United States Government Accountability Office

GAO Testimony 

Before the Subcommittee on Health, 

Committee on Energy and Commerce, 

House of Representatives 

MEDICAL DEVICES 

FDA Faces Challenges in 

Conducting Inspections of 

Foreign Manufacturing 

Establishments 

Statement of Marcia Crosse 

Director, Health Care 

For Release on Delivery

Expected at 10:00 a.m. EDT 

Wednesday, May 14, 2008

 

GAO-08-780T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

May 14, 2008

MEDICAL DEVICES

FDA Faces Challenges in Conducting Inspections of 

Foreign Manufacturing Establishments

Highlights of GAO-08-780T, a testimony 

before the Subcommittee on Health, 

Committee on Energy and Commerce, 

House of Representatives

As part of the Food and Drug 

Administration’s (FDA) oversight 

of the safety and effectiveness of

medical devices marketed in the 

United States, it inspects certain 

foreign and domestic

establishments where these

devices are manufactured. To help 

FDA address shortcomings in its 

inspection program, the Medical 

Device User Fee and Modernization

Act of 2002 required FDA to 

accredit third parties to inspect 

certain establishments. In

response, FDA has implemented 

two voluntary programs for that

purpose. 

This statement is based primarily

on GAO testimonies from January 

2008 (GAO-08-428T) and April 2008 

(GAO-08-701T). In this statement,

GAO assesses (1) FDA’s program 

for inspecting foreign 

establishments that manufacture

medical devices for the U.S. market

and (2) FDA’s programs for thirdparty inspections of those 

establishments. For GAO’s January 

and April 2008 testimonies, GAO 

interviewed FDA officials, analyzed

information from FDA, and 

updated GAO’s previous work on

FDA’s programs for inspections by 

accredited third parties. GAO 

updated selected information for 

this statement in early May 2008. 

FDA faces challenges managing its program to inspect foreign establishments 

that manufacture medical devices. GAO testified in January 2008 that two 

databases that provide FDA with information about foreign medical device 

establishments and the products they manufacture for the U.S. market 

contained inaccurate information about establishments subject to FDA 

inspection. In addition, comparisons between these databases—which could 

help produce a more accurate count—had to be done manually. Recent 

changes FDA made to its registration database could improve the accuracy of 

the count of establishments, but it is too soon to tell whether these and other 

changes will improve FDA’s management of its foreign inspection program. 

Another challenge is that FDA conducts relatively few inspections of foreign 

establishments; officials estimated that the agency inspects foreign 

manufacturers of high-risk devices (such as pacemakers) every 6 years and 

foreign manufacturers of medium-risk devices (such as hearing aids) every 

27 years. Finally, inspections of foreign manufacturers pose unique challenges 

to FDA, such as difficulties in recruiting investigators to travel to certain 

countries and in extending trips if the inspections uncovered problems. FDA 

is pursuing initiatives that could address some of these unique challenges, but 

it is unclear whether FDA’s proposals will increase the frequency with which 

the agency inspects foreign establishments. 

Few inspections of foreign medical device manufacturing establishments have 

been conducted through FDA’s two accredited third-party inspection 

programs—the Accredited Persons Inspection Program and the Pilot Multipurpose Audit Program (PMAP). Under FDA’s Accredited Persons Inspection 

Program, from March 11, 2004—the date when FDA first cleared 

an accredited organization to conduct independent inspections—through 

May 7, 2008, four inspections of foreign establishments had been conducted 

by accredited organizations. An incentive to participation in the program is 

the opportunity to reduce the number of inspections conducted to meet 

FDA’s and other countries’ requirements. Disincentives include bearing the 

cost for the inspection, particularly when the consequences of an inspection 

that otherwise might not occur in the near future could involve regulatory 

action. The Food and Drug Administration Amendments Act of 2007 made 

several changes to program eligibility requirements that could result in 

increased participation by manufacturers. PMAP was established on 

September 7, 2006, as a partnership between FDA and Canada’s medical 

device regulatory agency and allows accredited organizations to conduct a 

single inspection to meet the regulatory requirements of both countries. As of 

May 7, 2008, two inspections of foreign establishments had been conducted by 

accredited organizations through this program. The small number of 

inspections completed to date by accredited third-party organizations raises 

questions about the practicality and effectiveness of these programs to quickly 

help FDA increase the number of foreign establishments inspected. 

To view the full product, including the scope 

and methodology, click on GAO-08-780T. 

For more information, contact Marcia Crosse 

at (202) 512-7114 or crossem@gao.gov. 
Mr. Chairman and Members of the Subcommittee: 

I am pleased to be here today as you examine the Food and Drug 

Administration’s (FDA) program for inspecting foreign manufacturers of 

medical devices for the U.S. market. FDA is responsible for the regulation

of medical devices1 marketed in the United States, including those 

manufactured in foreign establishments.2

 FDA classifies medical devices 

into one of three classes based on degree of potential risk and level of 

control needed to reasonably ensure safety and effectiveness.3

 According 

to FDA data, a wide variety of class II (medium risk) and III (high risk) 

medical devices may be manufactured for the U.S. market by foreign 

establishments. Such devices include defibrillators, contact lenses, 

pacemakers, hip prostheses, and coronary stents.4

 FDA is responsible for 

inspecting certain foreign and domestic establishments to ensure they 

meet required manufacturing standards; such inspections are FDA’s 

primary means of assuring that the safety and effectiveness of medical 

devices are not jeopardized by poor manufacturing practices. 

The Medical Device User Fee and Modernization Act of 2002 (MDUFMA) 

addressed concerns about FDA’s ability to meet its responsibilities for 

inspecting medical device manufacturing establishments.5

 MDUFMA 

included provisions designed to (1) increase the number of inspected 

medical device manufacturing establishments and (2) help medical device

manufacturers meet the inspection requirements of both the United States

 1

Medical devices include instruments, apparatuses, machines, and implants that are

intended for use to diagnose, cure, treat, or prevent disease, or to affect the structure or

any function of the body. 21 U.S.C. § 321(h). 

2

FDA regulations define an establishment as a place of business under one management at

one general physical location at which a device is manufactured, assembled, or otherwise 

processed. 21 C.F.R. § 807.3(c) (2007). Medical device manufacturers may have more than

one establishment. We use the term “manufacture” to refer to activities including 

manufacturing, preparing, and processing devices. 

