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entitled 'Drug Safety: Better Data Management and More Inspections Are 
Needed to Strengthen FDA's Foreign Drug Inspection Program' which was 
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Report to Congressional Requesters: 

United States Government Accountability Office: 

GAO: 

September 2008: 

Drug Safety: 

Better Data Management and More Inspections Are Needed to Strengthen 
FDA's Foreign Drug Inspection Program: 

FDA Foreign Drug Inspection: 

GAO-08-970: 

GAO Highlights: 

Highlights of GAO-08-970, a report to congressional requesters. 

Why GAO Did This Study: 

The Food and Drug Administration (FDA), an agency within the Department 
of Health and Human Services (HHS), oversees the safety and 
effectiveness of human drugs marketed in the United States, including 
those manufactured in foreign establishments. FDA inspects foreign 
establishments in order to ensure that the quality of drugs is not 
jeopardized by poor manufacturing processes. This report examines (1) 
the extent to which FDA has accurate data on the number of foreign 
establishments subject to inspection, (2) the frequency of foreign 
inspections, and (3) oversight by FDA to ensure that foreign 
establishments correct serious problems identified during inspections. 
GAO analyzed information from FDA databases, reviewed inspection 
reports which identified serious deficiencies, and interviewed FDA 
officials. 

What GAO Found: 

FDA databases contain inaccurate information on foreign establishments 
subject to inspection. FDA uses information from a database of 
establishments registered to market drugs in the United States and a 
database of establishments that shipped drugs to the United States to 
compile a list of establishments subject to inspection, but these 
databases contain divergent estimatesabout 3,000 and 6,800, 
respectively. FDAs registration database contains information about 
establishments not subject to FDA inspection. Although annual 
reregistration is required, FDA does not deactivate in its database 
establishments that do not fulfill this requirement. The agency also 
does not routinely verify that a registered establishment manufactures 
a drug for the U.S. market. The accuracy of this information is 
important in FDAs identification of foreign establishments subject to 
inspection. 

FDA inspects relatively few foreign establishments each year to assess 
the manufacturing of drugs currently marketed in the United States. FDA 
inspected 1,479 foreign drug manufacturing establishments from fiscal 
years 2002 through 2007. Because FDA does not know the number of 
establishments subject to inspection, the percentage of those inspected 
cannot be calculated with certainty. However, using a list FDA 
developed to prioritize foreign establishments for inspection in fiscal 
year 2007, GAO estimated that FDA may inspect about 8 percent of 
foreign establishments in a given year. At this rate, it would take the 
agency more than 13 years to inspect these establishments once. In 
contrast, FDA estimates that it inspects domestic establishments about 
once every 2.7 years. Unlike domestic establishments, foreign 
establishments were generally only inspected if they were named in an 
application for a new drug. While FDA made progress in fiscal year 2007 
in conducting more foreign inspections, GAO estimated it still 
inspected less than 11 percent of such establishments. As FDA plans 
additional inspections, it is important that it ensure that foreign and 
domestic establishments with similar characteristics are inspected at a 
similar frequency. 

FDAs identification of serious deficiencies has led foreign 
establishments to take corrective actions, but inspections to determine 
continued compliance are not always timely. FDA identified deficiencies 
during most foreign inspections, but determining how the agency 
classified the results of a specific inspection is hindered by 
inconsistencies in its databases, particularly on the classification of 
inspections with serious deficiencies. From fiscal years 2002 through 
2007, FDA issued 15 warning letters to foreign establishments at which 
it identified serious deficiencies. FDA generally determined the 
adequacy of actions taken in response to these letters by reviewing 
information provided by the establishments. FDAs subsequent 
inspections to determine establishments continued compliance were not 
always timely. Of establishments named in the 15 warning letters, FDA 
subsequently inspected 4 establishments 2 to 5 years later, generally 
because these establishments were named in a new drug application. At 3 
of these 4 inspections, FDA verified that corrective actions had been 
taken but identified additional deficiencies. 

What GAO Recommends: 

GAO recommends that FDA improve the data that it uses to manage its 
foreign inspection program, conduct more inspections of foreign 
establishments, and ensure more timely inspection of foreign 
establishments where FDA has identified serious deficiencies. HHS 
agreed that FDA should conduct more foreign inspections but did not 
comment on the other recommendations. HHS noted that additional 
inspections are only one component of FDAs strategy to enhance 
oversight and elaborated on other initiatives, such as database 
improvements, discussed in this report. 

To view the full product, including the scope and methodology, click on 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-970]. For more 
information, contact Marcia Crosse at (202) 512-7114 or 
crossem@gao.gov. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

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

FDA Inspects Relatively Few Foreign Establishments to Assess the 
Manufacture of Drugs Currently Marketed in the United States: 

FDA's Identification of Serious Deficiencies Has Led Establishments to 
Take Corrective Actions, but Subsequent Inspections Were Not Always 
Timely: 

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

Conclusions: 

Recommendations for Executive Actions: 

Agency Comments and Our Evaluation: 

Appendix I: Scope and Methodology: 

Appendix II: Comments from the Department of Health and Human Services: 

Appendix III: GAO Contact and Staff Acknowledgments: 

Related GAO Products: 

Tables: 

Table 1: 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 Years 2002 through 2007: 

Table 2: Warning Letters Issued by FDA to Foreign Establishments in 
Response to Inspections Conducted from Fiscal Years 2002 through 2007: 

Figures: 

Figure 1: FDA's Process for Managing Inspections of Foreign 
Establishments: 

Figure 2: Foreign Establishments Registered to Manufacture Drugs for 
the U.S. Market by Country, Fiscal Year 2007: 

Figure 3: FDA Foreign Establishment Inspections by Type of Inspection, 
Fiscal Years 2002 through 2007: 

Figure 4: FDA's Methods for Determining the Adequacy of Corrective 
Actions for 15 Warning Letters Issued Following Foreign Inspections 
Conducted from Fiscal Years 2002 through 2007: 

Abbreviations: 

API: active pharmaceutical ingredient: 

CBP: Customs and Border Protection: 

CDER: Center for Drug Evaluation and Research: 

DRLS: Drug Registration and Listing System: 

D-U-N-S: Data Universal Numbering System: 

FACTS: Field Accomplishments and Compliance Tracking System: 

FDA: Food and Drug Administration: 

GMP: good manufacturing practice regulations: 

HHS: Department of Health and Human Services: 

MARCS: Mission Accomplishments and Regulatory Compliance Services: 

NAI: no action indicated: 

OAI: official action indicated: 

OASIS: Operational and Administrative System for Import Support: 

OCFITS: Office of Compliance Foreign Inspection Tracking System: 

ORA: Office of Regulatory Affairs: 

OTC: over-the-counter: 

SEDS: Shared Establishment Data Service: 

VAI: voluntary action indicated: 

United States Government Accountability Office: 

Washington, DC 20548: 

September 22, 2008: 

The Honorable John D. Dingell: 
Chairman: 
The Honorable Joe Barton: 
Ranking Member: 
Committee on Energy and Commerce: 
House of Representatives: 

The Honorable Bart Stupak: 
Chairman: 
The Honorable John Shimkus: 
Ranking Member: 
Subcommittee on Oversight and Investigations: 
Committee on Energy and Commerce: 
House of Representatives: 

The Honorable Charles E. Grassley: 
Ranking Member: 
Committee on Finance: 
United States Senate: 

The Honorable Ed Whitfield: 
House of Representatives: 

The United States is becoming increasingly dependent on drug products 
and drug ingredients manufactured in foreign countries.[Footnote 1] 
Whether drugs are manufactured in foreign or domestic establishments, 
oversight of the safety and effectiveness of drugs marketed in the 
United States is the responsibility of the Food and Drug Administration 
(FDA),[Footnote 2] an agency within the Department of Health and Human 
Services (HHS). In fulfilling its responsibility, FDA may inspect 
foreign establishments whose drugs are imported into the United States. 
Testing a drug at the border cannot reliably determine safety or 
quality, and FDA relies on establishment inspections to determine 
compliance with current good manufacturing practice regulations 
(GMP)[Footnote 3] and assure that the safety and quality of drugs are 
not jeopardized by poor manufacturing practices. 

Ten years ago, we reported that FDA needed to improve its foreign drug 
inspection program.[Footnote 4] Among other things, we noted that FDA 
had significant problems managing its foreign inspection data, and we 
were critical of the small number of inspections FDA conducted at 
foreign establishments. For example, we found that a database FDA used 
to track inspections did not always contain correct information about 
how FDA classified the results of a given foreign establishment 
inspection.[Footnote 5] We also found that the agency did not promptly 
issue warning letters asking establishments to correct serious GMP 
deficiencies identified during inspections.[Footnote 6] 

Given the importance of FDA's foreign drug inspection program, you 
raised questions about the safety of imported drugs and the agency's 
ability to adequately oversee foreign establishments manufacturing such 
products. In response, we began work and presented our preliminary 
findings in a November 2007 hearing before the Subcommittee on 
Oversight and Investigations, House Committee on Energy and Commerce, 
suggesting that there were serious weaknesses in FDA's foreign drug 
inspection program similar to those we reported on in 1998.[Footnote 7] 
Following that hearing, questions regarding the safety of drugs 
manufactured at foreign establishments continued to mount. In January 
2008, FDA began an investigation after receiving reports of serious 
adverse events in people receiving heparin sodium, a commonly used 
blood thinner. The agency later learned that an active pharmaceutical 
ingredient (API) found in this drug contained a contaminant and had 
been manufactured at a Chinese establishment never inspected by 
FDA.[Footnote 8] Since we started our work, FDA began or proposed 
several initiatives to strengthen its foreign drug inspection program. 
In April 2008, we testified before this same subcommittee on our 
preliminary assessment of how these initiatives might address some of 
the weaknesses we identified in our November 2007 testimony.[Footnote 
9] 

In this report, we discuss FDA's foreign drug inspection program, 
including updates to information presented in our November 2007 and 
April 2008 testimonies. Specifically, this report examines (1) the 
extent to which FDA has accurate data on the number of foreign 
manufacturing establishments subject to inspection, (2) the frequency 
of foreign inspections, (3) oversight by FDA to ensure that foreign 
manufacturing establishments correct serious deficiencies identified 
during inspections and to monitor establishments' continued compliance, 
and (4) issues unique to conducting foreign inspections. 

To address these objectives, we interviewed officials from FDA, 
including its Center for Drug Evaluation and Research (CDER) and Office 
of Regulatory Affairs (ORA), which each have responsibilities for 
managing the foreign inspection program. To examine the extent to which 
FDA has accurate data on the number of foreign manufacturing 
establishments subject to inspection, we obtained information from an 
FDA database on the number of establishments registered to market their 
drugs in the United States.[Footnote 10] We also obtained from FDA's 
import database data on the number of establishments manufacturing 
drugs shipped to the United States. We found information about the 
types of drugs shipped to the United States sufficiently reliable for 
the purposes of our report. We identified inaccuracies with some parts 
of FDA's registration and import databases, and we present these data 
to illustrate the variability in information that FDA's databases 
provide to agency officials on this topic. To examine the frequency of 
foreign inspections, we obtained information from another FDA database 
on the number of inspections conducted by FDA of foreign drug 
manufacturing establishments. We found counts of inspections 
sufficiently reliable for the purposes of our report. We also examined 
methods used by FDA to select establishments for inspection. To examine 
FDA's response to serious deficiencies identified during inspections of 
foreign manufacturing establishments, we examined FDA data indicating 
how the agency classified establishments' compliance with agency 
requirements. We identified inconsistencies with these data, and we 
present them to illustrate the variability in information that FDA's 
databases provide to agency officials on this topic. We also reviewed 
FDA files on inspections of foreign establishments that occurred from 
fiscal years 2002 through 2007, during which FDA identified serious 
deficiencies and subsequently issued warning letters. The files 
contained information about these establishments, their inspections, 
and their correspondence with FDA. To examine issues unique to 
conducting foreign inspections, we obtained information on agency 
initiatives that may have the potential to improve its program for 
inspecting foreign establishments. Our work focuses on human drugs 
regulated by CDER and not on biologics,[Footnote 11] medical devices, 
veterinary medicines, or other items or products for which FDA conducts 
inspections. (See app. I for a more detailed discussion of the scope 
and methodology for this report.) We conducted our work from September 
2007 through September 2008 in accordance with generally accepted 
government auditing standards. Those standards require that we plan and 
perform the audit to obtain sufficient, appropriate evidence to provide 
a reasonable basis for our findings and conclusions based on our audit 
objectives. We believe that the evidence obtained provides a reasonable 
basis for our findings and conclusions based on our audit objectives. 

