FDA Firsts in 2019: First-of-a-Kind Drug GMP Warning Letters and More to US Than Foreign Firms

This is the second report from the Food and Drug Law Institute (FDLI) conference in December 2019. The first one, published in two parts, covered the Department of Justice (DOJ) activities in the CGMP compliance space during 2019. This article focuses on Center for Drug Evaluation and Research (CDER) activities in 2019.

In FY 2019, FDA’s enforcement actions included a number of firsts—for example: the first time in nearly a decade that the agency issued more drug GMP warning letters to sites in the United States than to those overseas; the first warning letter jointly issued by the Center for Drug Evaluation and Research (CDER) and the Drug Enforcement Administration (DEA); and the first warning letter issued for violations of the Drug Supply Chain Security Act (DSCSA).

At the Food and Drug Law Institute (FDLI) Enforcement, Litigation, and Compliance Conference held in Washington, DC in December 2019, CDER Office of Compliance (OC) Director Donald Ashley reviewed these and other firsts from FY 2019.

In addition to a warning letter analysis and discussion of “a few significant enforcement actions” the agency took in FY 2019, Ashley discussed changes to the Drug Registration and Listing System (DRLS), the proactive promotion of compliance, changes in the regulation of homeopathic medicines, and his team’s use of operational excellence tools to streamline its warning letter classification and completion of regulatory actions processes.

Areas of concern targeted in warning letters and other compliance actions included:

  • a pattern of manufacturers with compliance issues in a specific supply chain
  • online opioid sales
  • wholesale distribution
  • compounding pharmacies, and
  • cannabidiol (CBD) products. 

Why the Change?

Regarding the warning letters, Ashley emphasized that CDER Office of Compliance “tries, whenever possible, to identify and execute those regulatory and enforcement actions that have the greatest impact on public health.” In FY2019, it issued 98 warning letters, including 54 to domestic facilities, 17 to facilities in India, and to 14 facilities in China, marking the first time in nearly 10 years that more drug GMP warning letters were given to U.S. firms as compared to non-U.S. firms.

“Why the change?” Ashley asked. “Well, we are not entirely sure, but it was likely the result of a number of factors.” For example, in FY 2017 and FY 2018 his office substantially completed inspecting and evaluating facilities that had never previously been inspected. Many if not most of those facilities were located overseas. And “the worst of those were placed on import alert” resulting in their not being inspected again until they remediate their facilities and processes.

Also, in FY 2019, more than 60% of the drug GMP warning letters his office issued went to facilities that were being inspected for the second or more times rather than facilities that had been inspected the first time, which is different than the previous year. In FY 2018, more than 60% of the warning letters were to facilities that had been inspected for the very first time.

Lastly, Ashley pointed out, “it appears to us that the distribution we are seeing for CGMP [current good manufacturing practice] warning letters in FY 2019 more closely approximates the distribution of facilities by country in our inventory.”

Pervasive Supply Chain Issues at Dollar Tree Prompt Warning Letter

Warning letters to Dollar Tree’s parent company for issues with non-compliance by suppliers and to McKesson regarding its distribution practices were both the first of their kind. However, each has its own unique circumstances and needs to be examined in more detail to get the true picture. 

The warning letter given to Greenbrier International d/b/a Dollar Tree was for receipt of adulterated drug products in violation of section 301(c) of the FD&C Act. “The key fact here is that we observed a pattern of manufacturers with seriously egregious CGMP violations in Dollar Tree’s supply chain over a course of several years,” Ashley emphasized.

The violations in the warning letters issued to the manufacturers in Dollar Tree’s supply chain include a variety of offenses, such as:

  • a failure to conduct any release testing for the products that they were selling in interstate commerce
  • a failure to conduct raw material inspection on the ingredients used to make these over-the-counter products, and
  • the presence of rodent feces in a facility.

These manufacturers were all issued warning letters and placed on import alert. The Chief Operating Officer of Greenbrier was copied on the warning letters issued to these manufacturers. The warning letter to Greenbrier is significant because it is the first time that the Office of Manufacturing Quality, which is part of the Office of Compliance, issued a warning letter to a drug distributor for a violation of section 301.

“This should serve as a reminder to distributors that, although a distributor may not be subject to CGMP requirements themselves, they are responsible for ensuring that the drugs that they distribute in interstate commerce are not adulterated,” Ashley commented.

