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United States Government Accountability Office:
GAO: 

Testimony: 

Before the Subcommittee on Oversight and Investigations, Committee on 
Energy and Commerce, House of Representatives:

For Release on Delivery: 
Expected at 10:00 a.m. EDT: 
Thursday, November 1, 2007: 

Drug Safety: 

Preliminary Findings Suggest Weaknesses in FDA's Program for Inspecting 
Foreign Drug Manufacturers: 

Statement of Marcia Crosse: 
Director: 
Health Care: 

GAO-08-224T: 

GAO Highlights: 

Highlights of GAO-08-224T, a testimony before the Subcommittee on 
Oversight and Investigations, Committee on Energy and Commerce, House 
of Representatives. 

Why GAO Did This Study: 

Many drugs marketed in the United States are manufactured in foreign 
countries and the value of such products entering the country is 
increasing. The Food and Drug Administration (FDA) is responsible for 
overseeing the safety and effectiveness of human drugs that are 
marketed in the United States, whether they are manufactured in foreign 
or domestic establishments. Foreign establishments that market their 
drugs in the United States must register with FDA and FDA inspects 
foreign establishments to ensure that they meet the same standards that 
are required of domestic ones. GAO reported 9 years ago that FDA needed 
to improve its foreign drug inspection program (GAO/HEHS-98-21). 
Questions remain as to whether FDA has improved its management of the 
foreign drug inspection program. 

This statement discusses preliminary information on (1) the extent to 
which FDA has accurate data to manage the foreign drug inspection 
program, (2) the frequency of foreign inspections and factors 
influencing the selection of establishments to inspect, and (3) issues 
unique to conducting foreign inspections. To address these issues GAO 
interviewed FDA officials; reviewed pertinent statutes, regulations, 
and guidance; and analyzed information from FDA databases. Because of 
the preliminary nature of our work, we are not making recommendations 
at this time. 

What GAO Found: 

FDAs effectiveness in managing the foreign drug inspection program 
continues to be hindered by weaknesses in its databases. FDA does not 
know how many foreign establishments are subject to inspection. 
Instead, FDA relies on databases that were not designed for this 
purpose. Further, these databases contain inaccuracies that FDA cannot 
easily reconcile. One database indicates there were about 3,000 foreign 
establishments registered to market drugs in the United States in 
fiscal year 2007, while another indicates that about 6,800 foreign 
establishments actually imported drugs in that year. FDA recognizes 
these flaws. Further, because the databases cannot exchange 
information, any comparisons of the data are performed manually, on a 
case-by-case basis. FDA officials told GAO that they have not generated 
an accurate count of foreign establishments whose drugs are imported 
into the United States. 

FDA inspects relatively few foreign establishments. Data from FDA 
suggest that the agency may inspect about 7 percent of foreign 
establishments in a given year. At this rate, it would take FDA more 
than 13 years to inspect each foreign establishment once, assuming that 
no additional establishments require inspection. However, FDA cannot 
provide an exact number of foreign establishments that have never been 
inspected. Most of the foreign inspections performed are conducted as 
part of a review associated with processing an application to market a 
new drug, rather than inspections for monitoring the quality of 
marketed drugs. Although FDA uses a risk-based process to develop a 
prioritized list of foreign establishments for inspections to monitor 
the quality of marketed drugs, few are completed in a given year. This 
prioritized list was used to select foreign establishments for 
inspection in fiscal year 2007. According to FDA, about 30 such 
inspections were completed in that year and at least 50 are targeted 
for inspection in fiscal year 2008. 

The foreign inspection process involves unique circumstances that are 
not encountered domestically. For example, FDA relies on staff that 
inspect domestic establishments to volunteer for foreign inspections. 
Unlike domestic inspections to monitor the quality of a marketed drug, 
FDA does not arrive unannounced at a foreign establishment. It also 
lacks the flexibility to easily extend foreign inspections if problems 
are encountered, due to the need to adhere to an itinerary that 
typically involves multiple inspections in the same country. Finally, 
language barriers can make foreign inspections more difficult than 
domestic ones. FDA does not generally provide translators to its 
inspection teams. Instead, they may have to rely on an English-speaking 
representative of the foreign establishment being inspected, rather 
than an independent translator. 

To view the full product, including the scope and methodology, click on 
[hyperlink, http://www.GAO-08-224T]. For more information, contact 
Marcia Crosse at (202) 512-7114 or crossem@gao.gov. 

[End of section] 

Mr. Chairman and Members of the Subcommittee: 

I am pleased to be here today as you examine the Food and Drug 
Administration's (FDA) inspections of foreign drug manufacturers whose 
products are imported into the United States. In 1998, we reported that 
FDA needed to improve its foreign drug inspection program.[Footnote 1] 
Among other things, we noted that FDA had serious problems managing its 
foreign inspection data and that it lacked a comprehensive automated 
system for tracking this important information. We were also critical 
of the number of inspections FDA conducted at foreign manufacturers. At 
that time, FDA reported on our growing dependence on imported 
pharmaceutical products, noting that as much as 80 percent of the bulk 
drug substances[Footnote 2] used by manufacturers in the United States 
to produce prescription drugs was imported and that the number of 
finished drug products manufactured abroad for the U.S. market was 
increasing. Today, we are still dependent on foreign 
establishments[Footnote 3] manufacturing drugs for the U.S. market as 
the value of pharmaceutical products coming into the United States from 
abroad continues to increase.[Footnote 4] 

Given the importance of FDA's foreign drug inspection program, you 
expressed concern about FDA's ability to oversee foreign establishments 
manufacturing drugs and asked whether FDA has improved its management 
of the foreign drug inspection program since our previous report was 
issued. My testimony today will summarize preliminary findings from our 
ongoing work to update our 1998 report. My remarks will focus on (1) 
the extent to which FDA has accurate data to manage its foreign drug 
inspection program, (2) the frequency of foreign inspections and 
factors influencing the selection of establishments to inspect, and (3) 
issues unique to conducting foreign inspections. 