Results in Brief: 

FDA databases contain inaccurate information on foreign establishments 
subject to inspection and recent initiatives do not fully address this 
weakness. FDA uses databases of registered establishments and imported 
drugs to help it select establishments for inspection, but these 
databases contain inaccuracies and were not designed for this purpose. 
FDA's registration database indicates about 3,000 foreign 
establishments could have been subject to inspection in fiscal year 
2007, while its import database contains information indicating that 
about 6,800 establishments shipped drugs to the United States in that 
year. FDA's registration database contains information about 
establishments that are not actually subject to FDA inspection. 
Although establishments that manufacture drugs for the U.S. market are 
required to reregister annually, FDA does not enforce this requirement 
by deactivating in its database establishments that do not fulfill this 
requirement. Therefore, foreign establishments that are no longer 
subject to FDA inspection may be included in the database. In addition, 
the agency does not routinely verify that a registered establishment 
actually manufactures a drug for the U.S. market. For example, foreign 
drug manufacturing establishments may register with FDA because, in 
some foreign markets, registration may appear to convey an "approval" 
or endorsement by the agency. FDA is making improvements to this 
database. However, these changes will not ensure that FDA enforces the 
requirement that establishments update their registration annually or 
that the agency verifies information provided by establishments. To 
reduce duplication in its import database, FDA supported a proposal to 
create a unique identifier for all establishments whose products, 
including drugs, are imported into the United States that would be used 
by all federal agencies involved in the oversight of imported products. 
However, the implementation of this identifier would require action 
from multiple federal agencies in addition to FDA and the timeline for 
its implementation is unclear. Finally, initiatives to improve the 
integration of these databases could be beneficial, but it is too early 
to know their impact. 

FDA inspects few foreign establishments, relative to domestic 
establishments, each year to assess the manufacturing of drugs 
currently marketed in the United States. FDA inspected 1,479 foreign 
drug manufacturing establishments from fiscal years 2002 through 2007. 
Although FDA does not know how many foreign establishments are actually 
subject to inspection, using the list of 3,249 establishments from 
which FDA prioritized establishments for inspection in fiscal year 
2007, we found that the agency may inspect about 8 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. 
In comparison, the agency estimates that it inspects domestic 
establishments manufacturing drugs about once every 2.7 years. From 
fiscal years 2002 through 2007, FDA selected few foreign establishments 
for inspections to conduct surveillance of drugs currently marketed in 
the United States. FDA generally only inspects foreign establishments 
if they are named in an application for new drug approval. In 
comparison, most of the domestic establishments inspected by FDA are 
selected for surveillance purposes to examine the manufacture of drugs 
currently marketed in the United States. While FDA made progress in 
fiscal year 2007 in conducting more foreign inspections, it still 
inspected relatively few establishments. The agency has proposed plans 
for conducting many more foreign inspections in fiscal year 2009, but 
these plans will require the agency to dedicate substantially more 
resources to such inspections than in the past. 

FDA's identification of serious deficiencies has led foreign 
establishments to take corrective actions, but subsequent inspections 
to determine continued compliance are not always timely. FDA identified 
deficiencies during most of its inspections of foreign establishments, 
but determining the number of such inspections during which the agency 
identified serious deficiencies is hindered by classification 
inconsistencies in FDA's databases. As a result, consistent information 
may not be readily accessible to FDA staff responsible for the 
oversight of those establishments manufacturing drugs marketed in the 
United States. In response to serious deficiencies that FDA identified 
at establishments inspected from fiscal years 2002 through 2007, the 
agency issued 15 warning letters requesting corrective actions; the 
agency generally did not restrict importation of drugs manufactured by 
these establishments. FDA had previously identified deficiencies that 
required corrective actions at establishments named in most of these 
letters, but had not issued a warning letter at that time. According to 
FDA files, corrective actions were taken by establishments that 
received warning letters. As of July 2008, FDA had deemed adequate the 
corrective actions of establishments named in 11 of the 15 warning 
letters; corrective actions taken by establishments referenced in the 
other 4 warning letters had not yet been accepted by FDA. Most often, 
FDA deemed an establishment's corrective actions adequate by reviewing 
documentation and other information provided by the establishment. 
Subsequent inspections by FDA to determine establishments' continued 
compliance were not always timely. Since deeming their corrective 
actions adequate, FDA subsequently inspected 4 of these 11 
establishments. In 1 case, FDA met its recommendation to inspect the 
establishment within 2 years by conducting a surveillance inspection. 
In the other 3 cases, the establishments were inspected about 4 to 5 
years after the inspection that resulted in the warning letter, 
although it had been recommended that they be inspected within 1 year. 
These 3 inspections were not conducted as part of routine surveillance, 
but rather because the establishment was named in an application for a 
new drug. Although FDA verified at 3 of the 4 subsequent inspections 
that the establishments had taken the promised corrective actions, the 
agency also identified additional deficiencies that required corrective 
actions. However, these additional deficiencies did not result in the 
issuance of a warning letter. 

Human resource and logistical challenges unique to foreign inspections 
influence the manner in which FDA conducts those inspections. For 
example, FDA does not have a dedicated staff to conduct foreign 
inspections and relies on those inspecting domestic establishments to 
volunteer. In addition, while FDA may conduct unannounced GMP 
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. 
FDA is pursuing initiatives that could address some of these 
challenges. For example, the agency plans to establish an office in 
China and has proposed overseas offices in other locations, but the 
impact that these offices will have on overcoming these challenges is 
unknown. 

Initiatives proposed by FDA could help address weaknesses in the 
agency's oversight of foreign establishments manufacturing drugs for 
the U.S. market, but additional actions are needed. Improving the 
accuracy of its databases could allow the agency to make better 
informed selections of foreign establishments for inspection. FDA's 
plans for additional inspections could provide it with an opportunity 
to conduct the inspections that are vital to its oversight of 
establishments manufacturing drugs that are currently marketed in the 
United States. Although the agency identifies deficiencies at foreign 
establishments at least as often as domestic establishments, foreign 
establishments are unlikely to be selected in order to inspect the 
manufacturing of drugs currently marketed in the United States. 
Therefore, it is important that the agency reassess its priorities to 
ensure that foreign and domestic establishments with similar 
characteristics are inspected at a similar frequency. Further, the 
continued identification of deficiencies at foreign establishments that 
previously received warning letters points to the need for FDA to 
promptly conduct subsequent inspections of establishments with a 
history of serious deficiencies so problems do not go undetected for 
extended periods. Therefore, we recommend that FDA take the following 
five actions: (1) enforce the requirement that establishments 
manufacturing drugs for the U.S. market update their registration 
annually, (2) establish mechanisms for verifying information provided 
by the establishment at the time of registration, (3) ensure that 
information on the classification of inspections with serious 
deficiencies is accurate in all FDA databases, (4) conduct more 
inspections to ensure that foreign establishments manufacturing drugs 
currently marketed in the United States are inspected at a frequency 
comparable to domestic establishments with similar characteristics, and 
(5) conduct timely inspections of foreign establishments that have 
received warning letters to determine continued compliance. 

HHS commented on one of our recommendations and agreed that FDA should 
conduct more inspections of foreign establishments. It did not comment 
on the other four recommendations we made. HHS noted that conducting 
additional inspections is only one component of FDA's overall strategy 
to enhance oversight of imported drugs. It also elaborated on some of 
the other FDA initiatives--such as database improvements and 
establishing foreign offices--that were discussed in our report. 

Background: 

FDA is responsible for overseeing the safety and effectiveness of human 
drugs marketed in the United States, whether they are manufactured in 
foreign or domestic establishments. As part of its efforts to ensure 
the safety and quality of imported drugs, FDA may inspect foreign 
establishments whose drugs 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 FDA's inspection of foreign and domestic 
establishments differ. Specifically, FDA is required to inspect every 2 
years those domestic establishments that manufacture drugs marketed in 
the United States,[Footnote 12] but there is no comparable requirement 
for inspecting foreign establishments. However, drugs manufactured by 
foreign establishments that are offered for import may not enter the 
United States if FDA determines--through the inspection of an 
establishment, a physical examination of drugs offered for import, or 
otherwise--that there is sufficient evidence of a violation of 
applicable laws or regulations. 

Within FDA, CDER sets standards and evaluates the safety and 
effectiveness of prescription and over-the-counter (OTC) 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 drugs in 
finished-dosage form as well as APIs used in finished drug products. 
These inspections are performed by investigators and, as needed, 
laboratory analysts.[Footnote 13] ORA conducts two primary types of 
drug manufacturing establishment inspections: 

* Preapproval inspections of domestic and foreign establishments are 
conducted before FDA will approve a new drug to be marketed in the 
United States.[Footnote 14] These inspections occur following FDA's 
receipt of a new drug application or an abbreviated new drug 
application and focus on the manufacture of a specific drug.[Footnote 
15] Preapproval inspections are designed to verify the accuracy and 
authenticity of the data contained in these applications to determine 
that the establishment is following commitments made in the 
application. FDA also determines that the establishment manufacturing 
the finished drug product, as well as each manufacturer of an API used 
in the finished product, manufactures, processes, packs, and labels the 
drug adequately to preserve its identity, strength, quality, and 
purity. 

* GMP inspections focus on an establishment's systemwide controls for 
ensuring that the processes it uses to manufacture drugs marketed in 
the United States produce drugs that are of high quality. Systems 
examined during these inspections include those related to materials, 
quality control, production, facilities and equipment, packaging and 
labeling, and laboratory controls. These systems may be involved in the 
manufacture of multiple drugs. For the purpose of surveillance, FDA 
conducts GMP inspections of establishments manufacturing drugs 
currently marketed in the United States to determine establishments' 
ongoing compliance with laws and regulations. FDA conducts for-cause 
GMP inspections when it receives information indicating problems in the 
manufacture of approved drugs, as well as when it follows up on 
establishments that were not in compliance with GMPs during previous 
inspections. 

FDA may conduct an inspection that combines both preapproval and GMP 
components during a single visit to an establishment. As the results of 
a GMP inspection can often be generalized to all drugs manufactured at 
a particular establishment, FDA can use the results of the combined 
inspection to make decisions in the future if the establishment is 
listed in another application. 

FDA uses a risk-based process to select some domestic and foreign 
establishments for GMP inspections to conduct surveillance of drugs 
currently marketed in the United States. According to an FDA 
report,[Footnote 16] 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. The process uses a 
risk-based model to identify those establishments that, based on 
characteristics of the establishment and of the drug being 
manufactured, have the greatest public health risk potential should 
they experience a manufacturing defect. Through this process, CDER 
annually prepares a prioritized list of domestic establishments and a 
separate, prioritized list of foreign establishments. FDA began 
applying this risk-based process to domestic establishments in fiscal 
year 2006 and expanded it to foreign establishments in fiscal year 
2007.[Footnote 17] 

FDA's process for determining whether a foreign establishment complies 
with GMPs involves both CDER and ORA. During an inspection, ORA staff 
report observations of significant objectionable conditions and 
practices that do not conform to GMPs on the list-of-observations form, 
commonly referred to as an FDA Form 483. They provide this Form 483 to 
the establishment, along with a briefing on the inspection's results, 
on the last day of the inspection. ORA staff discuss the observations 
on the Form 483 with the establishment's management to ensure that they 
are aware of any deficiencies that were observed during the inspection 
and suggest that the establishment respond to FDA in writing concerning 
all actions taken as a result of the observations. 

Once ORA staff complete the inspection, they prepare an establishment 
inspection report to document their inspection findings. Inspection 
reports describe the manufacturing operations observed during the 
inspection and any conditions that may violate federal statutes and 
regulations. Based on its inspection findings, ORA recommends whether 
the establishment is acceptable to supply drug products or drug 
ingredients to the United States. 

ORA makes a recommendation regarding the classification of the 
inspection. All inspection reports and classification recommendations 
related to inspections of foreign establishments are forwarded to CDER. 
CDER reviews the ORA recommendation and determines the final 
classification and whether regulatory action is necessary. 

* A classification of no action indicated (NAI) means that 
insignificant or no deficiencies were identified during the inspection. 

* A classification of voluntary action indicated (VAI) means that 
deficiencies were identified during the inspection, but the agency is 
not prepared to take regulatory action. Therefore, any corrective 
actions are left to the establishment to take voluntarily. 

* A classification of official action indicated (OAI) means that 
serious deficiencies were found that warrant regulatory action. 

Inspections classified as OAI may result in regulatory action, such as 
the issuance of a warning letter. FDA issues warning letters to those 
foreign establishments manufacturing drugs for the U.S. market that are 
in violation of the law or implementing regulations and may be subject 
to enforcement action if the violations are not promptly and adequately 
corrected.[Footnote 18] In addition, warning letters notify the 
establishment that FDA may refuse entry of the establishment's drugs at 
the border and will recommend disapproval of any new drug applications 
listing the establishment until sufficient corrections are made. It is 
FDA policy to consider many factors in determining whether to issue a 
warning letter. For example, the agency is to consider corrective 
actions taken or promised by the establishment since the inspection, 
and it may decide to not issue a letter if an establishment's 
corrective actions are adequate and the violations that would have 
supported the letter have been corrected. Warning letters are issued 
after the review and approval of FDA's Office of Chief Counsel. FDA 
policy states that the agency will strive to issue warning letters 
within 4 months of the last day of the inspection. 