3

21 U.S.C. § 360c. Medical devices are classified into one of three classes. Class I includes 

“low risk” devices, such as tongue depressors, elastic bandages, and bedpans. Class II 

includes “medium risk” devices, such as syringes, hearing aids, and electrocardiograph 

machines. Class III includes “high risk” devices, such as heart valves, pacemakers, and 

defibrillators. 

4

A coronary stent is a small tube that is placed within a coronary artery to keep the vessel 

open.

5

See Pub. L. No. 107-250, § 201, 116 Stat. 1588, 1602-09 (2002) (codified as amended at 

21 U.S.C. § 374(g)). 

Page 1 GAO-08-780T
and foreign countries in a single inspection. Specifically, MDUFMA 

required FDA to accredit third-party organizations to conduct inspections 

of certain foreign and domestic establishments.6

 In response, FDA 

implemented its Accredited Persons Inspection Program, which permits 

certain establishments to voluntarily request inspections from third-party 

organizations to meet inspectional requirements. In January 2007, we 

reported on the status of this program citing, among other things, 

concerns regarding its implementation and potential incentives and 

disincentives that may influence manufacturers’ participation.7

Additionally, in partnership with Health Canada,8

 FDA established in 

September 2006 another program for inspection by accredited third 

parties—the Pilot Multi-purpose Audit Program (PMAP)—that allows 

accredited organizations to conduct a single inspection to meet the 

regulatory requirements of both countries. 

My remarks today are based primarily on our January 2008 statement, 

which updated our January 2007 report, on FDA’s management of its 

medical device inspection program and our April 2008 statement on a 

number of new FDA initiatives related to foreign inspections of FDA 

regulated products, including medical devices.9

 My remarks will focus on 

our assessment of (1) FDA’s program for inspecting foreign 

establishments that manufacture medical devices for the U.S. market and

(2) FDA’s programs for third-party inspections of foreign medical device 

manufacturing establishments. 

 6

In this report, unless otherwise noted, when we discuss inspections, we are referring to

those conducted by FDA investigators. 

7

GAO, Medical Devices: Status of FDA’s Program for Inspections by Accredited

Organizations, GAO-07-157 (Washington, D.C.: Jan. 5, 2007). 

8

Health Canada is the governmental entity that regulates medical devices marketed in 

Canada. 

9

GAO, Medical Devices: Challenges for FDA in Conducting Manufacturer Inspections, 

GAO-08-428T (Washington, D.C.: Jan. 29, 2008) and GAO, Drug Safety: Preliminary 

Findings Suggest Recent FDA Initiatives Have Potential, but Do Not Fully Address 

Weaknesses in Its Foreign Drug Inspection Program, GAO-08-701T (Washington, D.C.: 

Apr. 22, 2008). 

Page 2 GAO-08-780T
To address these objectives, we used work completed for our January 

2008 statement on FDA’s medical device inspection program, for which we 

interviewed officials from FDA’s Center for Devices and Radiological 

Health (CDRH) and Office of Regulatory Affairs (ORA), which have 

responsibilities for managing the medical device inspection program.10 To 

assess FDA’s program for inspecting foreign establishments that 

manufacture medical devices, we obtained information from FDA’s Device 

Registration and Listing System (DRLS), as of September 19, 2007; Field 

Accomplishments and Compliance Tracking System (FACTS) for fiscal 

year 2002 through fiscal year 2007; and Operational and Administrative 

System for Import Support (OASIS) for fiscal year 2007. We assessed the 

reliability of these data by (1) reviewing existing information about the 

data and the databases that produced them, (2) interviewing agency 

officials knowledgeable about the data, and (3) performing electronic 

testing of data elements from DRLS and FACTS. We found the data in the 

FACTS database sufficiently reliable for our purposes. We also found that

DRLS was sufficiently reliable, to the extent that it accurately reflects 

information provided by foreign establishments that register to market 

medical devices in the United States. However, we determined that these 

data do not necessarily reflect the number of establishments that 

manufacture medical devices for the U.S. market. In addition, we found 

that OASIS is likely to overestimate the number of foreign establishments 

whose medical devices have been imported into the United States because 

of uncorrected errors in the data. Therefore, we present information from 

both DRLS and OASIS to illustrate the variability in information that FDA’s 

databases provide on this topic. These data represent the best information 

available and are what FDA relies on to manage its foreign medical device

inspection activities. In addition, in preparation for our April 2008

statement, we obtained information from FDA officials to learn about 

recent initiatives to improve the agency’s program for inspecting 

establishments manufacturing FDA-regulated products, including medical 

devices. For today’s statement, we obtained additional data from FDA to 

update selected information from our January 2008 statement.

To examine FDA’s programs for third-party inspections of foreign medical 

device manufacturing establishments, we updated work completed for our 

 10Within FDA, the Center for Biologics Evaluation and Research regulates medical devices

involved in human immunodeficiency virus (HIV) testing and the collection, processing, 

testing, manufacture, and administration of licensed blood, blood components, and cellular 

products. We did not include medical devices regulated by this center in the scope of our

work. 

Page 3 GAO-08-780T
January 2008 statement. We obtained FDA data on the number of 

inspections conducted by accredited third parties from March 11, 2004—

the date when FDA first cleared an accredited organization to conduct 

inspections—through May 7, 2008. For our January 2008 statement, we 

also obtained information from FDA about other critical aspects of its 

programs for inspections by accredited third parties. To gain perspective 

on recent changes to FDA’s programs for inspections by accredited third 

parties, we contacted representatives of the same 13 affected entities we 

interviewed for our January 2007 report on this topic.11 We received 

responses from 2 of 4 accredited organizations, 1 of 6 medical device 

manufacturers, and 2 of 3 organizations that represent medical device

manufacturers. We shared the facts contained in our current statement 

with FDA officials. FDA provided technical comments, which are 

appropriately addressed in the testimony. We conducted audit work for 

the January 2008 statement from December 2007 to January 2008; for our 

April 2008 statement, from March 2008 through April 2008; and updated 

our work on medical devices in early May 2008 for this statement. We 

conducted this work in accordance with generally accepted government 

auditing standards. Those standards require that we plan and perform the 

audit to obtain sufficient, appropriate evidence to provide a reasonable 

basis for our findings and conclusions based on our audit objectives. We 

believe that the evidence obtained provides a reasonable basis for our 

findings and conclusions based on our audit objectives. 

