Author: Orphan Drug Consulting

On 20^th March 2020 the EU-GMP Guideline of Annex 21 ‘Importation of Medicinal Products’ was published as a draft.  In addition to the guidance outlined in the main chapters and annexes, it was a thought that there was a need to publish a specific guideline on importation of medicinal products under a dedicated annex of the GMP guideline.

The annex outlines the principles and guidelines applicable to a manufacturing import authorisation (MIA) holder which imports medicinal products (human and veterinary) through the EU/EEA borders

In the guideline, importation refers to the action of physically bringing medicinal product from outside the EEA/EU and implies the requirement for physical importation and customs clearance before certification by the Qualified Person (QP).

When the draft concept paper for Annex 21 was originally published back in May 2015, it was anticipated that the implementation would bring standardised rules for import with an impact on supply chains as well as tax and legal implications. It was thought that the physical and financial flows of product would have to match and that “importation” from a regulatory point of view would be defined as the point in time when the title of goods changed from a non-EEA/EU company to an EEA/EU company.

This draft annex aims to clarify the application of GMP principles in the importation of Medicinal Products and the sites which are considered to have specific responsibilities and required to have a Manufacturing Import Authorisation (MIA) are the:

• Site(s) of physical importation

• Site(s) of QP certification of imported products

This draft does not cover unlicensed products nor products which are imported and directly re-exported and the issue of fiscal importation is no longer addressed in this draft. 

This new annex lays out specific requirements for these sites including a documented pharmaceutical quality system, product quality reviews, appropriate premises and equipment, documentation and operational expectations and appropriate systems for handling complaints, quality defects and product recalls. Contractual agreements must also exist between all companies or persons involved in the import activity.

The annex also lays out and clarifies the responsibilities of the QP in conjunction with that already specified in Annex 16. It reinforces the need for maintaining QP oversight of activities performed in the third county; ensuring EU GMP equivalence and MA compliance for manufacturers and exporters through audits and review of documentation. Import testing continues to be a requirement within the EEA/EU unless a Mutual Recognition Agreement or equivalent exists.

The draft will be subject to consultation between March 2020 and June 2020 with a deadline for it coming into operation still to be determined.

Questions you may need to think about

• What needs to be considered by Marketing Authorisation Holders and MIA Holders?
• What key considerations should the QP be thinking about?

If you would like to discuss the potential implications for your supply chain, Orphan Drug Consulting would be happy to help. Please contact us below.   

DISCLAIMER:
The information presented within this blog is for illustration purposes only and is not to be considered as professional advice.Any information related to health contained within this article is not a substitute for appropriate medical advice from licensed healthcare professionals.

References

https://ec.europa.eu/health/medicinal_products/consultations/importation_medicinalproducts_en
https://www.gmp-compliance.org/gmp-news/eu-gmp-annex-21-finally-published

On 31^st of December 2019, a cluster of pneumonia cases with unknown aetiology were reported in Wuhan, China. At the time, healthcare professionals could not identify the causative agent for these seemingly related incidents but on the 7^th of January the Chinese authorities confirmed a novel coronavirus (nCoV) was responsible for the disease. This virus is now known as SARS-CoV-2, and the resulting disease presenting in patients infected with this coronavirus is known as COVID-19.

SARS-CoV-2 has gone on to infect more than 200,000 people in 170 countries worldwide, causing over 8,000 deaths, and COVID-19 was officially declared a pandemic by the World Health Organization (WHO) on the 11^th of March 2020. In response to the growing infection rates of this virus, we have seen unprecedented measures being brought into countries such as Italy and China where mass quarantine conditions have been introduced to curb the spread of infection. It is too early to quantify the full impact of COVID-19 on the global economy, however recent analysis by McKinsey & Company has predicted three potential scenarios: “quick recovery”, “global slowdown” and “pandemic and recession”. In each scenario, a range of factors are considered such as controlling the spread of COVID-19, individual governmental responses and the transmissibility of the virus over time. The most pessimistic scenario of the three, (“pandemic and recession”) predicts global growth in 2020 falling to between –1.5% and 0.5% with a resulting recession.

