In light of the increased competition pharmaceutical and medical device manufacturers are facing in the marketplace, more of these companies are looking to contract manufacturing organizations (CMOs) for help.

In fact, a recent industry survey found that a typical U.S. manufacturing company depends on over 35 different CMOs to help cut costs and keep up with consumer demand. This add-on can lead to complex supply chains and significant business risks.

How could this upward trend in CMO reliance affect recall liability?

I recently wrote an article for Pharmaceutical Processing discussing the increased burden pharmaceutical and medical device manufacturers are now placing on contract manufacturers when a recall is announced. I have spoken with several CMOs whose customers are requiring they take all the necessary steps needed to effectively mitigate recall risks for all parties involved.  One company at a recent AdvaMed event even stated that it puts full product recall responsibility on its CMOs, leaving it up to them to negotiate other terms.

The U.S. Food and Drug Administration (FDA) has proposed legislation that would place more liability on pharmaceutical companies for the actions of CMOs. While the legislation has not been passed to date, it could lead to more of a burden on CMOs during a recall event.

Regardless of whether a CMO is required by its customers to take the necessary steps to diminish recall risks, every company should take pre-incident planning seriously.  Two very important steps contract manufacturers should already be taking is to invest in recall insurance and develop effective recall plans. Maintaining a transparent working relationship can also help ensure that a recall event is managed efficiently and ultimately protect your bottom line and reputation.

Are you surprised that the majority of U.S. manufacturers depend on over 35 different CMOs? What steps are you requiring CMOs to take to mitigate risks related to recalls? We welcome your thoughts below.

Mike Rozembajgier is Vice President of Recalls for Stericycle ExpertRECALL™. Mike is responsible for all aspects of recall service offerings, including development of strategic recall business initiatives, product enhancements, pricing and contracts, and marketing. Rozembajgier has more than 10 years of experience in the healthcare industry. Prior to joining ExpertRECALL he held various management positions at Guidant Corp. (now Boston Scientific) and at Deloitte in the Strategic Consulting practice.

The dangers of counterfeit medications have been highlighted recently in the media. Within the past few months, we have seen an uptick in stories describing the discovery of fake drugs available in the U.S. Estimated worldwide sales of counterfeit medicines topped $75 billion last year, up 90 percent since 2005, according to the World Health Organization. Meanwhile, U.S. Customs and Border Protection reported that seizures of imitation meds have tripled in the past two years.

What is leading to this startling rise in counterfeit medications entering the market?

I recently wrote an article for Pharmaceutical Processing discussing this issue and how it is a symptom of something much more concerning – the increasingly complex and vulnerable global pharmaceutical supply chain.

The U.S. has no national system for tracking medications, yet its complex drug supply chain involves a maze of wholesalers and secondary wholesale marketers. Recent drug shortages have exacerbated the counterfeit problem because health providers have had to scramble more to find medications and may turn to new and possibly less-reputable suppliers.

The pharmaceutical industry is responsible for complying with federal regulations and ensuring the safety and quality of medications.  Just one problem within the global product flow can result in adulterated or contaminated products ending up on store shelves. And the reputation a company has worked on building for years can be destroyed in a matter of days.

Pharmaceutical manufacturers are quickly realizing that the ability to detect the physical location of any drug is vital when responding to issues within the fragile supply chain.

For instance, track-and-trace technologies can have a profound impact on a company’s ability to effectively manage a recall event. Consumers are less likely to forgive a business when potentially dangerous products are found in stockrooms months after a recall is announced. The ability to quickly identify specific quantities of product and shipments affected by the issue can save companies a great deal of time and money. Track-and-trace systems also prove beneficial during the notification process of a recall event by making it easy for companies to locate the contact information of affected customers.

It is not mandatory for pharmaceuticals to implement track-and-trace strategies at this time. But that is likely to change. At the federal level, legislation has been introduced in the House of Representatives to create a mandatory bar-code system to trace prescription drugs.

