ABSTRACT

Medicines Regulatory Authorities (MRAs) are an essential part of national health systems and are charged with protecting and promoting public health through regulation of medicines. However, MRAs in resource-constrained settings often struggle to provide effective oversight of market entry and use of health commodities. This paper proposes a regulatory value chain model (RVCM) that policymakers and regulators can use as a conceptual framework to guide investments aimed at strengthening regulatory systems. The RVCM incorporates nine core functions of MRAs into five modules: (i) clear guidelines and requirements; (ii) control of clinical trials; (iii) market authorization of medical products; (iv) pre-market quality control; and (v) post-market activities. Application of the RVCM allows national stakeholders to identify and prioritize investments according to where they can add the most value to the regulatory process. Depending on the economy, capacity, and needs of a country, some functions can be elevated to a regional or supranational level, while others can be maintained at the national level. In contrast to a “one size fits all” approach to regulation in which each country manages the full regulatory process at the national level, the RVCM encourages leveraging the expertise and capabilities of other MRAs where shared processes strengthen regulation. This value chain approach provides a framework for policymakers to maximize investment impact while striving to reach the goal of safe, affordable, and rapidly accessible medicines for all.

Key words
Pharmaceutical preparations; standards; international cooperation; legislation, pharmacy; quality assurance, health care; medicines; Americas

RESUMEN

Los organismos de reglamentación farmacéutica son parte esencial de los sistemas nacionales de salud y se encargan de proteger y promover la salud pública mediante la reglamentación en torno a los medicamentos. Sin embargo, en lugares con pocos recursos, estos organismos suelen tener dificultad para supervisar eficazmente la entrada en el mercado y el uso de los productos sanitarios básicos. En el presente artículo se propone un modelo de cadena de valor reglamentaria (MCVR) que los responsables de las políticas y de la reglamentación pueden usar como marco conceptual para guiar las inversiones dirigidas a fortalecer los sistemas reglamentarios. El modelo incorpora en cinco módulos nueve funciones básicas de los organismos de reglamentación farmacéutica: (i) directrices y requisitos inequívocos; (ii) el control de los ensayos clínicos; (iii) la autorización de la comercialización de los productos médicos; (iv) el control de calidad antes de la comercialización; y (v) las actividades posteriores a esta. La aplicación del MCVR les permite a los interesados directos en los países determinar qué inversiones hacen falta y darles la prioridad debida teniendo presente dónde contribuirían en mayor medida a realzar el valor del proceso reglamentario. Si lo permiten la economía, la capacidad y las necesidades de un país, ciertas funciones pueden extenderse al nivel regional o supranacional, mientras que otras pueden seguir siendo nacionales. A diferencia de un método único para todos los casos, en el que cada país administra todo el proceso reglamentario en el nivel nacional, el MCVR promueve el aprovechamiento de la pericia y capacidades de otros organismos de reglamentación farmacéutica en áreas donde los procesos comunes fortalecen la reglamentación. Este método de la cadena de valor les proporciona a los formuladores de las políticas un marco para potenciar al máximo el efecto de las inversiones a la vez que se esfuerzan por lograr el objetivo de poner al alcance de todos medicamentos inocuos, asequibles y rápidamente accesibles.

Palabras clave
Preparaciones farmacéuticas; normas; cooperación internacional; legislación, farmacia; aseguramiento de calidad, prestación de atención de salud; preparaciones farmacéuticas; Américas

Countries with limited financial, human, and technical resources often struggle to provide effective oversight of the market entry and use of health commodities. As the number and classes of medical products available for human use continue to grow, so do the challenges. Inadequate regulatory oversight of medicines has led to growing concerns over the rise of antimicrobial resistance and the proliferation of falsified and substandard medicines (FSM), which has led to calls for more responsive and effective regulatory capacities at all levels (¹1 Institute of Medicine. Countering the problem of falsified and substandard drugs. Washington, DC: IOM; 2013., ²2 World Health Organization. Antimicrobial resistance: global report on surveillance. Geneva: WHO; 2014.).

