Revised Schedule M audits to test will, skill of regulators and regulated

From July 1, India’s medicines watchdog, the Central Drugs Standard Control Organisation (CDSCO), will start risk-based unannounced audits of pharma companies with a turnover over Rs 250 crore as per the revised Schedule M. Smaller companies have six months more to gear up for revised Schedule M audits.

But it is interesting to note that even as all global regulators, especially the US FDA, raise the bar on quality expectations, and major pharma companies in India express a willingness to learn from inspection outcomes, the US FDA has been facing scrutiny of its own processes and systems back home.

Giving the keynote address at the 9th Global Pharmaceutical Quality Summit organised by the Indian Pharmaceutical Alliance (IPA), Dr Arunish Chawla, Secretary, Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, reminded the audience of Prime Minister Modi’s vision that all Made in India products to be “zero defect, zero effect on the environment”, emphasising the push for quality at the highest level. “Our mission going forward is to make quality the centre of policy framework… The integrity of the Indian industry relies on every player’s adherence to the highest standards. When one fails, it affects the entire industry. Therefore, we must collectively uphold quality to protect our reputation and ensure excellence in every aspect.”

Dr Rajeev Raghuvanshi, Drug Controller General of India (DCGI) spoke about the several gains over the past year, like reducing approval timelines, increasing digitisation, and setting up internal quality audits with CDSCO, among many more.

But he also candidly admitted that continuous quality improvements are both a matter of will and skill, on the part of the regulated and the regulators. The hope is that the audits for larger companies will serve as a warning signal to under-Rs 250 crore companies to shape up or ship out by their deadline, January 2025.

A joint IPA-McKinsey presentation pointed out that as of March 2024, as part of the quality drive in the past year, around 64 pharmacos licenses, 53 licenses were suspended, and 17 drug testing laboratories shut down for non-compliance with GMP or continued lapses. Analysing data over the past decade, Sathya Prathipati, Senior Partner, McKinsey & Company, pointed out that Official Action Initiated (OAI) outcomes for India’s pharma industry improved significantly from (estimated) 26 per cent in 2014 to 13 per cent in 2023, lower than the global average 15 per cent.

He also cited that a five-year analysis of US FDA inspection data shows an approximately 20 per cent reduction in observations around essential cGMP training/capabilities and an approximate 45 per cent reduction in observations around lab controls and core manufacturing processes in 2023, versus 2018. Areas of concern remain, like the approximately 35 per cent increase in observations around ‘Facilities and Ancillary infrastructure’ and the approximately 25 per cent increase in observations around ‘Investigations and Root Cause Analysis’ in 2023, versus 2018.

While global regulators may acknowledge the progress, they emphasise that it’s a long road ahead. Patrizia Cavazzoni, MD, Director, Center for Drug Evaluation and Research (CDER) at the US Food and Drug Administration flagged several areas for improvement. One of the most recent examples she cited are the data integrity concerns observed in BA/BE study data submitted by CROs in India (Panexcell/ Synchron, Semler, Synapse) to support applications. Cavazzoni indicated the implications of such findings on the approval of such medicines, their disqualification from certain procurement systems in the US, etc.

Back home, the US FDA has been the subject of a House Energy and Commerce Committee investigation into FDA inspection practices, since 2023. Following letters in July and December  2023, a February 6, 2024 oversight hearing to which the US FDA reportedly declined to make an official available to testify, a new letter dated June 21, 2024, from the three lawmakers spearheading the investigation, presents findings that suggest ‘vast differences in the skill, thoroughness, and competence of FDA inspectors’, and also refers to ‘reports of, and concerns about, foreign manufacturers attempting to bribe or improperly influence inspectors.’

Their analysis of the outcomes of US FDA inspections in India and China from January 2014 to April 2024 reportedly reveals ‘tremendous variation in inspection outcomes.’ Giving examples, the letter points out that while some FDA inspectors found compliance issues during all or almost all of their inspections, other inspectors rarely reported finding a single compliance issue. Two inspectors never found a single compliance issue over the course of a combined 24 inspections in India. By contrast, the letter states that 16 FDA inspectors, with over 325 inspections collectively in India, found compliance issues during every inspection they conducted.

Consider that the House Energy and Commerce Committee was originally established in December 1795, to “regulate Commerce with foreign Nations, and among the several States”. This ongoing investigation focusing on China and India read along with the BIOSECURE bill introduced in the House of Representatives in January 2024, hints at the intentions of US lawmakers to red flag over dependence for services/products as a national security risk. It’s fair to say that biopharma honchos in India are watching these headlines closely.

As the US heads into acrimonious Presidential debates prior to elections in November, India too buckles in for a potentially stormy monsoon Parliament session. Quality of medicines and medical products is sure to remain a hot-button topic on both continents as lawmakers call out bad actors, ranging from compromised inspectors, lax companies and countries perceived to pose national security threats.

Hopefully, the revised Schedule M audits and limelight will incentivise more pharma companies to start and continue to invest in quality systems. After all, healthy patients lead to healthy nations and healthy balance sheets as well.