But, if there is anything recent regulatory events have taught us, it is that companies should not sit on their hands and wait for the government to issue mandates. Drug manufacturers should start looking into employing track-and-trace technologies sooner rather than later.

How does your business implement track-and-trace systems? If you currently do not have such a program in place, what is it that’s stopping you? We welcome your comments below.

Mike Rozembajgier is Vice President of Recalls for Stericycle ExpertRECALL™. Mike is responsible for all aspects of recall service offerings, including development of strategic recall business initiatives, product enhancements, pricing and contracts, and marketing. Rozembajgier has more than 10 years of experience in the healthcare industry. Prior to joining ExpertRECALL he held various management positions at Guidant Corp. (now Boston Scientific) and at Deloitte in the Strategic Consulting practice.

The Government Accountability Office (GAO) released a report last month condemning the FDA’s efforts to track and regulate overseas pharmaceutical manufacturing.  The GAO report emphasized that the FDA plays a more important role than ever before in guaranteeing the safety of our pharmaceutical supplies, which the GAO suggests are vulnerable to contamination from toxic or unchecked additives at foreign manufacturing plants. With proper FDA oversight, the risk of contamination and recalls can be controlled with recall prevention, proactive recall planning, and effective recall management.

According to the GAO, as a result of an increasingly globalized and interconnected pharmaceutical market, “there are concerns that the complexity of the drug manufacturing supply chain and the volume of imported drugs has created regulatory challenges for the FDA.”

The GAO notes that, in 2007, the FDA only inspected six percent of the foreign manufacturing facilities under its supervision, despite reports that 80 percent of pharmaceuticals used in the U.S. are manufactured abroad. At that rate, the GAO suggests, “it would take the FDA about 13 years to inspect all such establishments.”  Since 2007, the FDA has increased its percentage of establishments inspected, but the agency still admits that it is “far from achieving foreign drug inspection rates comparable to domestic inspection rates.”

With counterfeit drug sales, theft, and black markets for pharmaceuticals on the increase, more oversight is vital, and manufacturers can expect an increased number of inspections at foreign facilities, especially those with a past history of proven or suspected violations. The GAO also advised that the FDA be placed on a “high risk watch-list of organizations until it more effectively uses its enforceable authority to make drugs safe for market,” reports Angie Drakulich of PharmaTech.

In a hearing on Capitol Hill following the report’s release, senators voiced their concerns about the FDA’s competence in this area. Senator Barbara Mikulski (D-Md.) characterized overseas drug supply regulation as a national security issue, saying “the American people [need to] know that if they take a prescription drug, it will be okay.” Meanwhile, Senator Michael Bennett (D.-Colo.) urged fellow senators to come together in a bipartisan effort to provide the FDA with the resources necessary to address the GAO recommendations.

Pharmaceutical companies with manufacturing arms abroad should take note of all the attention that the GAO report has generated. Sen. Mikulski’s characterization of drug manufacturing regulation as a “national security” issue underscores the seriousness with which Congress is taking the GAO’s recommendations, even though in the current political climate increases in funding and authority for any federal regulatory agency seem unlikely.

In order to ensure product safety and avoid costly and damaging product recalls,  foreign drug supply manufacturers and U.S. pharmaceutical companies with plants abroad should make sure that they are following current FDA regulations, even as the agency reevaluates its oversight authority based on the GAO recommendations.

Stericycle ExpertRECALL™ is the industry leader in recall logistics and regulatory compliance for consumer product, pharmaceutical, medical device, juvenile product, and food and beverage recalls. ExpertRECALL’s professionals are experts in recall management who can help you streamline the entire product recall process.

A growing number of pharmaceutical companies are relying on overseas plants to supply ingredients for their prescription drugs. As previously detailed by ExpertINSIGHTS, the result is a complex network of foreign supply chains that pose significant challenges for the Food and Drug Administration (FDA), which has already found itself underfunded and unprepared for the tasks it is assigned.

