FDA Releases FY2024 Report on the State of Pharmaceutical Quality

The FDA's Office of Pharmaceutical Quality (OPQ) has published the seventh edition of the Report on the State of Pharmaceutical Quality for FY2024, providing a large amount of trend data and analysis on the regulation and compliance of pharmaceutical production.

The latest report for the fiscal year from October 2023 to September 2024 reflects a number of important shifts in the regulatory enforcement model and has also revealed several emerging quality challenges. Quality and regulatory affairs teams within the industry need to pay immediate attention to these.

General Situation

• The number of inspections increased in FY2024 (especially overseas inspections), the number of warning letters rose, and the approval and product catalog scale of biosimilars improved.
• Overall quality remained stable (93% compliant), but risks were more concentrated on API suppliers supplying compounding pharmacies, OTC (over-the-counter) producers, and eye products.

1. Core Data Overview

The following are the most notable data we extracted from the report, categorized by category.

Production Facility Inspections

• Total number of facilities in the CDER factory directory: 4,619 (41% in the United States, 59% overseas).
• Inspections completed in FY2024: 989, an increase of 27% compared to 776 in FY2023.
• Comparison of overseas and domestic inspections: Over 62% were overseas inspections (a record high).
• MRA partner inspections: 198, the highest recorded to date.
• Compliance results: 93% of factories worldwide received the conclusion of "No Action Indicated" (NAI) or "Voluntary Action Indicated" (VAI) at the latest inspection. The regions with the highest compliance rate: Europe (98%), and the lowest: India (87%).

Pharmaceutical basic information

Total number of products in the CDER directory (as of the end of FY2024):

• 14,168 ANDAs (generic drug applications), an increase of 4.4% compared to FY2023.
• 3,625 NDAs (new drug applications), an increase of 0.9%.
• 383 BLAs (biological product license applications), an increase of 8.2%, including 63 biosimilar drugs (an increase of 47%).
• 140,119 national drug codes (NDCs) for non-application products, an increase of 6.7%.

Total product growth: 6.3% in FY2024 (similar to 6.1% in FY2023).

Post-market quality defects (PQD)

• Total report count: 16,837 (a decrease of 1.5% compared to FY2023).
• MedWatch reports: 12,588 (an increase of 0.3%).
• On-site alert reports (FAR): 3,515 (a decrease of 7.5%).
• Biological product deviation reports (BPDR): 409 (an increase of 17%).
• Consumer complaints: 325 (a decrease of 18.3%).

Import alerts, recalls, and warning letters

• Import alerts

• In FY2024, 75 factories were included on the import alert list.
• Most were OTC specialized drug factories (65%).
• 25% were API (active pharmaceutical ingredient) producers (compared to only 2% in FY2023).
• Main source countries: China (39%), India (13%), Europe (13%).

• Recalls

• A total of 421 products were recalled (the lowest in the past five years).
• 165 factories launched 260 recall events (15% more than FY2023).
• The most frequent defect: pollution (31% microbial, 28% aseptic, 20% particulate).
• Primary recall classes (according to USP drug classification): ophthalmic preparations (14.1%), antibacterial drugs, cardiovascular drugs, dermatological drugs, respiratory system drugs, analgesics.
• Geographical breakdown: the United States (48% of recall events), India (41%).

• Warning letter

• Issued a total of 105 letters (the highest in five years).
• Domestic United States: 41 letters (lower than the 59 letters of FY2023).
• Abroad: the number increased, especially in China (13 letters) and South Korea (9 letters).
• Main cause: the number of warning letters issued based on on-site inspections increased (21% higher than FY2023).
• High-risk API suppliers: In the enforcement actions against API factories, 72% of the targets were factories supplying compounding pharmacies (while such factories only accounted for 18% of the total number of API factories).

2. Post-Pandemic, On-Site Inspection Activities See a Strong Rebound

The most notable dynamic in the report might be the sharp acceleration of FDA inspection activities. In FY2024, the FDA conducted 989 quality assurance inspections of drugs, an increase of 27% compared to 776 in FY2023.

What is more notable is that the number of overseas inspections reached a new high, accounting for 62% of all quality assurance inspections.

The report states: "In FY2024, over 62% of quality assurance inspections were conducted in overseas factories - a record high." The inspections focused particularly on India and China, with 34% and 28% of the factories in these countries in the factory directory undergoing inspections.

