Jill Wechsler is Pharmaceutical Technology Europe's Washington Editor, jillwechsler7@gmail.com.

Jill Wechsler

The US Food and Drug Administration (FDA) is moving boldly and aggressively to update and revise systems to ensure manufacturer compliance with good manufacturing practices (GMPs). By announcing progress on its initiative to improve regulation of pharmaceutical manufacturing in February, the agency put on hold its controversial electronic record keeping policy and shifted oversight of warning letters from the field to FDA centres. Agency officials also rolled out significant changes in plant inspection policies, a new process for making post-approval manufacturing changes and other actions designed to encourage modernization of production systems. These initiatives are part of FDA's broader initiative to develop a "risk-based approach" to GMP regulation of pharmaceuticals, which was launched last August (2002). 	

The GMP overhaul is headed by Center for Drug Evaluation and Research (CDER) director, Janet Woodcock, but also applies to biological and veterinary drugs. As described in a 6 month 'progress report' (

), the initiative involves dozens of staffers in FDA centres, district offices under the Office of Regulatory Affairs (ORA) and the commissioner's office who are developing a broad range of policies. Another update is expected in 6 months as FDA gains input from industry and other parties (see sidebar "Working together").	

A major thrust of the programme is to make the GMP inspection process more efficient. FDA acknowledges that limited resources prevent it from inspecting every pharmaceutical manufacturing plant, warehouse and packaging facility every 2 years, as required by statute. The agency consequently seeks to target inspections to higher-risk facilities and to streamline the inspection process itself. Last year, CDER fully implemented a systems-based inspection programme for drugs that focusses inspections on key aspects of a manufacturing process, instead of covering the entire plant. 				

The current initiative continues this approach by identifying those higher-risk facilities that should be at the top of the inspection priority list. These include:	

prescription drug manufacturers (excluding medical gas repackagers)

new registrants not previously inspected.

The agency aims to inspect those higher-risk facilities every 2 years, while visiting the thousands of medical gas repackagers much less often. The next step is to develop a "more complex" risk-based model for prioritizing sites for inspection. This will consider additional risk factors such as extent of patient exposure, type of formulation and GMP compliance record of the company. FDA aims to concentrate its resources on those facilities where non-compliance is most likely to yield the greatest adverse public health consequences, explained David Horowitz, director of CDER's Office of Compliance. His office was reorganized recently to create a Division of Compliance Risk Management and Surveillance that will identify more high-risk facilities requiring more frequent inspection and relate risk data to oversight activities.

			In addition to refining inspection priorities, FDA is making significant changes in who conducts inspections, evaluates GMP violations and determines appropriate enforcement action. These important initiatives will:	

Establish a pharmaceutical inspectorate. Similar to the Team Biologics programme for biotech products, FDA plans to form teams of specially trained inspec-tors to visit pharmaceutical manufacturing facilities. Instead of a central cadre that inspects plants across the country, as with Team Biologics, there will be multiple pharmaceutical inspection teams in ORA district offices that will conduct preapproval as well as GMP inspections. FDA hopes to enroll 15–25 drug inspectors in the programme by June. 	

Add product specialists to inspection teams. CDER specialists will be more available to participate in field inspections when needed. This is likely to occur for manufacturers using unique delivery technologies such as a new patch; a special process analytical technology (PAT) inspection group will review facilities implementing new production systems. It remains to be seen if increased use of specialists slows down inspections, delays approvals or is too costly, as some fear. If so, FDA may look at ways for specialists to advise inspectors without actually participating in site visits.	

Reduce disputes involving inspection deficiencies. FDA is encouraging manufacturers to discuss with investigators any observations listed on a 483 inspection report that a company feels are unjustified scientifically. The aim is to resolve issues early, where possible, and avoid listing incorrect observations. FDA will also test whether allowing a 48 hour delay in issuing a 483 could resolve scientific and technical issues that arise late in inspections and thus reduce citations and warning letters. The agency plans a 12 month pilot to determine whether such a delay allows inspectors to consult with FDA experts. The agency hopes that this approach will encourage the use of new technologies, instead of the "don't use" approach adopted by firms to avoid technical disputes with field inspectors. 	

FDA is also adding extra wording to the 483 report to clarify that cited deficiencies are only "inspectional observations" and do not represent final agency determination of company compliance with GMP regulations. The aim is to help manufacturers and others understand that these observations are just "one piece" of the overall compliance process, explained ORA chief, John Taylor. 	

Shift control of warning letters to centres. A major change is to return final review and authority to issue manufacturing warning letters to CDER, CBER (Center for Biologics Evaluation and Research) and CVM (Center for Veterinary Medicine). A decade ago, FDA transferred warning letter oversight from the centres to the field to speed up and gain more uniformity in the compliance process. This latest change again seeks to reduce inconsistencies in warning letters, now citing those that arise from differing approaches among ORA district offices. FDA's chief counsel will continue to have final clearance on warning letters, which aims to centralize agency authority and add weight to final letters.	

In CDER, Horowitz's compliance office will conduct a "triage" on warning letters proposed by district offices. Letters citing obvious violations may be sent out immediately, whereas others that raise technical issues may be further reviewed by a cross-agency group, explained Woodcock. 	

