Enforcement Litigation

and Compliance

Washington, DC

December 9-10,

2015

Drug and Medical Devices: GMPs

Cathy Burgess, Partner, Alston & Bird LLP

Sarah Spurgeon, Assistant General Counsel, PhRMA

Gregory Levine, Partner, Ropes & Gray LLP

Moderated by Jack Garvey, Principal/Chief Executive Officer, Compliance Architects LLC

Pharmaceutical & Medical Device GMPs

PANEL DISCUSSION

Traditional Risks • Current Issues • New Initiatives

FDLI Enforcement, Litigation & Compliance Conference

December 9 & 10, 2015

Breakout Session: Wednesday, December 9, 3PM – 4PM

Expert Panelists

Sarah Spurgeon

Assistant General Counsel

PhRMA

Cathy Burgess

Partner

Alston & Bird LLP

Greg Levine

Partner

Ropes & Gray LLP

Jack Garvey

CEO / Principal

Compliance Architects LLC

Moderator

Panel Discussion Structure

Introductions• cGMPs – A New Paradigm for Drug Inspection? – Cathy Burgess

• Quality Metrics Draft Guidance – Sarah Spurgeon

• Developments in FDA Regulation of Medical Device Quality –

Greg Levine

Part 1: Topical Presentations

Part 2: Structured Panel Questions

Audience Q & A

Part 1:

TOPICAL PRESENTATIONS

Current Good Manufacturing Practices

A New Paradigm for Drug Inspections?

FDLI Enforcement , Litigation and Compliance Conference

December 9, 2015

Cathy L. Burgess

Legal Background for cGMPS

Federal Food, Drug, and Cosmetic Act (“FDCA”) A drug is deemed to be adulterated if:

Methods, facilities or controls used For the manufacture, processing, packing, or holding of drugs Do not conform to or are not operated or administered in

conformity with current good manufacturing practice To assure that the drug meets FDA requirements For safety, identity, strength, quality and purity

7

Legal Background for cGMPS

FDA regulations enforce drug quality through cGMP regulations (21 CFR parts 210 and 211)

cGMP regulations mandate proper design, monitoring, and control of manufacturing processes and facilities

Regulations first published in 1963 Significant revisions in 1978. Preamble stated cGMP

regulations were intended to be general enough to apply to a wide variety of drug products but flexible enough to permit innovation

Described “what” not “how.” Major changes proposed in 1996 were withdrawn when “Pharmaceutical cGMPs for the 21st Century” initiative as well underway

Guidance documents are also used to address application of cGMPs in specific context, e.g., sterile/aseptic drug processing

Guidances are important resources for determining FDA expectations for cGMPs

8

New cGMP Authorities – FDA’s “Wake Up Call”

Supply Chain Issues Despite existing cGMP regulations there have been

recurring issues with the quality of the supplies, components, raw materials being used in drug manufacturing as well as contract manufacturing.

E.g., heparin contamination – Distribution of unsafe products Over-sulfated chondroitin sulfate contamination Unacceptable risk to patients Reports of 149 confirmed deaths and hundreds of injuries

Drug supply chain is global, long, and complex More than 80% of APIs are manufactured outside the

United States

FDA requested new authorities to explicitly address supplier quality issues

9

New cGMP Authorities –FDASIA

Title VII

– Sections 701 and 702: “unique facility identifier”– Section 705: risk-based schedule for inspections– Section 706: authority to request records before, or instead

of, an inspection– Section 707: inspection refusal = adulteration– Section 710: exchanges with foreign regulators– Section 711: requires oversight and control– Section 712: foreign government inspection recognition– Section 713: Shifts burden for imported drugs. FDA no longer

required to meet Section 801 appearance standard. Information regarding regulatory compliance of product required before admission

Title X – new authorities to combat drug shortages

10

Quality Metrics Draft Guidance - Details

Issued July 2015 Mandatory Program

Failure to comply would constitute a prohibited act

Data collected by product on quarterly basis Reporting establishments collect from covered

establishments Reporting Establishments submit reports annually

FDA unsure how it will use metrics Data: product complaint rate, lot acceptance

rate, invalidated OOS rate, APRs completed w/i 30 days

11

Quality Metrics Draft Guidance - Concerns

Statutory Authority under Section 704? Requires generation of new records Requires submission of data from third party

suppliers Guidance or Substantive Rule?