In addition to a warning letter, FDA may take other regulatory actions 
if it identifies serious deficiencies during the inspection of a 
foreign establishment. For example, FDA may issue an import alert, 
which instructs FDA staff that they may detain drugs manufactured by 
the violative establishment that have been offered for entry into the 
United States.[Footnote 19] In addition, FDA may conduct regulatory 
meetings with the violative establishment. Regulatory meetings may be 
held in conjunction with the issuance of a warning letter to emphasize 
the significance of the deficiencies or for the purpose of obtaining 
prompt voluntary compliance in those instances in which the 
deficiencies do not warrant the issuance of a warning letter. 

FDA uses multiple sources of information to determine whether the 
actions taken by an establishment to correct violations are adequate. 
FDA may, for example, review documentation describing completed or 
proposed corrective actions; hold meetings with representatives of the 
establishment to discuss corrective actions; agree to consider reports 
of inspections conducted by private consultants; obtain inspection 
reports from foreign regulatory bodies; and reinspect the establishment 
itself, though it is not required to do so. As part of this process, 
agency staff may also make a recommendation for when the establishment 
should next receive a surveillance inspection. See figure 1 for a 
description of this process. 

Figure 1: FDA's Process for Managing Inspections of Foreign 
Establishments: 

This figure is a diagram showing FDA's process of managing inspections 
of foreign establishments. 

[See PDF for image] 

Source: GAO. 

[End of figure] 

FDA uses multiple databases to manage its foreign drug inspection 
program. 

* The Drug Registration and Listing System (DRLS) contains information 
on foreign and domestic drug establishments that have registered with 
FDA to market their drugs in the United States. These establishments 
provide information, including company name and address and the drugs 
they manufacture for commercial distribution in the United States, on 
paper forms, which are entered into DRLS by FDA staff. 

* The Operational and Administrative System for Import Support (OASIS) 
contains information on drugs and other FDA-regulated products offered 
for entry into the United States, including information on the 
establishment that manufactured the drug. The information in OASIS is 
automatically generated from data managed by Customs and Border 
Protection (CBP). The data are originally entered by customs brokers 
based on the information available from the importer.[Footnote 20] CBP 
specifies an algorithm by which customs brokers generate a manufacturer 
identification number from information about an establishment's name 
and address. 

* The Field Accomplishments and Compliance Tracking System (FACTS) 
contains information on foreign and domestic establishments inspected 
by ORA, the type of inspection conducted, and the outcome of those 
inspections. Investigators and laboratory analysts enter information 
into FACTS following completion of an inspection. 

* The Office of Compliance Foreign Inspection Tracking System (OCFITS) 
contains information that CDER uses to track its review of foreign 
inspection reports submitted by ORA staff, such as information on the 
type of inspection conducted, CDER actions taken in connection with its 
review of inspection reports, and the outcome of those inspections. 
Information in OCFITS is entered by CDER staff. 

According to DRLS, in fiscal year 2007, foreign countries that had the 
largest number of registered establishments were China, India, Canada, 
France, Germany, Japan, the United Kingdom, and Italy (see fig. 
2).[Footnote 21] These countries are also listed in OASIS as having the 
largest number of establishments offering drugs for import into the 
United States. Specifically, according to OASIS, China had more 
establishments manufacturing drugs that were offered for import into 
the United States than any other foreign country. According to OASIS, 
in fiscal year 2007, a wide variety of prescription and OTC drugs 
manufactured in China were offered for import into the United States, 
including pain killers, antibiotics, blood thinners, and hormones. 

Figure 2: Foreign Establishments Registered to Manufacture Drugs for 
the U.S. Market by Country, Fiscal Year 2007: 

This figure is a shaded map of the world showing foreign establishments 
registered to manufacture drugs for the U.S. market by country, fiscal 
year 2007. 

[See PDF for image] 

Source: Copyright Corel Corp. All rights reserved (map); GAO analysis 
of FDA data. 

Note: The counts include foreign establishments that were registered to 
manufacture human drugs, biologics, and veterinary drugs; FDA was 
unable to provide the number of registered establishment 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, and the agency's recently announced initiatives do not 
fully address this weakness. The databases that FDA uses to select 
establishments for inspection do not contain accurate information on 
the number of establishments manufacturing drugs for the U.S. market. 
Instead of maintaining a list of establishments subject to inspection, 
FDA relies on information from databases that contain inaccuracies and 
that were not designed for this purpose. Furthermore, officials 
indicated that these databases cannot be electronically integrated or 
readily interact with one another to compare data, so some comparisons 
are done manually for each individual establishment. FDA has supported 
initiatives that could provide it with more accurate information about 
foreign establishments subject to inspection, but it is too early to 
tell if these efforts will provide the agency with an accurate count. 

FDA's Drug Registration Database Contains Inaccuracies and Planned 
Changes Will Not Ensure the Availability of Accurate Information on 
Foreign Establishments: 

DRLS provides FDA with some information that the agency uses to select 
establishments for inspection, but contains inaccuracies and does not 
provide a complete count of establishments subject to inspection. DRLS, 
established in 1991, is intended to list the registered establishments 
that manufacture drugs for the U.S. market. Requirements for the 
registration of foreign establishments were implemented in 
2002.[Footnote 22] FDA expected that requiring foreign establishments 
to register would provide it with a comprehensive list of 
establishments that manufacture drugs for the U.S. market. In fiscal 
year 2007, approximately 3,000 foreign establishments that reported 
manufacturing human drugs, biologics, or veterinary drugs were 
registered with FDA; FDA was unable to determine from this database the 
number of registered establishments specifically manufacturing human 
drugs. 

FDA officials told us that the count of registered foreign 
establishments in DRLS does not reflect the actual number whose drugs 
are being imported into the United States for several reasons. First, 
although foreign establishments are required to renew their 
registration information annually, FDA does not enforce this 
requirement by deactivating the registration of establishments that do 
not fulfill this requirement. Agency officials told us that some 
foreign establishments may not report to FDA if they stop manufacturing 
drugs for the U.S. market or go out of business, although 
establishments are required to do so. Thus, these establishments may 
still be listed in DRLS as actively registered establishments. Second, 
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. FDA officials told us that the agency does not routinely verify 
the information provided by establishments to ensure that it is 
accurate.[Footnote 23] Nor does FDA confirm that the establishment 
actually manufactures drugs for the U.S. market. FDA does not know how 
many foreign establishments are erroneously registered. In addition, 
DRLS does not provide the agency with a complete count of 
establishments subject to inspection because foreign establishments 
that manufacture APIs are not required to register if their products 
are not directly imported into the United States.[Footnote 24] 

Planned changes to DRLS could help FDA improve this database but will 
not provide an accurate count. In July 2008, FDA initiated a pilot of a 
voluntary electronic registration and listing system for establishments 
that manufacture drugs;[Footnote 25] the agency plans to accept only 
electronic registration beginning June 2009. The new system allows drug 
manufacturing establishments to submit registration and listing 
information electronically, rather than submitting it on paper forms. 
FDA hopes that electronic registration will result in efficiencies 
allowing the agency to shift resources from data entry to assuring the 
quality of the databases. Through this new system, FDA also plans to 
require establishments to update their registration information every 6 
months, rather than annually, as is currently required. In addition, 
FDA has asked establishments to voluntarily submit a unique 
identification number--a Dun and Bradstreet Data Universal Numbering 
System (D-U-N-S) Number--as part of their registration.[Footnote 26] 
An official said the agency plans to make this a requirement after it 
implements electronic registration in June 2009. This identification 
number could provide FDA with confidence regarding certain information 
about the establishment, such as its name and location. However, it 
will not prevent foreign establishments that do not manufacture drugs 
for the U.S. market from registering. As a result, the registration 
database will continue to contain inaccuracies when FDA selects 
establishments for inspection.[Footnote 27] 

FDA has also proposed, but not yet implemented, initiatives that could 
help improve the accuracy of information FDA maintains on registered 
establishments. FDA proposed a program to contract with an external 
organization to help manage and improve DRLS, which it describes in its 
proposal as fragmented and unreliable. As part of the contract, FDA 
states that the contractor would "establish reasonable credibility" of 
some of the information provided by establishments. However, as of June 
2008, the agency had not yet solicited proposals for this program. In 
addition, the agency has proposed the Foreign Vendor Registration 
Verification Program. Through this program, FDA plans to contract with 
an external organization to conduct on-site verification of the 
registration data and product listing information of foreign 
establishments shipping drugs and other FDA-regulated products to the 
United States. FDA has solicited proposals for this contract but is 
still developing the specifics of the program. For example, the agency 
has not yet formalized the criteria it would use to determine which 
establishments would be visited for verification purposes or determined 
how many establishments it would verify annually. As of July 2008, FDA 
had not yet awarded this contract. Given the early stages of these 
proposals, it is too soon to determine whether they will improve the 
accuracy of the data FDA maintains on foreign drug establishments. 

FDA's Import Database Contains Inaccurate Data on Establishments 
Offering Drugs for Import into the United States: 

OASIS, which FDA also uses to help it select establishments for 
inspection, provides an inaccurate count of foreign establishments 
manufacturing drugs offered for import into the United States. 
According to OASIS, 6,760 foreign establishments manufactured drugs 
that were offered for import into the United States in fiscal year 
2007. However, this count is inaccurate as a result of unreliable 
manufacturer identification numbers generated by customs brokers when a 
drug is offered for import.[Footnote 28] FDA officials told us that 
these errors result in the creation of multiple records for a single 
establishment, which results in inflated counts of establishments 
offering drugs for import into the U.S. market. FDA officials 
acknowledged this problem but were unable to provide us with an 
estimate of the extent of these errors. 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 training to brokers as a way to improve accuracy. 

FDA has supported a proposal with the potential to address weaknesses 
in OASIS, but FDA does not control the implementation of this proposed 
change. FDA, in conjunction with other federal agencies, is pursuing 
the creation of a governmentwide unique establishment identifier that 
could minimize duplication. Agencies currently rely on the creation and 
entry of an identifier at the time of import. Under this new proposal, 
establishments offering products, including drugs, for import into the 
United States would obtain a unique establishment identifier through a 
commercial service that would verify certain information about the 
establishment.[Footnote 29] This unique identifier would then be stored 
within the proposed Shared Establishment Data Service (SEDS)[Footnote 
30] and submitted as part of import entry data when required by FDA or 
other government agencies. The unique identifier could thus eliminate 
the problems that have resulted in multiple identifiers associated with 
an individual establishment. The implementation of SEDS is dependent on 
action from multiple federal agencies, including the integration of the 
concept into a CBP import and export system that is under development 
and scheduled for implementation in 2010.[Footnote 31] In addition, 
once implemented by CBP, FDA and other participating federal agencies 
would be responsible for bearing the cost of integrating SEDS with 
their own operations and systems. FDA officials are not aware of a 
specific time line for the implementation of SEDS. 

FDA's Databases Are Not Currently Electronically Integrated, which 
Could Help Reconcile Data Inaccuracies: 

The databases FDA uses to select establishments for inspection are not 
electronically integrated, and their integration could help reconcile 
data inaccuracies. To create a list of foreign establishments subject 
to inspection, the agency relies on information from databases that 
were not designed for that purpose and contain divergent estimates-- 
about 3,000 and 6,760 from DRLS and OASIS, respectively. FDA officials 
told us that these databases are not electronically integrated and do 
not readily interact with one another to help reconcile the data. FDA 
indicated that any electronic comparison of the data in these databases 
is complex and the agency conducts some comparisons manually for each 
individual establishment. For example, for fiscal year 2007, FDA used 
DRLS and other data to develop a list of 3,249 foreign establishments 
ranked by their risk level in order to select establishments for 
surveillance inspection. However, due to inaccuracies in DRLS, FDA must 
also check OASIS to determine which of these establishments actually 
had imported drugs into the United States and were subject to 
inspection. FDA officials indicated that they had to manually compare 
establishments on this list with establishments in OASIS. Because these 
databases are not electronically integrated, DRLS and OASIS are not 
conducive to routine analysis to compare the data and identify errors. 

FDA is in the process of improving the integration of some of its 
current data systems, which could make it easier for the agency to 
establish an accurate count of foreign drug manufacturing 
establishments subject to inspection. The agency's Mission 
Accomplishments and Regulatory Compliance Services (MARCS) is intended 
to help FDA electronically integrate data from multiple systems. It is 
specifically designed to give individual users a more complete picture 
of establishments but could also help the agency compare information in 
multiple databases to obtain an accurate count of establishments 
subject to inspection. For example, an FDA official indicated that 
MARCS in combination with planned improvements to the agency's 
registration database will allow FDA to electronically integrate FDA's 
drug registration and import data. FDA officials estimate that MARCS, 
which is being implemented in stages, could be fully implemented by 
2011 or 2012. An FDA official told us that the agency may be able to 
electronically integrate its registration and import data by the end of 
fiscal year 2009, but this implementation has previously faced delays. 
FDA officials told us that implementation has been slow because the 
agency has been forced to shift resources away from MARCS and toward 
the maintenance of current systems that are still heavily used, such as 
FACTS and OASIS. It is too early to tell whether the implementation of 
MARCS will improve FDA's management of its inspection program. 

