United States Government Accountability Office

GAO Report to Congressional Requesters

DRUG SAFETY 

Better Data 

Management and More 

Inspections Are 

Needed to Strengthen 

FDA’s Foreign Drug 

Inspection Program 

September 2008 

 

GAO-08-970 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

September 2008

DRUG SAFETY

Better Data Management and More Inspections Are 

Needed to Strengthen FDA’s Foreign Drug Inspection 

Highlights of GAO-08-970, a report to Program 

congressional requesters 

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 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 FDA’s strategy to

enhance oversight and elaborated

on other initiatives, such as 

database improvements, discussed 

in this report. 

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 

estimates—about 3,000 and 6,800, respectively. FDA’s 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 FDA’s 

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. 

FDA’s 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. FDA’s 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. 

To view the full product, including the scope 

and methodology, click on GAO-08-970. 

For more information, contact Marcia Crosse 

at (202) 512-7114 or crossem@gao.gov. 
Contents 

Letter 1

Results in Brief 5 

Background 8

FDA Lacks Accurate Information to Effectively Manage the 

Foreign Drug Inspection Program 17 

FDA Inspects Relatively Few Foreign Establishments to Assess the 

Manufacture of Drugs Currently Marketed in the United States 23 

FDA’s Identification of Serious Deficiencies Has Led 

Establishments to Take Corrective Actions, but Subsequent 

Inspections Were Not Always Timely 29 

Challenges Unique to Foreign Inspections Influence the Manner in 

which FDA Conducts Such Inspections 37 

Conclusions 41

Recommendations for Executive Actions 43 

Agency Comments and Our Evaluation 43 

Appendix I Scope and Methodology 46 

Appendix II Comments from the Department of Health 

and Human Services 49 

Appendix III GAO Contact and Staff Acknowledgments 52 

Related GAO Products 53 

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 25 

Table 2: Warning Letters Issued by FDA to Foreign Establishments 

in Response to Inspections Conducted from Fiscal Years 

2002 through 2007 32 

Page i GAO-08-970 FDA Foreign Drug Inspection
Figures 

Figure 1: FDA’s Process for Managing Inspections of Foreign 

Establishments 14

Figure 2: Foreign Establishments Registered to Manufacture Drugs 

for the U.S. Market by Country, Fiscal Year 2007 16 

Figure 3: FDA Foreign Establishment Inspections by Type of 

Inspection, Fiscal Years 2002 through 2007 28 

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 35 

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 

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

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necessary if you wish to reproduce this material separately. 

Page ii GAO-08-970 FDA Foreign Drug Inspection
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.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 

 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. 

Page 1 GAO-08-970 FDA Foreign Drug Inspection
responsibility of the Food and Drug Administration (FDA),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)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.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.5

 We also 

found that the agency did not promptly issue warning letters asking 

establishments to correct serious GMP deficiencies identified during 

inspections.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 

 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 highquality 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. 

Page 2 GAO-08-970 FDA Foreign Drug Inspection
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 1998.7

 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.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.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 

 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). 

Page 3 GAO-08-970 FDA Foreign Drug Inspection
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.

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,11

medical devices, veterinary medicines, or other items or products for 

which FDA conducts inspections. (See app. I for a more detailed 

 10Foreign 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).

11Biologics 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. 

Page 4 GAO-08-970 FDA Foreign Drug Inspection
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. 

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. 

Results in Brief 

Page 5 GAO-08-970 FDA Foreign Drug Inspection
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 

Page 6 GAO-08-970 FDA Foreign Drug Inspection
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 Englishspeaking 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 

Page 7 GAO-08-970 FDA Foreign Drug Inspection
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. 

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

Background 

Page 8 GAO-08-970 FDA Foreign Drug Inspection
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,

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.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.

14 These inspections occur following FDA’s receipt of a new 

drug application or an abbreviated new drug application and focus on the 

 1221 U.S.C. § 360(h). 

13ORA 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. 

14When 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.

Page 9 GAO-08-970 FDA Foreign Drug Inspection
manufacture of a specific drug.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. 

 15FDA 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. 

Page 10 GAO-08-970 FDA Foreign Drug Inspection
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,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 2007.17

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. 