In summary, we found that FDA faces challenges in its program to inspect 

foreign establishments manufacturing medical devices. In January 2008, 

we testified that two databases that provide FDA with information about 

foreign medical device establishments and the products they manufacture 

for the U.S. market contained inaccurate information about establishments 

subject to FDA inspection and could not exchange information. Since 

then, FDA has made changes to its registration process that could improve 

its database and provide the agency with a more accurate count of foreign 

establishments that manufacture medical devices. While the agency has 

initiated other steps to improve its databases, it is too soon to know if 

these changes will improve FDA’s management of its foreign inspection 

program. Another challenge is that FDA conducts relatively few 

inspections of foreign establishments that manufacture medical devices. 

Officials estimated the agency had inspected foreign class II 

 11These affected entities included accredited organizations, organizations that represent 

medical device manufacturers, and medical device manufacturers. 

Page 4 GAO-08-780T
manufacturers every 27 years and foreign class III manufacturers every 

6 years. Finally, inspections of foreign medical device manufacturing 

establishments pose unique challenges to FDA, such as difficulties in 

recruiting investigators to voluntarily travel to certain countries and in 

extending trips if problems are identified during inspections. FDA is 

pursuing initiatives that could address some of these challenges, but it is 

unclear whether the agency’s proposals will increase the frequency with 

which FDA inspects foreign establishments. 

Few inspections of foreign medical device manufacturing establishments 

have been conducted through FDA’s two programs for inspections by 

accredited third parties—the Accredited Persons Inspection Program and 

PMAP. Under FDA’s Accredited Persons Inspection Program, from 

March 11, 2004—the date when FDA first cleared an accredited

organization to conduct inspections—through May 7, 2008, four 

inspections of foreign establishments had been conducted by accredited 

organizations. To participate in this program, manufacturers must decide 

to request an inspection by an accredited organization, and this decision 

might be influenced by both potential incentives and disincentives. An 

incentive to participation in the program is the opportunity to reduce the 

number of inspections conducted to meet FDA and other countries’ 

requirements. Disincentives include bearing the cost for the inspection, 

particularly when the consequences of an inspection that otherwise may 

not occur in the near future could involve regulatory action. The Food and 

Drug Administration Amendments Act of 2007 (FDAAA) changed the 

requirements for inspections by accredited third parties in several ways, 

which could result in increased participation by manufacturers, although it 

is too soon to tell. For example, a requirement that foreign establishments 

be periodically inspected by FDA before being eligible for third-party 

inspections was eliminated. Device manufacturers may also request an 

inspection by an accredited third party through PMAP, which was 

established on September 7, 2006, and is limited to a partnership with 

Canada. As of May 7, 2008, two inspections of foreign establishments had 

been conducted by an accredited organization through PMAP. The small 

number of inspections completed by accredited third-party organizations 

raises questions about the practicality and effectiveness of these programs 

to help FDA conduct additional foreign inspections. 

Page 5 GAO-08-780T
FDA is responsible for overseeing the safety and effectiveness of medical 

devices that are marketed in the United States, whether manufactured in 

domestic or foreign establishments. All establishments that manufacture 

medical devices for marketing in the United States are required to register 

annually with FDA.12 As part of its efforts to ensure the safety, 

effectiveness, and quality of medical devices, FDA is responsible for 

inspecting certain foreign and domestic establishments to ensure that, 

among other things, they meet manufacturing standards established in 

FDA’s quality system regulation.13 Within FDA, CDRH is responsible for 

assuring the safety and effectiveness of medical devices. Among other 

things, CDRH works with ORA, which conducts inspections of foreign 

establishments. FDA may conduct inspections before and after medical 

devices are approved or otherwise cleared to be marketed in the United 

States. 

Background 

• Premarket inspections are conducted before FDA approves U.S. marketing 

of a new medical device that is not substantially equivalent to one that is

already on the market.14 Premarket inspections primarily assess 

manufacturing facilities, methods, and controls and may verify pertinent 

records. 

• Postmarket inspections are conducted after a medical device has been 

approved or otherwise cleared to be marketed in the United States and 

include several types of inspections: (1) Quality system inspections are 

conducted to assess compliance with applicable FDA regulations, 

including the quality system regulation to ensure good manufacturing 

practices and the regulation requiring reporting of adverse events.15 These 

inspections may be comprehensive or abbreviated, which differ in the 

scope of inspectional activity. Comprehensive postmarket inspections 

 1221 U.S.C. § 360(b), (i).

1321 C.F.R. pt. 820 (2007). The quality system regulation requires, among other things, that

domestic or foreign manufacturers have a quality system in place to implement current

good manufacturing practices in the design, manufacture, packaging, labeling, storage, 

installation, and servicing of finished medical devices intended for human use in the United

States. A quality system includes the organizational structure, responsibilities, procedures, 

processes, and resources for implementing quality management. 

14Currently, most medical devices are cleared for marketing in the United States because 

they are determined to be “substantially equivalent” to a marketed device. FDA generally 

does not conduct premarket inspections of establishments manufacturing these types of 

medical devices. 

1521 C.F.R. pt. 803 (2007). 

Page 6 GAO-08-780T
assess multiple aspects of the manufacturer’s quality system, including 

management controls, design controls, corrective and preventative 

actions, and production and process controls. Abbreviated postmarket 

inspections assess only some of these aspects, but always assess 

corrective and preventative actions. (2) For-cause and compliance followup inspections are initiated in response to specific information that raises 

questions or problems associated with a particular establishment. 

(3) Postmarket audit inspections are conducted within 8 to 12 months of a 

premarket application’s approval to examine any changes in the design, 

manufacturing process, or quality assurance systems. 

Requirements governing foreign and domestic inspections differ. 

Specifically, FDA is required to inspect domestic establishments that 

manufacture class II or III medical devices every 2 years.16 There is no 

comparable requirement to inspect foreign establishments. FDA does not 

have authority to require foreign establishments to allow the agency to 

inspect their facilities. However, if an FDA request to inspect is denied, 

FDA may prevent the importation of medical devices from that foreign 

establishment into the United States. In addition, FDA has the authority to

conduct physical examinations of products offered for import and, if there 

is sufficient evidence of a violation, prevent their entry at the border.17

Unlike food, for which FDA primarily relies on inspections at the border,

physical inspection of manufacturing establishments is a critical 

mechanism in FDA’s process to ensure that medical devices are safe and 

effective and that manufacturers adhere to good manufacturing practices. 