FDA Inspects Relatively Few Foreign Establishments to Assess the 
Manufacture of Drugs Currently Marketed in the United States: 

FDA inspects few foreign establishments, relative to domestic 
establishments, each year to assess the manufacture of drugs currently 
marketed in the United States. The percentage of such foreign 
establishments that have been inspected cannot be calculated with 
certainty because FDA does not know how many foreign establishments 
manufacture drugs for the U.S. market and are thus actually subject to 
inspection. Of the foreign establishments that FDA inspected, few were 
selected to conduct surveillance of drugs currently marketed in the 
United States. Instead, most foreign establishments are selected for 
inspection as part of the agency's review process associated with 
applications for approving a new drug. 

FDA Inspects Few Foreign Establishments Each Year, Relative to Its 
Inspection of Domestic Establishments: 

In each year we examined, FDA inspected fewer foreign establishments 
manufacturing drugs for the U.S. market than it inspected domestically. 
However, its lack of an accurate count of foreign establishments 
subject to inspection makes it difficult to exactly determine the 
relative size of that portion. Based on our review of data on 
inspections, FDA conducted an average of 247 foreign establishment 
inspections per year from fiscal years 2002 through 2007.[Footnote 32] 
Comparing this average number of inspections with FDA's count of 3,249 
foreign establishments that it used to prioritize its fiscal year 2007 
surveillance inspections suggests that the agency inspects about 8 
percent of foreign establishments in a given year.[Footnote 33] 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. In contrast, from fiscal years 2002 through 2007 
FDA conducted about 1,528 inspections of domestic establishments each 
year. FDA officials estimated that there were about 3,000 domestic 
establishments manufacturing drugs in fiscal year 2007. They told us 
that the agency inspects these domestic establishments about once every 
2.7 years. 

FDA's data indicate that some foreign establishments have never 
received an inspection, but the exact number of such establishments is 
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, as well as establishments 
whose drugs 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 inspection since at least fiscal 
year 2000.[Footnote 34] 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 in fiscal years 2000 
through 2002. 

FDA recently increased the number of foreign establishments it 
inspects, most of which are concentrated in a small number of 
countries. From fiscal years 2002 through 2007, the number of foreign 
establishment inspections FDA conducted varied from year to year, but 
increased overall from 220 in fiscal year 2002 to 332 in fiscal year 
2007. During this period, FDA inspected establishments in a total of 51 
countries. More than three quarters of the 1,479 foreign inspections 
the agency conducted during this period were of establishments in 10 
countries, as shown in table 1. Because some establishments were 
inspected more than once during this time period, FDA actually 
inspected 1,119 unique establishments. For example, of the 94 
inspections that FDA conducted of Chinese establishments, it inspected 
80 unique establishments. The proportion of establishments inspected in 
each of these 10 countries varied. The country with the lowest 
proportion of establishments inspected was China, for which FDA 
inspected 80 of its estimated 714 establishments. In contrast, the 
agency inspected 43 of the estimated 61 establishments in Ireland. 

Table 1: 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 Years 2002 through 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: 64; 
Number of inspections: Total: 199; 
Number of unique establishments inspected: 152; 
Estimated number of establishments[A]: 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: 25; 
Number of inspections: Total: 143; 
Number of unique establishments inspected: 95; 
Estimated number of establishments[A]: 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: 28; 
Number of inspections: Total: 140; 
Number of unique establishments inspected: 98; 
Estimated number of establishments[A]: 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: 20; 
Number of inspections: Total: 124; 
Number of unique establishments inspected: 88; 
Estimated number of establishments[A]: 288. 

Country: United Kingdom; 
Number of inspections: FY2002: 17; 
Number of inspections: FY2003: 21; 
Number of inspections: FY2004: 15; 
Number of inspections: FY2005: 18; 
Number of inspections: FY2006: 15; 
Number of inspections: FY2007: 16; 
Number of inspections: Total: 102; 
Number of unique establishments inspected: 84; 
Estimated number of establishments[A]: 169. 

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: 19; 
Number of inspections: Total: 94; 
Number of unique establishments inspected: 80; 
Estimated number of establishments[A]: 714. 

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: 24; 
Number of inspections: Total: 94; 
Number of unique establishments inspected: 71; 
Estimated number of establishments[A]: 162. 

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: 22; 
Number of inspections: Total: 94; 
Number of unique establishments inspected: 82; 
Estimated number of establishments[A]: 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: 17; 
Number of inspections: Total: 78; 
Number of unique establishments inspected: 50; 
Estimated number of establishments[A]: 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: 14; 
Number of inspections: Total: 58; 
Number of unique establishments inspected: 43; 
Estimated number of establishments[A]: 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: 83; 
Number of inspections: Total: 353; 
Number of unique establishments inspected: 276; 
Estimated number of establishments[A]: 817. 

Country: Total; 
Number of inspections: FY2002: 220; 
Number of inspections: FY2003: 189; 
Number of inspections: FY2004: 260; 
Number of inspections: FY2005: 266; 
Number of inspections: FY2006: 212; 
Number of inspections: FY2007: 332; 
Number of inspections: Total: 1,479; 
Number of unique establishments inspected: 1,119; 
Estimated number of establishments[A]: 3,249. 

Source: GAO analysis of FDA data. 

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

[End of table] 

While FDA has recently made progress in conducting more foreign 
inspections, it still inspects relatively few such establishments. FDA 
conducted more foreign establishment inspections in fiscal year 2007 
than it had in each of the 5 previous fiscal years. However, the agency 
still inspected less than 11 percent of the foreign establishments on 
the prioritized list that it used to plan its fiscal year 2007 
surveillance inspections. 

In order to inspect foreign establishments biennially, as is required 
for domestic establishments, FDA would have to dedicate substantially 
more resources than it has dedicated to such inspections in the past. 
In fiscal year 2007, FDA dedicated about $10 million to inspections of 
foreign establishments. FDA estimates that, based on the time spent 
conducting inspections of foreign drug manufacturing establishments in 
fiscal year 2007, the average cost of such an inspection ranged from 
approximately $41,000 to $44,000.[Footnote 35] If these estimates are 
applied to the 3,249 foreign drug establishments on the list FDA used 
to plan its fiscal year 2007 surveillance inspections, it could cost 
the agency $67 million to $71 million each year to inspect each of 
those establishments biennially. Using FDA's estimates for the cost of 
each inspection also suggests that it could cost the agency $15 million 
to $16 million each year to biennially inspect the estimated 714 drug 
manufacturing establishments in China, the country estimated to have 
the largest number of establishments. According to FDA budget 
documents, the agency estimates that it will dedicate a total of about 
$11 million in fiscal year 2008 to foreign drug inspections. 

Significant changes were recently made to the fiscal year 2009 budget 
request for FDA. The President's original budget request to the 
Congress called for $2.4 billion in fiscal year 2009 for FDA, including 
$13 million to conduct all inspections of foreign drug establishments. 
However, in June 2008, the President submitted an amendment requesting 
an additional $275 million for fiscal year 2009, an approximately 11 
percent increase over the original request. According to the 
submission, some of these additional funds were requested to allow FDA 
to conduct an additional 143 inspections of foreign drug establishments 
and 75 inspections of domestic drug establishments.[Footnote 36] 

FDA is pursuing initiatives with drug regulators in foreign countries 
that are intended to help the agency improve its inspectional coverage. 
FDA has announced an initiative with the regulatory body of the 
European Union to pilot joint inspections of establishments that 
manufacture finished drug products in either the United States or the 
European Union and supply both of these markets. FDA indicated that 
these joint inspections could help it leverage resources by allowing 
the agency to utilize staff from the E.U. regulatory body when forming 
joint inspection teams. According to FDA, the joint inspections will 
help the agency and the E.U. regulatory body build confidence in each 
other's inspections, which could allow FDA to review an inspection 
report completed by E.U. regulators instead of conducting its own 
inspection. As of July 2008, no joint inspections had been scheduled 
under this program, but they were in preliminary discussions with one 
establishment to conduct a joint inspection. In addition, FDA has 
announced an initiative with the regulatory bodies of the European 
Union and Australia to share their plans for and results of inspections 
of API manufacturing establishments in these and other countries. For 
example, FDA could receive the results of inspections conducted by 
these regulatory bodies and then determine if regulatory action or a 
follow-up inspection is necessary. FDA contends that prospectively 
sharing information about inspection plans will allow these regulatory 
bodies to more efficiently use their resources by minimizing the 
overlap in their plans. FDA and the other regulatory bodies held 
initial discussions in July 2008 and plan to further discuss the 
program in September 2008. While both initiatives are intended to 
improve FDA's knowledge of foreign establishments, both were recently 
announced and their impact will depend on the extent to which FDA 
effectively utilizes the information that it receives from the other 
regulatory bodies. 

FDA Selects Few Foreign Establishments to Inspect the Manufacturing of 
Drugs Currently Marketed in the United States, in Contrast to Its 
Inspections of Domestic Establishments: 

FDA selected few foreign establishments for inspection in order to 
examine the manufacturing of drugs currently marketed in the United 
States. We reported in 1998 that 20 percent of the agency's foreign 
inspections were for the purpose of routine surveillance.[Footnote 37] 
For fiscal years 2002 through 2007, we found that about 13 percent of 
foreign inspections were GMP inspections conducted to examine the 
manufacturing of drugs currently marketed in the United States, rather 
than to inspect an establishment listed in a new drug application. (See 
fig. 3.) In comparison, for fiscal years 2002 through 2007, about 85 
percent of FDA's inspections of domestic establishments were GMP 
inspections conducted to examine the manufacturing of drugs currently 
marketed in the United States. FDA conducts a similar number of 
preapproval inspections in domestic and foreign establishments each 
year, but many more domestic GMP inspections. Agency officials said 
that preapproval inspections are driven by specific goals for the 
timely review of new drug applications, which may necessitate the 
inspection of establishments referenced in those applications.[Footnote 
38] 

Figure 3: FDA Foreign Establishment Inspections by Type of Inspection, 
Fiscal Years 2002 through 2007: 

This figure is a pie graph showing FDA foreign establishment 
inspections by type of inspection, fiscal years 2002 through 2007. 

Both preapproval and GMP: 68%; 
Preapproval only: 19%; 
GMP only: 13%. 

[See PDF for image] 

Source: GAO analysis of FDA data. 

[End of figure] 

FDA often included a systemwide GMP inspection when it visited a 
foreign establishment for a preapproval inspection. From fiscal years 
2002 through 2007, the majority of FDA's foreign inspections combined a 
preapproval inspection with a broader GMP inspection. According to FDA 
officials, because foreign establishments are inspected infrequently, 
it is expedient for the agency to conduct preapproval inspections and 
GMP inspections during the same visit to a foreign 
establishment.[Footnote 39] 

Relatively few foreign establishments identified through CDER's risk- 
based process are selected for the agency to conduct surveillance of 
drugs currently marketed in the United States. 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 
and requested that ORA complete surveillance inspections of 25 of them. 
FDA officials indicated that 29 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 target of at least 50 
inspections. 

FDA's Identification of Serious Deficiencies Has Led Establishments to 
Take Corrective Actions, but Subsequent Inspections Were Not Always 
Timely: 

Though FDA oversight resulted in foreign establishments taking actions 
to address serious deficiencies identified during inspections, FDA's 
subsequent inspections of these establishments were not always timely. 
FDA identified deficiencies during most of its inspections of foreign 
establishments. However, determining the number of inspections during 
which FDA identified serious deficiencies is hindered by inconsistent 
data on inspection classifications. FDA issued 15 warning letters to 
foreign drug establishments found to be out of compliance with GMPs. To 
determine the adequacy of an establishment's corrective actions, FDA 
often relied on information provided by the establishment, rather than 
information obtained from another FDA inspection. Although FDA verified 
these corrective actions during subsequent inspections, FDA inspections 
to determine establishments' continued compliance were not always 
timely and identified additional deficiencies. 

FDA Identified Deficiencies during Most of Its Inspections of Foreign 
Establishments, but FDA's Databases Contain Inconsistent Information 
about Inspection Classifications: 

FDA identified deficiencies during most of its inspections of foreign 
establishments. Based on our review of classification data in FACTS, 
FDA identified deficiencies necessitating a classification of VAI or 
the more serious OAI in about 62 percent of foreign inspections 
conducted from fiscal years 2002 through 2006,[Footnote 40] compared to 
about 51 percent of inspections of domestic establishments. However, we 
determined that FDA's data did not provide reliable information about 
the number of foreign inspections with serious deficiencies classified 
specifically as OAI. 

Determining the number of inspections during which FDA identified 
serious deficiencies is hindered by inconsistencies in databases used 
by FDA to track inspections. FDA uses two databases to track 
information about foreign inspections--FACTS, which is accessible to 
ORA staff and staff in CDER and other FDA centers, and OCFITS, which is 
only accessible to CDER staff who review foreign inspection reports. In 
comparing inspection classification information for foreign inspections 
conducted from fiscal years 2002 through 2006, we found that of the 
inspections that could be identified in both databases,[Footnote 41] 92 
percent were consistently classified. However, for inspections that 
identified serious deficiencies, this rate was much lower. Of 
inspections classified as OAI in FACTS, 53 percent were identified in 
OCFITS as receiving the less serious classification of VAI. CDER 
officials told us that the final inspection classification should be 
the same in both FACTS and OCFITS. 