Establish a formal dispute resolution system. FDA plans to create a process for resolving those disputes arising from GMP inspections that cannot be resolved informally during or immediately following an inspection, as described above. A manufacturer may first request a formal review of a 483 citation by the district office, in consultation with the appropriate centre. If the company disagrees with decisions at that level, it can appeal to a dispute resolution panel in the office of the commissioner. FDA is developing criteria for determining when an issue involves scientific and technique issues suitable for dispute resolution; how and when a firm may seek such reviews; how FDA will resolve internal disagreements arising from such deliberations; and methods for disseminating information on resolved disputes. 	

The overall aim of these new policies is to prevent a delay in approval of new products because of technical disagreements that arise during inspections. FDA also hopes to avoid issuing invalid 483 observations and warning letters that lead to contracted disputes. In addition, the agency wants to avoid pressuring a manufacturer to make what it considers unnecessary changes in production processes merely to gain agency approval. 	

FDA officials believe that streamlining the inspection process and reducing needless disputes will encourage manufacturers to implement new production technologies designed to reduce manufacturing errors and promote quality production. FDA launched the PAT initiative 2 years ago, which promotes the use of new process monitoring and control technologies to improve manufacturing efficiency. 				

A working group is developing a draft guidance on regulatory processes for applying PAT and the agency has formed a PAT review-inspection team to facilitate oversight of such innovations.	

The GMP initiative seeks to spur further use of new manufacturing technologies by making it easier for firms to implement post-approval manufacturing changes. FDA issued a draft guidance in February that clarifies how firms can develop comparability protocols (CPs), which can reduce the need for prior approval of changes in production systems from agencies.	

Manufacturers have always been able to develop protocols for making certain routine CMC (chemistry, manufacturing and controls) changes, such as revisions in packaging or expiration dates. During the past decade, CDER has developed the SUPAC (scale-up and post-approval changes) programme, which simplifies regulation of specified post-approval changes in manufacturing processes and systems for certain dosage forms. To facilitate changes for more complex drugs made from biotechnology that do not lend themselves to the SUPAC model, FDA has issued guidances on how biotech companies can establish comparability protocols to gain more predictability for contemplated post-approval changes. 	

This new initiative clarifies how the CP approach may be used by manufacturers of conventional drugs, including animal drugs and generic products. The draft guidance spells out the basic elements of a CP, including acceptance criteria and tests and analytical procedures to be used to document that certain changes do not adversely affect product quality. A CP would consist of a detailed plan for documenting such comparability and may be submitted as part of a new drug application or after initial product approval. It allows FDA to designate a reduced reporting category for a subsequent manufacturing change (that is, a changes-being-effected supplement instead of prior approval). 	

CPs may describe one or multiple CMC changes and will be more or less difficult to compile depending on the complexity of a product and ability to characterize it. Those drugs that are robust, fairly safe and sensitive to analytical procedures may be more suitable for this approach. FDA discourages using CPs for significant changes in product specifications, formulation, type of delivery system, source materials, or in moves to a new site or facility that require a new GMP inspection. Protocols may be most useful in changing to equipment with a different operating principle, as could occur in implementing PAT.	

Manufacturers will have to decide individually whether it makes sense to document the analysis and testing needed to file a CP. A firm may find it valuable to gain FDA agreement on a strategy for implementing manufacturing changes that it knows it wants to make. Biotech manufacturers have generally found comparability protocols too complex and detailed to tackle before market approval, but FDA anticipates broader use of this approach for small molecules, commented Ajaz Hussain of CDER, who heads up this project. Manufacturers have until 20 April to submit comments to FDA on the proposal.	

One of the most significant announcements in the February GMP progress report was that FDA has launched a broad re-examination of its regulation for electronic record keeping and submissions, and will not enforce previously announced policies in this area for now. FDA issued a new draft guidance to explain its intent to narrow its approach for implementing Part 11 and to be lenient about requiring compliance with recent guidances. The agency acknowledged that this effort "may lead to revisions to clarify its scope and requirements" of Part 11 - for all FDA-regulated products, including medical devices and foods in addition to drugs. 				

In effect, it's back to the drawing board to develop a new policy for requiring validation and documentation of electronic records keeping systems. FDA has spent years deliberating this programme, which led to the publication of regulations for implementing Part 11 in 1997. Unfortunately, that policy generated voluminous objections from manufacturers for being too vague, too complex and too costly to implement. The agency tried to clarify its approach in several draft guidances and numerous presentations, but recent efforts to enforce Part 11 rules during GMP inspections raised further outcries. 	

When FDA launched its GMP overhaul initiative last August (2002), it signalled that a major change was under way by shifting responsibility for implementing Part 11 from ORA back to CDER. The agency then withdrew a draft guidance on electronic copies of records on 4 February 2003, to halt further industry review of the policy. As part of its GMP progress report a few weeks later, FDA issued its new draft guidance, which withdrew an internal compliance policy guide plus other draft guidances on validation, glossary of terms, time stamps and maintenance of electronic records. 	

Most important for manufacturers is the promise that field investigators will exercise "enforcement discretion" for regulating Part 11 while agency officials re-evaluate the rule. FDA "will not normally take regulatory action to enforce compliance with the validation, audit trail, record retention and record copying requirements of Part 11," the draft guidance states. The agency says it will continue to enforce electronic signature policies that apply to legacy systems, as well as predicate rules that require records to be maintained and submitted in a secure and reliable manner. FDA recommends that manufacturers maintain audit trails or other security measures to ensure the reliability of records and also validate computer systems that could affect product quality, safety and record integrity. Manufacturers should also supply copies of electronic records as required by predicate rules and protect electronic records so that they can be retrieved if needed.	

