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FDA FOREIGN DRUG INSPECTION 

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(II) 

COMMITTEE ON ENERGY AND COMMERCE 

JOHN D. DINGELL, Michigan, Chairman 

HENRY A. WAXMAN, California 

EDWARD J. MARKEY, Massachusetts 

RICK BOUCHER, Virginia 

EDOLPHUS TOWNS, New York 

FRANK PALLONE, JR., New Jersey 

BART GORDON, Tennessee 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

BART STUPAK, Michigan 

ELIOT L. ENGEL, New York 

ALBERT R. WYNN, Maryland 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

Vice Chairman 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANE HARMAN, California 

TOM ALLEN, Maine 

JAN SCHAKOWSKY, Illinois 

HILDA L. SOLIS, California 

CHARLES A. GONZALEZ, Texas 

JAY INSLEE, Washington 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

DARLENE HOOLEY, Oregon 

ANTHONY D. WEINER, New York 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

CHARLIE MELANCON, Louisiana 

JOHN BARROW, Georgia 

BARON P. HILL, Indiana 

JOE BARTON, Texas 

Ranking Member 

RALPH M. HALL, Texas 

J. DENNIS HASTERT, Illinois 

FRED UPTON, Michigan 

CLIFF STEARNS, Florida 

NATHAN DEAL, Georgia 

ED WHITFIELD, Kentucky 

BARBARA CUBIN, Wyoming 

JOHN SHIMKUS, Illinois 

HEATHER WILSON, New Mexico 

JOHN B. SHADEGG, Arizona 

CHARLES W. ‘‘CHIP’’ PICKERING, 

Mississippi 

VITO FOSSELLA, New York 

STEVE BUYER, Indiana 

GEORGE RADANOVICH, California 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE FERGUSON, New Jersey 

MIKE ROGERS, Michigan 

SUE WILKINS MYRICK, North Carolina 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

PROFESSIONAL STAFF

DENNIS B. FITZGIBBONS, Chief of Staff 

GREGG A. ROTHSCHILD, Chief Counsel 

SHARON E. DAVIS, Chief Clerk 

DAVID L. CAVICKE, Minority Staff Director 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

BART STUPAK, Michigan, Chairman 

DIANA DEGETTE, Colorado 

CHARLIE MELANCON, Louisiana 

Vice Chairman 

HENRY A. WAXMAN, California 

GENE GREEN, Texas 

MIKE DOYLE, Pennsylvania 

JAN SCHAKOWSKY, Illinois 

JAY INSLEE, Washington 

JOHN D. DINGELL, Michigan (ex officio) 

ED WHITFIELD, Kentucky 

Ranking Member 

GREG WALDEN, Oregon 

MIKE FERGUSON, New Jersey 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

JOE BARTON, Texas (ex officio) 


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(III) 

C O N T E N T S 

Page 

Hon. Bart Stupak, a Representative in Congress from the State of Michigan, 

opening statement ................................................................................................ 1 

Hon. Ed Whitfield, a Representative in Congress from the Commonwealth 

of Kentucky, opening statement ......................................................................... 4 

Hon. Michael C. Burgess, a Representative in Congress from the State of 

Texas, opening statement .................................................................................... 6 

Hon. Diana DeGette, a Representative in Congress from the State of Colorado, prepared statement .................................................................................... 8 

Hon. Tim Murphy, a Representative in Congress from the State of Pennsylvania, opening statement .................................................................................... 10 

Hon. Mike Ferguson, a Representative in Congress from the State of New 

Jersey, opening statement ................................................................................... 10 

Hon. Marsha Blackburn, a Representative in Congress from the State of 

Tennessee, opening statement ............................................................................ 12 

Hon. John D. Dingell, a Representative in Congress from the State of Michigan, prepared statement ...................................................................................... 14 

Hon. Joe Barton, a Representative in Congress from the State of Texas, 

prepared statement .............................................................................................. 18 

WITNESSES

Marcia Crosse, Director, Public Health and Military Health Care Issues, 

U.S. Government Accountability Office .............................................................. 22 

Prepared statement .......................................................................................... 25 

Carl R. Nielsen, Director (retired), Division of Import Operations, Office of 

Regulatory Affairs, Food and Drug Administration .......................................... 60 

Prepared statement .......................................................................................... 62 

William K. Hubbard, senior advisor, Coalition for a Stronger FDA, Chapel 

Hill, NC ................................................................................................................. 77 

Prepared statement .......................................................................................... 78 

Benjamin L. England, special counsel, Jones, Walker, Waechter, Poitevent, 

Carrere & Denegre, LLP, Washington, DC ........................................................ 90 

Prepared statement .......................................................................................... 93 

John B. Dubeck, partner, Keller and Heckman, LLP, Washington, DC ............. 134 

Prepared statement .......................................................................................... 138 

Bruce Downey, chairman and chief executive officer, Barr Pharmaceuticals, 

Inc. ......................................................................................................................... 156 

Prepared statement .......................................................................................... 159 

Guido Villax, immediate past president, Pharmaceuticals Business Committee, member, board of directors, European Fine Chemicals Group, Brussels, Belgium ........................................................................................................ 178 

Prepared statement .......................................................................................... 180 

Andrew C. von Eschenbach, M.D., Commissioner, Food and Drug Administration, U.S. Department of Health and Human Services .................................... 199 

Prepared statement .......................................................................................... 207 

Answers to submitted questions ...................................................................... 240 

SUBMITTED MATERIAL

Drug Imports Graph presentation, submitted by Mr. Stupak .............................

‘‘Chinese Chemicals Flow Unchecked Onto World Drug Market,’’ Walt 

Bogdanich, the New York Times, October 31, 2007 .......................................... 224 

‘‘Ensuring the Safety of Imported Products, Q&A with Deborah Ralston’’ ........ 231 

Subcommittee exhibit binder .................................................................................. 255 


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rfrederick on PROD1PC67 with HEARING
(1) 

FDA FOREIGN DRUG INSPECTION PROGRAM: 

A SYSTEM AT RISK 

THURSDAY, NOVEMBER 1, 2007 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS, COMMITTEE ON ENERGY AND COMMERCE, Washington, DC. 

The subcommittee met, pursuant to call, at 10:00 a.m., in room 

2123 of the Rayburn House Office Building, Hon. Bart Stupak 

[chairman of the subcommittee] presiding. 

Members present: Representatives DeGette, Inslee, Dingell, 

Whitfield, Walden, Ferguson, Murphy, Burgess, and Blackburn. 

Staff present: John Sopko, Chris Knauer, Scott Schloegel, Paul 

Jung, Joanne Royce, Kyle Chapman, Peter Spencer, and Alan 

Slobodin. 

OPENING STATEMENT OF HON. BART STUPAK, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN 

Mr. STUPAK. This meeting will come to order. Today we have a 

hearing on the ‘‘FDA Food and Drug Inspection Program, a System 

at Risk.’’ Each member will be recognized for 5 minutes for an 

opening statement. I will begin. 

This hearing is a continuation of this subcommittee’s investigations into the safety of imported products. Today we explore the 

question of whether the FDA is adequately regulating the manufacturing of pharmaceutical products and active pharmaceutical ingredients, or APIs, as they are called, for export into the United 

States. Most Americans do not realize that many of the drug products in their medicine cabinets come from overseas. In fact, more 

than 80 percent of the active pharmaceutical ingredients that go 

into drugs come from abroad. India and China account for almost 

half of these imports. India’s pharmaceutical imports into this 

country have increased 2,400 percent from 1996 to 2006, making 

it the fastest-growing drug importer, and China has doubled its 

pharmaceutical imports to the United States over the last 5 years. 

The Food and Drug Administration is responsible for regulating 

foreign-made medicines and ensuring the American public is supplied with safe medications. Despite a 2000 oversight hearing and 

a critical GAO audit in 1998, which pointed out many of the FDA’s 

weaknesses regarding importation of drugs, the FDA continues to 

use 20th-century tools and resources to address 21st-century regulatory challenges. 

Today’s hearing is intended to determine the effectiveness of 

FDA in overseeing foreign drug production and explore what reVerDate Aug 31 2005 02:23 Dec 20, 2008 Jkt 045057 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 E:\HR\OC\45057.XXX 45057

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sources the agency realistically needs to do the job. Unlike food 

products, FDA cannot rely on any testing to determine if the drug 

products are safe. Instead, FDA’s main tool for ensuring that a 

drug is manufactured safely is to conduct actual onsite inspections 

of drug-making facilities. The FDA is required to conduct a formal, 

pre-approval inspection before a form, domestic or foreign, can 

begin producing drugs for the U.S. market. After a pre-approval inspection, the agency is required to conduct follow-up surveillance 

inspections of domestic facilities to ensure they are continuing to 

meet U.S. manufacturing regulations. For U.S. drug manufacturers, Federal Law requires that follow-up inspections be done every 

2 years. Remarkably, there is no Law dictating how often the FDA 

must inspect foreign drug manufacturers, even though foreign 

firms pose just as great, if not greater, risk to the public health 

than domestic firms. 

In a petition to the FDA, the Synthetic Organic Chemical Manufacturers Association, who will testify today, noted, ‘‘Foreign facilities in general pose a greater risk to public safety because when 

a facility is inspected infrequently, as is the case for foreign manufacturers, there is a natural tendency for management to become 

complacent that what was adequate at the last inspection is still 

adequate. Maintaining regulatory compliance requires constant effort and vigilance. Minor deviations may not cause any apparent 

lack of quality, but it is well-paved road from one minor deviation 

to serious quality failures.’’ 

Twenty years ago, the drugs Americans consumed were made in 

the United States. Because few firms were overseas, the FDA was 

reasonably positioned to closely monitor drug production facilities. 

However, as more foreign drug producers entered the U.S. market, 

FDA’s ability to keep pace with inspections and monitoring has become severely limited. This was particularly true when the committee last examined this matter in 2000. Through the course of 

that investigation, the committee found significant shortcomings in 

the FDA’s ability to conduct foreign inspections. Back then, FDA 

was under-funded, over-stretched, and poorly coordinated. Among 

the committee’s principal findings at our 2000 hearing were, FDA 

officials could not determine how often foreign manufacturers were 

being inspected. Drug makers in India and in China were inspected 

on an average about every 4 to 5 years, which was more than twice 

FDA’s 2-year inspection requirement for domestic pharmaceutical 

manufacturers. FDA had only enough resources to inspect foreign 

pharmaceutical manufacturers on an average of once every 11 

years. Finally, the agency’s IT systems were in disarray, relying on 

separate 15 data systems to identify foreign pharmaceutical manufacturers, plan foreign inspection travel, track inspection results, 

and monitor enforcement actions. 

Nearly 8 years have passed since our last hearing, and surprisingly most of the same problems plague the FDA today. For example, resources dedicated to foreign inspection have actually declined 

since the GAO report of 1998, while the number of foreign drug 

manufacturers and imports have dramatically increased. Despite 

more than a decade of warnings from FDA’s own internal reviews, 

the Congress, and Government Accountability Office, FDA’s IT system is still based on multiple databases which lack integration and 


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contain unreliable information. Due to its poor IT systems, the 

FDA cannot obtain reliable data to run their risk models so they 

can effectively allocate what limited resources it does have for inspections. FDA’s IT system has made it nearly impossible to provide the GAO, this committee, or even its own FDA managers, with 

key data to measure ongoing resource needs. 

Let me give you one example. For almost 3 months, our committee and GAO have repeatedly asked the FDA for the number of 

foreign firms the agency is supposed to be inspecting overseas and 

where they are located. For 3 months the FDA has, on 10 different 

occasions, provided numbers ranging from 2,100 foreign firms to 

13,800 foreign firms. The database that we believe is probably the 

most accurate shows that about 3,000 firms are registered to ship 

drug products to the United States, yet the FDA’s own foreign inspection risk model uses data from about 3,300 foreign firms. Another FDA database, called OASIS, which captures actual drug 

shipments to the U.S., now shows an even higher figure of 6,800 

foreign firms. That number was revised down from 13,800 firms 

just last week. 

Frankly, it has been nearly impossible for the committee staff to 

calculate what resources FDA needs, because its internal data is 

simply in shambles. FDA may testify today that they know with 

some certainty the approximate number and location of every firm 

that is importing drug product in the United States, but I am not 

convinced the FDA can accurately calculate the number of foreign 

firms they should be inspecting. How can we have any confidence 

if the FDA is truly managing the risk that may come from foreignmade drug products if the FDA does not know the exact number 

or location of foreign drug manufacturers? This most basic information should be available within an hour, not 3 months. I don’t believe an auto dealership could survive if it was run on the IT system that said there is between 2,000 and 13,000 cars on its lot. But 

apparently this passes muster at the FDA, even though it involves 

safeguarding the U.S. drug supply. 

From the limited data we have gleaned from the agency, FDA’s 

foreign drug inspection program has serious shortcomings. For example, FDA is capable of conducting only 200 to 300 foreign followup inspections each year. These are inspections that, by Law, FDA 

attempts to do every 2 years for foreign firms. But if one assumes 

that at the rough estimate of 400 firms is likely around 3,000, a 

simple mathematic calculation would suggest the FDA can only inspect each foreign drug firm about every 13 years. One must also 

question whether FDA’s limited resources are being properly targeted. For example, we know that China now represents the largest source of production facilities, now shipping product to the 

United States with more than 700 drug firms. Yet China represents a mere four percent of where FDA is spending its foreign 

inspection resources. 

The administration believes one of the best ways to solve the 

FDA’s lack of inspection resources is to negotiate memorandums of 

agreement with foreign governments, but such efforts will not overcome the lack of FDA funding for on-the-ground foreign inspections. Mutual recognition agreements of each other’s inspection reports would save considerable money, but neither China nor India, 


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two very large producers of pharmaceutical goods, are anywhere 

near being ready for such agreements. Perhaps the FDA should 

open offices in these parts of the world, such as India and China, 

where many pharmaceutical firms are now located or moving their 

manufacturing. Astra Zeneca, to use just one example, is one of the 

world’s largest pharmaceutical companies, and it plans on obtaining 90 percent of its pharmaceutical ingredients from China in the 

very near future. 

