Guest Host: Diane Vogel

Over the past decade, the pharmaceutical industry has undergone big changes. More than eighty percent of the active ingredients for the prescription drugs taken in America are now made abroad, mostly in China and India. Supply chains can be tough to track and many manufacturing plants overseas are rarely, if ever, inspected. We explore the globalization of the drug industry and what it means for the quality and safety of prescriptions filled in the U.S.


  • Allan Coukell Director, Medical Programs, Pew Health Group
  • Heather Bresch President of Mylan, Inc., a pharmaceutical company


  • 13:06:43

    MS. DIANE VOGELFrom WAMU 88.5 at American University in Washington, welcome to "The Kojo Nnamdi Show," connecting your community with the world. I'm Diane Vogel sitting in for Kojo. Coming up later in the hour, the butterflies, cicadas, mosquitoes and stink bugs of summer. We'll get a visit from Mike Raupp, better known as the Bug Guy. But first, we hear about defective and poor quality products all the time. But what happens when those products are prescription drugs? In 2008, nearly 100 Americans die from a blood thinner made from contaminated ingredients. The blood thinner, it turned out, was manufactured in China.

  • 13:07:31

    MS. DIANE VOGELThese days, 80 percent of the active ingredients in our drugs come from overseas. Increasingly from developing countries where supply chains can be murky and manufacturing plants are inspected rarely, if at all. No doubt the Food and Drug Administration already has its plate full just trying to keep up with monitoring quality and safety at the plants here in the U.S. So what should we do?

  • 13:07:59

    MS. DIANE VOGELThere are discussions now underway between the FDA and the generic drug industry on ways to better protect the safety of the medicines we take. Joining us to discuss this today are two people, Allan Coukell is the director of medical programs for the Pew Health Group. Allan is a former clinical pharmacist in oncology and bone marrow transplant, so he comes with some really good credentials.

  • 13:08:26

    MS. DIANE VOGELAnd Heather Bresch is also joining us. Heather is the president of Mylan, Inc., a pharmaceutical company based in Pittsburgh, Pennsylvania. Her company just recently bought two foreign drug manufacturing companies. Heather has also served as the chair of the generic pharmaceutical association. Heather and Allan, thanks for joining us.

  • 13:08:51


  • 13:08:51

    MS. HEATHER BRESCHThank you.

  • 13:08:52

    COUKELLGood to be with you.

  • 13:08:53

    VOGELGood. Well I appreciate you both taking time away. I know you've been quite busy. But I'll start, Allan, with you because I was so surprised to learn when reading about this show and researching it, the number 80 percent. That 80 percent of the active ingredients in our drugs come from overseas. I also read that that's a really relatively new statistic. Tell me -- give me a sense of what drug manufacturing look like, say, 15 or 20 years ago and what it looks like today.

  • 13:09:27

    COUKELLWell, what we've seen is a transition from what was once a largely domestic industry and what you might call a vertically integrated industry, meaning companies did the whole process internally to one that, like other consumer goods, is increasingly outsourced and increasingly manufactured overseas. So if you go back only as recently as 2002, you can say there are about four times as many FDA-registered establishments domestically here in the U.S. as there are internationally.

  • 13:10:02

    COUKELLBy 2005, that has switched. There are now more international establishments registered with the FDA. And since 2005, that trend has just increased and the gap continues to widen. So, and a lot of that drugs -- some of those drugs are coming from Europe and Canada. But a lot of the growth is in developing economies, which is India and China in particular.

  • 13:10:23

    VOGELNow when we talk about active ingredients versus non-active ingredients and I don't know if this is a better question for Heather or Allan, but explain to us using for example perhaps the example we used earlier, the heparin example, the tainted blood thinner. What is an active ingredient? What is not an active ingredient and how did those things affect the consumer?

  • 13:10:47

    COUKELLSure. I mean, it's a good drug, whether it's a tablet or an injectable drug. You have the drug itself and that's the active ingredient. That's the acetaminophen, that's the heparin in your blood thinner. And then you have all the other stuff that's in the tablet, sometimes called the filler or the, you know, gel capsule. Or if it's an injectable it's in a solution and there are things to stabilize it and potentially keep it sterile and so on.

