Report to Congressional Requesters

United States Government Accountability Office

GAO

September 2005 PRESCRIPTION 

DRUGS 

Strategic Framework 

Would Promote 

Accountability and 

Enhance Efforts to 

Enforce the 

Prohibitions on 

Personal Importation 

GAO-05-372 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-05-372.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Richard Stana 

at (202) 512-8777 or StanaR@gao.gov. 

Highlights of GAO-05-372, a report to 

congressional requesters 

September 2005

PRESCRIPTION DRUGS 

Strategic Framework Would Promote 

Accountability and Enhance Efforts to 

Enforce the Prohibitions on Personal 

Importation 

The information currently available on the safety of illegally imported 

prescription drugs is very limited, and neither CBP nor FDA systematically 

collects data on the volume of these imports. Nevertheless, on the basis of 

their own observations and limited information they collected at some mail 

and carrier facilities, both CBP and FDA officials said that the volume of 

prescription drugs imported into the United States is substantial and 

increasing. FDA officials said that they cannot assure the public of the safety 

of drugs purchased from foreign sources outside the U.S. regulatory system. 

FDA has issued new procedures to standardize practices for selecting 

packages for inspection and making admissibility determinations. While 

these procedures may encourage uniform practices across mail facilities, 

packages containing prescription drugs continue to be released to the 

addressees. CBP has also implemented new procedures to interdict and 

destroy certain imported controlled substances, such as Valium. CBP 

officials said the new process is designed to improve their ability to quickly 

handle packages containing these drugs, but they did not know if the policy 

had affected overall volume because packages may not always be detected. 

We identified three factors that have complicated federal enforcement of 

laws prohibiting the personal importation of prescription drugs. First, 

volume has strained limited federal resources at the mail facilities. Second, 

Internet pharmacies can operate outside the U.S. regulatory system and 

evade federal law enforcement actions. Third, current law requires FDA to 

give addressees of packages containing unapproved imported drugs notice 

and the opportunity to provide evidence of admissibility regarding their 

imported items. FDA and HHS have testified before Congress that this 

process placed a burden on limited resources. In May 2001, FDA proposed to 

the HHS Secretary that this legal requirement be eliminated, but according to 

FDA and HHS officials, as of July 2005, the Secretary had not responded with 

a proposal. FDA officials stated that any legislative change might require 

consideration of such issues as whether to forgo an individual’s opportunity 

to provide evidence of the admissibility of the drug ordered. 

Prior federal task forces and working groups had taken steps to deal with 

Internet sales of prescription drugs since 1999, but these efforts did not 

position federal agencies to successfully address the influx of these drugs 

imported from foreign sources. Recently, CBP has organized a task force to 

coordinate federal agencies’ activities to enforce the laws prohibiting the 

personal importation of prescription drugs. The task force’s efforts appear to 

be steps in the right direction, but they could be enhanced by establishing a 

strategic framework to define the scope of the problem at mail and carrier 

facilities, determine resource needs, establish performance measures, and 

evaluate progress. Absent this framework, it will be difficult to oversee task 

force efforts; hold agencies accountable; and ensure ongoing, focused 

attention to the enforcement of the relevant laws. 

Consumers can be violating the law 

and possibly risking their health by 

purchasing imported prescription 

drugs over the Internet. U.S. 

Customs and Border Protection 

(CBP), in the Department of 

Homeland Security (DHS), and the 

Food and Drug Administration 

(FDA), in the Department of Health 

and Human Services (HHS), work 

with other federal agencies at 

international mail and express 

carrier facilities to inspect for and 

interdict prescription drugs 

illegally imported for personal use. 

This report addresses (1) available 

data about the volume and safety of

personal prescription drug imports, 

(2) the procedures and practices 

used to inspect and interdict 

prescription drugs unapproved for 

import, (3) factors affecting federal 

efforts to enforce the laws 

governing prescription drugs 

imported for personal use, and (4) 

efforts federal agencies have taken 

to coordinate enforcement efforts. 

What GAO Recommends

GAO recommends that (1) CBP and 

other task force agencies develop a 

strategic framework to enhance 

their enforcement efforts and (2) 

HHS assess the effect of modifying 

the requirement that FDA notify 

addressees about unapproved drug 

imports. DHS and most task force 

agencies generally supported the 

idea of a strategic framework. HHS 

agreed to assess modifying the 

notification requirement, and the 

U.S. Postal Service said that any 

proposal should consider 

international postal obligations. 
Page i GAO-05-372 Prescription Drugs 

Letter 1

Results in Brief 3 

Background 8 

Volume of Prescription Drug Imports Is Unknown but Believed to 

Be Substantial, and the Safety of These Drug Imports Is Not 

Assured 11 

Some Targeted Packages Containing Prescription Drugs Are 

Interdicted, but Many Others Are Not 18 

Factors beyond Inspection and Interdiction Complicate Efforts to 

Enforce the Prohibitions on Personal Importation of 

Prescription Drugs 27 

Federal Efforts to Coordinate Law Enforcement Activities Could 

Benefit from a Strategic Framework 34 

Conclusions 42 

Recommendations 43 

Agency Comments and Our Evaluation 44 

Appendix I Objectives, Scope, and Methodology 48 

Appendix II General Description of the Controlled Substance 

Products I through V 52 

Appendix III Federal Agencies Work with Credit Card 

Organizations to Enforce Prohibitions on 

Prescription Drugs 53 

Investigations of Credit Card Purchases of Prescription Drugs 

Imported from Internet Pharmacies Can Be Complicated by 

Legal and Practical Considerations 53 

Federal Enforcement Agencies and Credit Card Associations Have 

Discussed Credit Card Enforcement Issues 58 

Appendix IV Comments from the Department of Homeland 

Security 60 

Contents 
Page ii GAO-05-372 Prescription Drugs 

Appendix V Comments from the Department of Justice, Drug 

Enforcement Administration 62 

Appendix VI Comments from the Department of Health and Human 

Services 64 

Appendix VII Comments from the Office of National Drug Control 

Policy 68 

Appendix VIII Comments from the U.S. Postal Service 69 

Appendix IX GAO Contact and Acknowledgments 70 

Table 

Table 1: General Description of Controlled Substances, Schedules 

I-V 52 

Figures 

Figure 1: Acts Governing the Personal Importation of Prescription 

Drugs into the United States and FDA, DEA, and CBP 

Roles Implementing Those Acts 10 

Figure 2: Results of CBP’s Laboratory Analysis of 180 Imported 

Drugs 15 

Figure 3: Drugs Sent without Labeling 16 

Figure 4: Bins Containing Packages of Suspected Prescription 

Drugs Being Held for FDA Review and Possible 

Inspection 20 

Figure 5: Abandoned Schedule III through V Controlled Substances 

Awaiting Destruction 24 

Figure 6: Interagency Pharmaceutical Task Force and Working 

Group Goals 36 
Page iii GAO-05-372 Prescription Drugs 

Abbreviations 

CBP Customs and Border Protection 

DEA Drug Enforcement Administration 

DHS Department of Homeland Security 

FDA Food and Drug Administration 

HHS Health and Human Services 

ICE Immigration and Customs Enforcement 

ONDCP Office of Drug Control Policy 

UPU Universal Postal Union 

USPS U.S. Postal Service 

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Page 1 GAO-05-372 Prescription Drugs 

September 8, 2005 

The Honorable Norman Coleman 

Chairman 

Permanent Subcommittee on Investigations 

Committee on Homeland Security and Governmental Affairs 

United States Senate 

The Honorable John D. Dingell 

Ranking Minority Member 

Committee on Energy and Commerce 

House of Representatives 

The first Internet pharmacies began online service in early 1999. Since that 

time, American consumers have been increasingly drawn to the 

convenience, privacy, and cost advantages that might be accrued by 

purchasing prescription drugs over the Internet. Individual consumers can 

order over the Internet a range of prescription drugs from controlled 

substances,1

 such as Valium, to noncontrolled prescription drugs intended 

to improve an individual’s quality of life by addressing non-life-threatening 

conditions such as baldness, impotence, and obesity. Internet pharmacies, 

particularly those pharmacies located in foreign countries, can operate 

outside the U.S. regulatory process, which requires a licensed pharmacist 

to dispense a prescription drug when presented with a valid prescription 

from a licensed health care professional. According to FDA, there are 

legitimate Internet pharmacies that comply with applicable federal and 

state laws. However, the broad reach and access of the Internet allows the 

easy creation of online pharmacies that can anonymously traverse state 

and national borders to prescribe, sell, and dispense prescription drugs 

without complying with traditional state or federal regulatory safeguards. 

 1

The Controlled Substances Act establishes a classification structure for certain drugs and 

chemicals that are designated as controlled substances. This structure places such 

substances in one of five schedules, based on their medicinal value, risk to public health, 

and potential for abuse and addiction, among other factors. Schedule I is reserved for the 

most dangerous drugs that have no currently accepted medical use, such as heroin and 

ecstasy. Controlled substances that may be prescribed by a physician or used in medical 

facilities fall in schedules II through V (e.g., Valium). For certain law enforcement 

purposes, however, schedule II drugs are treated more like schedule I drugs. See appendix 

II for a general description of the controlled substance schedules I-V. 

United States Government Accountability Office

Washington, DC 20548 
Page 2 GAO-05-372 Prescription Drugs 

Under current law, the importation of prescription drugs, both controlled 

and noncontrolled, for personal use is illegal, with few exceptions. 

However, in recent years, Congress and others have debated whether 

Americans should be allowed to purchase drugs from pharmacies located 

in foreign countries. Members of Congress have introduced various bills 

related to this issue. Proponents argue that American consumers should 

be allowed to import prescription drugs because drugs purchased from 

some foreign pharmacies are viewed as safe and more affordable. 

Opponents contend that drugs from unregulated sources are not proven to 

be safe and effective and could be harmful. In addition, some allege that 

packages of prescription drugs purchased on the Internet and imported for 

personal use could be bundled together and sold to others. Currently, 

consumers could be violating federal law, unknowingly or intentionally, by 

having drugs shipped, in effect, imported, into the United States through 

the international mail and private carriers. Two acts specifically regulate 

the importation of prescription drugs into the United States. That is, all 

prescription drugs offered for import must meet the requirements of the 

Federal Food, Drug, and Cosmetic Act, and those that are controlled 

substances also must meet the requirements of the Controlled Substances 

Import and Export Act. Prescription drugs imported for personal use 

generally do not meet these requirements. 

Several federal agencies have responsibility for regulating the importation 

of prescription drugs through the international mail and private carriers. 

They include the Department of Homeland Security’s (DHS) U.S. Customs 

and Border Protection (CBP), which can inspect international mail and 

packages for potentially illegal drugs entering the United States through 

the U.S. Postal Service’s (USPS) international mail facilities or private 

carriers; the Department of Health and Human Services’ (HHS) Food and 

Drug Administration (FDA), which is responsible for ensuring the safety, 

effectiveness, and quality of domestic and imported drugs; the Department 

of Justice’s Drug Enforcement Administration (DEA), which regulates 

controlled substances; and the Department of Homeland Security’s U.S. 

Immigration and Customs Enforcement (ICE), which has law enforcement 

responsibilities that include investigations of prescription drugs coming 

into the United States through the mail and express carriers. Also, the 

Office of National Drug Control Policy (ONDCP) formulates the nation’s 

drug control strategy and addresses policy issues concerning the illegal 

distribution of controlled substances, as its authority does not extend over 

noncontrolled substances. 

You expressed interest in learning how federal agencies are addressing the 

importation of prohibited prescription drugs through international mail 
Page 3 GAO-05-372 Prescription Drugs 

and carrier facilities. In this report, we address the following questions: 

(1) What do the available data show about the volume and safety of 

prescription drugs imported into the United States for personal use 

through the international mail and private carriers? (2) What procedures 

and practices are used at selected facilities to inspect and interdict 

prescription drugs unapproved for import? (3) What factors affect federal 

agency efforts to enforce the prohibition on prescription drug importation 

for personal use through international mail and carrier facilities? (4) What 

efforts have federal agencies undertaken to coordinate the enforcement of 

the prohibitions on personal importation of prescription drugs? 

To answer these questions, we reviewed current federal laws, available 

studies and reports on the importation of prescription drugs and 

controlled substances, CBP and FDA procedures and practices related to 

prescription drugs and controlled substance importation, and applicable 

importation volume and safety data. We conducted interviews with 

officials from CBP, FDA, DEA, USPS, ONDCP, and ICE, as well as 

representatives of MasterCard International and Visa U.S.A., Inc.2

 We 

visited five facilities: three international mail facilities located in 

California, Illinois, and New York and two carrier facilities located in Ohio 

(for the DHL Corporation) and Tennessee (for the FedEx Corporation). 

We selected these facilities to include those with a high volume of 

processed packages and wide geographic dispersion. At these locations, 

we observed inspection and interdiction practices; met with CBP and FDA 

management, inspectors, and investigators; and reviewed relevant 

documents on inspection and interdiction procedures. At the international 

mail facilities, we also met with officials from USPS regarding mail 

handling and processing procedures. The information from our site visits 

is limited to the 3 international mail facilities and 2 carrier facilities and is 

not generalizable to all 14 international mail facilities and 29 carrier 

facilities. We conducted our review from April 2004 to August 2005 in 

accordance with generally accepted government auditing standards. 

Appendix I provides more details about our scope and methodology. 

The information currently available on the safety of illegally imported 

prescription drugs is very limited, and neither CBP nor FDA systematically 

 2

Representatives of these two card credit associations testified at congressional hearings in 

July 2004 on matters related to the illegal importation of prescription drugs. In addition, a 

DEA official identified these associations as the organizations used by the majority of 

Internet drug sites. 

Results in Brief 
Page 4 GAO-05-372 Prescription Drugs 

collects data on the volume of these imports. Nevertheless, on the basis of 

their own observations and limited information they have collected at 

some mail and carrier facilities, both CBP and FDA officials said the 

volume of prescription drugs imported into the United States is 

substantial. For example, a December 2004 HHS report states that 

approximately 10 million packages containing prescription drugs enter the 

United States annually from all over the world. However, this estimate was 

partially based on extrapolations from limited FDA observations at 

international mail branch facilities. Without reliable estimates of the 

volume of importation of prescription drugs, federal agencies cannot 

determine the full scope of the importation issue, which is of particular 

concern because of access to potentially unsafe or risky drugs, including 

highly addictive controlled substances. With regard to safety, the FDA 

officials told us that they cannot assure the public of the safety and quality 

of drugs purchased from foreign sources that are largely outside the U.S. 

regulatory system. Consistent with these concerns, in June 2004, we 

reported that a sample of drugs purchased from some foreign-based 

Internet pharmacies posed safety risks for consumers. 3

 Specifically, we 

identified several problems associated with the handling, FDA approval 

status, and authenticity of 21 prescription drug samples we purchased 

from Internet pharmacies located in several foreign countries—Argentina, 

Costa Rica, Fiji, Mexico, India, Pakistan, the Philippines, Spain, Thailand, 

and Turkey. We found fewer problems among 47 other samples from U.S. 

and Canadian Internet pharmacies, although most of the drugs obtained 

from Canada were unapproved for the U.S. market. 

Practices used at the mail and carrier facilities we visited to inspect 

packages and interdict prohibited prescription drugs are evolving based in 

part on procedures FDA issued in August 2004 to standardize the selection 

of packages by CBP and the forwarding of them to FDA for inspection. 

These procedures include guidelines for inspecting the packages and 

making admissibility determinations. However, under the current 

procedures, similar to previous practices, many packages that contain 

prescription drugs prohibited for import are released to the addressee. For 

example, packages that contain prescription drugs prohibited for import 

that have not been processed by FDA inspectors at the end of each 

workday are returned by FDA for delivery by USPS to the recipient. Also, 

 3

See GAO, Internet Pharmacies: Some Pose Safety Risks for Consumers, GAO-04-820

(Washington, D.C.: June 17, 2004) and GAO, Internet Pharmacies: Some Pose Safety Risks 

for Consumers and Are Unreliable in Their Business Practices, GAO-04-888T

(Washington, D.C.: June 17, 2004). 
Page 5 GAO-05-372 Prescription Drugs 

if CBP does not select packages containing prescription drugs for 

inspection, the packages can bypass FDA review. In our July 2004 

testimony, we stated that FDA officials acknowledged that tens of 

thousands of packages, containing drug products that may violate current 

laws and pose health risks to consumers, have been released.4

 CBP has 

also implemented a new policy to expedite its handling of schedule III 

through V controlled substances imported as prescription drugs. Until 

recently, CBP was required to seize and begin forfeiture proceedings on 

packages of such controlled substances it detected—a process CBP 

considered to be time-consuming given the volume of controlled 

substances entering some facilities. In September 2004, CBP determined it 

could treat schedule III through V controlled substances as abandoned 

property, thereby (1) reducing the amount of information needed to 

process the drugs and (2) enabling CBP to destroy the drugs 30 days after 

notifying the addressee that the drugs would be treated as abandoned 

property if not claimed. According to CBP officials, treating imported 

prescription drugs that are controlled substances as abandoned property 

has enabled them to process these packages faster. However, they 

acknowledge that they do not know the extent to which the policy is 

having an effect on the volume of these drugs entering the country 

because packages can still bypass inspection. 