To address these issues, we interviewed officials from FDA's Center for 
Drug Evaluation and Research (CDER) and Office of Regulatory Affairs 
(ORA), which each have responsibilities for managing the foreign drug 
inspection program. We reviewed pertinent statutes and regulations as 
well as agency documents that provide guidance on conducting 
inspections and provide the basis for FDA's assessment of an 
establishment's compliance with current good manufacturing practices 
(GMP).[Footnote 5] These documents included FDA's Compliance Program 
Guidance Manuals, its Guide to Inspections of Foreign Pharmaceutical 
Manufacturers, and its Investigations Operations Manual 2007. We also 
obtained information from FDA databases on establishments whose drugs 
have been imported into the United States. Specifically, we obtained 
data from the Drug Registration and Listing System (DRLS), the Field 
Accomplishments and Compliance Tracking System (FACTS), and the 
Operational and Administrative System for Import Support (OASIS). We 
assessed the reliability of these data by (1) reviewing existing 
information about the data and the databases that produced them, (2) 
interviewing agency officials knowledgeable about the data, and (3) 
performing electronic testing of data elements from FACTS. We found the 
data in the FACTS database reliable for our purposes. We also found 
that DRLS was reliable, to the extent that it accurately reflects 
information provided by foreign establishments that register to market 
drugs in the United States. However, we determined that these data do 
not necessarily reflect all foreign establishments whose drugs are 
imported into the United States. In addition, we found that OASIS is 
likely to over-estimate the number of foreign establishments whose 
drugs have been imported into the United States, due to uncorrected 
errors in the data. Therefore, we present information from both DRLS 
and OASIS to illustrate the variability in information that FDA's 
databases provide to agency officials on this topic. This represents 
the best information available and is what FDA relies on to manage its 
foreign drug inspection activities. Our ongoing work is focused on 
human drugs regulated by CDER and not on biologics,[Footnote 6] medical 
devices, veterinary medicines, or other items or products for which FDA 
conducts inspections. We received technical comments on a draft of this 
statement from FDA, which we incorporated as appropriate. Our work is 
being performed in accordance with generally accepted government 
auditing standards. 

In summary, our preliminary results indicate that more than 9 years 
after we issued our last report on this topic, FDA's effectiveness in 
managing the foreign drug inspection program continues to be hindered 
by weaknesses in its data systems. FDA does not know how many foreign 
establishments are subject to inspection. FDA relies on information 
from several databases that were not designed for this purpose. One of 
these databases contains information on foreign establishments that 
have registered to market drugs in the United States, while another 
contains information on drugs imported into the United States. One 
database indicates about 3,000 foreign establishments could have been 
subject to inspection in fiscal year 2007, while another indicates that 
about 6,800 foreign establishments could have been subject to 
inspection in that year. Despite the divergent estimates of foreign 
establishments subject to inspection generated by these two databases, 
FDA does not verify the data within each database. For example, the 
agency does not routinely confirm that a registered establishment 
actually manufactures a drug for the U.S. market. However, FDA used 
these data to generate a list of 3,249 establishments from which it 
prioritized establishments for inspection. 

Because FDA is not certain how many foreign establishments are actually 
subject to inspection, the percentage of foreign establishments that 
have been inspected cannot be calculated with certainty. We found that 
FDA inspects relatively few foreign establishments. Using the list of 
3,249 establishments from which FDA prioritized establishments for 
inspection, we found that the agency may inspect about 7 percent of 
foreign establishments in a given year. At this rate, it would take FDA 
more than 13 years to inspect each foreign establishment on this list 
once, assuming that no additional establishments are subject to 
inspection. FDA cannot provide the exact number of foreign 
establishments that have never been inspected. Most of the foreign 
inspections are conducted as part of processing a new drug application 
(NDA) or an abbreviated new drug application (ANDA),[Footnote 7] rather 
than as GMP surveillance inspections, which are used to monitor the 
quality of marketed drugs. Although FDA used a risk-based process to 
develop a prioritized list of foreign establishments for GMP 
surveillance inspections in fiscal year 2007, few such inspections are 
completed in a given year. According to FDA, about 30 such inspections 
were completed in fiscal year 2007 and at least 50 are targeted for 
inspection in fiscal year 2008. Further, the data on which this risk- 
based process depends limits its effectiveness. 

Finally, the very nature of the foreign inspection process involves 
unique circumstances that are not encountered domestically. For 
example, FDA does not have a dedicated staff to conduct foreign 
inspections and relies on those inspecting domestic establishments to 
volunteer. While FDA may conduct unannounced GMP surveillance 
inspections of domestic establishments, it does not arrive unannounced 
at foreign establishments. It also lacks the flexibility to easily 
extend foreign inspections if problems are encountered, due to the need 
to adhere to an itinerary that typically involves multiple inspections 
in the same country. Finally, language barriers can make foreign 
inspections more difficult to conduct than domestic ones. FDA does not 
generally provide translators to its inspection teams. Instead, they 
may have to rely on an English-speaking representative of the foreign 
establishment being inspected, rather than an independent translator. 

Because of the preliminary nature of our work, we are not making 
recommendations at this time. 

Background: 

FDA is responsible for overseeing the safety and effectiveness of human 
drugs that are marketed in the United States, whether they are 
manufactured in foreign or domestic establishments.[Footnote 8] Foreign 
establishments that market their drugs in the United States must 
register with FDA. As part of its efforts to ensure the safety and 
quality of imported drugs, FDA is responsible for inspecting foreign 
establishments whose products are imported into the United States. The 
purpose of these inspections is to ensure that foreign establishments 
meet the same manufacturing standards for quality, purity, potency, 
safety, and efficacy as required of domestic establishments. 

Requirements governing foreign and domestic inspections differ. 
Specifically, FDA is required to inspect registered domestic 
establishments that have been previously approved to market their drugs 
in the United States every 2 years,[Footnote 9] but there is no 
comparable requirement for inspecting foreign establishments. FDA does 
not have authority to require foreign establishments to allow the 
agency to inspect their facilities. However, FDA has the authority to 
conduct physical inspections of the imported product or prevent its 
entry at the border. 

Within FDA, CDER sets standards for and evaluates the safety and 
effectiveness of prescription drugs and over-the-counter drugs. Among 
other things, CDER requests that ORA inspect both foreign and domestic 
establishments to ensure that drugs are produced in conformance with 
federal statutes and regulations, including current GMPs. CDER requests 
that ORA conduct inspections of establishments that produce finished 
drug products. CDER also requests inspections of those that produce 
bulk drug substances, including the active pharmaceutical ingredients 
(API)[Footnote 10] used in finished drug products. These inspections 
are performed by investigators and laboratory analysts.[Footnote 11] 
ORA conducts two primary types of inspections[Footnote 12]: 

* Preapproval inspections of domestic and foreign establishments are 
conducted before FDA will approve a new drug to be marketed in the 
United States. These inspections occur following FDA's receipt of an 
NDA or ANDA and focus on the manufacture of a specific drug product. 
Preapproval inspections are designed to verify the accuracy and 
authenticity of the data contained in these applications and ensures 
that the manufacturer of the finished drug product, as well as each 
manufacturer supplying a bulk drug substance used in the finished 
product, manufactures, processes, and packs the drug adequately to 
preserve its identity, strength, quality, and purity. 

* Postapproval GMP surveillance inspections are conducted to ensure 
compliance with applicable laws and regulations pertaining to the 
manufacturing processes used by domestic and foreign establishments in 
the manufacture of finished drug products marketed in the United States 
and bulk drug substances used in the manufacture of those products. 
These inspections focus on a manufacturer's systemwide controls for 
ensuring that drug products are high in quality. Systems examined 
during these inspections include those related to quality control, 
production, and packaging and labeling. These systems may be involved 
in the manufacture of multiple drug products. 