The FDA does spend considerable resources in India, about 22 

percent, which is a good thing. Yet it begs the question of why the 

administration has not engaged in open discussions with that country, as they have been attempting to do with China. This is particularly strange given that the committee staff recently visited 

India and met with senior officials and industry officials, who 

strongly encouraged the FDA to open a permanent office in India, 

to reduce the backlog of needed inspections. 

Every year, consumers see more and more counterfeits and poorly-made drugs floating around the world. We dodged the bullet this 

year on tainted toothpaste, which could have made many people 

sick. But dozens of Panamanians weren’t so lucky last year when 

they died from taking poisoned medicine that purportedly came 

from China. That can happen here, and it surely will, if we do not 

get a better handle on ensuring that foreign-made drugs are safe, 

and their plants are inspected regularly. This will require resources 

and significant restructuring of the program. 

Chairman Dingell and I have already had legislation designed to 

give the FDA more resources to do its job. Moreover, we have already sent you, members, bipartisan correspondence delineating 

certain changes to the program that could be enacted almost immediately. We truly hope it will be sufficient to address what are truly 

the root causes plaguing the FDA’s foreign drug inspection program 

and not mere window dressing. We have been here before, in 1998, 

and we were told by the FDA that these problems would be fixed. 

Unfortunately, the problems were not fixed, and we are here again. 

To that end, I believe we have an opportunity to fix FDA’s foreign 

drug program before Americans are sickened or killed by contaminated imported drugs. 

That concludes my opening statement, and now I would like to 

turn to ranking member of the committee, Mr. Whitfield, for his 

opening statement. 

OPENING STATEMENT OF HON. ED WHITFIELD, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH OF KENTUCKY 

Mr. WHITFIELD. Chairman Stupak, thank you very much. As we 

all know, this subcommittee and the Energy and Commerce Committee as a whole has had many hearings on this important issue, 

and today we will examine the agency’s oversight of drugs and bulk 

drug ingredients imported into the United States. 

It is quite obvious that FDA falls short in ensuring that foreign 

firms exporting to the U.S. market meet good manufacturing practices. In fact, the agency devotes less than one quarter of its inspection resources and one tenth of actual inspections to these foreign 

operations. When you consider that 80 percent of active pharmaVerDate Aug 31 2005 02:23 Dec 20, 2008 Jkt 045057 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 E:\HR\OC\45057.XXX 45057

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ceutical ingredients originate from abroad, and the volume of drug 

imports is expected only to grow, this is especially the case with 

countries such as China and India. According to reported estimates, as much as 20 percent of the finished generic and over-thecounter drugs and more than 40 percent of bulk drugs come from 

China and India. Some predict these two countries will double their 

share of U.S.-imported drug supply within 15 years. And just consider that last year, among the 714 firms in China and 410 firms 

in India registered with the FDA, the agency conducted only 13 

and 65 inspections respectively. 

As we noted with food imports, FDA remains mired in an era 

when most drugs were synthesized and produced in the United 

States, and that is simply not the case today. Lack of good quality 

manufacturing is a recipe for harm. A bulk drug ingredient shipment of just 50 kilograms can result in millions of tablets or capsules produced for consumption. A bulk product that contains an 

impurity or was synthesized improperly, something spot testing 

may not detect, can cause injury or death to numerous people. And 

I might say that, while we have concern about the manufacturing 

process and the active pharmaceutical ingredients coming into the 

country, we certainly be concerned, and should continue to be concerned, greatly so, about drug re-importation issues as well. 

We have learned on this subcommittee at past hearings that 

FDA linked and unapproved and impure drug ingredients imported 

from one Chinese firm to toxic reactions that occurred in over 150 

patients across America in 1998 and 1999. One must wonder how 

often poorly made or intentional adulterated product causes harm, 

but it is undetected. Past criminal investigations have identified 

many bad actors, such as agents for foreign firms working to bring 

in cut-rate drug products, and we know without adequate oversight, people and firms can take shortcuts to save money without 

concern of harm to others. 

It is striking that FDA has made little progress in this area to 

reform its system, despite repeated findings by the committee and 

others over the years. Even when thoughtful and comprehensive 

plans for reform have been developed internally at FDA, somehow 

it does not seem to be implemented. 

Mr. Chairman, there are many issues to explore this morning. 

We all want to know how FDA can work to build the capacity for 

quality in countries and firms overseas so that we can be more confident in the manufacture of foreign drugs. We all want to know 

what improvements are needed for FDA’s information collection 

and risk assessment systems so that public health is protected effectively. And most importantly I know that we all want to work 

with Dr. von Eschenbach to make overhauling FDA’s foreign inspection program and FDA’s import operations a top priority. We 

want to provide the money, if that is what we need. If we need legislation, we want to do that. If we can help in regulations, we want 

to do that. And so we would just say to him, I know he is going 

to be testifying later, that we want to support, we want to rally behind him and his leadership to fix this problem. 

Thank you, Mr. Chairman. 

Mr. STUPAK. Mr. Burgess, for opening statement, please. 


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OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. BURGESS. Thank you, Mr. Chairman. I appreciate you holding this series of hearings because we are finding ourselves yet on 

the brink of one more problem, dealing with imports to our country. This time, the focus is a little bit different, but the story line 

is exactly the same as it has been over and over again all summer. 

This committee has spent a great deal of time over the past months 

discussing the safety and security of imported products, and we 

have learned our Federal agencies that are tasked with keeping 

America safe from harmful food or products are often using 20thcentury tools or possibly even 19th-century tools when dealing with 

a 21st-century problem. The Food and Drug Administration does 

not shoulder all of the blame in this situation. As I continue to 

study the problem, as the committee continues to study the problem, it becomes more and more convincing that a lot of people, including people in the United States Congress, actually could not 

have anticipated the exploding number of imports that we have 

seen over the past 10 years. 

Quite frankly, our Laws and regulations were never meant to 

handle the ever increasing number of foreign products entering 

into our ports. This doesn’t absolve us from guilt. It just means 

that, as the former Speaker of the House, Mr. Newt Gingrich, so 

often says, real change requires real change. Now, as a doctor, I 

think it is important that we spend some time today discussing 

medicine and medicines. Medicine is supposed to heal patients, not 

harm them. Before I took the oath of office to become a member 

of the United States Congress, I first swore an oath to my profession to first do no harm. Yet how can we do no harm if we don’t 

know what is in the medicines that are coming from what is supposedly a safe and regulated country? 

It has been estimated that more than 80 percent of the active ingredients in medicines come from overseas, and about half of that 

comes from India and China. China, Mr. Chairman, this is the 

same country that manufactured over 60 percent of all the Consumer Product Safety recalls, including 90 percent of the recalled 

toys. Like many other Americans, I am now regarding the label, 

made in China, as warning, consume at your own risk. While the 

20- to 40-percent number is disturbing, analysts predict that 80 

percent of the active ingredients will come from China and India 

within the next 15 years. If this is true, then our action here today 

and in subsequent hearings is critical. 

We must help to move the Food and Drug Administration into 

a 21st-century agency that can handle these 21st-century problems. 

And it is not just money alone that will solve the problems. We do 

need real reform. In fact, you can argue we need to go beyond reform. It is not just changes at the margin. It is time for real transformation. Now, at the last Oversight and Investigations hearing 

on food safety, I discussed the quality control with the witness from 

Tyson’s Chicken. You may remember. He informed the committee 

that, yeah, they did find problems with things that were coming 

into their plants from suppliers in the country where they were operating, within China. And when they found those problems they 

dealt with them internally, but they didn’t tell anybody else. They 


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are under no obligation to self-report any problems that they encounter with shippers, with other manufacturers, with other shippers, or even the Federal agency charged with protecting the 

health and safety of American citizens. 

Today I hope that the witnesses will speak to this issue. Mr. 

Chairman, before I yield back, I would be remiss if I didn’t make 

a couple of observations about the witnesses before us today. Certainly I want to thank Mr. William Hubbard for appearing before 

us today. Dr. Hubbard has appeared before us in the past and has 

inspired at least me to introduce legislation based on testimony 

that he has given to our committee, so I thank you for being with 

us today, and I hope you can continue to shed some light upon the 

solutions that are needed to fulfill the organization’s own mission 

of building a stronger Food and Drug Administration. 

And, of course, Dr. von Eschenbach is with us again today, and 

we are grateful that he has given his time. Honestly, Mr. Chairman, Dr. von Eschenbach is the head of a major Federal agency. 

His time is extremely valuable, and I know you would like to keep 

him in the audience so he can listen to your penetrating and probing questions, but at the same time he does have other duties to 

perform. 

We have tasked the FDA with transformation. We have tasked 

the FDA with keeping us safe, and yet as I sit here this is the third 

Food and Drug administrator that we have had since I came to 

Congress a very short time ago. He has an agency to get up to 

speed, to get up to 21st-century functioning. Yet he can scarcely 

perform that arduous task that we have set before him if he spends 

day after day after day listening to us pontificate from the dais. He 

could watch us on C-Span in between the activities that he needs 

to do at his agency. I hope in the future when Dr. von Eschenbach 

is called to testify we will afford the courtesy of allowing him to 

go early in the day as opposed to late in the day. I do realize that 

we do all ask very entertaining and probing questions, but I know 

Dr. von Eschenbach has a lot of other things he could be doing. I 

for one certainly appreciate the time that he has given, the courtesy he has shown this committee. He has never complained about 

this issue, but I find it undignified that the committee would behave in such a way. 

I do know that the FDA does require additional resources. At the 

same time, just this past year, when we reauthorized the Food and 

Drug Administration, it wasn’t just the reauthorization of PDUFA 

and MDUFA, we made some basic changes as to how data is handled at the FDA. This is going to take us to the cusp of the 21- 

century type of transformation that we all need. I hope we are not 

a hindrance in that process, and I will yield back the balance of 

my time. 

Mr. STUPAK. Ms. DeGette, for opening statement. 

Ms. DEGETTE. Chairman, I have a brilliant opening statement 

that I would like to submit for the record and in the interest of 

having extra time for questioning. 

[The prepared statement of Ms. DeGette follows:] 


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Mr. STUPAK. Very good. Mr. Murphy, I believe, is next. 

OPENING STATEMENT OF HON. TIM MURPHY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF PENNSYLVANIA 

Mr. MURPHY. Thank you, Mr. Chairman, and thank you for holding this hearing, which is a critically important issue we are dealing with. The American public’s confidence in any products made 

in some foreign countries, particularly in China, is probably at rock 

bottom, and even this morning as I have been watching ABC Good 

Morning, America, they tested 100 popular children’s toys. Although they found 90 of them had no lead levels of problems, still, 

10 of them did and got by Federal inspectors. Yet when it comes 

to children’s toys and when it comes to drugs, I think the American 

people should have zero tolerance for any kind of weakening of inspections or standards. 

Although plants in the United States must be inspected regularly 

every 2 years, we are not yet there for some other pharmaceutical 

manufacturers around the world. And, as China is among them, we 

must be concerned and want to hear everything that our government is doing to help make sure that such plants are inspected and 

are meeting top standards, particularly because as we also see 

many factories around the world, unfortunately in China, India, 

and others in other small countries are involved with a great deal 

of counterfeiting drugs, where not only are drugs being marketed 

as having active ingredients when they have absolutely no active 

ingredients in them or may actually have poisons in them or lead 

paint, et cetera. This is an intolerable situation, and we, of course, 

all share our concern that would any of these ever be marketed or 

sent out through Internet sites and other marketing mechanisms 

as if they are legitimate drugs, with all of the stamps and other 

procedures on them to make them look like they are real. The FDA 

is in a critically important position here, and with this committee’s 

oversight of looking at that, we are hoping to hear about the significant steps being taken to protect the American public. We want 

any breaches in this exposed. We want anybody who is involved in 

cutting any corners disciplined for that. It is something that this 

committee or Congress simply cannot tolerate when it comes to 

medications that are supposed to make things better. We cannot 

tolerate any system that is using counterfeiting or cutting corners 

that makes people sicker. 

So I applaud the actions of this committee in moving forward in 

this. I look forward to hearing the testimony about what is being 

done to make sure this area is made safe. And I yield back. 

Mr. STUPAK. Thank you, Mr. Murphy. Mr. Ferguson, for opening 

statement. 

OPENING STATEMENT OF HON. MIKE FERGUSON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY 

Mr. FERGUSON. Thank you, Mr. Chairman. Thank you, Mr. 

Whitfield and the members of the subcommittee and our witnesses, 

for being here to discuss what many of us know is a very important 

issue, the safety and the security of our nation’s drug supply. I am 

pleased that we are again addressing this critical issue in this subVerDate Aug 31 2005 02:23 Dec 20, 2008 Jkt 045057 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 E:\HR\OC\45057.XXX 45057

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committee. We have had several hearings in recent months on all 

aspects of drug safety. My biggest concern, and I think that of others on this subcommittee, is ensuring that the safety of the drug 

supply for our constituents and for all Americans. It is my hope 

that our witnesses today will be able to provide us with insights 

into why there seem to be gaps in the security of imported drugs 

into America. 

Most of you have probably the New York Times article from yesterday, and if you have I am sure you are as alarmed as I am 

about what was contained in that. It is paramount that the citizens 

of this country have faith in the Federal Government’s ability to 

monitor and ensure the safety of all of our drugs, and we know 

from recent investigations that they don’t have good reason to have 

faith in that process, and perhaps not as much faith as they used 

to have. Many facilities have not been inspected. Other companies 

are using loopholes to get adulterated ingredients into the supply 

chain. However, the majority of ingredients used in the production 

of drugs are coming from outside of the U.S. 

This globalization of the drug manufacturing industry is putting 

a strain on the FDA and their efforts to ensure the safety and the 

security of our drug supply. There are thousands of facilities producing finished drugs and/or ingredients around the world today 

creating products that will end up being ingested by Americans 

across our country. The GAO has been tasked with finding the deficiency in the safety and security of the drug manufacturing pipeline. Their investigations revealed that the FDA isn’t completely 

certain as to how many foreign manufacturing facilities are even 

subject to inspection. 