We identified three factors beyond inspection and interdiction issues that 

have complicated federal efforts to enforce laws prohibiting the 

importation of prescription drugs for personal use. First, the volume of 

importation has strained federal resources at the mail and carrier facilities. 

According to officials we contacted, agencies have multiple priorities, 

which can constrain the resources they are able to allocate to the 

inspection and interdiction of prescription drugs and controlled 

substances imported through mail and carrier facilities. Second, the 

attributes of Internet pharmacies have posed challenges to law 

enforcement efforts for multiple reasons. For example, according to DEA 

officials, foreign-based operations operate outside the U.S. regulatory 

system and may be located in countries where some drugs, including 

controlled substances, are legal; thus, U.S. law enforcement agencies have 

been challenged in obtaining assistance from their foreign counterparts in 

investigations. Internet sites can also be installed, moved, or removed in a 

short period of time, making it difficult for law enforcement agencies to 

 4

See GAO, Prescription Drugs: Preliminary Observations on Efforts to Enforce the 

Prohibitions on Personal Importation, GAO-04-839T (Washington, D.C.: July 22, 2004). 
Page 6 GAO-05-372 Prescription Drugs 

identify, track, monitor, or shut down those sites that operate illegally. 

Additionally, legal and practical considerations can limit the nature and 

extent to which commercial firms (e.g., Internet providers and credit card 

organizations) can assist in federal law enforcement actions. Third, the 

notification process in current law requires FDA to hold packages 

containing items that appear unapproved for import and give the 

addressee the opportunity to provide evidence of admissibility. FDA 

officials told us that this notification process is time-consuming—it can 

take up to 30 days per import—and can hinder their ability to quickly 

process packages containing potentially unapproved prescription drugs. 

FDA and the Secretary of Health and Human Services have expressed 

concerns about this process during testimony before Congress. Also, in a 

May 2001 correspondence to the Secretary of HHS, FDA proposed, among 

other things, that the notification requirement be eliminated. FDA noted 

that this change would likely require legislation, but as of July 2005, 

according to an HHS official and FDA officials, the Secretary had not 

responded with a legislative proposal to change FDA’s notification 

requirement. FDA officials said that any legislative change might 

necessitate consideration of some complicated issues, including whether 

the government would want to forgo an individual’s opportunity to provide 

evidence of admissibility for the drug(s) they ordered, or what imported 

prescription drugs and other imported products within FDA’s jurisdiction 

should be covered by the new law. In addition, USPS indicated that any 

discussion of options to expedite the processing and disposition of 

prescription drugs should consider international postal obligations. 

CBP has organized a task force to coordinate the activities of federal 

agencies responsible for enforcing laws prohibiting the personal 

importation of prescription drugs. Among other things, the task force has 

performed joint operations to gather data on the type and source of 

unapproved drugs entering international mail facilities and developed 

public service campaigns to inform the public about the risks of buying 

prescription drugs from Internet providers in foreign countries. Although 

the task force appears to be a step in the right direction, efforts to address 

many of the challenges facing these agencies could be further enhanced if 

the task force established a strategic framework to promote accountability 

and guide resource and policy decisions. Specifically, the task force may 

be missing opportunities to further enhance its efforts because it has not 

defined the scope of the problem (i.e., it has not estimated the volume of 

imported prescription drugs entering specific international mail and 

carrier facilities), established milestones and performance measures to 

gauge results, and determined necessary resources and investments while 

balancing risk reduction with costs and considering task force members’ 
Page 7 GAO-05-372 Prescription Drugs 

other law enforcement priorities. Our past work has shown that a strategic 

framework that includes these key elements, among others, is particularly 

useful in addressing problems, such as prescription drug importation, that 

are national in scope and involve multiple agencies with varying 

jurisdictions. Without such a strategic framework, it will be difficult for 

agency officials and congressional decision makers to oversee the overall 

federal effort, hold agencies accountable for their individual efforts, adjust 

to changing conditions, and ensure consistent and focused attention to the 

enforcement of prescription drug importation laws. 

To help ensure the government maximizes its ability to enforce laws 

governing the personal importation of prescription drugs, we recommend 

that the CBP Commissioner, in concert with other agencies responsible for 

enforcing these laws, develop and implement a strategic framework that, 

at a minimum, includes establishing an approach to more reliably estimate 

the volume of prohibited prescription drugs imported through 

international mail and carrier facilities; determine resource needs and 

target resources based on priorities; establish performance measures and 

milestones; and evaluate progress, identify barriers to achieving goals, and 

suggest modifications. Also, in view of the FDA’s continuing concern 

about the statutory notification requirement and its impact on 

enforcement, we also recommend that the Secretary of HHS assess the 

ramifications of removing or modifying the requirement, report on the 

results of this assessment, and, if appropriate, recommend changes to 

Congress. 

DEA and ONDCP generally agreed with our recommendation that the CBP 

task force develop a strategic framework. DEA agreed that such a 

framework needs to be flexible to allow for changing conditions and said 

DEA will, in concert with other task force agencies, support the CBP 

Commissioner’s strategic framework for the interagency task force. DHS 

generally agreed with the contents of our report and said that CBP is 

convening a task force meeting to discuss our recommendation. 

While generally concurring with our recommendation for a strategic 

framework, HHS questioned the need to include an approach for 

estimating the volume of unapproved drugs entering the country, because 

it believed its current estimates are valid. HHS also said our statement that 

the task force agencies could develop statistically valid volume estimates 

and realistic risk-based estimates of the number of staff needed to 

interdict parcels at mail facilities did not recognize FDA’s current level of 

effort at these facilities relative to its competing priorities. We believe that 

developing more systematic and reliable volume estimates might position 
Page 8 GAO-05-372 Prescription Drugs 

agencies to better define the scope of the problem so that decision makers 

can make informed choices about resources, especially in light of 

competing priorities. Regarding our recommendation to assess the 

ramifications of removing or modifying FDA’s statutorily required 

notification process, HHS generally agreed and stated that it intended to 

pursue an updated assessment. 

USPS did not state whether it concurred with our recommendations, but it 

noted that discussions of options to expedite the processing and 

disposition of prescription drugs must consider international postal 

obligations. 

All international mail and packages entering the United States through the 

U.S. Postal Service and private carriers are subject to potential CBP 

inspection at the 14 USPS international mail facilities and 29 express 

consignment carrier facilities operated by private carriers located around 

the country. CBP inspectors can target certain packages for inspection or 

randomly select packages for inspection. CBP inspects for, among other 

things, illegally imported controlled substances, contraband, and items—

like personal shipments of noncontrolled prescription drugs—that may be 

inadmissible. CBP inspections can include examining the outer envelope 

of the package, using X-ray detectors, or opening the package to physically 

inspect the contents. Each year the international mail and carrier facilities 

process hundreds of millions of pieces of mail and packages. Among these 

items are prescription drugs ordered by consumers over the Internet, the 

importation of which is prohibited under current law, with few exceptions. 

Two acts—the Federal Food, Drug, and Cosmetic Act and the Controlled 

Substances Import and Export Act—specifically regulate the importation 

of prescription drugs into the United States. Under the Federal Food, 

Drug, and Cosmetic Act, as amended, FDA is responsible for ensuring the 

safety, effectiveness, and quality of domestic and imported drugs and may 

refuse to admit into the United States any drug that appears to be 

adulterated, misbranded, or unapproved for the U.S. market as defined in 

the act.5

 Under the act and implementing regulations, this includes foreign 

versions of FDA-approved drugs if, for example, neither the foreign 

 5

An unapproved drug includes one that has not been demonstrated to be safe and effective 

and for which the manufacturing facility, methods, and controls have not been shown to 

meet FDA standards. Failure to meet other statutory and regulatory standards relating to 

labeling, handling, and packaging may result in a drug being considered adulterated or 

misbranded. See 21 U.S.C. §§ 351, 352, 355. 

Background 
Page 9 GAO-05-372 Prescription Drugs 

manufacturing facility nor the manufacturing methods and controls were 

reviewed by FDA for compliance with U.S. statutory and regulatory 

standards. The act also prohibits reimportation of a prescription drug 

manufactured in the United States by anyone other than the original 

manufacturer of that drug. According to FDA, prescription drugs imported 

by individual consumers typically fall into one of these prohibited 

categories. However, FDA has established a policy that allows local FDA 

officials to use their discretion to not interdict personal prescription drug 

imports that do not contain controlled substances under specified 

circumstances, such as importing a small quantity for treatment of a 

serious condition, generally not more than a 90-day supply of a drug not 

available domestically.6

 The importation of prohibited foreign versions of 

prescription drugs like Viagra (an erectile dysfunction drug) or Propecia (a 

hair loss drug), for example, would not qualify under the personal 

importation policy because approved versions are readily available in the 

United States. 

In addition, the Controlled Substances Import and Export Act, among 

other things, generally prohibits personal importation of those 

prescription drugs that are controlled substances, such as Valium. (See 

app. II for a general description of controlled substances.) Under the act, 

shipment of controlled substances to a purchaser in the United States 

from another country is only permitted if the purchaser is registered with 

DEA as an importer and is in compliance with the Controlled Substances 

Import and Export Act and DEA requirements. As outlined in the act, it 

would be difficult, if not impossible, for an individual consumer seeking to 

import a controlled substance for personal use to meet the standards for 

registration and related requirements.7

 Figure 1 illustrates the two acts that 

 6

According to the policy, other conditions should be met as well, such as (1) provision of 

the name and address of the doctor licensed in the United States responsible for the 

importer’s treatment with the product or evidence that the product is for continuation of 

treatment begun in a foreign country and (2) the absence of any known commercialization 

or promotion to persons residing in the United States by those involved in the distribution 

of the product at issue. Alternatively, in the case of a drug that is not for a serious 

condition, the policy also permits FDA officials to use their discretion to allow importation 

of that drug if the intended use is identified and the product is not known to represent a 

significant health risk. A complete description of FDA’s personal importation policy can be 

found in chapter 9 of FDA’s Regulatory Procedures Manual, which is available on the 

agency’s Web site. 

7

The act and implementing regulations permit an individual traveler under certain 

circumstances to carry a personal use quantity of a controlled substance (except a 

substance in schedule I) across the U.S. border, but they do not make a similar exception 

for importation by mail or private carrier. 
Page 10 GAO-05-372 Prescription Drugs 

specifically govern the importation of prescription drugs into the United 

States. It also presents the roles of FDA, DEA, and CBP in implementing 

those acts. 

Figure 1: Acts Governing the Personal Importation of Prescription Drugs into the United States and FDA, DEA, and CBP Roles 

Implementing Those Acts 

CBP is to seize illegally imported controlled substances it detects on 

behalf of DEA.8

 CBP may take steps to destroy the seized and forfeited 

substance or turn the seized substance over to other federal law 

enforcement agencies for further investigation.9

 CBP is to turn over 

packages suspected of containing prescription drugs that are not 

controlled substances to FDA.10 FDA investigators may inspect such 

 8

See 19 U.S.C. § 1595a(c)(1)(B); 19 C.F.R. §§ 162.23, 145.59, 145.58, 12.36. Controlled 

substances in schedules I and II are subject to summary forfeiture without notice, but those 

in schedule III through V are not. (See app. II for general description of controlled 

substances schedules I through V.) 

9

See 19 C.F.R. §§ 162.31, 162.32, 162.45, 162.45a, 162.46, 162.47, 162.63. 

10See 21 U.S.C. § 381(a); 19 C.F.R. §§ 12.1(a), 145.57; see also Chapter 9 of FDA’s 

Regulatory Procedures Manual, Subchapter Coverage of Personal Importations, “Mail 

Shipments” http://www.fda.gov/ora/compliance_ref/rpm_new2/ch9pers.html. 

Prohibits importation of any drug that 

appears to be adulterated, misbranded, or 

unapproved and reimportation of a drug 

manufactured in the United States by anyone 

other than the original manufacturer

U.S. Customs and Border Protection 

receives international mail and 

packages for possible inspection.

The Food and Drug Administration 

may inspect and hold prescription 

drugs that appear adulterated, 

misbranded, or unapproved, but 

must notify and allow addressee 

opportunity to present evidence as 

to why drug should be admitted 

into the United States.

U.S. Customs and Border Protection 

turns over prescription drugs 

imported for personal use that are 

not controlled substances.

On behalf of the Drug Enforcement 

Administration, U.S. Customs and 

Border Protection is to seize illegally 

imported controlled substances.

Federal Food, Drug,

and Cosmetic Act

FDA

Source: GAO analysis of 19 U.S.C. § 1595a(c); 21 U.S.C. §§ 381, 956, 957; U.S. Food and Drug Administration, Regulatory Procedures 

 Manual, chapter 9, subchapter: Coverage of Personal Importations.

CBP for

DEA

Prohibits importation of controlled substances by 

persons other than those registered with the Drug 

Enforcement Administration

Controlled Substances

Import and Export Act

Mail

suspected of

containing a

prescription

drug

?

Not a controlled substance Controlled substance
Page 11 GAO-05-372 Prescription Drugs 

packages and hold those that appear to be adulterated, misbranded, or 

unapproved, but must notify the addressee and allow that individual the 

opportunity to present evidence as to why the drug should be admitted 

into the United States.11 If the addressee does not provide evidence that 

overcomes the appearance of inadmissibility, then the item is refused 

admission and returned to the sender. 

Investigations that may arise from CBP and FDA inspections may fall 

within the jurisdiction of other federal agencies. DEA, ICE, and FDA 

investigators have related law enforcement responsibilities and may 

engage in investigations stemming from the discovery of illegally imported 

prescription drugs. Although USPS’s Inspection Service does not have the 

authority, without a federal search warrant, to open packages suspected of 

containing illegal drugs, it may collaborate with other federal agencies in 

certain investigations. Also, ONDCP is responsible for formulating the 

nation’s drug control strategy and has general authority for addressing 

policy issues concerning the illegal distribution of controlled substances. 

ONDCP’s authority does not, however, include prescription drugs that are 

not controlled substances. 

CBP and FDA do not systematically collect data on the volume of 

prescription drugs and controlled substances they encounter at the mail 

and carrier facilities. On the basis of their own observations and limited 

information they obtained at selected mail and carrier facilities, CBP and 

FDA officials believe the volume of prescription drug importation into the 

United States is substantial and increasing. However, neither agency has 

developed reliable estimates of the number of prescription drugs imported 

into the country. Further, the available information shows that some 

imported prescription drugs can pose safety concerns. We reported in 

June 2004 that prescription drugs purchased from some foreign-based 

Internet pharmacies posed safety risks for consumers. FDA officials said 

that they cannot assure the public of the safety and quality of drugs 

purchased from foreign sources that are largely outside the U.S. regulatory 

system. Of particular concern is the access to highly addictive controlled 

substances, which can be imported by consumers of any age sometimes 

without a prescription or consultation with a physician. 

 11See 21 U.S.C. § 381(a); 21 CFR §1.94. 

Volume of 

Prescription Drug 

Imports Is Unknown 

but Believed to Be 

Substantial, and the 

Safety of These Drug 

Imports Is Not 

Assured 
Page 12 GAO-05-372 Prescription Drugs 

CBP and FDA do not systematically collect data on the volume of 

prescription drugs and controlled substances they encounter at the mail 

and carrier facilities. Without an accurate estimate of the volume of 

importation of prescription drugs, federal agencies cannot determine the 

full scope of the importation issue. Yet FDA officials have often testified 

regarding the large and steadily increasing volume of packages containing 

prohibited prescription drugs entering the United States through the 

international mail and carrier facilities. CBP and FDA officials have said 

that in recent years they have observed increasingly more packages 

containing prescription drugs being imported through the mail facilities. 