FDA determines which establishments to inspect using a risk-based 

strategy. High priority inspections include premarket approval inspections 

for class III devices, for-cause inspections, inspections of establishments 

that have had a high frequency of device recalls, and other devices and 

manufacturers FDA considers high risk. The establishment’s inspection 

history may also be considered. A provision in FDAAA may assist FDA in 

making decisions about which establishments to inspect because this law 

authorizes the agency to accept voluntary submissions of audit reports 

 1621 U.S.C. § 360(h). There is no statutory requirement for inspection of class I medical 

device manufacturing establishments, and FDA does not routinely inspect them. However, 

FDA periodically inspects establishments manufacturing surgeon’s gloves and patient 

examination gloves, which are both class I medical devices, due to ongoing problems with 

leakage. FDA also periodically inspects manufacturers of randomly selected class I devices. 

1721 U.S.C. § 381(a); 21 C.F.R. § 820.1(d) (2007). 

Page 7 GAO-08-780T
addressing manufacturers’ conformance with internationally established 

standards for the purpose of setting risk-based inspectional priorities.18

FDA’s programs for foreign and domestic inspections by accredited third 

parties provide an alternative to the traditional FDA-conducted 

comprehensive postmarket quality system inspection for eligible 

manufacturers of class II and III medical devices. MDUFMA required FDA 

to accredit third persons—which are organizations—to conduct 

inspections of certain establishments. In describing this requirement, the 

House of Representatives Committee on Energy and Commerce noted that

some manufacturers have faced an increase in the number of inspections 

required by foreign countries and that the number of inspections could be 

reduced if the manufacturers could contract with a third-party 

organization to conduct a single inspection that would satisfy the 

requirements of both FDA and foreign countries.19 Manufacturers that 

meet eligibility requirements may request a postmarket inspection by an 

FDA-accredited organization.20 The eligibility criteria for requesting an 

inspection of an establishment by an accredited organization include that

the manufacturer markets a medical device in the United States and 

markets (or intends to market) a medical device in at least one other 

country and that the establishment to be inspected must not have received

warnings for significant deviations from compliance requirements on its 

last inspection.21

 18Pub. L. No. 110-85, § 228, 121 Stat. 823, 858 (2007). 

19H.R. Rep. No. 107-728, pt. 1, at 32-36 (2002). Some foreign countries have accredited, 

certified, or otherwise recognized organizations to conduct inspections. We use the term

“single inspection” to mean a complete inspection that covers all requirements of two or 

more countries, without repeating those activities covered under more than one set of

requirements. A complete inspection can be conducted during a single block of time or in

multiple phases. Two or more separate inspection reports could be generated on the basis 

of that single inspection. 

20Accredited organizations may conduct comprehensive postmarket quality system 

inspections, but not other types of inspections of establishments that FDA has the 

authority to conduct, such as premarket or for-cause inspections. FDA may conduct its

own inspections of establishments even after inspection by an accredited organization. 

21See 21 U.S.C. § 374(g)(6). FDAAA eliminated certain previously established eligibility 

requirements. For example, it eliminated a limitation on the number of consecutive 

inspections allowed by an accredited organization and a limitation that foreign 

establishments must be inspected periodically by FDA.

Page 8 GAO-08-780T
MDUFMA also established minimum requirements for organizations to be 

accredited to conduct third-party inspections, including protections 

against financial conflicts of interest and assurances of the competence of

the organization to conduct inspections. FDA developed a training 

program for inspectors from accredited organizations that involves both 

formal classroom training and completion of three joint training 

inspections with FDA. Each individual inspector from an accredited 

organization must complete all training requirements successfully before 

being cleared to conduct independent inspections. FDA relies on 

manufacturers to volunteer to host these joint inspections, which count as 

FDA postmarket quality system inspections. 

A manufacturer that is cleared to have an inspection by an accredited third 

party enters an agreement with the approved accredited organization and

schedules an inspection. Once the accredited organization completes its 

inspection, it prepares a report and submits it to FDA, which makes the 

final assessment of compliance with applicable requirements. FDAAA 

added a requirement that accredited organizations notify FDA of any 

withdrawal, suspension, restriction, or expiration of certificate of 

conformance with quality systems standards (such as those established by 

the International Organization for Standardization) for establishments they 

inspected for FDA.22

In addition to the Accredited Persons Inspection Program, FDA has a 

second program for accredited third-party inspections of medical device 

establishments. On September 7, 2006, FDA and Health Canada announced 

the establishment of PMAP. This pilot program was designed to allow 

qualified third-party organizations to perform a single inspection that 

would meet the regulatory requirements of both the United States and 

Canada. The third-party organizations eligible to conduct inspections 

through PMAP are those that FDA accredited for its Accredited Persons 

Inspection Program (and that completed all required training for that 

program) and that are also authorized to conduct inspections of medical 

device establishments for Health Canada. To be eligible to have a thirdparty inspection through PMAP, manufacturers must meet all criteria 

established for the Accredited Persons Inspection Program. As with the 

Accredited Persons Inspection Program, manufacturers must apply to 

participate and be willing to pay an accredited organization to conduct the 

inspection. 

 2221 U.S.C. § 374(g)(3)(F). 

Page 9 GAO-08-780T
FDA relies on multiple databases to manage its program for inspecting 

medical device manufacturing establishments. 

• FDA’s medical device registration and listing database contains

information on domestic and foreign medical device establishments that 

have registered with FDA. Establishments that are involved in the 

manufacture of medical devices intended for commercial distribution in 

the United States are required to register annually with FDA. These 

establishments provide information to FDA, such as an establishment’s 

name and its address and the medical devices it manufactures. Prior to 

October 1, 2007, this information was maintained in DRLS. As of 

October 1, 2007, establishments are required to register electronically 

through FDA’s Unified Registration and Listing System and certain 

medical device establishments pay an annual establishment registration 

fee, which in fiscal year 2008 is $1,706.23

• OASIS contains information on medical devices and other FDA-regulated 

products imported into the United States, including information on the 

establishment that manufactured the medical device. The information in 

OASIS is automatically generated from data managed by Customs and 

Border Protection (CBP). These data are originally entered by customs 

brokers based on the information available from the importer.24 CBP 

specifies an algorithm by which customs brokers generate a manufacturer 

identification number from information about an establishment’s name, 

address, and location. 