FDA officials suggested that inconsistencies between FACTS and OCFITS 
may result when changes in inspection classifications are not 
appropriately updated by FDA staff during the review process. Following 
an inspection of a foreign establishment, ORA staff enter 
classification recommendations into FACTS. However, CDER makes the 
final classification decision, which may be either more or less serious 
than ORA's recommendation. CDER officials enter this final 
classification into OCFITS and, according to FDA policy, should also 
update this information in FACTS. However, FDA officials indicated that 
CDER staff may not always update FACTS.[Footnote 42] FACTS is the 
database used by ORA investigators and staff in other FDA centers to 
check establishments' compliance history. When FACTS is not always 
updated consistent information on foreign establishments may not be 
readily accessible to FDA staff responsible for the oversight of 
foreign establishments manufacturing drugs marketed in the United 
States.[Footnote 43] 

FDA Issued Warning Letters to Establishments, Most of which Had 
Previous Deficiencies: 

FDA issued warning letters to establishments at which it identified 
serious deficiencies. Of the 1,479 inspections of foreign drug 
establishments that FDA conducted from fiscal years 2002 through 
2007,[Footnote 44] the agency issued a warning letter following 15 
inspections in which serious deficiencies were identified (see table 
2).[Footnote 45] The rate of warning letters issued to foreign 
establishments was similar to that for domestic 
establishments.[Footnote 46] Foreign establishments that received 
warning letters were located in 10 countries. For establishments listed 
in 4 of the 15 warning letters, in addition to issuing a warning 
letter, FDA also issued import alerts authorizing detention of the 
establishments' drugs if they were offered for import into the United 
States. When issuing the other 11 warning letters, FDA did not restrict 
importation of the establishments' drugs, but notified the 
establishments that failure to correct the identified deficiencies 
could result in the agency denying entry of their drugs when they were 
offered for import into the United States. 

Table 2: Warning Letters Issued by FDA to Foreign Establishments in 
Response to Inspections Conducted from Fiscal Years 2002 through 2007: 

Date inspection ended: Fiscal year 2002: April 16, 2002; 
Date warning letter issued: November 21, 2002; 
Location of establishment: Australia; 
Import alert issued: No; 
Time from inspection to warning letter issuance: 7 months, 5 days. 

Date inspection ended: Fiscal year 2003: September 10, 2003; 
Date warning letter issued: January 15, 2004; 
Location of establishment: Czech Republic; 
Import alert issued: No; 
Time from inspection to warning letter issuance: 4 months, 5 days. 

Date inspection ended: Fiscal year 2004: October 29, 2003; 
Date warning letter issued: January 5, 2004; 
Location of establishment: Taiwan, Republic of China; 
Import alert issued: No; 
Time from inspection to warning letter issuance: 2 months, 7 days. 

Date inspection ended: Fiscal year 2004: October 31, 2003; 
Date warning letter issued: February 10, 2004; 
Location of establishment: China; 
Import alert issued: Yes; 
Time from inspection to warning letter issuance: 3 months, 10 days. 

Date inspection ended: Fiscal year 2004: May 13, 2004; 
Date warning letter issued: August 3, 2004; 
Location of establishment: Switzerland; 
Import alert issued: No; 
Time from inspection to warning letter issuance: 2 months, 21 days. 

Date inspection ended: Fiscal year 2005: October 15, 2004; 
Date warning letter issued: February 15, 2005; 
Location of establishment: Canada; 
Import alert issued: Yes; 
Time from inspection to warning letter issuance: 4 months. 

Date inspection ended: Fiscal year 2005: March 24, 2005; 
Date warning letter issued: July 21, 2005; 
Location of establishment: Italy; 
Import alert issued: No; 
Time from inspection to warning letter issuance: 3 months, 27 days. 

Date inspection ended: Fiscal year 2005: April 8, 2005; 
Date warning letter issued: August 16, 2005; 
Location of establishment: Switzerland; 
Import alert issued: No; 
Time from inspection to warning letter issuance: 4 months, 8 days. 

Date inspection ended: Fiscal year 2006: November 11, 2005; 
Date warning letter issued: February 21, 2006; 
Location of establishment: India; 
Import alert issued: No; 
Time from inspection to warning letter issuance: 3 months, 10 days. 

Date inspection ended: Fiscal year 2006: February 8, 2006; 
Date warning letter issued: April 28, 2006; 
Location of establishment: Croatia; 
Import alert issued: No; 
Time from inspection to warning letter issuance: 2 months, 20 days. 

Date inspection ended: Fiscal year 2006: February 25, 2006; 
Date warning letter issued: June 15, 2006; 
Location of establishment: India; 
Import alert issued: No; 
Time from inspection to warning letter issuance: 3 months, 21 days. 

Date inspection ended: Fiscal year 2006: September 13, 2006; 
Date warning letter issued: February 23, 2007; 
Location of establishment: Canada; 
Import alert issued: No; 
Time from inspection to warning letter issuance: 5 months, 10 days. 

Date inspection ended: Fiscal year 2007: April 25, 2007[A]; 
Date warning letter issued: September 6, 2007; 
Location of establishment: China; 
Import alert issued: Yes[B]; 
Time from inspection to warning letter issuance: 4 months, 12 days. 

Date inspection ended: Fiscal year 2007: August 30, 2007; 
Date warning letter issued: October 31, 2007; 
Location of establishment: China; 
Import alert issued: Yes; 
Time from inspection to warning letter issuance: 2 months, 1 day. 

Date inspection ended: Fiscal year 2007: August 2, 2007; 
Date warning letter issued: January 14, 2008; 
Location of establishment: Japan; 
Import alert issued: No; 
Time from inspection to warning letter issuance: 5 months, 12 days. 

Source: GAO review of FDA warning letters. 

[A] This warning letter related to inspections of two establishments as 
drug production was being moved from one establishment to the other. As 
FDA referred to both establishments in its warning letter, we count the 
end date of the inspection of the second establishment as the relevant 
end date. 

[B] The import alert only applied to drugs manufactured at the 
establishment from which production was being moved. 

[End of table] 

During the inspections that resulted in these 15 warning letters, FDA 
identified various deficiencies. Identified deficiencies included those 
related to: laboratory controls, such as lack of an adequate impurity 
profile;[Footnote 47] documentation and records, such as records that 
did not include complete and accurate information relating to the 
production of each batch of drug produced; and facilities and 
equipment, such as an "unknown soft, yet flaking, black residue" inside 
a piece of equipment. 

FDA generally met its internal goal for the timely issuance of warning 
letters, and establishments usually began responding to deficiencies 
identified on the Form 483 prior to receiving the warning letter. FDA 
issued 9 of the 15 warning letters within 4 months of completing its 
inspection--as is FDA's policy--and issued 3 other letters in just over 
4 months. While FDA was reviewing the results of the inspection and 
drafting the warning letters, inspected establishments generally 
responded in writing to deficiencies identified on the Form 483, which 
establishments receive on the last day of an inspection. In all but one 
instance, the establishments responded in writing to Form 483 
observations within 5 weeks following the completion of the 
inspection.[Footnote 48] These written responses included information 
on the establishments' proposed, completed, or soon to be implemented 
corrective actions taken to address deficiencies identified during the 
FDA inspection. In more than half of the cases, FDA noted that more 
comprehensive corrective actions were needed than those outlined in the 
establishments' responses or that the responses lacked sufficient 
details, explanation, or documentation. The agency proceeded to issue 
the warning letters after finding the establishments did not provide 
sufficient written responses to the deficiencies identified during the 
inspection. 

Most of the foreign drug establishments to which FDA issued the 15 
warning letters had previously been found by the agency to be out of 
compliance with GMPs. FDA had previously inspected establishments named 
in 12 of the 15 warning letters.[Footnote 49] These previous 
inspections had been conducted 1 to 7 years prior to the inspection 
that resulted in the issuance of the warning letter, with 9 of the 12 
previous inspections occurring within 4 years of the warning letter 
inspection. FDA identified deficiencies in almost all of the 12 
previous inspections, classifying 10 as VAI and 1 as OAI, but did not 
issue any warning letters.[Footnote 50] For 7 of these inspections, the 
deficiencies FDA identified at these establishments were again 
identified during the inspection that led to the issuance of a warning 
letter. 

FDA often identified the warning letter deficiencies, which relate to 
the manufacture of a currently marketed drug, when it inspected the 
establishment as part of its review of a new drug application. In 7 of 
the 15 cases, FDA selected the establishment for inspection as part of 
its review of a drug application. In 3 cases, FDA conducted the 
inspection for surveillance purposes. In 3 other cases, FDA conducted 
the inspections following the receipt of information from an informant, 
such as allegations of insanitary conditions. In the 2 remaining cases, 
FDA conducted the inspection to follow up on a previous inspection 
performed by FDA or a foreign government that identified deficiencies. 

FDA Oversight Has Led Establishments to Take Corrective Actions, but 
Subsequent Inspections to Determine Continued Compliance Are Not always 
Timely: 

FDA oversight resulted in establishments taking actions to correct 
serious deficiencies, but the agency has not always conducted timely 
subsequent inspections to determine whether establishments continued to 
comply with agency requirements. FDA often relied on information 
provided by the establishment, rather than obtained from an FDA 
inspection, to determine the adequacy of an establishment's corrective 
actions. As of July 2008, FDA had determined that the corrective 
actions taken by establishments referenced in 11 of the 15 warning 
letters were adequate.[Footnote 51] (See fig. 4.) For 7 of these 11 
establishments, FDA relied on information provided by the establishment 
to make this determination. For example, establishments provided FDA 
with an outline of corrective actions to be taken. In some of these 
cases, FDA also met with officials from the establishments or held 
telephone conferences to discuss the corrective actions. This process 
often involved multiple communications between FDA and the 
establishment. FDA typically notified these establishments that their 
corrective actions were adequate within 4 months of issuing the warning 
letter. In this notification, the agency generally stated that it would 
verify the corrective actions taken at the time of the next inspection. 

Figure 4: FDA's Methods for Determining the Adequacy of Corrective 
Actions for 15 Warning Letters Issued Following Foreign Inspections 
Conducted from Fiscal Years 2002 through 2007: 

This figure is a diagram showing FDA's methods for determining the 
adequacy of corrective actions for 15 warning letters issued following 
foreign inspections conducted from fiscal years 2002 through 2007. 

[See PDF for image] 

Source: GAO analysis of FDA documents. 

[End of figure] 

FDA conducted an inspection or used the results of an inspection 
conducted by a private consultant to determine the adequacy of the 
establishments' corrective actions for the other four establishments it 
deemed adequate. FDA inspected three of these establishments between 8 
and 21 months after the issuance of the warning letter. Based on these 
inspections and other documentation, FDA determined that the 
deficiencies that led to the warning letter had been corrected. In two 
of those three inspections, FDA also found additional deficiencies that 
led to a classification of VAI. For one establishment, instead of 
waiting for FDA to conduct an inspection to determine the adequacy of 
its corrective actions, FDA agreed that the establishment could arrange 
for an inspection by a private consultant. The consultant found that 
the establishment had made the corrective actions requested by FDA. The 
agency stated that it would verify the corrective actions during its 
next inspection. 

FDA inspections to determine establishments' continued compliance were 
not always timely. As of June 2008, FDA had subsequently inspected 4 of 
the 11 establishments it determined had taken adequate corrective 
actions in response to the warning letters. For 3 establishments, FDA 
had previously determined the adequacy of their corrective actions by 
reviewing information provided by the establishment. Although CDER 
staff had recommended that they be inspected within 1 year, these 3 
establishments were inspected about 4 to 5 years after the inspection 
that resulted in the warning letter. However, FDA officials told us 
that dates recommended by CDER staff for subsequent inspections are 
only regarded as suggestions and scheduling inspections must be 
considered in light of other priorities. They noted that the selection 
of foreign establishments for inspection is driven by the drug approval 
process. We found that, in these 3 cases, FDA next selected the 
establishment for inspection as part of processing an application for a 
new drug, rather than for the purpose of surveillance. For the fourth 
establishment, FDA had previously determined the adequacy of the 
establishment's corrective actions by reviewing an audit report from a 
private consultant's inspection. CDER staff had recommended that this 
establishment be inspected within 2 years and the agency met this 
recommendation by conducting a surveillance inspection. 

FDA verified corrective actions during three of these four inspections 
subsequent to deeming the establishments' corrective actions adequate, 
but it also identified additional deficiencies. The agency found that 
the three establishments had taken the corrective actions indicated in 
their response to the warning letters. However, FDA found other 
deficiencies requiring correction at those establishments. FDA 
classified all four of these inspections as VAI and none resulted in 
the issuance of a warning letter. 

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--that influence the manner 
in which such inspections are conducted. For example, FDA does not have 
a dedicated staff devoted to conducting foreign inspections and relies 
on staff to volunteer. In addition, unlike domestic surveillance 
inspections, foreign 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. FDA has recently 
announced proposals to address some of the challenges unique to 
conducting foreign inspections, but it is unclear if these proposals 
will address all of these challenges. 