However, neither agency has complete data to estimate volume of 

importation. For example, a CBP official recently testified that the agency 

did not have data on the total number of packages containing imported 

controlled substances. A CBP official at a mail facility told us that to 

determine the total volume of prescription drug importation would require 

that the CBP personnel inspect each mail item—which they currently do 

not do, in part because mail from certain countries bypasses inspection—

and tally those that were suspected of containing prescription drugs. This 

official said that he did not have the resources at his facility for such an 

undertaking. In addition, neither CBP nor FDA tracked the number of 

packages suspected of containing prescription drugs that were held for 

FDA review. FDA officials told us that CBP and FDA currently have no 

mechanism for keeping an accurate count of the volume of illegally 

imported drugs, because of the large volume of packages arriving daily 

through the international mail and carriers. Furthermore, FDA officials 

told us that FDA did not routinely track items that contained prescription 

drugs potentially prohibited for import that they released and returned for 

delivery to the recipient. However, they said that FDA had begun gathering 

from the field information on the imported packages it handles, but as of 

July 2005, this effort was still being refined. 

CBP and FDA, in coordination with other federal agencies, have 

conducted special operations to gain insight regarding the volume of 

imported prescription drugs entering through selected mail facilities. 

Generally, these were onetime, targeted efforts to identify and tally the 

packages containing prescription drugs imported through a particular 

facility during a certain time period and to generate information for 

possible investigation. The limited data collected have shown wide 

variations in volume. For example, CBP officials at one mail facility 

estimated that approximately 3,300 packages containing prescription 

drugs entered the facility in 1 week. CBP officials at another mail facility 

estimated that 4,300 packages containing prescription drugs entered the 

facility in 1 day. While these data provide some insight regarding the 

CBP and FDA Do Not 

Know the Full Scope of 

Prohibited Prescription 

Drug Importation, but 

Believe It to Be Substantial 
Page 13 GAO-05-372 Prescription Drugs 

number of packages containing prescription drugs at a selected mail 

facility during a certain time period, the data are not representative of 

other time periods or projectable to other facilities. 

Debate continues over the estimated volume of prescription drugs 

entering the United States through mail and express carrier facilities. 

During congressional hearings over the past 4 years, FDA officials, among 

others, have presented estimates of the volume of imported prescription 

drugs ranging from 2 million to 20 million packages in a given year. Each 

estimate has its limitations; for example, some estimates were 

extrapolations from data gathered at a single mail facility. More recently, a 

December 2004 HHS report stated that approximately 10 million packages 

containing prescription drugs enter the United States—nearly 5 million 

packages from Canada and another 5 million mail packages from other 

countries.12 However, these estimates also have limitations, being partially 

based on extrapolations from limited FDA observations at international 

mail branch facilities. Specifically, FDA officials told us that FDA 

developed its estimate for Canadian drugs entering the country using (1) 

IMS Health13 estimates that 12 million prescriptions sold from Canadian 

pharmacies were imported into the United States in 200314 and (2) FDA’s 

experience during special operations at various locations from which it 

concluded that there appeared to be about 2.5 prescriptions in each 

package. According to FDA officials, the estimate for other countries was 

an extrapolation using the estimated 5 million packages from Canada in 

conjunction with FDA’s observations, likewise made during special 

operations, that 50 percent of the mail packages enter from countries 

other than Canada. 

FDA officials have said that they cannot provide assurance to the public 

regarding the safety and quality of drugs purchased from foreign sources, 

which are largely outside of their regulatory system. Additionally, FDA 

officials said that consumers who purchase prescription drugs from 

 12HHS Task Force on Drug Importation, Report on Prescription Drug Importation, 

Department of Health and Human Services, December 2004. 

13IMS Health is a management consulting firm that provides information to pharmaceutical 

and health care industries. It operates in more than 100 countries and receives data from 

data suppliers around the world. 

14FDA officials stated that while IMS’s survey of pharmacies was not 100 percent 

comprehensive, the data were adjusted for the pharmacies not included in its survey. 

Safety of Prescription Drug 

Imports Is Not Assured 
Page 14 GAO-05-372 Prescription Drugs 

foreign-based Internet pharmacies are at risk of not fully knowing the 

safety or quality of what they are importing. They further said that while 

some consumers may purchase genuine products, others may 

unknowingly purchase counterfeit products, expired drugs, or drugs that 

were improperly manufactured. 

CBP and FDA have done limited analysis of the imported prescription 

drugs identified during special operations, and the results have raised 

questions about the safety of some of the drugs. For example, during a 

special operation in 2003 to identify and assess counterfeit and potentially 

unsafe imported drugs at four mail facilities, CBP and FDA inspected 1,153 

packages that contained prescription drugs.15 According to a CBP report, 

1,019, or 88 percent, of the imported drug products were in violation of the 

Federal Food, Drug, and Cosmetic Act or the Controlled Substances 

Import and Export Act. Some of the drugs were foreign versions of U.S.-

approved drugs that are unapproved for import, including Lipitor (a 

cholesterol-lowering drug), Viagra, and Propecia. Other drugs never had 

FDA approval. For example, Taro-warfarin, an apparent unapproved 

version of Warfarin, which is used to prevent blood clotting, was imported 

from Canada. The drug raised safety concerns because its potency may 

vary depending on how it is manufactured, and it requires careful patient 

monitoring because it can cause life-threatening bleeding if not properly 

administered. A CBP laboratory analyzed 180 of the 1,153 drugs inspected, 

which showed that many of the imported drugs could pose safety risks. 

The drugs tested included some that were withdrawn from the U.S. market 

for safety reasons, animal drugs not approved for human use, and drugs 

that carry risks because they require careful dosing or initial screening. In 

addition, other drugs tested were found to contain controlled substances 

prohibited for import, and some of the drugs contained no active 

ingredients. Figure 2 illustrates the results of the CBP laboratory analysis. 

 15According to CBP officials, packages shipped through four mail facilities were examined 

over a 3-day period. Approximately 100 parcels (each of which may have contained 

multiple drug products) per day per facility were selected based upon their country of 

origin and CBP’s historical experience. 
Page 15 GAO-05-372 Prescription Drugs 

Figure 2: Results of CBP’s Laboratory Analysis of 180 Imported Drugs 

In a past review we found that prescription drugs ordered from some 

foreign-based Internet pharmacies posed safety risks for consumers. 

Specifically, in a June 2004 report, we identified several problems 

associated with the handling, FDA approval status, and authenticity of 

21 prescription drug samples we purchased from Internet pharmacies 

located in several foreign countries—Argentina, Costa Rica, Fiji, Mexico, 

India, Pakistan, the Philippines, Spain, Thailand, and Turkey.16 Our work 

showed that most of the drugs, all of which we received via consignment 

carrier shipment or the U.S. mail, were unapproved for the U.S. market 

because, for example, the labeling or the foreign manufacturing facility, 

methods, and controls were not reviewed by FDA. Of the 21 samples: 

• None included dispensing pharmacy labels that provided instructions for 

use, and only about one-third included warning information. 

• Thirteen displayed problems associated with the handling of the drug. For 

example, three samples that should have been shipped in a temperaturecontrolled environment arrived in envelopes without insulation, and five 

 16GAO-04-820 and GAO-04-888T. 

Drugs with no active 

ingredients

Drugs that have 

contained controlled 

substances 

prohibited for import

Drugs that were not 

FDA approved

67%

28%

5%

Source: GAO analysis of CBP information.
Page 16 GAO-05-372 Prescription Drugs 

samples contained tablets enclosed in punctured blister packs, potentially 

exposing them to damaging light or moisture. 

• Two were found to be counterfeit versions of the products we ordered. 

• Two had a significantly different chemical composition than that of the 

product we had ordered. 

We found fewer problems among 47 samples purchased from U.S. and 

Canadian Internet pharmacies. Although most of the drugs obtained from 

Canada were of the same chemical composition as that of their U.S. 

counterparts, most were unapproved for the U.S. market. We said that it 

was notable that we identified numerous problems among the samples we 

received despite the relatively small number of drugs we purchased, 

consistent with problems that had been recently identified by state and 

federal regulatory agencies. 

Similarly, during our current review, we observed that some prescription 

drugs imported through the mail and carrier facilities were not shipped in 

protective packages, including some wrapped in foil or in plastic bags. In 

addition to being shipped without containers, the drugs also lacked 

product identifications, directions for use, or warning labels. For some 

drugs, the origin and contents could not be immediately determined by 

CBP or FDA inspection. Figure 3 illustrates an example of drugs that were 

sent without labeling. 

Figure 3: Drugs Sent without Labeling 

Source: FDA.
Page 17 GAO-05-372 Prescription Drugs 

Federal agencies and professional medical and pharmacy associations 

have found that consumers, of any age, can obtain highly addictive 

controlled substances from Internet pharmacies, sometimes without a 

prescription or consultation with a physician. For example, a DEA official 

recently testified that Internet pharmacies that offer to sell controlled 

substances directly to consumers without a prescription and without 

requiring consultation with a physician can increase the possibility of 

addiction, access to counterfeit products, and adverse reactions to 

medications. According to the Office of National Drug Control Policy, 

Internet pharmacies that offer controlled substances bypass traditional 

regulations and established safeguards and expose consumers to 

potentially counterfeit, adulterated, and contaminated products. Both DEA 

and ONDCP have found that the easy availability of controlled substances 

directly to consumers over the Internet has significant implications for 

public health, given the opportunities for misuse and abuse of these 

addictive drugs. 

The American Medical Association recently testified that Internet 

pharmacies that offer controlled substances without requiring a 

prescription or consultation with a physician contribute to the growing 

availability and increased use of addictive drugs for nonmedical purposes. 

To demonstrate the ease with which controlled substances can be 

obtained via the Internet, the National Association of Boards of Pharmacy 

received prescription drugs from four different Internet pharmacies.17

From one of the Internet pharmacies, the association reported it received 

a shipment of Valium—a schedule IV controlled substance used to treat 

muscle spasm or anxiety—despite providing no prescription and the 

height and weight information for a small dog. The association also 

reported that 2 days after it received its shipment of 

30 tablets of Xanax—a schedule IV controlled substance used to treat 

anxiety—the Internet pharmacy sent daily refill reminders via electronic 

mail. 

 17In December 2003 and January 2004, the association ordered eight different drugs from 

five Web sites and received drugs from four of the sites. All of the drugs received were 

labeled in a foreign language. 

Highly Addictive Controlled 

Substances Widely Available 

via the Internet 
Page 18 GAO-05-372 Prescription Drugs 

In our July 2004 testimony, we reported that while some targeted packages 

were inspected and interdicted, many others either were not inspected and 

were released to the addressees or were released after being held for 

inspection. At the time, FDA officials said that because they were unable 

to process the volume of targeted packages, they released tens of 

thousands of packages containing drug products that may violate current 

prohibitions and could have posed a health risk to consumers. In August 

2004, FDA issued standard operating procedures to prioritize package 

selection, package examination, and admissibility determinations. While 

the new procedures may encourage uniform practices at the mail facilities, 

packages that contain potentially prohibited prescription drugs continue 

to be released to the addressee. Recently, CBP also issued a new policy for 

processing packages with controlled substances without using timeconsuming seizure and forfeiture procedures. While the policy may reduce 

processing time and encourage the interdiction of more controlled 

substances, CBP officials do not know whether the new policy has had an 

impact on the volume of prohibited prescription drug importation. 

In our July 2004 testimony, we reported that CBP and FDA officials at 

selected mail and carrier facilities used different practices and procedures 

to inspect and interdict packages that contain prescription drugs.18 While 

each of the facilities we visited targeted packages for inspection, the basis 

upon which packages were targeted could vary and was generally based 

on several factors, such as the inspector’s intuition and experience, 

whether the packages originated from suspect countries or companies, or 

were shipments to individuals. At that time, CBP officials told us that the 

factors could also include intelligence gained from prior seizures, 

headquarters, or other field locations. Specifically, officials at one facility 

we visited targeted packages on the basis of the country of origin. At this 

facility, FDA provided CBP with a list of seven countries to target, the 

composition of which changed periodically, and asked that CBP hold the 

packages they suspected of containing prescription drugs from those 

countries. Typically, CBP officials at this facility released packages to the 

addressee containing prescription drugs that were not from one of the 

targeted countries. 

 18See GAO, Prescription Drugs: Preliminary Observations on Efforts to Enforce the 

Prohibitions on Personal Importation, GAO-04-839T (Washington, D.C.: July 22, 2004). 

Some Targeted 

Packages Containing 

Prescription Drugs 

Are Interdicted, but 

Many Others Are Not 

New Procedures Should 

Encourage Uniform 

Practices, but They Still 

Allow Many Packages 

Containing Prescription 

Drugs to Be Released 
Page 19 GAO-05-372 Prescription Drugs 

Officials at another facility targeted packages based on whether the 

packages were suspected of containing a certain quantity of prescription 

drugs. At this facility, CBP officials held packages containing prescription 

drugs that appeared to exceed a 90-day supply—a violation of one of the 

criteria in FDA’s personal importation policy.19 If the package contained 

prescription drugs, including in some cases controlled substances, that 

appeared to be 90 pills or less, it was typically released. FDA officials at 

this facility told us that every week CBP turned over to FDA hundreds of 

packages that contained quantities of prescription drugs that appeared to 

exceed the 90-day supply. However, the FDA officials said that they were 

able to process a total of approximately 20 packages per day and, as a 

result, returned many of the packages for release to the addressee. FDA 

officials explained that 20 packages a day is an approximation because 

some packages can take longer than others to inspect, particularly if the 

packages contain many different types of drugs that need to be examined. 

According to FDA officials and data, in fiscal year 2004, FDA field 

personnel physically inspected approximately 20,800 packages containing 

prescription drugs entering the United States through the international 

mail facilities.20 Of the packages inspected, FDA’s data showed that 98 

percent were refused entry and marked returned to sender and the 

remaining, about 450, were released to the addressee. The FDA data 

indicate the number of packages physically inspected by FDA personnel 

and the results of that process; they do not specify the number of 

individual prescription drugs or smaller packages of drugs within a larger 

package. Most important, these data do not indicate the universe of 

packages of prescription drugs coming through the mail facilities. 

Figure 4 shows bins containing packages of suspected prescription drugs 

being held for FDA review and possible inspection at one mail facility. 

 19For a description of some of the other criteria in FDA’s personal importation policy, see 

footnote 6. 

20These data are collected in FDA’s OASIS database. According to FDA, information in 

OASIS is collected as an “entry,” which for international mail usually represents a single 

package. However, within each package, there may be more than one drug product. 
Page 20 GAO-05-372 Prescription Drugs 

Figure 4: Bins Containing Packages of Suspected Prescription Drugs Being Held 

for FDA Review and Possible Inspection 

In August 2004, FDA issued standard operating procedures that, according 

to FDA officials, have been adopted nationwide. According to FDA, the 

purpose of the new procedures was to “provide a standard operating 

environment for the prioritized selection, examination and admissibility 

determination of FDA-regulated pharmaceuticals imported into the United 

States via international mail.” Under the procedures, CBP personnel are to 

forward to FDA personnel any mail items, from FDA’s national list of 

targeted countries and based on local criteria,21 that appear to contain 

prescription drugs. The procedures outline how FDA personnel are to 

prioritize packages for inspection, inspect the packages, and make 

admissibility determinations. Deviations from the procedures must be 

requested by facility personnel and approved by FDA management. While 

the new procedures should encourage processing uniformity across 

facilities, many packages that contain prescription drugs are still released. 

 21Local criteria can include other targeted countries and additional intelligence. 

Source: GAO with permission of CBP and FDA.
Page 21 GAO-05-372 Prescription Drugs 

Specifically, according to the procedures, all packages forwarded by CBP 

but not processed by FDA inspectors at the end of each workday are to be 

returned for delivery by USPS to the recipient. However, according to the 

procedures, packages considered to represent a significant and immediate 

health hazard may be held over to the next day for processing. 

