March 6, 2017

Impact of the EU-US Mutual Recognition Agreement on Pharmaceutical Product Inspections


The Mutual Recognition Agreement: An Overview

It has been a long journey for the European Union (EU) and the United States of America (the USA) to reach the current form of the Mutual Recognition Agreement for Good Manufacturing Practice (GMP). From a historical perspective, in 1998 the EU and the USA entered into a Mutual Recognition Agreement (MRA), and while it included provisions concerning current Good Manufacturing Practices (GMPs) for medicines, the relevant annex was never fully implemented. In fact, Article 1.3 of the Annex contained two definitions of "Good Manufacturing Practices" and stated "the US and EC [European Community, now EU] have agreed to revisit these concepts." Since May 2014, regulatory authorities on both sides of the Atlantic have re-energized the initiative to reach an agreement to amend the original sectoral Annex for GMP of the MRA. The updated revised agreement took effect on 1 March 2017 following the signature of the USA and the European Commission, which took place on 19 January 2017 and 1 March 2017, respectively.

A response to the challenges posed by an increasingly global drug supply chain, the purpose of this MRA on GMPs is to allow the US Food and Drug Administration (FDA) and relevant regulatory authorities in the EU to rely on the results of each other's GMP inspections to facilitate cross-border movement of medicines between the two trading partners, and improve oversight of manufacturing facilities.1 The MRA extends the ongoing collaboration and cooperation in relation to various regulated activities between the two regions.

The updated agreement is a result of successful cooperation between the European Commission, the European Medicines Agency, and FDA. The agreement has entered into force, and the recognition of inspections can apply as early as November of 2017 when it is expected that the EU will have completed its assessment of the FDA. FDA is also expected to have completed its assessment of at least eight EU Member States by that time, and will progressively expand that effort to all EU Member States.

A Joint Sectoral Committee will monitor the implementation of the GMP MRA and has authority to amend the GMP annex in certain respects, such as to update the products within the scope of the MRA or adopt technical and administrative arrangements for effective implementation.2

Once the GMP annex takes effect, it will impact the following principal areas:

  • exchange of information between the FDA and regulatory authorities in the EU;
  • trade of medicinal products and their constituent ingredients between the regions; and
  • GMP inspections.

Products Currently Covered by the MRA at this Time

The MRA applies to post-approval products and, to an extent, pre-approval products for human and veterinary products. Appendix 3 contains an indicative list of the products covered by the MRA and includes the following3:

  • investigational products (clinical trial material);
  • marketed finished pharmaceuticals for human use (including homeopathic products and herbal products which are regulated as medicines by the EU and FDA);
  • marketed biological products such as vaccines for human use, plasma derived pharmaceuticals, therapeutic biotechnology-derived products, and allergenic products;
  • intermediates (for the EU) and in-process materials (for the USA);
  • active pharmaceutical ingredients or bulk drug substance; and
  • veterinary products.

These products are covered by the MRA to the extent that they are regulated by the authorities of both regions. However, human blood, human plasma, human tissues and organs, and veterinary immunologicals are excluded from the MRA.

Conditions for Mutual Acceptance of Inspections

Mutual recognition of GMP inspections and official GMP documents will not take place until both parties have assessed the regulatory authorities in the other region. The MRA is based on the guiding principle of equivalence, which is defined to mean that the regulatory system under which an authority operates is sufficiently comparable to assure that the process of inspection and the ensuing official GMP documents will provide adequate information to determine whether respective statutory and regulatory requirements of the authorities have been fulfilled. In the context of the MRA, equivalence does not require that the respective regulatory systems have identical procedures.

In order to determine whether to recognize an authority under the MRA framework, FDA and EU national competent authorities are subject to reciprocal assessments against the following agreed criteria set out in Appendix 4:

  • the legal authority to inspect against a standard for GMP;
  • the legal authority to manage conflict of interest in an ethical manner;
  • the ability to evaluate risks and mitigate them;
  • appropriate regulatory oversight of manufacturing facilities within its jurisdiction;
  • availability of sufficient resources;
  • availability of trained and qualified inspectors with the skills and knowledge to identify manufacturing practices that may lead to patient harm; and
  • availability of the tools necessary to take action to protect the public health arising from poor quality drugs or medicinal products.

Appendix 4 also establishes a procedure for assessment of EU authorities by FDA. Under this procedure, each EU Member State authority must submit a "capability assessment package" containing a variety of information (which FDA may modify on a case-by-case basis), such as inspection reports, standard operating procedures, and a conflicts of interest questionnaire. FDA then has 70 days from the date on which it receives a translation of all requisite information to make an initial capability determination. The Appendix further specifies that FDA will "dedicate two capability assessment teams" and will therefore conduct assessments of two Member State authorities at any given time.