  • 13:11:12


  • 13:11:13

    BRESCHAnd I think maybe -- I'm sorry.

  • 13:11:14

    VOGELOh, go right ahead.

  • 13:11:16

    BRESCHFor clarification that I think what people don't realize is where the active pharmaceutical ingredient made is also not always or hardly ever where the finished dosage form product is made. So, you have one site in some part of the world making the active pharmaceutical ingredient, which is the 80 percent you referenced coming from overseas. And then there's another facility that will make the finished dosage form. And the percentage of finished dosage form that are being made outside of the United States and shipped in is around 40 percent.

  • 13:11:49

    VOGELInteresting. I understand that you, for many years, you've been the president of this generic company that is based here in the U.S., correct?

  • 13:11:58

    BRESCHCorrect. We're the largest generic company in the world, headquartered out of the United States.

  • 13:12:02

    VOGELAnd you have employees in Morgantown, West Virginia. According to a recent New York Times article, your plant is so large that the FDA virtually stationed an employee there full time.

  • 13:12:16

    BRESCHYes. There's been a full-time FDA employee there for over 20 years actually.

  • 13:12:21

    VOGELSo how is it that you got involved with these overseas companies that you now own? And what did it bring to your attention?

  • 13:12:31

    BRESCHAs you mentioned, we started -- we have been in business for 50 years. The first 45 years, we were a domestic company and we made product in the United States and sold it into the United States. So, I obviously was very familiar with the fact that our facility had to be inspected every two years by law, according to the FDC Act. We went global, as you mentioned, in '07 and then had the opportunity to visit many facilities around the world, I realized that the robustness and the level and the amount of time that's in between inspections or, to your point, some maybe none at all was not nearly what it was in the United States.

  • 13:13:11

    BRESCHAnd so, when I came back and investigated how the FDC Act, which was written in 1938 and hasn't substantially been updated since, it was written from the very domestic perspective, as Allan just mentioned. You know, 20 years ago, 30 years ago, it was a much more domestic supply chain. So the way the law's written, it says that if the U.S. -- if you're a U.S. manufacturer, you need inspected every two years and it's silent to the rest of the world.

  • 13:13:38

    BRESCHSo, therefore, the FDA not having, as you mentioned, almost the resources they need just to handle the manufacturers in the United States, certainly have not had over the years and the number of foreign facilities has just grown dramatically have not had the resources allocated from Congress to do that work nor does the legal parameters and the statute necessitate that they do that work.

  • 13:14:02

    BRESCHSo, we really realized that we needed to take a holistic approach to this issue and problems to first ensure safe drugs are being given. You know, as a mother of children, I want to make sure that no matter or where I get my product, no matter where it's made, it's going to be held to one quality standard. And also, just from a level playing field perspective, you know, as being headquartered out of the United States and having one of the largest facilities in the world in the United States, I find that being held to a different standard and not having parody to foreign facilities that are producing product and selling it into the United States is not only one accounting for perhaps unsafe medicine coming in to our country, but it's also accounting for almost a disincentive to have manufacturing here in the United States.

  • 13:14:55

    BRESCHAnd as Allan could comment, their report showed that it costs the facility 25 percent more to be compliant, GMP compliant. So the cost and the burden to hold your manufacturing facility to the standards required by the FDA does have cost associated with it, and therefore a level playing field and parody is absolutely necessary to not only hold the jobs we have here in America, but perhaps add to them.

  • 13:15:21

    VOGELWell, thank you, Heather. Heather Bresch is the president of Mylan, Inc., a pharmaceutical company based in Pittsburgh, Pa. And her company also recently acquired two foreign drug manufacturing companies. You are also hearing from Allan Coukell, the director of medical programs for the Pew Health Group and a former clinical pharmacist in oncology and bone marrow transplant.