• FACTS contains information on FDA’s inspections, including those of 

domestic and foreign medical device establishments. FDA investigators 

enter information into FACTS following completion of an inspection. 

 2321 U.S.C. §§ 360(i)(1), (p), 379i(13), 379j(a)(3), (b), (h). The registration user fee will 

increase by 8.5 percent per year, to $2,364 in fiscal year 2012. Fees are available for 

obligation only to the extent and in the amount provided in advance in annual 

appropriations acts. FDA’s authority to assess registration fees terminates on October 1, 

2012. Pub. L. No. 110-85, § 217; 121 Stat. 823, 852 (2007). 

24Customs brokers are private individuals, partnerships, associations, or corporations

licensed, regulated, and empowered by CBP to assist in meeting federal requirements 

governing imports and exports. 

Page 10 GAO-08-780T
According to FDA data, there are more registered establishments in China 

and Germany reporting that they manufacture class II or III medical 

devices than in any other foreign countries.25 Canada and the United 

Kingdom also have a large number of registered establishments. 

FDA faces challenges in its program to inspect foreign establishments 

manufacturing medical devices. The databases that provide FDA with data 

about the number of foreign establishments manufacturing medical 

devices for the U.S. market have not provided it with an accurate count of

foreign establishments for inspection. In addition, FDA conducted 

relatively few inspections of foreign establishments. Moreover, inspections 

of foreign medical device manufacturing establishments pose unique 

challenges to FDA—both in human resources and logistics. 

FDA’s databases on registration and imported medical devices have not 

provided an accurate count of establishments subject to inspection, 

although recent improvements to FDA’s medical device registration 

database may address some weaknesses. In January 2008, we testified that 

DRLS provided FDA with information about foreign medical device 

establishments and the products they manufacture for the U.S. market. 

According to DRLS, as of September 2007, 4,983 foreign establishments 

that reported manufacturing a class II or III medical device for the U.S. 

market had registered with FDA.26 However, these data contained 

inaccuracies because establishments may register with FDA but not 

actually manufacture a medical device or may manufacture a medical 

device that is not marketed in the United States. In addition, FDA did not 

routinely verify the data within this database. 

Recent changes to FDA’s medical device establishment registration 

process could improve the accuracy of its database. In fiscal year 2008, 

FDA implemented, in addition to its annual user fee, electronic 

FDA Faces 

Challenges 

Conducting 

Inspections of 

Foreign 

Establishments That 

Manufacture Medical 

Devices

FDA Lacks Accurate Data 

on the Number of Foreign 

Establishments Subject to 

Inspection, but Has Made 

Recent Attempts to 

Improve Its Data 

 25Counts of registered establishments in China do not include establishments registered in 

Hong Kong or Taiwan as these establishments are tracked separately. 

26DRLS contained one additional registered establishment for which location information 

was not available. 

Page 11 GAO-08-780T
registration and an active re-registration process for medical device

establishments.27 According to FDA, about half of previously 

registered establishments had reregistered using the new system as of 

April 11, 2008.

28 While FDA officials expect that additional establishments 

will reregister, they expect that the final result will be the elimination of 

establishments that do not manufacture medical devices for the U.S. 

market and thus a smaller, more accurate database of medical device

establishments. FDA officials indicated that implementation of electronic

registration and the annual user fee seemed to have improved the data so 

FDA can more accurately identify the type of establishment registered, the 

devices manufactured at an establishment, and whether or not an 

establishment should be registered. According to FDA officials, the 

revenue from device registration user fees is applied to the process for the 

review of device applications, including premarket inspections.

29

FDA has also proposed, but not yet implemented, the Foreign Vendor 

Registration Verification Program, which could also help improve the 

accuracy of information FDA maintains on registered foreign 

establishments. Through this program, FDA plans to contract with an 

external organization to conduct on-site verification of the registration 

data and product listing information of foreign establishments shipping 

medical devices and other FDA-regulated products to the United States. 

FDA has solicited proposals for this contract, but it is still developing the 

specifics of the program. For example, as of April 2008, the agency had not 

yet established the criteria it would use to determine which establishments 

would be visited for verification purposes or determined how many 

establishments it would verify annually. FDA plans to award this contract

in June 2008. Given the early stages of this process, it is too soon to 

 27FDA indicated that it will deactivate the registrations of those establishments that fail to 

complete the annual registration. Officials noted that many establishments that had 

previously registered had not updated those registrations in several years. 

28According to FDA, the agency sent letters on April 11, 2008 and April 14, 2008 to 

establishments that had registered in the past but had not completed their registration for 

fiscal year 2008 advising them that they must register using the new system and must pay

the registration fee, if applicable, to be considered registered. Establishments that do not 

reregister within a month of those letters would be considered inactive. As of May 6, 2008, 

prior to the mid-May deadline, FDA reported that 4,284 registered foreign establishments 

reported that they manufacture class II or class III medical devices. This total also includes 

some establishments that may not reregister. 

29See 21 U.S.C. §§ 379i(8), 379j(h)(1), (2).

Page 12 GAO-08-780T
determine whether this program will improve the accuracy of the data 

FDA maintains on foreign medical device establishments. 

FDA also obtains information on foreign establishments from OASIS, 

which tracks the importation of medical devices and other FDA-regulated 

products. While not intended to provide a count of establishments, OASIS 

does contain information about the medical devices actually being 

imported into the United States and the establishments manufacturing 

them. However, inaccuracies in OASIS prevent FDA from using it to 

develop a list of establishments subject to inspection. OASIS contains an 

inaccurate count of foreign establishments manufacturing medical devices 

imported into the United States as a result of unreliable identification 

numbers generated by customs brokers when the product is offered for 

entry.30 FDA officials told us that these errors result in the creation of 

multiple records for a single establishment, which results in inflated 

counts of establishments offering medical devices for entry into the U.S. 

market. According to OASIS, in fiscal year 2007, there were as many as 

22,008 foreign establishments that manufactured class II medical devices 

for the U.S. market and 3,575 foreign establishments that manufactured 

class III medical devices for the U.S. market.31

FDA has supported a proposal with the potential to address weaknesses in

OASIS, but FDA does not control the implementation of this proposed 

change. FDA is pursuing the creation of a governmentwide unique 

establishment identifier, as part of the Shared Establishment Data Service 

(SEDS), to address these inaccuracies.