Well-functioning Medicines Regulatory Authorities (MRAs) can help address these challenges. MRAs are an integral part of health systems and are a crucial means to protect and promote public health. Unfortunately, MRAs receive less funding than many other components of health systems and tend to draw significant attention from the public and policymakers only after something has gone wrong (¹1 Institute of Medicine. Countering the problem of falsified and substandard drugs. Washington, DC: IOM; 2013., ³3 Institute of Medicine. Ensuring safe foods and medical products through stronger regulatory systems abroad. Washington, DC: IOM; 2012., ⁴4 Preston C, Valdez ML, Bond K. Strengthening medical product regulation in low- and middle-income countries. PLoS Med. 2012;9(10):e1001327.). Ideally, MRAs should be able to employ a comprehensive, rapid, and scientific review process to ensure the safety and quality of medicines from the point of a product’s approval throughout its lifecycle. Nevertheless, many MRAs in resource-constrained settings are not able to execute core regulatory functions, such as quality control testing and post-market surveillance, at a level consistent with their mandates (⁵5 World Health Organization. Assessment of medicines regulatory systems in sub- Saharan African countries: an overview of findings from 26 assessment reports. Geneva: WHO; 2010., ⁶6 Pan American Health Organization. Bulletin of the Observatory. Regional Platform on Access and Innovation for Health Technologies. Washington, DC: PAHO; 2014. [Report No. 1].). Limited political, financial, and infrastructure commitments can result in under-resourced and inadequately trained regulators (³3 Institute of Medicine. Ensuring safe foods and medical products through stronger regulatory systems abroad. Washington, DC: IOM; 2012.).

Many countries in the Region of the Americas face substantial challenges to medicine regulation and access. A 2014 analysis of 25 countries in the Region (⁶6 Pan American Health Organization. Bulletin of the Observatory. Regional Platform on Access and Innovation for Health Technologies. Washington, DC: PAHO; 2014. [Report No. 1].) found that a significant number did not have the capacity or legal authorities to carry out many basic functions of regulatory agencies: almost one-half (48%) did not have the authority to regulate clinical trials and up to 80% lacked the legal provisions to communicate characteristics of registered drugs to the public. Furthermore, the impact of rare diseases compounds the challenges of regulation and access faced by countries in the Region. Compared to countries in other regions, those in South and Central America have only recently enacted legislation to improve access to medicines for rare diseases (⁷7 Prat A. A practical overview of requirements for drug registration in Latin America. Regulatory Rapporteur. 2013; 10(9):5-10., ⁸8 Arnold RJ, Bighash L, Bryon Nieto A, Tannus Branco de Araujo G, Gay-Molina JG, Augustovski F. The role of globalization in drug development and access to orphan drugs: orphan drug legislation in the US/EU and in Latin America. F1000Res. 2015;4:57.). The laws and regulations vary widely among the countries, with differing requirements, definitions of orphan diseases, approval pathways, and review timelines (⁸8 Arnold RJ, Bighash L, Bryon Nieto A, Tannus Branco de Araujo G, Gay-Molina JG, Augustovski F. The role of globalization in drug development and access to orphan drugs: orphan drug legislation in the US/EU and in Latin America. F1000Res. 2015;4:57., ⁹9 Caetano P. Expedited approval of orphan drugs in Latin America not yet a reality. Rockville, MD: Regulatory Affairs Professionals Society; 2011.). Regulatory review times also vary greatly, ranging from months to years, presumably due to limited resources (⁷7 Prat A. A practical overview of requirements for drug registration in Latin America. Regulatory Rapporteur. 2013; 10(9):5-10.). The lack of harmonized requirements across Latin America and the Caribbean creates a regulatory challenge that decreases the efficiency and access to necessary medicines (⁷7 Prat A. A practical overview of requirements for drug registration in Latin America. Regulatory Rapporteur. 2013; 10(9):5-10.–⁹9 Caetano P. Expedited approval of orphan drugs in Latin America not yet a reality. Rockville, MD: Regulatory Affairs Professionals Society; 2011.).

