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FDA Confronts Mutual Recognition Reality

Medical Device & Diagnostic Industry Magazine
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An MD&DI August 1997 Column


Disgruntled FDA and EU officials couldn't reconcile differences before the scheduled May 28 signing of the mutual recognition agreement, and they face significant problems in the three-year transition ahead.

James G. Dickinson

Hailed with enthusiasm by the medical device industry at the end of May, the mutual recognition agreement (MRA) between the United States and the European Union (EU) still poses significant transitional problems, especially for an FDA trying hard not to look like a dinosaur.

One of those problems with the MRA is that FDA's officers in the compliance and enforcement group simply don't like it. Being loyal soldiers, however, these FDAers can't openly disagree with their commander in chief, at whose behest the MRA was negotiated. They can, however, quit. Unless their concerns are met by the agency during the MRA's three-year phase-in period, many probably will.

Their disagreement with the MRA hinges mainly on what they see as excessively loose wording that they fear will give too much latitude for interpretation. As originally drafted with FDA field organization input, the MRA language was much tighter. In that form, it met strong EU resistance, including an eleventh-hour formal protest from EU Commission president Jacques Santer to President Clinton claiming obstruction by unnamed U.S. regulatory agencies (assumed by everyone to mean FDA).

Under the pressure of a twice-deferred signature deadline of May 28, when Clinton would be in Europe for a much ballyhooed signing ceremony, the negotiators revised the wording to provide the wiggle room that now worries FDA enforcement staff. But even that change wasn't enough to produce an overall conclusion in time for the intended May 28 ceremony, and Clinton went on with his tour without signing the MRA.

Other disagreements were snagging the talks, mostly to do with drugs. Six subjects had separate draft MRAs, all to be embraced in an umbrella MRA--medical device approvals and inspections, pharmaceutical inspections, telecommunications equipment, recreational craft, electrical safety, and electrical compatibility. The medical device MRA was largely settled to the agreement of all parties, at least officially.

In contrast to the private views of many FDA staffers, an FDA paper issued on May 28 put the agency's public position plainly:

Under the MRA, both the U.S. and the EU may be able to save resources by relying on inspections of manufacturers conducted by the other country, thereby saving overseas travel time and expense. However, the MRA would only become operational after a three-year transition period comprised of rigorous joint activities designed to ensure that the inspections conducted by either party would be equivalent. Moreover, each party retains the right to conduct its own inspections, if needed.

For medical devices, the MRA also provides for premarket review of designated low and medium risk medical devices, beginning with the devices covered under FDA's third-party pilot program. Under the MRA, European notified bodies would participate in FDA's third-party pilot program by reviewing 510(k) applications against U.S. requirements, and submitting the review to FDA for final action.

During the three-year transition period, FDA would determine which European notified bodies have demonstrated proficiency to conduct such product reviews in a manner consistent with FDA standards. FDA would prepare written guidance on product testing requirements to help assure consistency in the review of similar applications by different notified bodies. This effort parallels a domestic program already under way to pilot 510(k) reviews conducted by designated third parties in the U.S.

For both inspections and premarket review, the paramount issue is that each party retains full control over the regulatory criteria that apply to products marketed in their country. The MRA recognizes this, and seeks to conserve resources by relying in large part on equivalent inspections or product reviews conducted in the other jurisdiction. This streamlines the process while maintaining the current high standards for health and safety of these products.

The failure of the president to sign the final MRA didn't prevent the Health Industry Manufacturers Association (HIMA) from issuing a May 28 news release applauding "a major trade agreement concluded today...that will boost U.S. economic growth and jobs by promoting greater two-way trade, increasing U.S. competitiveness in global markets, and eliminating regulatory redundancy and cost."

An official news release from the Office of the U.S. Trade Representative (USTR) was more reserved, declaring that outstanding issues had been "largely resolved" and expressing hope that "we will conclude an agreement in the next few days."

On one aspect of the less-than-conclusive MRA, both HIMA and the USTR were in complete agreement: The package would "serve to increase U.S. exports by saving manufacturers up to 10% of the cost of delivering U.S. exports to Europe," said the USTR statement, while HIMA observed that the MRA would save U.S. taxpayers millions of dollars a year by having EU third-party bodies conduct GMP inspections in place of FDA.

A third May 28 news release was less sanguine about the failure of the president to sign the MRA, while still emphasizing the economic importance of the negotiations. The European-American Business Council said it was "disappointed that negotiators failed to meet another deadline" and that it would seek "to ensure that the new deadline of 'soon' is just that."

