Current Regulatory Problems Facing API Manufacturers—One Man's Opinion


What is going on here? Why are so many problems being encountered by so many Active Pharmaceutical Ingredient (API) manufacturers, especially from India and China? Has the entire industry decided to ignore the rules of the game? Well, here is one man’s opinion on what is going on in the industry and what may be contributing to these problems.

When you invest almost 50 years working in the industry, you get an opportunity to see and experience a wide variety of human, industrial, and regulatory behavior. In fact, I tend to agree that “if you live long enough you will experience everything.”1 You will also discover that the English proverb: “what goes around comes around” could really be true! Current regulatory problems facing API manufacturers are not new, but have exhibited themselves over a long period of time and have included products such as bulk drugs (API), dosage forms, medical devices, food supplements, and just about every product produced and used by humans.

No, wait a minute! I have been too restrictive here. If anything involves people, it does not matter what their nationality, sex, religion, or any other human characteristic—it can and likely has occurred and will ultimately repeat itself when the right conditions, motivation, or opportunity exists. These occurrences can be good or bad, expected or unexpected, intentional or unintentional among many other possibilities.

Regulatory problems are not limited to any country, industry, large or small firm, or any other possible origin. They can and will happen to everyone, eventually! What is important to understand is how and why firms get into these situations and how public reactions and economics can play a major role in what develops over time.

The API Industry

From a US perspective, APIs have evolved into a truly worldwide industry. Fifty years ago, APIs were locally sourced whenever possible. This was particularly true for research-based pharmaceutical firms. With the growth of a large and expanding generic industry, and the worldwide expansion of chemical and pharmaceutical industries, the production of API increased outside of the US. International sourcing issues started to exhibit growing concerns for the world’s pharmaceutical industry. These issues included establishing a regulatory playing field that was balanced and met the requirements of GMP. For organizations such as the FDA and their equivalents around the world, this worldwide sourcing of compounds created challenges never before seen.

APIs are expected to be produced under GMP.2 Meeting API GMP is expected wherever the API-producing or consuming country is expected to comply with adopted ICH agreements. The original ICH Q7A guidance was issued for adoption by the members of the International Conference on Harmonization in November 2000 and was later renamed Q7 by the ICH, with no substantive changes other than the document title. ICH Q7A was officially adopted by all members of the ICH (ie, European Union, Japan, US) and ultimately accepted by many other countries around the world, as well as by the WHO. While WHO is not a member of ICH, WHO was an active participant in the Expert Work Group that negotiated and wrote ICH Q7A, which is the internationally accepted API GMP.

Historically, PhRMA and SOCMA asked FDA to increase its international drug inspections to assure that GMP is being appropriately applied no matter where a bulk pharmaceutical chemical or API is made. The US industry was concerned that FDA requirements for APIs being produced or used within the US were not being universally applied from one country to another around the world. For example, what was produced by foreign manufacturers was not always being inspected with the same frequency as US producers, and potentially not subject to meeting the same established standards due to the reduced level of oversight by the FDA. This reduced inspectional frequency and duration was seen as an increased risk to consumers and users of API sourced from outside of the US. Unfortunately, foreign contamination issues, whether intentional or unintentional, with diethylene glycol (DEG), melamine, or other substances further increased apprehension levels over the years.

Table 1 below is a snapshot of FDA Warning Letter activities from 2010 to part of 2014. Foreign inspections of API are historically driven by DMF references made by NDA/ANDA/DMF/Export Applications or CBER Drug Products for users of an API. While re-inspections of foreign API manufacturers do occur, the frequency has almost always been less frequent than what occurs for domestic producers of API. To deal with the criticism of FDA conducting too few foreign inspections, FDA decided to implement a risk-based inspection program. While I do not disagree with this approach, I am concerned that this particular program did little to catch the real issues that exist in less risky manufacturing.

Table 1. FDA Warning Letters (WL) Issued to Foreign Firms by Country*

If we focus only on sterile products, all other products can still be subject to poor GMP conditions which, under certain circumstances, can pose a real risk to the public. Some of the inappropriate conditions that have been recently uncovered by FDA would still exist if it were not for the more aggressive inspection program recently adopted by the agency.

I want to refer the reader back to the second paragraph of this article. My experience will suggest that if regulators don’t inspect firms for GMP compliance, there will always be a strong tendency to develop poor practices and allow deviations to exist which can be contrary to good science and effectiveness.