Indian and Chinese Pharmaceutical Supply Chains

The distribution of pharmaceuticals is a complex process with materials often being transported to multiple different countries before ever reaching patients. Players involved in this process can include active pharmaceutical ingredient (API) manufacturers, contract manufacturing organizations (CMO’s), primary packagers, secondary packagers, wholesale distributors and patient-facing organizations such as hospitals and pharmacies. While many of the larger pharmaceutical companies may have a large proportion of production in-house, smaller companies may be entirely outsourced for their production needs. This supply chain is also guided by stringent procedures to prevent occurrences like the introduction of falsified medicines and batch failure resulting from uncontrolled environmental conditions, making it even more challenging to navigate.   

Many biopharmaceuticals may be manufactured in USA and Europe but when it comes to generic pharmaceuticals there are two main players in the pharmaceutical manufacturing industry that account for a significant portion of global medicine production – China and India. At present, approximately 20% of the world’s API’s are produced in China which makes it the global leader with an annual production capacity exceeding 2 million tons. India is currently the largest worldwide supplier of generic medicines which account for 20% of global exports in terms of volume, supplying over 50% of worldwide demand for various vaccines, 40% of generic demand in the US and 25% of all medicine in UK.

What is important to consider is that while both countries have not seen the same effects of COVID-19, they are linked through their supply chains so one can impact the other. Currently India has less than 160 confirmed cases of COVID-19, while China has been the worst hit country globally with over 80,000 cases which has led to mass quarantines and restriction of movement of millions of people. The issue with supply comes from the fact that India imports approximately 70% of API’s required for production of medicines from China. The 14-day quarantine period associated with COVID-19 and closure of factories in China poses a risk to this supply chain. In general, Indian pharmaceutical companies keep 2-3 months of safety stock regardless, as a contingency to potential supply issues from China. However, recent restrictions imposed by the Indian government on the export of pharmaceuticals poses a potential risk to global supply chains. Even with pharmaceutical companies in India lobbying to have these restrictions lifted, at present there is a list of 26 different API’s including multiple antibiotics, hormones and vitamins that the government has temporarily restricted export of so that their domestic needs can be accounted for first. The date at which this restriction will be lifted is currently unknown which has led to uncertainty in global markets.

The European Medicines Agency’s Response to Potential Disruptions in Supply Chain

The European Medicines Agency (EMA) has implemented several plans and procedures to support the industry in the fight against COVID-19:

1. 4^th February 2020: the EMA activated its Health Threats Plan in order to coordinate efforts for the fast-track of potential vaccines and treatments for COVID-19.
2. 10^th March 2020: the European regulatory network of national competent authorities began formally assessing the impact COVID-19 could have on pharmaceutical supply chains.
3. 11^th March 2020: to reduce potential spread of infection the EMA begins holding virtual committee and working party meetings in place of face-to-face.
4.  12^th March 2020: fees associated with scientific advice are waived for companies working in treatments and vaccines for COVID-19.

While this is a volatile and unprecedented situation, it is important to note that as of 10^th March 2020 there are no reported supply chain disruptions or medication shortages in Europe linked to the spread of COVID-19. As part of the EMA’s efforts to maintain supply chains, an executive steering group is set to identify and coordinate EU-level measures in response to this pandemic. This group is made up of representatives from multiple agencies/departments including the European Commission, the EMA, national medicines agencies, the CMDh (Coordination Group for Mutual Recognition and Decentralised Procedures – Human) and the CMDv (Coordination Group for Mutual Recognition and Decentralised Procedures – Veterinary). Organisations are now being asked to perform risk assessments on their supply chains to identify potential weak spots before they become an issue. The EMA itself is also reviewing manufacturing information on centrally authorised medicines to proactively identify supply risks. In order to maintain a clear and consistent method of communication, the single point of contact network is to be utilised during this outbreak. This network began piloting in April 2019 as a means to improve information sharing between EU member states, the EMA and the European Commission on the supply of medicines.