CBP and FDA officials at two facilities told us that the new procedures 

resulted in an increase in the number of packages CBP personnel refer to 

FDA. Officials at one facility estimated that CBP referrals have increased 

from approximately 500 to an average of 2,000 packages per day. The FDA 

officials noted that the procedures did not resolve the heavy volume of 

prescription drug importation or FDA’s ability to deal with the volume, nor 

were they designed to do so. While the packages that are not targeted are 

released without inspection, so are many packages that are targeted and 

referred to FDA personnel. At one facility, FDA officials estimated that 

each week they return without inspection 9,000 to 10,000 of the packages 

referred to them by CBP. They said these packages were given to USPS 

officials for delivery to the addressee. If this facility were to maintain that 

level of release, about half a million packages per year would be delivered 

to addressees. 

In our July 2004 testimony, we reported that CBP officials were to seize 

the illegally imported controlled substances they detected. However, at 

that time, some illegally imported controlled substances were not seized 

by CBP. For example, CBP officials at one mail facility told us that they 

experienced an increased volume of controlled substances and, in several 

months, had accumulated a backlog of over 40,700 packages containing 

schedule IV substances. To keep the drugs from entering U.S. commerce 

and to clear the backlog, a CPB official at the facility said that CBP’s 

headquarters office granted them permission to send most of the drugs 

back to the sender.22 CBP officials at another facility told us that certain 

controlled substances were a priority and seized when detected; priority 

substances included anabolic steroids (a category of schedule III drugs 

that promote muscle growth and potentially boost athletic performance), 

and gamma hydroxybutyrate (a schedule I drug that acts as a central 

nervous system depressant). At this facility, other controlled substances 

 22According to a CBP official, most of the drugs returned were schedule IV controlled 

substances. They said that a small number of the packages contained nonscheduled 

prescription drugs that were referred to FDA. Also, CBP seized a small number of items 

that did not have a return address. 

New Controlled 

Substances Policy May 

Improve Interdiction 

Efforts, but Impact on 

Importation Is Unclear 
Page 22 GAO-05-372 Prescription Drugs 

encountered that were not a priority and that were shipped in small 

amounts, less than a 90-day supply, could be released to the addressee. 

CBP officials at another facility we visited turned over packages they 

suspected of containing controlled substances in small amounts to FDA 

for processing. Neither returning an illegally imported controlled 

substance to the sender nor releasing it to the addressee is in accordance 

with federal law. 

CBP field personnel said they did not have the resources to seize all the 

controlled substances they detected. Officials said that the seizure process 

can be time-consuming, taking approximately 1 hour for each package 

containing controlled substances. According to CBP officials, when an 

item is seized, the inspector records the contents of each package—

including the type of drugs and the number of pills or vials in each 

package. If the substance is a schedule I or II controlled substance, it is to 

be summarily forfeited without notice, after seizure. However, if it is a 

schedule III through V controlled substance, CBP officials are to notify the 

addressee that the package was seized23 and give the addressee an 

opportunity to contest the forfeiture by providing evidence of the 

package’s admissibility and trying to claim the package at a forfeiture 

hearing.24

To address the seizure backlog and give CBP staff more flexibility in 

handling controlled substances, in September 2004, CBP implemented a 

national policy for processing controlled substances, schedule III through 

V, imported through the mail and carrier facilities. According to the policy, 

packages containing controlled substances should no longer be 

transferred to FDA for disposition, released to the addressee, or returned 

to the sender. CBP field personnel are to hold the packages containing 

controlled substances in schedules III through V as unclaimed or 

abandoned property as an alternative to a seizure.25 According to a CBP 

headquarters official, processing a controlled substance as abandoned 

property is a less arduous process because it requires less information be 

 23The seized package could also be submitted to ICE for possible investigation of the 

addressee and the sender. 

24Since schedule I and schedule II controlled substances are subject to summary forfeiture 

without notice, there is no opportunity to contest the forfeiture of these drugs. 

25Under the policy, unless accompanied by a valid DEA Import Permit or DEA Declaration, 

schedules I and II controlled substances are to be seized pursuant to 19 U.S.C § 

1595a(c)(1)(B) and processed in accordance with established seized asset procedures. 
Page 23 GAO-05-372 Prescription Drugs 

entered into a database than if the same property were to be seized. Once 

CBP deems the controlled substance to be unclaimed property, the 

addressee is notified that he or she has the option to voluntarily abandon 

the package or have the package seized. If the addressee voluntarily 

abandons the package or does not respond to the notification letter within 

30 days, the package will be eligible for immediate destruction. If the 

addressee chooses to have the package seized, there would be an 

opportunity to contest the forfeiture and claim the package, as described 

above. CBP also instituted an on-site data collection system at 

international mail and express carrier facilities to record schedule III 

through V controlled substances interdicted using this new process.26

From September 2004 to the end of June 2005, CBP reported that a total of 

approximately 61,700 packages of these substances were interdicted, 

about 61,500 at international mail facilities and 200 at express carrier 

facilities. 

Generally, CBP officials we interviewed told us that the recent policy 

improved their ability to quickly process the volume of schedule III 

through V controlled substances they detected. A CBP official at one 

facility said that the abandonment process is faster than the seizure 

process, as it requires much less paperwork. A CBP headquarters official 

told us that the abandonment process takes an inspector at a mail facility 

about 1 minute to process a package. He added that the new policy was 

intended to eliminate the backlog of schedule III through V controlled 

substances at the facilities. Figure 5 shows schedule III through V 

controlled substances that were abandoned during a 1-month period at 

one mail facility and awaiting destruction. 

 26CBP officials emphasized that these data only include schedule III through V controlled 

substances interdicted through its new process and do not include those schedule III 

through V controlled substances seized. According to a CBP headquarters official, the 

number of interdictions made using the controlled substance policy implemented 

September 1, 2004, refers to single packages, because these detentions are almost all 

personal use quantities. In contrast CBP seizure data for schedules III, IV, and V controlled 

substances are most likely commercial shipments and, therefore, could include multiple 

packages. 
Page 24 GAO-05-372 Prescription Drugs 

Figure 5: Abandoned Schedule III through V Controlled Substances Awaiting 

Destruction 

While the recent policy may have expedited processing, CBP officials in 

the field and in headquarters said that they do not know whether the new 

policy has had any impact on the volume of controlled substances illegally 

entering the country that reach the intended recipient. Generally, CBP 

officials do not know the extent of packages that contain controlled 

substances that are undetected and released. For example, CBP officials at 

one facility told us that they used historical data to determine the 

countries that are likely sources for controlled substances and target the 

mail from those countries. They do not know the volume of controlled 

substances contained in the mail from the nontargeted countries. A CBP 

official at another facility said that he believed the volume of controlled 

substances imported through the facility had begun to decrease but had no 
Page 25 GAO-05-372 Prescription Drugs 

data to support this claim. One CBP official at a carrier facility told us that 

because the express carrier environment is constantly changing with new 

routes, service areas, and increasing freight volume and because 

smuggling trends shift in response to past enforcement efforts, he could 

not ascertain the quantities of packages containing controlled substances 

that are undetected by CBP. 

Packages containing prescription drugs can also bypass FDA inspection at 

carrier facilities because of inaccurate information about the contents of 

the package. Unlike packages at mail facilities, packages arriving at carrier 

facilities we visited are preceded by manifests, which provide information 

from the shipper, including a description of the packages’ contents. While 

the shipments are en route, CBP and FDA officials are to review this 

information electronically and select packages they would like to inspect 

when the shipment arrives.27 FDA officials at two carrier facilities we 

visited told us they review the information for packages described as 

prescription drugs or with a related term, such as pharmaceuticals or 

medicine. CBP and FDA officials told us that there are no assurances that 

the shipper’s description of the contents is accurate. The FDA officials at 

the carrier facilities we visited told us that if a package contains a 

prescription drug but is inaccurately described, it would not likely be 

inspected by FDA personnel. 

 27According to FDA officials, express carrier facility personnel electronically enter 

information into a CBP database that automatically transfers relevant data to FDA’s OASIS 

database. For carrier facilities, FDA said that a data entry is an accounting vehicle that 

represents all products within a shipment. However, importers have the option to report a 

single shipment as more than one entry. For fiscal year 2004, approximately 45,000 

shipments containing prescription drugs entering the United States were reported by 

express carrier facilities and recorded in OASIS. FDA officials said that FDA field 

personnel primarily reviewed this information electronically but physically inspected some 

packages, with the number physically inspected varying by facility. Approximately 2,000 

were refused entry by FDA after physical inspection and marked return to sender. Almost 

43,000 were released to the addressee, usually after electronic review. However, FDA 

officials noted that the information on prescription drugs entered into OASIS at express 

carrier facilities could vary by carrier, site for the same carrier, CBP local criteria at a site, 

or local arrangements between FDA and CBP. Accordingly, it is difficult to determine from 

these data the proportion imported for personal use. Most important, these data do not 

indicate the universe of shipments of prescription drugs coming through the express 

carrier facilities. 

Packages Containing 

Prescription Drugs Can 

Bypass FDA Review at the 

Carrier Facilities 
Page 26 GAO-05-372 Prescription Drugs 

According to FDA officials, FDA field personnel are not continually on-site 

at the two carrier facilities we visited. At the FDA field office that has 

responsibility for inspecting packages at one carrier facility, we observed 

FDA field personnel reviewing electronic information regarding packages 

that were en route to the carrier facility. The official said that the field 

office has electronic information regarding an average of 400 packages per 

day available for review. If the shipper does not provide enough 

information about its package, FDA field personnel can request that the 

carrier detain the package until more information is provided 

electronically or until the FDA personnel can visit the facility to conduct a 

physical inspection of the package. The number of physical inspections at 

the facilities we visited varied depending on the number of packages 

electronically reviewed. FDA field personnel, responsible for inspection at 

the other carrier facility, reported that in September 2004 they 

electronically requested that an average of 20 packages per day be held at 

the facility for a physical inspection. However, on occasion when the FDA 

personnel went to the facility to conduct the inspection, the packages 

were unavailable because they could not be found, had been delivered to 

the recipient by the carrier, or had been returned to the shipper. According 

to FDA headquarters officials, since our visit, FDA field personnel may 

now be visiting the carrier facility on a more routine basis. 

In contrast, CBP inspectors are located on-site at the carrier facilities we 

visited. As a result, CBP personnel are able to inspect packages upon 

arrival of the shipment. In addition, according to CBP officials at the 

facility, CBP’s on-site presence allows the inspectors to conduct random 

inspections, on a routine basis, of packages as they are processed at the 

facility. Instead of relying solely on the information provided by the 

shipper, CBP personnel said they conduct random inspections, on a daily 

basis, as another means to identify items that may be unapproved for 

import. CBP officials told us that they conduct these inspections because 

the shipper’s information can be inaccurate. During our visit we observed 

the CBP personnel randomly inspect several hundred packages selected. 

During these random inspections, CBP inspectors told us that they often 

come across packages containing noncontrolled prescription drugs, which 

they will set aside for FDA inspectors. For example, during a random 

inspection, CBP officials found and held for FDA 13 packages containing a 

human growth hormone—prohibited from import—that were inaccurately 

described as glassware. In contrast, according to FDA field personnel with 

inspection responsibility at the two carrier facilities we visited, few 

random inspections of packages were performed and when they occurred 

they were typically part of a special operation. For example, an FDA field 
Page 27 GAO-05-372 Prescription Drugs 

official told us that FDA personnel planned to perform one random 

inspection effort per year. 

CBP officials told us that they would like to have FDA personnel on-site to 

improve coordination efforts. One CBP Port Director said that he would 

like to have FDA personnel on-site to share data, perform analysis to 

identify trends from CBP’s referrals, and be available to immediately 

review prescription drugs. A CBP headquarters official also said that it 

would be helpful if FDA personnel were on-site to enable CBP officials to 

confer with them to identify controlled substances that are not clearly 

labeled. FDA officials told us that because FDA personnel review 

information regarding the packages electronically, there was no advantage 

to being physically on-site. Further, they said the responsible district can 

supply personnel to physically work at a given carrier facility for field 

examinations on an as-needed basis. FDA officials also noted that FDA is 

not reimbursed by the carriers to maintain staff on-site. By contrast, 

private express carriers reimburse the federal government for the 

personnel and equipment costs of the CBP staff located on-site. FDA 

officials said that there is not a provision under current law that would 

enable carriers to reimburse FDA so that it could maintain an on-site 

presence. 

We identified three factors beyond inspection and interdiction that have 

complicated federal efforts to enforce the prohibitions on prescription 

drugs imported for personal use: (1) the volume of importation has 

strained limited federal resources; (2) Internet pharmacies, particularly 

foreign-based sites, can operate outside of the U.S. regulatory system for 

noncontrolled and controlled prescription drugs and can evade federal law 

enforcement actions; and (3) current law requires that FDA notify 

addressees that their packages have been detained because they appear 

unapproved for import and give them the opportunity to provide 

admissibility evidence regarding their imported items. 

The current volume of prescription drug imports, coupled with competing 

agency priorities, has strained federal inspection and interdiction 

resources allocated to the mail facilities. CBP and FDA officials told us 

that the increased incidence of American consumers ordering drugs over 

the Internet in recent years has significantly contributed to the increase in 

imports through the international mail. CBP officials said that they are 

able to inspect only a fraction of the large number of mail and packages 

Factors beyond 

Inspection and 

Interdiction 

Complicate Efforts to 

Enforce the 

Prohibitions on 

Personal Importation 

of Prescription Drugs 

Volume of Imports Can 

Strain Federal Resources 
Page 28 GAO-05-372 Prescription Drugs 

shipped internationally. In 2004, FDA testified that each day thousands of 

individual packages containing prescription drugs are imported illegally 

into the United States. FDA officials have said that the large volume of 

imports has overwhelmed the resources they have allocated to the mail 

facilities. Officials add that they have little assurance that the available 

field personnel are able to inspect all the packages containing prescription 

drugs illegally imported for personal use through the mail. 

Agencies have multiple priorities, which can affect the resources they are 

able to allocate to the mail and carrier facilities. For example, FDA has 

multiple areas of responsibility, which include, among other things, 

regulating new drug product approvals, the labeling and manufacturing 

standards for existing drug products, and the safety of a majority of food 

commodities and cosmetics, which, according to FDA officials, all go to 

FDA’s mission of protecting the public health while facilitating the flow of 

legitimate trade. CBP’s primary mission is preventing terrorists and 

terrorist weapons from entering the United States while also facilitating 

the flow of legitimate trade and travel. FDA and CBP personnel operate in 

multiple venues, such as land border crossings and seaports. DEA’s 

multiple priorities include interdicting illicit drugs such as heroin or 

cocaine, investigating doctors and prescription forgers, and pursuing 

hijackings of drug shipments. DEA officials told us that they have limited 

resources and often have to balance efforts to address prescription drug 

importation with their other priorities. 

The Medicare Prescription Drug, Improvement, and Modernization Act of 

2003 required the HHS Secretary to conduct a study on the importation of 

drugs that included a review of the adequacy of federal agency resources 

to inspect and interdict drugs unapproved for import.28 The report, issued 

in 2004, states that substantial resources are needed to prevent the 

increasing volume of packages containing small quantities of drugs from 

entering the country. The Secretary found that despite agency efforts, 

including those with CBP, FDA currently does not have sufficient 

resources to ensure adequate inspection of the current volume of personal 

shipments of prescription drugs entering the United States. 

 28The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 directed 

the Secretary of Health and Human Services, in consultation with appropriate government 

agencies, to conduct a study of the importation of drugs into the United States and submit a 

report to Congress. Pub. L. No. 108-173, § 1122, 117 Stat. 2066, 2469 (2003). 
Page 29 GAO-05-372 Prescription Drugs 

CBP is also in the early stages of assessing the resources it needs at the 

mail facilities to address the volume of controlled substance imports. 

However, CBP officials admit that an assessment of resource needs is 

difficult because they do not know the scope of the problem and the 

impact of the new procedures. A CBP official told us that CBP has a 

statistician working on developing estimates on the volume of drugs 

entering mail facilities; however, he was uncertain whether this effort 

would be successful or useful for allocating resources. Likewise, in March 

2005, FDA officials told us that they had begun to gather from the field 

information on the imported packages it handles, such as the number of 

packages held, reviewed, and forwarded for further investigation. 

However, as of July 2005, they could not provide any data because, 

according to the officials, this effort was new and still being refined. 