Agency officials explain that they will seek a more narrow approach to Part 11 to clarify that the policy does not apply to every use of a computer or information system by a manufacturer. For example, Part 11 would apply to records maintained by a company in electronic format, but not to a computer that generates paper printouts of electronic records and other "merely incidental" uses of computers. 	

FDA plans to quickly publish a final guidance to clarify its policy review process. A key challenge for the agency is to determine whether it needs to revise the basic regulation or can accomplish its objectives through new guidances. 	

In addition to finalizing the two new draft guidances and implementing new inspection procedures, FDA officials plan to move forward with efforts to increase the quality of its own regulatory processes. FDA is commissioning an outside study of effective business practices and policies that could apply to internal review operations. The agency also seeks to harmonize its GMP policies with international standards through continued discussion with regulatory authorities and manufacturers in the International Conference on Harmonization (ICH). Agency officials will explore related topics for harmonization with colleagues at an ICH July (2003) meeting in Brussels.	

Articles

The US Food and Drug Administration is making changes in inspection processes, post-approval manufacturing changes and 21 CFR Part 11 policies to streamline oversight and improve product quality.

Overhauling Compliance and GMPs

As the US Food and Drug Administration (FDA) strives to streamline its regulatory process for bringing new drugs to market (see sidebar "Manufacturing data key to spurring drug development"), efforts to ensure the quality, safety and efficacy of dietary supplements and herbal medicines are gaining more attention. FDA is working with the Federal Trade Commission (FTC) to crack down on unsubstantiated health claims by supplement makers; reports of serious adverse events involving weight-loss supplements containing ephedra, a medicinal herb, have led to product seizures and FDA legal action against manufacturers. Researchers are also investigating whether herbal products with kava, another medicinal herb, cause liver toxicity. Manufacturers and regulators hope that new good manufacturing practice standards (GMPs) will help ensure the safety and quality of supplements on the market and overcome demands to regulate these products more like drugs. 	

Manufacturing data key to spurring drug development	

Under the Dietary Supplement Health and Education Act of 1994 (DSHEA), dietary supplement makers do not have to prove efficacy or even safety to go on the market, as is required for drugs. Manufacturers merely have to assure FDA that a product is "reasonably expected to be safe," shifting the burden to FDA to demonstrate that a product poses a significant or unreasonable risk to consumers before enforcement action can be taken. DSHEA permits manufacturers to make "structure/function" claims for supplements (such as "relieves stress" or "supports joint function") but not "health claims" (such as "reduces risk of cardiovascular disease"), a fuzzy distinction that has generated fierce legal battles. 				

However, the proliferation of questionable dietary product health claims - and the growth of the supplement market from $3.3 billion in 1990 to approximately $18 billion today - is prompting government regulators and enforcement officials to call for stronger oversight. Some members of Congress want to revise DSHEA to clarify government authority to remove unsafe products from the market and to require supplement manufacturers to file adverse event reports (AERs) with FDA. 	

In response, FDA's Center for Food Safety and Nutrition (CFSAN) is establishing a new AER data system for dietary supplements, food additives and cosmetics to detect more safety "signals" from the relatively few AERs filed for these products. FDA commissioner Mark McClellan has also launched a programme to clarify what health claims can be made for conventional foods, as well as supplements and other medical products, and what scientific evidence is needed to support such claims. However, a more liberal policy on health claims includes plans for stepped-up enforcement action against manufacturers that make false or misleading statements. 	

All parties agree that supplement regulation would be greatly improved by FDA's adoption of manufacturing standards. DSHEA has authorized FDA to do this, but the GMP development process has been excruciatingly slow. Manufacturers found an initial FDA GMP proposal too similar to standards for drugs. FDA tried to move the process forward by publishing a set of standards proposed by manufacturers in 1997, but then was slow to come up with its own version. A proposed rule that was headed for final publication in late 2000 was pulled by the Bush administration for further review. 				

Last October (2002), the Department of Health and Human Services (HHS) finally sent a revised proposed rule to the Office of Management and Budget (OMB) for clearance and announced in January (2003) that the proposal was coming "very soon."	

Officials at CFSAN's Office of Nutritional Products, Labeling and Dietary Supplements (ONPLDS) plan to hold public meetings to encourage broad dialogue on this long-awaited policy, but a final rule remains months, if not years, away. The debate is expected to focus on requirements for the validation of manufacturing processes and analytical methods, plus the need for expiration dating on products versus "use before" recommendations. Small supplement makers oppose strict validation policies as too costly and unnecessary, and don't want to do the extensive stability testing needed to set expiration dates. Once FDA adopts final GMPs, the agency plans to establish an inspection programme to ensure industry compliance. 	

One possibility is that FDA will modify inspection requirements for manufacturers that participate in voluntary quality audit programmes established by private organizations and laboratories. The National Nutritional Foods Association (NNFA) has a partnership with NSF International to audit and certify the quality of dietary supplements. NNFA requires members to comply with its own GMPs voluntarily. These call for firms to establish procedures and maintain records on plant maintenance, facility sanitation, equipment design, quality control operations, process controls, personnel training and distribution procedures. 								