Business Continuity

Many companies will have business continuity programmes in place already as part of an overall company risk and resiliency programme. These programmes help facilitate the management of and recovery from crises or disruptions such as we are currently experiencing and are there to ensure that essential functions and operations can continue. Larger companies in our industry will often benefit from having a mature suite of standard operating procedures and significant cross training of staff. Smaller companies may often be highly dependent upon key individuals which can present risk.

Orphan Drug Consulting, through its Supply Chain team, are keeping abreast of the current situation and advising its clients accordingly. Having established supply chain strategies for multiple clients, risk mitigation through implementing second source strategies, strategic safety stock programmes and alternate shipping route qualification, such programmes are now demonstrating their value.

Orphan Drug Consulting remains committed to doing all it can to mitigate supply issues for its clients and we encourage any company who would benefit from our guidance to reach out to us and avail of free advice during this challenging period.

DISCLAIMER:
The information presented within this blog is for illustration purposes only and is not to be considered as professional advice. Any information related to health contained within this article is not a substitute for appropriate medical advice from licensed healthcare professionals.

References

https://dcatvci.org/6389-eu-moves-to-mitigate-potential-disruptions-in-drug-supply
https://economictimes.indiatimes.com/industry/healthcare/biotech/pharmaceuticals/pharma-cos-ask-govt-to-lift-apis-export-restrictions/articleshow/74558607.cms?from=mdr
https://www.cdc.gov/coronavirus/2019-ncov/summary.html
https://www.ema.europa.eu/en/human-regulatory/overview/public-health-threats/coronavirus-disease-covid-19
https://www.ema.europa.eu/en/human-regulatory/post-authorisation/availability-medicines#eu-level-coordination-on-medicines-availability-section
https://www.fiercepharma.com/manufacturing/india-s-restrictions-api-exports-only-temporary-official-says-report
https://www.ibef.org/industry/indian-pharmaceuticals-industry-analysis-presentation
https://www.mckinsey.com/business-functions/risk/our-insights/covid-19-implications-for-business?_lrsc=7a8a3dca-f296-4baa-b099-d7e27428efcd&cid=other-soc-lke
https://www.nejm.org/doi/full/10.1056/NEJMoa2001191
https://www.pwc.com/gx/en/pharma-life-sciences/pharma-2020/assets/pharma-2020-supplying-the-future.pdf
https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(20)30459-1/fulltext
https://www.who.int/emergencies/diseases/novel-coronavirus-2019/technical-guidance/naming-the-coronavirus-disease-(covid-2019)-and-the-virus-that-causes-it
https://www.who.int/phi/publications/2081China020517.pdf
https://www.worldometers.info/coronavirus/

The United Kingdom (UK) voted in a referendum on June 23^rd, 2016 to leave the European Union (EU), by 52% to 48%, leaving the Single Market and the Customs Union. While the referendum was not legally binding, the UK government at the time promised to honour the result.  The UK has population of over 66 million. The makeup is, England (84.25%), Scotland (8.2%), Wales (4.7%), and Northern Ireland (2.8%). Interestingly, both Northern Ireland and Scotland voted in the referendum to remain in the EU.

This ‘Brexit’ (exit of the UK from the EU) was due to happen on 29 March 2019. That was two years after then Prime Minister Theresa May triggered Article 50, the formal EU process to leave. However, the Brexit date has been delayed twice. The UK (led by Theresa May) and the EU agreed a deal in November 2018, but Members of Parliament (MPs) voted to rejected it three times. Since then there has been an extension to the Brexit deadline out to the 31st October 2019.

The single market refers to the EU as one territory without any internal borders or other regulatory obstacles to the free movement of goods, services and people between all 28 EU member states (as well as Iceland, Norway, Liechtenstein and Switzerland, who are members of the European Economic Area). Countries in the single market apply many common rules and standards. The EU Single Market currently accounts for 500 million consumers and 21 million small and medium-sized enterprises. The single market is at the heart of the EU project.  Its aim is to stimulate competition and trade, improve efficiency, raise quality, and helps to cut prices.

The customs union ensures that all EU countries charge the same taxes on goods coming in from outside. They do not charge taxes on each other’s goods, but members cannot strike their own trade deals. This is a crucial point and part of the reason parliament voted not to accept the agreed deal.