A number of organizational and operational innovations, such as regional harmonization initiatives, have attempted to strengthen regulatory capacities, but a dearth of data, knowledge, and focus continues to plague many systems (¹⁰10 Institute of Medicine. International regulatory harmonization amid globalization of drug development: Workshop Summary. Washington, DC: IOM; 2013.). To overcome these challenges, a new approach to the regulation of medicines is needed.

The following paper proposes applying a regulatory value chain model (RVCM) as a conceptual framework that policymakers and regulators can use to think strategically about how best to invest in strengthening regulatory systems (¹¹11 Porter ME. Competitive advantage: creating and sustaining superior performance. New York City: Simon and Schuster; 1985.). The model gives stakeholders a stepwise framework to consider alternative models and strategically allocate resources across the full range of regulatory activities.

CHALLENGES TO IMPLEMENTING CORE REGULATORY FUNCTIONS

A primary goal of an MRA is to ensure that health products are safe, effective, and meet quality standards. However, the role of MRAs extends well beyond that mandate. To express the reach and complexity of the role, an iron triangle of health systems adapted to MRAs was designed (Figure 1). It suggests that MRAs have three key objectives: (i) to improve population health, (ii) to ensure equitable access for all, and (iii) to provide value that enhances the overall health system. Ensuring timeliness of product availability for patient use (the center of the triangle) is essential to achieving the three objectives. All MRAs, and particularly those in low-resource settings, face challenges when securing the human and financial resources needed to adequately address all the requirements and manage any potential trade-offs.

The Institute of Medicine (IOM) has identified nine functions that are vital to achieving the three key objectives of MRAs delineated above (Table 1) (³3 Institute of Medicine. Ensuring safe foods and medical products through stronger regulatory systems abroad. Washington, DC: IOM; 2012., ¹²12 Ndomondo-Sigonda M, Ambali A. The African medicines regulatory harmonization initiative: rationale and benefits. Clin Pharmacol Ther. 2011;89(2):176-8.). Unfortunately, many countries in the Region of the Americas have not been consistent in effectively implementing these core functions (⁶6 Pan American Health Organization. Bulletin of the Observatory. Regional Platform on Access and Innovation for Health Technologies. Washington, DC: PAHO; 2014. [Report No. 1].). An analysis by the Pan American Health Organization (PAHO) found that, on average, only 69% of basic MRA functions have been implemented across the 25 countries assessed (⁶6 Pan American Health Organization. Bulletin of the Observatory. Regional Platform on Access and Innovation for Health Technologies. Washington, DC: PAHO; 2014. [Report No. 1].). Furthermore, the PAHO analysis indicates that deficiencies exist in countries at all income levels in the Region (⁶6 Pan American Health Organization. Bulletin of the Observatory. Regional Platform on Access and Innovation for Health Technologies. Washington, DC: PAHO; 2014. [Report No. 1].). As a consequence, the vast majority of people are left without the protections afforded by an effective regulatory authority (¹1 Institute of Medicine. Countering the problem of falsified and substandard drugs. Washington, DC: IOM; 2013., ³3 Institute of Medicine. Ensuring safe foods and medical products through stronger regulatory systems abroad. Washington, DC: IOM; 2012., ⁶6 Pan American Health Organization. Bulletin of the Observatory. Regional Platform on Access and Innovation for Health Technologies. Washington, DC: PAHO; 2014. [Report No. 1]., ¹²12 Ndomondo-Sigonda M, Ambali A. The African medicines regulatory harmonization initiative: rationale and benefits. Clin Pharmacol Ther. 2011;89(2):176-8.).