Inspections of Foreign Drug Establishments Pose Unique Challenges to 
FDA: 

Human resource and logistical challenges unique to foreign inspections 
influence the manner in which FDA conducts those inspections. According 
to FDA officials, the agency does not have a dedicated staff to conduct 
foreign inspections. Instead FDA relies on investigators and laboratory 
analysts to volunteer to conduct foreign inspections. Officials 
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 in order to conduct inspections of foreign establishments. 
For example, they are required to take certain training courses and 
must have at least 3 years of experience conducting domestic 
inspections before they are considered qualified to conduct a foreign 
inspection. FDA reported that in fiscal year 2007 it had approximately 
335 employees who were qualified to conduct foreign inspections of drug 
manufacturing establishments. Approximately 250 of these employees were 
investigators and 85 were laboratory analysts.[Footnote 52] 

FDA officials told us that it is difficult to recruit investigators and 
laboratory analysts to voluntarily travel to certain countries and FDA 
does not mandate that they do so. 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 3-week foreign inspection trip completed, when their inspection 
reports are submitted within established time frames. FDA indicated 
that if the agency could not find an individual to volunteer for a 
foreign inspection trip, it would mandate that travel. However, FDA has 
not typically sent investigators and laboratory analysts to countries 
for which the Department of State has issued a travel warning.[Footnote 
53] 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 54] However, FDA 
officials told us that 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 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 of foreign establishments are to be approached in the same 
manner as domestic inspections. However, the guidance notes that 
logistics pose a significant challenge to the inspection team abroad. 
For example, FDA is unable to conduct unannounced inspections of 
foreign drug establishments, as it does with domestic establishments. 
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. However, prior notification is routinely 
provided to foreign establishments. FDA officials noted that the time 
and expense associated with foreign travel require them to ensure that 
managers of the foreign establishments are available and that the 
production line being inspected is operational during the inspection. 
In addition, FDA often needs the permission of the foreign government 
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. Furthermore, 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. In 
our review of FDA inspection reports, we identified instances in which 
FDA was unable to fully complete inspections of foreign establishments 
in the allotted time. For example, in one instance, the FDA staff had a 
commitment to travel to another city to inspect another establishment. 
In this instance, an unexpected cancellation during that same trip 
allowed FDA staff to return to the establishment at a later date to 
complete the inspection. 

FDA officials also told us that language barriers can make foreign 
inspections more difficult to complete than domestic inspections. The 
agency does not generally provide translators in foreign countries, nor 
does it require that foreign establishments provide independent 
interpreters. Instead, FDA staff may have to rely on an English- 
speaking employee of the foreign establishment being inspected, who may 
not be a translator by training, rather than rely on an independent 
translator. In our review of FDA inspection reports, we identified 
instances in which the translational support provided by an 
establishment created challenges. For example, an FDA investigator 
noted that during one inspection it was difficult to get an interpreter 
provided by the establishment to translate employee statements 
verbatim. FDA officials told us that while the presence of a translator 
is helpful, it is not necessary. They also pointed out that for 
inspections related to the review of a drug application, the 
establishment is required to submit its documentation in English. 

Unclear if Recent FDA Proposals Will Address All Challenges Unique to 
Foreign Inspections: 

FDA has recently announced proposals to address some of the challenges 
unique to conducting foreign inspections, but the extent to which these 
proposals will improve FDA's program is unclear. FDA is exploring the 
creation of a cadre of investigators who would be dedicated to 
conducting foreign inspections.[Footnote 55] FDA officials indicated 
that the agency plans to begin a pilot of the foreign cadre in early 
fiscal year 2009. As of July 2008, FDA had not yet begun recruiting 
investigators to participate in the foreign cadre, but officials 
expected the pilot group to consist of 15 investigators specializing in 
the inspection of drug establishments. An FDA official told us, 
however, that it may recruit investigators specializing in other FDA- 
regulated products, such as food or medical devices, if it is unable to 
recruit 15 drug investigators. The official also stated that the 
foreign cadre will be composed of investigators who have experience 
conducting foreign inspections. FDA has indicated that it would take 
approximately 4 years before a newly hired investigator would be able 
to complete independent inspections of foreign drug manufacturing 
establishments. According to FDA, the full size of the foreign cadre 
will be determined in fiscal year 2010, taking lessons learned from the 
fiscal year 2009 pilot and resources into consideration. 

FDA also recently announced plans to establish a permanent foreign 
presence overseas, although little information about these plans is 
available. Through an initiative known as "Beyond our Borders," FDA 
intends to establish foreign offices to improve cooperation and 
information exchange with foreign regulatory bodies, improve procedures 
for expanded inspections, allow it to inspect facilities quickly in an 
emergency, and facilitate work with private and government agencies to 
assure standards for quality. FDA's proposed foreign offices are 
intended to expand the agency's capacity for regulating, among other 
things, drugs, medical devices, and food. The extent to which the 
activities conducted by foreign offices are relevant to FDA's foreign 
drug inspection program is uncertain. Initially, FDA plans to establish 
a foreign office in China with three locations--Beijing, Shanghai, and 
Guangzhou--composed of a total of eight FDA employees and five Chinese 
nationals. The Beijing office, which the agency expects will be 
partially staffed by the end of 2008, will be responsible for 
coordination between FDA and the Chinese regulatory agencies. FDA staff 
located in Shanghai and Guangzhou, who the agency announced it will 
hire in 2009, will be focused on conducting inspections and working 
with Chinese inspectors to provide training as necessary. FDA has noted 
that the Chinese nationals will primarily provide support to FDA staff 
including translation and interpretation. The agency also plans to 
begin staffing offices in Central America, Europe, and India by the end 
of 2008 and in the Middle East in 2009. While the establishment of both 
a foreign inspection cadre and offices overseas has the potential for 
improving FDA's oversight of foreign establishments and providing the 
agency with better data on foreign establishments, it is too early to 
tell whether these steps will be effective or will increase the number 
of foreign drug inspections. 

Agreements with foreign governments, such as one recently reached with 
China's State Food and Drug Administration as part of Beyond our 
Borders, may help the agency address certain logistical issues unique 
to conducting inspections of foreign establishments.[Footnote 56] We 
have noted that one challenge facing FDA involved the need for its 
staff to obtain a visa or letter of invitation to enter a foreign 
country to conduct an inspection. However, FDA officials told us that 
the agency's agreement with China recently helped FDA expedite this 
process when it learned of the adverse events associated with a Chinese 
heparin manufacturing establishment. According to these officials, the 
agreement with China greatly facilitated FDA's inspection of this 
establishment by helping the agency send investigators much more 
quickly than was previously possible. 

Conclusions: 

Americans depend on FDA to ensure the safety and effectiveness of drugs 
marketed in the United States. More than 10 years ago we reported that 
FDA needed to make improvements in its foreign drug inspection program. 
Our current work indicates that flaws we identified at that time 
persist. The recent incident involving contaminated heparin sodium also 
underscores the need for FDA to obtain more information about foreign 
drug establishments, conduct more inspections overseas, and improve its 
overall management of this critical program. FDA recently announced 
initiatives that represent important steps for the agency and, if fully 
implemented, could address some of the concerns we identified in 1998 
and reiterated in recent testimonies. However, given the growth in 
foreign drug manufacturing for the U.S. market and the large gaps in 
FDA's foreign drug inspection program, significant challenges--such as 
improving its data systems and increasing the rate of inspection-- 
remain. 

FDA's oversight of its foreign inspection program is hampered by 
inaccurate and inconsistent data on foreign establishments. An 
important component of selecting establishments for inspection is an 
accurate list of establishments subject to inspection, which currently 
is not readily available to the agency. To reduce the creation of 
duplicate counts in its import database, FDA supports the establishment 
of a unique governmentwide identifier for foreign establishments. Such 
an identifier has the potential to improve the accuracy of the data 
that FDA maintains on foreign drug manufacturing establishments, and 
FDA's continued exploration of this option is an important step to 
improving the accuracy of its data. However, the establishment and 
utilization of a unique governmentwide identifier would be dependent on 
the actions of multiple agencies and would not provide an immediate 
solution to correcting the inaccuracies in FDA's databases. In 
addition, the agency's plan to institute electronic registration may 
provide FDA with a more efficient way to maintain information on each 
establishment, but it is unlikely to make a meaningful improvement in 
FDA's registration database by preventing erroneous registration and 
providing an accurate count of establishments subject to inspection. 
Enforcing the requirement that establishments update their registration 
annually, or biannually, as planned, is an important step towards 
keeping this database up to date. However, it is also important that 
FDA verify the information provided by establishments at the time of 
registration to ensure that establishments are appropriately 
registered. In addition, inconsistencies in databases that FDA uses to 
track inspections of foreign drug manufacturing establishments provide 
it with unreliable data on those establishments for which it identified 
serious manufacturing deficiencies. As a result, the different FDA 
staff responsible for oversight of these foreign establishments may not 
have ready access to accurate information on their compliance history 
when carrying out regulatory responsibilities. 

Conducting additional surveillance inspections of foreign 
establishments manufacturing drugs currently marketed in the United 
States is vital, but FDA's selection of foreign establishments for 
inspection has instead been driven by the need to inspect 
establishments named in an application for a new drug. While these 
preapproval inspections are an important component of FDA oversight, 
without additional surveillance inspections FDA has little opportunity 
to monitor the ongoing compliance of establishments manufacturing drugs 
currently marketed in the United States. In addition, FDA has not 
utilized its risk-based process to select foreign establishments for 
inspection to the extent it has for selecting domestic establishments. 
However, both FDA's inspection classifications and issuance of warning 
letters indicate that deficiencies, including serious GMP deficiencies, 
are found in foreign establishments at least as often as in domestic 
ones. Therefore, it is important that FDA inspect foreign and domestic 
establishments with similar characteristics at comparable frequencies. 
A reassessment of FDA's inspection priorities could help the agency to 
ensure that it is frequently inspecting those establishments, foreign 
or domestic, that pose the greatest potential risk to public health 
should they experience a manufacturing defect. 

Although foreign establishments have been responsive to FDA warning 
letters, the agency's subsequent inspections have often identified 
additional deficiencies. This points to the need for FDA to promptly 
inspect establishments with a history of serious deficiencies so 
problems do not go undetected for extended periods. FDA's plans to 
establish overseas offices and a cadre of investigators dedicated to 
foreign inspections are promising and have the potential to address 
many of the challenges unique to conducting foreign inspections. 
However, it is too early to tell whether these steps will be effective 
in improving the agency's foreign drug inspection program. 

Recommendations for Executive Actions: 

To address weaknesses in FDA's oversight of foreign establishments 
manufacturing drugs for the U.S. market, we recommend that the 
Commissioner of FDA take the following five actions: 

* Enforce the requirement that establishments manufacturing drugs for 
the U.S. market update their registration annually. 

* Establish mechanisms for verifying information provided by the 
establishment at the time of registration. 

* Ensure that information on the classification of inspections with 
serious deficiencies is accurate in all FDA databases. 

* Conduct more inspections to ensure that foreign establishments 
manufacturing drugs currently marketed in the United States are 
inspected at a frequency comparable to domestic establishments with 
similar characteristics. 

* Conduct timely inspections of foreign establishments that have 
received warning letters to determine continued compliance. 

Agency Comments and Our Evaluation: 

HHS reviewed a draft of this report and provided comments, which are 
reprinted in appendix II. HHS also provided technical comments, which 
we incorporated as appropriate. HHS commented on one of our 
recommendations and agreed that FDA should conduct more inspections of 
foreign establishments. It did not comment on the other four 
recommendations we made. HHS also stated that our report raises some 
important issues regarding FDA's foreign drug inspection program and 
noted that FDA has made efforts to improve this program. 

HHS agreed that additional inspections are needed to strengthen its 
foreign drug inspection program. The agency did not provide a specific 
plan or timeframe for conducting additional foreign inspections. HHS 
noted that these inspections represent only one component of its 
overall strategy to enhance oversight of imported drugs. HHS also said 
that conducting foreign inspections based on the same criteria as 
domestic inspections is problematic because of challenges associated 
with foreign inspections. As we noted in our draft report, we recognize 
that inspections of foreign establishments pose unique challenges to 
FDA. Nevertheless, foreign and domestic establishments with 
characteristics that pose similar potential risks to public health need 
to be inspected at comparable frequencies. As we noted, FDA finds 
serious GMP deficiencies in foreign establishments at least as often as 
in domestic ones. Therefore, we believe that it is important for the 
agency to use its resources, in coordination with its other 
initiatives, to prioritize for inspection those establishments, whether 
they are located in the United States or a foreign country, that have 
the greatest potential to negatively impact public health. 