With over 80 percent of the active ingredients found in drugs sold in the U.S. now sourced from foreign plants, patients are increasingly at risk of illness and death from generic medicines that may be contaminated, either accidentally or on purpose. These foreign plants are exempt from the inspections and regulations to which domestic manufacturers are subject.

According to a recent New York Times article, this all may soon change. A new agreement expected to be completed within weeks will have generic drug companies paying $299 million annually to underwrite third party inspections of foreign manufacturing plants every two years, the same frequency required of domestic plants.

The new agreement not only will help alleviates the FDA’s growing oversight burden, but will also benefit drug manufacturers by offering speedier product approvals. The median approval time for generic medicines is now 31 months.  If this new agreement is implemented, the approval time is expected to come down to only ten months.  In addition, more frequent and comprehensive inspections will help companies avoid product recalls which impact the confidence of the pharmaceutical industry as well as consumers here in the U.S.

Once implemented, this deal will be a big step toward increased drug safety by allowing government inspection earlier in the supply chain.  Incidents like the 2008 Heparin tampering may now be avoidable.

This deal only applies to generic prescription drug manufacturers. The inspection process for over-the-counter medicines and name-brand medicines will not change.  But generic drugs now account for almost 75 percent of the American prescription pharmaceutical market.  Many consumers, hospitals and doctors will appreciate the increased safety.

If this agreement is successful, it may open the door to better cooperation between the FDA and the makers of name brand and over-the-counter drugs and increased safety for their customers.

In the meantime, this proposal is a big step by generic pharmaceutical companies to ensure their commitment to consumer safety.  In an interview with the Times, Dr. Margaret Hamburg, commissioner of the FDA, said “If a program along the lines of what the parties are working on is enacted by Congress, it would represent a real breakthrough,” placing the FDA’s generic drug program on a “much more stable footing.”

This proposal is also a big step forward for the FDA, as the agency looks for ways to mitigate the inherent risks of the global marketplace and protect consumers from contaminated drugs.

Stericycle ExpertRECALL™ is the industry leader in recall logistics and regulatory compliance for consumer product, pharmaceutical, medical device, juvenile product, and food and beverage recalls. ExpertRECALL’s professionals are experts in recall management who can help you streamline the entire product recall process.

A private pharmaceutical industry information company recently introduced a new database network for reporting and collecting information on adverse events resulting from prescription drug use. The database, RxEvent.org, was launched last week by PDR Network, a leading distributor of drug labeling information and the publisher of the Physicians’ Desk Reference. RxEvent is likely to have a significant impact on the Food and Drug Administration’s (FDA) oversight of the industry and the recall management process for pharmaceutical products. If it is adopted by key industry groups, the new network will enable regulators to raise a red flag on products that might be unsafe for consumers and even trigger a recall.

The FDA currently manages an Adverse Event Reporting System designed to support the agency’s post-marketing oversight of approved pharmaceutical product. But reporting on adverse events by health care providers is voluntary, and the process is time-consuming and inefficient, account ting for only about ten percent of adverse events. RxEvent aims to bridge that gap by giving prescribers the ability to quickly file reports on adverse events and getting information to manufacturers and integrating it into hundreds of other electronic databases that are easily accessible by healthcare professionals across the country.

This new online resource will give physicians and other health care providers better access to possible trends and critical information about the drugs they prescribe. In a press release detailing the websites launch, Edward Fotsch, MD, CEO of PDR Network, explained that “RxEvent was designed to improve the convenience of adverse event reporting for physicians, the cost-efficiency for manufacturers and the quality of information ultimately reported to the FDA.”

Even in its early stages, this new resource is already getting industry-wide support. A statement issued by Thomas Menighan, executive vice president of the American Pharmacists Association, notes that “by supporting RxEvent, we hope to facilitate enhanced reporting by pharmacists, who see tens of thousands of adverse drug events annually.”

