By Donald D. Ashley and Kalah Auchincloss, Greenleaf Health
With President Biden’s signature, the Food and Drug Omnibus Reform Act of 2022 (FDORA), part of the larger Consolidated Appropriations Act of 2023 (Public Law 117-328), became law on Dec. 29, 2022. FDORA expands and modifies the inspection authority of the FDA in several key areas, including alternative tools to inspection, mutual recognition agreements, bioresearch monitoring, and unannounced foreign inspections.
1. Expanding the Availability of Alternative Tools to Inspection
FDORA expands FDA’s authority to make mandatory requests to industry for “records and other information” in advance, or in lieu, of an inspection. Section 704(a)(4) of the Food Drug and Cosmetic Act (FDCA) had previously limited use of this authority to drug establishments.1 Section 3611 of FDORA expands this authority to include device establishments and Section 3612 expands this authority further to bioresearch monitoring (BIMO) sites and facilities.
In guidance issued during the pandemic, FDA began to refer to section 704(a)(4) requests directed to drug establishments as a mandatory “remote regulatory assessment” (or RRA).2 Similar requests directed to non-drug establishments were categorized as voluntary RRAs, given the lack of a statutory basis to make a mandatory request. Despite this absence of specific statutory authority, CDER has made very robust use of voluntary RRAs seeking records and other information as part of its BIMO program.3 That practice should not only continue but increase, as responding to these requests will no longer be voluntary on the part of regulated industry.
Balanced against these expansions of agency authority under Section 704(a)(4), Section 3611 includes a new requirement that, whenever making a Section 704(a)(4) request, FDA must include a “rationale for requesting” the records and other information sought. In addition, by December 2023, the agency is required to issue guidance on the use of Section 704(a)(4) requests, including electronic processes for responding to such requests and the factors the FDA will use to determine whether requested records are provided within a reasonable timeframe and within reasonable limits, considering resource and other limitations, including for small businesses.
Arguably, FDORA’s most significant inspection related change is that Section 3613(b) now permits the FDA to rely on records and other information collected pursuant to Section 704(a)(4) “to satisfy requirements that may pertain to a preapproval or risk-based surveillance inspection, or to resolve deficiencies identified during such inspections, if applicable and appropriate.” This new authority is welcome news to those in industry advocating that FDA increase the use of inspection alternatives. How the agency utilizes this new permissive authority remains to be seen.
We predict this new provision will prove most useful in the area of risk-based surveillance, as Section 3613(b) removes the barrier that previously prevented FDA from relying on records and other information collected pursuant to Section 704(a)(4) to satisfy surveillance inspection requirements. The agency is required to inspect (“shall inspect”) drug establishments in accordance with a risk-based surveillance schedule pursuant to FDCA Section 510(h)(3). The agency has also interpreted the definition of inspection under FDCA Section 704(a)(1) to require a physical entry into the inspected establishment. Consequently, the agency’s view was that it could not satisfy surveillance inspection requirements in any manner short of a physical inspection. Given the nature of risk-based surveillance inspections and the backlog of such inspections resulting from the pandemic, we predict the agency will make great use of this new authority in the surveillance arena.
While Section 3613(b) also applies to pre-approval inspections and warning letter follow-up inspections, there was never a legal requirement to rely on an inspection in either of those two contexts. In fact, the agency frequently determines it is not necessary to conduct a pre-approval inspection when considering a drug application and has also used “remote interactive evaluations” in lieu of pre-approval inspections during the pandemic.4 Regarding warning letter follow-up inspections, FDA has never taken the position that verification of post-warning letter corrections requires an inspection in all cases. The big question is whether the agency will amend its practice of steadfast reliance on re-inspections of drug establishments that have received warning letters. There may be some slight movement here, but the Section 3613(b) change is permissive only and FDA is very likely to maintain its strong preference for post-warning letter inspections based on historical post-warning letter inspection results. Historically, more than 50% of drug facilities have failed their post-warning letter re-inspections, despite having provided records and other information to the agency in advance of the inspection purporting to show that the firm had adequately remedied past violations at the facility and was ready to be re-inspected.
2. Clarifying the Statutory Basis for Bioresearch Monitoring Inspections
In addition to extending Section 704(a)(4) to BIMO sites and facilities, FDORA Section 3612 establishes a specific statutory basis clarifying FDA’s authority to conduct BIMO inspections. Section 3612 provides a comprehensive framework describing the sites and facilities subject to BIMO inspections, the permitted purposes of such inspections, as well as the records and other information subject to inspection, including electronic information systems holding such information. In case you were wondering, this new statutory language also notes that it should not be inferred that FDA previously lacked the authority to conduct BIMO inspections. FDA is required to issue draft guidance describing the processes and practices applicable to BIMO sites and facilities by June 2024.
