FDA Act of 2009: Strengthening health product regulation

FDA functions and regulatory powers

Section 5 amends Section 4 of Republic Act No. 3720 to create the FDA as an office under the Office of the Secretary of the Department of Health (DOH).
Section 5 empowers the FDA to administer effective implementation of the Act and its implementing rules.
Section 5 makes the FDA the primary authority for collection of samples of health products.
Section 5 requires the FDA to analyze and inspect health products to implement the Act.
Section 5 authorizes the FDA to establish analytical data for standards and to recommend standards of identity, purity, safety, efficacy, quality, and fill of container.
Section 5 authorizes certificates of compliance and spot-checks to ensure compliance with regulations governing operation of manufacturers, importers, exporters, distributors, wholesalers, drug outlets, and other health product establishments/facilities, as determined by the FDA.
Section 5 directs the FDA to conduct tests on applicable health products prior to issuance of authorizations to ensure safety, efficacy, purity, and quality.
Section 5 requires reporting of incidents reasonably indicating that a health product caused or contributed to death, serious illness, or serious injury to a consumer, patient, or any person; it covers manufacturers, traders, distributors, importers, exporters, wholesalers, retailers, consumers, and non-consumer users.
Section 5 authorizes the FDA to issue cease and desist orders motu propio or upon verified complaint even for health products whether or not registered with the FDA.
Section 5 provides that for registered health products, a cease and desist order is valid for thirty (30) days and may be extended for sixty (60) days only after due process has been observed.
Section 5 authorizes, after due process, the FDA to order ban, recall, and/or withdrawal of health products that caused death/serious illness/serious injury or are imminently injurious, unsafe, dangerous, or grossly deceptive, and to require implementation of a risk management plan as a requirement for authorization.
Section 5 requires strengthening post market surveillance for health products and incidents of adverse events.
Section 5 authorizes development and issuance of standards and appropriate authorizations covering establishments, facilities, and health products.
Section 5 mandates the FDA to conduct, supervise, monitor, and audit research studies on health and safety issues of health products undertaken by entities duly approved by the FDA.
Section 5 authorizes the FDA to prescribe standards, guidelines, and regulations on information, advertisements, and other marketing instruments, including promotion, sponsorship, and other marketing activities for covered health products.
Section 5 authorizes the FDA to maintain bonded warehouses and/or establish them as determined by the director-general for confiscated goods in strategic areas, especially at major ports of entry.
Section 30(1) to (6) (added by Section 14) further grants the Director-General powers including contempt for disregard of orders; administering oaths; issuing subpoenas; obtaining information from government offices; issuing orders of seizure and holding custody of adulterated/counterfeited/misbranded/unregistered health products (and certain categories of drug, in-vitro diagnostic reagent, biologicals, and vaccine); deputizing law enforcement; and exercising necessary functions for implementation.

FDA organizational structure and offices

Section 6 amends Section 5 of Republic Act No. 3720 by establishing FDA centers per major product category regulated.
Section 6 defines the centers as:
- Center for Drug Regulation and Research (including veterinary medicine, vaccines, and biologicals),
- Center for Food Regulation and Research,
- Center for Cosmetics Regulation and Research (including household hazardous/urban substances), and
- Center for Device Regulation, Radiation Health, and Research.
Section 6 provides that each center regulates manufacture, importation, exportation, distribution, sale, offer for sale, transfer, promotion, advertisement, sponsorship of, and/or appropriate use and testing of health products, and conducts research and institutes standards.
Section 6 provides each center shall be organized with at least:
- a Licensing and Registration Division for evaluating establishments/products for authorizations and conditions,
- a Product Research and Standards Development Division for research, standards and regulations, compliance monitoring, and oversight/audit of related research, and
- a Laboratory Support Division for tests, calibration, analyses/trials, including oversight/audit of bioavailability and bioequivalence test centers and other tests, with direct line support separate per major product category.
Section 6 establishes an Administration and Finance Office headed by the deputy director-general for administration and finance, with divisions including Human Resource Development; Property and Logistics Management; Human Resource Management; Assets and Financial Management; and Information and Communication Technology Management.
Section 6 establishes a Policy and Planning Office under the Office of the Director-General with divisions including training, advocacy and communications, and monitoring performance of centers for research/evaluation and standards development.
Section 6 establishes a Field Regulatory Operations Office headed by the deputy director-general for field regulatory operations, including all field offices, field or satellite laboratories, and regulatory enforcement units.
Section 6 creates a Legal Services Support Center directly under the Office of the Director-General to provide legal services to the entire FDA.