NNFA members who want to certify GMP compliance may sign up for a third-party audit programme, a step taken by approximately 40 companies, with 60 more in the pipeline. The association has also launched a "true label" programme that conducts random tests on the ingredients in certain supplement product categories to see if what is in the product matches the label. Compliance with GMPs, explained NNFA executive director, David Seckman, at a conference on dietary supplements sponsored by the Food and Drug Law Institute (FDLI) in January, requires companies to understand, analyse and control their manufacturing and distribution processes and to demonstrate to third-party auditors that they keep required records and meet set standards. 	

NSF International has its own programme for certifying that individual supplement products meet quality standards recognized by ANSI, which involves demonstrating compliance with GMPs. Manufacturers submit products for testing and undergo an audit of production facilities. Under its agreement with NNFA, NSF will accept NNFA GMP certification and vice versa. NSF also offers GMP registration, which is particularly attractive to contract manufacturers that don't want to certify the quality of specific products. 	

The US Pharmacopeia (USP) has also established a dietary supplement verification programme (DSVP) that is open to all supplement firms. Manufacturers may display the DSVP seal on products that USP tests to ensure ingredients meet labelling strengths, have acceptable contaminant levels and meet USP manufacturing standards. USP conducts lab tests on products to evaluate composition, strength, contaminants and dissolution; reviews manufacturer quality control documentation, test methods and stability data; and inspects manufacturer facilities to ensure compliance with GMPs. 	

USP recently announced that it would award its seal to a number of products in Pharmavite's "Nature Made" line and to Kirkland products sold in Costco stores. Weider Nutrition International and Inverness Medical Innovations have products undergoing USP's testing process, and other supplement makers are signing up, according to USP vice president Srini Srinivasan. He believes that the USP audit programme complements FDA compliance efforts and that manufacturers that qualify for the USP seal will meet FDA GMP requirements. 	

Although GMPs and certification are important for ensuring that manufacturers operate high-quality production systems, they do not guarantee product purity, consistency or safety. GMPs will help bring all industry players up to a higher level of quality, observed Annette Dickinson, acting president for the Council for Responsible Nutrition (CRN) at the FDLI conference, but added that GMPs can be oversold as a guarantor of quality. Also needed are analytical methods and standards to ensure product purity and safety; her organization, for example, has issued a voluntary quality monograph on omega-3 fatty acids and is updating a publication on safe intake limit ranges of vitamins and minerals. 				

FDA, USP, National Institutes of Health (NIH) and others have launched a number of initiatives to analyse and set quality standards for supplements and botanicals, which are listed below:	

Analysis. FDA is conducting a systematic pharmacological analysis of ephedra products on the market to fully assess if they contain synthetic ephedrine alkaloids and thus would qualify as drugs and be subject to drug regulations. So far, such analysis has found that certain supplements marketed as "natural" actually contained the pharmaceutical-grade chemicals, ephedrine hydrochloride and caffeine anhydrous, which make them illegal and subject to prosecution.	

Monographs. USP is updating and expanding ingredient monographs for botanicals and dietary supplements, building on its original charge in 1820 to set standards on natural medicinal products such as chamomile, valerian and ginger. USP has published 28 monographs on botanicals and more than 100 on other supplement products based on more sophisticated analytical techniques, and dozens more are in the works. The organization has also issued reference standards for amino acids, botanicals, vitamins and minerals, and other products which can be used as standards to ensure product quality, purity and potency around the world. 	

Supplements. FDA and NIH's Office of Dietary Supplements (ODS) have awarded a contract to AOAC International (Gaithersburg, Maryland, USA) to provide accurate, validated analytical methods for 20 supplements during the next 5 years. An AOAC dietary supplement task group has drafted a priority list for evaluating ingredients based on product market share, FDA safety concerns and the availability of test methods. Expert review panels will identify best analytical methods for validating product quality and identity, starting with existing laboratory test methods for substances such as mcarotene, black cohosh, ginkgo, kava, ginseng and saw palmetto. The programme aims to train laboratory scientists to use accepted analytical methods and will disseminate official methods through an online electronic compilation of analytical methods. Recommended methods may be included in USP monographs and other standards. 	

Research. ODS at NIH supports a broad research programme to develop more information on safety and health claims for certain common supplements (for example, chromium's impact on diabetes and alternative therapies for treating benign prostate symptoms). One initiative is to create a database of research on supplement ingredients. ODS has also established several botanical research centres to identify and characterize botanicals, assess bioavailability and bioactivity, identify active ingredients and explore mechanisms of action. 	

Information. The American Botanical Council (ABC) seeks to document the value of herbal preparations by publishing more information on these products. In 1996, it issued a translation of German monographs on more than 300 herbs and combinations. ABC subsequently published a more in-depth guide to 107 popular US herbs. This year it will issue a clinical guide to 29 commonly used herbal medicines that provides information for practitioners on preparation, dosage, adverse events and herb-drug interactions.	

Safety. A joint committee formed by the Institute of Medicine's Food and Nutrition Board and the National Research Council has established a framework for evaluating the safety of dietary supplement ingredients. The panel recently issued prototype monographs and solicited public comment on six common ingredients - chaparral, shark cartilage, glucosamine, melatonin, saw palmetto and chromium picolinate. The monographs focus on ingredient safety issues, as opposed to health claims and effects, and aim to help FDA detect unsafe substances in supplements.	

