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Regulatory Inspections - Who Should Pay?

  • 1.  Regulatory Inspections - Who Should Pay?

    Posted 21-Jan-2019 10:43
    FDA inspections have historically been paid for with tax dollars; Eu inspections by notified bodies are paid for by the company that is being inspected. ​

    Who do you think should pay for regulatory inspections -- taxpayers or companies?

    Why?

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    Julie Omohundro, ex-RAC (US, GS), still an MBA
    Principal Consultant
    Class Three, LLC
    Durham, North Carolina, USA
    919-544-3366 (T)
    434-964-1614 (C)
    julie@class3devices.com
    ------------------------------


  • 2.  RE: Regulatory Inspections - Who Should Pay?

    Posted 22-Jan-2019 07:24
    Well I do not have much comment on EU side because I am not a fan of the Notified Body system.  My own personal opinion, it can be supplemented by government/taxpayers but payed for by the company as a "fee" could be an approach.  The issue with the Notified Body system is the EU should set the "fee" not allow Notified Bodies to set whatever fees they want.  Governments can help support financially and resource-wise but a company going through an inspection or regulatory audit could pay a fee according to class of device, size of company, revenue of company, processes employed, etc.  The controversy existing with paying for inspections or audits (such as NB system) is I have many people say then it is like a double-whammy - get inspected with deficiencies and then have to pay monies for those deficiencies.

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    Richard Vincins RAC
    Vice President Global Regulatory Affairs
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    Original Message


  • 3.  RE: Regulatory Inspections - Who Should Pay?

    Posted 22-Jan-2019 12:11
    ​Good points, Richard. 

    I have heard others question the wisdom of letting NBs set their own fees.  All approaches have their pros and cons.  The main con with letting the EC set the fees would seem to be that the EC is ultimately a political animal, and the device industry probably has more political clout (aka, "money") than the NBs.  So the lobbying would be to set fees low, possibly too low for the NBs to do a good job of it.

    I'm a big fan of transparency, so I think I'd like to see what happens if the NBs were left to set their own fees, but had to post them publicly, along with some KPIs that would tell you what you are supposed to get when you pay those fees.  (I find myself laughing as I type this.)

    I had not heard about the double-whammy.  It does seem a bit much to ask, doesn't it?  Of course, it could be argued that, if it's a good little device company, it would have no deficiencies. (Also laughing.)

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    Julie Omohundro, ex-RAC (US, GS), still an MBA
    Principal Consultant
    Class Three, LLC
    Durham, North Carolina, USA
    919-544-3366 (T)
    434-964-1614 (C)
    julie@class3devices.com
    ------------------------------

    Original Message


  • 4.  RE: Regulatory Inspections - Who Should Pay?

    Posted 22-Jan-2019 08:47
    Hi Julie!

    I love these sorts of what do you think questions because it really makes someone stop and eliminate pre-conceived notions before responding.  However, here is my thought - I think it should be a "blend" of the two.  Let me explain:

    For new products being introduced (think PAI-type inspections) I think the company should pay for the inspectional fees.  This ensures that companies are only coming to market with things that they expect to be able to mass produce in a way that meets all of the requirements of the government reviewers and also applies a bit of a "pay to play" methodology in that the person receiving the benefit (the company) covers the costs of obtaining the benefit (selling the new product into the market).

    For ongoing inspections I think this should be part of government appropriations.  This is because it would be too easy for skeptics (especially in the US) to argue that the payment for the inspection ​is essentially a "bribe" for approval or continuing without further action.  Many of us I am sure have seen enough litigation over how the company hood-winked the FDA and hid the unspeakable dangers, etc. to know that when the industry pays the fees it is almost always portrayed as paying for the government to turn their heads.

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    Victor Mencarelli
    Director Regulatory Affairs
    United States
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    Original Message


  • 5.  RE: Regulatory Inspections - Who Should Pay?

    Posted 22-Jan-2019 12:28
    ​I like the idea of discouraging companies coming to market with devices that don't pass muster.  My kind of stifling!

    It can be argued it is not only the company that benefits, but also patients.  (And both suffer when things go badly.)

    I think "bribe" is more accurately applied to the NB model, where the company pays the NB directly for specific inspection services.  If the government is getting paid via user fees, then the connection between any given payment and any given inspection is attenuated enough that I don't think "bribe" is quite accurate.  More along the lines of political influence.  Thus the gate-kept, closed-door MDUFA meetings. I'd like to see some transparency there, too.  (Still laughing.)

    I generally apply the philosophy that "He who pays, gets served."  If industry pays, the inspections will serve the needs of industry; if the government pays, the inspections will serve the needs of the government.  In theory, when the government pays, the taxpayer is really paying, so the needs of patients should be served, but that link is sufficiently tenuous, I wouldn't count on it.  (Not laughing.)

