“I think without a doubt that we have a problem with drug safety in this country,” Harkin said Thursday morning by phone. “Forty percent of our finished drugs come from overseas, mostly from China and India, and 80 percent of the ingredients that go into our drugs — both over the counter and prescription drugs — come from overseas. We just have an inadequate inspection system.”

The GAO found inspections of foreign drug manufacturers have improved since its similar 2007 report indicated only 8 percent of foreign establishments were subject to inspection. At the initial rate, the U.S. Food and Drug Administration would need 13 years to inspect all foreign facilities. The FDA’s inspection efforts in fiscal year 2009 represent a 27 percent increase in number of inspections it conducted previously. The GAO also notes that FDA officials understand that they remain far from achieving foreign drug inspection rates comparable to domestic inspection rates.

In addition, current types of inspections by the FDA do not generally include all parts of the drug supply chain, and holding such inspections abroad continues to pose unique challenges — including the authority to require such facilities to undergo FDA inspection.

For example, when tainted Haparin, a blood thinner often used in dialysis treatments, was distributed in the U.S. in 2007, leading to at least 81 deaths and numerous injuries, the problem was traced to a Chinese manufacturing facility that had never been inspected by the FDA. Although Herapin was made by an American company, the active ingredient had been sourced from the Chinese manufacturer, which had relied on other smaller suppliers. The tainted aspect of the drug, according to FDA reports, was likely added in China as a way to cut manufacturing costs.

And, according to FDA estimates, the number of drug products made outside of the U.S. has doubled from 2001 to 2008. In 2010, nearly 20 million shipments of food, drugs and cosmetics arrived at U.S. ports of entry — a decade earlier that number was closer to 6 million. According to the FDA, foreign facilities have grown by 185 percent, while inspection rates have decreased by nearly 57 percent.

In order to combat the existing problem and stem compounding problems that are sure to surface in future years, Harkin says the government needs to revamp old laws governing FDA inspection so that it is better equipped to secure a global supply chain — an effort very similar, he said, as to what Congress passed last year in relation to food safety.

Congressional Hearing

On Wednesday, Harkin and the full HELP Committee held hearings on government oversight of the drug supply chain, gathering testimony from FDA and GAO officials as well as advocacy groups and corporate interests.

Allan Coukell, director of medical programs for the Pew Health Group in Washington, D.C., lamented the fact that no one had yet been held accountable for the earlier incident involving the tainted Herapin.

“This incident represents a clear breach of the security of the U.S. pharmaceutical supply,” he said, adding that Congress has yet to act to update statues that govern drug manufacturing. “Numerous experts have asserted that, absent changes to the system, another such event is inevitable.

“In the case of Herapin, it appears that criminals deliberately introduced a substandard active ingredient into the supply chain. At other times, consumers may be at risk because of failures by manufacturers to comply with quality standards. Poor adherence to quality standards has been observed both in the U.S. and abroad, but the shift of manufacturing to low-cost environments with reduced oversight creates an increased risk. According to one estimate, ignoring Good Manufacturing Practices (GMPs) can save up to 25 percent of a factory’s operating costs. The expectation of inspections is an incentive for compliance with quality standards.”

In 2008, he noted, an Indian manufacturer was cited by the FDA for alleged falsification of stability testing records and use of active ingredients made at unapproved sites, according to a U.S. Department of Justice subpoena motion. And, in 2010, another Indian manufacturer was found to have falsified batch manufacturing records for an anti-platelet medicine. European Union inspectors discovered at least 70 batch-manufacturing records in the plant’s waste yard, all of which had been rewritten, and in some cases original entries changed.

In fact, Coukell added, in 2006, dozens of people in Panama died after taking cough medicine that had been made with diethylene glycol, a sweet-tasting poison solvent. It had been wrongly labeled in China and pass through a series of international brokers, who repeatedly re-labeled it, presumably without performing independent testing. Remarkably enough, it was a diethylene glycol poisoning in the U.S. in 1937 that prompted the government to enact the Federal Food, Drug and Cosmetic Act, which is the document that so many pharmaceutical experts and industry watchdogs now believe needs to be updated to reflect the circumstances of the 21st century.