What has Gone Wrong?

When you don’t look, you don’t find. When you walk down a street and never look at the sidewalk, you have a very high likelihood to miss seeing the banana peel that will cause you to fall and injure yourself. You can and will miss defective materials and products. Not looking may allow or even cause an ineffective or life-threatening product to be used and distributed.

First, let’s recognize that everyone can make a mistake. Even the best firms and people are subject to this human frailty. However, when you find a system or operating practice that repeats itself, you have a deficiency that must be addressed. My experience reinforces the need to be sure that regulatory reviews—whether performed by a manufacturer itself, an API user firm, or officially by a government agency such as the FDA—must be routinely performed. For simplicity, I will identify these regulatory reviews as “inspections.” The absence of these “inspections” will have the same effect, in my opinion, as having a city with no official police force to assure compliance with the rules. Without that function, not only will simple mistakes take place, but intentional and unintentional deviations are certain to occur. I can guarantee that without “inspections,” GMP deviations will certainly occur, and the frequency of these deviations will grow as the time between “inspections” increases! It is this last point that motivated the US industry to do what was mentioned earlier in this article: petition the FDA to assure that foreign manufacturers of APIs (then called bulk pharmaceutical chemicals) are inspected with the same frequency and requirements as domestic API manufacturers.

Unfortunately, the FDA was not able to really increase their inspections due to budget constraints, staffing levels, and the reality of a significantly larger number of foreign firms exporting into the US. Then in 2002, with a final report issued in 2004, the FDA announced its “Pharmaceutical CGMP for the 21st Century” initiative, a program that recognized the FDA Commissioner’s approach that included a risk-based initiative to pharmaceutical quality and inspections. This approach better utilized FDA resources and allowed industry to better implement technology. It would help prioritize the GMP compliance work of the FDA. However, the examination of the ever-growing foreign supply chain continued to strain the FDA’s inspectional resources, and, as I have already mentioned, you need to look at firms. Not looking does not work.

What occurred in China, India, and other foreign locations are glaring examples of how not looking leads to significant GMP problems for all concerned parties.

I am not going to cover all deviations that have been found during the most recent issues cited in Warning Letters. I just want to illustrate the pattern of deficiencies and discuss why they may have occurred and how they are/were preventable.

I will not discuss in this article outright fraud or illegal intentional adulteration of products. Firms that are guilty of such actions are intent on ignoring the public health and motivated by outright greed. They have no regard for their own company’s or country’s reputation and certainly have no regard for their customers or the public in general. What I do want to discuss are the deviations that occur for other reasons than what was just noted: what is happening, why they are occurring, and what needs to change.

In my opinion, what has gone wrong is that normal or expected corporate behavior has shifted without the migration being recognized. As I noted above, human behavior needs to be monitored and rechecked to assure a reliable conformance with established standards. This is especially important when the standards are established under different cultural and even timeframe environments. What is normal for one is not normal for another. We need on-site reviews and inspections to verify acceptable performance of GMP compliance. The Russian proverb, “Trust but verify,” used by President Ronald Reagan during his term in office, is an important element when discussing API GMP!3

For the period from 2010 to 2014, the FDA issued a significant number of General Warning Letters based upon a search of the FDA website.4 Table 1 summarizes the total number of Warning Letters issued and the number of those letters that covered API firms. What follows is just a sampling of issues cited by FDA during 2013 and 2014. The purpose of discussing the findings cited by the agency is to see if there is any visible pattern. Let’s quickly look at some of the issues listed in these FDA letters.

Pharmaceutical labeler/relabelers facilities5

  • Failure to maintain complete records of your APIs
  • Failure to transfer all quality or regulatory information received from the API manufacturer to your customers
  • Failure to control repackaging, relabeling, and holding operations in order to avoid mix-ups and the loss of the API identity
  • Failure to have a Quality Unit responsible for reviewing and approving CGMP documents and procedures, and assuring product quality
  • Mislabeled container was found. The practices resulting in this mislabeling incident can pose a severe hazard to consumers
  • Failure to maintain complete records for APIs
  • Misbranding Deviations noted by FDA