FDA allocates funds to ORA to carry out preapproval and postapproval 
inspections of foreign and domestic establishments. ORA develops an 
annual work plan and a budget that estimates human resources available 
to conduct activities related to foreign inspections. ORA also develops 
estimates for inspections of domestic establishments. Typically, ORA 
investigators and laboratory analysts travel abroad for about 3 weeks 
at a time, during which they inspect approximately three 
establishments. Each establishment inspection typically lasts a week, 
with 1 day of each week set aside for documenting the inspection or for 
extending the inspection, if necessary. 

CDER uses a risk-based process to select some domestic and foreign 
establishments for postapproval GMP surveillance inspections. According 
to an FDA report,[Footnote 13] the agency developed the process after 
recognizing that it did not have the resources to meet the requirement 
for inspecting domestic establishments every 2 years.[Footnote 14] The 
process uses a risk model to identify those establishments that, based 
on characteristics of the establishment and of the product being 
manufactured, have the greatest public health risk potential should 
they experience a manufacturing defect. (See table 1 for a description 
of the risk-based site selection model used by FDA in fiscal year 
2007.) For example, FDA considers the risk to public health from poor 
quality over-the-counter drugs to be lower than for prescription drugs, 
and consequently establishments manufacturing only over-the-counter 
drugs receive a lower score on this factor than other manufacturers. 
Through this process, CDER annually prepares a prioritized list of 
domestic establishments and a separate, prioritized list of foreign 
establishments. CDER began applying this risk-based process to domestic 
establishments in fiscal year 2006 and expanded it to foreign 
establishments in fiscal year 2007. 

Table 1: Summary of Factors in FDA's Risk-Based Site-Selection Model in 
Fiscal Year 2007: 

Category of factor: Product; 
Description: Factors pertaining to the intrinsic properties of drug 
products such that quality deficiencies could potentially and adversely 
affect public health; 
Example(s): FDA considers establishments manufacturing prescription 
drugs, as opposed to only over-the-counter drugs, to be higher risk. 

Category of factor: Process; 
Description: Factors pertaining to aspects of drug manufacturing 
operations that may predict potential difficulties with process control 
or vulnerability to various forms of contamination; 
Example(s): FDA considers establishments manufacturing small-volume 
drugs administered intravenously to be higher risk than those 
manufacturing prompt release tablets, because of the greater risk of 
contamination associated with the manufacture of small-volume 
intravenous products. 

Category of factor: Facility; 
Description: Factors relating to characteristics of a manufacturing 
site believed to be predictive of potential quality risks; 
Example(s): FDA considers establishments that have not had a recent GMP 
inspection to be higher risk than those that have received a recent GMP 
inspection. 

Source: GAO analysis of FDA's risk model. 

[End of table] 

FDA relies on multiple databases to manage the foreign drug inspection 
program. FDA assigns unique numeric identifiers to establishments, 
known as the FDA establishment identifier (FEI) number. An FEI number 
could be assigned at the time of registration, importation, or 
inspection. 

* DRLS contains information on foreign and domestic drug establishments 
that have registered with FDA. Establishments that market their drugs 
in the United States must register with FDA. These establishments 
provide information, such as company name and address and the drug 
products they manufacture for commercial distribution in the United 
States, on paper forms that are entered into DRLS by FDA. 

* OASIS contains information on drugs and other FDA-regulated products 
imported into the United States, including information on the 
establishment that manufactured the drug. The information in OASIS is 
automatically generated from data managed by U.S. Customs and Border 
Protection, which are originally entered by customs brokers based on 
the information available from the importer.[Footnote 15] Each 
establishment is assigned a manufacturer identification number that is 
generated from key information entered about an establishment's name, 
address, and location. 

* FACTS contains information on FDA's inspections of domestic and 
foreign drug establishments. FDA investigators and laboratory analysts 
enter information into FACTS, following completion of an inspection. 

According to DRLS, in fiscal year 2007, China and India had more 
establishments registered to manufacture drugs for the U.S. market than 
any other country.[Footnote 16] Other countries that had a large number 
of establishments registered to manufacture drugs for the U.S. market 
in this year were Canada, France, Germany, Italy, Japan, and the United 
Kingdom. (See fig. 1.) These countries are also listed in OASIS as 
having the largest number of manufacturers importing drugs into the 
United States. 

Figure 1: Foreign Establishments Registered to Manufacture Drugs for 
the U.S. Market, by Country, Fiscal Year 2007: 

[See PDF for image] 

This figure is a map of the world depicting countries with registered 
establishments in the following categories: 
no registered establishments; 
1-50 registered establishments; 
51-100 registered establishments; 
101-200 registered establishments; 
200+ registered establishments. 

The following countries are specifically depicted with their number of 
registered establishments: 
Canada: 152; 
United Kingdom: 83; 
Germany: 101; 
France: 103; 
Italy: 70; 
India: 299; 
China: 566; 
Japan: 91. 

Source: GAO analysis of FDA data. 

Note: These counts include foreign establishments that manufactured 
human drugs, biologics, and veterinary drugs; FDA was unable to provide 
the number of registered establishments specifically manufacturing 
human drugs. 

[End of figure] 

FDA Lacks Accurate Information to Effectively Manage the Foreign Drug 
Inspection Program: 

FDA does not know how many foreign establishments are subject to 
inspection; including the number of establishments that are registered 
and whose products are currently imported into the United States and 
establishments that are not required to register but whose products are 
ultimately used in drugs that are marketed here. Instead of maintaining 
a list of such establishments, FDA relies on information from several 
databases that were not designed for this purpose. 

DRLS, established in 1991, is intended to list the establishments 
registered that manufacture drugs for the U.S. market. However, 
requirements for the registration of foreign establishments were not 
implemented until 2002.[Footnote 17] FDA expected that requiring 
foreign establishments to register would provide it with a 
comprehensive list of such establishments. In fiscal year 2007, 
approximately 3,000 foreign establishments were registered with FDA 
that manufactured human drugs, biologics, or veterinary drugs; FDA was 
unable to determine from this database the number of registered 
establishments specifically manufacturing human drugs. 