However, he provided a caveat that all distributors should not now expect to receive section 301 warning letters from FDA. “I really want to emphasize that this letter came after FDA repeatedly flagged CGMP problems over at least a three-year period and an inspection of the laboratory operated by Dollar Tree’s corporate headquarters.”

McKesson Draws First Warning Letter Citing DSCSA

In February, FDA issued its first warning letter for violations of the Drug Supply Chain Security Act (DSCSA) to the McKesson Corporation, one of the largest wholesale drug distributors in the United States. The DSCSA was enacted by Congress and signed into law in late 2013.

Under DSCSA, manufacturers, repackagers, wholesale distributors like McKesson, and dispensers that are primarily pharmacies are required to have systems in place to quarantine and investigate suspect and illegitimate product, which, if they got into the supply chain, are especially dangerous situations to consumers.

During an inspection at McKesson, FDA observed that the firm did not perform the required steps when notified by trading partners that they may have distributed illegitimate products. “Given McKesson’s significant product volume,” Ashley pointed out, “you can imagine these violations could have tremendous adverse consequences on public health.”

He said, “the most concerning issues” identified during the FDA inspection included inadequate record-keeping, inadequate response to illegitimate product notifications from trading partners, failure to quarantine and investigate suspect product, and failure to make notifications to trading partners themselves.

“We continue to work with McKesson to review the corrective actions that they have put into place since receiving the warning letter and the new systems they have put into place to avoid similar violations in the future. And we will continue to monitor the supply chain generally for compliance with these important requirements under the DSCSA,” Ashley said.

Joint Warning Letters with Other Agencies a First

In FY 2019, CDER issued joint warning letters with the DEA regarding opioids and with the Center for Food Safety and Applied Nutrition (CFSAN) and the Center for Veterinary Medicine (CVM) for issues regarding CBD products.

While CDER has collaborated with DEA in the past, this is the first time a joint warning letter has been issued. In September, the agencies partnered to issue joint warning letters targeting four online networks that were illegally distributing opioids in violation of both the FD&C Act and the Controlled Substances Act.

“You know if you have been following this that we have been quite active in tackling the access to opioids online the last several years,” Ashley commented. “And these joint actions represent our amplified response to combatting the opioid crisis that has taken so many lives in the U.S. It also demonstrates our commitment to enhance inter-agency collaboration to address the public health emergency.”

In November 2019, a joint effort between CDER, CFSAN, and CVM resulted in the issuance of warning letters to 15 companies that were illegally selling CBD products in violation of the FD&C Act. The action demonstrates FDA’s ongoing efforts to monitor the marketplace and act as needed against companies that violate the law in ways that raise public health concerns.

“As a general matter, FDA is concerned that people may mistakenly believe that CBD cannot hurt them,” Ashley stressed. “The limited data that FDA has seen about CBD safety points to real potential risks, including liver injury, adverse drug interactions, and male reproductive toxicity, which has been specifically observed in animal studies involving CBD.”

“We are also particularly concerned at CDER in the marketing of unapproved CBD products with unapproved claims to treat serious diseases as well as the marketing of these unapproved products for use in all populations including infants and children. The companies that we targeted in this latest group of warning letters included several companies that were targeting infants and children with CBD products.”

While FDA continues to evaluate its approach to address the regulation of products made from CBD, this round of warning letters reinforces its commitment to protecting consumers from potentially harmful CBD products.

Compounding Pharmacies and Homeopathic Products Draw Agency Focus

Ashley summarized the CDER Office of Compliance’s risk-based enforcement strategy. “I think the best example of our efforts to identify and execute regulatory enforcement actions with the greatest impact on public health have been our efforts to seek injunctive relief against drug products presenting the greatest risk of harm in patients,” he said. He pointed specifically to the compounding industry.

The scope and severity of the quality and safety concerns the agency has continued to see in the compounding industry “pose a major public health challenge.” In FY 2019, CDER secured permanent injunctions against four compounding companies purportedly making sterile drug products that were adulterated because the drugs were made under insanitary conditions and/or in violation of CGMP requirements. These four compounders were:

  • Ranier Rx in Pennsylvania
  • Guardian Pharmacy Services in Texas
  • PharMedium Services at multiple sites, and
  • Pharm D Solutions, also located in Texas.

