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The MRA text defines a capable inspectorate as one that: • has the legal and regulatory authority to conduct inspections against a standard for GMP; • manages conflicts of interest in an ethical manner; • evaluates risks and mitigates them; • maintains appropriate oversight of manufacturing facilities within its territory; • receives adequate resources and uses them; • employs trained and qualified inspectors with the skills and knowledge to identify manufacturing practices that may lead to patient harm; and • possesses the tools necessary to take action to pro- tect the public from harm due to poor-quality drugs or medicinal products. "Capable" does not require that the inspectorate maintain procedures for conducting inspections and overseeing manufacturing facilities that are identical to the FDA's procedures. The FDA's capability assessment begins with observ- ing the EU's internal audit of an EU country to ensure that the inspectorate is functioning properly and does not deviate in any significant way from EU law and guidance. These audits include observations of drug manufacturing facility inspections conducted by the audited inspec- torates and utilize the 78 indicators based on the Pharmaceutical Inspection Cooperation Scheme (PIC/S) compliance assessment program with an EU addendum. the annex was never fully implemented. However, in 2017, the US and EU adopted an amended sectoral annex to the 1998 US-EU MRA [1]. This amended sec- toral annex allows the FDA and the EU inspectorates to use inspection reports and other related information obtained during drug manufacturing facility inspections, whether conducted by the FDA or by an EU inspec- torate, to help determine whether a facility is manufactur- ing high-quality drug products. Then, if necessary, the FDA or EU can require further inspections or take other actions to protect the public. Strengthening the use of each other's drug inspection expertise and resources will result in greater efficiencies for both regulatory systems and provide a more practical means to oversee the large number of drug manufacturing facilities outside of the US and EU. Prior to the 2017 amended sectoral annex, the FDA and EU would sometimes both inspect the same facilities in the same year, even if the facilities had a strong record of compliance. Going forward, such duplicate inspections should be the exception. By utilizing each other's inspec- tion reports and related information, the FDA and EU will be able to reallocate resources towards inspection of drug manufacturing facilities with potentially higher pub- lic health risks across the globe. This will benefit patients and reduce adverse public health outcomes. How does the FDA know when another inspectorate is capable of conducting drug manufacturing facility inspections that meet US requirements? Tablets & Capsules October 2018 13

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