BRUSSELS-U.S. officials conduct hundreds of inspections of pharmaceutical plants in the European Union each year, duplicating inspections performed by EU authorities. European inspectors do the same in the U.S.
It is a swath of red tape that the drug industry and European regulators hoped would be eliminated as part of negotiations on a sweeping trade and investment deal between the U.S. and the EU. But the U.S. is reluctant to stop its inspections in the EU, fearing that audits done by poorer countries in the 28-nation bloc aren't up to international standards, U.S. and EU officials say.
As negotiators meet in Washington for a fifth round of talks this week, removing trans-Atlantic red tape such as drug inspections is proving to be more difficult than many imagined.
From auto safety to regulation of drugs, cosmetics and chemicals, trade negotiators are taking aim at rules that hinder trans-Atlantic commerce. Economists believe that getting rid of them will produce the deal's biggest benefits, since trans-Atlantic tariffs are already low.
But doing so will require major regulatory agencies on both sides of the Atlantic, pushed by trade negotiators, to change bureaucratic procedures that have taken years to develop.
"It puts the regulators in a context that they're essentially unfamiliar with," said Peter Chase, vice president of the U.S. Chamber of Commerce's European program.
The drug inspections are supposed to assure domestic regulators that pharmaceutical imports are made in plants that meet international standards. When the U.S. and the EU started talks on a sweeping international trade deal last year, the drug industry argued the two regions could simply accept each other's inspections with no threat to public health.
"We see a lot of duplication of resources, as a high level of domestic inspections in the EU member states coincide with a high level of foreign inspections," the European Federation of Pharmaceutical Industries and Associations, which represents industry giants such as Merck MRK +0.86% & Co. and Pfizer Inc., PFE +0.55% said in a statement.
The EU is ready to accept U.S. inspections, officials say. The bloc already has similar pacts with Japan, Australia and several other developed nations. A deal would free up resources to inspect plants in the developing world that are subject to weaker regulation. "It allows us to go to China and India, where the problems are," said an EU official.
But the U.S. Food and Drug Administration has concerns about European drug inspections. Accepting the EU inspections would mean that audits done by the U.K. and Germany are equivalent to those by Eastern European nations such as Bulgaria and Romania, where concerns about mismanagement, regulatory resources and corruption linger. At a time when the FDA is under fire for allowing substandard medicine made in India and China into the U.S., the agency wants to assure itself that inspections across the EU are rigorous, a U.S. official said.
The U.S. Trade Representative's office didn't immediately comment on the regulatory concerns.
The EU argues that inspectors across the bloc follow EU-wide and international rules, and there has been little public concern in the EU about the issue. Pharmaceuticals shipped within the EU move freely across national borders. Implementing the inspection rules, though, is the responsibility of each member state. "Depending on the available resources, some of the inspectorates in the EU countries are more active than others," the Efpia said.
The FDA last week announced that it would examine how it could cooperate more with overseas drug regulators. But it is unclear whether that effort will result in the U.S. accepting EU inspections.
"We have increasing numbers of products coming from abroad," said Howard Sklamberg, the deputy FDA commissioner for global affairs. "In order to do our job of overseeing that, we have to work much more closely with foreign regulatory partners."
"This is an effort to determine how we can deepen our mutual reliance," Mr. Sklamberg added, "in what ways and how quickly."