Leadership, qualifications, and conflicts

Section 7 amends Section 6 of Republic Act No. 3720 to head the FDA with a director-general of the rank of undersecretary.
Section 7 provides the Director-General appoints personnel below assistant director level in coordination with the Secretary of Health.
Section 7 provides the Director-General is assisted by two (2) deputy directors-general: one for administration and finance and one for field regulatory operations.
Section 7 provides appointment by the President of the Philippines for the Director-General and both deputy directors-general.
Section 7 sets qualification preferences:
- the Director-General preferably has a university degree in medicine or at least the relevant master’s degree in pharmaceutical sciences or allied sciences or an equivalent executive course in regulatory management, plus management experience;
- the Deputy Director-General for Field Regulatory Operations preferably has a master’s degree in pharmaceutical sciences or allied sciences (or equivalent executive course in regulatory management) plus management experience;
- the Deputy Director-General for Administration and Finance must be a certified public accountant or have a master’s degree in accounting, management, economics, or related business course plus management experience.
Section 7 establishes disqualification for certain conflicts:
- a person previously employed full-time in a regular capacity in regulated establishments (including related foundations) is disqualified for three (3) years from termination from appointment as director-general or deputy director-general;
- candidates must disclose incomes for the past three (3) years from all establishments regulated by the Act;
- upon assumption, the Director-General and deputy directors-general must declare any conflict of interest with any establishment covered by the FDA, including foundations.
Section 7 provides that each center and field office is headed by a director assisted by an assistant director, both appointed by the Secretary of Health.
Section 7 provides preference for existing directors of the Bureau of Health Devices and Technology and division chiefs of BFAD to be appointed as directors and assistant directors of their respective centers, with a compliance rule if required third level civil service eligibility is lacking: compliance within three (3) years or the appointment is revoked immediately.
Section 8 requires the FDA to review its staffing pattern and position titles subject to approval of the Secretary of Health.

Definitions and what is covered

Section 9 amends Section 10 of Republic Act No. 3720 by defining FDA, Food, Drug, Device, Medical device, Radiation device, and Health-related device for Act purposes.
Section 9 defines Cosmetics and Label, including how label requirements apply to retail packaging.
Section 9 defines Director-general, Distribute, and clarifies Manufacturer to include operations such as preparation, processing, compounding, formulating, filling, packing, repacking, altering, ornamenting, finishing, and labeling—except compounding and filling of prescriptions in drugstores and hospital pharmacies; it also states a trader is categorized as a manufacturer.
Section 9 defines Veterinary drugs, Assay, Authorization, Bioavailability, Bioequivalence, Distributor/importer/exporter, Distributor/wholesaler, and Establishment.
Section 9 defines Food/dietary supplement, Health products, Household/urban hazardous substance, In-vitro diagnostic reagents, Licensing, Misbranding, Registration, Trader, and Retailer.
Section 25 provides the Act governs all health products, while keeping jurisdiction of other specialized agencies and special laws for acts covered by them, including those covered by Republic Act No. 9211, Executive Order No. 245, Executive Order No. 18, and Presidential Decree No. 1468.

Prohibited acts and criminal penalties

Section 10 amends Section 11 of Republic Act No. 3720 by defining prohibited acts covering health products.
Section 10 prohibits manufacture, importation, exportation, sale, offering for sale, distribution, transfer, non-consumer use, promotion, advertising, or sponsorship of any health product that is adulterated, unregistered, or misbranded.
Section 10 prohibits the adulteration or misbranding of any health product.
Section 10 prohibits giving a guaranty or undertaking referred to in Section 12(b) which is false, with an exception for good-faith reliance on a guaranty/undertaking signed by and naming the person/entity from whom the health products were received in good faith.
Section 10 prohibits alteration, mutilation, destruction, obliteration, or removal of labeling (or other acts affecting health products while held for sale) that results in the article being adulterated or misbranded, while allowing a retailer to sell in smaller quantities subject to FDA guidelines.
Section 10 prohibits manufacture, importation, exportation, sale, offering for sale, distribution, transfer, non-consumer use, promotion, advertisement, or sponsorship of health products requiring registration but not registered with the FDA pursuant to the Act.
Section 10 prohibits operating a radiation or pest control establishment without the FDA license required under the Act, and prohibits specified unlicensed manufacture/import/transfer/distribution or retail operations for drugs, devices, in-vitro diagnostic reagents, and categories of food, cosmetics, and household/urban hazardous substances.
Section 10 prohibits sale, offering for sale, importation, exportation, distribution, or transfer of any health product beyond its expiration/expiry date, if applicable.
Section 10 provides that the prohibited acts cover all applicable health products.
Section 11 amends Section 12(a) of Republic Act No. 3720:
- violation of Section 11 results in imprisonment of not less than one (1) year but not more than ten (10) years, or a fine of not less than PHP 50,000 but not more than PHP 500,000, or both, at the court’s discretion.
Section 11 increases penalties when the offender is a manufacturer, importer, or distributor of a health product:
- imprisonment of at least five (5) years but not more than ten (10) years and a fine of at least PHP 500,000 but not more than PHP 5,000,000, or both.
Section 11 imposes an additional one percent (1%) of the economic value/cost of the violative product or violation, or PHP 1,000, whichever is higher, for each day of continuing violation.
Section 11 authorizes seizure and custody of health products found in violation pending proceedings, without hearing or court order, when the Director-General has reasonable cause to believe from facts found by the Director-General or an authorized FDA officer/employee that the products may cause injury or prejudice to the consuming public.
Section 11 provides that if the offense is committed by a juridical person, the Chairman of the Board, the president, general manager, or partners and/or persons directly responsible are penalized.
Section 11 provides that if the offense is committed by a foreign national, deportation follows service of sentence, in addition to prescribed penalties, without further proceedings.