  • 13:15:45

    VOGEL"The Kojo Nnamdi Show" is -- I'm Diane Vogel, managing producer of "The Kojo Nnamdi Show," and we're talking about inspecting generic drug plants. We want to hear from you as well. Have you had reason to be concerned about any of the prescription drugs you've purchased whether at the pharmacy or online? Have you had a reason to believe there's questions of quality or safety about your medication? Call us at 1-800-433-8850, 1-800-433-8850 or e-mail us at

  • 13:16:19

    VOGELNow, I understand that you've been campaigning for better regulations of plants overseas, Heather. And I understand that generic drugs are actually monitored differently than brand name drugs. Can you give us just a basic sense of the difference in how they're overseen?

  • 13:16:40

    BRESCHWell, actually it's not a difference and I think that's a misnomer. And that's why having these programs and the awareness that's bringing this issue to the forefront, the FDC Act, as I mentioned, that was written in 1938 covers all of the drugs that the FDA is responsible for and which is all prescription medicine. So, the brand facilities and the generic facilities, that's an industry-wide issue.

  • 13:17:05

    BRESCHBut what the generic industry has done is stepped up to the plate and is willing to have fees and to actually help resource the FDA and the funding that's needed to allow them to be able to have the reach and the frequency and create a level playing field and parody and be able to inspect foreign facilities at the same ratio they are domestic facilities. So, it's an industry-wide issue and we're just the industry that has stepped up first to help resource and do the funding that's necessary to allow FDA to do the job they need to do.

  • 13:17:39

    VOGELNow, Allan, I don't know if I got, you know, perhaps -- this is a complicated issue. So, I may have gotten something wrong, but it was my understanding that generics and brand name drugs are treated somewhat differently by the FDA. That they go sort of on separate tracks through the FDA. Is that correct, Allan?

  • 13:17:57

    COUKELLWell, yes and no. As Heather said, the legal oversight and the FDA's responsibility to ensure is quality is completely the same for generic and brand name drugs. The difference is that the two sectors negotiate separately with the FDA. And Congress treats them separately in terms of how Congress establishes user fees that give the FDA the resources to approve drugs and to inspect plants and so on.

  • 13:18:30


  • 13:18:30

    COUKELLSo, as Heather says, the generic industry has now stepped up to the plate and said, you know, absolutely this is an issue. The FDA needs more resources to deal with our globalized world and it could have been for that. But that same globalization trend is going on with brand name manufacturers as well. And the FDA similarly needs to be doing -- be able to provide more oversight of manufacturing of brand name products occurring outside the country.

  • 13:18:59

    VOGELSure. Well, thank you for clarifying that a bit. I think most of us may not even realize that three-quarters of the drugs we take are now generic in the U.S. I'm going to continue this conversation on the other side of the break. We're talking about inspections of foreign drug plants and the amount of generic drugs we take and how much the FDA should or shouldn't be involved in reviewing this issue. And whether or not you need to be concerned. You're listening to "The Kojo Nnamdi Show." I'm Diane Vogel. We're right back after the break.

  • 13:21:17

    VOGELWelcome back to "The Kojo Nnamdi Show." I'm Diane Vogel, Managing Producer of the show sitting in for Kojo. You're listening to a discussion on manufacturing generic drugs and watching the -- inspecting the plants overseas. We know that the New York Times, Heather, credits you as leading this campaign for better regulation and inspection overseas.

  • 13:21:45

    VOGELSo I'm going to ask you to give us a bit of an explanation as to how -- the reaction you got -- when you spoke with generic drug manufacturers, your fellow compadres, the reaction you got and what exactly you guys have -- are coming -- working on an agreement with the federal government to do. I do know, Allan, that there are hearings going on in Congress currently -- or before the summer break, there were and that they'll be back next year. When we're completed with -- when Heather completes her answer we'll go to you and have you explain what Congress is hearing. Heather.