Internet pharmacies, particularly foreign-based sites, which operate 

outside the U.S. regulatory system, pose a challenge for regulators and law 

enforcement agencies. In our 2004 report, we described how traditionally, 

in the United States, the practice of pharmacy is regulated by state boards 

of pharmacy, which license pharmacists and pharmacies and establish and 

enforce standards. To legally dispense a prescription drug, a licensed 

pharmacist working in a licensed pharmacy must be presented a valid 

prescription from a licensed health care professional. The requirement 

that drugs be prescribed and dispensed by licensed professionals helps 

ensure patients receive the proper dose, take the medication correctly, 

and are informed about warnings, side effects, and other important 

information about the drug. However, the Internet allows online 

pharmacies and physicians to anonymously reach across state and 

national borders to prescribe, sell, and dispense prescription drugs 

without complying with state requirements or federal regulations 

regarding imports. Recently, FDA officials have testified that inadequately 

regulated foreign Internet sites have become portals for unsafe and illegal 

prescription drugs. FDA officials state that if a consumer has an adverse 

drug reaction or other problem, he or she may have little to no recourse 

because the operator of the pharmacy is often not known and FDA has 

limited authority to take action against foreign operators. 

The nature of the Internet has challenged U.S. law enforcement agencies 

investigating Internet pharmacies, particularly foreign-based sites. Internet 

sites can easily be installed, moved, or removed in a short period of time. 

FDA officials said that one Internet site can be composed of multiple 

related sites and links, thereby making their investigations complex and 

resource intensive. This fluidity makes it difficult for law enforcement 

Internet Pharmacies 

Challenge Law 

Enforcement Efforts 
Page 30 GAO-05-372 Prescription Drugs 

agencies to identify, track, monitor, or shut down those sites that operate 

illegally. Further, FDA officials said that some Internet pharmacies do not 

disclose enough information on their Web sites to allow consumers to 

determine if the drugs they purchased were approved in the United States 

and dispensed according to state and federal laws. Some Internet 

pharmacies also do not disclose enough or accurate information regarding 

the source of the drugs they offer. An Internet pharmacy can claim that the 

drugs they offer originate in one country, but the drugs may actually be 

manufactured in another country. Similarly, the anonymous nature of the 

Internet allows consumers of any age to obtain drugs without a legitimate 

medical need. 

According to FDA, when the Internet is used for an illegal sale of 

prescription drugs, to conduct an investigation they may need to work 

with the Department of Justice to establish grounds for a case, develop 

charges, and take action as they would if another sales medium, such as a 

store or magazine, had been used. Investigations can be more difficult 

when they involve foreign-based Internet sites, whose operators are 

outside of U.S. boundaries and may be in countries that have different 

drug approval and marketing approaches than the United States has. For 

example, according to DEA officials, drug laws and regulations regarding 

controlled substances vary widely by country. DEA officials told us their 

enforcement efforts with regard to imported controlled substances are 

hampered by the different drug laws in foreign countries. Internet 

pharmacy sites can be based in countries where the marketing and 

distribution of certain controlled substances are legal. Steroids, for 

example, sold over the Internet may be legal in the foreign country in 

which the online pharmacy is located. 

Federal agencies can face challenges when working with foreign 

governments to share information or develop mechanisms for cooperative 

law enforcement. For example, FDA officials have testified that they 

possess limited investigatory jurisdiction over sellers in foreign countries 

and have had difficulty enforcing the law prohibiting prescription drug 

importation when foreign sellers are involved. A DEA official told us that 

the agency introduced a resolution at the March 2004 International 

Narcotics Control Board conference in Vienna, Austria, to encourage 

member states to work cooperatively on Internet pharmacy issues. 

However, the DEA official told us that it was difficult to convince some 

foreign governments that the illegal sales of prescription drugs over the 

Internet is a global problem and not restricted to the United States. 
Page 31 GAO-05-372 Prescription Drugs 

FDA and DEA officials told us that they work with commercial firms, 

including express carriers, credit card organizations, Internet providers, 

and online businesses to obtain information to investigate foreign 

pharmacies, but these investigations are complicated by legal and practical 

considerations. FDA and DEA officials said that the companies have been 

willing to work with government agencies to stop transactions involving 

prescription drugs prohibited from import, and some have alerted federal 

officials when suspicious activity is detected. However, officials also 

identified current legal and practical considerations that complicated 

obtaining information from organizations, such as credit card 

organizations. These considerations included privacy laws; federal law 

enforcement agencies’ respective subpoena authority, priorities, and 

jurisdictions; and the ease with which merchants engaged in illegal activity 

can enter into a new contract with a different bank to use the same 

payment system. 

For example, privacy laws sometimes limit the extent to which companies 

(e.g., credit card organizations) will provide information to federal 

agencies about parties to a transaction. According to FDA, DEA, and ICE 

officials, credit card organizations29 and banks and other financial 

institutions30 that issue credit cards will not provide to the agencies 

information about the parties involved in the transaction without a 

subpoena. Representatives from the credit card companies we contacted 

explained that these issues generally are resolved if the agency issues a 

properly authorized subpoena for the desired information.31 (See app. III 

for information on federal enforcement agencies’ work with credit card 

organizations to enforce prohibitions on prescription drug importation.) 

 29Two types of credit card organizations handle the four major U.S. credit cards. Credit 

card associations, such as Visa and MasterCard, license their member banks to issue bank 

cards, authorize merchants to accept those cards, or both. In contrast, full-service credit 

card companies, such as American Express and Discover, issue their own brands of cards 

directly to customers and authorize merchants to accept those cards. See also GAO, Money 

Laundering: Extent of Money Laundering through Credit Cards Is Unknown, 

GAO-02-670 (Washington, D.C.: July 22, 2002), and Internet Gambling: An Overview of the 

Issues, GAO-03-89 (Washington, D.C.: December 2, 2002). 

30When banks and financial institutions, rather than the credit card company, have the 

direct relationship with the merchants and credit cardholders, the former are the primary 

source of transactional information needed for law enforcement purposes. 

31According to a DEA official, the majority of Internet drug sites used the payment systems 

of the two associations we contacted. 
Page 32 GAO-05-372 Prescription Drugs 

FDA headquarters officials said that packages that contain prescription 

drugs for personal use that appear to be prohibited from import pose a 

challenge to their enforcement efforts because these packages cannot be 

automatically refused. Before any imported item is refused, the current 

law requires FDA to notify the owner or consignee that the item has been 

held because it appears to be prohibited and give the product’s owner or 

consignee an opportunity to submit evidence of admissibility. If the 

recipient does not respond or does not present enough evidence to 

overcome the appearance of inadmissibility, then the item can be returned 

to the sender, or in some cases destroyed. 

FDA officials told us that this requirement applies to all drug imports that 

are held under section 801(a) of the Federal Food, Drug, and Cosmetic 

Act. Nonetheless, they said that they believe this notification process is 

time consuming because each package must be itemized and entered into 

a database; a letter must be written to each addressee; and the product 

must be stored. The process can take up to 30 days per import—and can 

hinder their ability to quickly process packages containing prescription 

drugs prohibited from import. According to FDA investigators, in most 

instances, the addressee does not present evidence to support the drugs’ 

admissibility, and the drugs are ultimately provided to CBP or the U.S. 

Postal Service for return to sender. FDA headquarters officials told us that 

the Standard Operating Procedures, introduced in August 2004 and 

discussed earlier in this report, were an attempt to help FDA address the 

burden associated with the notification process because it was designed to 

focus resources on packages containing drugs considered to be among the 

highest risk. 

FDA concerns about the notification process are not new. In testimony 

before Congress, FDA and the Secretary of HHS raised concerns about the 

notification process, noting that it is time-consuming and resource 

intensive. However, FDA’s testimony did not propose any legislative 

changes to address the concerns it identified. In May 2001, FDA’s Acting 

Principal Deputy Commissioner wrote a memorandum to the Secretary of 

HHS expressing concern about the growing number of drugs imported for 

personal use and the dangers they posed to public health. The 

memorandum explained that because of the notice and opportunity to 

respond requirements, detaining and refusing entry of mail parcels was 

resource intensive. The Acting Principal Deputy Commissioner proposed, 

among other things, the removal of the requirement that FDA issue a 

notice before it could refuse and return personal use quantities of FDAregulated products that appear violative of the Food, Drug, and Cosmetic 

Act. He noted that removal of the notification requirement would likely 

Notification Process 

Challenges Enforcement 

Efforts 
Page 33 GAO-05-372 Prescription Drugs 

require legislation, but without this change, FDA could not effectively 

prohibit mail importation for personal use. 

As of July 2005, according to FDA officials and an HHS official, the 

Secretary had not responded with a specific legislative proposal to change 

FDA’s notification requirement. FDA officials said that there are some 

complicating issues associated with eliminating the notification 

requirement. For example, they said that one of the arguments against 

eliminating the notification requirement is the importance of providing due 

process, which basically gives individuals the opportunity to present their 

case as to why they should be entitled to receive the property, in this case 

prescription drugs that they ordered from a foreign source. Another is to 

what extent the law should be changed to cover all imported prescription 

drugs and other products. In addition, USPS indicated that any discussion 

of options to expedite the processing and disposition of prescription drugs 

must consider international postal obligations, specifically the 

requirements of the Universal Postal Union (UPU).32 FDA officials said that 

currently, the notification requirement also applies to large commercial 

quantities of prescription drugs and other nonpharmaceutical products for 

which the requirement is not a problem. They said it has become a burden 

only because FDA and CBP are overwhelmed with a large volume of small 

packages. 

FDA officials said that they have considered other options for dealing with 

this issue, such as summarily returning each package to the sender 

without going through the process. However, they said that the law would 

likely need to be changed to allow this, and, as with the current process, 

packages that are returned to the sender could, in turn, be sent back by 

the original sender to go through the process again. They said that another 

option might be destruction, but they were uncertain whether they had the 

authority to destroy drugs FDA intercepts; they indicated that the 

authority might more likely lie with CBP. Regardless, FDA officials said 

that whatever approach was adopted, FDA might continue to encounter a 

resource issue because field personnel would still need to open and 

 32UPU is a specialized agency of the United Nations governing international postal services. 

According to the USPS, the Universal Postal Convention establishes a general rule that 

undeliverable items are to be returned to sender. UPU regulations provide that where an 

item can neither be delivered to the addressee nor returned to the sender, the Postal 

Service must notify the postal administration of origin of how the item was dealt with, 

including indicating the prohibition under which the item falls. USPS noted that this is 

particularly important with respect to registered or insured mail for which the Postal 

Service can be held financially responsible if it is not delivered or returned. 
Page 34 GAO-05-372 Prescription Drugs 

examine packages to ascertain whether they contained unapproved 

prescription drugs. 

Federal agencies have been taking steps to address Internet sales of 

prescription drugs since 1999, but these efforts have not positioned them 

to successfully prevent the influx of prescription drugs that are being 

imported through foreign pharmacies. CBP has recently organized a task 

force to coordinate federal efforts related to prescription drugs imported 

for personal use. This task force appears to be a step in the right direction. 

However, its efforts could be further enhanced if the task force 

established a strategic framework to promote accountability and guide 

resource and policy decisions. In January 2004, CBP organized an 

interagency task force to address various issues associated with 

unapproved prescription drugs entering the United States from foreign 

countries. Although CBP, FDA, ONDCP, DEA, and ICE appear to be 

working together to address these very complex issues, their efforts could 

be enhanced by a strategic framework that guides resource and policy 

decisions and promotes accountability. Such a framework that establishes 

measurable, quantifiable goals and strategies for achieving these goals, 

including a determination of resources needed to achieve the goals, would 

enhance the ability of agency officials and congressional decision makers 

to ensure accountability and consistent and focused attention to enforcing 

the prohibitions on personal importation. 

Congress enacted the Government Performance and Results Act of 1993 to 

have agencies focus on the performance and results of programs, rather 

than on program resources and activities. The principles of the act include 

(1) establishing measurable goals and related measures, (2) developing 

strategies for achieving results, and (3) identifying the resources that will 

be required to achieve the goals. The act does not require agencies to use 

these principles for individual programs, but our work related to the act 

and the experience of leading organizations have shown that a strategic 

approach or framework is a starting point and basic underpinning for 

performance-based management—a means to strengthen program 

performance. A strategic framework can serve as a basis for guiding 

operations and help policy makers, including congressional decision 

makers and agency officials, make decisions about programs and 

activities. 

Our work has also shown that a strategic framework can be useful in 

providing accountability and guiding resource and policy decisions, 

particularly in relation to issues that are national in scope and cross 

Federal Efforts to 

Coordinate Law 

Enforcement 

Activities Could 

Benefit from a 

Strategic Framework 
Page 35 GAO-05-372 Prescription Drugs 

agency jurisdictions, such as prescription drug importation.33 When 

multiple agencies are working to address aspects of the same problem, 

there is a risk that overlap and fragmentation among programs can waste 

scarce funds, confuse and frustrate program customers, and limit overall 

program effectiveness.34 Use of a strategic framework may help mitigate 

this risk. 

Since 1999, federal law enforcement and regulatory agencies have 

organized various task forces and working groups to address issues 

associated with purchasing prescription drugs over the Internet; however, 

recent efforts have begun to focus particular attention on imported 

prescription drugs. For example, according to an FDA official, many of 

FDA’s efforts, started in 1999, focused on Internet pharmaceutical sales by 

illicit domestic pharmacies and the risks associated with purchasing those 

drugs, rather than drugs that are being imported from foreign countries. 

This official said that although FDA had established working groups and 

advanced media campaigns to address problems associated with drugs 

purchased over the Internet from domestic sources, imported drugs have 

added a new dimension that was only incidentally recognized during 

efforts begun in 1999. He said that the plans developed by FDA in 1999 are 

still viable as far as domestic sales are concerned, but they have not been 

refocused to reflect concerns about imported prescriptions and did not 

position federal law enforcement agencies to anticipate the increased 

volume of drugs that are imported by individuals. 

More recent efforts have focused on prescription drugs entering 

international mail and express carrier facilities. In January 2004, the CBP 

Commissioner initiated an interagency task force on pharmaceuticals, 

composed of representatives from CBP, FDA, DEA, ICE, and ONDCP as 

well as legal counsel from the Department of Justice. According to the 

Commissioner, the proposal to create the task force was prompted by 

“intense public debate and congressional scrutiny, which has resulted in 

increasing pressure being applied to regulatory and law enforcement 

agencies to develop consistent, fair policies” to address illegal 

 33GAO, Combating Terrorism: Evaluation of Selected Characteristics in National 

Strategies Related to Terrorism, GAO-04-408T (Washington, D.C.: February 2004). 

34GAO, Agencies Annual Performance Plans under the Results Act: An Assessment Guide 

to Facilitate Congressional Decisionmaking, GAO/GGD/AIMD-10.1.18 (Washington D.C.: 

February 1998). 

Federal Agencies Have 

Recently Begun to 

Coordinate Efforts to 

Focus on Prescription 

Drugs Imported for 

Personal Use 
Page 36 GAO-05-372 Prescription Drugs 

pharmaceuticals entering the United States. The Commissioner proposed 

that the task force achieve five specific goals, and according to a CBP 

official, five working groups were established to achieve these goals. 

Figure 6 shows the task force goals, the five working groups, and the goals 

of each working group. 

Figure 6: Interagency Pharmaceutical Task Force and Working Group Goals 

A CBP official told us that the task force is designed to foster cooperation 

among the agencies responsible for enforcing the laws governing 

prescription drugs imported for personal use. The task force was created 

to go beyond interdiction at the mail and carrier facilities. The official also 

said that the task force was fashioned to deal with supply and demand 

issues, thereby reducing the volume of drugs entering these facilities. For 

example, on the demand side, the public awareness working group is 

responsible for conveying information about the health and safety risks of 

imported prescription drugs, and on the supply side, the working 

cooperatively with industry group is responsible for, among other things, 

Source: GAO analysis of CBP documents.

Interagency Pharmaceutical Task Force

Working group

Mail and express 

consignment operator 

facilities procedures

Increasing public 

awareness

Working cooperatively 

with industry

Targeting/data research

Legal

Working group’s goal

Develop standardized policies and 

procedures for use at mail and express 

consignment operative facilities and assess 

existing resources at these locations.

Disseminate the central message that 

imported pharmaceuticals may be dangerous 

to the health and safety of U.S. citizens and 

residents. The audience is Internet purchasers 

of medication and individual travelers.

Develop and utilize industry partnerships 

to address current pharmaceutical 

importation issues.

Improve information sharing and 

targeting criteria and identify criteria for 

future enforcement operations and 

cooperative efforts.

Advise the task force on legal/regulatory 

issues related to pharmaceutical importations. 

