The head of the U.S. Federal Drug Administration (FDA), Margaret Hamburg, noted on her recently completed first trip to China that the country’s oversight of food and drug exports is improving.  As Supply Chain Matters readers well know, there have been many past incidents of substandard, tainted or contaminated products originating from China, and the FDA Commissioner’s statements are certainly a welcome sign. The FDA has established resident offices in three of China’s major cities including Beijing, Guangzhou and Shanghai, and is collaborating with Chinese regulatory agencies on joint training and inspection activities.

This year alone, the agency expects more than 20 million imports of regulated products to enter into the U.S.but less than one percent are typically inspected. What Supply Chain Matters finds as most astute are statements from Commissioner Hamburg reinforcing that the FDA will never have the physical and financial resources to inspect all foreign manufacturers, and that cooperation with industry and other foreign governments to develop common standards, improve accountability and identify areas of the most vulnerability should be targeted.

According to a blog posting of the Wall Street Journal, The Commissioner also acknowledged that regulators need to gain deeper access to the lower tiers of Chinese food and drug supply chains, including providers of active ingredients used in end-item pharmaceuticals. “China is a major producer of active pharmaceutical ingredients and we have had some very focused discussions on that very component of the supply chain.”

The most important message and take-away in our view, is that the pharmaceutical and food industry has to step-up and take more visible oversight and audit responsibility for monitoring all levels of China’s supply chain related to food and drugs. Consumers have strong views regarding the overall safety of these products that are exported from China. Interesting enough, Chinese consumers themselves now favor non-Chinese brands of milk, infant formula and dairy products due to these same perceptions. The Chinese milk industry, with the assistance of foreign private capital venture firms, is attempting to change these perceptions through ensuring increased integrity of the dairy supply chain.

There is much at stake from the perspective of both Chinese exports and China’s domestic markets for food and drugs.  Industry and government collaboration in insuring integrity and safety of China’s entire supply chain should remain a high priority.

Bob Ferrari