  • 13:22:21

    BRESCHYeah, thank you. So as I mentioned I certainly was able to get the perspective -- the global perspective after our acquisition. And it really, like I said, opened my eyes to what was lacking from a regulatory and a legal standpoint with FDA. So we certainly led the charge as far as putting a holistic plan and idea together. But I have to say it's been the generic industry that got behind that plan solidly and unitedly and has gone now into the FDA starting back in February to really negotiate the finer details about how our user fee program could marry up to what we believe is the most important thing to do, which is have safety and transparency in the supply chain.

  • 13:23:04

    BRESCHSo that and the actual negotiations are still ongoing so I'm not going to get into what's actually being discussed. But it's really hammering out the parameters of the deal that we've talked here about today on the show towards inspections and access and transparency. And as far as Congress, just from my perspective, there's actually two things that Congress is going to have to undertake. It will be the entire user fee package that the FDA brings to them January of 2012 that needs to be passed by this summer.

  • 13:23:37

    BRESCHBut we also need to address the fact that this 1938 statute is very domestic in nature and needs to be modernized to really represent today's global world. And that is something that we're working on and we hope gets introduced -- a bipartisan bill will get introduced this fall and there'll be public hearings with that as well.

  • 13:23:57

    VOGELThank you. That's the voice of Heather Bresch, the President of Mylan, Inc., a pharmaceutical company out of Pittsburgh, Pa. And also joining Heather is Allen Coukell, the Director of Medical Programs at Pew Health Group and a former pharmacist -- clinical pharmacist working in oncology and bone marrow transplants. Allan, what is Congress doing? What have they been hearing at their hearings this year and what do you expect to see come next fall and winter?

  • 13:24:27

    COUKELLI think in both parties in both chambers of congress there's really a recognition that this is unfinished business. The heparin contamination a few years ago that you talked about was really a wakeup call to...

  • 13:24:41

    VOGELThe blood thinner that killed about 80 people, right.

  • 13:24:44

    COUKELL...the one from China. You know, it's a wakeup call to people in the industry, to the FDA itself and to Congress. And so, you know, we do hope that we will see bipartisan legislation this year that Congress will pass next year. That's the hope. And inspections are one part of it but just one component of the safety system. And part of what Congress has been hearing is that there are some other pieces that need to be updated. For example, as manufacturing kind of moved outside the walls of a single facility, there's a lot of standards right now about what a company has to do inside its facility.

  • 13:25:22

    COUKELLBut right now, there's nothing in the law that says here's what you have to do in terms of validating your suppliers and knowing what conditions are in place at your suppliers or your suppliers' suppliers, which is what actually turned out to be the problem with heparin. It wasn't the U.S. company that marketed the drug. It was their supplier and indeed upstream of their supplier where the problem was introduced. So we need companies to be able to guarantee the integrity of their own supply chains as far back as necessary. And of course some companies are already doing this but any supply chain is only as strong as its weakest link.

  • 13:25:58

    COUKELLSo that's one of the things Congress is hearing. And then they're also hearing that, again, the statute's outdated. So people might be surprised to learn that the FDA can order the recall of a defective medical device, an artificial hip say. And as of last year they can order the recall of contaminated food but they can't order the recall of a drug product. That's always voluntary and of course most of the time that's not a problem. But it's the kind of authority that you want the agency to have so that there's no question that if there's a public safety risk that the product will, you know, come back.

  • 13:26:33

    VOGELNow, I'm amazed. I'm sure the reaction from our audience is as amazed as I was. We're getting a lot of calls about how to know -- and a lot of e-mails about how to know. Bob in Silver Spring wants to know if domestically manufactured medicines are marked any differently from foreign-made manufactured drugs. Is there any way to tell where your drug was made?

  • 13:26:59

    COUKELLThere isn't any country of origin requirement right now. It is important to, I think, say that, you know, the message here is not that what's on the pharmacy shelves or in the medicine cabinet is unsafe, 'cause that's absolutely not the case. We have a robust system in the U.S. but we just have to make sure that it's updated so that these rare but potentially very serious events don't happen.