Mandatory program Enforcement action

Burden underestimated Product v. Site Lack of Agreement on Definitions

12

Quality Metrics Draft Guidance – Broader Questions

Data to be collected by product – how will FDA evaluate site risk?

Data collected annually – how will this help mitigate drug shortages?

Will FDA have adequate resources to evaluate data?

How will FDA establish inspection frequency for establishments with drugs and devices or with combination products?

Will Investigators focus on manufacturing records or on verification of data submissions?

13

FDA’s Quality Metrics Draft Guidance

Practical Implications

Sarah A. Spurgeon

PhRMA – Assistant General Counsel

Proposed “Required” Quality Metrics

• Lot Acceptance Rate = 1 – x (x = the number of specification-related rejected lots in a timeframe divided by the number of lots attempted by the same establishment in the same timeframe).

• Product Quality Complaint Rate = the number of product quality complaints received for the product divided by the total number of lots of the product released in the same timeframe.

• Invalidated Out-of-Specification (OOS) Rate = the number of OOS test results for the finished product invalidated by the establishment divided by the total number of OOS test results divided by the total number of tests performed by the establishment in the same timeframe.

• Annual Product Review (APR) or Product Quality Review (PQR) on Time Rate = the number of APRs or PQRs completed within 30 days of annual due date at the establishment divided by the number of products produced at the establishment

Proposed “Optional” Quality Metrics

Proposed as “Evidence of Manufacturing Robustness and a Commitment to Quality”

•Senior Management Engagement

– Was each APR or PQR reviewed and approved by the following:

1) the head of the quality unit; (2) the head of the operations unit; (3) both; or (4) neither?

•CAPA Effectiveness– What percentage of your corrective actions involved re-training of personnel (i.e., a root cause of the deviation is lack of

adequate training)?

•Process Capability/Performance– A “yes” or “no” value of whether the establishment’s management calculated a process capability or performance index

for each critical quality attribute (CQA) as part of that product’s APR or PQR.– A “yes” or “no” value of whether the establishment’s management has a policy of requiring a corrective action or

preventive action (CAPA) at some lower process capability or performance index. – If “yes” to the above question – what is the process capability or performance index that triggers a CAPA? If “no” to the

above question – please do not respond.

Quality Data To Be Reported

1. The number of lots attempted of the product.

2. The number of specification-related rejected lots of the product, rejected during or after manufacturing.

3. The number of attempted lots pending disposition for more than 30 days.

4. The number of OOS results for the product, including stability testing.

5. The number of lot release and stability tests conducted for the product.

6. The number of OOS results for lot release and stability tests for the product which are invalidated due to lab error.

7. The number of product quality complaints received for the product.

8. The number of lots attempted which are released for distribution or for the next stage of manufacturing the product.

9. If the associated APRs or PQRs were completed within 30 days of annual due date for the product.

10. The number of APRs or PQRs required for the product.

PhRMA Comments: Key Themes

• PhRMA supports the development of a quality metrics program that will permit the Agency to– Optimize its approach to risk-based inspection frequency– Create timely pathways for managing post-approval mfg. changes without extensive

regulatory oversight

• Supports an initially voluntary, phased approach to implementation– Industry/Agency Burden Underestimated– Need to Further Refine Definitions and Understand FDA’s Plans for Data Analysis– Plus:

• Any “mandatory” scheme legally requires formal rulemaking• Data should be considered “confidential commercial information”• No support for public ranking system

Industry & Agency Burden

Estimated Burden• Using information from “experts,” FDA estimates an average industry burden per

response of 10.6 hours for compiling information that is “currently developed and maintained” and for populating spreadsheet(s) necessary for reporting