DRLS provides FDA with some information about establishments subject to 
inspection, but contains inaccuracies and does not provide a complete 
count. FDA officials told us that the count of registered foreign 
establishments in DRLS does not reflect the actual number whose 
products are being imported into the United States for several reasons. 
First, foreign establishments may register with FDA, whether or not 
they actually manufacture drugs for the U.S. market. FDA officials told 
us that this is made more likely by the fact that FDA does not charge 
foreign establishments a fee to register. FDA officials pointed out 
that some foreign establishments register because, in foreign markets, 
registration may erroneously convey an "approval" or endorsement by 
FDA. Second, foreign establishments may not renew their registration 
information, although they are required by FDA to do so annually. 
Agency officials told us that if foreign establishments stop 
manufacturing drugs for the U.S. market or go out of business they may 
not report the change to FDA, even though it is required. FDA officials 
told us that the agency does not routinely verify the information 
provided by the establishment to ensure that it is accurate or confirm 
that the establishment actually manufactures drugs for the U.S. 
market.[Footnote 18] FDA does not know how many foreign establishments 
are erroneously registered. Third, foreign establishments that 
manufacture APIs are not required to register if their products are not 
directly imported into the United States.[Footnote 19] 

OASIS also provides FDA with some information about establishments 
subject to inspection, but this database contains inaccurate data on 
the count of foreign establishments manufacturing drugs imported into 
the United States. According to OASIS, 6,760 foreign establishments 
manufactured drugs that were imported into the United States in fiscal 
year 2007. However, FDA officials told us that errors in data entry 
result in inaccurate counts of establishments whose drugs are imported 
into the United States. FDA officials told us that if information about 
an establishment--such as its name--was entered by customs brokers 
incorrectly, a new manufacturer identification number, and thus a new 
FEI number, could be assigned to an establishment that already has an 
FEI number. For example, a customs broker may enter an establishment's 
name slightly differently from the way it is displayed in OASIS, such 
as using "Inc." instead of "Incorporated," which would lead to the 
creation of a second FEI number for the establishment. Therefore, a 
single establishment may be counted more than once in OASIS, which 
would result in an artificially high count of foreign establishments 
importing drugs into the United States. FDA officials acknowledge this 
problem but were unable to provide us with an estimate of the extent of 
that error. In addition, the agency does not have a process for 
systematically identifying and correcting these errors. To mitigate 
this problem, the officials told us that FDA has provided regional 
training to brokers as a way to improve accuracy. FDA officials also 
told us that the agency is pursuing a new government-wide initiative 
that would address this problem by providing a unique identifier for 
each foreign establishment involved in the import supply chain. 

FDA's data suggest that between 3,000 and 6,760 establishments could be 
subject to FDA inspection. However, FDA officials told us that the two 
databases--DRLS and OASIS--cannot be electronically integrated or 
interact with one another, so any comparisons are done manually for 
each individual establishment. Because comparisons of the data and 
error identification are done manually, the databases are not conducive 
to routine data analysis. FDA officials told us that they have not 
generated an accurate count of the establishments whose drugs are 
imported into the United States. 

Because FDA does not have a list of all foreign establishments subject 
to inspection, in fiscal year 2007 it created a list of such 
establishments for the purpose of applying its risk-based 
process.[Footnote 20] In preparing this list, FDA draws on information 
from DRLS. It also obtains information from previous inspections to 
help it identify establishments that are subject to inspections but are 
not required to register--such as the manufacturer of an API whose 
product is not directly imported into the United States. For fiscal 
year 2007, this list consisted of 3,249 foreign establishments. 
However, as a result of the inaccuracies in DRLS, FDA recognizes that 
this list does not provide an accurate count of establishments subject 
to inspection. 

FDA Conducts Relatively Few Foreign Establishment Inspections and 
Relies on the NDA and ANDA Review Process as the Primary Selection 
Factor: 

FDA conducts relatively few inspections of foreign drug establishments. 
However, because FDA is not certain how many foreign establishments are 
actually subject to inspection, the percentage of foreign 
establishments that have been inspected cannot be calculated with 
certainty. Most foreign establishments are selected for inspection as 
part of the agency's review process associated with an NDA or ANDA. 
Therefore, the vast majority of foreign inspections include a 
preapproval inspection. In addition, although FDA has implemented a 
risk-based process in selecting foreign establishments for GMP 
surveillance inspections, relatively few such inspections are 
conducted. FDA tries to make efficient use of its resources by 
selecting establishments for these inspections that allow it to 
coordinate travel with preapproval inspections. 

Relatively Few Foreign Establishments Are Inspected by FDA Each Year: 

In each year we examined, FDA inspected a small portion of foreign 
establishments through either preapproval or GMP surveillance 
inspections. However, its lack of a list of foreign establishments 
subject to inspection makes it difficult to determine an exact 
percentage. Based on our review of data on inspections, FDA conducted 
an average of 241 foreign establishment inspections per year from 
fiscal year 2002 through fiscal year 2007.[Footnote 21] Comparing this 
average number of inspections with FDA's count of 3,249 foreign 
establishments it used to plan its fiscal year 2007 prioritized GMP 
surveillance inspections suggests that the agency inspects about 7 
percent of foreign establishments in a given year. At this rate it 
would take FDA more than 13 years to inspect this group of 
establishments once, assuming that no additional establishments are 
subject to inspection. 

FDA's data indicate that some foreign drug manufacturers have not 
received an inspection, but the exact number of establishments not 
inspected was unclear. Of the list of 3,249 foreign establishments, 
there were 2,133 foreign establishments for which the agency could not 
identify a previous inspection. Agency officials told us that this 
count included registered establishments whose drugs are being imported 
into the United States that have never been inspected but also included 
other types of establishments, such as those whose products were never 
imported into the United States or those who have stopped importing 
drugs into the United States without notifying FDA. FDA was unable to 
provide us with counts of how many establishments fall into each of 
these subcategories. Of the remaining 1,116 establishments on FDA's 
list, 242 had received at least one inspection, but had not received a 
GMP surveillance inspection since fiscal year 2000,[Footnote 22] and 
the remaining 874 establishments had received at least one GMP 
inspection since fiscal year 2000. Of these 874 establishments, 326 had 
last been inspected in fiscal years 2005 or 2006, 292 were last 
inspected in fiscal years 2003 or 2004, and the remaining 256 received 
their last inspection from fiscal year 2000 through fiscal year 2002. 

FDA has increased the number of foreign establishments it inspects, 
most of which are concentrated in a small number of countries. From 
fiscal year 2002 through fiscal year 2007, the number of foreign 
establishment inspections FDA conducted annually varied from year to 
year, but increased overall from 222 in fiscal year 2002 to 295 in 
fiscal year 2007. During this period, FDA inspected establishments in a 
total of 51 countries. More than three quarters of the 1,445 foreign 
inspections the agency conducted during this period were of 
establishments in ten countries, as shown in table 2. The country with 
the most inspections during this period was India, which had 200 
inspections. Inspections of establishments located in India increased 
from 11 in fiscal year 2002 to 65 in fiscal year 2007. 