Using a risk-based assessment of the number of facilities subject 

to inspection, the FDA comes up with the number 3,249. However, 

this risk-based assessment is processed off an unverified database. 

At the agency’s current rate of inspections it would take 13 years 

to inspect all of these facilities. This is with the stipulation that no 

new facilities be added to the list in the meantime. Even more 

alarming is the fact that the Federal Government doesn’t have one 

interoperable database of manufacturing facilities, both foreign and 

domestic, which are willing to register and be inspected. We have 

three different databases for three different purposes, the drug registration and listing system for registration purposes, the field accomplishments and compliance tracking system for completed inspection information, and the operational and administrative system for import support for information on drugs and other regulated substances being imported. 

If our government doesn’t have a handle on the good actors, the 

responsible actors, how can DHS and FDA and Customs work to 

prevent adulterated or counterfeit drugs from entering our supply 

chain from the bad actors? I am pleased to say that I am going to 

be an original co-sponsor of Mr. Boullier’s legislation when he introduces it. I want to commend Mr. Boullier. He has done an enormous amount of work on this issue. He has been a leader on the 

counterfeit drug issue. He has invested a lot of time and effort in 

the issue, and I think he has come up with a very good product. 

But it really drives home the point, if we can’t regulate the good 

actors that are playing by the rules in this industry, how are we 


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ever going to ensure the safety of the drug supply of other drugs 

coming into America? The GAO’s information is very alarming, and 

I really think it drives home the point that preventing the importation of drugs into our supply chain, which can create safety and security problems, we have some on this committee and in this Congress who want to kick open the doors, kick open the flood gates 

of any drugs coming into this country, and they say, well, it is only 

from Canada or a country that we know of. We know for a fact that 

Canada and other so-called safe countries with safe drug supplies 

are really acting as a post office for drugs coming into this country 

from any place in the world. It is irresponsible, and it is wrong. We 

know the struggles we are having with just ensuring the drug supply of the responsible actors of products coming into this country. 

How in the name of God can we make sure the drug supply is safe 

if we are going to kick open the flood gates to any and all actors? 

It is the wrong way to go. 

I hope we will be able to address these and other issues in the 

coming weeks. I look forward to hearing the testimony of our witnesses, and I thank you again, Mr. Chairman, for having this hearing. 

Mr. STUPAK. Thank you, Mr. Ferguson. Mrs. Blackburn, opening 

statement. 

OPENING STATEMENT OF HON. MARSHA BLACKBURN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TENNESSEE 

Mrs. BLACKBURN. Thank you, Mr. Chairman. I thank you for 

calling the hearing to examine this foreign drug inspection program. The inadequacies of our food and drug import system have 

been widely reported during the past year, and you have had the 

New York Times article referenced several times already today. 

There is a serious problem. We all recognize that. Given that the 

U.S. imports 80 percent of the active drug ingredients, it is critical 

that the Federal Government improve its drug monitoring safety 

system to ensure that the U.S. drug supply remains the safest in 

the world. 

The volume of FDA-regulated pharmaceutical imports doubles 

every 5 years and will continue to increase. How much weight can 

American consumers give to the label, FDA regulated, when the 

FDA cannot perform timely safety inspections? When the agency 

fails to enforce action against foreign manufacturers and lacks the 

tools to monitor foreign drug manufacturers, how can Americans 

feel safe? If American drug manufacturers are required to follow 

the letter of the Law regarding FDA drug safety inspections, Congress should expect nothing less from foreign manufacturers. Foreign manufacturers must play by the same rules that our domestic 

manufacturers follow. 

If consumer safety is priority number one, and it should be, then 

we have a lot of work to do to ensure that this goal is going to be 

met. It is worth noting, however, that many of the voices calling 

for an overhaul of the U.S. drug safety inspection system concurrently called for legislation that would import prescription drugs 

from other nations. Drug re-importation fails to ensure the high 

safety standards that Americans have come to expect. Americans 


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clearly do not need a flood of unsafe prescription drugs finding 

their way into the medicine cabinets across this country, especially 

since there is no guarantee of quality or that imported medication 

is indeed safe for us. 

When someone gets that imported drug, and it turns out to be 

unsafe, we have another public health threat on our hands. This 

subcommittee has examined drug import safety in numerous hearings during the 110th Congress, and the record shows that it is unrealistic for the FDA to inspect all imports coming into the United 

States. However, Americans demand greater accountability in the 

nation’s drug supply through considerable and expedient improvement of the FDA’s current drug safety review system. 

I look forward to the testimony today from our witnesses, and I 

yield back the balance of my time. 

Mr. STUPAK. Thank the gentlelady. Seeing no other members, we 

will call our first panel to come forward. Dr. Marcia Crosse, the Director of the Public Health and Military Health Care Issues at the 

United States Accountability Office; Mr. William Hubbard, former 

senior FDA employee and current Senior Advisor to the Coalition 

for a Stronger FDA; Mr. Ben England, former senior FDA employee 

and current Special Counsel at Jones, Walker, et al. law firm; and 

Mr. Carl Nielsen, retired Director of the Division of Import Operations within the Office of Regulatory Affairs at the FDA. 

It is the policy of this subcommittee to take all testimony under 

oath. Please be advised that witnesses have a right under the rules 

of the House to be advised by counsel during their testimony. Do 

any of you wish to be represented by counsel? Seeing none of you 

wish to, then I am going to swear you in, but then I am going to 

have Mr. Dingell give an opening statement if he so wishes. So 

please raise your right hand. 

[Witnesses sworn] 

Mr. STUPAK. Let the record reflect that each witness answered 

in the affirmative, and they are now all under oath. Mr. Chairman, 

would you like to make an opening statement at this time? 

Mr. DINGELL. Mr. Chairman, you are most gracious. This is deja 

vu all over again. I have a fine opening statement. I am sure everybody is familiar with it. It is something very much identical to 

what has been given for years, and I don’t want to deter you in 

your good work. I commend you for what you are doing. I thank 

you for your gracious kindness to me. I urge you to continue your 

vigorous effort in this matter, and we are going to try and make 

the American people safe from some of these imported pharmaceuticals and imported foods that are putting their lives at risk. 

Thank you, Mr. Chairman. 

[The prepared statements of Messrs. Dingell and Barton follow:] 


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Mr. STUPAK. Thank you, Mr. Dingell. Dr. Crosse, if you would, 

we would start with you for an opening statement, please. A longer 

version will be submitted for the record, so please try to limit your 

testimony to five minutes. Dr. Crosse. 

TESTIMONY OF MARCIA G. CROSSE, DIRECTOR, PUBLIC 

HEALTH AND MILITARY HEALTH CARE ISSUES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE 

Ms. CROSSE. Thank you, Mr. Chairman, and members of the subcommittee. I am pleased to be here today as you examine FDA’s 

inspections of foreign drug manufacturers. As you know, the 

United States increasingly relies on drugs manufactured in other 

countries. Slide, please. 

[Slide] 

As you can see in this figure, there are firms in more than 50 

countries that are registered to manufacture drugs for the U.S. 

market, with the heaviest concentration in China and India, as we 

have heard. The FDA is responsible for overseeing the safety and 

quality of human drugs sold in the United States, whether they are 

manufactured in foreign or domestic establishments. As part of its 

efforts to ensure the safety and quality of imported drugs, FDA is 

responsible for inspecting foreign establishments to ensure that 

they meet the same quality standards required of domestic establishments. For domestic establishments, FDA’s usual approach is to 

conduct surveillance inspections of good manufacturing practices to 

ensure that marketed drugs continue to be manufactured in compliance with standards. FDA is required to conduct such inspections every 2 years for domestic establishments, but there is no 

comparable requirement for inspecting foreign establishments. 

We reported in 1998 that FDA needed to improve its foreign drug 

inspection programs. Today, almost a decade later, questions remain about FDA’s ability to oversee foreign drug establishments 

and whether FDA has improved its management of the foreign 

drug inspection program. My remarks provide preliminary information on the review we are conducting at your request. Today I will 

discuss the extent to which FDA has accurate data to manage the 

foreign drug inspection program, the frequency of foreign inspections, and factors influencing the selection of establishments to inspect, and certain issues that are unique to conducting foreign inspections. 

We are finding that FDA’s effectiveness in managing the foreign 

drug inspection program continues to be hindered by substantial 

weaknesses in its databases. FDA does not know how many foreign 

establishments are subject to inspection. Because of this, FDA does 

not have adequate information on the full scope of their responsibilities, which limits their ability to appropriately manage. Instead, FDA relies on databases that were designed for other purposes and contain inaccuracies that FDA cannot easily reconcile. 

Slide, please. 

[Slide] 

For example, one of the databases indicates there are about 

3,000 establishments registered to import drugs into the United 

States, while another indicates that about 6,800 foreign establishments actually imported drugs in the past year. However, despite 


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the more than two-fold different in the estimates of foreign establishments, FDA does not verify the information within each database. For example, the agency does not confirm that a registered 

establishment actually manufactures a drug for the U.S. market. 

Similarly, FDA has not generated an accurate listing of the establishments whose drugs have actually been imported into the United 

States. Slide, please. 

[Slide] 

At a time when manufacturing of drugs for the U.S. market is 

increasing in foreign countries, FDA’s inspections have not kept 

pace. FDA inspects relatively few foreign establishments. Data 

used by FDA to prioritize foreign establishments for inspection suggests that the agency may inspect about seven percent of foreign 

establishments in a given year. At this rate, it would take FDA 

more than 13 years to inspect each foreign establishment once, assuming that the rate of inspections remains constant and that no 

additional establishments require inspection. Slide, please. 

[Slide] 

The mismatch between the number of inspections performed and 

the number of establishments subject to inspection appears to be 

the largest in China. Further, FDA cannot provide an exact number of foreign establishments that have never been inspected. But, 

according to FDA’s data, it may be more than 2,000, and the largest number of such establishments are also likely to be in China. 

Slide, please. 

[Slide] 

FDA’s foreign inspection process is driven by the current statutory and regulatory requirements for timely review of applications 

to market new drugs. Among the limited number of foreign inspections, most are pre-approval inspections conducted as part of the 

processing of a drug application to allow a manufacturer to begin 

marketing a particular drug in the United States. In the last 6 

years, 88 percent of FDA’s inspections of foreign inspections involved such pre-approval inspections. Although FDA uses a risk 

model to develop a prioritized list of foreign establishments for surveillance inspections, to ensure continued compliance, few such inspections are completed in a given year. This prioritized list was 

used to select about 30 foreign establishments for inspection in fiscal year 2007, and 50 are targeted for inspection in fiscal year 

2008. Further, FDA coordinates these relatively few surveillance 

inspections with travel to locations for pre-approval inspections to 

make efficient use of travel funds. The need to coordinate travel is 

a bigger factor in the selection of foreign establishments than 

FDA’s risk model. Slide, please. 

[Slide] 

This is in marked contrast to the pattern of domestic inspections. 

About 78 percent of FDA’s inspections of domestic establishments 

were specifically for the purpose of a surveillance inspection, to ensure that manufacturers continue to comply with good manufacturing requirements. The comparable figure for foreign establishments is 12 percent. Further, in the last 6 years, FDA has conducted almost seven times as many inspections domestically as 

abroad. And this is for about an equal or smaller number of establishments. Slide, please. 


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[Slide] 

Finally, the foreign inspection process also involves unique circumstances that are not encountered domestically. For example, 

FDA relies on staff that inspect domestic establishments to volunteer for foreign inspections. Unlike domestic inspections, FDA does 

not arrive unannounced at a foreign establishment. It also lacks 

the flexibility to easily extend foreign inspections if problems are 

encountered because of the need to adhere to an itinerary that typically involves multiple inspections in the same country. In addition, 

language barriers can make foreign inspections more difficult than 

domestic ones. FDA does not generally provide translators to its inspection teams. Instead, they may have to rely on an Englishspeaking representative of the foreign establishment being inspected rather than an independent translator. Slide, please. 

[Slide] 

In conclusion, our preliminary work indicates that fundamental 

flaws that we identified in the management of this program in 

1998 continue to exist. FDA still does not have a reliable list of foreign establishments that are subject to inspection. As more imported drugs enter the United States, it becomes increasingly important that foreign establishments receive appropriate scrutiny. 

However, until FDA responds to systemic weaknesses in the management of this important program, it cannot provide the needed 

assurance that the drug supply reaching our citizens is appropriately scrutinized and safe. 

Mr. Chairman, this concludes my prepared remarks. I would be 

happy to answer any questions that you or other members of the 

subcommittee may have. 

[The prepared statement of Dr. Crosse follows:] 


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Mr. STUPAK. Thank you, Dr. Crosse. And, Mr. Nielsen, for an 

opening statement, please, sir. Pull your mike up there a little closer and the green light should be on, hopefully. Thank you. 

TESTIMONY OF CARL R. NIELSEN, DIRECTOR (RETIRED), DIVISION OF IMPORT OPERATIONS, OFFICE OF REGULATORY AFFAIRS, FOOD AND DRUG ADMINISTRATION 

Mr. NIELSEN. Mr. Chairman, members of the subcommittee. We 

are to provide information to enable you to better assess the adequacy of the current FDA foreign inspection program and to help 

you formulate practical, effective solutions for improvement. It is 

unavoidable for us to also discuss FDA’s import operations, since 

obviously foreign-made goods gained entry into the U.S. market 

through FDA’s import procedures. 

FDA manages the importation of drugs using the same entry reviewers, the same organizational structure, and the same information technology infrastructure as those used to oversee the importation of foods, medical devices, biologics, and all other regulated 

commodities. I recall an interview with the Journal of Commerce 

not long after that fateful 9/11 day. I was Director of FDA’s ORA 

Division of Import Operations and Policy at the time. During the 

interview I was asked whether there were significant 

vulnerabilities in the current FDA import operation. I say to you 

today what I said then. Do the math. The import system was broken then, and it is even more so now. The volume of lines of entry 

have more than tripled since 1999, while resources have remained 

essentially static or have been reduced. 

