The World Health Organization (WHO) late last month announced it was suspending approval for all tuberculosis drugs produced by the Pakistan plant of a subsidiary of the U.S. drug company Wyeth, because it was “no longer assured of the quality of the product.” The drugs had been approved by WHO, which UN agencies, national governments, and other international organizations use to guide the procurement of millions of dollars of HIV/AIDS, malaria, and tuberculosis drugs for the world’s poorest patients.

According to a letter to the company posted on WHO’s website, Wyeth failed to inform WHO that it had changed suppliers for some of its active pharmaceutical ingredients (API) and had altered storage conditions. “They had been informed on a number of occasions”—directly and through communications to all suppliers—“about the importance of informing WHO,” Matthias Stahl, medical officer in charge of assessments at WHO’s drug approval program, told us. WHO’s most recent inspection of the site, in 2005, identified serious noncompliance with Good Manufacturing Practice (GMP), and since that time only limited corrective action had been taken.

As more firms source more intermediate chemicals and active pharmaceutical ingredients from myriad countries, we may be seeing the beginning of a trend.

The case reveals that it is not only generic firms from middle-income countries that have problems with GMP, as we have previously discussed regarding India’s largest drug company Ranbaxy. Wyeth and Ranbaxy, which are both reputable companies, will probably resolve their particular problems soon. But as more firms source more intermediate chemicals and API from myriad countries, we may be seeing the beginning of a trend.

Currently, more than 40 percent of all API used in U.S. medicines is from India and China; that number is expected to double over the next 15 years. While most exports to wealthy industrialized countries—which are monitored by pharmaceutical manufacturers policing their own supply chains and by strict drug regulatory authorities—are high quality, legal enforcement within China remains weak, and drug counterfeiting is becoming increasingly sophisticated. Last year, 95 Americans died from heparin distributed by U.S.-based Baxter that was believed to have been “deliberately contaminated” in China.

It is not clear where Wyeth Pakistan sourced its API, and whether the supplier had any record of poor quality products. In an email to the authors, the company acknowledged that “one supply source closed its facility and an alternate supplier was required.” Its annual report suggests it had been hard-strapped to find reliable suppliers: “Sales growth was adversely affected by non-availability of our two major products which was due to the non-availability of quality raw materials.” There is no evidence that the company manufactured any substandard drugs: Wyeth affirms that all materials used in its products “regardless of source, follow the same rigorous process of testing and certification,” and WHO has not recalled or withdrawn any products.

Currently, more than 40 percent of all active pharmaceutical ingredients used in U.S. medicines is from India and China; that number is expected to double over the next 15 years.

Regardless, WHO must be vigilant about the drugs it features on its list. During the four years that WHO waited to take public action, Pakistan’s Ministry of Health bought more than 5.9 million treatments from Wyeth Pakistan. In some emergency cases, like the emerging H1N1 swine flu epidemic, drug regulatory authorities may consider waiving embargoes for essential products, as the U.S. Food and Drug Administration (FDA) did when it permitted the importation of Ranbaxy’s antiretroviral Ganciclovir while banning other Ranbaxy products last fall. But continued procurement offers companies little incentive to reform.

Stahl points to the combination of factors—the most recent disclosure problems coupled with poor GMP—to explain why WHO acted when it did. The adoption of new protocols, including a new “notice of concern” policy in June 2008, made it easier. Previously, WHO only published the most recent, positive outcomes of manufacturer inspections; any negative reports of noncompliance were never mentioned. (Even under the revamped policy, manufacturers have up to 30 days to address WHO concerns before a notice is made public.) WHO insists it is not an official regulatory agency, although it acts as a de facto one when it lists products not approved by stringent regulatory agencies, such as the FDA and the European Medicines Agency. And as Stahl admits, it has a mandate to ensure that drugs on its list are safe and effective.

Last year, 95 Americans died from heparin distributed by U.S.-based Baxter that was believed to have been “deliberately contaminated” in China.

In an effort to improve its performance, WHO recently rolled out draft “requalification” procedures, which would require re-inspections of manufacturing sites at regular intervals. This is necessary but not sufficient to improve quality of production. WHO should also consider making records of noncompliance and corrective action publicly available, which would help procurers identify suppliers that have consistently adhered to GMP or, in cases of deviance, speedily corrected problems.

Ultimately, it is up to member states to provide political and financial support. If it is not forthcoming, WHO will be forced either to keep the list as-is—running the risk of featuring manufacturers who may let production standards slip after initial approval—or to exclusively feature products approved and regularly monitored by stringent regulatory authorities, which would undoubtedly limit product availability and likely upset other WHO member states with major producers, such as Brazil and India. With more than 9 million new cases of tuberculosis in 2007 (and millions more afflicted by diseases like HIV/AIDS and malaria), many lives hang in the balance.

Roger Bate is Legatum Fellow at the American Enterprise Institute. Karen Porter is a research assistant at AEI and an editorial assistant at The American.

FURTHER READING: Bate and Porter recently wrote “Regulation in the Era of Globalization” on regulating the FDA and “IMPACT’s Impact” on the WHO’s International Medical Products Anti-Counterfeiting Taskforce. Bate is the author of Making a Killing, a book about counterfeit drugs.

Image by Darren Wamboldt/Bergman Group.