• FDA expects to receive 63,000 product reports containing the 15 quality metrics data outlined in this document and described in the draft guidance

Weaknesses and Problems with Estimate:– Individual firms may not track the information in requested format – Especially more burdensome if require reporting on a “by product” basis– Need more information on how QM data would reduce inspection frequency—

potentially offsets burden– FDA provides no information on tools it will use to process this volume of data

Industry Burden

• Example #1:– Invalidated Out-of-Specification (OOS) Rate = #OOS test results for the product invalidated by the

establishment divided by the total number of OOS test results divided by the total number of tests performed by the establishment in the same timeframe

– Possible Firm Practice: A MAH may have a centralized release and stability facility. In this case, OOS data may not be collected separately for each manufacturing site. Reporting this aggregated data could skew FDA’s risk conclusions for each manufacturing site that feeds into this centralized data collection facility.

• Example #2:– Lot Acceptance Rate = 1 – x (x = the number of specification-related rejected lots in a timeframe divided

by the number of lots attempted by the same establishment in the same timeframe).

– Possible Firm Practice: A manufacturer’s enterprise resource planning (ERP) data structure may not allow for identification of lots specifically manufactured for the U.S. market as required. Costs to restructure ERP systems to accommodate such segmentation of QM data will be significant.

Feedback on Metrics

• Supports With Refinements– Invalidated Out-of-Specification (OOS) Rate

– Lot Acceptance Rate

– Product Quality Complaint Rate

– Certain Optional, Survey Style Metrics Including

• A metric relating to Process Capability and Performance

• A metric related to Measuring Review of APRs/PQRs by Management

• Does Not Support:– Annual Product Review (APR) or Product Quality Review (PQR) on Time

• Of limited value, especially during expected implementation challenges during initial phase

– Optional metric regarding CAPA effectiveness

Developments in FDA Regulation of Medical Device Quality

Greg Levine

Partner & Co-Chair of Life Sciences Practice, Ropes &

Gray LLP

Developments in FDA Regulation of Medical Device Quality

• Device Quality Challenges• Recent FDA Initiatives• What to Expect

Device Quality Challenges

• Increasing device complexity and rapid innovation• Supply chain globalization and complexity • Ever-increasing number of regulated firms, devices, adverse event

reports, recalls• Finite FDA resources• Cost and time to market pressures within industry• Limitations on quality metrics/visibility of comparative quality

FDA Report, “Understanding Barriers to Medical Device Quality” (Oct. 2011)

Recent FDA Initiatives and Actions

• Voluntary compliance Improvement Program (VCIP) Pilot• International Programs • Critical-to-Quality (CTQ) Initiative• Program Alignment Initiative• Unique Device Identifiers• Transparency• Consent Decree Actions

Voluntary Compliance Improvement Program (VCIP) Pilot

• Launched in December 2013• 3-5 manufacturers may participate

– Limited to manufacturers of class II devices that are non-life saving and non-life sustaining

• Alternative to surveillance inspections – Manufacturers self-identify and correct deficiencies– FDA meets regularly with participants to review their analyses, consider

corrective actions identified, and evaluate efficacy of those actions– Participants must retain an expert consultant to monitor and certify they have

defined problems, analyzed root causes, and taken effective corrective action

• No public updates on status of program, participation, or results

International Programs

• IMDRF Medical Device Single Audit Program (MDSAP) Pilot– FDA began participating in January 2014– Allows a single audit to satisfy requirements of all regulatory authorities

participating in the pilot program– Participating nations include U.S., Australia, Brazil, Canada, and Japan– August 2015 status report : August 2015 status report: 10 audits completed

• Other international initiatives– Permanent offices in China, India, Europe, Latin America (since 2008/2009)– Participation in International Medical Device Regulators Forum (IMDRF) with

regulators from Australia, Brazil, Canada, China, EU, Japan, and Russia– Information sharing with international regulatory authorities through trainings,

scientific and policy discussions, confidentiality commitments

Critical-to-Quality (CTQ) Initiative• FDA launched Case for Quality in 2011 with three core components:

– Critical-to-Quality initiative– Enhanced data transparency– Stakeholder engagement

• Battery-powered implantable device CTQ pilot– Completed inspection pilot involving 4 manufacturers– Inspections focused on critical-to-quality factors (developed with input from

CDRH/ORA and stakeholders)

• FDA plans to shift strategy to issuing CTQ guidances– 13 product-specific CTQ information documents developed to date (e.g., implantable

spine devices, semi-constrained knee implants, defibrillator leads, infusion pumps)– CTQ guidances will be available to public as well as investigators; will serve as a

resource for traditional QSIT audits

Program Alignment Initiative

• Initiative announced in 2013 to reorganize ORA to create teams of specialized investigators by product type (e.g., device inspectorate)– Sub-specialties within device inspectorate to be developed over time; will

include sub-specialty in radiological health and Mammography Quality Standards Act (MQSA)

• Action plans developed by each respective center and ORA• ORA/CDRH 2015 action plan includes

– Establish baseline of staff involved in device and radiological health activities– Develop plan for establishing device and MQSA inspectorates

• Work in progress; timing of reorganization not yet announced

Unique Device Identifiers (UDI)• 2013 regulation established unique device identification system

– Requires UDIs on device labels and packages (and directly on multiple use devices) with limited exceptions

– Device labelers must submit information to FDA’s Global Unique Device Identification Database (GUDID)

• Potential quality/safety benefits– Ability to identify and correct problem devices more quickly– Standardized identifier to facilitate recalls– Foundation for a more secure global distribution chain

• System goes into effect in stages over 7 years, from 2014-2018• 5 UDI guidances/draft guidances issued in 2014/2015

Transparency

• Case for Quality transparency strategy– Publish releasable quality data to permit independent analyses by stakeholders – Conduct and publish analyses of quality-related data

• Launch of openfda.gov in June 2014– Release of extensive device data in August 2015 including data on device

classifications, registrations, listings, recalls, and adverse events– Intended to be flexible platform for easier access and searching of data

• Medical Device Metrics– Joint FDA/Xavier Health initiative to develop, pilot, and publicize defined product

quality metrics for devices – Metrics developed in 2015 to be piloted in Q4 2015/Q1 2016

Consent Decree Actions

• Maquet consent decree (Feb. 2015)– Atrium may continue to distribute certain products deemed medically necessary if

customer signs a certificate of medical necessity

• Medtronic consent decree (Apr. 2015)– Contains exception to prohibition on manufacturing and distribution of Synchromed II

Implantable Infusion Pump Systems where the device is used to treat certain enumerated conditions and a physician completes a certificate of medical necessity

• Custom Ultrasonics– Under 2007 consent decree, FDA ordered a recall of all automated endoscope

reprocessors (Nov. 2015)

What Should Manufacturers Expect: One Outside Perspective

• FDA is challenged by the dynamic forces of innovation, globalization, industry economic pressures, and limited agency resources

• Agency is searching for ways to make the most effective use of its finite resources

• Initiatives to date are preliminary and have limited scope and applicability • For the immediately foreseeable future, most firms should expect business

as usual• Despite challenges facing FDA and pressures affecting industry,

manufacturers that emphasize quality are more likely to reduce the risks of regulatory enforcement, recalls, adverse publicity, and litigation

Part 2:

STRUCTURED PANEL QUESTIONS

Pharmaceutical Metrics

• What is missing in the current regulatory oversight framework that this new initiative is necessary?

• Do the FDASIA metrics authority provisions pertain only to pharmaceutical manufacturers?– Are CDER and CDRH collaborating at all on their respective initiatives?? If

not, why not?– Do the benefits and possible concerns about metrics differ between devices

and drugs?