Manufacturers generally support public-private initiatives to document product quality and curtail illegal claims to promote consumer confidence in supplements and herbal remedies, as well as head off more stringent government regulation. "Industry needs to step up to the plate and take responsibility for products," commented Dickinson of CRN. She considers third-party validation programmes sponsored by USP and other independent laboratories a good way to help companies demonstrate their commitment to quality. 				

At the same time, ongoing legal and regulatory battles concerning products such as ephedra have undermined public confidence in supplements overall and has prompted closer scrutiny of supplement marketing by FDA, FTC and state officials. "It's bad for industry, bad for FDA and bad for consumers for an issue like this to go on for years," Dickinson commented. Supplements may offer health benefits, but manufacturers need to be proactive about compiling evidence on product safety and benefits to retain public confidence.	

As the US Food and Drug Administration (FDA) strives to streamline its regulatory process for bringing new drugs to market (see sidebar "Manufacturing data key to spurring drug development"), efforts to ensure the quality, safety and efficacy of dietary supplements and herbal medicines are gaining more attention.

Standards for Supplements

The international community has launched a massive campaign to combat the AIDS epidemic and other major diseases raging throughout the third world. Last year, numerous international conferences highlighted the need for a huge investment in the development of new vaccines and medicines to combat AIDS, malaria and tuberculosis (TB). At the World AIDS Conference in Barcelona, Spain (July 2002), pharmaceutical manufacturers announced additional price reductions for AIDS therapies and increased support for research into new treatments. Further discussion of these issues took place at the Johannesburg World Summit on Sustainable Development in September. World AIDS Day in December generated pledges from the West to increase support for international disease prevention and treatment programmes.	

Up until now, efforts to combat AIDS and other diseases have focussed largely on increasing public access to existing therapies, and investing in research into new compounds and biomedical approaches that are likely to lead to new vaccines and disease treatments. Donor organizations and health foundations have been expanding research and development (R&D) programmes and establishing international clinical trial networks to study promising therapies. Pharmaceutical companies are involved in tests of 14 vaccine candidates, including one that has begun Phase III clinical trials in Thailand, the US and Europe. 				

As programmes to develop new vaccines and therapies show promise, health experts are recognizing the need to plan to manufacture any new treatments on a global scale. To be able to produce a vaccine as soon as it is licensed, plant construction has to begin before sponsors have assurance that a test product will work. Construction of a vaccine manufacturing plant that meets GMP (good manufacturing practice) standards normally requires several years and at least $50 million to build. However, the numbers are much higher for an AIDS vaccine that would be needed by much of the world. 	

Many of the difficulties related to new vaccine production have been apparent for years, as international health organizations have struggled with vaccine production, distribution and safe administration challenges involved in expanding third-world access to existing vaccines and medicines (see sidebar "Innovation spurs access"). Drug manufacturing capability still barely exists in most third-world nations, and vaccine shipping and storage often requires rigid monitoring. The need to find ways to produce billions of vaccine doses that will be affordable in Africa and Asia is nothing short of overwhelming. 	

Consequently, sponsoring organizations are launching programmes to map out manufacturing approaches and investment requirements. Process development challenges dwarf the difficulties of getting a test product into clinical trials, observed Edward Pollock, director of business development and strategic planning of the International AIDS Vaccines Initiative (IAVI). "We can't just focus on clinical candidates," but need to follow up with "real manufacturing capability to go along with it," he commented at the Partnering for Global Health Forum (2002) sponsored by the Biotechnology Industry Organization (BIO) and the Bill & Melinda Gates Foundation in Washington DC in December. The Forum brought together funding organizations, such as Gates and groups associated with the World Bank and the United Nations, with biotech companies seeking support for R&D programmes for AIDS and other third-world diseases. 		

Formulation changes threaten vaccine access	

Whereas most presentations discussed R&D, several addressed issues related to manufacturing and product development:	

The Global Alliance for TB Drug Development is paying more attention to whether potential test products will lend themselves to affordable manufacturing in deciding what new technologies to fund.

The International Financial Institution, a member of the World Bank Group, is funding large-scale private sector drug manufacturing projects in India, South Africa and other countries to enhance third-world production capacity.

California-based VaxGen has formed a $120 million joint venture with South Korean investors to build manufacturing facilities for AIDS and anthrax vaccines and other cell culture products. A plant in 

San Francisco (California, USA) will be able to produce up to 10 million vaccine doses per year by 2005. A South Korean facility (Celltrion) will produce 200 million doses annually and will eventually have eight 12000 litre bioreactors that are capable of a much greater production volume. 

IAVI is devoting considerable resources to formulating a plan for massive AIDS vaccine production as part of its "virtual company" model for managing vaccine R&D projects. The non-profit organization was founded in 1996 to spur AIDS vaccine development and is funded by Gates and other foundations, the World Bank, industry and Western governments. A prime goal is to link academic research efforts with networks that are able to conduct clinical trials in developing nations and have the product development skills found in the vaccine industry. To speed vaccines to Phase I trials, IAVI uses contract manufacturers to produce pilot lots for preclinical testing and for early clinical studies. 					