32 Rather than relying on the 

creation and entry of an identifier at the time of import, SEDS would 

provide a unique establishment identifier and a centralized service to 

provide commercially verified information about establishments.33 The 

 30The algorithm currently used by customs brokers to assign the manufacturer 

identification number does not provide for a number that is reliably reproduced or 

inherently unique. 

31According to FDA officials, a single establishment could be manufacturing more than one

class of device. 

32The SEDS concept was developed by a working group with representatives from FDA, the

Environmental Protection Agency, and the departments of Agriculture, Commerce, 

Defense, and Homeland Security. 

33If an establishment did not already have an identification number, it would request an

identification number through SEDS, which would verify the data about the establishment 

through a commercial service. This commercial service would provide researched and

validated records on domestic and foreign establishments. 

Page 13 GAO-08-780T
standard identifier would be submitted as part of import entry data when 

required by FDA or other government agencies. SEDS could thus eliminate 

the problems that have resulted in multiple identifiers associated with an 

individual establishment. The implementation of SEDS is dependent on 

action from multiple federal agencies, including the integration of the 

concept into a CBP import and export system under development and 

scheduled for implementation in 2010. In addition, once implemented by 

CBP, participating federal agencies would be responsible for bearing the 

cost of integrating SEDS with their own operations and systems. FDA 

officials are not aware of a specific time line for the implementation of 

SEDS. Developing an implementation plan for SEDS was recommended by 

the Interagency Working Group on Import Safety.34

Although comparing information from its registration and import 

databases could help FDA determine the number of foreign establishments 

marketing medical devices in the United States, the databases do not 

exchange information to be compared electronically and any comparisons 

are done manually. FDA is in the process of implementing additional 

initiatives to improve the integration of its databases, and these changes 

could make it easier for the agency to establish an accurate count of 

foreign manufacturing establishments subject to inspection. The agency’s

Mission Accomplishments and Regulatory Compliance Services (MARCS) 

is intended to help FDA electronically integrate data from multiple 

systems. It is specifically designed to give individual users more complete 

information about establishments. FDA officials estimated that MARCS, 

which is being implemented in stages, could be fully implemented by 2011 

or 2012. However, FDA officials told us that implementation has been slow

because the agency has been forced to shift resources away from MARCS

and toward the maintenance of current systems that are still heavily used, 

such as FACTS and OASIS. Taken together, changes to FDA’s databases 

could provide the agency with more accurate information on the number 

of establishments subject to inspection. However, it is too early to tell 

whether this will improve FDA’s management of its inspection program. 

 34Interagency Working Group on Import Safety, Action Plan for Import Safety: A Roadmap

for Continual Improvement (Nov. 2007) (www.importsafety.gov/report/actionplan.pdf, 

accessed May 6, 2008). 

Page 14 GAO-08-780T
From fiscal year 2002 through fiscal year 2007, FDA inspected relatively 

few foreign medical device establishments and primarily inspected 

establishments located in the United States. During this period, FDA 

conducted an average of 247 foreign establishment inspections each year, 

compared to 1,494 inspections of domestic establishments.35 This average 

number of foreign inspections suggests that each year FDA inspects about

6 percent of registered foreign establishments that reported manufacturing 

class II or class III medical devices.36 FDA officials estimated the agency 

had inspected foreign class II manufacturers every 27 years and foreign 

class III manufacturers every 6 years. The inspected foreign 

establishments were in 44 foreign countries and more than two-thirds 

were in 10 countries. Most of the countries with the highest number of 

inspections were also among those with the largest number of registered

establishments that reported manufacturing class II or III medical devices. 

The lowest rate of inspections in these 10 countries was in China, where 

64 inspections were conducted in this 6-year period and 568 

establishments were registered as of May 6, 2008. (See table 1.) 

FDA Inspects Relatively 

Few Foreign Medical 

Device Establishments 

 35We were unable to differentiate inspections according to medical device classification. 

FDA’s inspection database contains the most recent information available to FDA about 

the class of device manufactured at the establishment and consequently does not contain 

readily available information about the class of devices manufactured at the time of a

specific inspection. As a result, the data we present include all inspections, regardless of 

the classification of the manufactured device or devices. According to FDA officials, FDA 

primarily conducts inspections of establishments manufacturing class II or III medical 

devices. 

36This calculation is based on the 4,284 registered establishments that reported that they

manufacture class II or III medical devices, as of May 6, 2008. 

Page 15 GAO-08-780T
Table 1: Number of FDA Inspections of Foreign Medical Device Establishments, Fiscal Year 2002 through Fiscal Year 2007 

Number of inspectionsa

Country FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 Total 

Number of registered

class II or III 

manufacturing 

establishmentsb

Germany 39 30 34 51 25 52 231 460

United Kingdom 25 31 28 14 25 43 166 277

Canada 17 17 24 11 13 26 108 282

Japan 7 8 20 21 16 25 97 210

Ireland 15 22 13 13 16 11 90 62

France 16 14 17 14 12 10 83 154

Switzerland 6 12 19 9 7 18 71 108

Chinac0 0 21 19 11 13 64 568d

Mexico 10 7 12 8 12 11 60 122

Italy 8 7 10 6 13 11 55 170

All other countries 66 83 102 67 69 69 456 1,871

Total 209 231 300 233 219 289 1,481 4,284

Source: GAO analysis of FDA data. 

a

We were unable to differentiate inspections according to medical device classification. FDA’s 

inspection database contains the most recent information available to FDA about the class of device 

manufactured at the establishment and consequently does not contain readily available information 

about the class of devices manufactured at the time of a specific inspection. As a result, the data we 

present include all inspections, regardless of the classification of the manufactured device or devices. 

According to FDA officials, FDA primarily conducts inspections of establishments manufacturing class 

II or III medical devices. 

b

These counts represent the number of registered establishments as of May 6, 2008.

c

The inspection counts for China do not include inspections conducted in Hong Kong or Taiwan 

because these inspections are tracked separately in FACTS. 

d

Counts of registered establishments in China do not include establishments registered in Hong Kong

or Taiwan because these establishments are tracked separately. 