Kendra Martello, assistant general counsel for Pharmaceutical Research and Manufacturers of America (PhRMA), which represents researched-based pharmaceutical and biotech companies, said her organization favors granting FDA discretion to set routine inspection intervals for foreign and domestic facilities according to risk and in lieu of the agency’s current rolling two-year schedule.

“We support providing FDA with the flexibility to prioritize inspections of foreign establishments based on the risks they present, and believe in relying on set criteria such as compliance history, time since last inspection, and volume and type of products produced, will enhance the FDA’s ability to target its inspection resources efficiently and effectively,” Martello told the lawmakers.

She also suggested that the FDA should recognize and utilize foreign inspection reports or those from accredited third parties to facilitate the often difficult task of oversight of those manufacturers.

“These inspections would not take the place of FDA inspections, which are a necessary and important part of the agency’s mandate; however, they would provide FDA with the flexibility to leverage the work of foreign regulatory bodies and maximize its resources, all without foreclosing its ability to inspect any facility.”

Deregulatory Climate

Amid national discussions on how to spur job creation and enhance the economy, calls for reviewing or eliminating government oversight and regulation of private industry have become common both in Iowa and throughout the nation as part of the 2012 Republican presidential nomination process.

In fact, while U.S. Sen. Mike Enzi, a Wyoming Republican and ranking member of the HELP Committee, noted the need for concessions in U.S. policies regarding the globalization of the pharmaceutical supply chain, he also added a caveat that such increased oversight shouldn’t hinder private industry.

“We want to make sure FDA has the tools it needs to ensure supply chain security,” Enzi said. “At the same time, I am concerned about FDA over-regulating in a way that threatens jobs and patient access to therapies.”

When Congress moves forward to address the problem, Harkin said he will push for strengthened FDA inspection authority for foreign products and facilities.

“We do need legislation and we are working on that. That’s what the hearing was about yesterday. Next year, when we turn to the reauthorization of the Prescription Drug User Fee Act, we’re going to have something in there about FDA’s authority and ability to ramp up inspections of important drugs and components,” he said.

Companies, he said, including pharmaceutical companies, have begun reaching out to lawmakers about increasing foreign inspections and oversight.

“They want this. Why? Because many of them who have sourced their goods in this country have been placed at a competitive disadvantage. They want a level playing field. If we are going to inspect here, then the drugs that come in should also be inspected,” Harkin explained.

“I think this is an area that cries out for some form of regulation and support for a leveling of the playing field. If there are Republicans that say they don’t want to regulate on this are they telling people that this is a just a case of buyer beware? When you give medicine to your kids, you don’t know if it is safe or not? Is that what they want to say?”

The GAO’s statement before the HELP Committee is embedded below:

FDA Faces Challenges Overseeing the Foreign Drug Manufacturing Supply Chain

Pachauri’s comments come as observers expect little progress in the upcoming United Nations climate change talks in Cancun; some have suggested that bilateral agreements between countries will help lay the foundation for a future binding climate treaty.

Pachauri, speaking to reporters on a conference call set up by the Natural Resources Defense Council, said he hopes to see a “very clear plan of action” from the two leaders after the meeting that focuses on extending an already-established clean energy partnership between the countries. Pachauri called for collaborative research and development as well as increased investments in green energy technology.

NRDC Director of Global Strategy and Advocacy Jacob Sherr, also on the call, said the leaders should commit to helping the countries adapt to the affects of climate change by establishing a “green hotline” that would allow India and the United States to share resources.

“Uncertainty raises challenges,” Schmidt said, adding that “not just saying that it will take action, but actually showing that it will take action” is key.