Table 2: Number of FDA Inspections of Foreign Establishments Involved 
in the Manufacture of Drugs for the U.S. Market, by Country for the 10 
Most Frequently Inspected Countries, Fiscal Year 2002 through Fiscal 
Year 2007: 

Country: India; 
Number of inspections: FY2002: 11; 
Number of inspections: FY2003: 19; 
Number of inspections: FY2004: 38; 
Number of inspections: FY2005: 33; 
Number of inspections: FY2006: 34; 
Number of inspections: FY2007[A]: 65; 
Number of inspections: Total: 200; 
Number of establishments[B]: 410. 

Country: Germany; 
Number of inspections: FY2002: 24; 
Number of inspections: FY2003: 15; 
Number of inspections: FY2004: 35; 
Number of inspections: FY2005: 25; 
Number of inspections: FY2006: 19; 
Number of inspections: FY2007[A]: 22; 
Number of inspections: Total: 140; 
Number of establishments[B]: 199. 

Country: Italy; 
Number of inspections: FY2002: 17; 
Number of inspections: FY2003: 30; 
Number of inspections: FY2004: 26; 
Number of inspections: FY2005: 21; 
Number of inspections: FY2006: 18; 
Number of inspections: FY2007[A]: 19; 
Number of inspections: Total: 131; 
Number of establishments[B]: 150. 

Country: Canada; 
Number of inspections: FY2002: 29; 
Number of inspections: FY2003: 12; 
Number of inspections: FY2004: 17; 
Number of inspections: FY2005: 23; 
Number of inspections: FY2006: 23; 
Number of inspections: FY2007[A]: 19; 
Number of inspections: Total: 123; 
Number of establishments[B]: 288. 

Country: United Kingdom; 
Number of inspections: FY2002: 19; 
Number of inspections: FY2003: 22; 
Number of inspections: FY2004: 15; 
Number of inspections: FY2005: 18; 
Number of inspections: FY2006: 15; 
Number of inspections: FY2007[A]: 13; 
Number of inspections: Total: 102; 
Number of establishments[B]: 169. 

Country: France; 
Number of inspections: FY2002: 14; 
Number of inspections: FY2003: 15; 
Number of inspections: FY2004: 13; 
Number of inspections: FY2005: 12; 
Number of inspections: FY2006: 16; 
Number of inspections: FY2007[A]: 24; 
Number of inspections: Total: 94; 
Number of establishments[B]: 162. 

Country: China; 
Number of inspections: FY2002: 11; 
Number of inspections: FY2003: 9; 
Number of inspections: FY2004: 17; 
Number of inspections: FY2005: 21; 
Number of inspections: FY2006: 17; 
Number of inspections: FY2007[A]: 13; 
Number of inspections: Total: 88; 
Number of establishments[B]: 714. 

Country: Japan; 
Number of inspections: FY2002: 11; 
Number of inspections: FY2003: 13; 
Number of inspections: FY2004: 14; 
Number of inspections: FY2005: 21; 
Number of inspections: FY2006: 13; 
Number of inspections: FY2007[A]: 15; 
Number of inspections: Total: 87; 
Number of establishments[B]: 196. 

Country: Switzerland; 
Number of inspections: FY2002: 12; 
Number of inspections: FY2003: 12; 
Number of inspections: FY2004: 11; 
Number of inspections: FY2005: 17; 
Number of inspections: FY2006: 9; 
Number of inspections: FY2007[A]: 14; 
Number of inspections: Total: 75; 
Number of establishments[B]: 83. 

Country: Ireland; 
Number of inspections: FY2002: 11; 
Number of inspections: FY2003: 5; 
Number of inspections: FY2004: 11; 
Number of inspections: FY2005: 14; 
Number of inspections: FY2006: 3; 
Number of inspections: FY2007[A]: 11; 
Number of inspections: Total: 55; 
Number of establishments[B]: 61. 

Country: All other countries; 
Number of inspections: FY2002: 63; 
Number of inspections: FY2003: 38; 
Number of inspections: FY2004: 63; 
Number of inspections: FY2005: 61; 
Number of inspections: FY2006: 45; 
Number of inspections: FY2007[A]: 80; 
Number of inspections: Total: 350; 
Number of establishments[B]: 817. 

Country: Total; 
Number of inspections: FY2002: 222; 
Number of inspections: FY2003: 190; 
Number of inspections: FY2004: 260; 
Number of inspections: FY2005: 266; 
Number of inspections: FY2006: 212; 
Number of inspections: FY2007[A]: 295; 
Number of inspections: Total: 1,445; 
Number of establishments[B]: 3,249. 

Source: GAO analysis of FDA data. 

[A] Inspection data for fiscal year 2007 may not be complete because 
FDA provided GAO with these data as of September 26, 2007, prior to the 
end of the fiscal year. 

[B] This count represents the number of establishments FDA used to plan 
its fiscal year 2007 prioritized surveillance inspections. 

[End of table] 

The Need to Conduct Preapproval Inspections Associated with NDAs and 
ANDAs Drives FDA's Selection of Foreign Establishments: 

While enforcing GMP compliance through surveillance inspections is 
FDA's most comprehensive program for monitoring the quality of marketed 
drugs, FDA's inspections of most foreign establishments occur as part 
of the agency's review of an NDA or ANDA. Agency officials said that 
FDA may need to inspect establishments involved in the manufacture of 
the drug referenced in an NDA or ANDA in order to meet specific goals 
for the timely review of these applications. As we reported in 1998 and 
we still found in 2007, most inspections of foreign manufacturers occur 
only when they are listed in an NDA or ANDA. For fiscal years 2002 
through 2007, 88 percent of FDA's inspections of foreign establishments 
were conducted as part of the preapproval process. When FDA receives an 
NDA or ANDA, CDER officials review the inspection history of each 
establishment listed on the application. According to FDA officials, if 
an establishment listed on the NDA or ANDA has received a satisfactory 
GMP inspection in the previous 2 years and the agency has no new 
concerns, FDA will consider this inspection sufficient and will not 
perform a preapproval inspection of this establishment.[Footnote 23] 

FDA often includes a GMP inspection when it visits an establishment for 
a preapproval inspection. As presented in figure 2, from fiscal year 
2002 through fiscal year 2007, the majority of FDA's foreign 
inspections combined a preapproval inspection with a GMP inspection. 
According to FDA officials, because foreign establishments are 
inspected infrequently, it is expedient for investigators and 
laboratory analysts to conduct preapproval inspections and GMP 
inspections during the same visit to a foreign establishment. During 
one establishment visit, FDA investigators can conduct inspections 
related to multiple compliance programs.[Footnote 24] Because a GMP 
surveillance inspection examines the major manufacturing systems at an 
establishment, the results of such an inspection can be generalized to 
all products manufactured at a particular establishment. FDA can thus 
use the results of the combined inspection to make decisions in the 
future if that establishment is listed again in another NDA or ANDA. 