Recently, the organization hired Don Gerson, who has led vaccine manufacturing programmes at Wyeth and Acambis, to move to the next step: large-scale development and manufacturing partnerships. As IAVI's managing director for manufacturing, Gerson's task is to formulate a programme for producing a vaccine to meet the needs of 5 billion people in the Third World. He estimates that it will take 6–7 years to build and validate the necessary production facilities, which coincides with the time frame that scientists estimate will be needed to fully test and license an effective product. 	

Gerson has begun by preparing a preliminary engineering study for meeting such an enormous goal. The initial plan is to establish five regional plants, each able to serve 1 billion people and to produce 150 million doses a year. Each plant will be able to accommodate a variety of vaccine products in three production areas for egg or cell production of viral vectors and bacterial plasmid production. Each plant will cost approximately $300 million to build, for a total manufacturing construction budget of $1.5 billion. That amount will get the facilities built in compliance with GMPs, but does not cover actual production costs. 	

The next steps for Gerson are to develop more detailed construction plans with real cost estimates and to locate suitable construction sites. 	

A key challenge is creating plant designs  that will meet GMPs no matter where the plant is located. "There can be no compromise on quality," he emphasized; a plant in Africa will meet standards just as well as one in New Jersey. He envisions constructing five essentially identical plants, a strategy used by major high tech manufacturers around the world to gain economies of scale and to facilitate regulatory compliance. 	

IAVI hopes to complete this massive construction programme through partnerships with large pharmaceutical companies (whether involved or inactive in vaccine production) plus biotech and contract manufacturing firms. IAVI may also consider alternative partnering strategies for bulk manufacturing, packaging and distribution programmes for vaccines in developing countries. A related project is to define a core regulatory dossier to support product licensure and registration in all regions.	

Funding organizations are also exploring ways to expand incentives that can encourage private sector investment in vaccine manufacturing and distribution for poor nations. These include "push" approaches, such as tax breaks and research grants, likely to spur industry participation in these programmes. The UK government, for example, has announced plans to offer a tax credit to UK companies for R&D on vaccines and drugs to treat AIDS, TB and malaria, and a similar measure has been proposed in the US. Manufacturers would like R&D tax credits to apply to plant construction in third-world countries. Industry would also like to add a "roaming" element to credits, so that tax incentives could be applied to other more profitable products.				

"Pull" strategies, which involve guaranteeing markets and future prices to promote private sector investment, are also gaining more attention. A McKinsey (www.mckinsey.com) report for the Global Alliance for Vaccines and Immunization (GAVI) emphasizes the importance of accurately forecasting vaccine demand in developing markets early in the product development cycle so that manufacturers will be able to build sufficiently large production facilities to meet realistic future demand. Uncertainty regarding future consumption is considered the key barrier to ensuring adequate vaccine supply. 	

Similarly, a report on the "State of the World's Vaccines and Immunization" from the World Health Organization (WHO), UNICEF and the World Bank notes that even though the Third World constitutes a potentially vast market for vaccines, considerable roadblocks have limited access to new treatments. A "firm commitment upfront to purchase safe and effective vaccines," it states, will reduce the risks faced by manufacturers and stimulate vaccine research needed by developing countries. 	

The report describes numerous difficulties in ensuring vaccine quality and safety, such as a lack of regulatory capacity in many developing nations that makes it difficult to guarantee that vaccines are manufactured to meet appropriate safety and potency standards. WHO seeks to strengthen national regulatory authorities by assisting them in developing clear requirements for product licensing, field surveillance programmes, lot release systems, laboratory testing capabilities and regular manufacturer inspection programmes to ensure compliance with GMPs. It also questions whether all policies appropriate for the West meet the needs of third-world nations (see sidebar "Formulation changes threaten vaccine access").	

These analyses and others identify a number of obstacles to providing a reliable, affordable supply of vaccines and medicines for poorer nations:	

Prices and diversion. GlaxoSmithKline (GSK), Merck, Bristol-Myers Squibb, Roche and others have slashed prices on anti-retroviral drugs for developing nations, largely since their disastrous attempt to enforce drug patents in South Africa. Unfortunately, two-tier pricing has encouraged illegal diversion of discounted products to high-priced markets in Europe. In October (2002), GSK reported that three million doses of AIDS drugs worth $18 million were diverted by European wholesalers from Africa to Germany, The Netherlands and other nations between July 2001 and July 2002, when the fraud was discovered. The investigation indicates that African organizations that distribute the medicines locally may be involved in the illegal activity, testifying to the need to improve monitoring and oversight of low-price drug distribution in developing nations. 	

Patent protection. A key issue in vaccine and drug development is to provide sufficient intellectual property protection for innovator firms, which want the rights to develop additional uses for a new technology. Many donors seek partnership arrangements that retain incentives for innovation as well as public access. 	

However, international patent rights currently face a serious challenge from developing nations that seek to amend the World Trade Organization (WTO) TRIPS (Trade-Related Aspects of Intellectual Property Rights) agreement to expand access to generic copies of patented medicines. The TRIPS agreement negotiated at Doha, Qatar, in 2001 permits poor nations without domestic pharmaceutical production capacity to import generic versions of medicines to combat national health emergencies. Now, more newly industrialized nations also want the right to import generics, and they want to extend the policy beyond treatments for AIDS, malaria and TB. US trade negotiators and pharmaceutical companies seek to limit both the list of nations eligible to import under compulsory license and the range of applicable health conditions. Poor nations fear that the current policy limits their access to cheap therapies, but also recognize the need for incentives to spur new research. Agreement appears far away.	

