By Lisa Seachrist

Washington Editor

WASHINGTON -- The U.S. and the European Union (EU) have concluded negotiations that will allow the FDA and its European counterparts to recognize each others' inspections of pharmaceutical manufacturing facilities.

The Mutual Recognition Agreement (MRA) is a series of understandings designed to eliminate various regulatory barriers to trade for products ranging from boats to telecommunications. For the pharmaceutical and biotechnology industries, MRA means the end of duplicate inspections and batch testing of imported pharmaceuticals.

"At a time when patients everywhere are waiting for cures for AIDS, Alzheimer's, cancer and a host of other diseases, this agreement will help get new treatments to patients faster," said Alan Holmer, president of the Pharmaceutical Research and Manufacturers of America (PhRMA). "And the money saved by avoiding duplication of effort can be used to increase research on cures for currently incurable diseases."

The current system has inspectors from the FDA and the EU conducting hundreds of overseas inspections each year to insure that the facilities producing pharmaceuticals for export into each jurisdiction comply with necessary good manufacturing practices (GMP) regulations. Pharmaceuticals made in the U.S. for export into the EU are subject to batch testing at the point-of-entry into the EU.

"For complex products like biologicals there is a real risk of testing error," said Anne Oman, vice president for communications at PhRMA. "A failure to pass a batch test not only denies import and causes unnecessary delays but could result in negative publicity and regulatory reaction in other markets."

MRA talks began in April 1994 at the behest of the EU. Under the Technical Barriers to Trade (TBT) provisions of the World Trade Agreement, World Trade Organization members are encouraged to enter into recognition agreements on conformity assessment procedures.

The issue for the pharmaceutical and biotechnology industries was the periodic GMP inspections for products that had garnered approval. A company that wanted to produce a drug in Europe and export it to the U.S. had to entertain inspectors at its production facilities from both the U.S. and Europe. The situation was precisely the same for companies producing pharmaceuticals in the U.S.

These duplicative efforts caused unnecessary delays and cost a significant amount of money. Under MRA, the FDA and EU will streamline the processes and potentially save considerable resources.

Under terms of the agreement, a three-year transition period will be in place during which both parties will participate in joint training and joint inspections. The FDA has established that it must be satisfied that EU inspections are equivalent to its own. In addition, the FDA wants to be sure that GMP are also equivalent.

"We see this as a nice step forward," Oman said. "Pharmaceuticals were reportedly the most difficult part of this agreement, but this agreement will save time and money for both parties." *