• Is FDA’s Guidance “binding” on Industry? – When FDA requests the information, does the company, by law, have to

provide it? – If so, what could the penalties be for non-compliance? – Could a Notice of Refusal be issued for failure to provide requested

information?

• How might FDA use the provided information?– Could FDA issue a FDA Form 483 based solely on the information provided?– What if a company provides incorrect or inaccurate information?

QUESTIONS:

The “Yates Memo”, Individual Accountability & Current Enforcement Focus

• Is the Yates Memorandum substantively different, and impactful, or, is it much ado about nothing relative to traditional DOJ enforcement approach?

• What impact do you expect the Yates memo to have on drug and device firms more broadly, if any?

• Are there any current FDA enforcement areas, i.e., dietary supplement claims, pharmacy compounding, pharmaceutical data integrity, etc. that create more risk for individual executives or employees under the Yates approach and traditional DOJ enforcement approach?

BACKGROUND:

The “Yates Memorandum” (DOJ Deputy Attorney General Sally Yates, 9/9/15) reiterated and

expanded upon DOJ’s long-standing position that individual accountability for acts of corporate

malfeasance will be pursued to incentivize proper corporate behavior, and hold the proper parties

responsible for their actions.

QUESTIONS:

Compounding Response to Pharmaceutical Price Concerns

• Is this action legal? Doesn’t this action, by definition, turn Imprimis into a “manufacturer” of Daraprim, regardless of whether Imprimis claimed orders were individual requests?

• If this action is legal, which manufacturing requirements should apply: those that currently apply to pharmaceutical “compounders” or traditional cGMPs under 21 CFR 211 that apply to pharmaceutical “manufacturers”?

• How widespread do you expect this practice to become?

BACKGROUND:

In response to Turing Pharmaceutical’s price increase to $750/tablet for Daraprim, Imprimis

Pharmaceuticals “announced a program available throughout the United States. [sic] which would

work with third party insurers, pharmacy benefit managers and buying groups to provide these

compounded drug formulations at lowered prices.” (Imprimis website, emphasis added)

QUESTIONS:

FDA Medical Device Single Audit Program

• Are there limits to how far can international harmonization can go? When it comes to enforcement, what are the limits?

• What is the legal authority for a “Single Audit Program”, specifically to include possible enforcement actions based on non-US FDA inspectors? FDASIA §610? Presumably the Chief Counsel has opined in the affirmative on this program – is there any indication legal authority is not valid?

• How would courts possibly view legal challenges to enforcement actions based on non-US inspectors, and non-QSR citations?

• Do you see any other practical issues for FDA’s desire to implement the Single Audit Program?• If this approach does not work, what are the alternatives?

BACKGROUND:

The MDSAP audit process was designed and developed to ensure a single audit will provide efficient yet

thorough coverage of the requirements of medical devices. FDA will accept the MDSAP audit reports as a

substitute for routine Agency inspections. Developed under International Medical Device Regulators Forum

(IMDRF) cooperation. Pilot in process to 31 Dec 16.

QUESTIONS:

New Pharmaceutical Inspection Protocol Project

Do you believe this will:• Make pharmaceutical inspections more efficient and improve outcomes for

manufacturers?• Generally extend pharmaceutical inspections, requiring deeper analysis of technical

and compliance decision making and data, and resulting in tougher inspections and worse outcomes? or

• A little of both – more balanced and efficient, with better outcomes for prepared manufacturers and worse outcomes for unprepared manufacturers?

BACKGROUND:

FDA is developing a new model for assessing plant operations based on standardized measures of a facility’s state of quality and compliance. The project will apply to pre-

approval, GMP surveillance, and for-cause inspections. CDER OPQ is developing the new protocols and planning pilot NIPP inspections with ORA. Stated objectives:

•to obtain quantitative scores that can help compare sites, and reduce variability in observations by different Investigators;

•to provide manufacturers with a clearer idea of what they need to do to maintain quality.

QUESTIONS:

AUDIENCE Q & A