Should The FDA Charge For Plant Inspections?
8 CommentsBy Ed Silverman // June 8th, 2010 // 8:38 am
In the wake of the Johnson & Johnson recall scandal, almost as many questions were raised about the conduct of the FDA as there were about the behavior of the healthcare giant. During a May 27 congressional hearing, FDA deputy commish Josh Sharfstein was repeatedly asked why the agency didn’t move faster to discover and rectify the numerous quality-control problems at different J&J plants where Tylenol and Motrin are made.
This prompted an interesting discussion the other day. Would the FDA have been more effective and efficient if its resources were infused with fees from drugmakers for plant inspections? After all, drugmakers pay fees for product reviews, so why not this as well? It’s not as if they don’t pay elsewhere. The UK’s Medicines and Healthcare products Regulatory Agency charges for all sorts of things. The daily rate for all GMP, GCP and pharmacovigilance inspections is about $3,700 (see here). And these are the fee schedules for scientific advice and laboratory compliance.
Of course, the fees reviewing med has never been uniformly popular. There are ongoing complaints that fees never really solved the problem of increased agency costs; the system now favors pre-market applications instead of post-market surveillance, and industry winds up with too much influence over the process. Some will say taxes should be used to pay for more inspections, while others may argue drugmakers would pay more attention if they pay for upfront rather than later in the form of fines and possible shutdowns. An FDA spokeswoman reminds us Congress considered imposing such a fee under the Food and Drug Administration Globalization Act of 2009, but so far…nothing. What do you think?
Should The FDA Charge For Plant Inspections?
- Yes (54%, 50 Votes)
- No (46%, 42 Votes)
Total Voters: 92
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HelicalZz
Not for spot inspections, as this is a function / responsibility of the agency as a watchdog, and charging could introduce unnecessary conflicts. It also introduces potential problems with overseas inspections. What was addressed at the JNJ hearing was whether the FDA should be able to recover costs incurred during follow-up inspections i.e. those inspections that wouldn’t have been necessary if the spot inspection didn’t show problems. Here too, conflicts can arise, but I’d be more inclined to support this type of a consideration, and this is probably best done via fining.
Zz
Pharma Conduct Guy
I agree with HelicalZz. Imagine the conflict of interest that would exist if a company being investigated by the SEC for fraud had to bear the cost of the investigation.
The PDUFA brought in a huge amount of cash from Pharma that resulted in the FDA being able to hire many more inspectors. However, it created another problem wherein the FDA become much too reliant on PDUFA “income” to serve effectively as an industry watchdog.
Anyone who doubts whether stricter regulatory oversight is needed, take a look at the BP fiasco in the Gulf of Mexico right now. Stricter regulatory oversight combined with potential for severe pecuniary losses for violations will create a business driver to take actions that will minimize harm.
sven
I just watched the webcast of this hearing and did not hear Sharfstein repeatedly being asked why FDA did not act sooner.
On top of that… you failed to mention that inspection fees have been proposed during the past three appropriation requests.
I’m not sure you know FDA as well as you think you do.
Ed Silverman
Dear Sven,
Thanks for your note. Back on May 5, the House Committee on Oversight & Government Reform released this statement when it launched its probe…
http://oversight.house.gov/index.php?option=com_content&task=view&id=4911&Itemid=49
In there, the committee noted it was “questioning the adequacy of FDA’s inspection procedures… whether FDA’s inspection and recall procedures were sufficient.” Toward that end, the committee has reviewed more than 1,000 pages of documents supplied by the FDA, according to a source.
I did note that Congress considered a fee for inspections, but nothing has come of it. The question is posed to gauge the extent to which, if any, others think a fee should, in fact, become a reality, not whether the FDA should make such a request.
Hope this helps,
ed
Andrea
Many years ago, in another life career, when I was in banking, the bank paid for their own surprise audits by the state examiners. It would seem that the pharmaceutical companies should be willing to pay to make sure their manufacturing plants are up to code, after all, they should already be policing themselves (LOL). I mean, it’s not like the taxpayers get any free drugs…we pay dearly for the ones we use. And who would have ever thought that that children’s Tyelenol and Motrin, the mother’s milk of children’s care since Reyes’ syndrome took away aspirin, would be dangerous…not necessarily from the active ingredients or even the inactive ingredients, but from contaminants that had no warning labels! They can’t blame foreign manufacturers for things like lead or cadmium on this one. So pharma giants, pay up, or at least pay dearly for infractions found in the inspections, perhaps with liquidated damages daily until things are corrected, as happens in the insurance world with state government buisiness. Maybe that would be the way to go!
pharmavet
This would work about as well as Fortune 500 companies paying the credit rating agencies that give them their ratings. This is chutzpah to me. FDA comes into your plant, sometimes slowing things down for weeks at a time, and now they want to get paid for the effort. Gone are the days when you could squirrel away the the inspector in a back room with your batch records and a full pot of coffee. Now they actually want to walk onto the plant floor. Imagine that!
ex-FDAer
No.
Where there’s money involved there’s corruption. I’ve seen it.
As for slowing things down for weeks. Maybe if there were less interference in inspections (remember the info coming out over the last few years) JNJ wouldn’t have the mess on their hands that they do now.
Anne PME
1. USDOJ works with FDA on investigations. If the FDA gets money while funding for USDOJ remains stagant or decreases, then I am not sure that it makes sense to give the FDA greater powers and more money.
2. I hope that as this inquiry moves forward, staffers take a look at current state pharmacy board resources and potential penalties that may be incurred by state licensed distributors and dispensors of adulterated prescription drugs, and consider that the only real way for states to penalize pharma is via false claims. Let’s hope that for the sake of their stockholders, pharma also looks at this.
The pharmaceutical company is not licensed by the state, so they are not liable and cannot be held responsible by state pharmacy boards. However, they may be held liable by states under Medicaid false claims regulations. So, states may have a conflict of interest with regard to FDA recall and inspections because under certain circumstances certain states ( such as states with high Medicaid populations and weak pharmacy boards) stand to make more money by allowing adulterated prescription drugs and devices to be dispensed to Medicaid patients.
The state gets a federal match or reimbursement. The state can then recollect (i.e receive a second reimbursement) via state pharmacy board penalty fees. Perhaps better yet, the state can collect a second reimbursement while the feds do most or event all of the work if a false claims case is filed. As we move forward with HCR, it might make sense to take a look at this and ensure that states are also proactive in preventing unfit medicines and devices from being distributed or dispensed.
While states are supposed to have adequate controls in place to prevent these types of Medicaid false claims, I worry that budget deficits combined with increases in Medicaid beneficiaries are creating a type of perfect storm that may allow harm to be exploited for profit.