Increased Foreign Company Enforcement Likely: Attorneys

Three Arnall Golden Gregory attorneys say that foreign drug and medical device companies are likely to see heightened FDA enforcement activity as part of the second Trump administration’s “America First” agenda. Writing in an online post, the attorneys present statistics on FDA overseas inspections before and after the Covid-19 pandemic.

They say a new wave of post-pandemic inspections “has revealed an increased frequency of compliance violations.” In 2023 and 2024, they write, foreign facilities were classified as Official Action Indicated or Voluntary Action Indicated nearly three times more frequently than domestic facilities. “Persistent historical noncompliance by manufacturers in India and China has heightened concerns about the safety and quality of products entering the U.S. market,” they add.

The post reviews the case of Indian drug manufacturer Fresenius Kobi Oncology Limited, which in 2021 was fined $30 million and forfeited $20 million after pleading guilty to concealing and destroying records before a 2013 FDA inspection. It also discusses how Indian generic drug manufacturer Ranbaxy paid $500 million in 2013 to resolve violations including failing to conduct proper safety tests for drugs and falsifying stability testing data to suggest compliance.

“While the overall number of inspections by FDA could decline in the wake of the ongoing reduction in the federal workforce, foreign manufacturers are likely to face heightened scrutiny during the second Trump administration due to multiple interrelated factors,” the attorneys say, including high-profile cases such as Fresenius Kobi Oncology and Ranbaxy and “America First” trade policies that will likely amplify enforcement scrutiny on foreign entities, creating a regulatory environment that demands greater accountability and compliance from exporters to the U.S.

The post says that foreign manufacturers should not wait for FDA to arrive, but instead should take a proactive approach that includes:

• reviewing and enhancing internal quality management systems;
• providing comprehensive training for staff at all levels on FDA standards, inspection protocols, and best practices for maintaining accurate records;
• conducting regular mock audits simulating real-world inspection scenarios;
• paying close attention to supply chain management;
• establishing open lines of communication with FDA; and
• monitoring regulatory developments at the U.S. state and federal levels.

“By taking these proactive measures, foreign manufacturers can strengthen their compliance frameworks and reduce the likelihood of costly enforcement actions, mitigate penalties in the case of inadvertent noncompliance, and safeguard the reputation of foreign firms in the highly competitive U.S. market,” the attorneys conclude.