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European Pharmaceutical Contractor

Keeping it Real

Falsified medicines are fake products that are represented as real, authorised drugs. The market for falsified treatments has evolved from a demand for lifestyle medicines, such as diet pills, into copying more sophisticated products that treat acute medical conditions – prompting the European Commission to introduce the Falsified Medicines Directive (FMD) to tackle this growing problem (1).

The goal of the FMD is to prevent the entry of falsified medicines into supply chains across the European Union (EU). It is a significant endeavour, which necessitates a comprehensive and cohesive strategy at both EU and international level. The case for a Europewide solution involving international cooperation is strong, as the dangers posed by falsified medicines do not respect borders.

The FMD is heralded as a tough set of harmonised rules to improve the protection of public health by ensuring that pan-European trade in medicines is rigorously controlled. So far, 18 countries have transposed the FMD into their national laws. The European Commission, European Medicines Agency (EMA) and national authorities are working diligently to implement the Directive in practice and to publish guidelines to assist industry with navigating the new regime.

Importing Active Substances

Active substances are described as the ‘backbone’ of a medicine. An active substance is the ingredient in a finished medicine that exerts a pharmacological, immunological or metabolic action with a view to restoring, correcting or modifying physiological functions or to make a medical diagnosis. Most active substances used in finished medicines manufactured in Europe are imported from so-called third countries (those outside the EU). An estimated 50-70 per cent of these that are used in the EU are imported from India and China alone. To tackle the risk of falsification of active substances, and prevent them from ending up in finished medicines, the FMD has reformed importation rules.

Since 2nd January 2013, all active substances brought into the EU must be produced in compliance with standards of manufacture and control that are at least equivalent to EU Good Manufacturing Practice (GMP). This requirement constitutes one of the main areas of change introduced by the FMD. It instils a clear basis for the concept of international cooperation on active substances, based on sharing responsibilities with local regulators. Importers, manufacturers and distributors of active substances established in the EU must also register their activities with the competent authority of the member state in which they are established.

Written Confirmation

As of 2nd July 2013, EU imports of active substances must be accompanied by a ‘written confirmation’, confirming that the facility where the active substance was manufactured is subject to control and enforcement of GMP. A template written confirmation has been published by the European Commission (2). In short, the written confirmation should provide the following assurances:

  • That the standards of GMP applicable at the facility are at least equivalent to those in force in the EU
  • That the facility is subject to regular and strict controls and effective enforcement of GMP, including inspections
  • That the information on findings relating to non-compliance is supplied by the exporting third country, without delay, to the authorities in the importing country in the EU

A written confirmation is issued by the national regulator in the third country and applies to the individual manufacturing facility and active substance(s) manufactured at the facility. For example, in India, the Central Drugs Standard Control Organisation is responsible for issuing written confirmations. By 24th July 2013, it had issued 218 written confirmations – a welcome development given the volume of active substances sourced from India.

Each imported consignment must be accompanied by a written confirmation, which can be a copy providing the original is still valid. It is the responsibility of the importer of the active substance and the manufacturer of the finished medicine to ensure that the imported product is accompanied by a written confirmation. In turn, national authorities may verify whether the importer and manufacturer have fulfilled their obligations when they conduct inspections of the importer’s or manufacturer’s national facilities.

Reasons for Exemption

There are two exceptions to the requirement for a written confirmation:

Exception 1

The requirement for written confirmation is waived for third countries assessed and confirmed by the European Commission as having a GMP regulatory framework equivalent to EU GMP. To date, the European Commission has confirmed that Switzerland, Australia, Japan and the US are exempt. Equivalence assessments in respect of Singapore, Brazil, New Zealand and Israel are ongoing.

Exception 2

It has been acknowledged that the introduction of these additional requirements may, in some cases, make the sourcing of active substances from some third countries difficult. Contingency plans are being put in place by regulators to facilitate continued legitimate supply, where appropriate.

Where necessary, to ensure the continued availability of a medicine, a facility in which an active substance is manufactured can be inspected by an EU member state. If a ‘certificate of compliance’ with EU GMP is issued, active substances may be sourced from the facility and imported into the EU without a written confirmation, for as long as the certificate is valid.

Although this is intended to be used in exceptional circumstances only, it is an important protection to ensure security of supply while the new FMD rules are bedding in. It is estimated that approximately 30 per cent of centrally authorised products using active substances are sourced from third countries. A risk analysis for centrally authorised products has been carried out to identify facilities to be prioritised for inspection. A similar approach is being adopted by some national regulators in respect of nationally authorised medicines.

Additional Factors

Because the rules are new, the EMA recognises the possibility that active substances may be imported from third countries that are not exempt and without a written confirmation. To facilitate a harmonised approach, the EMA has published guidance for importers and national authorities to deal with cases where active substances arrive in European Economic Areas without the necessary written confirmation (3).

It is also important to bear in mind that the new rules apply to the importation of active substances only. They do not, for example, apply to: 

  • The importation of finished medicines (the rules for which remain the same; namely, importation authorisation and batch release by a qualified person)
  • Imported active substances that have already been mixed with excipients
  • Active substances used for investigational medicines, or for medicines intended for R&D trials

The European Commission has published a helpful ‘Questions & Answers’ document regarding importation of active substances (4).