 Task force goals

A mutually agreed upon strategy for 

enforcement, interdiction, and disposition of 

unlawful pharmaceuticals entering into the 

United States.

Proposals for joint enforcement operations at 

ports of entry. 

Recommendations for appropriate statutory 

or regulatory changes to increase the 

effectiveness of enforcement efforts.

Mutually agreed upon policies relative to 

unauthorized importations.

Agreements for the commitment of resources 

to carry out the strategy and polices that are 

developed by the task force.
Page 37 GAO-05-372 Prescription Drugs 

ways of identifying rogue Internet sites. CBP officials and other members 

of the task force provided examples of activities being carried out or 

planned by task force working groups that are discussed below. 

• The working group on mail and express consignment operator facilities 

procedures has carried out special operations at five international mail 

and three express carrier facilities to examine parcels suspected of 

containing prohibited prescription drugs over specific periods of time, 

such as 2 or 3 days. While similar operations have occurred since 2000, a 

CBP official told us that those conducted under the task force are 

multiagency efforts. Among other things, task force members gather data 

about the source, type, and recipients of the drugs and test the contents of 

the parcels to determine whether they are counterfeit or otherwise 

prohibited. These operations are expected to continue during the 

remainder of 2005 at all of the remaining mail facilities and some of the 

carrier facilities. 

• The working group on targeting/data research is using the results of 

special operations to analyze data retrieved during the special operations 

and determine how these data can be used to guide future operations and 

enforcement efforts. Also, ICE was working with CBP and the government 

of an Asian country to identify and track controlled substances destined 

for the United States. ICE plans to use this approach to identify and take 

possible law enforcement action against illegal enterprises. 

• The working group on increasing public awareness has been developing 

and disseminating public service announcements on the risks associated 

with purchasing drugs over the Internet. The working group has placed 

public service announcements on the FDA and CBP Web sites and is 

coordinating with FDA on its efforts, ongoing since 1999, to disseminate 

similar material in magazines, online, and in pharmacies. Also, the working 

group has entered into an agreement with a major Internet service 

provider and others to have a public service announcement link on screen 

when someone tries to access online pharmacy sites. 

• The working group on working cooperatively with industry has met with 

Internet businesses, such Internet service providers and companies that 

operate search engines, to discuss how task force members can work with 

Internet businesses to stem the flow of imported drugs coming into the 

country, including discussing standards for identifying legitimate Web 

sites. It has also met with representatives of express carriers and plans to 

meet with representatives of credit card organizations in late summer 

2005. 
Page 38 GAO-05-372 Prescription Drugs 

In addition, task force members are working with ONDCP to address the 

importation of controlled substances through international mail and 

carrier facilities. In October 2004, ONDCP issued a plan for addressing 

demand and trafficking issues associated with certain man-made 

controlled substances—such as pain relievers, tranquilizers, and 

sedatives.35 Among other things, ONDCP recommended that DEA, CBP, 

ICE, State Department, National Drug Intelligence Center, and FDA work 

with USPS and private express mail delivery services to target illegal mail 

order sales of chemical precursors, synthetic drugs, and pharmaceuticals, 

both domestically and internationally. ONDCP officials said that a 

multiagency working group is meeting to discuss what can be done to 

confiscate these controlled substances before they enter the country. An 

ONDCP official said that participants at these meetings included officials 

from CBP, USPS, and DEA. 

Finally, USPS is exploring what additional steps it can take to further help 

the task force. Although USPS has participated in task force activities, 

USPS officials said USPS is concerned about a conflict between its 

mission to keep the mail moving and whether it is positioned to determine 

the admissibility of mail. USPS officials said that they proposed, during a 

July 2004 hearing, the possibility of cross-designating U.S. Postal 

Inspectors with Customs’ authority so that Postal Inspectors can conduct 

warrant-less searches, at the border, of incoming parcels or letters 

suspected of containing illegal drugs. According to USPS officials, such 

authority would facilitate interagency investigations. They said that their 

proposal has yet to be finalized with CBP. In addition, internationally, 

USPS has drafted proposed changes to the U.S. listing in the Universal 

Postal Union List of Prohibited Articles.36 A U.S. Postal Service official told 

us that USPS is awaiting a response to a letter it sent to FDA last year 

requesting FDA’s views on the proposed changes. The official said that, 

without FDA input, USPS does not have the expertise to determine 

 35ONDCP, National Synthetic Drugs Action Plan: The Federal Government Response to 

the Production, Trafficking, and Abuse of Synthetic Drugs and Diverted Pharmaceutical 

Products (Washington D.C.; October 2004). According to ONDCP, the Action Plan is to 

provide a blueprint for action under the President’s National Drug Control Strategy and 

“focuses primarily on illicitly manufactured synthetic drugs which are not of primarily 

organic origin” and “selected pharmaceutical products which are sometimes diverted from 

legitimate commerce.” 

36The Universal Postal Union List of Prohibited Articles is a listing of articles prohibited for 

importation into the United States, as well as other member countries of the UPU. The 

listing is shared with foreign postal administrations to enable them to educate their 

customers on country prohibitions for international mail. 
Page 39 GAO-05-372 Prescription Drugs 

whether the proposed changes are accurate. In August 2005, FDA officials 

said that after receiving the letter last year, they met with USPS officials 

regarding drug importation, including this proposal. However, according 

to FDA officials, USPS had not subsequently engaged FDA on this 

particular issue, and FDA did not believe USPS was awaiting a formal 

written response. FDA officials stated that if USPS would like to discuss 

this matter further, they would be happy to work with USPS. 

Although the task force has taken positive steps toward addressing issues 

associated with enforcing the laws on personal imports, it has not fully 

developed a strategic framework that would allow the task force to 

address many of the challenges we identify in this report. Carrying out 

enforcement efforts that involve multiple agencies with varying 

jurisdictions is not an easy task, especially since agencies have limited 

resources and often conflicting priorities. The challenges identified in this 

report could be more effectively addressed by using a strategic framework 

that more clearly defines the scope of the problem by estimating the 

volume of drugs entering international mail and carrier facilities, 

establishes milestones and performance measures, determines resources 

and investments needed to address the flow of imported drugs entering 

the facilities and where those resources and investments should be 

targeted, and evaluates progress. 

Our review showed that the task force has already begun to establish some 

elements of a strategic framework, but not others. For example: 

• In light of the Commissioner’s January 2004 memo discussed earlier, the 

task force has a clear picture about its purpose and why it was created. 

However, it has not defined the scope of the problem it is trying to address 

because, as discussed earlier, CBP and FDA have yet to develop a way to 

estimate the volume of imported prescription drugs entering specific 

international mail and carrier facilities. Without doing so, it is difficult to 

assess what resources are necessary to effectively inspect parcels and 

interdict those that contain unapproved drugs. 

• Whereas the task force and individual working groups have goals that 

state what they are trying to achieve, the task force has not established 

milestones and performance measures to gauge results. A CBP official said 

that the goals are intended to be guidelines rather than goals to be 

measured; he would expect progress or results to be measured within the 

context of strategic plans prepared by individual agencies. However, 

without task force-specific milestones and performance measures, it is 

difficult to measure improvement over time and ensure accountability, 

Strategic Framework 

Would Further Enhance 

Task Force Efforts 
Page 40 GAO-05-372 Prescription Drugs 

particularly if the goals and measures of individual task force members do 

not directly address, or are not in harmony with, the goals of the task 

force. 

• The task force has not addressed the issue of what its efforts will cost so 

that it can target resources and investments, balancing risk reduction with 

costs and considering task force members’ other law enforcement 

priorities. Instead, according to a CBP official, working group projects are 

done on an ad hoc basis wherein resources are designated for specific 

operations. Nonetheless, the absence of cost and resource assessments 

makes effective implementation harder to achieve because over time, 

alternative agency priorities and resource constraints may hinder the 

ability of the task force to meet its goals. 

We acknowledge that such a strategic framework needs to be flexible to 

allow for changing conditions, but it could be helpful to organize it in a 

logical flow, from conception to implementation. Specifically, the 

strategy’s purpose leads to definition of the problems and risks it intends 

to address, which in turn leads to specific actions for tackling those 

problems and risks, allocating and managing appropriate resources, 

identifying different organizations’ roles and responsibilities, and finally 

integrating action among all the relevant parties and implementing the 

strategy. 

Advancing a strategic framework could establish a mechanism for 

accountability and oversight and set the stage for defining specific 

activities needed to achieve results and specific performance measures for 

monitoring and reporting on progress. In so doing, task force officials 

could measure progress over time, identify new and emerging barriers or 

obstacles to carrying out goals and objectives, develop strategies to 

overcome them, and inform decision makers about the implications of 

taking or not taking specific actions. For example, CBP, FDA, and the 

other agencies could work jointly to develop statistically valid estimates of 

the number of parcels suspected of containing imported prescription 

drugs entering particular facilities and begin to develop realistic risk-based 

estimates of the number of CBP and FDA staff needed to interdict parcels 

at mail facilities. 

Task force members could also take steps to explore how they can work 

more collaboratively and strategically with private organizations, such as 

credit card organizations and express carriers. In doing so, task force 

members and representatives of these organizations could examine what 

can be done within the context of current law and establish strategies and 
Page 41 GAO-05-372 Prescription Drugs 

goals for overcoming any practical considerations that act as barriers to 

enforcing the prohibition on imported pharmaceuticals, including 

controlled substances. They could also identify any legislative barriers 

they face in aggressively enforcing the prohibition and work together to 

develop legislative proposals aimed at stemming the flow of imported 

prescription drugs into the country. 

In addition, agencies could work collaboratively among themselves to 

examine the resources and investments needed to address particular 

strategies. Any effort to implement task force objectives would require 

sustained high-level leadership and commitment to ensure that resources 

are available to carry out task force goals, commensurate with the goals 

and priorities of the individual agencies involved with the task force. 

According to a CBP official involved in the task force, agencies have made 

a high-level commitment to supporting the task force. Nonetheless, in the 

absence of a strategic framework and, in particular, measurable goals and 

milestones, there is little assurance that this commitment will continue as 

the goals and priorities of individual agencies change. 

A strategic framework could also enable the task force to adjust to 

changing conditions. As mentioned earlier, FDA had developed plans and 

initiated steps in 1999 to deal with Internet sales of prescription drugs, but 

most of those efforts focused on domestic sales. However, plans to 

address Internet sales had not been refocused to reflect prescriptions 

imported from foreign countries for personal use, partly because FDA and 

other agencies did not anticipate that the volume of imported drugs would 

overwhelm available resources. A strategic framework, with ongoing 

problem definition and risk assessment, might help task force members, 

including FDA and others to identify the impact of this emerging threat 

and give the task force members the opportunity to adjust their 

enforcement strategies to address the threat on a proactive, rather than a 

reactive, basis. It also might help them consider interrelationships 

between the enforcement strategies and priorities of the task force and 

their own strategies and priorities. 

Furthermore, a strategic framework could help agencies adjust to 

potential changes in the law governing the importation of prescription 

drugs for personal use. During recent sessions of Congress, members 

introduced a number of bills that could have changed how personal 

prescription drug imports were treated under the law. Some proposals 

would have allowed importation of selected prescription drugs under 

certain conditions, for example, allowing importation from certain 

countries, such as Canada. Another proposal would have maintained the 
Page 42 GAO-05-372 Prescription Drugs 

current prohibitions, but would have allowed for expedited disposal of 

illegally imported prescription drugs, such as controlled substances 

available by prescription. Those bills that would have allowed some 

personal importation also included provisions for expediting the process 

of disposing of those drugs that still may not be imported for personal use. 

Although none of these changes were adopted, continued congressional 

interest could prompt changes in the future. If that occurred, a strategic 

framework could better position agencies to adjust to any changes; 

identify any new threats or vulnerabilities; and redefine strategies, roles, 

and responsibilities. 

Enforcing the laws governing prescription drug imports for personal use is 

a complex undertaking that involves multiple agencies with various 

jurisdictions and differing priorities. We acknowledge these complexities, 

but current inspection and interdiction efforts at the international mail 

branches and express carrier facilities have not prevented the reported 

substantial and growing volume of prescription drugs from being illegally 

imported from foreign Internet pharmacies into the United States. CBP 

and other agencies have taken a step in the right direction by establishing 

a task force designed to address many of the challenges discussed in this 

report. Although agencies responsible for enforcing these laws have a 

mechanism in place to jointly address the threat posed by prohibited and 

sometimes addictive drugs entering the country via the international mail 

and express carriers, many packages that may contain these drugs enter 

the United States daily. Furthermore, according to officials, resources are 

strained as the volume of prescription drugs entering the country is large 

and increasing. 

Our past work has shown how a strategic framework can be useful in 

promoting accountability and guiding policy and resource decisions. In the 

case of the task force, a strategic framework that facilitates 

comprehensive enforcement of prescription drug importation laws and 

measures results would provide it an opportunity to better focus agency 

efforts to stem the flow of prohibited prescription drugs entering the 

United States. The task force could become more effective as it becomes 

more accountable. An assessment of the scope of the problem would help 

the task force prioritize activities and help ensure that resources are 

focused on the areas of greatest need. With milestones and performance 

measures, it could be able to better monitor progress and assess efforts to 

enforce the laws. An analysis of resources and investments is critical 

because of current resource constraints, a point highlighted by the 

Secretary of Health and Human Services’ report under the Medicare 

Conclusions 
Page 43 GAO-05-372 Prescription Drugs 

Modernization Act. Moreover, without these elements culminating in 

concrete plans for implementation, it will be difficult for the task force to 

maximize effectiveness in reducing the flow of prohibited imported 

prescription drugs into the United States. 

In addition to the broader issues being addressed by the task force, FDA 

has said it faces a significant challenge handling the substantial volume of 

prescription drugs imported for personal use entering international mail 

facilities. Specifically, in recent years, FDA has expressed continuing 

concern to Congress that it encounters serious resource constraints 

enforcing the law at mail facilities because packages containing personal 

drug imports cannot automatically be refused. Instead, under current law, 

FDA is to notify recipients that they are holding packages containing drugs 

that appear to be prohibited from import and give them the opportunity to 

provide evidence of admissibility. FDA has stated that it cannot effectively 

enforce the law unless the requirement to notify recipients is changed. 

FDA has suggested that the HHS Secretary consider proposing changes to 

this requirement, but the HHS Secretary has not yet responded with a 

legislative proposal. Although there may be complex issues associated 

with changing the requirement to notify, including an individual’s due 

process right to provide evidence of admissibility and consideration of 

Universal Postal Union requirements, assessing the ramifications of such a 

proposal would help decision makers as they consider how best to address 

FDA’s resource constraints and responsibility to enforce the law and 

protect the health and safety of the American public. 

To help ensure that the government maximizes its ability to enforce laws 

governing the personal importation of prescription drugs, we recommend 

that the CBP Commissioner, in concert with ICE, FDA, DEA, ONDCP, and 

USPS, develop and implement a strategic framework for the task force 

that would promote accountability and guide resource and policy 

decisions. At a minimum, this strategic framework should include 

• establishment of an approach for estimating the scope of the problem, 

such as the volume of drugs entering the country through mail and carrier 

facilities; 

• establishment of objectives, milestones, and performance measures and a 

methodology to gauge results; 

• determination of the resources and investments needed to address the 

flow of prescription drugs illegally imported for personal use and where 

resources and investments should be targeted; and 

Recommendations 
Page 44 GAO-05-372 Prescription Drugs 

• an evaluation component to assess progress, identify barriers to achieving 

goals, and suggest modifications. 

In view of the FDA’s continuing concern about the statutory notification 

requirement and its impact on enforcement, we also recommend that the 

Secretary of HHS assess the ramifications of removing or modifying the 

requirement, report on the results of this assessment, and, if appropriate, 

recommend changes to Congress. 

We requested comments on a draft of this report from the Secretary of 

Homeland Security, Attorney General, Director of the Office of National 

Drug Control Policy, Secretary of Health and Human Services, and 

Postmaster General. DHS, DEA, ONDCP, HHS, and USPS provided written 

comments, which are summarized below and included in their entirety in 

appendixes IV through VIII. 

DHS generally agreed with the contents of our report. Since our 

recommendation that the CBP-led task force develop and implement a 

strategic framework to address prescription drug importation issues 

affects other agencies, DHS said that CBP would convene a task force 

meeting to discuss our report and recommendation and is to provide us 

with additional information after the meeting. 

Responding for DOJ, DEA generally agreed with our recommendation that 

the CBP task force develop and implement a strategic framework. 

