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Tackling falsified medicines in 2013 and beyond

AUTHOR(S): Michael Finn
PRACTICE AREA GROUP: Healthcare, Life Sciences
DATE: 01.02.2013

Introduction

In response to growth in the increasingly sophisticated falsified human medicines market, in July 2011, the European Commission introduced the EU Falsified Medicines Directive, aimed at preventing their entry into the legal supply chain.

January 2 2013 marked the transposition of certain aspects of this new directive into the law of member states. In Ireland, the publication of transposing legislation is awaited. It is anticipated that draft legislation will be published for a short consultation period in the coming weeks. However, in the interim, the regulatory authority for medical products – the Irish Medicines Board – has issued guidance on the registration requirements for manufacturers, importers, distributors and brokers of active substances. This update examines the board's guidance and other upcoming developments.

Registration of manufacturers, importers and distributors of active substances

The Falsified Medicines Directive requires manufacturers, importers and distributors of active substances (ie, active ingredients of medicinal products) to register with the competent authority of the member state in which they are established. The board's Guide to Registration Requirements for Active Substance Manufacturers, Importers and Distributors addresses the administrative and technical aspects of the registration scheme in Ireland. The requirement to register applies to entities involved in both the total and partial manufacture of an active substance. Entities which have authorisations to manufacture, import or distribute finished medicinal products are not exempt from the new registration rules. Manufacturers, importers and distributors of active substances must register with the board.

Entities which carried out activities before January 2 2013 must register by March 2 2013. Others wishing to commence activities after January 2 2013 must register with the board before they can start. The board may inspect these businesses in order to ensure compliance with the relevant good practice standards. For example, under the Falsified Medicines Directive, manufacturers must comply with the principles of good manufacturing practices for medicinal products, and must use only active substances which have been manufactured in accordance with such practices. The European Commission will adopt a 'delegated act',(1) which will flesh out the principles and guidelines of good manufacturing practices for active substances. It is expected that this delegated act will be available later in 2013. However, the vast majority of manufacturing sites in Ireland already participate in a voluntary inspection programme and hold good manufacturing practices certificates awarded by the board. The board has stated that these certificates will continue to apply, and the inspection process will now become part of the programme of mandatory inspections of all active substance manufacturing sites. The board has also stated that sites participating in the voluntary scheme will not require immediate re-inspection when the legislation is enacted.

Registration of brokers

The Falsified Medicines Directive also introduced a requirement that brokers must register with the competent authority of the member state in which they are established. Brokers have not traditionally been regulated. The concept of brokering is a financial activity that is focused solely on purchasing and selling. It does not involve taking ownership of the medicinal products, or even handling them, but is instead an intermediary role that is limited to the negotiation of the financial transaction.

The board's guidance provides that brokers operating in Ireland that commenced activity before January 2 2013 must register with the board by March 2 2013. Those wishing to commence activity after January 2 2013 must register with the board before they can begin any brokering activity. Brokers are required to maintain (among other things):

  • an emergency plan for product recalls;
  • a quality system setting out responsibilities and risk management in relation to their activities; and
  • records to assist with ensuring full traceability across the supply chain.

When considering a registration application, the board may inspect the broker's premises to ensure that these requirements are met; an inspection may not occur in all cases. The board's decision as to whether to inspect will be based on a risk assessment.

Under the Falsified Medicines Directive, brokers must also comply with the principles of good distribution practice, which will be set out in guidelines currently being considered by the European Medicine Agency's Good Distribution and Manufacturing Practices Inspectors Working Group. The board's guidance highlights that the directive does not include a provision for competent authorities to certify a broker's operations for good distribution practice compliance; wholesalers are instead required to verify the good distribution practice compliance of any broker that they use by inspecting the broker's quality system.

Other developments awaited

While the board's guidelines and the steady work of the European Commission to produce delegated acts add some flesh to the bones of the Falsified Medicines Directive, further clarity is eagerly awaited from the legislature so that manufacturers, importers, distributors, wholesalers and brokers can fully understand the scope of the new rules and the penalties for non-compliance.

For example, a delegated act detailing the harmonised, pan-European safety and control measures for use on packaging for certain medicines is expected in 2014. Once implemented, this system will afford member states the opportunity to extend the scope of the measures for monitoring the supply of products under national reimbursement schemes in order to achieve savings.

As of January 2 2013,all active substances imported into the European Union must be manufactured in compliance with standards of good manufacturing practices that are at least equivalent to the standards in the European Union. From July 2 2013 onwards, this compliance must be confirmed by way of a written confirmation issued by the competent authority of the exporting country. Each imported consignment must be accompanied by a written confirmation. Importers of active substances and manufacturers of medicinal products must check that the written confirmation is in place. The European Commission is in the process of publishing a list of countries which are exempt from the requirement to issue written confirmations. The commission has already confirmed that Switzerland is exempt; applications by Australia, Singapore, Brazil, Japan and the United States are being considered.

Comment

The evolving regulatory landscape highlights that all entities in the supply chain must exercise vigilance and appreciate the scale of their obligations. This is particularly the case for businesses which are now captured under the regulatory framework for the first time. Entities should also consider any impact that the new regime has on their existing contracts and implement any necessary changes to reflect their risk profile. Close monitoring over the coming months and beyond should also continue, as the supply chain regulatory field takes shape through the publication of the anticipated delegated acts and guidelines.

For further information please contact Michael Finn or Paul Clifford.

Endnotes

(1) A delegated act under EU law is a means by which law makers delegate the power to adopt acts amending or further detailing non-essential elements of a legislative act to the European Commission.

This article was first published in International Law Office

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