3. Recognition of Foreign Government Inspections
FDORA Section 3613(c) promotes further FDA use of mutual recognition agreements with foreign counterparts in two ways. It amends FDCA Section 809 to expressly permit FDA to include pre-approval inspections within the scope of foreign mutual recognition agreements. Section 3613(c) also adds a new provision to Section 809 requiring the agency to periodically assess whether additional mutual recognition agreements are appropriate and to report to Congress the results of those assessments every four years. The existing mutual recognition agreements with the EU and the U.K. are considered a great success in the agency. A new mutual recognition agreement was also just signed between the FDA and Switzerland on January 12. FDA is already routinely considering additional such agreements, but this new legislation should encourage further action in this area. Interestingly, the EU, U.K., and Swiss agreements already permit FDA to ask a treaty partner to conduct a pre-approval inspection. In the case of the agreement with the EU, FDA reports that implementation of the pre-approval inspection provision in the treaty has been held up by delays in developing a U.S.-EU joint work plan for pre-approval inspection capability assessments.
4. Regional Compliance History Added as a Surveillance Inspection Criterion
In 2012, the Food and Drug Administration Safety Innovation Act (FDASIA) eliminated the requirement to inspect domestic drug facilities every two years and directed the FDA to remove any distinction between foreign and domestic facilities when determining surveillance inspection frequency. FDORA Section 3613(a) can be seen as a bit of backtracking on this point, as it directs the agency to now consider the compliance history of establishments in a particular country or region when determining the schedule for risk-based inspections of facilities located there. Some are also criticizing the provision for fear that it will work to the detriment of a facility with a good compliance history that happens to be in a country with a relatively poorer rate of compliance. However, we think these concerns are overblown, as decisions on surveillance inspection frequency are based on several factors, one of the most important of which is the compliance history of the specific facility being considered for inspection, which will surely be weighed more heavily by FDA than the overall compliance history of the region or country where the facility is located. Interestingly, one result of Section 3613 is that, everything else being equal between two facilities, a U.S. based facility may now be flagged by FDA for a surveillance inspection more frequently than a comparable European facility, as the data indicates that facilities in Europe have a lower overall level of Official Action Indicated (OAI) classifications than do those in the U.S.
5. GAO Directed to Prepare Report on Alternative Tools Used by FDA and Foreign Counterparts
FDORA Section 3614 directs the U.S. Government Accountability Office (GAO) to prepare a wide-ranging report on how the FDA and foreign counterparts use alternative tools to inspection, no later than June 2024. Among other factors, the report must cover:
- what alternative tools, including remote inspections/evaluations, other countries are using to facilitate inspections;
- how frequently trusted foreign regulators conduct inspections that FDA could review in lieu of conducting its own inspections;
- how frequently FDA is using mutual recognition agreements (MRA) and whether use of such agreements could be expanded;
- whether FDA has accepted reports of inspection of facilities in China and India conducted by FDA’s MRA partners; and
- what other countries has FDA considered and rejected for a possible MRA treaty.
6. Expect More Unannounced Foreign Inspections
Foreign drug establishments should expect more unannounced FDA inspections due to FDORA Section 3615. Prior to the pandemic, FDA inspections of domestic drug establishments were almost always unannounced, while foreign establishments generally received advanced notice of their inspections. This disparity in treatment raised concerns, including within Congress and the GAO, that foreign facilities were being given the opportunity to fix problems before FDA investigators arrived. So much so, in a report accompanying FDA’s fiscal year 2021 appropriation, the House Appropriations Committee directed FDA to begin piloting the use of unannounced and short notice inspections in India and China and provided FDA funding to implement those pilots. In April 2022, FDA reported that unannounced foreign inspections had begun in India but had not yet begun in China due to local pandemic-related restrictions.
Section 3615 doubles down on direction to FDA in this area, requiring for the first time in statutory language that FDA conduct a pilot program to “increase the conduct of unannounced surveillance inspections of foreign human drug establishments[.]” Section 3615 further directs FDA to evaluate the observed differences between announced and unannounced inspections under the pilot, including the violations identified, costs, benefits, and any other significant differences, among other factors. Finally, FDA must produce a report on its findings and recommendations within 180 days after completion of the pilot.
