four
other generic drug makers, saying they conspired on the pricing of two common
generic drugs.
The lawsuit, filed in the district court of Connecticut, names Heritage
Pharmaceuticals as a “ring leader” of the price manipulation, and also lists Mayne,
Aurobindo
and Citron
as participants.
According to federal prosecutors, Glazer participated in a price-fixing
conspiracy related to two generic drugs, doxycycline
hyclate (used primarily to treat severe acne) and glyburide
(an oral diabetes medicine).
The government says between April 2013 and December 2015, Glazer and his
co-conspirators worked together to fix and maintain prices of doxycycline
hyclate.
The price of doxycycline increased 8,000 percent — from US $ 20 for 500 tablets to US $ 1,849 between October 2013 and May 2014 — according to Senator Amy Klobuchar.
According to the complaint, Glazer and Malek communicated with Mylan
executives over phone calls and emails and agreed to allocate market share.
They also agreed not to indulge in a price war for doxycycline.
Mylan agreed to walk away from at least one large national wholesaler and
one large pharmacy chain to let Heritage increase its market share, the
complaint says.
Malek also had a direct relationship with an unnamed Teva employee and the
two agreed to raise prices on glyburide, the complaint adds.
The embezzling brothers-in-law
Heritage fired Glazer and Malek in August.
In November, the company filed a massive racketeering lawsuit against the brothers-in-law, accusing Glazer and Malek of running “a criminal enterprise” that included five dummy corporations — Tal Pharma LLC, Dorado Pharma
LLC, Element Pharma LLC, VetGen Pharma LLC, and Astor Pharma LLC — and numerous schemes “to steal the company’s profits and property.”
In a detailed 130-page complaint filed in federal court in New Jersey, Heritage claimed that Glazer and Malek had the company sell deeply discounted drugs to their dummy corporations that sold the drugs to Heritage’s own customers that paid the market price.
The complaint alleges that Glazer and Malek redirected US $ 9 million worth of Heritage’s sales to one of these dummy corporations — Dorado Pharma — between 2012 and 2015.
Heritage also claimed that Glazer and Malek embezzled the company’s intellectual property through the transfers of abbreviated new drug applications (ANDA).
The accusations against Glazer and Malek
Here is a list of some accusations made by Heritage against Glazer and
Malek:
• “Over the course of at least seven years, Glazer and Malek looted tens of millions of dollars from Heritage by misappropriating its business opportunities, fraudulently obtaining compensation for themselves, and embezzling its intellectual property.”
• “The magnitude of defendants’ theft is captured in an August 2015 text message exchange, in which Glazer told Malek that their scheme had netted US $ 466,000 in profit that day.”
• “Similarly, during a text message exchange with Malek in September 2015, Glazer spoke boastfully about the “healthy orders” coming into Dorado Pharma, one of their dummy corporations, and his conclusion that they would generate US $ 2.85 million. Malek later confirmed that his calculations showed profits totalling more than US $ 2.5 million.”
• “Malek even went so far as to falsely pretend on multiple occasions to be a female customer service representative named “Judy Jones” while communicating with Heritage employees through an email account associated with Dorado Pharma, one of the defendants’ dummy corporations.
• “In May 2012, Glazer instructed a Heritage employee to complete an FDA submission transferring the company’s ANDA for the generic drug Ketoprofen to defendants’ company Dorado Pharma — with no compensation of any type to Heritage. Shortly thereafter, Glazer and Malek entered into contracts for the manufacture and marketing of Ketoprofen through Dorado Pharma.”
• “In February 2016, Glazer sold an ANDA held by Heritage at a below-market price to a close business associate. In exchange for this favorable sales price, the purchaser agreed to pay kickbacks to Glazer and Malek through Tal Pharma.”
• “Shortly after his termination from Heritage, Glazer also embezzled more than six million membership rewards points from the company’s American Express account. As the primary cardholder for Heritage’s account, Glazer had sole access to these points and the ability to transfer or redeem them at his sole discretion. Based on information and belief, Glazer has converted these membership rewards points accrued by the company, with an estimated value of US $ 60,000, for his own personal benefit”
Price fixing case against Impax
While US regulators filed charges of price-fixing, another US-based generic company — Impax
Laboratories — received a subpoena in the same case.
According to the Financial Times, Impax’s pricing came under scrutiny yet again this week.
The company started selling mebendazole
this year at an average wholesale price of US $ 442 per pill. Due to this steep
price, the two-pill treatment for pinworm (a parasitic infection) costs US $
884 in the US, where it is a prescription-only drug.
In the UK, however, it is available over the counter for £6.99 (or US $ 8.65) for a pack of four pills, or £1.75 (US $ 2.17) each. In the developing world it can be bought for less than 1 cent per pill.
Mebendazole is on the World Health Organisation’s list of essential medicines. Pinworms are common in
children and affect 200 million people a year worldwide. It is recommended that
a family takes treatment for this infection at the same time.
Therefore, a family of four would have to shell out a whopping US $ 3500 or
more for the treatment.