All information collected on RxEvent will also be made available through various electronic health record (EHR) platforms and through other online services. A recent Healthcare IT News article about the launch of the database reports that, “EHR use among physicians in the U.S. has grown dramatically and is approaching 50 percent.” The article goes on to say that several studies have shown that EHR’s increase the convenience, content and volume of adverse event reports. With increasing buy-in from healthcare professionals, we can expect RxEvent to be successful in monitoring the effectiveness and safety of pharmaceutical products.

The increased use of digital platforms for collecting and relaying information about consumer products is especially useful in the pharmaceutical industry, where individual reactions to a drug could provide crucial information on its use and viability. RxEvent could lead to greater industry self-policing and oversight. Companies involved in pharmaceutical drug production and distribution should keep a close watch on these digital resources in order to stay a step ahead and be ready to efficiently manage a recall.

Stericycle ExpertRECALL™ is the industry leader in recall logistics and regulatory compliance for consumer product, pharmaceutical, medical device, juvenile product, and food and beverage recalls. ExpertRECALL’s professionals are experts in recall management who can help you streamline the entire product recall process.

Many attractive business opportunities in today’s global marketplace also present new and complex challenges to consumer safety. As regulators reassess their role in overseeing manufacturers and retailers, they are paying greater attention to industries where the potential for product recalls and recall management is greater than previously expected. Not only are the final products under increased scrutiny, but components and ingredients, regardless of their origin, are quickly becoming targets for regulators looking to crack down on unsafe products.

While the global marketplace has, in many cases, outpaced regulators, there is now an increased regulatory focus on the areas where lapses in oversight have occurred and where areas of risk exist. Regulatory agencies today must do their work within an increasingly interwoven network of supply chains, where the resources, labor and manufacturing of a product can be derived from widely diverse regions and under equally diverse circumstances.

One such example was outlined in a recent Chemical & Engineering News cover story, which reported that drug makers are increasingly relying on the outsourced production of active pharmaceutical ingredients (APIs). The article notes that in the past several years, the Food and Drug Administration (FDA) has had to deal with several cases where gaps in supply chain oversight have led to substandard or criminally adulterated APIs. Recent recalls of products on a global scale illustrate how products developed in the global marketplace are constantly at risk of  contamination.

A recent report by the Government Accountability Office subsequently found that the FDA had inspected only 11 percent of the foreign establishments listed as suppliers of drug products sold in the U.S. in 2009, compared with 40 percent of domestic establishments inspected that same year. The FDA has since concentrated its efforts at being “prevention-focused and global,” as it seeks to strengthen its oversight. This, along with steps taken by the industry itself is contributing to improved consumer safety standards.

At the same time, drug companies and API suppliers have taken greater initiative in maintaining global quality standards by volunteering information through Rx360.com, a pharmaceutical supply chain consortium. The consortium serves as a valuable resource for both security and transparency.

Lawmakers in the U.S. are also taking an interest in the safety concerns traditionally associated with outsourced pharmaceutical drug production. Last year, Senator Michael F. Bennet (D-Colo.) introduced the Drug Safety & Accountability Act, which, among other provisions, would strengthen the FDA’s ability to track foreign manufacturing sites. Representative John. D. Dingell (D-Mich.) introduced the Drug Safety Enhancement Act, another bill that would increase the FDA’s oversight authority.

The risks posed by substandard or adulterated APIs illustrate the need for regulatory bodies to keep apace with the industries they oversee. As drug companies, politicians, and the FDA tighten their oversight of foreign supply chains, manufacturers should work to ensure that they are doing their part to ensure the safety of their products, and prepare for recalls.

Stericycle ExpertRECALL™ is the industry leader in recall logistics and regulatory compliance for consumer product, pharmaceutical, medical device, juvenile product, and food and beverage recalls. ExpertRECALL’s professionals are experts in recall management who can help you streamline the entire product recall process.

This may go down in history as the year that Congress took a close look at the Food and Drug Administration (FDA)’s ability to keep consumers safe and then empowered the agency with tougher regulations and stricter enforcement authority. From food to pharmaceutical products to medical devices, recent Congressional inquiries into the FDA’s ability to protect consumers could lead to new regulations that affect how companies approach their recall management and navigate the complicated recall process.