FDA’s inspections of foreign medical device establishments were primarily 

postmarket inspections. While premarket inspections were generally 

FDA’s highest priority, relatively few have had to be performed in any 

given year.37 Therefore, FDA focused its resources on postmarket 

 37Currently, most medical devices are cleared for marketing in the United States because 

they are determined to be “substantially equivalent” to a marketed device. FDA generally 

does not conduct premarket inspections of establishments manufacturing these types of 

medical devices. 

Page 16 GAO-08-780T
inspections. From fiscal year 2002 through fiscal year 2007, 89 percent of 

the 1,481 foreign establishment inspections were for postmarket purposes. 

FDA Faces Unique 

Challenges in Conducting 

Foreign Inspections 

Inspections of foreign establishments pose unique challenges to FDA—

both in human resources and logistics. FDA does not have a dedicated

cadre of investigators that only conduct foreign medical device 

establishment inspections; those staff who inspect foreign establishments 

also inspect domestic establishments. Among those qualified to inspect 

foreign establishments,38 FDA relies on staff to volunteer to conduct 

inspections. FDA officials told us that it has been difficult to recruit 

investigators to voluntarily travel to certain countries. However, they 

added that if the agency could not find an individual to volunteer for a 

foreign inspection trip, it would mandate the travel. Logistically, foreign 

medical device establishment inspections are difficult to extend even if 

problems are identified because the trips are scheduled in advance.

39

Foreign medical device establishment inspections are also logistically 

challenging because investigators do not receive independent translational 

support from FDA or the State Department and may rely on Englishspeaking employees of the inspected establishment or the establishment’s 

U.S. agent to translate during an inspection. 

FDA recently announced proposals to address some of the challenges 

unique to conducting foreign inspections, but specific steps toward 

implementation and associated time frames are unclear. FDA noted in its 

report on revitalizing ORA that it was exploring the creation of a cadre of

investigators who would be dedicated to conducting foreign inspections.40

However, the report did not provide any additional details or time frames 

about this proposal. In addition, FDA announced plans to establish a 

permanent presence overseas, although little information about these 

plans is available. FDA intends that its foreign offices will improve 

cooperation and information exchange with foreign regulatory bodies, 

 38Staff members must meet certain criteria in terms of their experience and training to 

conduct inspections of foreign establishments. For example, they are required to take

certain training courses and have at least 3 years of experience conducting domestic 

inspections before they can be considered qualified to conduct a foreign inspection. 

39Typically, FDA investigators travel abroad for about 3 weeks at a time, during which they 

inspect approximately three establishments. 

40See, for example, Food and Drug Administration, Revitalizing ORA: Protecting the 

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

Page 17 GAO-08-780T
improve procedures for expanded inspections, allow it to inspect facilities 

quickly in an emergency, and facilitate work with private and government 

agencies to assure standards for quality. FDA’s proposed foreign offices 

are intended to expand the agency’s capacity for overseeing, among other 

things, medical devices, drugs, and food that may be imported into the 

United States. The extent to which the activities conducted by foreign 

offices are relevant to FDA’s foreign medical device inspection program is 

uncertain. Initially, FDA plans to establish a foreign office in China with 

three locations—Beijing, Shanghai, and Guangzhou—comprised of a total 

of eight FDA employees and five Chinese nationals. The Beijing office,

which the agency expects will be partially staffed by the end of 2008, will 

be responsible for coordination between FDA and Chinese regulatory 

agencies. FDA staff located in Shanghai and Guangzhou, who are to be 

hired in 2009, will be focused on conducting inspections and working with

Chinese inspectors to provide training as necessary. FDA noted that the

Chinese nationals will primarily provide support to FDA staff, including 

translation and interpretation. The agency is also considering setting up 

offices in other locations, such as India, the Middle East, Latin America, 

and Europe, but no dates have been specified. While the establishment of 

both a foreign inspection cadre and offices overseas have the potential for

improving FDA’s oversight of foreign establishments, it is too early to tell

whether these steps will be effective or will increase the number of foreign 

medical device establishment inspections. 

Page 18 GAO-08-780T
Few inspections of foreign medical device manufacturing 

establishments—a total of six—have been conducted through FDA’s two

accredited third-party inspection programs, the Accredited Persons 

Inspection Program and PMAP. FDAAA specified several changes to the 

requirements for inspections by accredited third parties that could result 

in increased participation by manufacturers. 

Few inspections have been conducted through FDA’s Accredited Persons 

Inspection Program since March 11, 2004—the date when FDA first 

cleared an accredited organization to conduct independent inspections. 

Through May 7, 2008, four inspections of foreign establishments had been

conducted independently by accredited organizations.41

As of May 7, 2008, 16 third-party organizations were accredited, and 

individuals from 8 of these organizations had completed FDA’s training 

requirements and been cleared to conduct independent inspections.42 FDA 

and accredited organizations had conducted 44 joint training inspections. 

As we previously reported, fewer manufacturers volunteered to host 

training inspections than have been needed for all of the accredited 

organizations to complete their training,43 and scheduling these joint 

training inspections has been difficult. FDA officials told us that, when 

appropriate, staff are instructed to ask manufacturers to host a joint 

training inspection at the time they notify the manufacturers of a pending

inspection. FDA schedules inspections a relatively short time prior to an 

actual inspection,44 and as we previously reported, some accredited 

Few Inspections of 

Foreign 

Establishments Have 

Been Conducted 

Through FDA’s ThirdParty Programs, but 

Recent Changes 

Could Eliminate Some 

Obstacles to 

Manufacturers’ 

Participation 

 41Two inspections of domestic establishments were also conducted through FDA’s 

Accredited Persons Inspection Program. 

42Specific foreign jurisdictions that have certified, accredited, or otherwise recognized one 

or more of the FDA-accredited organizations that have been cleared to conduct 

independent inspections include all member states of the European Community, Australia, 

Canada, New Zealand, Norway, Taiwan, and the United Kingdom. Of the eight third-party 

organizations that have been cleared to conduct independent inspections through the

Accredited Persons Inspection Program, four may conduct inspections through PMAP. 

43As we reported in January 2007, some representatives of affected entities speculated that 

manufacturers might not have volunteered to host training inspections because they 

believed that training inspections would require more time and effort for their staff (and 

would thus be more disruptive) than inspections conducted by fully trained personnel, or

that manufacturers might have believed that training inspections would be more rigorous 

than nontraining inspections if the trainees and FDA personnel were to take particular care 

to demonstrate their thoroughness to each other. 

