The Office of the Inspector General at the US Department of Health and Human Services (HHS) issued a report this month citing the US Food and Drug Administration’s need to improve its oversight of foreign clinical trials. The report raises questions over the effectiveness of federal regulatory practices and resources to keep pace with an increasingly global pharmaceutical industry, and in doing so, also engenders larger policy considerations on how to best address this problem.

The HHS report noted that 80% of approved marketing applications for drugs and biologics contained data from foreign clinical trials. More than half of clinical-trial subjects and sites were located outside the United States. Western Europe accounted for most foreign clinical-trial subjects and sites. Central and South America had the highest average number of subjects per site. Overall, FDA inspected clinical investigators at only 1.2% of all clinical-trial sites for applications approved in fiscal year 2008. It inspected 1.9% of domestic clinical-trial sites and 0.7% of foreign clinical-trial sites. The report said that challenges to conducting foreign inspections and data limitations inhibit FDA’s ability to monitor clinical trials, which included problems of having early-phase clinical trials being conducted outside the US without investigational new drug (IND) applications.

In its report, HHS recommends that FDA require standardized electronic clinical-trial data, monitor trends in foreign clinical trials not conducted by INDs, and to continue to explore ways to expand its oversight of foreign clinical trials. Such recommendations are reasonable, but they also raise larger policy questions that come into play with the increased globalization of the pharmaceutical industry. That is, given the nature of the products being made and the attendant regulation that is required, should a different model of business practices and regulation apply to pharmaceutical products compared with consumer and industrial products? Should another set of rules of apply?

There is no easy answer to that question as it requires a balance of free-market principles with public regulation. Drug products, unlike consumer and industrial products, require a higher level of regulatory oversight to ensure their safety and quality. Products developed or manufactured outside the US are neither implicitly better or worse than products developed or manufactured in the US. But given the limitations of financial resources and jurisdictional authority of US federal agencies outside the US, is it a prudent course to have clinical development or manufacturing of pharmaceutical products that are targeted for the US market, to be performed outside the US? Is this question an economic debate of free trade versus protectionism or a broader policy matter in ascertaining the relevance of domestic regulation in a global marketplace? Should regulation dictate business practice or business practice dictate regulation?

It seems now that we have a hybrid response. During the past several years, FDA has responded with the opening of offices in China, India, Central America, and South America as a way to increase its oversight of pharmaceutical development and manufacturing outside the US, which is a good move in the interest of public safety. But again, it raises another broader philosophical question: should federal resources be used to indirectly support offshoring functions outside the US? There is an ongoing policy debate as to how to increase the US position in science, technology, engineering, and mathematics (STEM) with initiatives supporting STEM activities in education and suggestions to foster competitiveness in innovation. But in the case of pharmaceutical products, is there a disconnect in federal policy, where on one hand we want to encourage STEM activities domestically, but on another hand are indirectly fostering STEM activities outside the US?

A lot to consider. Admittedly, it is a difficult balance of short-term, long-term, economic, and scientific goals, but perhaps one in which the sum of the parts rather than the individual parts should be considered.