Figure 2: FDA Foreign Establishment Inspections by Type of Inspection, 
Fiscal Year 2002 through Fiscal Year 2007: 

[See PDF for image] 

This figure is a pie chart depicting the following data: 

Type of inspection: GMP only; 
Percentage: 12%; 

Type of inspection: Preapproval only; 
Percentage: 19%; 

Type of inspection: Both preapproval and GMP; 
Percentage: 69%. 

Note: Inspection data for fiscal year 2007 may not be complete because 
FDA provided GAO with these data as of September 26, 2007, prior to the 
end of the fiscal year. 

[End of figure] 

FDA conducts fewer GMP surveillance inspections of foreign 
establishments than it does of domestic ones. Of the 1,445 foreign 
establishment inspections conducted from fiscal year 2002 through 
fiscal year 2007, 1,177 inspections included a GMP component, of which 
998 were conducted in conjunction with a preapproval inspection. In 
contrast, FDA conducted 9,694 domestic establishment inspections that 
included a GMP component, of which 7,742 were not conducted in 
conjunction with a preapproval inspection. Figure 3 shows a comparison 
of foreign and domestic inspections, by type of inspection. 

Figure 3: Number of FDA Foreign and Domestic Establishment Inspections, 
by Type of Inspection, Fiscal Year 2002 through Fiscal Year 2007: 

[See PDF for image] 

This figure is a vertical bar graph with number of inspections 
represented on the vertical axis. The horizontal axis represents type 
of inspections. The following data is depicted: 

Preapproval, foreign: 268 inspections; 
Preapproval, domestic: 245 inspections; 
GMP, foreign: 179 inspections; 
GMP, domestic: 7,742 inspections; 
Preapproval and GMP, foreign: 998 inspections; 
Preapproval and GMP, domestic: 1,952 inspections. 

Source: GAO analysis of FDA data. 

Note: Inspection data for fiscal year 2007 may not be complete because 
FDA provided GAO with these data as of September 26, 2007, prior to the 
end of the fiscal year. 

[End of figure] 

FDA's funding for its domestic and foreign inspection programs is 
consistent with this approach. From fiscal year 2002 through fiscal 
year 2007, FDA dedicated more funding to domestic establishment 
inspections than foreign establishment inspections. The agency 
dedicated more funding to conduct foreign preapproval inspections than 
foreign GMP surveillance inspections, as shown in table 3. 

Table 3: FDA Funding for Foreign and Domestic Inspections Related to 
Human Drugs, Fiscal Year 2002 through Fiscal Year 2007: 

Activity (dollars in thousands): Foreign Preapproval inspections; 
FY2002: $8,274; 
FY2003: $8,515; 
FY2004: $8,406; 
FY2005: $8,604; 
FY2006: $7,544; 
FY2007[A]: $7,558. 

Activity (dollars in thousands): Foreign Postapproval inspections; 
FY2002: 5,256; 
FY2003: 5,177; 
FY2004: 5,150; 
FY2005: 5,224; 
FY2006: 5,261; 
FY2007[A]: 5,191. 

Activity (dollars in thousands): Domestic Preapproval inspections; 
FY2002: 21,846; 
FY2003: 23,008; 
FY2004: 23,965; 
FY2005: 25,213; 
FY2006: 21,775; 
FY2007[A]: 23,532. 

Activity (dollars in thousands): Domestic Postapproval inspections; 
FY2002: 23,102; 
FY2003: 28,601; 
FY2004: 27,989; 
FY2005: 28,270; 
FY2006: 27,607; 
FY2007[A]: 28,452. 

Source: GAO analysis of FDA data. 

[A] Fiscal year 2007 funding is estimated. 

[End of table] 

FDA's Risk-Based Process Is Used to Select Relatively Few Foreign 
Establishments for GMP Surveillance Inspections: 

Relatively few foreign establishments identified through CDER's risk- 
based site selection process are selected for GMP surveillance 
inspections. In fiscal year 2007, after using this process to rank the 
3,249 establishments by their potential risk level, CDER forwarded to 
ORA a list of 104 foreign establishments that it considered to be a 
high priority for inspection. Of these, CDER requested that ORA 
complete GMP surveillance inspections of 25 establishments and FDA 
officials estimated that about 30 such inspections were actually 
completed in fiscal year 2007. In fiscal year 2008, CDER submitted a 
list of 110 foreign establishments to ORA, with a negotiated target of 
at least 50 inspections. 

The application of the risk-based site selection process does not 
ensure that the foreign establishments posing the greatest potential 
risk are selected for GMP surveillance inspections. First, FDA 
officials acknowledge that they do not have an accurate list of foreign 
establishments manufacturing drugs for the U.S. market to use in the 
application of the risk-based process. Second, the usefulness of the 
risk-based process is weakened by the incomplete and possibly 
inaccurate information on those foreign establishments that FDA has not 
inspected recently, as well as those that have never been the subject 
of a GMP surveillance inspection. As a consequence, FDA lacks 
sufficient data to make an accurate assessment of the potential risk of 
such establishments. FDA recognized the effect of such data limitations 
on the domestic application of the risk-based process and undertook a 
data quality improvement initiative in fiscal year 2005, but it has yet 
to make a comparable effort to improve its data on foreign 
establishments. 

To help account for the differences in information available to FDA 
between foreign establishments that have and have not been inspected, 
the agency categorizes establishments into one of three groups for the 
purposes of examining risk scores: (1) those that have received a GMP 
surveillance inspection since fiscal year 2000; (2) those that have not 
received a GMP surveillance inspection since fiscal year 2000, but have 
received another type of inspection in that time (for example, a 
preapproval inspection or a veterinary drugs inspection); and (3) those 
that may never have received an inspection.[Footnote 25] These groups 
were created to account for limitations in the data and are not 
designed to indicate relative risk among groups. FDA officials told us 
that risk scores can be more readily compared within a group, than 
among groups. In 2007, FDA selected 33 establishments from the first 
group, 31 from the second group, and 40 from the third group to create 
the list of 104 establishments it submitted to ORA. 

FDA officials indicated that they do not know if the establishments on 
the prioritized list forwarded to ORA differ significantly from each 
other in risk level. Consequently, they do not necessarily select the 
highest ranked establishments and therefore consider the locations of 
other planned inspections in making a final determination of foreign 
establishments from the prioritized list for GMP surveillance 
inspections. According to FDA officials, this gives them needed 
flexibility to make selections that will make efficient use of 
available resources. For example, if ORA is sending an investigator and 
laboratory analyst to a particular region in China for a preapproval 
inspection and an establishment in the same region appears on the 
prioritized list for GMP surveillance inspections, ORA might add this 
establishment to the inspection itinerary. 