Administrative procedure and sanctions

Section 12 amends Section 26 of Republic Act No. 3720:
- hearings authorized or required by the Act are conducted by the FDA;
- upon preliminary findings, the Director-General issues proper notices or orders, and the persons concerned are given an opportunity to be heard before the FDA.
Section 12 provides that both criminal and administrative actions may be instituted separately and independent of one another.
Section 13 adds Section 29-A on Administrative Sanctions:
- when prohibited actions are found and persons liable are determined after notice and hearing, the Director-General may impose one or more administrative penalties.
Section 13(1) authorizes cancellation of any FDA authorization or suspension of validity for a period the Director-General deems reasonable, not exceeding one (1) year.
Section 13(2) authorizes a fine of not less than PHP 50,000 but not more than PHP 500,000, and an additional fine of not more than PHP 1,000 for each day of continuing violation.
Section 13(3) authorizes destruction and/or appropriate disposition of the subject health product and/or closure of the establishment for any violation, as determined by the Director-General.

FDA decisions, appeals, and finality

Section 15 adds Section 31:
- FDA orders, rulings, or decisions become final and executory after fifteen (15) days from receipt by the adversely affected party unless an administrative appeal has been perfected within that period.
- One (1) motion for reconsideration may be filed and suspends the running of the finality period.
Section 15 adds Section 32:
- FDA orders, rulings, or decisions are appealable to the Secretary of Health;
- an appeal is deemed perfected upon filing the notice of appeal and posting the corresponding appeal bond;
- an appeal does not stay the decision unless the Secretary of Health issues an order to stay execution.

Fees, retained income, oversight, and funds

Section 17 amends Section 34 on Fees and Other Income:
- FDA authorization and other fees are annually determined and reviewed by the FDA upon sole approval of the Secretary of Health;
- proposed increases must be published in two (2) leading newspapers of general circulation.
Section 17(b) provides for additional fees called “other related regulatory fees”, including sale of publications and services, assessment fees, fines, penalties, and other fees/charges outside usual licensing and registration fees.
Section 17(c) authorizes the FDA Director-General, upon approval of the Secretary, to promulgate rules on collecting these other related regulatory fees, subject to periodic review and publication of increases in two (2) leading newspapers.
Section 18 establishes retention of FDA income under the Universally Accessible Cheaper and Quality Medicines Act of 2008:
- retained income is deposited in an authorized government depository bank as a special regulatory fund;
- interest earned forms part of retained income;
- the fund is used primarily for office and laboratory space; human resource development and expansion; purchase of laboratory equipment and motor vehicles; upgrading current facilities and equipment; maintenance of central office laboratory divisions and satellite laboratories in Davao, Cebu and other testing laboratories if increased; and other agency activities/services to perform its mandate.
Section 18 allows the fund to accept grants, donations, and all other endowments from local and external sources in accordance with applicable laws, rules, and regulations.
Section 18 provides that retention, use, and application of the special regulatory fund shall not be delayed, amended, altered, or modified by directives from executive offices, and shall be subject only to general accounting rules and COA guidelines, with the stated primary purpose prevailing.
Section 18 requires submission of utilization reports to the Secretary of Health, the Secretary of Budget and Management, and the Congressional Oversight Committee.
Section 18 requires establishment of a legal fund out of interest earned from retained income for legal actions against FDA officials and employees in the course of official functions.
Section 23 creates a Congressional Oversight Committee (COC) to oversee implementation for five (5) years and review accomplishments and utilization of FDA income.
Section 23 composes the COC of Chairpersons of House Health and Appropriations Committees and two (2) Members appointed by the Speaker, plus Senate Health and Finance Committee Chairpersons and two (2) Members appointed by the President of the Senate.
Section 23 provides that the COC secretariat is drawn from existing personnel of the committees composing the COC.