APPLYING THE VALUE CHAIN CONCEPT TO MRAs

A value chain is a concept drawn from organizational analysis and business management that is increasingly being applied to the health sector (⁶6 Pan American Health Organization. Bulletin of the Observatory. Regional Platform on Access and Innovation for Health Technologies. Washington, DC: PAHO; 2014. [Report No. 1]., ¹³13 Kim JY, Farmer P, Porter ME. Redefining global health-care delivery. Lancet. 2013;382(9897):1060-9.). A value chain provides a systems framework in which production, processing, and sale of a given product are operated and analyzed comprehensively (¹¹11 Porter ME. Competitive advantage: creating and sustaining superior performance. New York City: Simon and Schuster; 1985.), as opposed to one in which each component operates independently, without consideration for linkages among activities. Alignment of governance and incentives are critical value-chain characteristics. Value is added along the course of the chain by different clusters of activities until a final product (or health outcome) is produced. In the case of the regulatory value chain, one can conceptualize the final output as safe, effective, available medicines that meet quality standards. A value chain integrates the full set of activities needed to deliver this output—the chain is only as strong as its weakest link—while acknowledging that individual segments of the value chain may be resourced, measured, and managed in quite different ways, depending on a nation’s needs, costs, policy preferences, and capacity.

The RVCM proposed here incorporates the nine IOM-identified core functions into five modules (Figure 2). These modules are: (i) clear guidelines and requirements; (ii) control of clinical trials; (iii) market authorization of medical products; (iv) pre-market quality control; and (v) post-market activities. The general functions of each of the five modules, as well as the overarching enabling factors necessary for implementation, are elements of analysis and function within a regulatory value chain. This model provides a framework for stakeholders to assess the effectiveness of the entire regulatory continuum and of each module independently.

Fundamentally, the systematic application of the RVCM offers national stakeholders a means to ask questions about the priorities for their regulatory system and where supranational harmonization programs or investments to strengthen the system are most appropriate. The value chain allows stakeholders to imagine options for bundling or unbundling various modules and managing them differentially. Depending on a country’s economics, capacity, and needs some functions can be elevated to a regional or supranational level, while others can be maintained at the national level or devolved to subnational authorities. This contrasts the “one size fits all” approach to regulation systems in which each country manages the full regulatory value chain at the national level without leveraging the expertise or capabilities of other nations.

RVCM APPLIED TO NATIONAL AND REGIONAL NEEDS

As a first step to applying the RVCM, a comparative assessment of health priorities, existing regulatory frameworks, and resource capacities of each MRA should be undertaken. Understanding a system’s current strengths and weaknesses allows informed and strategic allocation of resources with the aim of maximizing health benefit while minimizing resource input. It also enables more nuanced discussions of the appropriate focus of oversight for regulatory authorities and the potential benefits of supranational or regional models. For example, a country with significant FSM challenges that wishes to focus its limited MRA resources on post-market oversight activities, may choose to establish a mutual recognition regime or harmonization of product approval and market authorization processes with other countries. The result of applying the RVCM is better alignment of MRA resource allocation with country goals.

Once a comprehensive regulatory capacity assessment has been completed and current performance of the regulatory system is established, the RVCM can help policymakers determine how to best leverage limited resources for the greatest public health benefit. Standardized assessment tools, such as those made available by PAHO and WHO (¹⁸18 Pan American Health Organization. Pan American Network on Drug Regulatory Harmonization. Washington, DC: PAHO; 2014. Available from: www.paho.org/hq/index.php?option=com_content&view=category&id=1156&layout=blog&Itemid=1685&lang=en Accessed on 18 January 2015.
www.paho.org/hq/index.php?option=com_con... , ¹⁹19 Azatyan S, Kopp S. Presentation: Regulatory harmonization initiatives: update. Proceedings of the Interagency Pharmaceutical Coordination group (IPC) meeting, December 2012, Washington, DC. Geneva: World Health Organization; 2012. Available from: www.who.int/medicines/areas/policy/IPC_dec2012_Kopp_reg.pdf Accessed on 18 January 2015.
www.who.int/medicines/areas/policy/IPC_d... ), may be used to calibrate a regional model to the needs and strengths of the participating MRAs.

Analyses that forecast what incremental investments in various modules could yield in improved performance can change the nature of resource allocation decisions. Regulatory system strengthening should be viewed as an investment with a measurable return that improves medicines access and quality. A focus on measuring the return on investment in regulatory systems may justify committing additional national resources for certain regulatory activities, while also justifying the need for harmonization of others. These include activities that increase efficiency through integration of upstream regulatory processes (e.g., laws, policies, and regulations) or internal operations (e.g., technical review and approval of applications), or that expedite access to essential, life-saving therapies for patients (¹⁴14 Papazoglou MP, Ribbers P, Tsalgatidou A. Integrated value chains and their implications from a business and technology standpoint. Decis Support Syst. 2000;29(4): 323-42.).

