Thank you for that kind introduction. It is a pleasure to be back in China and, in particular, to have the opportunity for a return visit here at Peking University. I want to thank the school's distinguished administration, faculty, and students for hosting me on your beautiful campus.
Your university has a long and distinguished history as a center for research and learning, and a tradition of both educating and hosting many of this nation's great leaders and thinkers. And your renowned academic reputation is well deserved, as you do an extraordinary job to advance scholarship and to train the next generation of leaders, many of whom I’m sure are sitting here before me today.
As you know, an institution of higher education is not defined by its coursework alone. And this is another reason why this school excels -- because it promotes the values of inquisitiveness, integrity, and academic and intellectual freedom, which epitomize and reinforce the essence of teaching, study and learning.
As the great American educator Robert Maynard Hutchins once said, “The object of education is to prepare the young to educate themselves throughout their lives.” All of you are certainly building that foundation, and the hope is that your education will be the endeavor of a lifetime.
So it would be worth the journey here just to meet with you today. But there are a number of other reasons for my return to China this week. Starting tomorrow through the end of the week, I will be attending the 9th International Summit of Heads of Medicines Regulatory Agencies Meeting, which provides an important opportunity to address common public health challenges, share emerging knowledge, and discuss regulatory challenges and potential areas of international cooperation. I'm especially encouraged by the leadership role that China’s Food and Drug Administration (CFDA) has played in organizing and hosting this key multilateral meeting.
I am also meeting separately with Chinese officials to discuss additional ways in which our two nations can enhance our partnerships to strengthen the safety of food produced in China for export to the United States, and the quality and effectiveness of medical products produced in China for export to the United States. And how, through our work together, we can improve health and safety for all.
I think it is a sign of the growing importance and closeness of our countries' relationship -- and the seriousness with which we take the issue of the regulation of foods and medical products -- that my visit this week was preceded just two weeks ago by an official visit from FDA's Deputy Commissioner for Foods and Veterinary Medicine, Michael Taylor. And when President Obama visited last week for the APEC Leaders' Summit, his staff were in regular touch with FDA's China Office staff regarding our efforts to expand our presence here.
So we have a deep relationship that crosses many layers of Government. We also collaborate at the technical level. For instance, I look forward to the opportunity I will have tomorrow to visit a mobile counterfeit product testing laboratory, a resource that helps us in our work together to prevent the scourge of counterfeit drugs.
Although I was in China in 2012, and briefly last summer as a tourist, it was back in 2010 that I was last here at your school. At that point, it was still early in my tenure as Commissioner of the FDA and I was gaining familiarity with the organization I had been chosen by President Obama to lead. I was just beginning to appreciate the breadth of FDA’s mission and the impact of its vast responsibilities.
FDA ensures the safety, efficacy, and quality of human and veterinary drugs, medical devices, and human biological products, as well as of the blood supply in the United States. We regulate cosmetics, dietary supplements, radiation-emitting products and, beginning five years ago, tobacco products. And of course, we oversee the majority of the food supply, and the investigation and mitigation of outbreaks of foodborne illness.
Additionally, FDA helps to speed innovations that make medicines and devices safer and more effective. And we ensure the public has accurate, science-based information it needs to use medicines, devices, and foods to improve their health.
What all this means is that FDA is responsible every year for overseeing an estimated two trillion dollars worth of medical products, food, cosmetics, dietary supplements and tobacco. The products we regulate account for more than 20 cents of every dollar spent on consumer goods in the United States.
Needless to say, the enormous scope and importance of FDA's responsibilities – combined with the extraordinary potential offered today by science to transform the prevention, diagnosis and treatment of many diseases and public health challenges– meant I had to set some priorities when I came into the agency. And one of the priorities that I identified from the very beginning involved the growing challenge of globalization, which has an enormous and direct impact on FDA's ability to do its job.
Our world today has been greatly transformed by the new realities of production and distribution of food and medical products that consumers use in their daily lives, and that transformation is accelerating. Nations on opposite sides of the world are interconnected in ways they never were 50 or 100 years ago. Even a decade ago, the world looked considerably different.
This increasing interconnectedness of global supply chains have been, in many ways, a good thing. We all can get access to products we never could have before. But it also presents many new threats to our health and security, especially as that supply chain grows more complex. No aspect of food or medical products today is untouched by the movement of those products through the global pipeline of manufacturing, processing, packaging, production, and transport. The complicated system leaves those products newly vulnerable to threats that could compromise their safety and security.
Today I want to talk with you about some of these challenges we face in this new environment, and what we as regulators can do -- and are doing both domestically and through increasing cooperation among nations -- to address and overcome them.