So, is FDA’s foreign drug inspection program adequate to prevent 

entry of unsafe drug products? Let us do a quick review of some 

relevant information. Maybe some simple arithmetic can help us 

come to a logical conclusion. First, FDA is expected to handle approximately 18 million lines of entry for all regulated commodities 

this year. Drugs and biologics comprise approximately 10 percent, 

or 1.8 million lines, foods and cosmetics comprise approximately 60 

percent, and medical devices comprise approximately 30 percent, or 

5.4 million lines of entry. Number two, entries of FDA-regulated 

goods enter through 250 or more U.S. Customs Ports of Entry. Nationwide, there is approximately 200 field investigators and inspectors who spend most, but not all, of their time reviewing entries, 

collecting samples, examining cargo, and conducting investigations 

and inspections for all imported commodities. That is less than one 

person per port on average, and 90,000 entries per person on average. 

There is an estimated 300,000 plus foreign manufacturers of 

FDA-regulated commodities. FDA conducts 500 to 900 foreign inspections per year for all industries. That is an inspection cycle of 

333 to 600 years on average for all commodities. The foreign-made 

products are received from 200 plus countries, not just a handful 

of concern. FDA inspects an average 200 to 300 foreign inspectors 

of Rx drugs per year. Inspection of foreign manufacturers of OTC 

drugs are virtually non-existent. There is an estimated 3,000 to 

6,800 foreign manufacturers of Rx drugs, on top of which there are 

thousands of OTC manufacturers. The estimated foreign inspection 


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cycle for the Rx industry ranges from 10 to 30 years or more, while 

the cycle for OTC drugs could be 50 years or more, or almost never. 

Conclusion—FDA knows very little about the actual conditions of 

manufacture of most imported drugs, and that should be found totally unacceptable in a professed risk-based approach. Many potential risks are mitigated when good manufacturing practices are 

used, and many potential risks are increased when good manufacturing practices are not used. In order to ensure a safe drug supply, FDA needs to verify compliance by the foreign drug industry 

with current good manufacturing practice requirements. FDA 

needs to revamp its entire organizational structure and approach 

to managing products from the international market. There is no 

cheap fix. That is part of the price of a global economy. Agency 

oversight must follow the regulated industry to be effective. 

The current, domestic-oriented organization has had decades to 

get this right. It has not, and I don’t think it can. We are sitting 

here talking about the very same issues from more than a decade 

ago. Unless there is significant investment in the IT systems and 

establishment of a new organization that can implement an effective risk-management system for all imported regulated products, 

not just for foods and drugs, then I suspect folks will gather here 

in another 10 years wondering why something wasn’t done this 

time around that could have avoided many injuries and deaths 

from unsafe, imported drug products. 

I appreciate the opportunity to appear before you all, and I will 

do everything I can to avoid coming back in another 10 years on 

the same topic. I look forward to participating in this hearing. 

[The prepared statement of Mr. Nielsen follows:] 


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Mr. STUPAK. Thank you, Mr. Nielsen. Mr. Hubbard, please, for 

your opening. 

TESTIMONY OF WILLIAM HUBBARD, SENIOR ADVISOR, 

COALITION FOR A STRONGER FDA 

Mr. HUBBARD. Thank you, Mr. Chairman. I have a written statement, which is remarkably similar to yours, so I won’t repeat what 

you said, but I will say it is frustrating to be back here over and 

over again, as Mr. Nielsen said. I remember being here in 1986 

with these issues, in the 1990s, and your hearings in 2004, and 

now we are back again. And it does seem to be a continuing concern. It doesn’t get fixed. 

But bottom line, though, is how can we live with a process in 

which you have this pervasive regulatory system over U.S.-produced drugs, with inspections and rigorous adherence to quality 

controls, but yet the majority of our drugs are coming from foreign 

countries and often developing countries, which rarely get inspected. I think that is an indefensible contradiction, and clearly 

the examples you have all given are real. Drug ingredients coming 

from countries like China and India that have weak process controls. Counterfeiting of drugs is endemic around the world. In some 

countries, you are more likely to get a counterfeit than a real drug. 

And, of course, Americans are going to the Internet and buying 

drugs that they think are coming from Canada, and in fact they 

are coming from some of the darkest corners of the world. 

So I must say this does need to be addressed. I worked at FDA 

almost 30 years, with 14 acting and permanent commissioners, and 

all of them were forced to play this public health version of the 

kids’ game, whack-a-mole, in which they were forced to shift resources to wherever the squeakiest wheel was of the day and try 

to fix that. That was all it was, and nothing ever seemed to get 

fixed. And so you see now, inadequate food inspections, you know, 

inspections of clinical trials, inspections of human tissues, and of 

course the drug inspections for foreign firms lags the worst in 

many ways. 

So the safety of drug imports just keeps coming back over and 

again every few years, but we just don’t seem to fix it. So I hope 

this time the committee will make a tenable effort to make this a 

point of concern and move to fix it. This committee has done tremendous things for the FDA over the years, and I hope that this 

is one that you will stay with and tackle. Thank you very much. 

[The prepared statement of Mr. Hubbard follows:] 


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Mr. STUPAK. Thank you, Mr. Hubbard. Mr. England, please, your 

opening statement. 

TESTIMONY OF BEN ENGLAND, SPECIAL COUNSEL, JONES, 

WALKER, WAECHTER, POITEVENT, CARRERE, & DENEGRE, 

LLP 

Mr. ENGLAND. Mr. Chairman and members of the committee, I 

am Benjamin England. I am an attorney in the Washington, DC, 

offices of the law firm of Jones, Walker, 17-year veteran of the U.S. 

Food and Drug Administration. My bio is more fully explained in 

my written statement, which I would ask to be made part of the 

record. 

Relevant to today’s topic, I will only note that during my career 

Carl Nielsen and I participated in a series of imported counterfeit 

bulk drug investigations with Customs Enforcement in Newark, 

New Jersey, prior to the creation of FDA’s office of criminal investigations. Some of those cases became of the topic of that hearing 

in June of 2000 before this committee. I am now an attorney in private practice. I represent domestic and foreign companies before 

and against various Federal agencies related to the manufacture, 

distribution, importation, and exportation of FDA and USDA-regulated commodities. I spent much of time assisting foreign companies and importers in complying with the myriad of Federal and 

State regulatory requirements prior to the process of importation 

to the United States. I do represent myself as a former FDA official 

interested in the matters before the committee. 

At the outset, I will say I am very pleased that the committee 

has taken this issue up again and to focus specifically on the FDA’s 

foreign drug inspection program, but as the Chair will know, this 

is not a new discussion. It has obviously been mentioned a number 

of times about the number of hearings that have been had on this 

particular issue. And I would also note that during the prior hearings we also discussed these imported counterfeit bulk drug cases. 

That New York Times article that published yesterday reported 

this rampant counterfeit active pharmaceutical ingredient, or API, 

industry in China, manufacturing not so fine chemicals and passing them off in Europe, South America, and Canada, and even the 

United States as legitimate product for drug manufacturing. These 

chemicals are manufactured in an uncontrolled and unregulated 

environment, as reportedly admitted by the industry participants 

and the Chinese government. True to the pattern, though, that Mr. 

Nielsen and I discovered in the early 1990s, these counterfeit and 

unapproved APIs make their way to the U.S. through third countries just as the Chinese manufacturer of the counterfeit gentamycin sulfate sent its bulk drugs to the United States through Europe. The stories of the Haitian children that were killed by DEGtainted over-the-counter cough syrup, and now the more recent 

Panamanian incident, is all being reported as news. I daresay it is 

not news to the committee. It is not news to me, and it is not news 

to the FDA. 

FDA’s drug import program, its foreign drug inspection program, 

and its information technology systems, which are tasked with 

managing both and trying to integrate data, are broken. They were 

broken 8 years ago, and they remain broken today. FDA’s current 


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import program is simply not capable of adequately assessing risks 

that may be associated with imported drugs, particularly given the 

ever-increasing volume, variety, and complexity of those drugs. One 

of the effects of free trade is the migration of manufacturing and 

processing to lower-cost markets. For FDA, that meant the answers 

to FDA’s safety and quality questions about drugs, the real questions, which relate to how that drug is designed and how it is manufactured, and the environment in which it is made, cannot be 

found by border examinations in this country. You can’t use a finished-product testing regime in order to assess that risk. Only 

boots-on-the-ground inspectors inside facilities can identify that. 

Given the numbers of foreign manufacturers, processors, growers, storage facilities, exporters that send products to the United 

States, it is a foregone conclusion that FDA will never cross those 

firms’ thresholds in any meaningful number or in any significant 

frequency. The question is, how can FDA get there more often to 

conduct these critical GMP inspections? And secondly, how can 

FDA obtain sufficient verifiable information about what is happening inside the manufacturing plant in China or in India or in 

Malaysia when FDA can’t get there? 

This foreign inspection problem and the import risks, the import 

program are conjoined problems. To be clear, one of the most important challenges I think FDA faces is lack of any efficient, realtime, risk-based, intelligent operational data screening system and 

its persistent siloing of agency data systems. Without correcting 

that problem, FDA could not even use the data that might emerge 

from more and more frequent foreign inspections. OASIS is only 

screening against preset data. It is not monitoring products that 

are imported. It is not evaluating those shipments for compliance 

with FDA requirements or for safety. 

I think we all agree FDA needs a significant influx of resources. 

I don’t want to discuss many numbers. I will simply note that the 

weakness of FDA’s foreign drug inspection program is not really 

limited just to this 3,000 to 6,800 number. First, if you include the 

over-the-counter products, which is where we actually have had 

these reports of the safety risks, that number would be far, far 

greater. Then if we include foods and devices and biologics, the 

numbers skyrocket, and what we are left with to manage that risk 

is the import program, and the numbers that are involved in that 

program are even worse. Relying on that program leaves us with 

a more entrenched finished-product regime. It is critical that FDA 

get into more foreign firms that conduct good manufacturing practice inspections. Without more inspections, you can’t even identify 

the risk baseline for drug imports, so you can’t figure out where the 

baseline, as it dynamically shifts, where FDA should be focusing its 

resources in both the foreign inspection program and the import 

program. Both of these need to be repaired. The agency cannot use 

really any of the data it receives if it cannot integrate it and assess 

it, and that IT problem, if not fixed, will have us back here in 5 

years with the same problem, except much more exaggerated. 

Shortly after September 11, 2001, FDA’s leadership council established an import strategic plan steering committee. By spring of 

2003, that import strategic plan was virtually complete. FDA developed the ISP from contributions of more than 100 agency experts 


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and all product centers, field and headquarters components, laboratories, international program staff, general counsel’s office, and the 

Office of Policy, Planning, and Legislation. I believe those ISP principles and many of those proposed solutions are critical to establishing a functional FDA program to integrate these foreign import 

and domestic operations, and then you have something to fund. 

Then you can target your resources, and you can identify and target new authorities. I also refer you to my proposals at the end of 

my written statement and look forward to a vigorous discussion on 

the important topic. Thank you. 

[The prepared statement of Mr. England follows:] 


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Mr. STUPAK. Thank you, Mr. England. That concludes the opening statements of our witnesses. We will begin with questioning. 

We will go for five-minute rounds on questioning. Dr. Crosse, on 

page 13 of your testimony, you note, and I quote, ‘‘The FDA’s data 

indicate that some foreign drug manufacturers have not received 

an inspection, but the exact number of establishments not inspected was unclear.’’ In fact, you note that there are more than 

2,000 foreign establishments for which the agency could not identify previous inspections. Where are these firms? Who are these 

firms? What are they shipping? What risks do they pose, and what 

does it mean that there is no record they have ever been inspected? 

Ms. CROSSE. Well, as to who are these firms, where are they, and 

what are they shipping, we don’t know, and I am not certain that 

FDA knows. 

Mr. STUPAK. Have you asked for the information? 

Ms. CROSSE. We are still continuing our work for the committee 

to try to understand in greater depth the nature of some of these 

problems and what kind of enforcement actions FDA has been taking. The data about the number of establishments that may never 

have been inspected are coming from one of the many data systems 

that they have. This is from their risk-based model, where they 

had between 3,200 and 3,300 establishments that they assessed, to 

prioritize those for their routine surveillance inspections. Those 

records, as part of the risk assessment, examine whether or not 

there has been a recent GMP inspection at a facility. Over 2,000 

of those establishments had no inspection indicated in that system. 

Mr. STUPAK. Did they have a pre-approval inspection? 

Ms. CROSSE. Not clear from these data, but because some of the 

establishments included in this risk-based prioritization system are 

those that have registered and may never have imported a product 

into the United States—so their risk model is not necessarily built 

on the base of firms that are sending product here. 

Mr. STUPAK. Well, we all talked about that in a lot of the discussion about prescription drugs or active pharmaceutical ingredients, 

but that also includes, does it not, over-the-counter drugs that you 

don’t need a prescription for? You just go in the drug store and buy 

it? Like the toothpaste with the DEG that was found? 

Ms. CROSSE. Yes. In their—— 

Mr. STUPAK. FDA has responsibility to inspect those facilities 

where they are manufactured? 

Ms. CROSSE. That is correct. FDA is responsible for inspecting all 

of those facilities. In their risk-based model, they consider over-thecounter manufacturers to be of lower risk than those producing certain types of prescription drugs. 

Mr. STUPAK. Well, let me just ask this panel or anyone who cares 

to answer it, there has been a movement, and I know it has nothing related to this hearing directly, but indirectly it does, there has 

been a movement to put a third class of drug. You have prescription drugs, you have your over-the-counter drugs, now there is this 

movement to make the BTC or behind-the-counter drugs. If we do 

that, a third class, is that just opening up to more drugs with less 

inspections, or more drugs with, we have no idea what they are? 

Ms. CROSSE. No, sir, I don’t believe that is the case. My understanding of the third class of drugs is that some current drugs that 


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are marketed, either over-the-counter or primarily those that are 

prescription drugs, would simply move to a behind-the-counter status, where you would have to have some interaction with the pharmacist in order to obtain the drug. Not that it would add a whole 

new category of drugs that don’t currently exist into the marketplace, would just regulate some of them differently. 