Challenges Unique to Foreign Inspections Influence the Manner in Which 
FDA Conducts Such Inspections: 

Inspections of foreign drug establishments pose unique challenges to 
FDA--in both human resources and logistics. For example, unlike 
domestic inspections, FDA does not have a dedicated staff devoted to 
conducting foreign inspections and relies on volunteers. In addition, 
unlike domestic GMP surveillance inspections, foreign establishment GMP 
surveillance inspections are announced in advance and inspections 
cannot be easily extended due to travel itineraries that involve more 
than one establishment. Other factors, such as language barriers, can 
also add complexity to the challenge of completing foreign 
establishment inspections. 

According to FDA officials, the agency does not have a dedicated staff 
to conduct foreign inspections. They explained that the same 
investigators and laboratory analysts are responsible for conducting 
both foreign and domestic inspections. These staff members must meet 
certain criteria in terms of their experience and training to conduct 
inspections of foreign establishments. For example, they are required 
to take certain training courses and have at least 3 years of 
experience conducting domestic inspections before they can be 
considered to conduct a foreign inspection. FDA reported that it 
currently has approximately 335 employees who are qualified to conduct 
foreign inspections of drug manufacturers. Approximately 250 of these 
employees are investigators and 85 are laboratory analysts. These 
counts do not represent the number of individuals that actually conduct 
foreign inspections in a given year. Not all investigators and 
laboratory analysts who are qualified to conduct a foreign inspection 
do so in a given year, while others may perform multiple inspections 
during the same period. Using data from FACTS, we found that the total 
number of employees conducting pre-approval and GMP surveillance 
inspections of drug manufacturing establishments, either foreign or 
domestic, decreased from 587 in fiscal year 2002 to 446 in fiscal year 
2007, as shown in table 4. However, of these, the number of employees 
who conducted foreign inspections of drug manufacturers increased from 
100 to 141 during that same period. While an investigator and analyst 
team may participate in foreign inspections, FDA officials stated that 
in certain circumstances, such as inspections that do not involve the 
review of laboratory facilities, only an investigator is sent. 

Table 4: Number of FDA Employees Conducting Inspections, Fiscal Year 
2002 through Fiscal Year 2007: 

Location of inspection: Employees who conducted foreign inspections; 
FY2002: 100; 
FY2003: 94; 
FY2004: 117; 
FY2005: 114; 
FY2006: 102; 
FY2007[A]: 141. 

Location of inspection: Employees who conducted foreign or domestic 
inspections; 
FY2002: 587; 
FY2003: 595; 
FY2004: 539; 
FY2005: 512; 
FY2006: 478; 
FY2007[A]: 446. 

Source: GAO analysis of FDA data. 

[A] Inspection data for fiscal year 2007 may not be complete because 
FDA provided GAO with these data as of September 26, 2007, prior to the 
end of the fiscal year. 

[End of table] 

FDA relies on investigators and laboratory analysts to volunteer to 
conduct foreign inspections. FDA officials told us that it is difficult 
to recruit investigators and laboratory analysts to voluntarily travel 
to certain countries. However, officials noted that the agency provides 
various incentives to recruit employees for foreign inspection 
assignments. For example, employees receive a $300 bonus for each three 
week trip completed. FDA indicated that if the agency could not find an 
individual to volunteer for a foreign inspection trip, it would mandate 
the travel. However, FDA does not typically send investigators and 
laboratory analysts to countries for which the U.S. Department of State 
has issued a travel warning nor would it mandate travel to such a 
country.[Footnote 26] We found that 49 foreign establishments 
registered as manufacturers of drugs for the U.S. market were located 
in 10 countries that had travel warnings posted as of October 
2007.[Footnote 27] However, FDA officials told us that in the past they 
have conducted inspections in countries with travel warnings. They also 
provided us with one example in which an establishment in a country 
with a travel warning hired security through the U.S. Department of 
State to protect the inspection team. 

FDA also faces several logistical challenges in conducting inspections 
of foreign drug manufacturing establishments. FDA guidance states that 
inspections at foreign facilities are to be approached in the same 
manner as domestic inspections. However, the guidance notes that one 
main difference posing a significant challenge to the inspection team 
abroad is the logistics borne by the program itself. For example, FDA 
is unable to conduct unannounced inspections of foreign drug 
manufacturers, as it sometimes does with domestic manufacturers. FDA 
policy states that the agency, with few exceptions, initiates 
inspections of establishments without prior notification to the 
specific establishment or its management so that the inspection team 
can observe the establishment under conditions that represent normal 
day-to-day activities.[Footnote 28] However, prior notification is 
routinely provided to foreign establishments. FDA recognizes that the 
time and expense associated with foreign travel requires them to ensure 
that the foreign establishment's managers are available and that the 
production line being inspected is operational during the inspection. 
In addition, FDA does not have explicit authority to inspect 
establishments in foreign countries, and it therefore may have to 
obtain permission from the government and company prior to the 
inspection. FDA officials explained that, in some cases, investigators 
and laboratory analysts may need to obtain a visa or letters of 
invitation to enter the country in which the establishment is located. 
In addition, FDA does not have the same flexibility to extend the 
length of foreign inspection trips if problems are encountered as it 
does with domestic inspections because of the need to maintain the 
inspection schedule, which FDA officials told us typically involves 
inspections of multiple establishments in the same country. 

FDA officials also told us that language barriers can make foreign 
inspections more difficult to conduct than domestic inspections. The 
agency does not generally provide translators in foreign countries, nor 
does it require that foreign establishments provide independent 
interpreters. Instead, they may have to rely on an English-speaking 
representative of the foreign establishment being inspected, who may 
not be a translator by training, rather than rely on an independent 
translator. 

Concluding Observations: 

Millions of Americans depend on the safety and effectiveness of the 
drugs they take. More than nine years ago we reported that FDA needed 
to make improvements in its foreign drug inspection program. Yet, our 
preliminary work indicates that fundamental flaws that we identified in 
the management of this program in 1998, continue to persist. FDA still 
does not have a reliable list of foreign establishments that are 
subject to inspection. As more imported drugs enter the United States, 
it becomes increasingly important that foreign establishments receive 
appropriate scrutiny. We understand that FDA currently cannot inspect 
all foreign establishments every few years. We also recognize that FDA 
has taken steps to improve its management of the foreign drug 
inspection program by enhancing the risk-based process it uses to 
select establishments for GMP surveillance inspections. In addition, 
FDA is pursuing an initiative that is intended to improve its 
identification of foreign drug establishments. However, until FDA 
responds to systemic weaknesses in the management of this important 
program, it cannot provide the needed assurance that the drug supply 
reaching our citizens is appropriately scrutinized, and safe. 

Mr. Chairman, this completes my prepared statement, I would be happy to 
respond to any questions you or the other Members of the subcommittee 
may have at this time. 

Contacts and Acknowledgments: 

For further information about this testimony, please contact Marcia 
Crosse at (202) 512-7114 or crossem@gao.gov. Contact points for our 
Offices of Congressional Relations and Public Affairs may be found on 
the last page of this testimony. Geraldine Redican-Bigott, Assistant 
Director; Katherine Clark; Robert Copeland; William Hadley; Cathleen 
Hamann; Julian Klazkin; Romonda McKinney; Lisa Motley; and Suzanne 
Worth made key contributions to this testimony. 