  • 13:27:21

    VOGELI'd like to take a phone call from one of our listeners. Jeff in Centerville, Va. Jeff, you're on the air.

  • 13:27:29

    JEFFThank you for taking my call. I'm calling as -- I guess as a question about concern and curiosity. I have Bipolar disorder and narcolepsy. I take a variety of medications, including Abilify, Lamictil and, let's see, Xyrem which is distributed by SDS Pharmacy. And I understand that SDS is one of the -- is the only producer and distributor of that medication in the world, if not the country. And I'm curious as to what the competitive -- what the competition is like for the distribution chain. Or are the pharmacies that are producing most of these medications the same ones distributing them?

  • 13:28:07

    JEFFAnd then also I wanted to make a comment and just maybe you can explore this if it's on topic. I had an experience taking Lamictil that the brand name version was a higher quality consistency, whereas the generics that I received would crumble more often. And I'm, you know, a little concerned 'cause these are the cocktail medications I take to balance my life. And if there's any sort of quality control issue there that's really going to affect my behavior.

  • 13:28:34

    VOGELThank you, Jeff. Two good calls. I'll go to Allan first, if you can address both Jeff's questions about the competition within the supply chain. And then separately we'll get to the question about whether the generics are of different composition than the name brands.

  • 13:28:52

    COUKELLWell, and the question was are the manufacturers the same as the companies that distribute the meds and the answer's no. There is a whole separate industry that moves drugs from the manufacturer to the pharmacy, a big complex wholesale system. And there's a related issue here that we actually don't have a national system for tracking and tracing drugs once they're out in the system. So we have a low prevalence of counterfeit drugs in the U.S. but no good way to verify the drugs that are in the pharmacy to check that yes indeed, this is authentic product.

  • 13:29:28

    VOGELVery good. I'll ask you, Allan and Heather, Susie writes us an e-mail asking if...

  • 13:29:35


  • 13:29:35

    VOGELOh, I'm sorry. Did you want to respond as well?

  • 13:29:37

    BRESCHI just wanted to answer the second part. I just didn't want to...

  • 13:29:38

    VOGELSure, go right ahead, Heather.

  • 13:29:40

    BRESCH...leave the second part of his question unanswered about the regulations around generic and brand products. Where actually the FDA approves obviously both brand and generic products and they are held to the same standard and required to show bioequivalence to each other. So there's not a different standard of a generic product approved versus the brand.

  • 13:30:02

    BRESCHAnd I think, you know, just as you mentioned -- and use the heparin as an example -- that was a brand product with a global supply chain that unfortunately had the issues it did. That's why, you know, really stepping back and addressing, as Allan said, we have a great system here in the United States. It's just not mandated and legally bound to the world we live in today. And that's what we're trying to do, modernize just to insure and make sure that there's no cracks and that we have a system that not only recognizes the good actors but also has a way to filter out the bad ones.

  • 13:30:37

    VOGELSure. And -- thank you, Heather. The e-mail from Susie says, "If 80 percent of drug ingredients are made in foreign places often with less inspection than U.S. drugs than why the double standard in the U.S. forbidding personal import of drugs from other countries except as a sop to domestic drug companies. Is that it?" She's asking, I guess, about mail order drugs. Is there a reason or something behind that? Allan, you want to start?

  • 13:31:09

    COUKELLWell, I mean, our focus is on the U.S. supply, so the drugs that you would get in a U.S. hospital or a U.S. pharmacy. I think -- you know, I suppose part of what the question gets at though is it is a global world. And anything that we do that makes our own supply safer should also make the drugs that go to other countries safer. And indeed as the FDA grapples with how do we regulate, you know, a drug supply that now originates in 150 countries, they have recognized that they can't do it alone and that they need to be working more closely with European regulators and other regulators that have similar quality standards.

  • 13:31:55

    VOGELHeather, I'm going to ask you, if you would perhaps, your personal experience as the President of now a company that includes overseas manufacturing to perhaps respond to John in Ashburg (sic) , Va. John's one of our callers. John, you're on the air.