 16Department of Health and Human Services, U.S. Food and Drug Administration, “RiskBased Method for Prioritizing CGMP Inspections of Pharmaceutical Manufacturing Sites—

A Pilot Risk Ranking Model” (September 2004), 

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

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

Page 11 GAO-08-970 FDA Foreign Drug Inspection
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.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 

 18FDA 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. 

Page 12 GAO-08-970 FDA Foreign Drug Inspection
instructs FDA staff that they may detain drugs manufactured by the 

violative establishment that have been offered for entry into the United 

States.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. 

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

Page 13 GAO-08-970 FDA Foreign Drug Inspection
Figure 1: FDA’s Process for Managing Inspections of Foreign Establishments 

FDA uses multiple databases to manage its foreign drug inspection 

program. 

Source: GAO.

CDER identifies a foreign establishment for preapproval or postapproval inspection

CDER requests inspection

ORA schedules inspection and assigns staff

ORA staff inspect establishment to look for deficiencies

CDER reviews the establishment inspection report and any response to the Form 483 

received from the establishment

CDER determines whether establishment complied with GMPs

No regulatory 

action 

warranted

Import 

alert 

may be 

issued

No

deficiencies

identified

Deficiencies

identified

ORA staff issue Form 483 and 

establishment voluntarily responds

Yes (NAI or VAI)

Establishment

generally complied

with GMPs

No (OAI)

Serious GMP deficiencies

identified during

preapproval inspection

No (OAI)

Serious GMP deficiencies

identified during

postapproval inspection

Establishment 

may be denied 

drug approval 

and issued

untitled letter

Establishment 

may be issued

warning letter

ORA staff write establishment inspection report, and ORA makes a recommendation 

regarding classification to CDER

and/or

• 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. 

Page 14 GAO-08-970 FDA Foreign Drug Inspection
• 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.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).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. 

 20Customs 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.

21The 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.

Page 15 GAO-08-970 FDA Foreign Drug Inspection
Figure 2: Foreign Establishments Registered to Manufacture Drugs for the U.S. Market by Country, Fiscal Year 2007 

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

No registered establishments

1-50 registered establishments

51-100 registered establishments

101-200 registered establishments

200+ registered establishments

Canada

152

Brazil

XX

Germany–101

France–103

India

299

China

566

Italy–70

Japan

91

United

Kingdom–83

Domestic 

establishment 

counts not shown

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. 

Page 16 GAO-08-970 FDA Foreign Drug Inspection
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. 

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 2002.22 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 Lacks Accurate 

Information to 

Effectively Manage 

the Foreign Drug 

Inspection Program 

FDA’s Drug Registration 

Database Contains 

Inaccuracies and Planned 

Changes Will Not Ensure 

the Availability of Accurate 

Information on Foreign 

Establishments 

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 

 22See 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). 

Page 17 GAO-08-970 FDA Foreign Drug Inspection
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.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.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;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 

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

24For 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. 

25This 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 

http://www.fda.gov/cder/guidance/index.htm (accessed July 30, 2008). 

Page 18 GAO-08-970 FDA Foreign Drug Inspection
Dun and Bradstreet Data Universal Numbering System (D-U-N-S®) 

Number—as part of their registration.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.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 

 26The 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.

27In 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. 

Page 19 GAO-08-970 FDA Foreign Drug Inspection
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.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 

 28The 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. 

Page 20 GAO-08-970 FDA Foreign Drug Inspection
establishment.29 This unique identifier would then be stored within the 

proposed Shared Establishment Data Service (SEDS)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 2010.31 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 

 29If 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. 

30The 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) 

(www.importsafety.gov/report/actionplan.pdf, accessed May 6, 2008). 

31In 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). 

Page 21 GAO-08-970 FDA Foreign Drug Inspection
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. 

Page 22 GAO-08-970 FDA Foreign Drug Inspection
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. 

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 2007.32 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.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 Inspects 

Relatively Few 

Foreign 

Establishments to 

Assess the 

Manufacture of Drugs 

Currently Marketed in 

the United States 

FDA Inspects Few Foreign 

Establishments Each Year, 

Relative to Its Inspection 

of Domestic 

Establishments 

 32Our 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. 

33In 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. 

Page 23 GAO-08-970 FDA Foreign Drug Inspection
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 2000.34 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. 

 34According to FDA officials, some of these establishments may have received an

inspection for another type of product, such as a veterinary drug. 