Insufficient funding. Patient advocates and developing nations continue to pressure richer nations to boost support for the campaign against AIDS and other third-world diseases. At the Barcelona AIDS conference last July, participants blasted Health and Human Services (HHS) secretary, Tommy Thompson, for failing to provide the $2–3 billion needed to fully fund the global anti-AIDS effort. Secretary of State, Colin Powell, had a similar experience in Johannesburg in September when describing the Bush administration's "stepped up" support for development in Africa. 	

In Washington DC, Congressional committees expanded funding for international AIDS programmes in foreign aid budget bills for 2003, but the legislators were unable to reach final agreement on the budget plan last autumn. Many Congressional leaders support major increases in US funding of international AIDS programmes, and the Bush administration has offered a new approach to foreign aid that could boost the funding pool for international health programmes. Political leaders in the US and other industrial states increasingly recognize that if not addressed, the spread of AIDS and other diseases will impose high economic and political costs, and threaten stability and growth in Africa and other parts of the world.	

Progress in developing AIDS vaccines is focussing attention on the challenges involved in producing millions of doses for developing nations.

Manufacturing Capability Key to Global Health Advances

This year's top policy issue for pharmaceutical manufacturers is to influence legislation providing drug benefits to 40 million Medicare beneficiaries. Republicans gained control of both the Senate and House during November (2002), in part by promising pharmacy coverage for seniors; consequently, President Bush and GOP Congressional leaders are under pressure to fulfil the pledge. They seek a programme that is relatively low in cost and administered by private insurers and pharmacy benefit managers (PBMs) instead of the federal government, an approach that manufacturers support. 

Congress backs device user fees and orphan drugs	

However, the process of crafting this still very expensive programme will stimulate efforts to reduce drug prices, which risks undermining incentives for new drug development - manufacturers are already filing fewer new drug applications (NDAs) with the US Food and Drug Administration (FDA). Scientific and regulatory challenges erect high hurdles to bringing new products to market, but uncertainty regarding future reimbursement policies may also limit industry research and development (R&D) programmes.	

Last year, Congress approved bioterrorism legislation and renewed the FDA user fee programme for drugs and biologics, but left most health policy legislation on the table (see sidebar "Congress backs device user fees and orphan drugs"). This gives the legislators a fairly full health care agenda to address this year:				

Coverage for the uninsured. Former vice president, Al Gore, is leading efforts to make the plight of the uninsured a central policy issue for Democrats. 	

New Senate leaders shape health care debate	

Gore emphasizes expansion of federal and state health care programmes, whereas Republicans prefer to increase tax credits to help consumers purchase health insurance. The administration backs a $90 billion tax credit programme (during the next decade) and hopes to gain bipartisan support by setting high standards for the type of insurance eligible for credits. 	

Liability reform. Physicians have made malpractice and tort reform their top legislative issues, creating an opportunity for pharmaceutical manufacturers to seek limits on damages in lawsuits claiming injury from drugs or vaccines. Last year, the House passed a bill that set caps on malpractice damage awards and limited class action suits, but it died in the Senate. Now there will be Senate hearings on the issue, but any kind of liability reform legislation faces a very tough fight. Democrats almost killed a provision expanding liability protections for vaccine manufacturers that was included in recent legislation establishing the Department of Homeland Security; the measure survived but still faces further scrutiny by Congress.	

Stem cell research. The biomedical research community believes that Republicans will maintain strong support for basic research, but budget squabbles have already delayed promised funding increases. A major concern is that GOP conservatives may push through legislation to ban human reproductive cloning that also kills stem cell research. Moderates will work to craft a bill that limits only undesirable cloning but allows somatic cell nuclear transfer research on embryos to continue. 		

Medicare Rx. Senate Republicans are expected to begin the debate with last year's compromise bipartisan bill. A prime sponsor is Senator Charles Grassley (Republican, Iowa), who will now chair the Senate Finance Committee that is responsible for Medicare spending (see sidebar "New Senate leaders"). The bill subsidizes insurers and PBMs that offer pharmacy plans within set parameters: maximum monthly premiums and annual deductions, 50% co-pays up to $3500 a year and catastrophic coverage. The programme is projected to cost approximately $370 billion during the next 10 years - half the price of a more generous Democratic plan. 	

A key concern is how various options for designing Medicare drug benefits will affect the cost of the programme and resulting efforts to influence pharmaceutical prescribing and reimbursement. A recent analysis of Medicare Rx programme design factors by the Congressional Budget Office (CBO) predicts a rapid rise (10% per annum) in Medicare beneficiaries' drug costs during the next decade, and that expanded drug coverage for seniors will boost spending even more. These numbers support the use of formularies, generic drug substitution and other policies to shift cost-sharing to beneficiaries and limit programme expenditures.	

Generic drug access. Republican efforts to sweeten a Medicare benefit package to build bipartisan support are also likely to encourage changes in the Hatch-Waxman Act governing generic drug regulation. The broad generic reform bill that was approved by the Senate last July (2002) is not likely to be reconsidered, but there will be interest in adding to a Medicare Rx bill a moderate measure to codify some of the changes recently proposed by FDA. Senator Orrin Hatch (Republican, Utah), who once again chairs the Senate Judiciary Committee, prefers that Congress decides any major revisions to Hatch-Waxman instead of making changes through FDA regulatory action. Hatch is expected to address pharmaceutical and biologic patent issues fairly early. 	