A potential application of the RVCM is to provide a blue print for the development of a regional regulatory system. In general, any function that is not best performed at the national level could be centralized at a regional or supranational level or “outsourced” to another MRA that has distinctive strength in that function. In the Region of the Americas, six regulatory authorities³3Argentina, Brazil, Canada, Colombia, Cuba, and Mexico; United States is in the process of becoming a NRA/RR. have been recognized as National Regulatory Authorities of Regional Reference (NRA/RR), and another is in the process of joining the group (¹⁵15 Pan American Health Organization. System for evaluation of the National Regulatory Authorities for Medicines Washington, DC: PAHO; 2015. Available from: www.paho.org/HQ/index.php?option=com_content&view=article&id=1615%3Asistema-evaluacion-autoridades-reguladoras-nacionales-medicamentos-&catid=1267%3Ahss-quality-drug-regulation&Itemid=1179&lang=en Accessed on 12 March 2015.
www.paho.org/HQ/index.php?option=com_con... , ¹⁶16 Guaia MI. Regulatory affairs in Latin America. 2014. Available from: http://latampharmara.com/2014/02/24/americas-health-authorities-meeting/ Accessed on 12 March 2015.
http://latampharmara.com/2014/02/24/amer... ). Leveraging the capacity of NRA/RR would allow for increased regulatory capacity in the Region, with minimal additional investment. NRA/RRs could “un-bundle” the value chain modules to carry out different regulatory functions on behalf of all partners.

ECONOMIC BENEFITS

By applying the RVCM and measuring cost and performance at the module level, the cost of various approaches can be compared. For example, if Regional harmonization of particular modules is deemed most cost-effective overall, a net investment approach can be used to offset the savings from duplicative efforts against the initial investment required to set up a Regional authority (¹⁰10 Institute of Medicine. International regulatory harmonization amid globalization of drug development: Workshop Summary. Washington, DC: IOM; 2013.). The economic benefits should also take into account the savings garnered from improvements to population health that result from a well-functioning regulatory system. For example, in a country with significant FSM problems, modest investments that address this challenge could offer substantial economic and health returns to the population. Finally, RVCM application gives countries a better understanding of the cost of establishing a self-sustaining Regional regulatory system. To ensure operational sustainability, the system must be flexible, responsive, and outcome-driven, while continuing to offer a favorable return on investment (³3 Institute of Medicine. Ensuring safe foods and medical products through stronger regulatory systems abroad. Washington, DC: IOM; 2012.).

