Another Brick in the Wall: A New Commitment Implementing the Mutual Recognition of Inspections

According to a European Medicines Agency (EMA) press release issued on August 23, 2017, the FDA, the European Commission (EC), and the European Medicines Agency (EMA) recently signed a new confidentiality commitment that allows the FDA to share non-public and commercially confidential information, including trade secret information, contained in drug inspection reports with these European Agencies.

As you may recall, back in March, we reported that the United States and the European Union had agreed to recognize each other’s drug cGMP inspections. The agreement reached (see here and here) amended the Pharmaceutical Annex to the 1998 U.S. – E.U. Mutual Recognition Agreement, with a view to avoiding duplicative inspections and saving millions of dollars in repetitive inspections.

At the time, FDA stated that they believe this “…initiative will result in greater efficiencies for both regulatory systems and provide a more practical means to oversee the large number of drug manufacturing facilities outside of the U.S. and EU.” Until then, the EU and FDA would sometimes inspect the same facilities within a brief period of time. With the agreement announced earlier this year, such duplication is expected to become the exception, rather than the rule.

Fundamentally, the problem has been that while European regulators have, for years, shared with FDA unredacted inspection reports from their European inspections, FDA has shared only redacted inspection reports with our European counterparts.  These redacted reports have been of limited utility to European regulators in determining whether any regulatory action needed to be taken against U.S. based pharmaceutical facilities.

Then, in 2012, with the enactment of The Food and Drug Administration Safety and Innovation Act (FDASIA), FDA was provided with the statutory authority to enter into memoranda of understanding for purposes of information exchanges with foreign governments, and specifically with the authority to share trade secret information under certain circumstances. Section 708(c) of the Federal Food, Drug, and Cosmetic Act, codified at 21 USC 379(c), reads in part as follows:

(c) AUTHORITY TO ENTER INTO MEMORANDA OF UNDER- STANDING FOR PURPOSES OF INFORMATION EXCHANGE.—

The Secretary may enter into written agreements to provide information referenced in section 301(j) to foreign governments subject to the following criteria:

(1) CERTIFICATION.—The Secretary may enter into a written agreement to provide information under this subsection to a foreign government only if the Secretary has certified such government as having the authority and demonstrated ability to protect trade secret information from disclosure. Responsibility for this certification shall not be delegated to any officer or employee other than the Commissioner of Food and Drugs.

(2) WRITTEN AGREEMENT.—The written agreement to provide information to the foreign government under this subsection shall include a commitment by the foreign government to protect information exchanged under this subsection from disclosure unless and until the sponsor gives written permission for disclosure or the Secretary makes a declaration of a public health emergency pursuant to section 319 of the Public Health Service Act that is relevant to the information.

(3) INFORMATION EXCHANGE.—The Secretary may provide to a foreign government that has been certified under paragraph (1) and that has executed a written agreement under paragraph (2) information referenced in section 301(j) in only the following circumstances: (A) Information concerning the inspection of a facility may be provided to a foreign government if— (i) the Secretary reasonably believes, or the written agreement described in paragraph (2) establishes, that the government has authority to otherwise obtain such information; and (ii) the written agreement executed under paragraph (2) limits the recipient’s use of the information to the recipient’s civil regulatory purposes. (B) Information not described in subparagraph (A) may be provided as part of an investigation, or to alert the foreign government to the potential need for an investigation, if the Secretary has reasonable grounds to believe that a drug has a reasonable probability of causing serious adverse health consequences or death to humans or animals.

(4) EFFECT OF SUBSECTION.—Nothing in this subsection affects the ability of the Secretary to enter into any written agreement authorized by other provisions of law to share confidential information. [Emphasis added]

As a result, since the enactment of FDASIA, FDA has had the statutory authority to share inspectional information containing trade secrets with European counterparts, however, until recently, FDA had presumably been unwilling or unable to certify under 21 USC 379(c)(1) that such governments “…had the authority and demonstrated ability to protect trade secret information from disclosure.”

That appears to have changed, as stated in the EMA press release: “[t]he new confidentiality commitment formally recognizes that FDA’s EU counterparts have the authority and demonstrated ability to protect the relevant information. This step now allows the sharing of full inspection reports, allowing regulators to make decisions based on findings in each other’s inspection reports and to make better use of their inspection resources to focus on manufacturing sites of higher risk.”

We will continue to monitor the implementation of this inspection initiative with the EU, and to assess whether it bears the fruits its FDA proponents advertise, without the drawbacks that many fear.