Laboratory Operations6

  • Failure to perform laboratory testing of APIs to ensure conformance to specifications and to accurately report results on Certificates of Analysis
  • Failure to maintain complete data derived from all laboratory tests
  • Failure to ensure equipment is cleaned in a reproducible and effective manner
  • Failure to ensure that APIs are produced according to pre-approved instructions

Laboratory computer system failed to have systems to prevent manipulation of data—lacked audit trails (IT)7

  • Failed to prevent unauthorized access or changes to data
  • Failed to ensure that employees receive appropriate and documented training

Failure to maintain complete and accurate lab test data8

  • Failure to maintain and make available for inspectional review production and control records
  • Inadequate investigations of critical deviations or a failure of a batch to meet its specifications

Firm is missing the fundamental raw data and information9

  • Firm frequently performs “unofficial testing”

CGMP Violations included10:

  • Failure to implement an effective system of managing quality and failure to transfer all quality or regulatory information received from the API manufacturer to your customers
  • Failure of the quality unit to review batch production records prior to distribution of an API batch
  • Failure to document manufacturing operations at the time they are performed
  • Failure to adequately maintain equipment

FDA cited specific violations observed by agency investigators11:

  • Failed to protect computerized data from unauthorized access or changes
  • Failed to ensure that test procedures are scientifically sound and appropriate to ensure that key starting materials and intermediates conform to established standards
  • Failed to follow and document quality-related activities at the time they are performed

Table 1 illustrates what has been happening since 2010 with API Warning Letters being issued by the US FDA to API manufacturers. While the table shows that Warning Letters issued to API-related firms are a small percentage of the total written by the FDA, it is important to note the significant jump that has been noted for 2014. This increase is directly associated with increased surveillance by FDA of foreign API firms.

Why the GMP Deviations?

Many factors contribute to why a firm or industry can experience GMP deviations. Based upon my experience, these 5 elements capture many of the contributing factors that are resulting in GMP violations recently being cited by FDA. In my opinion, addressing these 5 factors will go far in improving GMP compliance levels around the world!

  1. Firms either do not understand what is expected by API GMP or do not care to comply because they don’t believe they are required to comply if they want to sell their materials domestically or export their products.
  2. If employee or management understanding is a broad deficiency, then serious API GMP training is needed. These firms don’t really understand the intent written into the API GMP. Anyone that has received training and understands the intent of ICH Q7, in my opinion, should not be violating so many fundamental GMP expectations.
  3. If culture and pride do not drive organizations to do their best to comply with API GMP, then economic and trade risks will need to keep firms on target. If this doesn’t work, then those firms need to go out of business. This can happen only if regulators prohibit their products from being imported into countries.
  4. While cultural differences can impact how firms accept and apply regulatory expectations from other countries, this must not be allowed to undermine drug or product safety. Data integrity with proper documentation and operational practices must always exist no matter where a material is produced or tested.
    Yes, there will always be the occasional misstep, but any acts by personnel that indicate a culture intent on hiding or removing data for the purpose of allowing defective materials/products to be used or distributed should never be tolerated. The FDA and the management of any firm must assure that data integrity exists.
  5. In my opinion, a major contributor to having GMP deviations is the lack of oversight by regulators and from firms purchasing API materials. If you examine some of the referenced Warning Letters, you will note that in one correspondence about 6 years had passed before there was another inspection of a particular firm. The letter notes that the same deficiency was noted 6 years earlier and still exists! A significant failure to implement “trust but verify”! This failure to verify and therefore allow shipments and sales into other countries undermines the public health, and increases risks to consumers and the public in general.

You need to recognize that since the FDA increased its focus on API firms in certain countries, as noted by the most current numbers of Warning Letters, the governments of those API firms have put the pressure on to address the risks being faced. This combination of internal and external regulatory pressure will either work and we will see a reduction in GMP deviations, or not work and the firms will fail due to customer and public pressure caused by repeated deviations.

What Needs to Happen?

Deviations from GMP are preventable. Understanding the intent of API GMP, applying procedures and systems designed to address the intent, and strong commitments from the management of firms and their personnel will go a long way to assuring API GMP compliance. Anyone that truly has serious GMP deficiencies doesn’t care about their quality.

They may not care about GMP compliance, but I do!