Drug prices under scrutiny in UK too
Earlier this month, Pfizer was fined £84.2 million (US $ 104.24
million) in the UK by the Competition and Markets Authority (CMA) for ramping
up the cost of an epilepsy drug to the NHS by as much as 2,600 percent.
Issuing its biggest fine, the CMA had said the “extraordinary price rises have cost the NHS and the taxpayer tens of millions of pounds”. Pfizer, however, had rejected CMA’s findings.
This week, Allergan
was provisionally found to break competition law by raising the price
of 10 mg hydrocortisone tablets by more than 12,000 percent.
Hydrocortisone tablets are used as the primary replacement therapy for people whose adrenal glands do not produce sufficient amounts of natural steroid hormones, as in the case of Addison’s disease. The condition can be life threatening.
Our view
Across the world, pricing of both branded and generic drugs is coming under
scrutiny. As political winds push for faster drug approvals and the possibility
of cross-border trade of drugs, the pharmaceutical industry should brace for a
2017 where routine business practices will most likely stop becoming
routine.
Impressions: 6274
Over
700 commonly used generic medicines were
recommended for suspension by the European Medicines Agency (EMA) based on data
integrity concerns, over clinical studies conducted at GVK Biosciences in
Hyderabad, India.What
will be the global fallout of the European decision? The European decision has
impacted products from companies such as:Abbott Laboratories, Accord Healthcare (Intas), Actavis, Alembic, Apotex, Betapharm (Dr. Reddy’s), Brown & Burk UK, Fair Med Healthcare AG, Glenmark, Lupin, Micro Labs, Mylan, Orion Corporation, Ranbaxy, Ratiopharm, Sandoz, Sanofi-Aventis, Stada, Teva, Torrent, Wockhardt, Zydus… and many, many more.The
original recommendation of suspending
some of the medicines
made in January 2015, was an outcome of an inspection of GVK Biosciences’ site in Hyderabad (GVK BIO is a Clinical Research Organization-
CRO) by the
French medicines agency (ANSM) through the EMA. The EMA stated in their official release: “The
inspection revealed data manipulations of electrocardiograms (ECGs) during the
conduct of some studies of generic medicines, which appeared to have taken
place over a period of at least five years. Their systematic nature, the
extended period of time during which they took place and the number of members
of staff involved cast doubt on the integrity of the conduct of trials at the
site.” 1000 drugs reviewed// 700
rejectedWhile
over 1,000 pharmaceutical forms and strengths were reviewed at the GVK site,
over 300 of them had sufficient supporting data available from other sources.
As a result, these medicines were allowed to remain on the market in the EU.However, for the over 700 other medicines, the EMA after its second review, maintained its previous recommendation of January 2015, to suspend medicines, where no additional supporting data from other studies was available. Only one exception after that second review was spared from suspension, as the company was able to address the EMA’s concerns: it was Bivolet Nebivolol (5 mg tablets/ marketing authorisation holder: Neo Balkanika EOOD).While the agency noted that “there is no evidence of harm or
lack of effectiveness linked to the conduct of studies by GVK Biosciences at
Hyderabad. Some of these medicines may remain on the market” if they are of critical importance for patients. However, the recommendation
will now be sent to the European Commission for a legally binding decision,
which will apply to Member States regardless of the decision taken in the
interim period.The updated list of medicines for which, the CHMP (Committee
for Medicinal Products for Human Use) recommends suspension, is available on the EMA website. Companies
are given 12 months to submit additional data. The potential global impact of the European
suspensions?The GVK Biosciences
scandal is almost as severe in magnitude and impact, as the data falsification
concerns, which were discovered at Ranbaxy (Katherine Eban’s stunning investigation in Fortune, “Dirty Medicine” covers this extensively). One of the main promoters of GVK Biosciences is Mr. D.S. Brar who was CEO & Managing Director of Ranbaxy from 1999-2004. The impact of GVK
Biosciences’ misdeeds is already being felt on new product launches. Mylan recently withdrew its European application for generic
Abilify (aripiprazole) (2014 sales US$6.2x billion) citing “identification of major GCP issues (Good
Clinical Practices).” What about the impact on the US market?In 2010, FDA discovered data integrity
violations, which bankrupted
clinical research organization, Cetero Research/PRACS. Based on the Cetero findings
in the United States, the EMA suspended seven drugs. Now it remains to
be seen, how the FDA will handle the data integrity concerns found in Europe
since products like repaglinide & candesartan cilexitil (Mylan), levetiracetam (Dr. Reddy’s), clonazepam (Sandoz), metformin hydrochloride (Actavis), tacrolimus (Panacea Biotech) all have U.S. FDA approvals. Leading GVK Biosciences’ defense is the Indian government, who warned last month that if the European Union does not reconsider their decision, it may go to the World Trade Organization. The Indian government’s position is based on an appeal by GVK Biosciences, which made the “Indian government set up a panel of experts last year to investigate
the matter and found no manipulation”, GVK Biosciences CEO Manni Kantipudi told Reuters.However, globally reputed GMP expert, Lachman Consultants, believes that the GVK Bioscience episode “could potentially impact data integrity, similar to the Cetero/PRACS
case”.It’s clear for us that this is not the end of the story…
Impressions: 4151