Testing labs, field offices, and enforcement unit

Section 19 mandates establishment of a Regulatory Enforcement Unit (REU) for a period not exceeding five (5) years from effectivity:
- the REU has at least five (5) qualified personnel in every region;
- it is directly under the control and supervision of the Deputy Director-General for Field Regulatory Operations and administratively supported by field offices.
Section 19 requires REU personnel to be classified as law enforcement agents, including being trained, bearing arms, and wearing official uniforms and insignias.
Section 19 provides REU personnel serve and execute FDA Director-General rulings, orders, and decisions.
Section 19 provides REU personnel execute and serve search warrants and arrest warrants issued by courts in connection with violations under the Act and related laws on regulation of health products.
Section 19 states authority is strictly limited to implementation of the FDA’s regulatory functions.
Section 19 provides REU regional units are headed by a lawyer aged at least thirty (30) years but not older than fifty (50), an IBP member of good standing, with rank of Division Director; it provides an assistant who is at least a law graduate with rank of Assistant Division Director.
Section 20 (Section 35) mandates FDA improvement to test, calibrate, assay, and examine samples:
- FDA must establish at least one (1) testing laboratory each in Luzon, Visayas, and Mindanao with state-of-the-art equipment and personnel;
- central testing laboratories are maintained as support units for centers and also as testing centers for assay and supervision/oversight/audit of bioequivalence and bioavailability tests/researches.
Section 20 (Section 35) provides that existing laboratories in Cebu and Davao are upgraded and transformed as quality assurance laboratories, and another is established in Subic, Zambales.
Section 20 (Section 35) authorizes the Director-General (with Secretary approval) to increase testing laboratories and to call upon other government and private testing laboratories to conduct testing, calibration, assay, and examination, provided private labs are accredited by the Philippine Accreditation Office (PAO) of the Department of Trade and Industry (DTI) and the DOH.
Section 20 (Section 36) mandates FDA to establish field offices in all regions to implement regulatory functions:
- current regional food and drug regulatory officers and regional health physicists in every DOH regional office are placed under the FDA’s sole control and supervision.
Section 20 (Section 36) provides field offices assume primary jurisdiction in sample collection for food, drugs, devices and cosmetics imported or offered for import at ports of entry other than Manila, within the assigned region, when the items satisfy conditions under Section 33(a) of Republic Act No. 3720 as amended.
Section 20 (Section 36) clarifies this does not prejudice Director-General powers under Sections 13 and 14 of this Act.
Section 20 (Section 36) requires field offices include:
- a licensing, inspection and compliance division for inspection of food, drugs and cosmetic establishments engaged in manufacture, importation, distribution, and sale;
- a satellite laboratory division; and
- an administrative division.
Section 20 (Section 37) authorizes the FDA (with Secretary approval) to create organizational units and additional plantilla positions to augment human resources to address emerging concerns and keep abreast with internationally acceptable standards.

Implementing rules, appropriations, coverage, and transition

Section 21 directs that appropriations for BFAD and BHDT included in DOH budgets under the current General Appropriations Act are used to carry out this Act, and that appropriations may be augmented by income the agency may retain under the Act.
Section 21 provides that thereafter, sums necessary for continued implementation are included in the annual General Appropriations Act.
Section 22 requires the DOH to promulgate implementing rules and regulations in consultation with the FDA within one hundred twenty (120) days after passage of the Act.
Section 24 provides transitory transfers:
- BFAD Director and Deputy Director serve as FDA Director-General and Deputy Director-General for Field Regulatory Operations, respectively;
- BFAD and BHDT officials/employees and relevant CHD regional personnel transfer to appropriate FDA units as determined by the Director-General;
- there shall be no demotion in ranks and no diminution of salaries, benefits, allowances, and emoluments for transferred personnel.
Section 24 provides transfer of positions, powers/functions/duties, facilities/equipment/supplies/records/files/appropriations/funds to the FDA.
Section 28 provides effectivity: the Act takes effect fifteen (15) days after publication in the Official Gazette or in two (2) newspapers of general circulation.
Section 26 contains a separability clause preserving remaining provisions if any part is declared invalid or unconstitutional.
Section 27 contains a repealing clause repealing or amending laws, executive orders, circulars, regulations, and memoranda inconsistent with the Act.

Issuance details and approval timeline

Republic Act No. 9711 is **approved on August 18, 2009.
Republic Act No. 9711 provides an effectivity rule under Section 28 of fifteen (15) days after publication in the Official Gazette or two (2) newspapers of general circulation.