[End of section] 

Footnotes: 

[1] GAO, Food and Drug Administration: Improvements Needed in the 
Foreign Drug Inspection Program, GAO/HEHS-98-21 (Washington, D.C.: Mar. 
17, 1998). 

[2] A bulk drug substance is any substance that is represented for use 
in a drug that, when used in the manufacturing, processing, or 
packaging of a drug, becomes an active ingredient or a finished drug 
product. 21 C.F.R.  207.3(a)(4)(2007). 

[3] FDA regulations define an establishment as a place of business 
under one management at one general physical location. 21 C.F.R.  
207.3(a)(7)(2007). Drug firms may have more than one establishment. 

[4] According to GAO analysis of International Trade Centre data, the 
value of pharmaceutical imports increased 42 percent from 2001 to 2005 
adjusted for pharmaceutical inflation. The International Trade Centre 
is a joint agency of the United Nations Conference on Trade and 
Development and the World Trade Organization. 

[5] GMPs provide a framework for a manufacturer to follow to produce 
safe, pure, and high-quality products. See 21 C.F.R. pts. 210, 211 
(2007). 

[6] Biologics are materials, such as vaccines, derived from living 
sources such as humans, animals, and microorganisms. Some biologics are 
regulated by CDER and inspections related to those products are 
included in our work. 

[7] FDA must approve an NDA in order for a new drug product to be 
marketed in the United States; approval for a generic drug is sought 
through an ANDA. FDA also reviews scientific and clinical data 
contained in these applications, as part of its process in considering 
them for approval to be marketed. 

[8] FDA regulations define manufacturing to include the manufacture, 
preparation, propagation, compounding, or processing of a drug. See 21 
C.F.R.  207.3(a)(8) (2007). 

[9] 21 U.S.C.  360(h). 

[10] An API is any component that is intended to provide 
pharmacological activity or other direct effect in the diagnosis, cure, 
mitigation, treatment, or prevention of disease. According to FDA 
officials, the agency typically only inspects establishments 
manufacturing inactive ingredients on a for-cause basis. FDA defines 
inactive ingredients as any component of a drug product other than the 
API, such as materials that improve the appearance, stability, and 
palatability of the product. 

[11] ORA investigators lead inspections. They are responsible for 
performing or overseeing all aspects of an inspection. ORA laboratory 
analysts are chemists or microbiologists and have expertise in 
laboratory testing. 

[12] FDA may also conduct other postapproval inspections, such as to 
address adverse events associated with a particular drug. In addition, 
FDA conducts for-cause inspections when it receives information 
indicating problems in the manufacture of approved drug products, as 
well as when it follows up on manufacturers that were not in compliance 
with GMPs during previous inspections. 

[13] Department of Health and Human Services, U.S. Food and Drug 
Administration, "Risk-Based Method for Prioritizing CGMP Inspections of 
Pharmaceutical Manufacturing Sites--A Pilot Risk Ranking Model," 
(September 2004), 
[http://www.fda.gov/cder/gmp/gmp2004/risk_based_method.htm] (accessed 
Oct. 21, 2007). 

[14] Previously, FDA used other less formal risk-based systems to 
prioritize its inspections. For example, we noted in our 1998 report 
that FDA had used a risk-based site selection system, in which it 
classified establishments according to risk tiers. See GAO/HEHS-98-21. 

[15] Customs brokers are private individuals, partnerships, 
associations, or corporations licensed, regulated, and empowered by 
U.S. Customs and Border Protection to assist in meeting federal 
requirements governing imports and exports. 

[16] These counts include foreign establishments that manufactured 
human drugs, biologics, and veterinary drugs; FDA was unable to provide 
the number of registered establishments specifically manufacturing 
human drugs. 

[17] See Pub. L. No. 105-115,  417, 501, 111 Stat. 2296, 2379-80. FDA 
issued implementing regulations in 2001, which were effective February 
11, 2002. 66 Fed. Reg. 59138 (Nov. 27, 2001). 

[18] If the agency learns of an error, it would ask the establishment 
to submit corrected information. 

[19] For example, an establishment in China may export an API to 
Germany. The German establishment may use the API in its production of 
a drug that is imported into the United States. Although the German 
establishment would be required to notify FDA of its arrangement with 
the Chinese establishment, and the Chinese establishment would be 
subject to inspection by FDA, the Chinese establishment is not required 
to register. 

[20] In addition to establishments identified for the purposes of 
conducting its risk-based analysis, FDA also identifies establishments 
subject to inspection that are named in NDAs or ANDAs using its 
Establishment Evaluation System database. This database identifies the 
multiple establishments involved in drug manufacturing, including the 
establishments manufacturing a finished product for import into the 
United States and the establishments manufacturing any APIs for that 
finished product. 

[21] Inspection data for fiscal year 2007 may not be complete because 
FDA provided GAO with these data as of September 26, 2007, prior to the 
end of the fiscal year. Our analysis includes all foreign and domestic 
inspections that were identified in FDA's data as being either related 
to the drug application approval process or GMP. It does not include a 
small number of other inspections, such as those related to problems 
identified by consumers or health care professionals. 

[22] According to FDA officials, some of these establishments may have 
received an inspection for another type of product, such as a 
veterinary drug. 

[23] According to FDA officials, the agency typically only inspects 
establishments manufacturing inactive ingredients on a for-cause basis. 
FDA defines inactive ingredients as any component of a drug product 
other than the API, such as materials that improve the appearance, 
stability, and palatability of the product. 

[24] Compliance programs outline procedures for conducting different 
types of inspections, including preapproval inspections for drugs that 
are the subject of an NDA or ANDA, drug manufacturing inspections, and 
drug repacker and relabeler inspections. 

[25] This third group may include registered establishments whose drugs 
are imported into the United States. However, some establishments in 
this group may have received an inspection under a different FEI 
number, be shippers rather than manufacturers, only manufacture 
products other than human drugs, or never have or no longer have their 
drugs imported. FDA was unable to provide counts of how many 
establishments fall into each of these subcategories. 

[26] Travel warnings are issued when the U.S. Department of State 
recommends that Americans avoid travel to a certain country. 

[27] These ten countries are Colombia, the Democratic Republic of the 
Congo, Haiti, Indonesia, Israel, Kenya, Nigeria, Pakistan, the 
Philippines, and Saudi Arabia. 

[28] ORA Field Management Directive No. 112A, Prior Notification to FDA 
Regulated Industries of Impending Inspections, August 1996. However, 
for both domestic and foreign preapproval inspections, FDA provides 
prior notification to the establishment. 

[End of section] 

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