Mr. STUPAK. OK, thanks. Mr. England, I was really intrigued 

with your import strategy plan when 2003 recommendations were 

made to the FDA on what should be done, and this was, I think, 

Mr. Nielsen, were you involved in that also, the import strategic 

plan? 

Mr. NIELSEN. Yes, I was. 

Mr. STUPAK. That was right after 9/11. That was what you were 

referring to? How do we—What ever happened to that? Either one, 

Mr. England or Mr. Nielsen, or Mr. Hubbard, if you know, if you 

were a part of—were you a part of that group, too, the ISP? 

Mr. HUBBARD. Yes, I was. 

Mr. STUPAK. What ever happened to it? 2003 was recommendations made to finalize their plan. What happened to it? 

Mr. HUBBARD. Well, the commissioner at the time was faced 

with, as I said, he was faced with tremendous priorities elsewhere 

and felt that to do that plan, while it was a reasonable plan, there 

was simply no funding for it, and he didn’t believe that a request 

for funding would be welcome at that point. 

Mr. STUPAK. Would be welcome by the administration or by the 

Congress? 

Mr. HUBBARD. Well, whomever. The FDA had so many other priorities at the time that he basically said, look, I think you guys are 

on the right track here, but I would have no way to fund this, and 

we can’t do it without funding. But I do understand the agency has 

been trying to do pieces of it—— 

Mr. STUPAK. Well, that is what I was just going to ask Mr. England, since you brought it up in your testimony. There were pieces 

of this ISP, Import Strategic Plan of 2003, that could be really implemented with little or no cost, right? 

Mr. ENGLAND. That is true. 

Mr. STUPAK. Give us an example. 

Mr. ENGLAND. Well, I will give you an example. When FDA conducts a foreign inspection and goes in the country, you know, FDA 

receives registration data from foreign facilities. They may be food 

facilities, or they may be cosmetic facilities on a voluntary basis, 

they might be medical device or drug facilities. The discussion ensued during the development of the ISP that one of our weaknesses 

in the agency was that there was no real gatekeeper on the registration process. No one knows who these people are, and so during foreign visits, would it not be possible for a foreign inspector 

to perhaps stay an extra day, take the addresses, and at least identify the facilities that are listed in the addresses for the registrations actually exist, or that there is not an apartment complex 

there? I mean, just some basic verification of data while inspectors 

are in the country. They are already there to do a foreign inspection anyway. But those would be the kinds of examples. The other 

examples might be to rely upon data that other U.S. government 

agencies have from foreign inspections they conduct. You know, 


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there are inspections that are conducted by other agencies of foreign seafood processors, of bottled water manufacturers, of, you 

know, where there are contracts that are let by another government agency. Another government agency may sub-contract an inspection process prior to procurement. That data is actually out 

there and could be used for integration into the FDA import process. I think the biggest problem we ran into, though, was, how do 

you integrate the data, because the IT systems were so broken. 

Mr. STUPAK. Right. It is in shambles. Mr. Hubbard, my time is 

up, but I want to ask you this. You have been at the FDA, you said 

30 years. You talked about the 1986 hearing. You talked about the 

1998 GAO report, the 2000 hearing. Now we are here in 2007. 

What happens internally? I mean, we have these hearings. You 

were in one of the key positions in the FDA, especially 2000. I remember that one clearly because I was here, the 1998 report. What 

happens? We hear these promises. Things will be different. We will 

fix the IT system. It goes back to the FDA, and all this testimony 

and all this just goes in the circular file, or what? 

Mr. HUBBARD. Well, I share your frustration, Mr. Chairman. I 

think it comes down to resources. The program has always been a 

poor little sister there at FDA. It has never gotten resources. Even 

now, they only devote a little over 100 FTEs a year to these folks’ 

market issues, so to me it is resources. I think there needs to be 

some funding provided if it will fix the problem. To me that is the 

big missing piece, is the funding. 

Mr. STUPAK. But, again, going back to your experience, but what 

happens on the resources? I mean, I don’t ever remember the FDA 

coming up pounding on the table before the appropriators, saying, 

we need this, just from a safety point of view, to protect America. 

We need these resources. Is the gatekeeper of the resources request 

the administration? And if the administration doesn’t make it a 

priority, it doesn’t put the resource request in? 

Mr. HUBBARD. If you look at the last 10 or 15 years, the president’s budget usually gets funded, but if it doesn’t get in the president’s budget, Congress never adds more. And the president’s 

budget has been very strict on FDA in recent years. 

Mr. STUPAK. Mr. Whitfield, questions, please. Thank you. We are 

probably going to go more than one round here. 

Mr. WHITFIELD. Well, we appreciate all of you being here today, 

and certainly all of you all are experts at the FDA. Three of you 

worked there for many years, and you have attended enough of 

these hearings and expressed the frustration in your own testimony, and obviously lack of dollars is one of the big issues. And, 

would you all agree with that? OK. And in addition to that, would 

you elaborate on some other obstacles, just from your experiences. 

I mean, is there a culture over there that has something to do with 

it? I know that one of you mentioned that the most serious issue 

was a lack of a risk-based data screening system that really works. 

But if each one of you would just. You have all been involved in 

coming up with new plans. As you say, every 2 to 3 years we are 

back here talking about the same problem. So, lack of money is one 

big issue, and would each one of you maybe elaborate on a couple 

of other things? Dr. Crosse. 


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Ms. CROSSE. Well, I haven’t been in FDA, but it is certainly true 

that resources is a major constraint here. It also seems to me, 

though, that because of the resource constraint the approach has 

been, OK, we can’t do it all. Let us work backwards at this. Given 

the regulatory requirements, the statutory requirements for inspections, we have only got this many resources. How many can we do, 

and then do some figuring on where you can go within that, rather—— 

Mr. WHITFIELD. We can’t do everything, and—— 

Ms. CROSSE. We can’t do everything, but rather than trying to 

make an assessment, it appears there has been no attempt to try 

to make an assessment of what the universe is and to try to integrate the information and start from that end to assess the risks 

that are the largest and to try to manage from that side. 

Mr. WHITFIELD. OK. What about you, Mr. Nielsen? 

Mr. NIELSEN. I think the biggest obstacle is the current organization is the original organization, totally organized not for the international market. Even the location of the facilities, or because of 

the location in a judicial district, not because of incoming products. 

Then, on top of that, because of the existing system largely being 

oriented to overseeing the domestic industry, the work planning 

process is not designed to deal with the international difficulties, 

either. And so it is also my contention that the organization stovepiping is what causes our IT stove-piping, and that is why I believe 

part of the real solution is it really is an organization designed for 

all of these problems we have been talking about for over a decade. 

And then the requirements and the solutions can be realized and 

I believe can be implemented with the appropriate funding. 

Mr. WHITFIELD. OK. Mr. Hubbard. 

Mr. HUBBARD. Well, someone suggested the way to solve this 

would be some forms of memorandum of agreements with other 

countries in which they step up and do a better job, and conceptually I think that is a good idea, but take China as an example. 

The Chinese are suffering 200,000 to 300,000 deaths a year from 

sub-standard and counterfeit drugs, among their own people. 

Mr. WHITFIELD. 200,000 to 300,000? 

Mr. HUBBARD. Yes, that is an estimate that is out there, and my 

point is, if they can’t protect their own people, I don’t think we can 

depend on them or any other country to protect us. I think we need 

to protect ourselves. 

Mr. ENGLAND. Yeah, I would, if I could, just build quickly on 

what Mr. Nielsen and what Mr. Hubbard both said. This idea of 

culture is a persistent issue in the agency, and I can recall when 

I left the lab in Baltimore and went into investigations, and I went 

into the import operations group, the supervisor I worked for in the 

lab asked me if I was nuts. He said he realized it is a dead-end 

job to go work in imports. And then, a couple years later, NAFTA 

was passed, and then we began to see these increases in imports 

became more significant, and the foreign market became more significant. So timing was good on my side. I don’t propose to have 

any gift of prophecy, but it has worked out. But I think that that 

persists. I mean, imports and the foreign program largely is still 

essentially this red-headed stepchild. A very small percentage of 

the dollars that FDA expends are expended on the foreign source 


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market. In 2003 the number was about $7 out of every $100 was 

based on imports or foreign, so it is a very small number. I don’t 

know what it is now, but that was the number that I received then. 

I think that, in order to try to address it, though, organizationally, 

this framework problem does call for the need for an organization 

within the agency that does have the responsibility. They have got 

the line-item budget authority. They have got the ability to manage 

the field assets. Some things that report into the commissioner 

level, that it is the import foreign program, and from that can come 

information sharing, but they also have to have this IT system that 

is also integrated, and it can’t be just about drugs. It has to be 

about drugs and foods and devices and biologics. So you really are 

talking about a rather substantial reorganization in the agency in 

order to create the line of authority and the budgeting in order to 

actually drive the process. 

Mr. WHITFIELD. Just one quick question. You mentioned this 

Haiti, the children in Haiti. How many children died in that incident? 

Mr. ENGLAND. I don’t recall. There was a couple hundred. I don’t 

recall. 

Mr. HUBBARD. Well, in Haiti, I believe it was 86, and Panama 

I believe it was in the 40s, but it was a lot of kids with clearly a 

substitute of antifreeze, that we put in our automobiles, for a legitimate drug. 

Mr. ENGLAND. And in my understanding, that product was found 

here eventually and had to be recalled. And so it is almost as if 

we are waiting for these deaths to occur in other countries, and 

then we go looking for it. Whereas, as Carl points out, I think in 

his written testimony, that GMPs would have addressed that issue. 

That is a GMP—that is an incipient ingredient processing issue 

that happens to be in an OTC manufacturer, so whether there is 

oversight there is a different question, but—— 

Mr. STUPAK. Right. We used this chart before on this, and I know 

Mr. Whitfield is familiar with it, the DEG that they put into the 

toothpaste in both Panama and Haiti but also found in our toothpaste here in this country. 

Mr. ENGLAND. That is correct, so—— 

Mr. STUPAK. Mr. Dingell, for questions, please. 

Mr. DINGELL. Mr. Chairman, I would like to commend the panel. 

This is one of the best panels we have had in this committee, and 

I want to thank you for your quality and vigorous testimony and 

for your help to us. I have a limited amount of time, so we have 

to deal with this very quickly. Mr. Nielsen, you are the former director of imports in FDA, with 28 years of experience. Isn’t it true 

that FDA can provide a meaningful figure on the number of firms 

shipping drug products to the United States because of outdated 

databases? 

Mr. NIELSEN. Yes. 

Mr. DINGELL. Mr. Nielsen, FDA doesn’t have a good handle on 

this inventory, do they? 

Mr. NIELSEN. That is correct. 

Mr. DINGELL. Mr. Nielsen, since FDA can’t calculate the total 

number of foreign firms that are shipping drug products to the 


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United States with any precision, how can we have confidence that 

the agency is truly managing risk? 

Mr. NIELSEN. You can’t. 

Mr. DINGELL. Now, Mr. Nielsen, some insiders have told us that 

FDA’s IT or their information technology system should be 

scrapped and rebuilt from scratch, simply because it doesn’t work. 

Do you agree with that? 

Mr. NIELSEN. No. 

Mr. DINGELL. You don’t agree? 

Mr. NIELSEN. No. I think there are steps. It has to be replaced, 

but you can’t just scrap it. 

Mr. DINGELL. OK. We have to have a system, but we have one 

that doesn’t work. 

Mr. NIELSEN. That is right. 

Mr. DINGELL. And it has got to have major rebuild, does it not? 

Mr. NIELSEN. That is correct. 

Mr. DINGELL. Now, Mr. England, isn’t it true that domestic firms 

are inspected properly every 2 years because Law requires it? Isn’t 

that so? 

Mr. ENGLAND. That is true. 

Mr. DINGELL. Mr. England, isn’t it true that there is no Law defining frequency of GMP inspections for foreign firms? 

Mr. ENGLAND. That is true. 

Mr. DINGELL. Shouldn’t foreign firms be inspected at least as frequently as U.S. firms? 

Mr. ENGLAND. I believe so. 

Mr. DINGELL. Isn’t it true that foreign drug manufacturers’ facilities subject to FDA inspection rarely receive a follow-up GMP inspection? 

Mr. ENGLAND. That is true. 

Mr. DINGELL. So that means that they are not being adequately 

inspected, even the small number that are, in fact, being inspected. 

Is that right? 

Mr. ENGLAND. I believe that is true, that there is not—— 

Mr. DINGELL. Isn’t it true that since the year 2000, imported 

drug volume has nearly doubled but foreign drug program resources have actually declined? 

Mr. ENGLAND. That, I believe, is true. 

Mr. DINGELL. Now, Mr. Hubbard, isn’t it true that today about 

2/3 of the drugs consumed in the United States today contain foreign drug components? 

Mr. HUBBARD. That apparently is true, yes. 

Mr. DINGELL. Of the millions of drug shipments arriving from 

foreign countries each year, isn’t it true that there is almost no 

chance of an imported drug being sampled, tested at entry into this 

country? 

Mr. HUBBARD. That is correct, Mr. Chairman. 

Mr. DINGELL. And if they are sent back out, they can simply be 

brought in through another port? 

Mr. HUBBARD. Unfortunately, that does happen. 

Mr. DINGELL. And that happens also with regard to food, although that is not the subject of this hearing? 

Mr. HUBBARD. Yes. 


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Mr. DINGELL. Aren’t we buying even larger percentages of our 

drug ingredients from producers in developing countries overseas 

with virtually no or no FDA inspection? 

Mr. HUBBARD. That is correct. 

Mr. DINGELL. Mr. Hubbard, can the FDA ensure the safety of imported drug products at its current rate of foreign inspections? 

Mr. HUBBARD. I am sorry, Mr. Chairman. I missed that. 

Mr. DINGELL. Can the FDA, and I apologize for that. I had a very 

serious dental visit this morning. Aren’t we buying even—or, I am 

sorry. Can the Food and Drug assure that the safety of imported 

drug products is real at its current rate of foreign inspections? 

Mr. HUBBARD. Oh, no. 