Good Distribution Practice

In formulating the new rules, the European Commission recognised the potential for falsification to occur at any stage in the supply chain before finished medicines reach patients. For this reason, the FMD aims to capture any entity that plays a role in the distribution channel for finished medicines.

Wholesalers

Traditionally, entities engaged in the wholesale distribution of medicines are accustomed to regulation. The FMD increases wholesalers’ regulatory obligations, which include requirements to:

  • Ensure that medicines that they receive are not falsified, by verifying the safety features on packaging (this is yet to be introduced)
  • Verify that their suppliers hold appropriate licences and comply with Good Distribution Practice (GDP) ●● Verify that their ‘brokers’ comply with the FMD
  • Maintain a quality system that sets out responsibilities, processes and risk management measures in relation to their activities
  • Immediately inform the national authority and the marketing authorisation holder if they receive or are offered falsified medicines, or medicines they suspect to be falsified

Brokers

The FMD casts the regulatory net wider and captures entities engaging in ‘brokering’ activities, who have, up to now, not been subjected to regulatory obligations. Brokering is a financial activity that is focused solely on purchasing and selling. It does not involve taking ownership of medicines, or even handling them, but is instead an intermediary role limited to the negotiation of the financial transaction.

Brokers must register with the national authority in the member state in which they are based, and can be inspected by national authorities. In March 2013, the European Commission published revised guidelines on GDP, which include specific provisions for brokering activities (5). The new guidelines will come into force on 8th September 2013.

Still to Come

Packaging Safety Features

The FMD envisages that a ‘unique identifier’ system will be introduced to safely track medicines from the manufacturer through to the dispensing pharmacy. This obligatory authenticity feature on the outer packaging of medicines will apply to all medicines subject to prescription and other medicines that are considered to be at risk of being falsified. The barcodes will be checked into a database by the manufacturer and checked out when dispensed by a pharmacy.

A Delegated Act detailing the harmonised, pan-European safety and control measures for use on packaging is expected in 2014. Once implemented, this system will also give member states the opportunity to extend the scope of the measures for monitoring the supply of products under national reimbursement schemes, in order to monitor expenditure and achieve savings.

Sales at a Distance

The FMD also foresees the introduction of an obligatory common logo for all online pharmacies operating from member states. The logo will be recognisable throughout the EU and must be clearly displayed on all websites offering medicines for sale at a distance. The logo will also enable the identification of the member state where the online pharmacy is established.

The intention of this logo is to allow for the identification of authorised online pharmacies providing authentic medicines, making it easier to distinguish between legal and illegal operators throughout the EU. Online pharmacies will be required to register in their member state, each of which will publish a list of authorised online pharmacies operating in their jurisdictions.

The target date for adoption of the technical, electronic and cryptographic requirements for verification of the authenticity of the common logo and the design of the logo is the close of 2013.

Increasing Momentum

Though the FMD has been anticipated for some time, the momentum has increased significantly in 2013. The new regulatory landscape highlights the need for all parties involved in the supply chain to exercise vigilance and know their obligations. The new requirements reinforce the need for importers and manufacturers to carefully select third country active substance manufacturers, and ensure that they have written confirmations for all consignments. Entities should also consider any impact that the new regime has on their existing contracts and implement any necessary changes to reflect their risk profile. Close monitoring over the coming months and beyond should also continue, as the supply chain regulatory field takes shape through the publication of further anticipated Delegated Acts and guidelines.

References

1. Directive 2011/62/EU

2. Visit: http://ec.europa.eu/health/files/ documents/active_pharmaceutical_ ingredients_leaflet_en.pdf

3. Visit: www.hma.eu/fileadmin/dateien/ Human_Medicines/02-HMA_Topics/ Falsified_Meds/2013_06_API_ ImportProcess.pdf

4. Visit: http://ec.europa.eu/health/files/ gmp/2013_04_12_qa_en.pdf

5. Visit: http://ec.europa.eu/health/ human-use/good_distribution_ practice/index_en.htm


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Michael Finn is a Senior Associate in the Healthcare Group and Commercial Litigation and Dispute Resolution Department at Matheson. He advises clients in relation to the regulation of medicinal products and medical devices in Ireland, and has built up a strong expertise in assisting multinational pharmaceutical clients in resolving impasses. Michael has substantial experience representing clients in the defence of complex and high-value medical malpractice claims, and regularly represents medical practitioners in the defence of regulatory complaints before advisory bodies.

Paul Clifford is an Associate in the Healthcare Group and Commercial Litigation and Dispute Resolution Department at Matheson. He advises a broad range of multinationals and healthcare professionals operating in the pharmaceutical, biotechnology, medical devices, cosmetics and healthcare sectors. Paul specialises in the defence of product liability and clinical negligence actions, as well as complaints before professional regulatory bodies. He also advises healthcare professionals and leading indemnity bodies regarding commissions of investigation, equality tribunal matters and Coroner’s Court inquests.

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