Not only has the FDA been granted new powers under the Food Safety Modernization Act, but a recent Government Accountability Office (GAO) report and congressional hearing are looking into the agency’s medical device approval process. Congress is also now taking a look at agency’s “slower-than-expected” implementation of a newly launched import screening system.

Last week, FDA Commissioner Margaret Hamburg testified at a House Energy and Commerce Subcommittee on Oversight on the agency’s implementation of Predictive Risk-Based Evaluation for Dynamic Import Compliance Testing (PREDICT), a system that aims to monitor imported products and is designed, through a numerical score process, to strategically select which shipments and which goods to inspect.

The new system is critical because the FDA has oversight of products imported to the U.S. from more than 150 countries. There are currently more than 130,000 importers of record, with products arriving from more than 300,000 facilities around the world. The FDA is only able to inspect about two percent of all imported products.

But once implemented, PREDICT is expected to help the agency more effectively identify the shipments to target and hopefully increase the number of inspections the agency can conduct. While the PREDICT system was launched last year, it is currently only used in Los Angeles, New York, Seattle and San Francisco. Congress wants faster action, and in today’s regulatory environment, lawmakers are sending a clear message to watchdog agencies: we want change now.

As a manufacturer or importer, you are not only under scrutiny from regulatory agencies, but now also Congress. When Congress takes aim at the regulatory agencies, expect the agency that regulates your business to wield a heavier hand. With Congress actively looking into the FDA, your company should act now to review your internal procedures and double check to make sure your overseas partners are importing safe products and following appropriate manufacturing procedures at their facilities.

In this era of increased accountability, supply chain management is critical, particularly when imported goods are a primary target for the FDA. Now is the time to review import criteria, logistics and manufacturing policies. Otherwise you face the risk that the FDA will block your products from entering the U.S. market and put your company on the agency’s watch list.

Stericycle ExpertRECALL™ is the industry leader in recall logistics and regulatory compliance for consumer product, pharmaceutical, medical device, juvenile product, and food and beverage recalls. ExpertRECALL’s professionals are experts in recall management who can help you streamline the entire product recall process.

Like it or not, track-and-trace may soon be a reality for the pharmaceutical industry. Earlier this month, the Obama administration recommended implementation of a track-and-trace initiative as part of a package of proposals designed to fight counterfeit drugs and protect consumers. While several industry organizations have expressed concerns about the cost involved, if there is anything recent regulatory events can tell us, it is that companies are better off running to the light and embracing new consumer protection mechanisms than pushing back against regulators.

The National Association of Chain Drug Stores (NACDS), while supporting parts of the Administration’s proposal, has made clear its opposition to the track-and-trace idea. NACDS’s objections are based primarily on the fact that such systems are still under development and may not be effective in their current state, and that they would be too expensive for pharmacies and supply chain operators to implement.

At the same time, however, PhRMA, the national association representing drug manufacturers, is supporting, in general terms, the government’s focus on collaboration and information sharing “as it relates to counterfeit pharmaceuticals.”

Needless to say, there is widespread public support for protecting consumers and fighting counterfeit drugs, but the industry’s concerns are legitimate. Nevertheless, particularly as recall enforcement events, legislation, and regulatory oversight continue to expand, companies have little to gain from fighting new consumer safety recommendations.

Instead, as we have often recommended, the most successful approach is to beat regulators to the punch. If a company or industry does not approve of the precise mechanism the government wants to implement, try developing, launching, and publicizing your own version before the government. Doing so not only demonstrates a commitment to consumer safety – before regulators mandate it – but also enables companies to play a role in determining just how the details take shape.

When it comes to track-and-trace requirements – as well as other regulatory advances – companies should not simply sit back and wait for the government to issue mandates. By taking the lead and getting out in front of both regulators and public opinion, companies can protect consumers and their reputations.