China and other key countries have taken significant actions to reduce their greenhouse gas emissions, leaving the United States, which has consistently failed to pass significant climate legislation, in the dust. In order to build trust at the talks next week in Tianjin, China, and later in Cancun, Mexico, the United States should come prepared to detail what it has done and will do to reduce its emissions, Schmidt said.

But the climate talks in Cancun are not expected to produce a binding climate treaty, though Schmidt said the talks will “lay some important foundations,” including potential agreements on transparency and deforestation.

The visa hikes likely cannot be reversed, so Indian industry groups are attempting to prevent additional fee increases in the future, National Journal reported today:

“The bigger concern for us is whether this will happen more,” said Som Mittal, president of the National Association of Software and Services Companies, the Indian chamber of commerce. “Clearly this recent incident is poorly timed, in my opinion, and has left a sour taste.”

Mittal said he expects the fee increases to be brought up when Obama makes a historic visit to India in November focused on how to continue improving U.S.-India business relationships. [...]

Somers and Mittal also challenged another claim leveled by Schumer that the hiring practices of Indian firms are taking jobs away from U.S. workers. They said the visa programs are used to hire highly skilled workers in the technology industry, which has not seen the job losses that other sectors such as construction and retail have experienced.

It is unclear what percent of visas go to Indian firms — Immigration and Customs Enforcement could not confirm the number to National Journal. But as Suzy Khimm argued today at The Washington Post, Congress should have considered how visa hikes would impact the labor market before imposing additional fees:

Given the abiding concerns about jobs amid a lingering recession, it may be the time to reform the country’s visa and legal immigration system if it would help our economic recovery. This could entail bigger barriers to entry and smaller quotas for work visas. But it could also entail more readily available visas for highly skilled foreign entrepreneurs who want to bring their talents to the United States and for short-term foreign workers who can inject new life into certain sectors of the economy — ultimately creating more jobs for U.S. citizens.

Basically, these are costs and benefits that need be weighed holistically, without arbitrarily picking off a particular industry because it fits into a readymade populist argument about jobs and immigration.

And yet, this happened this morning in Kabul:

A powerful suicide bomb rocked Kabul this morning outside the Indian embassy, destroying vehicles and splintering buildings, killing at least 17 civilians and wounding nearly 80 people, officials said.

There was an attack last year at India’s Afghanistan embassy as well. It makes no sense for these attacks to occur, at the very least, unless the insurgent groups believed they were acting in Pakistan’s interest.

Conducted between March 7 and 30, it’s a grim one from an American perspective. More Pakistanis believe the United States was behind last year’s Mumbai terrorist attacks (20 percent) than believe the Pakistani anti-Indian terrorist group Lashkar e-Toiba — whom India accuses of culpability in the mass murder — was responsible (seven percent). As Holbrooke stated, there’s a strong base of support for the Swat deal that left the Taliban effectively in charge of the Swat Valley, with 80 percent backing it and 74 percent believing it will bring peace to the region, which it manifestly didn’t. Over half of Pakistani respondents, 56 percent, support similar accomodations with the Taliban “in areas such as Karachi, Multan, Quetta or Lahore.”

Support for President Asif Ali Zardari is a dismal 19 percent, which is unchanged since IRI’s previous poll from last October. His opposition, Nawaz Sharif, has skyrocketed from a 15 percent favorability rating to  75 percent. I suppose it’s fair to say that the Pakistanis are looking for a civilian savior after disillusionment with Zardari — and it’s worth noting that this poll was conducted amidst Sharif’s “Long March” standoff with the president — since 77 percent of Pakistanis prefer an unprosperous democracy to a military dictatorship that provides peace, land and bread. Perhaps that’s why Holbrooke talked more this morning about supporting a generic Pakistani democracy than about supporting the Zardari government. (Did I mention that government has a 79 percent disapproval rating?)