  1. Torricelli R., Xplore Inc, 2014. Available at: quotes/quotes/r/roberttorr404413.html. Accessed November 10, 2014.
  2. U.S. Department of Health and Human Services; Food and Drug Administration; Center for Drug Evaluation and Research (CDER); Center for Biologics Evaluation and Research (CBER). Guidance for Industry, Q7A Good Manufacturing Practice Guidance for Active Pharmaceutical Ingredients. August 2001, ICH.
  3. Reagan R., Xplore Inc, 2014. Available at: quotes/quotes/r/ronaldreag147717.html. Accessed September 13, 2014.
  4. U.S. Food and Drug Administration. Inspections, Compliance, Enforcement, and Criminal Investigations. Warning Letters. Available at: EnforcementActions/WarningLetters/default.htm. Updated November 9, 2014. Accessed November 10, 2014.
  5. U.S. Food and Drug Administration. Inspections, Compliance, Enforcement, and Criminal Investigations. Warning Letters. FDA Warning Letter (WL: 320-14-02) Issued January 31, 2014. Available at: ucm384794.htm. Updated February 6, 2014. Accessed November 10, 2014.
  6. U.S. Food and Drug Administration. Inspections, Compliance, Enforcement, and Criminal Investigations. Warning Letters. FDA Warning Letter (WL: 320-14-04) Issued February 27, 2014. Available at: ucm387960.htm. Updated March 10, 2014. Accessed November 10, 2014.
  7. U.S. Food and Drug Administration. Inspections, Compliance, Enforcement, and Criminal Investigations. Warning Letters. FDA Warning Letter (WL: 320-14-10) Issued July 7, 2014. Available at: ucm404316.htm. Updated July 14, 2014. Accessed November 10, 2014.
  8. U.S. Food and Drug Administration. Inspections, Compliance, Enforcement, and Criminal Investigations. Warning Letters. FDA Warning Letter (WL: 320-14-005) Issued March 6, 2014. Available at: ucm390278. Updated April 1, 2014. Accessed November 10, 2014.
  9. U.S. Food and Drug Administration. Inspections, Compliance, Enforcement, and Criminal Investigations. Warning Letters. FDA Warning Letter (WL: 320-14-08) Issued May 7, 2014. Available at: ucm397054.htm. Updated May 19, 2014. Accessed November 10, 2014.
  10. U.S. Food and Drug Administration. Inspections, Compliance, Enforcement, and Criminal Investigations. Warning Letters. FDA Warning Letter (WL: 320-14-12) Issued July 9, 2014. Available at: ucm406835.htm. Updated July 28, 2014. Accessed November 10, 2014.
  11. U.S. Food and Drug Administration. Inspections, Compliance, Enforcement, and Criminal Investigations. Warning Letters. FDA Warning Letter (WL: 320-13-23) Issued August 2, 2013. Available at: ucm365427.htm. Updated August 20, 2014. Accessed November 10, 2014.

Max Lazar retired from Hoffmann-La Roche Inc. in 2001 after 35 years, where he was Vice President, FDA & DEA Compliance. In that position, he was responsible for compliance oversight of all of the Roche USA businesses including Active Pharmaceutical Ingredients, Pharmaceuticals, R&D, Diagnostics, Fine Chemicals and Vitamins. Following his retirement, he established a consulting business specializing in API GMP issues and the training of personnel covering the ICH Q7A Guidance as well as the Excipient GMP (IPEC) Guidance.

His almost 50-year career in the Pharmaceutical Industry includes numerous memberships and chairs of professional committees. He founded and chaired Pharmaceutical Manufacturers Association’s (PMA) Bulk Pharmaceutical Committee of the Quality Control Section. This chair lasted through the reorganization of PMA into PhRMA and until his retirement in 2001. Max was named by PhRMA, Topic Leader and voting member of the ICH Expert Work Group Q7A team that negotiated and developed the ICH API GMP document.

For his contribution to Q7A, he was awarded the USA FDA Commissioner’s Special Citation “for outstanding cooperation and achievement in development an internationally harmonized good manufacturing practice guidance for active pharmaceutical ingredients used in human drug products.” He was Vice Chair of the USP Pharmaceutical Waters Expert Committee (2000- 2005), re-elected to another 5-year term (2005-2010) as a member on this USP Expert committee, and is currently an official member of the USP Water Panels (2010-2015).

Max Lazar can be contacted via email at: [email protected]

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