Specifically, DEA agreed that a strategic framework can be useful in 

promoting accountability and guiding policy and resource decisions, but it 

said that the interagency task force is a cooperative initiative and DEA 

must balance priorities in accordance with agency mandates. DEA also 

said that its strategic plan clearly establishes a framework to articulate 

agency priorities and assess its performance. Noting that our report 

acknowledges that such a framework needs to be flexible to allow for 

changing conditions, DEA stated that, in concert with other task force 

agencies, it will support the CBP Commissioner’s strategic framework for 

the interagency task force. 

ONDCP generally concurred with our recommendation that the CBP-led 

task force develop and implement a strategic framework. ONDCP also 

“strongly” suggested that the ONDCP-led Synthetic Drug Interagency 

Working Group play a significant role in integrating prescription drug 

considerations with all of the other synthetic drug concerns that 

potentially inflict harm on our society. ONDCP noted that our report 

documented well the problems associated with effectively policing 

Internet purchases and identified the significance played by credit card 

Agency Comments 

and Our Evaluation 
Page 45 GAO-05-372 Prescription Drugs 

use as a facilitator of the problem. In addition, ONDCP stated that it 

encouraged law enforcement proposals that may curtail some of these 

dangerous practices and concurred with our identification of the 

cumbersome nature of currently required enforcement practices dealing 

with the use of the mails to transfer illicit narcotics. 

HHS generally concurred with both recommendations. With regard to the 

strategic framework, HHS said that it would work with its federal partners 

to discuss the development of a more formalized approach for addressing 

the issues associated with the importation of unapproved drugs. However, 

HHS questioned whether the framework should include an approach for 

developing more reliable volume estimates, because HHS believes the 

volume estimates already provided in HHS’s December 2004 report on 

drug importation are valid. HHS said that volume may depend on the 

incentive for the public to import unapproved drugs, as well as other 

external factors, and said that, short of opening and counting each 

package as it enters the United States, the reliability of estimates would 

always be in question given the fluid nature of unapproved prescription 

drug imports and the number of mail and courier facilities involved. HHS 

also stated that volume estimates would not alter the resource calculations 

articulated in HHS’s December 2004 report, which, according to HHS, 

were derived from special operations, called blitzes, by CBP and FDA at 

various international mail facilities. According to HHS, these calculations 

were based on personnel time and salaries needed to process each 

package. HHS further noted that our statement that the task force agencies 

could develop statistically valid volume estimates and realistic risk-based 

estimates of the number of staff needed to interdict parcels at mail 

facilities did not recognize that FDA is not always able to process the 

current number of packages set aside by CBP. In addition, HHS said that 

FDA must always be cognizant of competing priorities regardless of 

fluctuations in the volume of illegally imported prescription drugs. 

We recognize that any number of factors can influence the volume of 

unapproved drugs entering the country at any point in time or location. 

However, HHS’s current estimates are based on estimates of drugs 

imported from Canada during 2003 and, in part, on extrapolations from 

FDA’s limited observations during special operations at international mail 

branch facilities. We believe a more reliable and systematic approach 

might begin by using information already being collected by CBP and FDA 

at the various field locations, including the number of packages deemed 

abandoned by CBP and the number of imported packages FDA handles. 

With regard to resource calculations, as more reliable estimates are 

developed, FDA and other task force agencies would be better positioned 

to define the scope of the problem so that the task force and other 
Page 46 GAO-05-372 Prescription Drugs 

decision makers can make informed choices about resources devoted to 

this problem, especially in light of competing priorities. 

Regarding our recommendation that the HHS Secretary assess FDA’s 

statutorily required notification process, HHS said that it intends to pursue 

an updated assessment. HHS observed that, given the increased volume of 

illegally imported prescription drugs since its initial request for 

modification of FDA’s notification process, other actions might be needed, 

and HHS would work with its federal partners to determine the actions 

required. HHS also provided technical comments that have been included, 

as appropriate. 

USPS did not state whether it agreed or disagreed with our 

recommendations but expressed a concern about possible procedural and 

legislative changes to the current notification requirements governing the 

processing and disposition of imported pharmaceuticals. Specifically, 

USPS requested that the report acknowledge the United States’s 

international postal obligations and stated that any discussion of options 

to expedite the processing and disposition of prescription drugs should 

consider these obligations. USPS further noted that recognizing these 

obligations is particularly important with respect to registered or insured 

mail for which the Postal Service can be held financially responsible if it is 

not delivered or returned. We acknowledge USPS’s concerns and have 

added language to the report accordingly. 

As arranged with your offices, 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 Secretary 

of the Department of Homeland Security, the Secretary of Health and 

Human Services, and interested congressional committees. We will also 

make copies available to others upon request. In addition, the report will 

be available at no charge on GAO’s Web site at http://www.gao.gov. 
Page 47 GAO-05-372 Prescription Drugs 

If you or your staff have any questions concerning this report, please 

contact me on (202) 512-8777 or stanar@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on the 

last page of this report. Major contributors to this report are listed in 

appendix IX. 

Richard M. Stana, Director 

Homeland Security and Justice Issues 
Appendix I: Objectives, Scope, and 

Methodology 

Page 48 GAO-05-372 Prescription Drugs 

This report addresses the following questions: (1) What do available data 

show about the volume and safety of prescription drugs imported into the 

United States for personal use through the international mail and private 

carriers? (2) What procedures and practices are used at selected facilities 

to inspect and interdict prescription drugs unapproved for import? 

(3) What factors affect federal agency efforts to enforce the prohibition on 

prescription drug importation for personal use through international mail 

and carrier facilities? (4) What efforts have federal agencies undertaken to 

coordinate the enforcement of the prohibitions on personal importation of 

prescription drugs? 

We performed our work at the Department of Homeland Security’s U.S. 

Customs and Border Protection (CBP) and U.S. Immigration and Customs 

Enforcement (ICE), the Department of Health and Human Services’ (HHS) 

Food and Drug Administration (FDA), the Department of Justice’s Drug 

Enforcement Administration (DEA), the U.S. Postal Service (USPS), and 

the Office of National Drug Control Policy (ONDCP). We also carried out 

work at 3 of the 14 international mail facilities—New York, Los Angeles, 

and Chicago—and 2 of the 29 carrier facilities—Cincinnati (DHL 

Corporation) and Memphis (FedEx Corporation). We selected the New 

York and Los Angeles mail facilities because they (1) processed among the 

highest overall number of packages,1

 representing 27 percent of the total 

number of estimated packages going through international mail facilities 

in 2002 and (2) also received prescription drugs.2

 The Chicago facility was 

selected because it received prescription drugs and provided geographic 

dispersion. The 2 carrier facilities selected were (1) different companies; 

(2) handled the highest overall number of packages, according to data 

provided by CBP; and (3) were located near each other. At each of these 

locations, we collected and reviewed available relevant importation and 

interdiction data from FDA and CBP; observed inspection and interdiction 

practices; met with CBP and FDA management, inspectors, and 

investigators to discuss issues related to inspection and pharmaceutical 

importation volume; and reviewed relevant documents on inspection and 

interdiction procedures. At the international mail facilities, we also met 

with USPS officials to discuss mail handling and processing procedures. 

The information from our site visits is limited to the 3 international mail 

 1

Data on the number of packages process were provided to us by CBP from the U.S. Postal 

Service. 

2

On January 27, 2005, CBP began operations at one additional international mail facility in 

San Juan, Puerto Rico. We did not include the San Juan facility as part of our original 

selection because it was not in operation when we began our review. 

Appendix I: Objectives, Scope, and 

Methodology 
Appendix I: Objectives, Scope, and 

Methodology 

Page 49 GAO-05-372 Prescription Drugs 

facilities and 2 carrier facilities and is not generalizable to the remaining 10 

international mail facilities and 27 carrier facilities. 

To determine what the available data show about the volume and safety of 

imported prescription drugs, we interviewed CBP, FDA, DEA, ICE, and 

USPS headquarters officials and CBP and FDA officials at the 3 

international mail facilities and 2 carrier facilities. We obtained and 

analyzed available data on the volume and safety of imported prescription 

drugs (1) collected from the facilities we visited and (2) gathered through 

multiagency special operations at selected mail facilities and provided to 

us by CBP headquarters. The available CBP and FDA information on the 

volume and safety of prescription drugs imported through the mail and 

carrier facilities we visited was primarily based on estimates and limited to 

observations at these locations. To obtain additional views on the overall 

volume or safety of imported prescription drugs, we reviewed ONDCP and 

HHS reports and testimony from the American Medical Association. We 

discussed with FDA officials the methodology used to develop the volume 

estimates presented in the 2004 HHS report on prescription drug 

importation3

 and we reviewed the methodology to determine any 

limitations. In addition, we interviewed an official and reviewed 

documents from the National Association of Boards of Pharmacy to obtain 

the association’s findings on the safety of prescription drugs imported 

from foreign-based Internet pharmacies. We also relied on existing GAO 

work on the safety of prescription drugs imported from some foreignbased Internet pharmacies. 

To understand procedures and practices, we reviewed current federal law 

and CBP and FDA policies, procedures, and guidance regarding or 

applicable to prescription drugs and controlled substance importation. We 

interviewed officials at CBP, FDA, DEA, ICE, and USPS headquarters. To 

understand inspection procedures and practice, at each of 3 international 

mail facilities and 2 carrier facilities, we carried out site visits, observing 

the inspection process and interviewing CBP and FDA officials. At the 

selected international mail facilities, we also interviewed USPS officials to 

obtain information about their procedures and practices. In addition, when 

FDA and CBP implemented new procedures at the international mail 

facilities and carrier facilities, we carried out additional interviews at FDA 

and CBP headquarters, pursued telephone interviews with CBP and FDA 

 3

HHS Task Force on Drug Importation, Report on Prescription Drug Importation, 

Department of Health and Human Services, December 2004. 
Appendix I: Objectives, Scope, and 

Methodology 

Page 50 GAO-05-372 Prescription Drugs 

officials at the facilities we had visited, and revisited 2 of the mail facilities 

to determine how the new procedures were being implemented, working 

in practice; and being monitored and evaluated. We also obtained from 

FDA fiscal year data on the number of mail packages containing 

prescription drugs it processed. From CBP we obtained data on the 

number of packages interdicted using its new procedures for processing 

schedule III through V controlled substances. Because these data were 

used for contextual purposes, we did not assess the reliability of these 

data. However, we discussed the scope of the FDA and CBP data with the 

respective agency officials and have noted the limitations in the report. 

To determine what factors affect federal agency efforts to enforce the 

prohibitions on prescription drug importation for personal use through 

international mail and carrier facilities, we interviewed CBP, FDA, DEA, 

ICE, and USPS officials. We asked these officials to identify any factors 

that affected their respective agency’s efforts to process or interdict 

prescription drugs imported through the mail and carriers. The 

information presented in this report is limited to the views expressed by 

the officials interviewed. In addition, we met with representatives from 

MasterCard International and Visa U.S.A., Inc., the two credit card 

associations identified by DEA as the organizations used by the majority of 

Internet drug sites. These associations also testified in July 2004 at 

congressional hearings on matters related to the illegal importation of 

prescription drugs. We discussed with them each association’s efforts to 

assist federal enforcement of the prohibitions on prescription drug 

importation. 

To determine what efforts federal agencies have undertaken to coordinate 

the enforcement of the prohibitions on personal importation of 

prescription drugs, we interviewed CBP, USPS, FDA, DEA, ICE, and 

ONDCP headquarters officials. We obtained and reviewed documents 

describing these initiatives, their status, and any studies or data describing 

the results of the initiatives. These documents included agency guidelines 

and memorandums, indicating changes to agency policies and procedures; 

congressional hearings; and selected legislative proposals. We obtained 

these documents from agency officials; agency Web sites, as directed by 

agency officials; and congressional Web sites. We also interviewed CBP 

and FDA field officials at the selected international mail facilities and 

private carrier facilities to ascertain the status of the implementation of 

these initiatives. We analyzed and synthesized the information gathered 

from the interviews and documents. 
Appendix I: Objectives, Scope, and 

Methodology 

Page 51 GAO-05-372 Prescription Drugs 

In addition, in appendix III of this report, we used data from FDA on the 

number of open and closed investigations it had undertaken related to 

Internet drug sales and imported prescription drugs. We also used data 

from DEA on the number of arrests related to the illegal diversion of 

pharmaceuticals. Because these data were used for contextual purposes, 

we did not assess their reliability. 

We conducted our review between April 2004 and August 2005 in 

accordance with generally accepted government auditing standards. 
Appendix II: General Description of the 

Controlled Substance Schedules I through V 

Page 52 GAO-05-372 Prescription Drugs 

The drugs and drug products that come under the Controlled Substances 

Act are divided into five schedules. A general description and examples of 

the substances in each schedule are outlined below. 

Table 1: General Description of Controlled Substances, Schedules I-V 

Schedule Description of substances in the schedule Examples 

I Substances that have no accepted medical use in the United 

States and have a high potential for abuse 

Heroin, lysergic acid diethylamide (LSD), 

marijuana, and gamma hydroxybutyric acid (GHB) 

II Substances that have a high potential for abuse with severe 

psychic or physical dependence liability—certain narcotic, 

stimulant, and depressant drugs 

Opium, morphine, codeine, methadone, and 

meperidine (Demerol) 

III Substances that have a potential for abuse that is less than 

those in schedules I and II and include compounds containing 

limited quantities of certain narcotic drugs and non-narcotic 

drugs 

Anabolic steroids; derivatives of babituric acid 

(except those listed in another schedule); 

benzphetamine; and any compound, mixture, 

preparation or suppository dosage form containing 

amobarbital, secobarbital, or pentobarbital 

IV Substances that have a potential for abuse that is less than 

those listed in schedule III 

Barbital, alprazolam (Xanax), Cathine—constituent 

of the “Khat” plant—and Diazepam (Valium) 

V Substances that have a potential for abuse that is less than 

those listed in schedule IV and consist primarily of preparations 

containing limited quantities of certain narcotic and stimulant 

drugs 

Pyrovalerone (Centroton, Thymergix) 

Source: GAO analysis of Drug Enforcement Administration information 

Appendix II: General Description of the 

Controlled Substance Schedules I through V 
Appendix III: Federal Agencies Work with 

Credit Card Organizations to Enforce 

Prohibitions on Prescription Drugs 

Page 53 GAO-05-372 Prescription Drugs 

During congressional hearings in July 2004, representatives from 

MasterCard International and Visa U.S.A., Inc., testified on issues 

concerning the use of credit cards to purchase prescription drugs for 

importation from Internet pharmacies, including discussions with federal 

law enforcement agencies to address these issues.1

 Accordingly, we met 

with Drug Enforcement Administration (DEA), Food and Drug 

Administration (FDA), and Immigration and Customs Enforcement (ICE) 

officials, as well as representatives from MasterCard International and 

Visa U.S.A., Inc.to more fully understand how these organizations are 

working together to address prohibitions on prescription drug 

importation.2

 The agency officials and credit card association3

representatives described their working relationship as cooperative, but 

complicated by legal and practical considerations. The following section 

summarizes our discussions. 

According to FDA, DEA, and ICE officials, their agencies have worked 

with credit card organizations to obtain information to investigate the 

importation of prescription drugs purchased with a credit card from 

Internet pharmacies, but these investigations were complicated by legal 

and practical considerations. Such considerations included privacy laws; 

federal law enforcement agencies’ respective subpoena authority, 

priorities, and jurisdictions; and the ease with which merchants engaged in 

illegal activity can enter into a new contract with a different bank to use 

the same payment system. In addition, according to the two credit card 

associations we contacted, their respective associations have also 

undertaken searches of the Internet for Web sites that appeared to be 

selling problematic materials and accepting their respective payment 

cards, but these investigations can also be complicated by legal 

considerations. 

 1

Buyer Beware: The Danger of Purchasing Pharmaceuticals over the Internet: Federal 

and Private Sector Responses: Hearing Before the Permanent Subcomm. on 

Investigations of the Senate Comm. on Government Affairs, 108th Cong. (July 22, 2004). 

2

According to a DEA official, the majority of Internet drug sites used these two companies’ 

payment systems. 