From a counterinsurgency perspective, this might be the most important finding in the poll:

When asked if they felt that their economic well being would improve or worsen during the upcoming year, the number saying that they thought it would improve increased 15 points to 29 percent, while the number saying that they thought their economic situation would worsen dropped 23 points to 36 percent, as compared to the October 2008 poll.  Although the majority of Pakistanis’ still felt pessimistic about their economic future, this gap has closed considerably.

Hope is a funny thing in counterinsurgency. It raises expectations and introduces an element of impatience with the gap between desire and reality. Counterinsurgents have to move expeditiously to match them, and that can explain Holbrooke’s fervent endorsement of the Kerry-Lugar Senate aid bill for Pakistan. That said, these are still dismal numbers the prospects for material improvement, and the refugee flows coming from the Pakistani counteroffensive against the Taliban can only provide more grist for perceptions of economic deterioration.

Fire breaks out at the Taj Mahal Palace Hotel in Mumbai during terrorist attacks this week. (rubaljain, flickr)

President-elect Barack Obama campaigned on deploying additional U.S. troops to Afghanistan — and, potentially, taking military action in Pakistan — as part of a renewed focus on a neglected war against Al Qaeda and its Taliban allies. When he takes the oath of office Jan. 20, he’ll inherit a far different regional picture in South Asia than his campaign could have anticipated.

Over the past several weeks, developments in Afghanistan, Pakistan and India pose new challenges for the U.S. mission in Afghanistan. The Karzai government in Kabul has dramatically moved to bring the war to a conclusion — announcing the pursuit of far-reaching negotiations with the Taliban-led insurgency and calling, for the first time, for a U.S. timetable for withdrawal.

Illustration by: Matt Mahurin

Changes and obstacles in Pakistan and India have significant implications for the region next year — particularly this week’s coordinated terrorist attacks in Mumbai that have left at least 160 people dead.

With Obama’s foreign-policy team not yet in place, it is unclear how his administration will handle what looks more and more like a simmering crisis in South Asia. Experts say hard choices are unavoidable.

The incoming administration must make “an overall assessment of where this [Afghanistan] mission is going,” Dan Markey, a former State Dept. official and current regional expert at the Council on Foreign Relations, said in a conference call this week, “whether it accepts Afghanistan to be, in the next 10 years or 20 years, a modern, centralized state or … a place that will have to continue to be radically decentralized in order to be effective.”

Whatever Obama’s assessment of the future of the U.S. war in Afghanistan is, he will have to react to President Hamid Karzai’s recent initiatives. In October, the Afghan president sent his brother to Saudi Arabia to begin discussions with former members of the Taliban on whether a deal could be struck that ends the insurgency.

The Taliban — whose leadership is based in the Pakistani city of Quetta — have insisted that there can be no deal without U.S and NATO troops leaving first. But plans are underway in Washington to increase the number of U.S. troops by an Army brigade and a Marine battalion — about 5,000 troops — by January. At least two more Army brigades are expected to deploy to Afghanistan in 2009.

Experts in the U.S. have intensely debated the utility of negotiating with the Taliban. Most doubt that the so-called “Quetta Shura” Taliban — the hardcore of the religious movement driven out of power in 2001 and still loyal to Mullah Mohammed Omar — will negotiate a deal with the Karzai government. But they do see potential for the Afghan government to sow divisions between the Quetta Shura and its affiliated insurgent groups, as well as between the Taliban-led insurgency and the Afghan people.

“The enthusiasm that there is — such as there is — for reconciliation is very much along the lines of taking particular warlords who are aligning with the Quetta Shura and Mullah Omar as a matter of tactical convenience or economic advantage and peeling them off,” said Steve Biddle, a military expert at the Council on Foreign Relations who is a confidante of Gen. David Petraeus, the commanding general of U.S. forces in South Asia. His comments were in response to a question from The Washington Independent on the conference call.

Petraeus expressed openness to some form of negotiations with the Taliban during a talk in October to the conservative Heritage Foundation, as has Gen. David McKiernan, commander of U.S. forces in Afghanistan.