It is not enough that we work together. Our work must also take advantage of the continuing advances in science and technology to help us promote and protect the public health.
I thought I might begin by citing an early example of the intertwining of global issues and medical products. Consider, for example, the innocent rhubarb, a root that by the year 1100—and likely even earlier than that -- was found to have important medical properties. It was highly sought after as a purgative, or laxative, which was an important therapeutic property that fit in well with medical systems of the day. And Chinese rhubarb was particularly prized. For centuries, China was a major importer and exporter, using its historic trade routes to send it throughout the world.
Not surprisingly, perhaps, other nations sought to restrict and regulate rhubarb. By the late 1680s, for instance, the Russian government exercised controls over the rhubarb trade. And in the early 18th century it imposed restrictions to improve the product's quality mandating the removal of what it said were “all inferior or spurious pieces,” as well as by ordering that the root be dried and packed in waterproof chests so it would not get wet before being sold to druggists. Who would have thought that there would be so much attention to rhubarb?
I cite this example because on the one hand it demonstrates how some of the underlying issues involved in the conflicts over rhubarb -- supply and demand, production and regulation, product quality and efficacy -- remain central to the global commerce of many medical products today.
I mention it also to underscore some of the fundamental differences with today's global marketplace. One is that that the challenges we face related to the production, distribution and regulation of medical products across the globe are greater than ever. The scale of production and distribution today is vast and ever more complex, thanks to innovations in manufacturing, transportation, refrigeration and communication. Additionally, developments in science and technology – as well as information about these breakthroughs -- have made even complex medical products easier to manufacture. Thus, many nations that might never have dreamed of being producers and distributors of drugs, medical devices, and biologics are today able to churn out these products and distribute them across the globe.
These changes have had an enormous impact on the United States and on the FDA's roles and responsibilities. When our agency was created a little over a century ago, we were primarily domestically-focused, and our regulated industries were largely local in nature. Today, however, not only has the volume of products we regulate increased exponentially, but increasingly those products are coming, in whole or in part, from outside the United States.
Fewer and fewer products regulated by the FDA are manufactured and distributed exclusively within the United States. Instead, they are coming from more than 150 different countries and more than 300,000 facilities around the world. For example, in China alone, there are nearly 4,000 medical device establishments that have registered with the FDA, listing nearly 20,000 devices they produce.
Today, nearly 40 percent of finished drugs consumed by Americans are made elsewhere, as are about 50 percent of medical devices Americans use. And approximately 80 percent of the manufacturers of active pharmaceutical ingredients (APIs) used in the United States are located abroad.
Some countries have demonstrated particularly significant growth. India, Mexico, and Thailand, for example, have had enormous increases in production, in both quantity and types of products. And China, of course, has seen particularly dramatic expansions in its production and export of medical products in recent years.
Today, for instance, China is the world's largest supplier of bulk drug or Active Pharmaceutical Ingredients (APIs) required for pharmaceutical products and certain supplements. For example, China is the world’s largest producer of acetaminophen, widely used as a pain killer, and is also a major producer of Vitamin C, manufacturing over 100,000 tons a year, and exporting approximately 90 percent.
Indeed, the growth of China’s vibrant pharmaceutical and medical product industry has played an important role in this country’s historic economic development over the last few decades. Equally important, these investments – both public and private -- are paying other important dividends in the advancement of global health. Organizations like the WHO, the Gates Foundation, and other key stakeholders are working directly with China to provide low-cost, safe, effective essential medicines and vaccines in the developing world.
But though the medical products produced in China are used all over the world, the highest percentage come to the United States. China has clearly emerged as one of America’s most important partners for medical products, including drugs, biologics, and medical devices. In 2013, the value of pharmaceutical products exported from China to the United States was nearly $4 billion, with the majority of these products being active pharmaceutical ingredients. The value of U.S. pharmaceutical exports to China, by comparison, was $1.22 billion.
China now ranks sixth among countries that export drugs and biologics to the United States. And China is the number one exporter of medical devices and equipment to the United States.
In our modern, globalized world, the many very positive aspects to this growth are easy to see. Certainly Americans benefit from the global sourcing of medical products, from China and from elsewhere.
But there are also potential dangers as a result of gaps in the quality or safety of these products. Indeed, the risks are greater at every step in our increasingly complex global supply chain networks today. Sometimes these hazards are the result of a lack of quality control that affects formulation, or packaging – or results in contamination. And sometimes, these hazards stem from intentional acts of diversion, counterfeiting, or adulteration.
As you can imagine, the development of a production process that spans not simply different factories or farms, but different nations, means an increasing burden on the regulators who are responsible for ensuring the safety and security, as well as the efficacy of these medical products.