Stripped of rhetoric, the struggle to reach general MRA consensus reflects a classic conflict between marketplace forces and governmental protectionism. Business representatives see only gains through lowering of governmental barriers to trade, especially where such barriers are seen as duplicative and excessive. Government officials such as those in FDA's enforcement division, by contrast, see only risk and endangerment of the public if the regulatory barricades being lowered are their own.

There are other, less-obvious challenges to the success of the MRA as well. Among these are the cultural and political differences between countries that the MRA must first bridge, then blend. For example, for 30 years the United States has had a tradition of government openness, primarily expressed in the Freedom of Information (FOI) Act. The act is derided by many as the "legalized industrial espionage act" (indeed, almost 80% of all FOI requests received at FDA are from or for companies researching their competitors). The FOI Act has spawned a myriad of entities and special interests that use information derived from formerly secret government documents to advance their respective causes in various forms of public dialogue.

Europe has no equivalent to the FOI Act, a deficiency that almost killed the MRA negotiations. In Europe, factory inspections by regulators and third-party auditors are treated as confidential. In the United States, however, all details other than statutorily-defined trade secrets and commercial or confidential data are publicly releasable. Under the MRA, if FDA delegates to an EU counterpart an inspection it would in the past have conducted itself, could it release the resulting report pursuant to the FOI Act? No, said the EU. The stalemate became a potential deal-breaker, but at the eleventh hour the EU relented.

That agreement, however, opened a new can of worms. Which documents are releasable, and how will U.S. requesters know to request them? In the United States, an inspection becomes public knowledge in two ways: first, FDA posts in its FOI office all warning letters (each suitably purged of trade secrets and commercial or confidential content), and second, FDA posts in the same office a daily FOI log that includes, among other things, requests for information on inspections that the requester has either heard about through the grapevine or that occurred at the requester's own facility.

Thus, FDA has a formal mechanism for advising the world about its own inspections. No such mechanism exists in EU countries. Under the MRA, which doesn't address this issue, FDA presumably would need to create a mechanism for advising the world about EU inspections done on its behalf.

FDA's enforcement community does not like the MRA for another reason. At a time when the FDA field organization's budget is reeling from unprecedented cuts, an official estimate predicts that the MRA would require as many as 50 full-time-equivalent personnel from the field organization to assess and evaluate, during a three-year transition period, the equivalency of EU and FDA inspections. That's a meaningful diversion of resources for an organization with 1100 investigators.

FDAers may wonder whether, after the three-year transition period is over, the turn-of-the-century Congress will let the agency keep the 50 investigators who will no longer be needed to do inspections in Europe. "Only one thing can save us," a long-serving senior enforcement official said, not too hopefully: "A major public health disaster in the meantime."

From the device industry's point of view, FDA's field organization may only be getting its just desserts after too many years of unnecessary officiousness, arrogance, and disruption of company operations. In any event, the concerns of the MRA naysayers do not appear to have received much consideration in the offices of FDA's highest policymakers.

Deputy commissioner for external affairs Sharon Smith Holston made no bones about her commitment to the MRA concept. She could not conceive of a future FDA, she said, that did not have an MRA with Europe. Budget realities, combined with new responsibilities assigned by Congress, were making it increasingly unlikely that FDA could do its job without MRAs.

Some FDA staffers may well wish to keep their agency in the past. But if Holston's views are any indication, FDA is not likely to turn into a regulatory dinosaur.

FDA-wide reform on the back of medical device legislation seems to be the aim of a bill filed in the House on May 22 by Joe Barton (R­TX) and Anna Eshoo (D­CA). Their bill (HR 1710) would give the agency a new mission statement; require General Accounting Office reports on its work "approving drug, device, and food products"; and authorize an FDA dispute-resolution procedure. The Center for Devices and Radiological Health (CDRH) gets attention in sections on a revised classification system, third-party review for most submissions, and limits on device tracking and postmarket surveillance. On the sponsor list are 10 of the Commerce Committee's 23 Democrats and all 28 of its Republicans.

In the Senate, Labor and Human Resources Committee chairman Jim Jeffords (R­VT) unveiled an omnibus FDA reform bill at a staff press briefing on May 28; it was filed on June 2, but despite avowals of a speedy markup, two days later it ran into opposition from Democrats led by Senator Edward Kennedy (D­MA). The consensus-driven bill covers devices, drugs, and reauthorization of the Prescription Drug User Fee Act and removes most of the provisions FDA objected to last year.

James G. Dickinson is a veteran reporter on regulatory affairs in the medical device industry.

Copyright ©1997 Medical Device & Diagnostic Industry
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