3

Two types of credit card organizations handle the four major U.S. credit cards. Credit card 

associations, such as Visa and MasterCard, license their member banks to issue bank cards, 

authorize merchants to accept those cards or both. In contrast, full-service credit card 

companies, such as American Express and Discover, issue their own brands of cards 

directly to customers and authorize merchants to accept those cards. See also: GAO, 

Internet Gambling: An Overview of the Issues, GAO-03-89 (Washington, D.C.: December 2, 

2002) 

Appendix III: Federal Agencies Work with 

Credit Card Organizations to Enforce 

Prohibitions on Prescription Drugs 

Investigations of 

Credit Card 

Purchases of 

Prescription Drugs 

Imported from 

Internet Pharmacies 

Can Be Complicated 

by Legal and Practical 

Considerations 
Appendix III: Federal Agencies Work with 

Credit Card Organizations to Enforce 

Prohibitions on Prescription Drugs 

Page 54 GAO-05-372 Prescription Drugs 

Privacy laws can sometimes limit the extent to which companies, 

including credit card organizations, will provide information to federal law 

enforcement agencies about parties to a transaction. FDA and DEA 

officials told us that credit card organizations and/or banks and other 

financial institutions, when they have the direct contractual relationship 

with the merchants, have provided to the agencies information regarding 

transactions involving prescription drugs prohibited from import, as well 

as alerting federal officials when suspicious activity is detected. However, 

they said that the companies do not provide information about the parties 

involved in the transaction without a subpoena. Representatives from the 

two associations with whom we met explained that law enforcement 

usually needs to issue a subpoena because of company concerns about 

possible legal action by the subject of the investigation (for example, if the 

subject asserted that information was provided by the association or bank 

to law enforcement in violation of federal privacy laws). They further 

noted, however, that their respective associations would provide law 

enforcement information without a subpoena, when properly requested 

under certain circumstances, including matters of national security or 

when a human life was in immediate jeopardy. 

DEA, ICE, and FDA officials confirmed that they are able to obtain 

information from credit card companies and/or banks and other financial 

institutions through subpoenas, although the agencies have different 

subpoena authority with regard to entities, such as banks and credit card 

companies. DEA and ICE have the authority to subpoena information 

directly from such entities, but FDA must ask a U.S. Attorney to obtain a 

grand jury subpoena requesting the information.4

 DEA and ICE may also 

use grand jury subpoenas. For example, DEA officials told us that usually 

they are able to obtain needed information using administrative 

subpoenas; however, they may use a grand jury subpoena if a company 

will not provide the requested information or a U.S. Attorney prefers that 

approach. DEA, FDA, and ICE could not readily provide data on the 

 4

FDA has the authority to inspect certain records of those entities processing drugs under 

section 704 of the Federal Food, Drug, and Cosmetic Act, such as, a drug manufacturer, but 

not the records of third parties, such as credit card organizations. However, section 704 is 

an administrative authority, and it may not be relied upon when the agency is solely 

interested in obtaining evidence for a criminal prosecution. According to FDA, when 

criminal Internet/importation investigations mature to the point that a grand jury becomes 

involved, FDA’s Office of Criminal Investigations (OCI) routinely uses grand jury 

subpoenas to obtain information from credit card companies and banks. Use of a grand 

jury subpoena to obtain this kind of information is a standard investigatory practice. FDA 

stated that when served with grand jury subpoenas, the banks and credit card companies 

have consistently been cooperative and have provided OCI with the information requested. 
Appendix III: Federal Agencies Work with 

Credit Card Organizations to Enforce 

Prohibitions on Prescription Drugs 

Page 55 GAO-05-372 Prescription Drugs 

number of subpoenas served because (1) data on DEA and ICE 

administrative subpoenas were maintained at the field office requesting 

the subpoena and were not organized according to payment method and 

(2) none of the agencies could share grand jury information.5

Agencies’ priorities also affect their ability to conduct investigations of 

credit card purchases of prescription drugs for importation. According to 

FDA, DEA, and ICE officials, their investigations, including those involving 

imported prescription drugs, focused on commercial quantities, rather 

than quantities to be consumed for personal use.6

 DEA officials also said 

that DEA seeks to dismantle major drug supply and money laundering 

organizations; therefore, its investigations of prescription drug violations 

focused on the suppliers of Internet pharmacies, not individual consumers. 

DEA reported no active cases on individuals who were illegally importing 

controlled substance pharmaceuticals over the Internet for personal 

consumption.7

 FDA, DEA, and ICE officials said that investigations 

involving smaller quantities may be handled by state and local law 

enforcement. 

In addition to the quantity of drugs being imported, federal enforcement 

agencies consider jurisdiction when determining whether to pursue an 

investigation, including investigations of Internet pharmacies using credit 

card payment systems that cross U.S. borders. For a federal enforcement 

agency to determine whether it has jurisdiction to investigate potential 

illegal activity outside the United States, it generally needs to consider 

whether (1) the federal statute or statutes violated apply to activity outside 

the country and (2) there is sufficient evidence of an intent to produce 

effects in the United States or some other connection to the United States, 

such as a U.S. distributor. Pursuit of investigations of Internet pharmacies 

using credit card payment systems presents both jurisdictional and 

practical limitations, when some or all of the operations (e.g., pharmacies, 

Web sites, and bank accounts) are located in foreign countries and there is 

 5

Rule 6(e) of the Federal Rules of Criminal Procedure codifies the traditional practice of 

grand jury secrecy. With certain limited exceptions, Rule 6(e) generally prohibits disclosure 

of “matters occurring before the grand jury.” 

6

FDA officials noted, however, that in matters of public health and safety, FDA would seek 

a prosecution no matter what the quantity of illegal drugs involved. 

7

According to DEA, as of June 21, 2005, it had made 560 arrests related to the diversion of 

pharmaceuticals; those arrested included retailer dealers, leaders within organizations, and 

heads of organizations, among others. However, DEA data do not include information on 

which of the arrests involved Internet sales for importation or use of credit card payment 

systems. 
Appendix III: Federal Agencies Work with 

Credit Card Organizations to Enforce 

Prohibitions on Prescription Drugs 

Page 56 GAO-05-372 Prescription Drugs 

no U.S. distributor. According to FDA officials, in cases that FDA does not 

have jurisdiction to pursue, it may ask its foreign counterparts for 

assistance.8

 ICE officials told us that they focused on transporters of 

commercial quantities across U.S. borders from a foreign country into the 

United States. 

By contrast, DEA enforces a statute that specifically applies to 

manufacturers or distributors of certain prescription drugs who are 

located in foreign countries. Specifically, DEA has jurisdiction over a 

manufacturer or distributor of schedule II controlled substances in a 

foreign country who knows or intends that such substances will be 

unlawfully imported into the United States.9

 However, the relevant statute 

does not apply to prescription drugs that are schedules III through V 

controlled substances. Therefore, according to a DEA official, to pursue 

such investigations, DEA has to devise other ways to reach those 

operating outside the United States. 

A DEA official said that another practical consideration affecting 

investigations of credit card purchases of imported prescription drugs was 

the ease with which merchants engaged in illegal activities were able to 

open new merchant credit card accounts. Credit card association 

representatives confirmed that the reappearance of the same violators 

using a different name or bank, or even disguising the illegal activity as a 

different and legal activity, can be a problem. They said that unlike law 

enforcement, credit card organizations do not have the authority to arrest 

the violators, and some of the merchants engaged in such illegal activities 

are skilled at moving from bank to bank and masking their illegal 

activities. 

In addition to investigations by federal law enforcement agencies, each of 

the credit card associations we contacted had also undertaken searches of 

the Internet for Web sites that appeared to be selling problematic 

 8

According to FDA, as of June 2005, FDA’s OCI has closed 24 full-scale investigations 

related to Internet drug sales and imported prescription drugs. These 24 investigations 

resulted in 7 judicial cases where a defendant was brought before a court; each of these 

cases may include one or more prosecutions. During 5 of the 24 investigations, FDA 

worked cooperatively with foreign governments. In addition, FDA reported that as of June 

2005, OCI had 23 pending full-scale investigations related to Internet drug sales and 

imported prescription drugs, 5 of which had matured into pending prosecutions. In 7 of the 

23 investigations, OCI was working cooperatively with foreign governments. 

9

21 U.S.C. § 959. 
Appendix III: Federal Agencies Work with 

Credit Card Organizations to Enforce 

Prohibitions on Prescription Drugs 

Page 57 GAO-05-372 Prescription Drugs 

materials and using its payment cards.10 One association used a vendor to 

carry out the searches and then provided the information to its member 

banks regarding their merchants who appear to have been involved in 

selling controlled substances. The other association’s security personnel 

conducted the Internet search, identified the sites, and then attempted to 

contact the member bank that had contracted with the merchant. 

Representatives of the latter association told us that as a result of this 

effort, at the association’s request, contracts with approximately 500 

merchants had been terminated by the member banks that had authorized 

the particular merchants to accept the association’s credit card. 

Representatives from both associations agreed that federal law 

enforcement agencies were in the best position to enforce the prohibition 

on prescription drug importation, because they have arrest authority and 

can remove the violators. However, these representatives had differing 

opinions concerning the desirability of their taking any additional 

enforcement steps in this area. Representatives of one association told us 

they did not want the authority to make purchases to confirm that illegal 

transactions were occurring. They said once their investigators identified a 

site willing to sell drugs, they contacted the bank that authorized the 

merchant’s account so that the bank could take appropriate action. 

Further, they told us that the association was not set up to make such 

purchases safely and its mail room was not structured to take delivery. 

Representatives of the other association told us that their association 

would like the authority to make such purchases, noting that their 

investigations were complicated by the inability of the association’s 

security personnel to purchase controlled substances. However, these 

representatives told us that, if they were allowed to make such 

transactions, they would expect to turn over the controlled substances to 

federal law enforcement immediately upon receipt. 

 10The associations’ role in the day-to-day management of their operations includes 

responsibilities for, among other things, (1) establishing standards and procedures for the 

acceptance and settlement of each of their members’ transactions on a global basis; (2) 

conducting the due diligence for the financial soundness of potential members and 

requiring periodic reporting of members on fraud, chargeback, counterfeit card, and other 

matters that may impact the integrity of the association as a whole; and (3) operating the 

security and risk systems to minimize risk to the member banks, including operating fraud 

controls to allow members to monitor transactions with their cardholders and establishing 

specific design features of the bankcard to enhance security features. See also GAO, 

Money Laundering: Extent of Money Laundering through Credit Cards Is Unknown,

GAO-02-670 (Washington, D.C.: July 22, 2002). 
Appendix III: Federal Agencies Work with 

Credit Card Organizations to Enforce 

Prohibitions on Prescription Drugs 

Page 58 GAO-05-372 Prescription Drugs 

A DEA official told us that currently credit card organizations are not 

exempt from the general prohibition against possessing controlled 

substances, 11 and therefore it is illegal for them to purchase controlled 

substances from an Internet pharmacy to show that the pharmacy is acting 

illegally. 12 He also said that even if the law were changed to allow such 

transactions, executing them could be unmanageable, because the 

companies would have to comply with federal regulations for handling and 

storing controlled substances.13 For example, federal regulations require 

that controlled substances be stored in a safe, vault, steel cabinet, or cage. 

The regulations also specify the methods and materials to be used to 

construct the storage facility, as well as the type of security system 

(alarms, locks, and anti-radiation devices) required to prevent entry. Even 

if a credit card company planned to turn over purchased controlled 

substances to federal law enforcement upon receipt, it would need to have 

a facility as prescribed by federal regulations to hold and store the 

substances until a DEA agent could take possession of them. 

Federal enforcement agencies and credit card organizations have had 

periodic discussions about credit card enforcement issues involving 

purchases of prescription drugs for importation from Internet pharmacies. 

In addition, the associations told us that they had provided information 

about this issue to banks and other financial institutions. 

According to FDA and DEA officials and representatives of the two credit 

card associations we contacted, meetings have been held periodically, 

between individual agencies (e.g., DEA and FDA) or as part of the 

Customs and Border Protection (CBP) Interagency Task Force (discussed 

earlier in this report) and with representatives of one or more companies 

present. Association representatives told us that they believed that the 

meetings, which began in late 2003, have provided an educational 

opportunity for both the credit card companies and the federal law 

enforcement agencies. For example, the representatives of one association 

said that during the meetings they had described how the association’s 

payment system operated, explaining (1) the relationship among the 

association, the banks and other financial institutions, merchants, and 

 1121 U.S.C. § 844(a). 

12The official emphasized that the current U.S. system for handling controlled substances is 

a closed system of distribution. It can account for every tablet produced from raw product 

coming into the country to the final tablet. 

1321 C.F.R. § 1301.72. 

Federal Enforcement 

Agencies and Credit 

Card Associations 

Have Discussed 

Credit Card 

Enforcement Issues 
Appendix III: Federal Agencies Work with 

Credit Card Organizations to Enforce 

Prohibitions on Prescription Drugs 

Page 59 GAO-05-372 Prescription Drugs 

cardholders, and (2) which entities maintained the transactional 

information needed by law enforcement for investigations of Internet 

pharmacies. They said that DEA and FDA had explained federal laws 

related to the importation of prescription drugs, both controlled and 

noncontrolled substances. Representatives of the other association said 

that the meetings helped to educate its officials about issues, concerns, 

and risks related to the illegal importation of prescription drugs. In 

addition, agency officials and association representatives said that they 

had discussed the role credit card organizations can play with regard to 

illegal importation. No minutes of these meetings are maintained. 

According to association representatives, information obtained at these 

meetings was disseminated to the banks and other financial institutions 

through bulletins. Through association bulletins, both credit card 

associations provided to banks and other financial institutions information 

concerning the illegal importation of prescription drugs. The bulletins 

reminded the recipients of their obligation to ensure that the credit card 

system was not to be used for illegal activity, alerted them to the risk of 

illegal activity involving transactions for prescription medications 

purchased over the Internet, and underscored the need for due diligence 

to ensure that merchants were not engaged in illegal activities. One 

association also issued a press release that, according to the association’s 

representatives, was to communicate to the public information similar to 

that which had been sent to the banks. 

FDA and DEA officials and association representatives said that the 

dialogue was continuing and described the relationship between the 

agencies and associations as good. A meeting between credit card 

organizations and the CBP task force is to be held in late summer 2005. 

Moreover, they noted that informal contacts between the agencies and the 

credit card organizations occurred, as needed, on specific matters related 

to prescription drug importation. However, agency officials confirmed that 

they had no plan or written strategy for dealing with credit card 

organizations related to the illegal importation of prescription drugs 

purchased with a credit card. 
Appendix IV: Comments from the Department of Homeland Security 

Page 60 GAO-05-372 Prescription Drugs 

Appendix IV: Comments from the 

Department of Homeland Security 
Appendix IV: Comments from the Department of Homeland Security 

Page 61 GAO-05-372 Prescription Drugs 
Appendix V: Comments from the Department of Justice, Drug Enforcement Administration 

Page 62 GAO-05-372 Prescription Drugs 

Appendix V: Comments from the Department 

of Justice, Drug Enforcement Administration 
Appendix V: Comments from the Department of Justice, Drug Enforcement Administration 

Page 63 GAO-05-372 Prescription Drugs 
Appendix VI: Comments from the Department 

of Health and Human Services 

Page 64 GAO-05-372 Prescription Drugs 

Appendix VI: Comments from the 

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

of Health and Human Services 

Page 65 GAO-05-372 Prescription Drugs 
Appendix VI: Comments from the Department 

of Health and Human Services 

Page 66 GAO-05-372 Prescription Drugs 
Appendix VI: Comments from the Department 

of Health and Human Services 

Page 67 GAO-05-372 Prescription Drugs 
Appendix VII: Comments from the Office of 

National Drug Control Policy 

Page 68 GAO-05-372 Prescription Drugs 

Appendix VII: Comments from the Office of 

National Drug Control Policy 
Appendix VIII: Comments from the U.S. Postal 

Service 

Page 69 GAO-05-372 Prescription Drugs 

Appendix VIII: Comments from the U.S. 

Postal Service 
Appendix IX: GAO Contact and 

Acknowledgments 

Page 70 GAO-05-372 Prescription Drugs 

Richard M. Stana (202) 512-8777 

In addition to the above, John F. Mortin, Assistant Director; Leo M. 

Barbour; Frances A. Cook; Katherine M. Davis; Michele C. Fejfar; Yelena T. 

Harden; James R. Russell; and Barbara A. Stolz made key contributions to 

this report. 

Appendix IX: GAO Contact and 

Acknowledgments 

GAO Contact 

Acknowledgments 

(440282) 
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