Restraints on drug reimbursement and patent limits, however, carry the risk of curbing incentives for the increasingly large investment in R&D demanded from pharmaceutical companies. There is mounting concern regarding a decline in the number of new drugs and new molecular entities (NMEs) approved by FDA during recent years, with similar trends apparent in the European Union. 					

Some analysts maintain that the pharmaceutical R&D pipeline remains robust, but acknowledge that fewer new products are coming to market. During the mid-1990s, FDA was approving approximately 120 new drug applications per year, with a record 53 NMEs during 1996. In 2001, FDA approved only 66 NDAs and 24 NMEs, and last year's numbers looked even bleaker last autumn. Similarly, manufacturers are seeking "priority" approval status for only a handful of applications; a sign that fewer new therapies warrant regulatory treatment as breakthrough products. 	

These developments are prompting industry and policy makers to examine what factors may be slowing development and market approval of new drugs. Manufacturers point out that they continue to invest huge sums in R&D, but that the pay-off has been curbed by regulatory demands and scientific setbacks. Curbs on reimbursement for "me-too" drugs has increased pressure on companies to explore new therapeutic categories, which is more costly and time-consuming. 	

Pharmacogenomics, for example, promises to produce customized patient treatments that can reduce drug safety issues, and new cell replacement treatments generate enthusiasm, but practical discoveries in these fields are still very far away. Even new breakthrough therapies, such as Merck's promising vaccine to prevent cervical cancer, face questions regarding future coverage and reimbursement. 	

A key issue is to what extent FDA regulatory policies aggravate these trends. Whereas agency officials emphasize that they cannot approve applications if sponsors do not file them, manufacturers complain that expanded pre-market test requirements add to drug development costs and delays. Sponsors say they now have to run more preclinical screening tests to improve detection of liver toxicity and potential side-effects. They also feel compelled to support larger Phase III trials to obtain more safety data. Not only are such procedures costly, but the added information may lead a manufacturer to halt a development programme based on problematic early data. Records show that manufacturers have considered cancelling the development of products that showed early safety problems but turned out to be major blockbusters. 				

Industry interprets FDA demands for more preclinical and clinical data as a sign that the agency has become more cautious when approving new products without extensive safety data. FDA has been criticized about several high-profile drug withdrawals during the last 5 years, some involving patient fatalities. Patient advocates claim that tighter user fee approval deadlines have accelerated the application review process too much, whereas manufacturers point to an excessive slow-down in FDA review times. 	

Agency officials maintain that the numbers indicating longer review times are misleading. With fewer NDAs coming into the agency, a few problematic applications can raise overall review-time statistics. The agency believes that added funding under its third new user fee programme will address key regulatory problems and improve review operations. 	

In addition, FDA officials are working to ensure that its operations and policies encourage new drug development and avoid blocking useful new products from the market. The agency has launched programmes to update good manufacturing practice (GMP) standards and to consolidate regulation of certain biotech therapies with conventional drugs in the same therapeutic categories (see sidebar "FDA outlines biotech product shift"). 				

Most importantly, FDA now has a new commissioner to implement new policies and programmes after 2 years without a permanent leader. Even before his official swearing-in on 14 November 2002, Mark McClellan began mapping out his agenda, which features initiatives including:	

McClellan wants to set standards for barcoding to enhance the safe use of medical products and he acknowledges the importance of addressing regulatory issues on the international front. 	

Providing agency systems able to review new drugs, devices and biological treatments as quickly and as efficiently as possible is at the top of the list and may require "a re-examination and an updating of the way FDA does its job," the new commissioner told FDA and government officials at a ceremonial groundbreaking for new FDA facilities in the Maryland suburbs of Washington DC. FDA is "not here just to check boxes on an inspection list," he said in his first speech after being sworn in as commissioner. "We are here to implement the best possible approaches to reduce risks to the public health," McClellan stated.	

The new commissioner used this opportunity to emphasize the importance of retaining talented scientists if FDA is to fulfil its critical missions. FDA has experienced considerable erosion of top talent, a trend that could accelerate with the shift of key regulatory activities from the Center for Biologics Evaluation and Research (CBER) to the Center for Drug Evaluation and Research (CDER). Jay Siegel, director of CBER's Office of Therapeutics Research and Review, recently left the agency, and other biotech experts are expected to follow suit. 	

McClellan aims to stem the exodus by establishing a work environment that "encourages creativity, efficiency and superior performance." In addition to building a new campus to eventually house most FDA offices, McClellan supports added educational opportunities and financial incentives for staffers, including salary increases linked to performance and retention allowances for physicians. He suggested that FDA professionals should be involved in research activities that are "relevant" to fulfilling FDA's mission, noting that effective regulation of emerging technologies such as cellular and gene therapies requires "a close connection to the latest scientific developments." Such comments may signal willingness to retain certain research programmes in the agency, a strategy supported strongly by FDA scientists, but opposed by manufacturers who have been unwilling to foot the bill. Resolving this contentious management issue may provide an early challenge for the new commissioner.	

Efforts to establish a Medicare pharmacy benefit programme will affect drug pricing and policies that shape industry research and development.