HHS also elaborated on some of the initiatives to improve FDA's foreign 
drug inspection program that were discussed in our report--such as 
initiatives to improve FDA databases, establish foreign offices, and 
collaborate with foreign governments. In particular, HHS noted that as 
FDA implements electronic registration, it also plans to require 
establishments to update their registration at 6-month intervals, which 
is more frequent than is currently required. We have revised our report 
to reflect this proposed change. While requiring establishments to 
update their registration more often could enhance the accuracy of 
FDA's registration information, we remain concerned about the agency's 
enforcement of this provision. There is already a requirement for 
establishments to update this information annually, but FDA has not 
enforced it. FDA's proposal to direct establishments to update their 
registration information at more frequent intervals will only be 
meaningful if the agency takes steps to actively enforce this 
requirement. 

As arranged with your office, unless you publicly announce its contents 
earlier, we plan no further distribution of this report until 30 days 
after its issue date. At that time, we will send copies of this report 
to the Commissioner of FDA and appropriate congressional committees. We 
will also make copies available to others on request. In addition, the 
report will be available at no charge on the GAO Web site at 
[hyperlink, http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact me 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 report. GAO staff who made major contributions to 
this report are listed in appendix III. 

Signed by: 

Marcia Crosse: 

Director, Health Care: 

[End of section] 

Appendix I: Scope and Methodology: 

To address our reporting objectives, we interviewed officials from 
several components of the Food and Drug Administration (FDA), including 
the Center for Drug Evaluation and Research (CDER) and the Office of 
Regulatory Affairs (ORA). We also 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 practice 
regulations (GMP). These documents included FDA's Compliance Program 
Guidance Manuals; Guide to Inspection of Foreign Pharmaceutical 
Manufacturers; Investigations Operations Manual 2008; Regulatory 
Procedures Manual, March 2008; and Field Management Directives. To 
obtain perspectives from relevant stakeholders, we also interviewed 
officials from the Generic Pharmaceutical Association, Pharmaceutical 
Research and Manufacturers of America, and Synthetic Organic Chemical 
Manufacturers Association. 

To examine the extent to which FDA has accurate data on the number of 
foreign manufacturing establishments subject to inspection, we obtained 
information from FDA databases on establishments whose drugs have been 
imported into the United States. Specifically, we obtained data from 
CDER's Drug Registration and Listing System (DRLS) and ORA's 
Operational and Administrative System for Import Support (OASIS). 

* From DRLS, we obtained counts of establishments registered with FDA 
in fiscal year 2007 to market drugs in the United States. We assessed 
the reliability of these data by (1) reviewing existing information 
about the data and the databases that produced them and (2) 
interviewing agency officials knowledgeable about the data. We found 
that DRLS was reliable for our purposes, 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. 

* From OASIS, we obtained counts of establishments that offered drugs 
for import into the United States in fiscal year 2007. We also obtained 
fiscal year 2007 data from OASIS to determine the types of drugs 
manufactured in China and offered for import into the United States. 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. We found that while 
OASIS is likely to overestimate the number of foreign establishments 
involved in the manufacture of those drugs because of uncorrected 
errors in the data, it provides sufficiently reliable information about 
the types of drugs offered for import into the United States. 

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. We examined FDA's plans to improve these and 
other databases. We also obtained information from the Center for 
Devices and Radiological Health to learn about changes to one of its 
databases that address problems similar to CDER's problems with DRLS. 

To examine the frequency of foreign inspections and factors influencing 
the selection of such establishments for inspection, we obtained data 
on foreign and domestic inspections from ORA's Field Accomplishments 
and Compliance Tracking System (FACTS). Our analysis includes all 
foreign and domestic inspections that were identified in FACTS as being 
either related to the drug application approval process or GMP. Our 
November 2007 testimony included the number of inspections from FACTS 
as of September 26, 2007.[Footnote 57] Therefore, we obtained FACTS 
data that contained information on fiscal year 2007 inspections 
conducted or entered into this database since September 26, 2007, to 
update the data presented in our November 2007 testimony. 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. We found these data from the FACTS 
database reliable for our purposes. In addition, we examined methods 
used by FDA to help it select foreign and domestic establishments for 
inspection, including its risk-based site selection process. 

To examine FDA's response to serious deficiencies identified during 
inspections of foreign manufacturing establishments and FDA's 
monitoring of establishments' corrective actions and continued 
compliance, we examined data in two sources, FACTS and CDER's Office of 
Compliance Foreign Inspection Tracking System, which each contain 
information on how the agency classified establishments' compliance 
with agency requirements. We assessed the reliability of these data by 
interviewing agency officials knowledgeable about the data and 
performing electronic testing to compare the data from each of these 
databases. We found that these databases sometimes presented 
inconsistent information about the final classification of foreign 
inspections. Therefore, we present data from these databases on 
inspection classification to illustrate the variability in information 
that FDA's databases provide to agency officials on this topic. We also 
reviewed case files provided by FDA that relate to inspections of 
foreign establishments conducted from fiscal years 2002 through 2007, 
during which FDA identified serious deficiencies and subsequently 
issued warning letters. The case files contained information about 
these establishments, their inspections, and their correspondence with 
FDA. 

To examine issues unique to conducting foreign inspections, we reviewed 
FDA practices and policies related to the conduct of foreign 
inspections and interviewed FDA officials about these topics. We also 
obtained information about recent or proposed FDA initiatives that may 
have the potential to improve the agency's foreign drug inspection 
programs. 

We conducted the work for this report from September 2007 through 
September 2008 in accordance with generally accepted government 
auditing standards. Those standards require that we plan and perform 
the audit to obtain sufficient, appropriate evidence to provide a 
reasonable basis for our findings and conclusions based on our audit 
objectives. We believe that the evidence obtained provides a reasonable 
basis for our findings and conclusions based on our audit objectives. 

[End of section] 

Appendix II: Comments from the Department of Health and Human Services: 

Department Of Health At Human Services: 
Office Of The Secretary: 

Assistant Secretary for Legislation: 
Washington, DC 20201: 

September 2, 2008: 

Marcia Crosse: 
Director, Health Care: 
441 G Street NW: 
U.S. Government Accountability Office: 
Washington, D.C. 20548: 

Dear Ms. Crosse: 

Enclosed are the Department's comments on the U.S. Government 
Accountability Office's (GAO) draft report entitled, "Drug Safety: 
Better Data Management and More Inspections Are Needed to Strengthen 
FDA's Foreign Drug Inspection Program" (GAO 08-970). 

The Department appreciates the opportunity to comment on this draft 
before its publication. 

Sincerely,

Jennifer R. Luong: 

for: 

Vincent J. Ventimiglia, Jr.: 
Assistant Secretary for Legislation: 

Attachment: 

Comments Of The U.S. Department Of Health And Human Services (HHS) On 
The U.S. Government Accountability Office's (GAO) Draft Report 
Entitled, "Drug Safety: Better Data Management And More Inspections Are 
Needed To Strengthen FDA's Foreign Drug Inspection Program" (GAO 08-
970): 

The Food and Drug Administration (FDA) appreciates the opportunity to 
review and comment on the Government Accountability Office's (GAO) 
draft report. GAO has raised some important issues regarding FDA's 
foreign drug inspection program. FDA strives continually to advance its 
public health mission, and this includes significant efforts to improve 
the foreign drug inspection program. As stated in the report's title, 
GAO is recommending that more inspections are needed to strengthen this 
program. Although FDA recognizes the need for additional risk-based 
targeted foreign inspections, this is only one component of FDA's 
overall strategy to enhance oversight of imported drugs. The overall 
approach is multi-faceted and includes conducting risk-based targeted 
inspections of foreign firms, working collaboratively with the 
importing community and state and local governments, reaching out to 
foreign producers, exporters and governments, improving information 
technology (IT), and expanding FDA's foreign presence. FDA believes 
that strategic use of resources for this multi-faceted approach to 
foreign firms, as opposed to simply increasing numbers of inspections, 
will provide the greatest public health protection. With our Import 
Safety Action Plan, FDA is adopting a strategy that shifts the primary 
emphasis for import safety from intervention to a risk-based 
"prevention with verification" model. GAO acknowledges that there are 
unique challenges to foreign inspections not present in the domestic 
arena. Therefore, the conclusion that FDA should endeavor to conduct 
foreign inspections based on the same criteria as domestic inspections 
is also problematic because of the differences in regulatory 
methodology and resources. 

FDA has many initiatives underway focused on improving the foreign drug 
inspection program. The FDA "Beyond Our Borders" initiative is a multi-
pronged approach to promote and verify compliance of imported food, 
cosmetics, and medical products with FDA requirements. Key components 
of this initiative are establishing an FDA presence in China, India, 
Latin America, Europe and the Middle East; increased FDA inspections; 
greater laboratory capacity; greater sharing and use of foreign 
regulatory authority inspection reports and other information; use of 
third party certification; and increased capacity building with 
countries that have less developed regulatory systems to ensure product 
safety. FDA plans to establish offices in several countries around the 
world, starting with China and India. On July 25, 2008, seven new 
positions within FDA's China Office were announced in addition to the 
previously selected country director. Consumer safety officer positions 
in India were also recently announced. These positions demonstrate 
FDA's efforts toward a more global approach to our regulatory 
responsibilities. FDA also plans to establish a foreign inspection 
cadre, which will consist of highly qualified consumer safety officers 
with relevant skills and experience to conduct foreign inspections. The 
supervisory position in the Division of Field Investigations for the 
cadre has also been announced. 

FDA also has several plans to enhance its IT systems in ways that will 
enable the Agency to better utilize risk-based information from the 
entire life-cycle of imported products. These projects will improve 
databases, enhance interoperability of systems within the Agency and 
among other regulatory agencies, and provide better analytical function 
to assess and control risk. The following are specific examples of 
ongoing IT projects: 

* One of many activities proceeding under the auspices of the 
Bioinformatics Board and in particular the Product Quality Business 
Review Board is the Harmonized Inventory project, which is bringing 
together many databases to have a common identifier for each 
establishment, a problem most acute for foreign establishments. 

* The Center for Drug Evaluation and Research (CDER) is working 
vigorously to establish electronic Drug Registration and Listing 
(eDRLS) which will, among other things, require firms to update their 
registration electronically every 6 months to be active. Overall, these 
efforts will modernize our databases to prevent outdated, inaccurate, 
and duplicative information. 

* CDER has recently published a draft guidance on eDRLS which is 
piloting its use prior to the actual regulatory implementation date. 
One of the features of this pilot will be to have establishments enter 
their Dun and Bradstreet number (DUNS) to serve as a recognized 
identifier to avoid duplications and error. The link to this draft 
guidance is provided here--[hyperlink, 
http://www.fda.gov/cder/guidance/OC2008145.htm]. 

All of these activities will improve FDA's ability to ensure the safety 
and efficacy of human drugs, regardless of where they are manufactured. 

[End of section] 

Appendix III GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Marcia Crosse, (202) 512-7114, crossem@gao.gov. 

Acknowledgments: 

In addition to the contact named above, Geraldine Redican-Bigott, 
Assistant Director; Katherine Clark; Andrew Fitch; William Hadley; 
Cathleen Hamann; Julian Klazkin; Daniel Ries; and Monique B. Williams 
made key contributions to this report. 

[End of section] 

Related GAO Products: 

Medical Devices: FDA Faces Challenges in Conducting Inspections of 
Foreign Manufacturing Establishments. GAO-08-780T. Washington, D.C.: 
May 14, 2008. 

Drug Safety: Preliminary Findings Suggest Recent FDA Initiatives Have 
Potential, but Do Not Fully Address Weaknesses in Its Foreign Drug 
Inspection Program. GAO-08-701T. Washington, D.C.: April 22, 2008. 

Medical Devices: Challenges for FDA in Conducting Manufacturer 
Inspections. GAO-08-428T. Washington, D.C.: January 29, 2008. 

Drug Safety: Preliminary Findings Suggest Weaknesses in FDA's Program 
for Inspecting Foreign Drug Manufacturers. GAO-08-224T. Washington, 
D.C.: November 1, 2007. 

Food and Drug Administration: Improvements Needed in the Foreign Drug 
Inspection Program. GAO/HEHS-98-21. Washington, D.C.: March 17, 1998. 

[End of section] 

Footnotes: 

[1] 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. 

[2] Drugs are defined to include, among other things, articles intended 
for use in the diagnosis, cure, mitigation, treatment, or prevention of 
disease, and include components of those articles. 21 U.S.C.  
321(g)(1)(B), (D). FDA regulations define manufacturing to include the 
manufacture, preparation, propagation, compounding, or processing of a 
drug. 21 C.F.R.  207.3(a)(8) (2007). In addition, 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. 

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

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

[5] FDA classifies inspections based on the seriousness of the 
deficiencies identified during the inspection. 

[6] FDA issues warning letters to those establishments manufacturing 
drugs for the U.S. market where it has identified violations that may 
lead the agency to initiate enforcement action if not promptly and 
adequately corrected. 

[7] GAO, Drug Safety: Preliminary Findings Suggest Weaknesses in FDA's 
Program for Inspecting Foreign Drug Manufacturers, GAO-08-224T 
(Washington, D.C.: Nov. 1, 2007). 