Still, many questions remain. Even if non-Quetta Shura-dominated insurgents express an openness to negotiations, it’s unclear what the Karzai government is prepared to offer for peace. “The problem at the moment is figuring out what incentive an individual warlord has to switch sides,” Biddle said on the conference call. “There’s a lot of skepticism that what we have to offer can compete with the status, power, prestige, money and so on that the key warlords enjoy by being on the other side.”

In a pre-election interview with Time magazine’s Joe Klein, Obama tepidly endorsed exploring negotiations with the Taliban, drawing an analogy to Iraq. “The Sunni Awakening changed the dynamic in Iraq fundamentally,” Obama said. “It could not have occurred unless there were some contacts and intermediaries to peel off … tribal leaders, regional leaders, Sunni nationalists from a more radical messianic brand of insurgency. Well, whether there are those same opportunities in Afghanistan I think should be explored.”

A complicating factor is Obama’s repeated insistence that under certain emergency conditions of Pakistani intransigence, he would use military force in Pakistan to kill or capture top Al Qaeda leaders. It is unknown what effect a military incursion would have on any prospective Karzai-Taliban peace talks.

This week, Karzai delivered another surprise. Speaking in Kabul to a visiting United Nations delegation, he publicly flirted with a timetable for U.S. forces to withdraw from Afghanistan. “If there is no deadline, we have the right to find another solution for peace and security, which is negotiations,” he said. It is unclear how prepared Karzai is to press the issue with the new administration.

Intimately related to Afghanistan is a rapidly changing situation in Pakistan. The new government of President Asif Ali Zardari and Army chief of staff Gen. Ashfaq Parvez Kayani has sent mixed signals to Washington. In response to increasing U.S. military incursions into Pakistani territory to attack leaders of the Afghanistan insurgency, Pakistani troops opened fire on their ostensible U.S. partners in September. Both Zardari and Kayani issued harsh statements denouncing violations of Pakistani sovereignty.

Yet some in Washington have whispered about the Pakistanis accepting a tacit modus vivendi — allowing U.S. missile strikes into the volatile tribal areas along the Afghanistan border.

“The Pakistan-U.S., or Pakistan-NATO, military-to-military relationship along [the Afghanistan-Pakistan] border is, in many ways, significantly better than has been reported here in Washington,” said Markey, who recently toured U.S. military installations in Afghanistan. The U.S. military has “actually been able to coordinate fire with their Pakistani counterparts — that [U.S. commanders] have essentially gotten calls from the Pakistani side identifying militants who were getting ready to cross across the border; and that they have identified those with Pakistani help, and that they have called in fire from U.S. or NATO forces.”

Still, experts say the Obama administration will have to transform the U.S.-Pakistani relationship if Pakistan is to remain a stable ally in the war on terrorism while it confronts a growing insurgency at home. Under the Bush administration, relations with Pakistan centered on military ties and largely ignored the economy.

A new report from the liberal Center for American Progress — whose president, John Podesta, is heading the Obama transition team — argues for a fundamental restructuring of U.S.-Pakistani ties. “U.S. policy must recognize that the military component alone is insufficient to build stability and security in Pakistan,” the report states. It calls for “a diverse approach, including strengthening governance and rule of law, creating economic opportunities and exploring political negotiations” with militant groups.

While it’s by no means clear whether this week’s multiphased attacks in Mumbai involved Pakistani militant organizations, the attacks underscored the rising tide of militancy that threatens Afghanistan and Pakistan as well as India. On Friday, the Zardari government offered to dispatch Ahmed Shuja Pasha, head of its powerful intelligence service, to assist India in investigating the attacks — a tacit recognition that Pakistan’s Inter Services Intelligence was a natural suspect, given its long history of anti-India subterfuge.

To combat the rising instability, the still-coalescing Obama administration will have to make a number of hard choices in a rapidly changing environment. It’s possible that South Asia will be the first major foreign crisis the new administration confronts.