U.S.-EU Mutual Recognition Agreement (MRA)/ Congressional Hearing

On October 2, 1998, the Commerce Committee's Subcommittee on Oversight and Investigations held a hearing on the United States - European Union MRA on pharmaceuticals. The members of the Subcommittee who attended the hearing were Chairman Joe Barton (R-Tex.), Ranking Member Ron Klink (D-Penn.), Jim Greenwood (R-Penn.), Henry Waxman (D-Cal.), and Richard Burr (R-N.C.). The testifying witnesses were Sharon Smith Holston, the Food and Drug Administration's (FDA) Deputy Commissioner for External Affairs, Ralph Ives, the United States Trade Representative's (USTR) Deputy Assistant Trade Representative for Europe and the Mediterranean, and Charles Ludolph, the Department of Commerce's Deputy Assistant Secretary for Europe. This was the first of several hearings on this matter.

The MRA consists of a general framework ("umbrella agreement") and six sectoral annexes, which cover telecommunications, electromagnetic compatibility, electrical safety, recreational craft safety, medical devices, and pharmaceutical good manufacturing practices (GMPs). (Written Testimony of Charles Ludolph, Before the Subcommittee on Oversight and Investigations, Oct. 2, 1998, at p.2). The agreement, signed in May, 1998, is set to take effect on December 1, 1998. The October 2 hearing focused on the pharmaceutical GMP Annex, which covers human and animal drugs and certain biological products. (Written Testimony of Sharon Smith Holston, Before the Subcommittee on Oversight and Investigations, Oct. 2, 1998, at p.12).

The purpose of the GMP Annex is to "govern the exchange . . . and normal endorsement . . . of official Good Manufacturing Practices (GMP) inspection reports after a [three-year] transitional period aimed at determination of the equivalence of the regulatory system of the Parties. . . ." (Written Testimony of Holston, supra, at p.13). Essentially, the MRA would require the FDA to determine whether the regulatory and inspection systems of each of the 15 member nations of the European Union is "equivalent" to the FDA. Once the FDA finds a nation's systems to be equivalent, drug manufacturers in that nation that have passed GMP inspection by that nation's inspectors will be able to export drugs to the U.S. without having to submit them for re-inspection by the FDA.

The GMP Annex defines "equivalence" as "regulatory systems are sufficiently comparable to assure that the process of inspection and the ensuing inspection reports will provide adequate information to determine whether respective statutory and regulatory requirements of the authorities have been fulfilled. Equivalence does not require that the respective regulatory systems have identical procedures." (Written Testimony of Holston, supra, at p.14-15). This definition seems to mean a nation's regulatory system is equivalent to the FDA if FDA can determine, by reading inspection reports from that nation's inspectors, whether those inspectors have fulfilled the requirements of the laws and regulations of that nation. It does not speak to the equivalence of the nation's laws and regulations to the laws and regulations of the U.S. Thus, a nation may have laws and regulations on pharmaceuticals completely different from U.S. laws and regulations on pharmaceuticals and still be determined "equivalent" by the FDA.

Furthermore, the FDA's definition of "equivalence" differs from the MRA's definition. According to the FDA, "equivalence" means the FDA "has determined that another country's regulatory system for GMPs (i.e., regulations, inspections procedures, and enforcement) provides at least the same level of consumer protection as FDA s system." (FDA, A Plan That Establishes a Framework for Achieving Mutual Recognition of Good Manufacturing Practices Inspections, at p.3, addendum to Written Testimony of Holston, supra). The FDA's inability to agree with its European counterparts on definitions of terms was one of the problems noted by members of the Subcommittee. For example, Rep. Burr noted that the U.S. and the E.U. couldn't even agree on the definition of GMPs.

In fact, the Subcommittee members cited numerous concerns with the MRA. Rep. Klink noted that the FDA would either need new funding or have to divert funds from other areas to be able to determine the equivalence of the statutory and regulatory systems of fifteen different countries with eleven different languages. Ms. Holston admitted that the FDA would be able to determine equivalence for only two or three countries in the three-year transition period. Chairman Barton stated that E.U. nations that had not obtained equivalent status could just ship their pharmaceuticals to E.U. nations that had, and then those nations could ship those products to the U.S. He cited several past instances when the FDA had refused to allow pharmaceuticals from European drug manufacturers into the U.S. because of concerns about their manufacturing practices. The manufacturers simply turned around and shipped the products to E.U. nations.

Both Rep. Burr and Rep. Klink expressed concern that the agreement on pharmaceuticals was included in the MRA only to get the Europeans to make concessions in the other five sectors. At one point, Rep. Greenwood suggested that the FDA agreed to the MRA so it would not endanger $40 billion in trade between the U.S. and the E.U., and Rep. Klink stated that the FDA's decision to sign the MRA was based on economics, not the health and safety of the U.S. public. In response to a question from Rep. Burr, Mr. Ives said that the E.U., not the U.S., had raised the issue of pharmaceuticals in the MRA.

The Subcommittee members often referred to documents, including internal FDA memos and e-mail messages, to make their points. Rep. Greenwood read an e-mail message from Mike Dubinsky, an FDA official on the MRA negotiating team, to Walter Baxt, the Director of FDA's Office of International Affairs, which stated that the MRA contained more cons than pros for the FDA and that the FDA should consider withdrawing from the MRA negotiations. Rep. Greenwood then noted that Mr. Dubinsky was no longer in the FDA's employ. Ms. Holston claimed that all of Mr.. Dubinsky's concerns had been addressed, but could not point to any specific language in the MRA. Chairman Barton declared the record would be left open so the FDA could demonstrate precisely how Mr. Dubinsky's concerns had been addressed by the MRA. Rep. Klink read a long and detailed newspaper article about an Italian minister of health who for years took bribes in exchange for approving dangerous drugs and even HIV-tainted blood for sale in Italy and other E.U. nations. Rep. Klink then asked Ms. Holston how anyone could be sure such a situation would not be repeated with dangerous products being shipped to the U.S. She admitted the MRA contained no guarantees against fraud or bribery.

At the hearing's conclusion, Chairman Barton apologized to Ms. Holston for the Subcommittee members harsh criticism of the FDA in this case. "But," he stated, "you re trying to defend something [the pharmaceutical MRA] that's indefensible." He used a poker analogy to describe the situation: "You don't even have a pair of twos, and we're all holding full houses and straight flushes." Chairman Barton then stated that the witnesses had done nothing to assuage the concerns of the Subcommittee members and that the Subcommittee would hold further hearings on the MRA to give them the opportunity to do so.