These changes have meant an enormous increase in the number of products in global supply lines, as well as greater challenges to determine who has handled a product, and whether it has been properly manufactured, distributed and stored. This transformation means that we can no longer operate, as we once did, to ensure the safety of the products entering a country through reliance largely on inspectors operating at a nation’s port of entry.
So how do we respond to the challenges of ensuring that the products our citizens buy and use are safe, wholesome, and work as intended?
In part, the answer involves using new, state of the art technologies and better methods of analysis to strengthen and make existing approaches more efficient. For example, while screening products at a point of entry today, regulators increasingly employ risk-based analytics and sophisticated algorithms to categorize shipments, identify the nature of the products, and apply aggregate knowledge about risks.
But even these more sophisticated means of inspection are not enough, by themselves, to ensure quality and safety in today’s world of global commerce. Prevention requires engagement in the process before products ever reach the borders of the country where they are being delivered. It requires building a presence and new understandings in those countries from which products are imported, at the source.
FDA has been working to strengthen our ability to reach beyond U.S. borders and engage with our regulatory counterparts in other countries. As part of this we are helping to build stronger systems to oversee the development and distribution process in those countries, to help ensure the existence of the necessary quality and security controls.
Achieving this has required the FDA to transform itself from a domestic agency operating in a globalized world into an agency with a truly global perspective prepared to address the risks involved in the manufacture of a product, regardless of where in the world that process takes place. We’ve been accomplishing this in a variety of ways.
In 2012, for instance, the U.S. Congress gave FDA additional authorities and an expanded mandate in the areas of prevention, detection, and response, as well as improving the security and integrity of the supply chain, by passing the Food and Drug Administration Safety and Innovation Act (FDASIA). Among the authorities it provides is explicit authority for the FDA to partner with foreign regulatory authorities so that it can leverage resources through information-sharing and recognition of regulatory counterparts’ inspections.
We've also opened multiple foreign offices over the last 10 years, including here in China. I want to recognize FDA's Director of our China office, Dr. Christopher Hickey, and his entire staff for their work here. These posts have proven to be important in planning inspections of foreign facilities and manufacturing sites.
But perhaps even more significant is the role our offices here play as a hub for cooperation and information exchange with our Chinese counterparts, and with Chinese industry. For example, we have worked closely with Chinese authorities to build regulatory capacity and share best practices – including through the facilitation of FDA training in important regulatory areas.
In collaboration with the CFDA, international regulatory agencies, and other professional organizations, Dr. Gang Wang from our China Office has conducted numerous workshops and training sessions on risk-based drug GMP inspections to ensure safety and quality of drug products manufactured by Chinese manufacturers and exported to the U.S. Over 1,000 CFDA regulators and drug inspectors have participated in these workshops and training.
China has encountered some challenges as its medical products industry has matured, including the need to improve compliance and quality systems and strengthen manufacturing practices. Some of these were due to the creation of many smaller companies that did not have the appropriate systems in place to ensure good manufacturing practices.
But China is certainly not alone in the challenges it has faced from the growth in its medical products industry. Quite simply, a number of the countries that are experiencing this enormous expansion in productivity lack the mature regulatory framework that is essential to ensure the safety and security of the manufacturing and distribution process. Sometimes they do not have the fiscal or human resources to build or maintain it. Sometimes challenges come from the sheer complexity of the products themselves and the lack of training in regulatory science. And sometimes, there are public pressures to remove regulatory oversight.
Whatever the reason for the lack of adequate regulatory oversight, such failure presents an unacceptable risk to consumers, while also threatening a nation’s economy and security…and frankly that of other nations as well. That is why we are working together to expand partnerships between countries, improve information sharing and data collection, and leverage resources.
To its credit, China has worked to strengthen its regulatory system in a rapid and impressive fashion, and U.S. FDA has built a strong relationship with China. We continue to improve cooperation between our countries at all levels, including in industry and the research and academic community, as well as between our governments and regulatory agencies. The goal is the same -- to ensure that products that are produced here and sent to the United States are of high quality, and are safe and effective for consumers.
In 2007, for instance, the U.S. Department of Health and Human Services, of which FDA is a part, entered into two precedent-setting agreements with the Chinese government, formalizing a new era of cooperation and establishing mechanisms for regulatory cooperation on food and feed safety, and the safety of drugs and medical devices.
Under these agreements, the US and China agreed to notify each other as soon as they discover a circumstance that could endanger public health, such as the need for a product recall. In addition, Chinese regulators will require registration of products exported to the United States and work toward a system to certify that these products meet FDA standards before they are exported.
Last year, during his trip to China, Vice President Biden affirmed the importance of cooperation in these areas and China committed to issuing visas for additional FDA food and drug inspectors.