Fig. 1 FDA Drug Quality Assurance Inspections by Country and Region for FY2019-FY2024. (Source: fda.gov)

The report also reveals that the number of inspections completed through FDA's "Mutual Recognition Agreement (MRA)" partners reached a new high of 198, a record high, indicating that FDA is increasingly relying on international regulatory cooperation to expand its supervisory capacity.

3. The Number of Warning Letters Has Reached a Five-year High

The increase in inspection activities has directly translated into more law enforcement actions - this has been witnessed by us, as the auditing, simulation inspection, and rectifying partners of numerous enterprises in the industry.

The FDA issued 105 warning letters in FY2024 due to drug quality issues, the highest number in five years. Among them, the number of warning letters sent to domestic enterprises decreased from 59 to 41, while the number sent to foreign enterprises increased from 35 to 64.

The overall increase in the number was mainly driven by on-site inspections, but Chinese factories were an exception. Most of the warning letters received by them originated from the discovery of defects in the record review requests under §704(a)(4) provisions, rather than on-site inspections.

Fig. 2 Warning Letters by Country and Region for FY2020-FY2024. (Source: fda.gov)

The report specifically pointed out: "Unlike the overall increase in the number of warning letters mainly based on on-site inspections, the number of warning letters sent to Chinese factories in FY2024 increased, mainly because quality defects were found in record review requests under §704(a)(4) provisions (8 out of 13 warning letters originated from this)."

4. Compounding Pharmacies Face a Crisis in the API Supply Chain

One of the most alarming findings in the report is related to API manufacturers supplying domestic compounding pharmacies.

The data shows a severe quality gap: "Over the past five years, in all FDA-regulated actions (such as warning letters, import alerts, and regulatory meetings) of API production factories, 72% were factories supplying to compounding pharmacies." However, such factories accounted for only 18% of all API manufacturers in the factory directory.

This fourfold excess ratio in regulatory actions indicates systematic quality problems within this subset of the supply chain. The majority of non-compliant factories are located in China (51%) and India (30%).

From industry experience, this is also in complete agreement with our observations over the past approximately 12 months. Compounding pharmacies seeking quality management system (QMS) support, auditing, and inspection preparation services have significantly increased, either actively seeking help to prevent problems before they occur, or passively seeking remediation after receiving 483 forms, warning letters, or other enforcement measures.

5. The Import Alert Model Highlights the Expansion of Regulatory Thinking

The report recorded that 75 factories were placed on the import alert list due to quality issues in FY2024, with China accounting for an excessively high proportion of 39%, although its number of factories accounted for only 17% of the total number of foreign factories.

It is notable that 65% of the quality-related import alerts targeted OTC monograph drug manufacturers, and another 25% involved API manufacturers.

The FDA extensively used the record review request tool under §704(a)(4) provisions in FY2024, with over 60% of quality-related import alerts related to this. Particularly, 40% of import alerts were issued to factories that the FDA had never conducted on-site inspections, reflecting that the FDA's regulatory thinking is to cast a wider net rather than merely changing inspection methods.

6. Drug Quantity Reporting System Shows Improvement, Yet Gaps Remain

Since the implementation of the requirements related to the CARES Act, the reporting situation for application-type drugs has significantly improved (in FY2024, BLA was 71%, NDA was 65%, ANDA was 60%).

However, the reported compliance rate for OTC monograph drugs is significantly lagging behind, at only 37%.

The report states: "Although the drug quantity reporting is not complete, the FDA has used the existing data to provide information for the facility inspection targeting model for FY2025's supervision and inspection." This means non-compliant behavior is likely to have an increasingly high probability of being inspected.

7. Recall Incidents Rise, Yet Number of Affected Products Hits Five-Year Low

It seems contradictory that the total number of recall events increased by 15% from the previous FY2024 (which increased to 260) and the number of recalled products (421) dropped to the lowest in five years.

The decrease in the number of products involved in a single incident suggests that even though law enforcement activities are increasing, the scope of recalls has become narrower and more targeted.

Fig. 3 Recalled Products by Defect Groups for FY2020-FY2024. (Source: fda.gov)

Pollution remains the primary reason for recalls, accounting for 137 of the recalled products. According to the USP drug classification, ophthalmic preparations account for the highest proportion of all recalls, reaching 14.1%.

Disclaimer: The above content is compiled based on existing public information and is for reference only.

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