This is on top of injunctions that were obtained in conjunction with colleagues at the Justice Department and the Office of Chief Counsel at FDA against two compounders in FY 2018, specifically Delta Pharma in Mississippi and the Cantrell Drug Company in Arkansas.

CDER has also increased its focus on homeopathy, as that industry “continues to grow in leaps and bounds,” according to Ashley. In October, the agency issued a revised draft guidance that details a risk-based enforcement policy prioritizing certain categories of homeopathic products that could pose a higher risk to public health. It includes products with routes of administration other than oral and topical, products that are marketed to vulnerable populations such as infants and children, and products with significant quality issues.

At the same time, it withdrew Compliance Policy Guide (CGP) 400.400, Conditions Under Which Homeopathic Drugs May be Marketed.

“Since that CPG was issued in 1988,” Ashley explained, “we have seen a number of cases in which homeopathic drug products posed significant risk to patients even though they appeared to meet the conditions described in the CPG.”

As a result of the agency’s ongoing evaluation of its regulatory framework in the homeopathic product space, including consideration of the “substantial” public input that it has received on the issue and the recent growth of safety concerns associated with these products, “we felt it was appropriate to withdraw the CPG at this time. In short, CGP 400.400 is inconsistent with the agency’s risk-based approach to enforcement generally, and it does not accurately reflect the agency’s current thinking.”

CDER Making Headway on Closing Inspections and Assigning Outcomes

CDER is making headway on its Concept of Operations (ConOps) initiative in collaboration with colleagues at FDA’s Office of Regulatory Affairs (ORA) in formal efforts to streamline facility evaluation and inspection outcome processes in the human drug inspection program.

The initiative has target dates for two activities: issuing a facility classification decision—voluntary action indicated (VAI) or official action indicated (OAI)—and completing all regulatory actions associated with facilities that are classified as OAI.

The target for issuing a final facility classification decision is 90 days. The classification will be communicated to the facility owner by way of a letter. The target for completing OAI regulatory actions is six months.

In FY 2019, FDA issued 839 classification letters and 86% of these, or 719, met that 90-day target, which was up from 82% the previous year.

Regarding OAI regulatory actions, in FY 2019 the median time from the end of an inspection to the issuance of a warning letter decreased to 6.5 months, an overall improvement of 44% since FY 2015 when the median time was 11.6 months (see Figure 1).

Figure 1: Number of Warning Letters and Time to Issue from Inspection Close

Efforts to Keep the FDA Drug Registration and Listing Up to Date Showing Success

In August 2019, CDER issued a notice of intent to inactivate drug listing records that were not certified as being accurate and up-to-date or were associated with a manufacturing establishment that is not currently registered with FDA.

When a firm fails to comply with the registration and listing requirements, the registration database contains incomplete and inaccurate information that compromises the agency’s ability to rely on it to support programs and activities such as drug recalls, drug establishment inspections, post-marketing surveillance, and counter-terrorism.

As of mid-November, CDER inactivated over 15,000 NDCs. The NDC (National Drug Code) is a unique numeric identifier given to each medication. The intent for the future is to inactivate uncertified human drug listings every January and July as described in the Federal Register Notice. 

Ashley advised companies to go into the electronic Drug Registration and Listing System (eDRLS) and update or certify their registration and listing entries.

Compounding Center of Excellence CDER Outreach Effort Aims to Shore Up Compliance

Ashley detailed his office’s latest effort to “proactively support compliance” and “look for opportunities to pursue transformative stakeholder engagement and collaboration”—a “Compounding Quality Center of Excellence.”

The goal of the center is to enhance engagement with outsourcing facilities, to help the industry bolster the quality of the compounded drugs they produce and thereby reduce the potential risk of harm that may arise from using these products. CDER executed a contract and began work in September 2019 in order to lay the groundwork for the Center of Excellence.

The contract includes the planning and development of both in-person and web-based training for every outsourcing facility located in the United States, on all aspects of quality compounding as well as important information regarding compliance with specific regulatory requirements. That will include a large end-of-the-year conference for all outsourcing facilities as well.


Greenbrier International, Inc d/b/a Dollar Tree Warning Letter

McKesson Corporation Warning Letter

FDA Draft Guidance: Drug Products Labeled as Homeopathic

Federal Register Notice: Drugs Intended for Human Use That Are Improperly Listed Due to Lack of Annual Certification or Identification of a Manufacturing Establishment Not Duly Registered With the Food and Drug Administration; Action Dates

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