Mr. DINGELL. Given the volume of foreign drug products imported in the United States, isn’t the only real way to ensure drug 

safety and safe drug supply to significantly increase the resources 

to conduct on-site inspections overseas? 

Mr. HUBBARD. I certainly believe that that is the biggest need, 

yes. 

Mr. DINGELL. Now, gentlemen, this panel has over 80 years of 

FDA experience. Are things worse now than they have been before, 

or are they better? 

Mr. ENGLAND. I think that you would have to say that they are 

worse now. 

Mr. HUBBARD. I think I would have to agree, simply because the 

globalization has caused us an enormous shift of suppliers from 

here to developing countries—— 

Mr. DINGELL. What you are saying is that the risk is higher and 

the resources are lower? Is that a fair statement? 

Mr. HUBBARD. That is correct. And then you have got the concomitant concerns of people buying drugs over the Internet and 

things like that, so, yes, there are great risks out there. 

Mr. DINGELL. Now, why, gentlemen and ladies, are things worse 

now than they have been before? Starting with Dr. Crosse. 

Ms. CROSSE. I think, as we have heard, the globalization of the 

market and the decrease in the resources that have been available 

to try to handle that. 

Mr. DINGELL. Sir? 

Mr. NIELSEN. Also, besides the funding, also the failure to redirect the resources to the global economy condition. 

Mr. HUBBARD. The drugs knocking on our door are less safe, so 

therefore we need more protection, and we have been cutting the 

FDA, so that, to me, is a simple equation. 

Mr. ENGLAND. Yeah, I believe the combination of all those is 

true. I think there is also a continuing culture that it is just easier 

for the FDA to think in terms of domestic regulation, because they 

are used to it, the Statute was built that way, and this NAFTA, 

the conversions that happened in NAFTA and the economy, just 

have not carried over into the FDA. They persist, I think, really, 

on a pre-NAFTA platform rather than a post-NAFTA platform. 

Mr. DINGELL. Would this observation be correct? FDA said it has 

a risk management plan. That risk management plan, being as deficient as it is in personnel, money, and in the way that it works, 

is actually of no value at all. Is that right? 


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Mr. ENGLAND. I wouldn’t say it is of no value. I would say it 

has—— 

Mr. DINGELL. Limited value. 

Mr. ENGLAND. —limited value. 

Mr. DINGELL. Now, would I be fair in saying that simply assures 

that perhaps a lesser number of people are going to be killed, defrauded, or hurt by imported pharmaceuticals? Is that a fair statement? 

Mr. ENGLAND. I think that would always be true, that if you 

have less resources assessing risk you always then would have a 

lower number of people protected by those programs. 

Mr. DINGELL. Does the rest of the panel agree? There is no nod 

button on the recorder’s machine here. 

Mr. NIELSEN. Absolutely agree. 

Mr. DINGELL. Mr. Chairman, I have used more time than I am 

entitled to. Thank you for your courtesy. 

Mr. STUPAK. Thank you, Mr. Dingell. We have three votes on the 

floor. I think we are going to recess until twelve o’clock. Let us try 

to get back at twelve o’clock so we can continue. 

I am looking down this row. None of you guys can do it in five 

minutes, I can tell you that right now. Go ahead, Mr. Burgess. I 

think you were next in the—I was going by your list of attendance, 

and I think Mr. Burgess—OK, Mr. Walden. I know he will stay at 

five, and I know Mr. Burgess won’t, so why don’t you go ahead? 

Mr. WALDEN. All right, thank you. Thank you, Mr. Chairman. 

My colleague from Pennsylvania, Mr. Murphy, suggested this question, and I think it is a really good one, and I would like a yes or 

no answer out of each of the panel members. If your child were prescribed a drug that you knew was manufactured in a facility in 

China that is not inspected, would you let your child take your 

drug? Dr. Crosse? Yes or no? 

Ms. CROSSE. Yes, because if they were ill enough to require a 

prescribed drug, I would be concerned that they take something. 

Mr. WALDEN. Mr. Nielsen? 

Mr. NIELSEN. Yes, because I don’t feel there is an option. 

Mr. WALDEN. Mr. Hubbard? 

Mr. HUBBARD. I think we are doing it every day, so there is no 

choice. 

Mr. ENGLAND. I would agree. It is what you are left with, that 

you have nothing else to go to. 

Mr. WALDEN. That is a pretty sad commentary, isn’t it? That we 

are putting our kids’ health at risk to take drugs that a physician 

prescribes that we all now know are coming from factories that we 

don’t have the resources to inspect. That is a scary proposition 

when we know our toothpaste is poisoned. We know our dog food 

got poisoned. We know—and we have no options? Then we had better change how FDA operates. Mr. England, I want to ask you a 

couple of questions here. Please refer to the document from the 

FDA’s Web site called ‘‘Consumer Update: Ensuring the Safety of 

Imported Products—Q&A with Deborah Ralston, Director, FDA’s 

Office of Regional Operations’’. According to the FDA questioner, 

the number of imported goods that FDA regulates has more than 

doubled in the last 5 years. Ms. Ralston states on the Web site that 

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cialists who conduct inspections, analyze samples, and monitor the 

entry of regulated products at our nation’s borders. Is this number 

of 2,000 FDA people working on imports a credible number? 

Mr. ENGLAND. I have no idea who they could be. I would think 

that roughly 200, maybe between 200 and 250, in the inspection 

side, perhaps another 100 in the lab side, that spend more than 50 

percent of their time, probably is a more reasonable number. 

Mr. WALDEN. Ms. Ralston states that the FDA analyzes about 

30,000 import product samples annually. That sounds like a big 

number, doesn’t it? 

Mr. ENGLAND. Sure does. 

Mr. WALDEN. 30,000 import samples. 

Mr. ENGLAND. It does sound like a big number. 

Mr. WALDEN. This 30,000 samples is out of how many lines of 

entry? 

Mr. ENGLAND. 18 million, probably, this year. 

Mr. WALDEN. So 30,000 out of 18 million. Do you think that is 

an acceptable number when our nation’s health relies on these 

drugs? 

Mr. ENGLAND. It is a remarkably small percentage. 

Mr. WALDEN. Do we know what kind of product samples she is 

talking about? Do you think a lot of these samples are drug products? 

Mr. ENGLAND. The majority would be food, I would expect. 

Mr. WALDEN. So the majority of the 30,000 of the 18 million 

would be food samples. 

Mr. ENGLAND. I would expect that, yes. 

Mr. HUBBARD. Yes, they sample about 20,000 foods each year, so 

the majority are food. 

Mr. WALDEN. So we are down to 10,000? I was a journalism 

major, not a math major, but that only leaves about 10,000, then, 

that you estimate would be drug samples, out of 18 million? 

Mr. ENGLAND. It could be cosmetics, and then it could be some 

pharmaceuticals. 

Mr. WALDEN. Do these analyses tell the FDA how many of the 

samples analyzed were safe? 

Mr. ENGLAND. Well, the FDA would have. They would make a 

determination on the given shipments that they are analyzing, but 

it doesn’t tell them anything about the next shipment. 

Mr. WALDEN. Do these analyses of these product samples generate an FDA report of any kind? 

Mr. ENGLAND. My understanding is that there may be some information inside the system, but it is probably very difficult, if not 

impossible, to retrieve it from the system, so I would guess probably no. 

Mr. WALDEN. Would you expect that the committee would be able 

to obtain from the FDA the results of these sample analyses, what 

the FDA learned, and what action the FDA took? 

Mr. ENGLAND. I would expect that they should be able to do that 

through its fax system and the OASIS system, the combination of 

those two systems. Mr. Nielsen actually may know better. 

Mr. WALDEN. Mr. Nielsen? 

Mr. NIELSEN. Yes, I think they should be able to provide that. 


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Mr. WALDEN. So you could provide it to us, but it sounds like no 

report is generated internally at the FDA for the FDA’s own use, 

do you think? 

Mr. NIELSEN. It is usually case by case. 

Mr. WALDEN. All right. Ms. Ralston states the FDA conducted 

approximately 30 inspections of manufacturing processing sites in 

China for FDA-regulated products. How many establishments are 

there in China involved with FDA-regulated products? 

Mr. ENGLAND. Wow—— 

Mr. WALDEN. Wow? 

Mr. ENGLAND. It is a very large number. I don’t know the answer. I know that Dr. Lumpkin testified, I think a couple weeks 

ago, that there were 3,000 medical device manufacturers alone in 

China. That is just that industry, which probably is a fraction of 

the entire—— 

Mr. WALDEN. Does 30 inspections a year sound like an adequate 

number to ensure the safety of products from China? 

Mr. ENGLAND. Not overall of products from China, no. 

Mr. WALDEN. All right. My time has expired. I thank Mr. Chairman. 

Mr. HUBBARD. Mr. Chairman, may I make one comment to Mr. 

Walden’s earlier question? 

Mr. STUPAK. Yes, sir. 

Mr. HUBBARD. I don’t think we should leave people with the impression, though, that our drug supply is unsafe. 

Mr. WALDEN. It is just vulnerable. 

Mr. HUBBARD. It is vulnerable, exactly. I mean, I think, you 

know, the manufacturers here that receive these foreign components do a good job, under FDA supervision, to screen them. So we 

are not, like, taking dangerous drugs every day. But, as you said, 

we are vulnerable. 

Mr. STUPAK. But 80 percent of the active pharmaceutical ingredients found in over-the-counter and prescription drugs are from offshore. 

Mr. HUBBARD. Right. And so clearly there is a risk, but personally I don’t think the drug supply in the United States—I think it 

is actually the best in the world. 

Mr. STUPAK. Right, and in their—I don’t mean to argue or take 

any more time, but we inspect 97 percent of the plants here in the 

United States every 2 years. They do a good job domestically, but 

offshore is where the problem is occurring. If 80 percent of your 

product is coming from offshore, we have to devote the resources 

to offshore. 

Mr. HUBBARD. OK. The manufacturers here are required, under 

FDA supervision, to do lots of screening before that pill actually 

goes to the drug store, so—— 

Mr. WALDEN. My concern is it is only a matter of time if we don’t 

fix the inspection process. 

Mr. STUPAK. Absolutely. 

Mr. HUBBARD. No, I don’t disagree with you at all. 

Mr. WALDEN. Mr. Chairman, could we put that document in the 

record? I ask unanimous consent. 


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Mr. STUPAK. Yes. Without objection, the U.S. Food and Drug Administration interview, Question and Answer with Deborah Ralston, will be entered as part of the record. 

With that, we have 31⁄2 before we have a vote time expires. We 

will be in recess. Let us still shoot for 12 o’clock, shortly after 

twelve o’clock. We will continue. We still have many members that 

would like to ask questions of this panel. Thank you. 

[Recess.] 

Mr. STUPAK. If am I may ask Mr. Nielsen, Mr. Hubbard, and 

England, Mr. Dingell and myself, Mr. Pallone has put in legislation 

which would generate about $300 million for drug safety, drug inspections. Have any of you had a chance to review that legislation, 

Mr. Nielsen, Mr. Hubbard, or Mr. England? 

Mr. HUBBARD. Is that the user fee? 

Mr. STUPAK. Right. The user fee with the Food and Drug bill we 

put in. 

Mr. ENGLAND. I have reviewed it. 

Mr. NIELSEN. Yes. 

Mr. HUBBARD. Yes. 

Mr. STUPAK. Any comments on it? 

Mr. NIELSEN. I fundamentally have difficulty with a user fee for 

that purpose. I just don’t see—I use a parallel of perhaps if I had 

to pay a user fee for IRS to process my income tax form, they came 

to audit me, and I had to pay them to audit, and then they put 

me in jail and I have to pay for that, too. And, on the other 

hand—— 

Mr. STUPAK. That is not the way it goes, though. 

Mr. NIELSEN. What is that? 

Mr. STUPAK. Nothing. 

Mr. NIELSEN. Yes. But I do think it needs to be considered—— 

Mr. STUPAK. But where else would you go to look for the resources? I mean, you need a significant amount of resources. Obviously, the FDA has been reluctant to ask for it. We generate $300 

million. That is $1000 a line. That is all it is, a line. A line will 

give you a boat-load of goods, or it can be one box of goods. But—— 

Mr. NIELSEN. Well, the problem I see with that is, FDA can ramp 

up the foreign inspections. If everything is done as it is done now, 

you are still not going to deliver that information into the import 

process. You must have the IT, and I believe a user fee, a nominal, 

like 50 cents or $1.50 per line user fee could be justified in providing service and the infrastructure to do what needs to be done. 

Mr. STUPAK. So, in other words, if we did leave it at that $1000, 

let us say, we have got to dedicate at least part of that for IT, because without a data system we are done. 

Mr. ENGLAND. That is right. 

Mr. HUBBARD. If I—— 

Mr. STUPAK. Go ahead. Mr. Hubbard? 

Mr. HUBBARD. The problem I have seen with user fees, Mr. 

Chairman, is that the budgeters of the world see new money come 

in the FDA, so they cut the budget in the non-user-fee areas, and 

that clearly happened with the PDUFA program, so the food program and the import programs have actually gotten weaker. FDA 

has lost about 1,000 people in the last decade from appropriated 

dollars, even though the agency’s total budget has gone up, due to 


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these user fees. But the user fee money is dedicated only to the review of new drug and device applications. 

Mr. STUPAK. Correct. 

Mr. HUBBARD. So you have actually had a shift where some programs are getting richer, and others are getting poorer. And so I 

think you have to find a way to make sure that the budget folks 

don’t essentially take that money away from appropriations—— 

Mr. STUPAK. And then substitute it for annual—— 

Mr. HUBBARD. Exactly. That is what happened with user fee, and 

that is what happened with the earlier user fees, and so you have 

to build some sort of firewall. 

Mr. STUPAK. OK. Mr. England? 

Mr. ENGLAND. I would say that the way I read the user-fee legislation is that those monies would be used to essentially help pay 

for border examinations and samplings of imported product. I am 

afraid that it reinforces a finished product testing regime. I 

also—— 

Mr. STUPAK. Would you say it does not work, or is not the preferred method of protection, finished product hitting the—— 

Mr. ENGLAND. That is correct. And the end result—— 

Mr. STUPAK. Do you want to explain this? 