Stericycle ExpertRECALL™ is the industry leader in recall logistics and regulatory compliance for consumer product, pharmaceutical, medical device, juvenile product, and food and beverage recalls. ExpertRECALL’s professionals are experts in recall management who can help you streamline the entire product recall process.

When an over-the-counter drug is recalled, consumers are generally aware of the immediate impact. The recall process requires that affected products are removed from store shelves. Consumers are warned to discontinue use of the drug in order to protect themselves against any health risks the recalled drug may pose. But effective recall management also means that safe products quickly replace the recalled drugs in order to make sure that consumers always have the medications they need.

Unfortunately, recovery can be the most difficult part of the recall management process. A recent Chicago Tribune article reported that hospitals across the country are experiencing shortages of key medications as a result of manufacturing and quality control issues at major pharmaceutical companies. As a result, doctors many not always have the medicines they count on to treat their patients. Of particular concern are injectable medicines that have a longer production times than pills.

The FDA has recently been taking a more proactive approach to regulating the pharmaceutical industry, cracking down on quality issues such as toxins and particulate matter found in medicines. As the FDA works to ensure the safety of all drugs and medications, pharmaceutical and medical device manufacturers must make sure that the medicines and devices they make, as well as the processes they use to make them, are safe.

In addition to regular plant inspections and quality audits throughout the manufacturing process, your company should be reviewing its recall plans and regularly conducting mock recalls. Now is the time to prepare for a recall. Preparation is the key to effective recall management; allowing you to return to business as usual and getting your products back on store shelves and into the hands of doctors and hospitals quickly.

Stericycle ExpertRECALL™ is the industry leader in recall logistics and regulatory compliance for consumer product, pharmaceutical, medical device, juvenile product, and food and beverage recalls. ExpertRECALL’s professionals are experts in recall management who can help you streamline the entire product recall process.

The U.S. Food and Drug Administration (FDA) announced last week that it is going on offense, targeting nearly 500 cold, cough, and allergy drugs that are on the market but that the agency says it has never approved. Concerned about the effectiveness and overall safety of medications, the agency is expecting manufacturers to take appropriate action – which could mean a withdrawal or recall. While the companies that manufacture products targeted by the FDA are already aware of the scrutiny and risks associated with this announcement, they need to understand that this is just the beginning. Their recall management will be closely monitored, and anything less than full compliance could mean further regulatory action.

With this announcement the FDA is publicly cracking down on non-compliant companies – both foreign and domestic – that have failed to register products that have been “repacked, and or re-labeled.” While some of these products may have been approved when they first came on the market, failure to update drug listing information with the FDA is a violation that can lead to tough regulatory action. According to the FDA, products that have been repackaged or relabeled without being properly listed with the agency are considered misbranded.

But repackaging and relabeling issues are not the agency’s only concern. According to Deborah Autor, director of compliance at the Center for Drug Evaluation and Research, the unapproved products pose a variety of concerns such as “excessive amounts of active ingredients or extended-release formulas that don’t function properly.”

This FDA initiative forces manufacturers to think about how they can stay in compliance. How to notify direct accounts and customers who have these products may be one concern.  Additionally, manufacturers must consider how they could remove and retrieve these products from the marketplace if needed. Product retrieval is a complicated and time consuming process that takes careful planning and precise execution to ensure all affected products are removed.

This latest attack on prescription products stems from the agency’s Marketed Unapproved Drugs – Compliance Policy Guide (CPG). Since the guide was issued in 2006, the agency has taken action against unapproved drugs 17 times. In this particular case, manufacturers must take several actions. Companies are required to stop manufacturing the repackaged or re-labeled drugs within 90 days. Shipments of the products must be stopped within 180 days. Manufacturing and shipping of drugs never previously registered with the FDA must be stopped immediately.

This recent announcement by the FDA is another reminder that it is not always the discovery of a severe health or safety risk that leads to withdrawals and recalls. There are plenty of regulations surrounding the manufacture, approval, and sale of products that could force a company to manage a recall. Take the time now to review your recall plans and conduct a mock recall to ensure that when you are faced with managing a recall, your team is ready.