DISCUSSION

The value of regulatory harmonization of technical requirements for registration of medicines and other medical products is widely recognized (³3 Institute of Medicine. Ensuring safe foods and medical products through stronger regulatory systems abroad. Washington, DC: IOM; 2012., ⁶6 Pan American Health Organization. Bulletin of the Observatory. Regional Platform on Access and Innovation for Health Technologies. Washington, DC: PAHO; 2014. [Report No. 1]., ¹⁰10 Institute of Medicine. International regulatory harmonization amid globalization of drug development: Workshop Summary. Washington, DC: IOM; 2013., ¹²12 Ndomondo-Sigonda M, Ambali A. The African medicines regulatory harmonization initiative: rationale and benefits. Clin Pharmacol Ther. 2011;89(2):176-8.). Currently, several regional harmonization initiatives⁴4Asia-Pacific Economic Cooperation (APEC); Association of Southeast Asian Nations (ASEAN); East African Community (EAC); Gulf Cooperation Countries (GCC); Pan American Network on Drug Regulatory Harmonization (PANDRH); and South African Development Community (SADC). exist to standardize registration procedures (¹⁷17 International Conference on Harmonisation. FAQs/ICH Organisational Structure: International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use; 2015. Available from: www.ich.org/about/faqs.html Accessed on 18 January 2015.
www.ich.org/about/faqs.html... ). The Pan American Network for Drug Regulatory Harmonization is an example of such an initiative (¹⁸18 Pan American Health Organization. Pan American Network on Drug Regulatory Harmonization. Washington, DC: PAHO; 2014. Available from: www.paho.org/hq/index.php?option=com_content&view=category&id=1156&layout=blog&Itemid=1685&lang=en Accessed on 18 January 2015.
www.paho.org/hq/index.php?option=com_con... ). However, while regulatory harmonization is an important first step, it is not enough. While harmonization initiatives help develop common standards, execution of the standards is still the responsibility of individual nations (¹⁹19 Azatyan S, Kopp S. Presentation: Regulatory harmonization initiatives: update. Proceedings of the Interagency Pharmaceutical Coordination group (IPC) meeting, December 2012, Washington, DC. Geneva: World Health Organization; 2012. Available from: www.who.int/medicines/areas/policy/IPC_dec2012_Kopp_reg.pdf Accessed on 18 January 2015.
www.who.int/medicines/areas/policy/IPC_d... ). As such, there are persisting financial and technical challenges to enacting harmonized standards. These affect countries at all income levels, and many nations are not able to successfully implement the already harmonized standards set by International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use (³3 Institute of Medicine. Ensuring safe foods and medical products through stronger regulatory systems abroad. Washington, DC: IOM; 2012., ⁶6 Pan American Health Organization. Bulletin of the Observatory. Regional Platform on Access and Innovation for Health Technologies. Washington, DC: PAHO; 2014. [Report No. 1].).

A value chain model has much to offer the Region of the Americas, which now has the opportunity to significantly improve health by strengthening its MRAs. Over the last decade, Latin America and the Caribbean have experienced remarkable economic and social development, with the middle class expanding over 50% (²⁰20 Latin America: Middle class hits historic high. Washington, DC: The World Bank Group; 2012. Available from: www.worldbank.org/en/news/feature/2012/11/13/crecimiento-clase-media-america-latina Accessed on 12 March 2015.
www.worldbank.org/en/news/feature/2012/1... ). Despite this, expansion of the Region’s medicines regulatory capacity is highly variable and lags behind its economic development (⁶6 Pan American Health Organization. Bulletin of the Observatory. Regional Platform on Access and Innovation for Health Technologies. Washington, DC: PAHO; 2014. [Report No. 1].). Given the substantial deficiencies observed in the PAHO basic indicators data, the Region of the Americas could benefit from using the RVCM as a tool for prioritizing regulatory system changes at national, regional, and/or subregional levels (⁶6 Pan American Health Organization. Bulletin of the Observatory. Regional Platform on Access and Innovation for Health Technologies. Washington, DC: PAHO; 2014. [Report No. 1].).

Application of the RVCM framework allows countries to pursue gradual, dynamic regulation, concurrently determining which functions benefit from regionalization and which should be preserved as sovereign, deemed essential to local needs and priorities. Instead of replacing MRAs, regional regulatory systems allow for efficient use of limited resources to provide high quality, consistent regulation of medical products. The European Medicines Agency and Gulf Central Committee for Drug Registration are successful entities that work in conjunction with their national counterparts to regulate medical products (²¹21 European Medicines Agency 2015. Available from: www.ema.europa.eu/ema/ Accessed on 18 January 2015.
www.ema.europa.eu/ema/... , ²²22 Pateriya S, Janodia M, Deshpande P, Ligade V, Talole K, Kulshrestha T, et al. Regulatory aspects of pharmaceuticals’ exports in gulf cooperation council countries. J Young Pharm. 2011;3(2):155-62.). While these are based on the specific cultural and political context of their regions, it may be instructive to learn from the successes and challenges of these collaborations.

The RVCM provides a useful adaptive framework that takes into account the unique cultural and political characteristics of the Americas. The framework has the potential to provide specific metrics for data collection and analysis, enabling policymakers to conduct standardized evaluations throughout the Region. We believe policymakers and regulators will find this approach useful to striving toward and attaining the goal of safe, affordable, and rapidly accessible medicines for all the people of the Americas.

REFERENCES

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