The EU is the world’s largest trading block. Its GDP was estimated to be $18.8 trillion in 2018, representing about 22% of the global economy.  Together with the United States and China, the EU is one of the 3 largest global players in international trade. It has significant trade deals with other economies around the world having recently done trade deals with Japan and Canada. These trade deals can sometimes take years to negotiate.

The deal that was agreed between the UK and EU (the withdrawal agreement) but not approved by the UK parliament, covers the following critical areas (and many more):

• Citizens’ rights, both of UK citizens in EU countries and vice-versa,
• Border arrangements and customs, particularly along the border between the UK and the Republic of Ireland
• The law, and the mechanisms for resolving disputes, currently vested with the European Court of Justice

The agreement also sets up a transitional period, which lasts until 31 December 2020 and can be extended once by mutual consent. During the transitional period, the UK would remain a member of the European Economic Area, the single market, and the customs union, EU laws would continue to apply to the UK, and the UK would continue to pay into the EU budget. However, the UK would not be represented in the decision-making bodies of the EU. The transition period would give businesses time to adjust to the new situation and time for the British and EU governments to negotiate a new trade deal between the EU and UK.

Without a parliamentary approved agreement or a further extension there would be a hard Brexit on 31^st October 2019, i.e. a no-deal scenario and the UK would immediately leave the EU. Overnight, the UK would leave the single market and customs union. No deal also means immediately leaving EU institutions such as the European Court of Justice and Europol, its law enforcement body. Membership of dozens of EU bodies that govern rules on everything from medicines to trademarks would end. There would be no transition period and the UK would effectively become like a third country to the EU without any trade deal in place and it would mean that the UK service industry would lose its guaranteed access to the EU single market.

Continuity of supply of medicines to patients in both the UK and the rest of the EU has long been one of the major areas of concern in the context of Brexit. The European Medicines Agency (EMA), which has relocated from London to Amsterdam, has called on all biopharmaceutical companies across the EU to continue their preparedness for the UK’s withdrawal. It says it is well prepared for Brexit and has finalised authorisations for nearly all the 400 drugs under its watch that required further clearing because of Britain’s impending departure.Over 37 million patient packs are supplied from the EU-27/EEA to the UK each month.

In the UK, the Department of Health and Social Care (DHSC) has determined that around three-quarters of the medicines and over half of the clinical consumables used in the UK come from or via the EU.  Following an analysis, DHSC has put in place processes to minimise any supply disruption, through a combination of securing freight and warehousing space, building up safety stocks and providing regulatory flexibility. The impact on medical supplies will also be felt beyond the UK. About 45 million packs of medicines are shipped from the UK to the rest of the EU27 every month, in trade worth nearly 12 billion GBP in 2016.

Many biopharmaceutical companies have been building up safety stocks of raw materials and finished goods where possible (and shelf life permitting) as a contingency. Investing in trusted trader accreditations e.g. Authorised Economic Operator (AEO) has also been a wise move for companies who have achieved this. If queues of trucks build up at Dover or Calais for example, prioritisation will be given to companies who have a trusted trader status.

The other key areas that will be impacted by Brexit for biopharmaceutical manufacturers and marketing authorisation holders are:

• GMP certification
• Qualified Person (QP) release
• Clinical trials
• Product coming from the UK (including Active Pharmaceutical Ingredients)
• Release testing
• Sample storage

In the event of a hard Brexit there may be other areas or issues that become problematic for all the actors in the biopharmaceutical supply chain and it is these unknowns that are of most concern.

Understanding and aligning your supply across the differing legal, tax, customs, finance, regulatory and compliance framework to ensure successful supply can be challenging.  Orphan Drug consulting is here to navigate these legislative frameworks on your behalf and ensure that your patients receive seamless product first time and every time across the world.

References:
https://www.ema.europa.eu/en/about-us/uks-withdrawal-eu/brexit-related-guidance-companies
https://ec.europa.eu/commission/brexit-negotiations_en
https://www.bbc.com/news/politics/uk_leaves_the_eu
https://www.gov.uk/brexit

DISCLAIMER:
The information presented within this article is for illustration purposes only and is not to be considered as professional advice.