We have been working closely with the Chinese to achieve this goal, and to finalize two implementing arrangements that further advance the cooperative approach and methods established in those 2007 accords. These two arrangements will allow our relationship to grow further, by defining the framework for the exchange of information and documents related to inspections, and provide for each agency to obtain information on regulatory decision-making.
There are other ways our countries are successfully working together. For example, in May 2012, the FDA took enforcement action against more than 100 websites we had identified that were selling adulterated dietary supplements and medical products to both Chinese and U.S. customers. Our Office of Criminal Investigations (OCI) investigated the sites and shared information with our Chinese counterparts. OCI also provided a training course on Open Source Internet Investigations to CFDA and we continue to collaborate in other ways on fighting cybercrimes.
But our cooperative endeavors are not only involved with enforcement issues. Chinese regulators have become important strategic partners for FDA. Today, we regularly engage on everything from sharing information on clinical trials to product safety issues that may impact consumers, to medical advances in important areas for health.
Late last year, for example, FDA allowed marketing of several gene-sequencing devices. FDA's China Office subsequently relayed this information to contacts at CFDA. Because of this communication, when CFDA recently published requirements strengthening its rules related to gene sequencing, those new requirements reflected information learned from FDA's experiences.
And finally, I would be remiss if I did not mention one other very important and successful collaboration of which I am extremely proud -- between FDA's China Office, our Center for Drug Evaluation and Research, and this great University. And that is the establishment of a world-class graduate degree program in international pharmaceutical engineering management (IPEM) to train future leaders in China's pharmaceutical industry and accelerate modernization of the industry.
This collaboration began in 2005 with just two courses on current good manufacturing practices. These proved hugely successful, and drew attention from Chinese drug companies and regulatory agencies, as well as industry and regulators in neighboring countries.
The following year, the school established its M.S. in IPEM, with support from the FDA and multinational pharmaceutical companies. The program was formally launched in March 2007, with courses in regulatory science, pharmaceutical science, and engineering, as well as related business, management, and leadership skills, all at the international level.
While the collaboration is itself noteworthy, just as significant is its underlying purpose – to produce a new generation of highly-trained professionals who understand how to comply with international standards for the pharmaceutical industry and regulatory agencies of China. This fits closely into the overall curriculum of this school and the goal of preparing its students to become leaders in government and the private sector.
Programs like the IPEM also go a long way toward strengthening the field of regulatory science by training new minds to be able to develop the science, standards and tools necessary to ensure the safety of, and speed the development, review, and approval of new medical products that can make a difference in the lives of patients. This is the kind of forward-looking thinking we want to invest in to ensure the highest regulatory and scientific standards in our global economy of the future.
Even as our two nations continue to strengthen our relationship bilaterally, we must still move to build systems of global governance that offer us even broader collaborative mechanisms. This vision has generated great interest and enthusiasm from regulators and regulated industry, as well as other stakeholders.
I'm pleased that we already have some such structures in place or in development, including the new International Coalition of Medical Regulatory Authorities (or ICMRA), the International Conference on Harmonization, the Pharmaceutical Inspection Cooperation Scheme, and the International Pharmaceutical Regulators Forum.
Building such a global governance approach makes good sense, because it promotes efficiency and information sharing. By creating a more coordinated approach among the world’s manufacturing facilities we can raise standards, ensure levels of quality, and leverage fiscal resources and expertise.
But there’s one other very important reason to build and strengthen regulatory capacity in developing countries that goes beyond ensuring the quality of those products and the enhancement of consumer safety. By improving domestic health and productivity and supporting reliable industry and economic growth, we have the opportunity to provide important and lasting health and economic development benefits to those nations.
As I have said previously, threats to health anywhere are threats to individuals everywhere. We certainly see this profoundly in the case of Ebola. The challenges of globalization do not only involve issues of commerce and trade. They relate directly to how we share ideas and solutions to some of the serious health problems that many nations individually may face – but that ultimately will affect our entire and increasingly interconnected world.
Through the meetings I am having here this week, through the partnerships we have established between our two countries, and through the global systems of governance we are building among the nations of the world, we are beginning to see some success in addressing these global health challenges.
I look forward to continuing the partnership with China and the work we are doing together with other nations to create a stronger system that meets the growing demands of our globalized world while helping to ensure the health of all its residents, no matter what country they live in.
And I also am especially looking forward to seeing the impact that the students at this University will have on that future. I’m confident that with your energy, intellect, and leadership, there are no limits on what we can achieve. I hope that together we can truly fulfill the promise of globalization, and in doing so, improve health and safety for all.
Thank you.
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