Page 24 GAO-08-970 FDA Foreign Drug Inspection
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 

Number of inspections

Country FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 Total

Number of unique

establishments

inspected

Estimated 

number of 

establishmentsa

India 11 19 38 33 34 64 199 152 410

Germany 24 15 35 25 19 25 143 95 199

Italy 17 30 26 21 18 28 140 98 150

Canada 29 12 17 23 23 20 124 88 288

United Kingdom 17 21 15 18 15 16 102 84 169

China 11 9 17 21 17 19 94 80 714

France 14 15 13 12 16 24 94 71 162

Japan 11 13 14 21 13 22 94 82 196

Switzerland 12 12 11 17 9 17 78 50 83

Ireland 11 5 11 14 3 14 58 43 61

All other countries 63 38 63 61 45 83 353 276 817

Total 220 189 260 266 212 332 1,479 1,119 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. 

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 

Page 25 GAO-08-970 FDA Foreign Drug Inspection
$41,000 to $44,000.35 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.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, 

 35According 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.

36The 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. 

Page 26 GAO-08-970 FDA Foreign Drug Inspection
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.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 

 37GAO/HEHS-98-21, 23. 

Page 27 GAO-08-970 FDA Foreign Drug Inspection
may necessitate the inspection of establishments referenced in those 

applications.

38

Figure 3: FDA Foreign Establishment Inspections by Type of Inspection, Fiscal 

Years 2002 through 2007 

13%

19%

68%

Source: GAO analysis of FDA data.

GMP only

Preapproval only

Both preapproval and GMP

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.39

 38When 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. 

39Because 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. 

Page 28 GAO-08-970 FDA Foreign Drug Inspection
Relatively few foreign establishments identified through CDER’s riskbased 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. 

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. 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 2006,40 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. 

FDA’s Identification of 

Serious Deficiencies 

Has Led 

Establishments to 

Take Corrective 

Actions, but 

Subsequent 

Inspections Were Not 

Always Timely 

FDA Identified 

Deficiencies during Most 

of Its Inspections of 

Foreign Establishments, 

but FDA’s Databases 

Contain Inconsistent 

Information about 

Inspection Classifications 

 40We 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. 

Page 29 GAO-08-970 FDA Foreign Drug Inspection
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,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.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 

 41We 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. 

42We 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. 

Page 30 GAO-08-970 FDA Foreign Drug Inspection
responsible for the oversight of foreign establishments manufacturing 

drugs marketed in the United States.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 2007,44 the agency issued a 

warning letter following 15 inspections in which serious deficiencies were

identified (see table 2).45 The rate of warning letters issued to foreign 

establishments was similar to that for domestic establishments.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. 

 43Although 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. 

44FDA 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. 

45One 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. 

46We 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. 

Page 31 GAO-08-970 FDA Foreign Drug Inspection
Table 2: Warning Letters Issued by FDA to Foreign Establishments in Response to Inspections Conducted from Fiscal Years 

2002 through 2007

Date inspection ended 

Date warning 

letter issued Location of establishment Import alert issued

Time from inspection to

warning letter issuance 

Fiscal year 2002 

April 16, 2002 November 21, 2002 Australia No 7 months, 5 days 

Fiscal year 2003 

September 10, 2003 January 15, 2004 Czech Republic No 4 months, 5 days 

Fiscal year 2004 

October 29, 2003 January 5, 2004 Taiwan, Republic of China No 2 months, 7 days 

October 31, 2003 February 10, 2004 China Yes 3 months, 10 days 

May 13, 2004 August 3, 2004 Switzerland No 2 months, 21 days 

Fiscal year 2005 

October 15, 2004 February 15, 2005 Canada Yes 4 months 

March 24, 2005 July 21, 2005 Italy No 3 months, 27 days 

April 8, 2005 August 16, 2005 Switzerland No 4 months, 8 days 

Fiscal year 2006 

November 11, 2005 February 21, 2006 India No 3 months, 10 days 

February 8, 2006 April 28, 2006 Croatia No 2 months, 20 days 

February 25, 2006 June 15, 2006 India No 3 months, 21 days 

September 13, 2006 February 23, 2007 Canada No 5 months, 10 days 

Fiscal year 2007 

April 25, 2007aSeptember 6, 2007 China Yesb4 months, 12 days 

August 30, 2007 October 31, 2007 China Yes 2 months, 1 day 

August 2, 2007 January 14, 2008 Japan No 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. 