44FDA generally notifies manufacturers about a week in advance of postmarket quality 

system inspections of domestic establishments and about 6 to 8 weeks in advance of

postmarket quality system inspections of foreign establishments. 

Page 19 GAO-08-780T
organizations have not been able to participate because they had prior 

commitments. 

We previously reported that manufacturers’ decisions to request an 

inspection by an accredited organization might be influenced by both 

potential incentives and disincentives. According to FDA officials and 

representatives of affected entities, potential incentives to participation 

include the opportunity to reduce the number of inspections conducted to

meet FDA and other countries’ requirements. For example, one inspection 

conducted by an accredited organization was a single inspection designed 

to meet the requirements of FDA, the European Union, and Canada. 

Another potential incentive mentioned by FDA officials and 

representatives of affected entities is the opportunity to control the 

scheduling of the inspection by an accredited organization by working 

with the accredited organization. FDA officials and representatives of 

affected entities also mentioned potential disincentives to having an 

inspection by an accredited organization. These potential disincentives 

include bearing the cost for the inspection,45 doubts about whether 

accredited organizations can cover multiple requirements in a single 

inspection, and uncertainty about the potential consequences of an 

inspection that otherwise may not occur in the near future—consequences 

that could involve regulatory action.

Changes specified by FDAAA have the potential to eliminate certain 

obstacles to manufacturers’ participation in FDA’s programs for 

inspections by accredited third parties that were associated with 

manufacturers’ eligibility. For example, a requirement that foreign 

establishments be periodically inspected by FDA before being eligible for

third-party inspections was eliminated. Representatives of the two 

organizations that represent medical device manufacturers with whom we 

spoke about FDAAA told us that the changes in eligibility requirements 

could eliminate certain obstacles and therefore potentially increase 

manufacturers’ participation. These representatives also noted that key

incentives and disincentives to manufacturers’ participation remain. FDA 

 45In January 2007, we reported that representatives of accredited organizations indicated

that the cost to manufacturers would vary depending on such factors as the size of the

manufacturer and how much extra time would be required to assess compliance with FDA

requirements. Representatives suggested that covering FDA’s requirements could take 2 or 

more days in addition to the time spent assessing other countries’ requirements, plus time 

for advance preparation and writing the inspection report. They speculated that they would 

probably charge manufacturers from $1,700 to $2,500 per day, plus the cost of travel and 

living expenses.

Page 20 GAO-08-780T
officials told us that they were revising their guidance to industry in light 

of FDAAA and expected to issue the revised guidance during fiscal 

year 2008.46 It is too soon to tell what impact these changes will have on

manufacturers’ participation. 

FDA officials have acknowledged that manufacturers’ participation in the 

Accredited Persons Inspection Program has been limited. In 

December 2007, FDA established a working group to assess the successes 

and failures of this program and to identify ways to increase participation. 

Representatives of two organizations that represent medical device

manufacturers told us that they believe manufacturers remain interested 

in the Accredited Persons Inspection Program. The representative of one 

large, global manufacturer of medical devices told us that it was in the 

process of arranging to have 20 of its domestic and foreign device

manufacturing establishments inspected by accredited third parties. 

As of May 7, 2008, two inspections of foreign establishments had been

conducted through PMAP,47 FDA’s second program for inspections by 

accredited third parties. Although it is too soon to tell what the benefits of 

PMAP will be, the program is more limited than the Accredited Persons 

Inspection Program and may pose additional disincentives to participation 

by both manufacturers and accredited organizations. Specifically, 

inspections through PMAP would be designed to meet the requirements of 

the United States and Canada, whereas inspections conducted through the 

Accredited Persons Inspection Program could be designed to meet the 

requirements of other countries. In addition, two of the five 

representatives of affected entities whom we spoke to for our January 

2008 statement noted that in contrast to inspections conducted through 

the Accredited Persons Inspection Program, inspections conducted 

through PMAP could undergo additional review by Health Canada. Health

Canada will review inspection reports submitted through this pilot 

program to ensure the inspections meet its standards. This extra review

poses a greater risk of unexpected outcomes for the manufacturer and the 

accredited organization, which could be a disincentive to participation in 

PMAP that is not present with the Accredited Persons Inspection Program. 

 46As of May 6, 2008, this guidance had not been issued. 

47Three inspections of domestic establishments were conducted through PMAP. 

Page 21 GAO-08-780T
Americans depend on FDA to ensure the safety and effectiveness of 

medical devices manufactured throughout the world. A variety of medical

devices are manufactured in other countries, including high-risk devices 

designed to be implanted or used in invasive procedures. However, FDA 

faces challenges in inspecting foreign establishments. Weaknesses in its 

database prevent it from accurately identifying foreign establishments 

manufacturing medical devices for the United States and prioritizing those 

establishments for inspection. In addition, staffing and logistical 

difficulties associated with foreign inspections complicate FDA’s ability to 

conduct such inspections. The agency has recently taken some positive 

steps to improve its foreign inspection program, such as initiating changes

to improve the accuracy of the data it uses to manage this program and 

announcing plans to increase its presence overseas. However, it is too 

early to tell whether these steps will ultimately enhance the agency’s 

ability to select establishments to inspect and increase the number of 

foreign establishments inspected. To date, FDA’s programs for inspections 

by accredited third parties have not assisted FDA in meeting its regulatory 

responsibilities nor have these programs provided a rapid or substantial 

increase in the number of inspections performed by these organizations, 

as originally intended. Recent statutory changes to the requirements for 

inspections by accredited third parties may encourage greater 

participation in these programs. However, the lack of meaningful progress 

in conducting inspections to this point raises questions about the 

practicality and effectiveness of these programs to help FDA conduct 

additional foreign inspections. 

Mr. Chairman, this completes my prepared statement. I would be happy to

respond to any questions you or the other Members of the subcommittee 

may have at this time. 

For further information about this statement, please contact 

Marcia Crosse at (202) 512-7114 or crossem@gao.gov. Contact points for 

our Offices of Congressional Relations and Public Affairs may found on 

the last page of this statement. Geraldine Redican-Bigott, Assistant 

Director; Kristen Joan Anderson; Katherine Clark; William Hadley; 

Cathleen Hamann; Julian Klazkin; and Lisa Motley made key contributions 

to this statement. 

Concluding 

Observations 

Contacts and 

Acknowledgments 

(290719) Page 22 GAO-08-780T
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