Mr. ENGLAND. The end result is you are paying for a program 

that is not really useful if you don’t know the GMP status of the 

manufacturer. I mean, if you were to test within the same batch 

of drug, that batch, depending upon its size, could be different at 

the front end of the process from the back end of the process if 

GMPs are not in place. So if you happen to sample from one portion of that, you may not even be able to detect a problem within 

the same batch. So I think finished product testing of drugs in particular is troublesome, but, and I agree with Mr. Nielsen’s idea of 

funding the IT program perhaps through user fees at the border 

level. I think another aspect about it is that if you take that money 

and then put it into GMP inspections in the foreign facilities, now 

you have the U.S. importer paying for essentially inspections by 

the FDA in the foreign market and getting free quality assurance 

advice from FDA, and who knows how many times they have to go 

back before they get it right? So I think perhaps you could do it 

on the registration end of it, and that way you have some gate, and 

people wouldn’t be inclined to go on and just register their facilities 

if they knew that there was money that was involved in it, a. And 

b., that that money could be used to fund the FDA conducting an 

inspection in their facility. 

Mr. STUPAK. Good point. Ms. DeGette, for questions? I believe 

you have eight minutes, since you waived your opening. 

Ms. DEGETTE. Thank you. Thank you, Mr. Chairman. Well, all 

of you testified that the FDA needs increased resources to inspect 

these foreign facilities, and I certainly agree with that, but I don’t 

think it is just an issue of resources because you also testified that 

the current computer—I think Dr. Crosse in particular testified 

that the current computer systems are inadequate for cross-referencing and determining the various facilities abroad, so I am 

wondering if you can comment, how much of the problem is more 

resources, and how much of it is an inadequate computer system, 

and what can we do to get the FDA to update their computers? 


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Ms. CROSSE. Well, I think it is both. I think part of the resource 

issue is resources to update their information technology systems 

and that the resources have not been devoted to that, and there 

was some testimony about plans that they had had that were 

scrapped, largely because of the lack of resources. 

Ms. DEGETTE. But do you think there is a commitment on the 

FDA’s part to—a recognition that their IT systems are inadequate 

and a commitment to improving those systems? 

Ms. CROSSE. I believe that there is a recognition that their systems are inadequate. I think that the question is better asked of 

others, whether there is a commitment. 

Ms. DEGETTE. All right. Let us hear from Mr. Hubbard. 

Mr. HUBBARD. I would say that I saw the import folks and the 

regional affairs folks ask for funding over and over again through 

the budget process for these systems, going all the way back to 

your hearings of the 1980’s, and that money was always denied. 

And even the current administration, they had this theory that too 

many IT resources were being wasted, and FDA was being constantly squeezed on IT, when IT actually saves you money in the 

end. 

Ms. DEGETTE. Right. 

Mr. HUBBARD. I hope that Dr. von Eschenbach will describe how 

he is committed to fixing that system now, but money is clearly the 

reason that they don’t have it now, in my view. 

Ms. DEGETTE. Well, another thing that we could do with money, 

aside from improving the IT systems, is improve the system of inspection that we have. Dr. Crosse testified, and she briefed us yesterday on this pathetic system that they have for actually inspecting the overseas facilities, where they take a volunteer, and the 

volunteer goes into this factory, and then the volunteer doesn’t 

even have a translator. I can’t imagine how you could get any adequate information inspecting a facility when you didn’t even have 

someone to translate for you, especially if it is a foreign facility 

that has a vested interest in not providing and willfully withholding information. I am wondering if you can comment a little 

further on that, Dr. Crosse. 

Ms. CROSSE. Well, we certainly think that is a concern. When 

they have a need for translation services, they are, in general, relying upon a representative of that establishment to do the translation for them. I have talked with some of the folks from FDA’s 

Office of Regulatory Affairs, and they indicated that they believe 

there are many items they can look at. They can still physically inspect the plant and see if whether there are, you know, leaking 

pipes and other sorts of problems, that some of the data they need 

to review is numeric, but some of the data they need to review is 

not numeric, and some of what they need to obtain has to be gathered through interviews and discussions with officials there in the 

facility. And so—— 

Ms. DEGETTE. And then they are relying on—— 

Ms. CROSSE. I have a concern. 

Ms. DEGETTE. And they are relying on translation by representatives of the officials at the facility. 


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Ms. CROSSE. That is right, and they are relying on that facility 

having an understanding of what is expected out of our regulatory 

system. 

Ms. DEGETTE. And counsel just told me he was in a factory in 

China, and they wanted to talk to some of the employees, and the 

State Department representative who was with them said, you 

know what, what the translator is saying these people are saying, 

they are not saying. And you would have no way to know that if 

you were just some FDA inspector standing there, right? 

Ms. CROSSE. Correct. 

Ms. DEGETTE. And that is a place where resources might help. 

Does the FDA, in your opinion, acknowledge this problem as well? 

Ms. CROSSE. They have been reluctant to acknowledge this as a 

problem to us. 

Ms. DEGETTE. Does anyone else have a comment on the whole 

inspection process and how it can be improved, Mr. England? 

Mr. ENGLAND. I would just note, and actually a number of days 

ago I was on the phone with somebody in the FDA, and that happens to be one of the foreign inspection cadre participants who has 

done inspections quite a number of years for FDA as a foreign inspector, and recounting, you know, they have a short period of time 

to get in-country and maybe a long trip. They are tired when they 

get there. They have a couple of days to do an announced inspection, maybe 2 or 3 days, which, that same inspection, if there are 

problems identified, which there probably will be, in a foreign inspection, would probably have been stretched out to 10 to maybe 

14 days, and then they have to get on the train or plane, get the 

next one. By the end of several weeks, now they are going back to 

their notes and trying to remember and rebuild the inspection and 

do their inspection reports. I mean, I think all of those kinds of 

things, those add to the complexity of just even the current system 

at FDA. Add translation, add the fact that the volunteers are doing 

it, that it is announced. Many times the inspector is relying on the 

inspected firm for transportation between locations. 

Ms. DEGETTE. Great. Now, when the FDA inspects domestic facilities, it can arrive unannounced, it has more enforcement ability 

over domestic than foreign countries, and it doesn’t have to have 

things translated, and I am wondering if we need to beef up our 

foreign inspections, realizing that these are all impediments. Dr. 

Crosse? Or, Mr. Nielsen? 

Mr. NIELSEN. I think that is very—I mean, there has to be a 

credible presence in the industry to give the incentive to comply, 

for those provisions that do result in safe products. There has to 

be a credible presence. 

Ms. DEGETTE. And one last question, to Dr. Crosse’s point, the 

GAO findings are that the current U.S. firms are inspected every 

2 years by the FDA, correct? 

Ms. CROSSE. The data that they provided to us show that they 

actually get there about every 2.7 years. 

Ms. DEGETTE. And there is no Law defining the time between inspections for foreign firms and, in fact, at the foreign firm inspection, because of FDA’s reliance on volunteers and so on, it is much 

more sporadic than domestic. Is that right? 

Ms. CROSSE. That is correct. 


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Ms. DEGETTE. So I would think it would make sense to require 

that foreign firms shipping drugs to the U.S. be inspected at least 

as frequently as U.S. firms. Would you not agree with that, Dr. 

Crosse? 

Ms. CROSSE. I think there is certainly every reason to believe 

that the risks abroad are the same or greater than the risks in domestic establishments. 

Ms. DEGETTE. Would the rest of you agree that we should have 

at least the same type of inspection system we have for domestic 

firms, Mr. Hubbard? 

Mr. HUBBARD. Well, I think it would be meaningless without the 

resources. They can’t do the current statutory requirement of every 

2 years. If you impose that on them for foreign, they would simply 

fail, so you would have to have some sort of provision to make sure 

that they have the resources. 

Ms. DEGETTE. Well, obviously, you can’t do the inspections without the resources, but don’t you think that we need to have some 

kind of a standard for the foreign inspections, especially in light of 

the recent revelations that we have had from China and other 

countries? I mean, we are not even talking here about drug counterfeiting. We are not talking about drug re-importation from the 

Internet. We are talking about legitimate drug ingredients that are 

used for FDA-approved drugs, and we are not even able to inspect 

them because we don’t have the resources to inspect them like we 

do domestically. That seems like a backwards system, that we 

should really be focusing on the foreign producers and obviously domestic, too, but it seems like we shouldn’t say, well, we are not 

going to inspect foreign because we don’t have the resources. 

Mr. HUBBARD. Well, you are absolutely right. It is indefensible 

that we would be doing the domestic firms so frequently and the 

foreign firms so infrequently, but again, FDA has got to be given 

the wherewithal to actually do that. 

Ms. DEGETTE. And do you think they have the will to do it if we 

gave them the wherewithal? 

Mr. HUBBARD. I would certainly hope so. 

Ms. DEGETTE. Mr. England? 

Mr. ENGLAND. I would note that in the worst-case scenario, the 

equivalency is made between the domestic and the foreign industry 

as far as the frequency of inspection, without resources. What that 

would at least force is a shifting of existing resources towards risk. 

It really should force a risk assessment with regard to foreign 

versus domestic, because in these foreign manufacturers, many 

times these countries are developing countries. They don’t have a 

regulatory regime, like we have in the United States. They may not 

have potable water, at least in the community. Hygiene could be 

deficient. So I think the risks, if you were to actually lay them side 

by side, the risks would be greater in the foreign market. I think 

it would at least force that shift into the foreign market. 

Ms. DEGETTE. Thank you. The Chairman was right. This was a 

wonderful panel, one of the best I have seen in my years in Congress. Thank you for your testimony. 

Mr. STUPAK. Mr. Burgess, for questions. 

Mr. BURGESS. Thank you, Mr. Chairman. Dr. Crosse, in your testimony, and forgive me for being out of the room. So if this has 


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been asked, I apologize. On the use of translators, how big a deal 

is that? 

Ms. CROSSE. I think in some countries it has got to be an enormous deal. 

Mr. BURGESS. Is there a risk that, since we are depending upon 

the company, the manufacturer, to provide the translator, that it 

could be an inside job or an inside plant? 

Ms. CROSSE. There certainly is that risk. That is a concern that 

we would have. 

Mr. BURGESS. Are those interviews or exchanges that are taking 

place between the FDA and the manufacturer through a manufacturer’s supplied intermediary, are those taped or transcribed? Is 

there any way to quality check the quality of the information that 

has been given back and forth? Because even with someone’s best 

of intentions, just in the translation, as we all know, things can get 

lost. 

Ms. CROSSE. Not to my knowledge. No, I don’t believe so. 

Mr. BURGESS. On the whole issue of the database, I guess, Mr. 

England, this morning downtown former FDA Commissioner Mark 

McClellan was addressing this issue, more from the standpoint of 

how it interacts with, do we get the most efficient technology, do 

we deliver the most value for the patient, and the previous lack of 

a reliable database at the FDA, in this country, for those types of 

activities, made that a real problem. I think it was referred to as 

stove-piping. I had a younger staffer who didn’t know what a stove 

pipe was, so maybe we had better use silo. I guess they know what 

a silo is, maybe not from farm country. But Dr. McClellan was 

talking about the coverage side low, the technology side low, and 

how we needed to be able to bridge that gap, and it sounds like 

we are kind of talking about the same phenomenon here. Is that 

correct? 

Mr. ENGLAND. I think it is true that the IT systems FDA has are 

siloed, and they are really wrapped around the agency’s internal 

siloing. 

Mr. BURGESS. And yet in the private sector, because we also 

heard testimony from—or, not testimony, but it was a symposium 

downtown with Health Affairs for their 25th anniversary, I think 

it was Mr. Williams from Aetna Insurance Company. It seems like 

I heard 10 years ago that they reinvested about 10 percent of their 

capital into health information technology or information technology, and this morning he gave a figure of 15 percent of his work 

force of 34,000 people across the country. Most of them aren’t out 

there selling insurance and doing customer service. 15 percent are 

actually involved with development of software, maintaining their 

infrastructure, and I think he made the statement, I may be misquoting, but I think I heard him say that if Aetna’s information 

technology department were a stand-alone company it would be one 

of the largest software development companies in the United 

States. So it just goes to underscore how much private industry in 

this country has recognized that they must invest in this, and it 

sounds like, even though we did make some big steps in the FDA 

reauthorization bill as far as monitoring the treatment database, 

we have got to do a lot more as far as certainly this aspect of it, 

in monitoring foreign manufacturers. Is that a fair assessment? 


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Mr. ENGLAND. I do think it is fair. I would even add that I think 

because of those kinds of investments in the private sector, and 

particularly in the areas where FDA has jurisdiction, and the risks 

maybe even perceived with some relevance between what FDA is 

trying to do and what maybe, for instance, Aetna might be trying 

to do, there are more off-the-shelf technology that you can take and 

you can modify rather than developing systems from scratch. I 

mean, the OASIS system essentially is a from-scratch software development program. There are some off-the-shelf elements to it, but 

that ends up costing a fair amount of money, to try to develop it 

and then maintain it. Then you become married to a contractor as 

well, which is problematic. 

Mr. BURGESS. And what would be some examples of that, in the 

private sector currently? 

Mr. ENGLAND. Examples of off-the-shelf technology? Well, I 

mean—— 

Mr. BURGESS. What companies are, say, doing that in the private 

sector that are doing it well, that have maybe a similar problem 

that the FDA has? 

Mr. ENGLAND. You would probably see most of it in the Customs 

international transactional environment, and you would see it in— 

that is why I don’t want to misidentify any specific companies—— 

Mr. BURGESS. Right. 

Mr. ENGLAND. But you also would see it in the defense area, 

where you have just got many, many transactions, risk that is built 

into those transactions someplace, and the ability to process a high 

volume, high, fast stream of data, in order to think about that 

data, in order to assess and mitigate risk. 

Because we will never be able to eliminate that risk, but we 

ought to be able to manage it a little bit better than we are doing. 