7. Previously Sunset Provisions to Prevent Shortages in Enforcement Cases are Revitalized
In 2012, FDASIA established new statutory requirements in the FDCA to help prevent drug shortages, including FDCA Sections 506(D)(b),(c), and (e) requiring, before FDA takes an enforcement action or issues a warning letter that could reasonably be anticipated to lead to a drug shortage: 1) advance coordination with CDER’s Drug Shortage Staff; and 2) an evaluation of the relative risks associated with the violations at issue and the likely patient impact resulting from the anticipated shortage. Pursuant to FDASIA’s original sunset provision, however, these coordination requirements ceased to be effective in July 2017. FDORA Section 3616 reestablishes and makes permanent those coordination requirements. It is worth noting that coordination efforts on drug shortages have remained strong within FDA since July 2017, despite these provisions having sunset. Nevertheless, permanently building these coordination requirements into the statute is a welcome development. In addition, Section 3616 inserts a new provision, FDCA Section 506D(g), directing FDA to ensure timely and effective coordination between ORA, CDER Compliance, and CDER’s Drug Shortage Staff concerning the review of inspection reports and follow-up actions taken in response to those reports, concerning inspections of facilities that raise potential drug shortage implications.
8. Annual Report on Inspections
FDORA Section 3617 amends the requirements, first established in 2017 by Section 902 of the FDA Reauthorization Act (FDARA) (Public Law 115-52), for the FDA’s annual report on human drug and device inspections. Previously, the required report focused exclusively on inspections of facilities necessary to approve a drug or device, including: 1) the time it took to begin a requested facility inspection, as well as the timing for compliance actions following completion of the inspection (e.g., warning letters); and 2) the number of application approvals delayed or withheld because of these inspections. The Section 3617 amendments include a requirement to track the same information for drugs on the FDA shortage list as well as to convert the report from an annual to a fiscal year basis.
- FDCA Section 704(a)4) was previously limited to requests directed to “a person that owns or operates an establishment that is engaged in the manufacture, preparation, propagation, compounding, or processing of a drug[.]”
- See Conducting Remote Regulatory Assessments, Questions and Answers, Draft Guidance for Industry, July 2022, https://www.fda.gov/media/160173/download.
- In fiscal year 2021, CDER conducted 133 BIMO RRAs. See FDA Bioresearch Monitoring (BIMO) Fiscal Year 2021 Metrics, https://www.fda.gov/media/156517/download.
- See Remote Interactive Evaluations of Drug Manufacturing and Bioresearch Monitoring Facilities During the COVID-19 Public Health Emergency, Guidance for Industry, April 2021. During the pandemic, CDER conducted remote interactive evaluations using livestreamed video of operations as well as remote, live interactions with facility personnel to assess manufacturing facilities named in marketing applications, https://www.fda.gov/media/147582/download.
- See Regulatory Procedures Manual, Section 4-1-8 (“Usually, the standard for verifying that corrections have been implemented will be a follow-up inspection.”) (emphasis added), https://www.fda.gov/media/71878/download.
- FDORA Section 3612 adds new Section 704(a)(5) to the FDCA concerning the authority to conduct BIMO inspections.
- See e.g., United States – European Union Amended Sectoral Annex For Pharmaceutical Good Manufacturing Practices (GMPs), Article 11, https://ustr.gov/sites/default/files/IssueAreas/Manufacturing/20170119%20Pharma%20MRA
- See Frequently Asked Questions – [U.S./EU] Mutual Recognition Agreement, Question 13, https://www.fda.gov/media/103391/download.
- As of May 2020, only two percent of EU based drug manufacturing facilities were classified as OAI as compared to seven percent of U.S. based facilities. See FDA Testimony before the U.S. Senate Committee on Finance (Judith McMeekin), June 1, 2020, Figure 6, https://www.finance.senate.gov/imo/media/doc/02JUN2020.FDAJNT.STMNT.pdf.
- See House Committee on Appropriations Report 116-446, Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Bill FY21, p. 86, https://www.congress.gov/116/crpt/hrpt446/CRPT-116hrpt446.pdf.
About The Authors:
Donald D. Ashley, executive vice president of regulatory compliance at Greenleaf Health, is an expert in compliance and enforcement matters with 25 years’ experience with the FDA and the Department of Justice (DOJ), including six years as director of CDER’s Office of Compliance. Before joining the FDA, he spent nearly two decades at DOJ in both the Civil and Criminal Divisions prosecuting violations of the Food, Drug, and Cosmetic Act and other criminal statutes as well as managing investigations on the national and international level. Ashley earned his J.D. from Harvard Law School and an A.B. from John Carroll University.
Kalah Auchincloss, J.D., M.P.H., is executive vice president of regulatory compliance and deputy general counsel for Greenleaf Health. She has more than 15 years of food and drug legal, policy, and regulatory experience at the FDA, on Capitol Hill, and in the private sector. At Greenleaf, Auchincloss advises pharmaceutical and medical device companies on compliance, policy, and other regulatory issues. Before moving to Greenleaf, Auchincloss spent six years at the FDA in the Commissioner’s Office and in CDER’s Office of Compliance and Office of Regulatory Policy. She earned her J.D. from Georgetown University, her M.P.H. from Harvard University, and her B.A. from Williams College.