[8] 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. 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. See 21 C.F.R.  210.3(b)(7), (8) (2007). According to FDA 
officials, the agency typically only inspects establishments 
manufacturing inactive ingredients when it receives information 
indicating potential problems with their manufacture. 

[9] GAO, Drug Safety: Preliminary Findings Suggest Recent FDA 
Initiatives Have Potential, but Do Not Fully Address Weaknesses in Its 
Foreign Drug Inspection Program, GAO-08-701T (Washington, D.C.: Apr. 
22, 2008). 

[10] Foreign and domestic establishments that manufacture drugs for the 
U.S. market are required to register annually with FDA. Establishments 
provide FDA with, among other things, their names and addresses and a 
listing of the drugs that they manufacture for the U.S. market. 21 
U.S.C. 360(b), (i), (j). 

[11] Biologics are materials, such as vaccines, derived from living 
sources such as humans, animals, and microorganisms. Biologics are 
generally regulated by FDA's Center for Biologics Evaluation and 
Research. Biologics regulated by this center are not addressed in this 
report. However, some biologics are regulated by CDER and inspections 
related to those products are included in our work. 

[12] 21 U.S.C.  360(h). 

[13] ORA investigators lead inspections. Investigators are responsible 
for performing or overseeing all aspects of an inspection. ORA 
laboratory analysts are chemists or microbiologists and have expertise 
in laboratory testing. In some instances, staff from CDER may 
participate in inspections. 

[14] When FDA receives an application for drug approval, officials 
review the inspection history of each establishment listed on the 
application. According to FDA officials, if an establishment listed on 
the application 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. 

[15] FDA must approve an application for a new drug before it can be 
marketed in the United States. FDA reviews scientific and clinical data 
contained in these applications as part of its process in considering 
them for approval to be marketed. Approval for a generic drug is sought 
through an abbreviated new drug application, which generally does not 
require preclinical and clinical data but which must demonstrate that 
the generic drug performs in the same manner as the new drug on which 
the generic is based. While new OTC drugs may reach the market through 
FDA's review of a new drug or abbreviated new drug application, the 
majority of OTC drugs are marketed today through a different process, 
which has established the marketing conditions for various categories 
of OTC drugs with particular active ingredients. Drugs marketed through 
this different process may be marketed without FDA preapproval and 
establishments that manufacture such drugs may not receive a 
preapproval inspection. 

[16] 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), [hyperlink, 
http://www.fda.gov/cder/gmp/gmp2004/risk_based_method.htm] (accessed 
June 26, 2008). 

[17] For more information about this process, see GAO-08-224T. 

[18] FDA issues untitled letters to violative foreign establishments 
that were inspected as part of the agency's review of an application 
and intend to market a drug in the United States but do not yet do so. 

[19] An import alert can apply to specific drugs or all drugs 
manufactured by an establishment. 

[20] Customs brokers are private individuals, partnerships, 
associations, or corporations that are licensed, regulated, and 
empowered by CBP to assist in meeting federal requirements governing 
imports and exports. 

[21] The counts include foreign establishments that were registered to 
manufacture human drugs, biologics, and veterinary drugs; FDA was 
unable to provide the number of registered establishment specifically 
manufacturing human drugs. 

[22] See Pub. L. No. 105-115,  417; 111 Stat. 2296, 2379 (1997). FDA 
issued implementing regulations in 2001 (21 C.F.R.  207.40), which 
were effective February 11, 2002. 66 Fed. Reg. 59138 (Nov. 27, 2001). 

[23] If the agency learns of an error, it asks the establishment to 
submit corrected information. 

[24] 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. 

[25] This voluntary program was established through release of draft 
FDA guidance in July 2008. See "Guidance for Industry: Providing 
Regulatory Submissions in Electronic Format--Drug Establishment 
Registration and Drug Listing" at [hyperlink, 
http://www.fda.gov/cder/guidance/index.htm] (accessed July 30, 2008). 

[26] The D-U-N-S Number is a unique nine-digit sequence recognized as 
the federal government's universal standard for identifying and keeping 
track of business entities. Submitting the site-specific number for an 
entity would provide, by reference to the number, certain business 
information for that entity that is otherwise required for drug 
establishment registration. For example, a D-U-N-S Number could be 
used to identify trade names used by the entity; addresses; additional 
ownership information, such as the name of each partner or the name of 
each corporate officer and director; and the state of incorporation. 

[27] In fiscal year 2008, another FDA center implemented changes 
affecting the registration of medical device manufacturing 
establishments, an activity for which we previously identified problems 
similar to those found in DRLS. See Medical Devices: FDA Faces 
Challenges in Conducting Inspections of Foreign Manufacturing 
Establishments, GAO-08-780T (Washington, D.C.: May 14, 2008). Officials 
indicated that the Center for Devices and Radiological Health began 
deactivating the registrations of those establishments that fail to 
complete the annual registration process. In addition, it implemented 
an electronic registration system and began charging an annual user 
fee, $1,706 in fiscal year 2008, per registration for certain medical 
device establishments. (CDER does not have authority to charge such a 
fee to drug establishments.) Officials found that, combined, these 
changes resulted in the elimination of establishments from the 
database. They anticipated that this would provide FDA with a smaller, 
more accurate database of medical device establishments. 

[28] The algorithm currently used by customs brokers to assign the 
manufacturer identification number does not provide for a number that 
is reliably reproduced or inherently unique. 

[29] If an establishment did not already have an identification number, 
it would request an identification number and data about the 
establishment would be verified through a commercial service. This 
commercial service would provide federal agencies with researched and 
validated records on domestic and foreign establishments. 

[30] The SEDS proposal was developed by the Federal Health Architecture 
Food Safety Work Group, which is comprised of representatives from FDA, 
the Environmental Protection Agency, and the departments of 
Agriculture, Commerce, Defense, and Homeland Security. These agencies 
are involved in the oversight of products imported into the United 
States. In addition, developing an implementation plan for SEDS was 
recommended by the Interagency Working Group on Import Safety in 2007. 
In July 2007, the Interagency Working Group on Import Safety was 
established to conduct a comprehensive review of current import safety 
practices and determine where improvements could be made. Interagency 
Working Group on Import Safety, Action Plan for Import Safety: A 
Roadmap for Continual Improvement (November 2007) ([hyperlink, 
http://www.importsafety.gov/report/actionplan.pdf], accessed May 6, 
2008). 

[31] In October 2007, we reported on CBP's implementation of its import 
and export system, known as the Automated Commercial Environment. We 
found that CBP has made progress but warned that further efforts were 
needed to avoid major program schedule delays and cost overruns. See 
Information Technology: Improvements for Acquisition of Customs Trade 
Processing System Continue, but Further Efforts Needed to Avoid More 
Cost and Schedule Shortfalls, GAO-08-46 (Washington, D.C.: Oct. 25, 
2007). 

[32] Our analysis includes all foreign and domestic inspections that 
were identified in FDA's FACTS database as being either related to the 
drug application approval process or GMP. It does not include a small 
number of other inspections, such as inspections conducted to determine 
whether drug manufacturers are submitting to FDA, as required, complete 
and accurate data on adverse drug experiences associated with marketed 
drugs. 

[33] In preparing this list, FDA drew on information from DRLS. It also 
obtained information from previous inspections to help it identify 
establishments that are subject to inspection but are not required to 
register--such as the manufacturer of an API whose product is not 
directly imported into the United States. However, as a result of the 
inaccuracies in its data, FDA recognizes that this list does not 
provide an accurate count of establishments subject to inspection. 

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

[35] According to FDA, the cost of conducting foreign inspections 
varies, depending on the time spent at an establishment, the number of 
FDA staff conducting the inspection, the costs associated with 
traveling to the country in which the establishment is located, and 
whether the type of inspection was a preapproval or GMP surveillance 
inspection. 

[36] The submission requested funds for FDA to conduct a total of 2,100 
inspections in addition to those the agency already planned to conduct. 
Of the 2,100 inspections, 1,050 would be of foreign establishments 
manufacturing food, drugs, and other medical products and 1,050 would 
be of domestic establishments manufacturing food, drugs, and other 
medical products. 

[37] GAO/HEHS-98-21, 23. 

[38] When FDA receives a new drug application, CDER officials review 
the inspection history of each establishment listed on the application. 
According to FDA officials, if an establishment listed on the 
application has received a satisfactory GMP inspection in the previous 
2 years and the agency has no new concerns, FDA will consider this 
inspection sufficient for the review of the application and will not 
perform a preapproval inspection of this establishment. Otherwise, the 
agency may inspect the establishment as part of the application review 
process. 

[39] Because a GMP inspection examines the major manufacturing systems 
at an establishment, the results of such an inspection can often be 
generalized to all drugs 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 in another new 
drug application. 

[40] We present data from fiscal years 2002 through 2006 because, at 
the time we received these data, some inspections conducted in fiscal 
year 2007 may not have received their final classification. 

[41] We were unable to match all inspection information in the two 
databases. For fiscal years 2002 through 2006, we identified 1,147 
inspections in FACTS and 1,128 inspections in OCFITS. Of these, we were 
able to reliably determine that 1,060 inspections in each database were 
indeed the same inspections. 

[42] We identified a similar weakness in our 1998 report. We reported 
that a 1988 FDA evaluation of its foreign inspection program found that 
an inspection tracking database that served as a precursor to FACTS 
contained incomplete information for 37 percent of foreign inspections 
conducted between fiscal years 1982 and 1987. The evaluation attributed 
this error to CDER staff not updating the inspection tracking database 
after reviewing and classifying inspection reports. In addition, our 
review of data on inspections conducted between January 1, 1994, and 
May 15, 1996, found that these data were missing or incorrect in 15 
percent of inspections. Similar to FDA's 1988 findings, we attributed 
some of these errors to staff not updating the database after reviewing 
and classifying inspection reports. GAO/HEHS-98-21. 

[43] Although we have concerns about the consistency with which CDER 
staff update final classification information in FACTS, we use FACTS, 
rather than OCFITS, as our source for this information. FDA inspections 
of both domestic and foreign establishments are tracked in FACTS, while 
only foreign inspections are tracked in OCFITS. Thus, for purposes of 
comparison, we report both domestic and foreign inspection counts from 
FACTS. For consistency, we used that same count of inspections to 
conduct our analysis of classification information. As we report, our 
analysis of FACTS data suggested that about 62 percent of foreign 
inspections conducted from fiscal year 2002 through 2006 were 
classified as VAI or OAI. Similarly, about 61 percent of foreign 
inspections in OCFITS were classified as VAI or OAI, though 
classifications of individual inspections differed between the two 
databases. 

[44] FDA only issues warning letters to those foreign establishments 
manufacturing drugs for the U.S. market at which it has identified 
violations that could lead to enforcement action. If the violative 
foreign establishment is not yet manufacturing any drugs for the U.S. 
market, but intends to, the agency may issue an untitled letter. 
Because our analysis may have included inspections of establishments 
named in a new drug application that did not yet manufacture a drug for 
the U.S. market, in some instances the identification of serious 
deficiencies could have resulted in an untitled letter and not a 
warning letter. 

[45] One warning letter related to the inspection of two establishments 
as drug production was being moved from one establishment to the other. 
As FDA referred to both inspections in its warning letter, we count 
this as a single inspection. 

[46] We base this statement on a comparison of inspections conducted 
and warning letters issued from fiscal years 2004 through 2007. The 
number of domestic warning letters issued prior to fiscal year 2004 was 
not readily available. 

[47] An impurity profile describes the identified and unidentified 
impurities present in an API. GMP guidance notes that impurity profiles 
should be compared with historical data at appropriate intervals to 
detect changes in the API. 

[48] One establishment did not respond to the identified deficiencies 
until 6 months after the FDA inspection. FDA did not receive a response 
from the establishment until after it issued the warning letter. 

[49] In the case of three establishments that received warning letters 
but that FDA had not previously inspected, the establishments 
manufactured OTC drugs. FDA does not generally conduct preapproval 
inspections for establishments manufacturing OTC drugs because the 
majority of OTC drugs may be marketed without FDA preapproval. FDA 
generally considers establishments manufacturing OTC drugs to have a 
lower inspection priority. 

[50] None of the inspections that directly preceded the warning letter 
inspection resulted in a warning letter. However, FDA indicated that 
two of the establishments in our review had received a previous warning 
letter since fiscal year 1995, the year from which FDA could reliably 
determine warning letter issuance. 

[51] As of July 2008, the corrective actions of establishments 
referenced in the other four warning letters had not been accepted by 
FDA. 

[52] These counts do not represent the number of individuals who 
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 other qualified 
investigators and laboratory analysts may perform multiple inspections 
during the same period. While an investigator and laboratory 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. 

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

[54] These 10 countries were Colombia, the Democratic Republic of the 
Congo, Haiti, Indonesia, Israel, Kenya, Nigeria, Pakistan, the 
Philippines, and Saudi Arabia. 

[55] See Food and Drug Administration, Revitalizing ORA: Protecting the 
Public Health Together In a Changing World (Rockville, Md.: January 
2008). 

[56] For additional information about FDA's agreements with foreign 
regulatory bodies, see GAO-08-701T. 

[57] GAO-08-224T, 15.

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