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 

Page 32 GAO-08-970 FDA Foreign Drug Inspection
profile;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.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.49 These previous inspections had 

 47An 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. 

48One 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. 

49In 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. 

Page 33 GAO-08-970 FDA Foreign Drug Inspection
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.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.

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 

 50None 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. 

51As of July 2008, the corrective actions of establishments referenced in the other four

warning letters had not been accepted by FDA. 

Page 34 GAO-08-970 FDA Foreign Drug Inspection
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

Source: GAO analysis of FDA documents.

Corrective 

action deemed 

adequate 

through FDA 

inspection

Corrective 

action deemed 

adequate 

through private 

consultant 

inspection

Corrective 

action deemed 

adequate 

through

document

review

Establishment’s

corrective 

actions not yet 

deemed 

adequate

Establishment’s

corrective 

actions deemed 

adequate

15 warning

letters issued 

to foreign 

establishments

4

11

7

4 3 1

15 warning letters

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 

Page 35 GAO-08-970 FDA Foreign Drug Inspection
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. 

Page 36 GAO-08-970 FDA Foreign Drug Inspection
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. 

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.52

Challenges Unique to 

Foreign Inspections 

Influence the Manner 

in which FDA 

Conducts Such 

Inspections 

Inspections of Foreign 

Drug Establishments Pose 

Unique Challenges to FDA 

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 

 52These 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.

Page 37 GAO-08-970 FDA Foreign Drug Inspection
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.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.

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

 53Travel warnings are issued when the Department of State recommends that Americans 

avoid travel to a certain country. 

54These 10 countries were Colombia, the Democratic Republic of the Congo, Haiti, 

Indonesia, Israel, Kenya, Nigeria, Pakistan, the Philippines, and Saudi Arabia. 

Page 38 GAO-08-970 FDA Foreign Drug Inspection
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.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 

 55See Food and Drug Administration, Revitalizing ORA: Protecting the Public Health

Together In a Changing World (Rockville, Md.: January 2008).

Page 39 GAO-08-970 FDA Foreign Drug Inspection
us, however, that it may recruit investigators specializing in other FDAregulated 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 

Page 40 GAO-08-970 FDA Foreign Drug Inspection
conducting inspections of foreign establishments.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. 

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. 

Conclusions 

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 

 56For additional information about FDA’s agreements with foreign regulatory bodies, see 

GAO-08-701T. 

Page 41 GAO-08-970 FDA Foreign Drug Inspection
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. 

Page 42 GAO-08-970 FDA Foreign Drug Inspection
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. 

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. 

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. 

Recommendations for 

Executive Actions 

Agency Comments 

and Our Evaluation 

Page 43 GAO-08-970 FDA Foreign Drug Inspection
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 http://www.gao.gov. 

Page 44 GAO-08-970 FDA Foreign Drug Inspection
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. 

Marcia Crosse 

Director, Health Care 

Page 45 GAO-08-970 FDA Foreign Drug Inspection
Appendix I: Scope and Methodology Appendix I: Scope and Methodology 

To adress 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 

Page 46 GAO-08-970 FDA Foreign Drug Inspection
Appendix I: Scope and Methodology 

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, 2007.1

 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 

 1

GAO-08-224T, 15. 

Page 47 GAO-08-970 FDA Foreign Drug Inspection
Appendix I: Scope and Methodology 

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. 

Page 48 GAO-08-970 FDA Foreign Drug Inspection
Appendix II: Comments from the Department Appendix II: Comments from the Department of Health and Human Services 

of Health and Human Services 

Page 49 GAO-08-970 FDA Foreign Drug Inspection
Appendix II: Comments from the Department 

of Health and Human Services 

Page 50 GAO-08-970 FDA Foreign Drug Inspection
Appendix II: Comments from the Department 

of Health and Human Services 

Page 51 GAO-08-970 FDA Foreign Drug Inspection
Appendix III: GAO Contact and Staff Acknowledgments 

Page 52 GAO-08-970

Appendix III: GAO Contact and Staff 

Acknowledgments 

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

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. 

Acknowledgments 

FDA Foreign Drug Inspection
Related GAO Products 

Page 53 GAO-08-970

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. 

(290657) FDA Foreign Drug Inspection
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