Since the FDA is the only regulatory authority in the USA, the EU's task is less onerous and is targeted for completion by 1 July 2017. FDA will have to assess the regulatory authorities in all 28 EU Member States, which is scheduled for completion in accordance with the timelines in Appendix 5. Specifically, Appendix 5 sets out the following schedule for FDA to complete assessments:

  • 1 November 2017: eight assessments
  • 1 March 2018: four additional assessments
  • 1 June 2018: two additional assessments
  • 1 December 2018: six additional assessments
  • 15 July 2019: eight additional assessments4

Nonetheless, both regions have the right to suspend recognition of a recognized authority in an objective and reasoned manner.5 Once the assessment process is complete, each region will recognize pharmaceutical inspections and accept "official GMP documents" issued by a recognized authority of the other region for manufacturing facilities located in its territory, unless there is indication of material inconsistencies or inadequacies in an inspection report, quality defects identified in the post-market surveillance, or other specific evidence of serious concern in relation to product quality or consumer safety.6

Processing, packaging, testing, and sterilizing facilities, including contract facilities performing these functions located in the USA and the EU, are all subject to the MRA.

Acceptance7 of official GMP documents issued by a recognized authority of the other party for manufacturing facilities located outside the territory of the issuing authority is at the discretion of each region, and the MRA allows them to individually determine the terms and conditions under which it accepts such documents.

FDA does not routinely inspect all manufacturing facilities for investigational products during the conduct of clinical studies, although a pre-approval inspection is routinely conducted as part of the review of the approval application. In the EU, sites which manufacture investigational products are susceptible to GMP inspection given that the GMP requirements for such products are now aligned with that of marketed products. The updated agreement now allows regulatory authorities to carry out inspections of sites engaged in the manufacture and control of pre-approval products at the request of another.8

Mechanism for Greater Information Sharing

The MRA contemplates that regulatory authorities of one region may request official post-approval GMP documents from the other. If they consider it necessary to do so, they can ask the other region to conduct a new inspection.

Regulatory authorities of the two regions are required to inform and consult each other on proposals to introduce new controls or for changes to existing technical regulations or significant changes to pharmaceutical inspection procedures, and to provide the opportunity for the other region to comment on such proposals.

A database will be established to facilitate the exchange of official GMP documents and other information relating to the inspection of a manufacturing facility, as well as information concerning any confirmed reports relating to GMP non-compliance, corrective actions, recalls, rejected import consignments, and other regulatory and enforcement problems for products covered by the MRA.

In addition, both regions are required to maintain a system to alert the regulatory authorities of quality defects, recalls, counterfeit, or falsified products or potential serious shortages and other problems concerning quality or non-compliance with GMP, which could necessitate additional controls or suspension of the distribution of the affected products.

Notwithstanding the foregoing, the MRA permits each region to retain the right to inspect a manufacturing facility in the territory of the Party. However, it is expected that the exercise of such rights will ultimately be exceptional.

Possible Effect of Reducing Trade Barriers

In the EU, the Qualified Person (who is personally responsible for certifying batch release, including importation testing of product batches from outside of the EU) will be relieved of the responsibility of verifying that medicinal products have been manufactured in accordance with GMP prior to authorizing batch release of products onto the market, provided that the following conditions are met:

  • the equivalent controls were carried out in the US;
  • the product was manufactured in the US; and
  • each batch/lot is accompanied by a batch certificate issued by the manufacturer certifying that the product complies with requirements of the marketing authorization and signed by the person responsible for releasing the batch/lot.

For the US, while initially FDA will have to expend resources to determine whether a foreign regulatory authority is a "capable authority," once this determination has taken place, FDA will be able to focus its resources on nations where drug manufacturing has greatly increased, and prior inspections have suggested risk-based prioritization, such as India and China. According to FDA, over the last 5 years about 40 percent of FDA's drug inspections were performed in the EU. Under the new framework, a regulatory authority conducting its own inspection of a manufacturing facility in the territory of another party to the Annex should become an "exception to the normal practice."9

Impact of 'Brexit'

The United Kingdom's (UK) eventual departure from the EU is likely to take the UK outside the scope of this MRA, given that MRA is an agreement between the two trading blocs. FDA has indicated that once the UK has finalized the terms on which it will leave the EU under Article 50 of the EU Treaty, the FDA and the Medicines and Healthcare products Regulatory Agency acting on behalf of the UK licensing authority will re-examine existing commitments between the two countries and, if necessary, renegotiate any existing agreements. FDA did not comment on what the USA position would be if new commitments or agreements are required to implement an MRA with the UK separately. This may present uncertainty about the possible cross-border movement of pharmaceutical products between the USA and the UK post-Brexit.

*Bethan Jones contributed to this Advisory. She is a graduate of the University of Pennsylvania Law School employed at Arnold & Porter Kaye Scholer LLP. Ms. Jones is not admitted to the District of Columbia Bar.

  1. Article 2.

  2. Article 14.

  3. Veterinary products may be included to the extent that they are added to the list by the Joint Sectoral Committee pursuant to Article 20.

  4. While FDA has not provided insight regarding when these assessments will take place, since May 2014, FDA and the EU have been working together through the Mutual Reliance Initiative to "evaluate the way they each inspect drug manufacturers" and assess "the risk and benefits of mutual recognition of drug inspections." As part of this initiative, FDA has observed more than 12 audits of drug inspectorates across the EU.

  5. Article 13.

  6. Article 8.

  7. Acceptance of an official GMP document means to rely on the factual findings in such a document.

  8. Article 11.

  9. Article 18.

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