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    Julie Omohundro, ex-RAC (US, GS), still an MBA
    Principal Consultant
    Class Three, LLC
    Durham, North Carolina, USA
    919-544-3366 (T)
    434-964-1614 (C)
    julie@class3devices.com
    ------------------------------

    Original Message


  • 6.  RE: Regulatory Inspections - Who Should Pay?

    Posted 22-Jan-2019 09:54
    For User fee products (drugs, devices, biologics, generics) the money to cover the cost of the inspection now comes out of the user fee that is paid.  Since the money is paid to cover review activities, this includes inspections related to the review.

    Routine GMP inspections are also covered by the annual product fee that is paid for each approved product.  For products not covered by user fees (foods, etc), the cost of inspections comes from FDA's general appropriation (ie., tax dollars).

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    Michael Hamrell, Ph.D., RAC, FRAPS
    Huntington Beach CA
    United States
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    Original Message


  • 7.  RE: Regulatory Inspections - Who Should Pay?

    Posted 22-Jan-2019 12:46
    ​Thanks for the info, Michael.

    I tilt toward premarket and clinical, so when you put postmarket and manufacturing together, I'm well out of my depth.  Not that this has ever stopped me.  However, I would have thought that routine manufacturing facility inspections would be paid for with registration fees and product-focused inspections with product-specific fees.  (This doesn't mean I think this is how it's done; just that this is what would make sense to me.)

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    Julie Omohundro, ex-RAC (US, GS), still an MBA
    Principal Consultant
    Class Three, LLC
    Durham, North Carolina, USA
    919-544-3366 (T)
    434-964-1614 (C)
    julie@class3devices.com
    ------------------------------

    Original Message


  • 8.  RE: Regulatory Inspections - Who Should Pay?

    Posted 23-Jan-2019 14:13
    Can't speak for the other areas, but for devices this isn't strictly true. Although there are MDUFA fees for registrations, the utilization of such fee money is focused on pre-market activity, with a very few exceptions (of which routine inspections aren't one). The MDUFA commitment letter is available online and is interesting to read what the FDA commits to in return for the fees.

    Now, knowing how the real world works, there is no doubt in my mind that the FDA therefore spends more of their congressionally allocated funds for post-market activities, so that they can achieve what they want, but technically user fees doesn't cover this.

    g-

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    Ginger Glaser RAC
    Chief Technology Officer
    MN
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    Original Message


  • 9.  RE: Regulatory Inspections - Who Should Pay?

    Posted 22-Jan-2019 15:48
    Hello Julie,

    Just to add a bit more of information to your post.

    In the case of ANVISA/Brazil inspections (and subsequent GMP Certification), are paid for the companies (local established companies).

    It is a very interesting question. Who do you, Julie, think should pay for regulatory inspections?



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    Marcela Saad PharmD, MSc, RAC, FRAPS
    President & Senior Consultant
    MarcM Consulting Canada
    Kitchener ON Canada
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    Original Message


  • 10.  RE: Regulatory Inspections - Who Should Pay?

    Posted 22-Jan-2019 21:11
    ​Hi Marcela,

    I don't think there is an easy answer.  What I know for sure is that I want inspections to serve the interests of patients, not of companies or regulatory agencies.  Both approaches are just concepts; real-world implementation is a different matter.  I'm open to the idea that some implementations of government-paid inspections might serve those interests better than some implementations of company-paid; and vice versa.

    Of the two implementations with which I am familiar--FDA and NB--I choose FDA's, which I consider to be one implementation of government-paid, in a heartbeat.  It's not clear to me that the NB implementation ever served anyone's interests but the NB's, and now those chickens have come home to roost.  I look forward with interest to seeing how the next NB implementation works out.

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    Julie Omohundro, ex-RAC (US, GS), still an MBA
    Principal Consultant
    Class Three, LLC
    Durham, North Carolina, USA
    919-544-3366 (T)
    434-964-1614 (C)
    julie@class3devices.com
    ------------------------------

    Original Message


  • 11.  RE: Regulatory Inspections - Who Should Pay?

    Posted 30-Jan-2019 14:57
    Interesting Questions and Interesting Answers!

    In my opinion, the government should pay for these inspections which in turn come from the Tax Payers. Any agency that performs inspection are doing so to ensure that the drug is safe for the patient. Having the companies pay is an indirect bribe in my opinion.

    Thanks,
    Loga

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    Loganathan Kumarasamy
    Senior Consultant
    Waukegan IL
    United States
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    Original Message


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