  • 13:32:12

    JOHNYes, hello. Given that it's already difficult enough to monitor the overseas production plants, it seems that there might be another weak spot in the supply chain. And that is what happens to these drugs, be they just the active ingredients or the finished products, after they leave a plant -- you know, a perfectly safe and efficacious drug leaves the plant but then do we know what kind of storage -- handling conditions they've used for storage and transport of these drugs? You know, it's not like just shipping standard stuff. It's -- I would imagine that some of these require careful handling conditions.

  • 13:32:55

    VOGELSure. Heather, can you tell us about how your things get from one place to another and what you see among competitors?

  • 13:33:01

    BRESCHSure. So as you just mentioned, these products, the active pharmaceutical ingredients, the API as well as the finished dosage form, you know, are made from all over the world and shipped in. And it is -- the manufacturer would typically, when it leaves a facility, whether it's an API or finished dosage form, it's required to pass certain release testing that allows it -- that it's assured held to a certain quality. And then, on the receiving end, whoever is receiving that what -- manufacturer is also required that when it does reach where it's going that it again is released to certain quality standards.

  • 13:33:38

    BRESCHSo there's testing done on both sides of it. Again though, that's only -- that testing and everything's only as good as the companies who are performing it and ensuring that their quality systems are as robust as they should be. So really that all gets back to the fact that we need to give the FDA the resources they need and the legal ability to be able to hold American manufacturers and foreign manufacturers to the same standard. So we know that it's a global supply chain and that's not going to change. And if anything it's going to continue to increase to be more complex and more global.

  • 13:34:14

    BRESCHSo what we're saying is that every person in America should know when they go to the pharmacy and take a prescription and have one filled that no matter where that product's made the API or the finished dosage form is produced around the world. If it's being distributed within the United States that it's all held to the same quality and drug standard.

  • 13:34:32

    VOGELSure. Well, I know that right now there's a 31-month backlog, I believe, 2500 applications pending for approval of generic drugs at the FDA. And the suggestion here that the generic drug companies may be paying a sort of fee to help the FDA have more oversight and so on. It sounds good to a lot of people but consumer advocates, Allan, they seem to worry. They say industry fees will make the relationship between the industry and the FDA too cozy. Is that something we should worry about?

  • 13:35:11

    COUKELLWell, I think it's always something that we need to think about. But the reality is over many, many years now we have continually asked the FDA to do more and more things. And we haven't kept up their -- their funding hasn't increased proportionate with what we need them to do. So, you know, in the case of the supply chain if the companies are moving manufacturing to countries -- to low cost manufacturing environments overseas, it seems -- you know, where it's more costly and more difficult to do inspections it seems reasonable that they should also pay a portion of the increased cost for providing the oversight we expect.

  • 13:36:00

    VOGELWell, thank you...

  • 13:36:01

    BRESCHAnd maybe just to add to that. You know, almost every other regulated market in the world requires fees to help ensure just that, that they have the resources and the subsidy necessary to do the jobs they need to do. And I think, you know, as we know not -- that you -- there's perhaps nothing perfect but certainly we have in our -- in the United States many failsafe measures to try to help and ensure and audit, you know, the quality of these systems over time.

  • 13:36:27


  • 13:36:27

    BRESCHSo I certainly believe that we need -- you know, addressing it is much better than not addressing this very important issue.

  • 13:36:34

    VOGELMost definitely. And we'll keep an eye on it. I know that January, 2012 is when -- according to some of what I've read, it's when we might expect Congress to actually act on this. And I believe that under the law by October, 2012 they have to act. Otherwise the FDA, you know, loses out on its funding. So thank you very much. Heather Bresch is the President of Mylan, Inc., a pharmaceutical company based in Pittsburgh, Pa. Allan Coukell is the Director of Medical Programs at the Pew Health Group and a former clinical pharmacist. Thank you so much, both of you, for joining us on "The Kojo Nnamdi Show." We'll be right back and we'll be discussing the insects of summer after this short break.

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