Now, I get the impression from talking to the panel that this—I 

think, Mr. Hubbard, you said 1986 was the earliest figure I heard, 

but 1998, the year 2000, I mean, this has been something that we 

have all been aware of, and I am a recent arrival, but people have 

been aware of for some time, so through several administrations, 

both Republican and Democratic, through several Congresses, both 

Republican and Democratic, so this obviously doesn’t become a partisan issue or an issue that is isolated to one administration, but 

I would just ask, since there is so much familiarity with it over 

time, what—we have a relatively new FDA Commissioner, Dr. 

Crosse, have you spent time talking to Dr. von Eschenbach about 

this? 

Ms. CROSSE. I have not. 

Mr. BURGESS. OK. Mr. Nielsen, what sort of interplay have you 

and Dr. von Eschenbach had on this issue? Have you brought this 

to his attention and some of the previous suggestions that were out 

there, from 2000? 

Mr. NIELSEN. No, I have not. 

Mr. BURGESS. OK. And, Mr. Hubbard? 

Mr. HUBBARD. I was trying to describe how the Commissioner is 

juggling so many priorities, and when there is not funding to deal 

with them effectively, some things fall away, and I think imports 

has been one, historically, that has not been able to rise to the top 


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for funding. Perhaps, as a result of some of your work this year, 

that will change. 

Mr. BURGESS. And, Mr. England, have you talked with Dr. von 

Eschenbach about this? 

Mr. ENGLAND. I had the pleasure of meeting him for the first 

time today. 

Mr. BURGESS. Well, he is right behind you, so I urge you to get 

his card and do talk to him about this, because it is clearly important, and clearly, legislation is going to be developed, not from this 

subcommittee, but out of our full committee, and it is important 

that we get it right on just so many levels, the safety level now and 

how we monitor and maintain the system decades into the future. 

So I yield back, Mr. Chairman. 

Mr. STUPAK. Well, thanks, Mr. Burgess. Now you see why it is 

so important to have Dr. von Eschenbach for all these panels that 

they can direct—— 

Mr. BURGESS. But I was trying to make sure we make good use 

of his time—— 

Mr. STUPAK. As you were saying earlier this morning—— 

Mr. BURGESS. This morning, and I wanted to draw that in. 

Mr. STUPAK. Mr. Whitfield, questions? I am going to ask a few 

more, and if you want to go back to the mike, we will go back for 

a couple more questions. If I may, Mr. England, you talked about, 

I think it was page 19 of your testimony, about the Bioterrorism 

Act that we passed, I think it was in about 2002, and it came out 

of this committee, I know that, and you mentioned food, but we 

don’t have drug imports in there? And that should be amended? 

Mr. ENGLAND. The provision that I was speaking about is a provision that requires the agency to design and implement information technology systems related to imported food that will assist 

the agency in allocating its resources where the greatest risk of, in 

that case, intentional adulteration of food. But one of the elements 

there, also, was to facilitate the importation of food that is in compliance with the Act, and I perceive that as being really the opposite side of the risk coin. There is a tremendous amount of product 

that is out there that is safe. The difficulty is knowing which is 

which. I mean, to go to the issue of the fact that the domestic manufacturers do screening, that is true, but that is different than saying that therefore we are safe. And so the opposite side of the risk 

coin is that where industry can demonstrate that they are in compliance with GMPs in the case of the drug industry, that product 

should be facilitated. That provision, though, is restricted to imported foods. It doesn’t cover drugs, devices, or any other commodities regulated by FDA. 

Mr. STUPAK. In questions of Mr. Walden, based on this newsletter from U.S. Food and Drug Administration, FDA, on Ensuring 

the Safety of Imported Products, we were kicking around the numbers. It was 30,000 out of 18 million that they look at each other, 

and I think you said it was about 10 percent related to drugs, so 

even if you gave the figure of 30,000 to use, FDA analyzes about 

30,000 import product samples annually. Even at 10 percent, or 1.8 

million, that is only like two percent, if my math is correct, 30,000 

into 1.8 million. That is only, like, about two percent, then, correct? 


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Mr. ENGLAND. Well, 20,000 of that 30,000 would be foods, so you 

are really talking about 10,000 out of 1.8 million. 

Mr. STUPAK. So it is probably—— 

Mr. ENGLAND. We are assuming the balance are all drugs, which 

I don’t think they would be. They would be biologics and other 

products. 

Mr. NIELSEN. And, Mr. Chairman, I would expect the majority of 

those drug samples to be from activities at the international mail 

facilities. 

Mr. STUPAK. So the figure might be closer to 20 percent of one 

percent of drugs. 

Mr. ENGLAND. You are beyond me in your math. 

Mr. STUPAK. I am beyond myself, too. That is why I am asking 

you. 

Mr. ENGLAND. I think to Mr. Nielsen’s point, though, there also 

is that, let us say for the sake of discussion that it is 5,000 to 7,000 

of the—30,000. Probably a large percentage of those are inspections 

conducted by folks at FedEx or UPS or an international—— 

Mr. STUPAK. For Customs, or whatever it may be. 

Mr. ENGLAND. Looking at very, very small packages that Customs happens to kick out. In other words, not 30 metric tons of 

product coming in. Probably a good percentage of even the drug inspections would be related to that. 

Mr. STUPAK. But then it gets to the point I was trying to make. 

If it is only one percent of the food that we are inspecting, drugs 

are far less than that one percent, then, of the drugs coming in 

here, so it is a problem, not just against drugs from foreign countries, but also food, drugs. I mean, we got a serious problem here. 

And it seems to lie with the databases, at least that is where we 

should start. Mr. Nielsen, there is a new program. Can you explain 

a little bit? I think it is called Predict, that is used for seafood? And 

that got funded through an earmark, correct? 

Mr. NIELSEN. Yes. 

Mr. STUPAK. A congressional earmark that everyone is against 

right now but this was an earmark that was actually put in. That 

is how it got funded at the FDA. Can you explain this a little bit 

more to me? How would it relate here to drugs? 

Mr. NIELSEN. Yes, and it actually also falls into some of the lowhanging fruit of the ISP that was implemented. But the Predict 

model is being piloted or at least was being piloted, I believe in Los 

Angeles, for the seafood industry. I was program manager for the 

development while I was Director of Import Ops, which is why I 

know about it. But what it really does is it starts to integrate information from both external and internal sources. It actually learns 

the risk posed for imports based on a variety of data points and 

will assist the entry reviewer in deciding which of the riskier shipments to do the examinations. 

Mr. STUPAK. Thank you. Mr. Burgess, do you have any further 

questions before we let this panel go? 

Mr. BURGESS. Yes, I do, Mr. Chairman. Thank you for coming 

back to me. Just to follow up on my last thought before we got cut 

off, I mean, we have all been fairly intense in our criticism of the 

FDA, which is fair. The Commissioner of the FDA has been in his 

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bard has already correctly alluded to the fact that there is lots of 

things going on at the FDA, lots of different things to juggle, so it 

is fair to criticize the FDA, but at the same time if we have got 

constructive solutions, and it sounds like we have had those, at 

least been thinking about those for at least 20 years, so, I mean, 

again, I just concur it was a great panel, but I encourage you to 

follow up with Dr. von Eschenbach, and let us talk about these and 

explore them. Don’t, you know, don’t leave it to us to write the Law 

by, you know, a vacuum, because I don’t think we will do a very 

good job. So we count on your input, and we count on that input 

being delivered to Dr. von Eschenbach, so in turn the agency can 

help us help the agency. Now, on the issue, Mr. Hubbard, you mentioned human tissue at one point, I think, in your discussions. Is 

that correct? 

Mr. HUBBARD. Right. Well, that is just one of many, many things 

that have popped up in recent years that needed attention, got 

some, but then drifted away. 

Mr. BURGESS. Well, it got my attention when you said it, because 

obviously there have been some fairly disturbing, even macabre, 

stories in the news in this country about some practices with dealing with human tissue that I found very disturbing. Are we importing human tissue products from overseas? 

Mr. HUBBARD. When I was in it, there was some. We did a sting 

in which a Romanian gentleman was selling us the body of a Russian gentleman who had apparently died in the street, and he died 

of AIDS, and he was selling his whole body to us and shipping it 

via the airlines flight that day. So, I mean, it was that kind of example that caused the Commission at that time to put in place 

some rulemaking and beef up regulation. The problem is, the funding was never there, in my opinion, to really have a permanent 

program to inspect tissue banks to make sure they were following 

proper procedures. 

Mr. BURGESS. Is that likely to still be continuing today, as we 

have seen this advance in globalization and all the other pressure 

put on the drugs, the toys, the food imports? Is it likely to be additional pressure put on—— 

Mr. HUBBARD. I don’t know exactly what is going on out there 

now, but I can’t imagine the FDA has sufficient resources to adequately inspect all of that industry. 

Mr. BURGESS. Well, Mr. Chairman, I know that is beyond the 

scope of this hearing, but I would encourage this committee to very 

seriously consider—for some time I have thought that we ought to 

look at the use of human tissue that originates in this country. I 

had no idea, no idea that there was the possibility that there is 

human tissue coming from outside. And Mr. Hubbard correctly alluded to some of the problems there, and if there is lack of quality 

in the active ingredients in a Lipitor pill, goodness knows, we want 

that quality assurance for people who are going to have human tissue grafted or implanted. One last thing, Mr. Nielsen, on the good 

manufacturing practice, it seems like that would affect the whole 

debate of re-importation. That is, if we want good manufacturing 

process, and we are crying out for more inspections and more funding for the FDA to do more inspections and move that chart graph 

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er footprint, but then we have people in Congress today who are 

arguing for, hey, we can get cheaper drugs if we just allow re-importation from Canada, and of course the supply chain then comes 

from who knows where, so it almost seems as cross purposes to 

argue for improvement of good manufacturing processes and at the 

same time argue for re-importation Laws. Am I missing something? 

Mr. NIELSEN. If the two are not connected, absolutely. 

Mr. BURGESS. Well, just by definition, or at least the legislation 

I have seen offered for re-importation, it doesn’t really seem to 

have a lot of control. It just says, from Canada, and we have all 

seen the reports that what looks like a maple leaf might in fact be 

an insignia of some other country and, as someone said, from the 

darkest corners of the world. So if we embrace re-importation 

wholeheartedly, again, as some people have suggested, and that is 

a bipartisan issue. I am not putting that in anyone’s theme in particular, but we know who has been arguing for that pretty forcefully for some time, basically that ends all product testing, does it 

not? 

Mr. NIELSEN. Yes, and I have to say, on the GMP, the principle 

of the GMP is it is going to prevent the entry—it is really going 

to contribute, but it is the whole process, from the application process for the prescription drugs, to the post-surveillance process, including adherence to the GMPs. If you don’t have the whole picture, you are just adding risk to it, and I have to give an example. 

This is not just a finished drug issue. The industry that is overseas 

are also finished product manufacturers. There is even less oversight of the ingredients going into the finished products overseas. 

At least here, when the APIs or the ingredients come in, it is not 

going to a black hole. We know where it is going. It can be checked. 

There is a warehouse. There is a facility to go to, and there is a 

process for checking potency, identity, and certificates of analysis, 

and it is not an issue of waiting for more bodies to show up. The 

med watch, the adverse events are not necessarily going to say everything is going to be OK unless there is an adverse report here. 

The carbamazepine scenario experience that I painted in my written testimony is a good example where the products going into the 

formulation have a potential adverse effect if it is not in compliance 

with both the application and the GMPs governing that manufacturing process. The good thing about the carbamazepine is if it 

didn’t work, carbamazepine is an anti-convulsant drug. If it didn’t 

work, the epileptics were seizing. You could see it. 

Mr. BURGESS. So the bio-assay was positive. 

Mr. NIELSEN. On the other hand, if a drug, like gentamycin, is 

knocking your kidneys out, you are not necessarily going to see it. 

And you are not necessarily going to know that it is not doing what 

it is supposed to do. I believe generally the public, all of us, have 

kind of been trained, if something doesn’t work, something is 

wrong in my metabolism that caused that drug not to work. Well, 

maybe yes, maybe no. And what we are trying to do is say that 

there is a way to minimize the risk from that drug that is supposed 

to help you. 

Mr. BURGESS. I thank you for that. It was very illuminating. Mr. 

Chairman, I do just need to mention, I think I mentioned a drug 

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tration. I have no knowledge that that drug of that brand name 

even is manufactured in China. So I apologize for that oversight. 

I was simply trying to make a point, and I yield back. 

Mr. STUPAK. You have an 80 percent chance of being correct. Dr. 

Crosse, thank you, and thank you to your staff for pulling everything together quickly. I know you are going to continue your work, 

and this committee and subcommittee appreciate it. To our panel, 

thank you very much. Both sides, everyone has been saying what 

a great panel. We could go round and round on questions, but we 

do have two other panels. But thank you for your time. Your 80 

years of experience with the FDA certainly helped us out here 

today. Thank you very much. I will dismiss this panel, and we will 

move to our second panel of witnesses. 

Mr. John Dubeck, the partner in the law firm of Keller and 

Heckman, as well as counsel to the Bulk Pharmaceutical Taskforce 

at the Synthetic Organic Chemical Manufacturers Association; Mr. 

Bruce Downey, chairman and CEO of Barr Pharmaceuticals and 

chairman of the Generic Pharmaceutical Association; and Mr. 

Guido Villax, the immediate past chairman of the Pharmaceuticals 

Business Committee and member of the Board of Directors of the 

European Fine Chemicals Group. Gentlemen, would you all come 

forward? It is the policy of this subcommittee to take all testimony 

under oath. Please be advised that the witnesses have the right 

under rules of the House to be advised by counsel during their testimony. Do any of you wish to be accompanied by counsel? All witnesses indicate no, so I ask you, raise your right hand, take the 

oath, please. 

[Witnesses sworn.] 

Mr. STUPAK. Let the record reflect the witnesses answered in the 

affirmative. They are now under oath. 

Mr. Dubeck, we will begin with you, with your 5-minute opening 

statement, please, sir. 

TESTIMONY OF JOHN DUBECK, PARTNER, KELLER AND HECKMAN, LLP, AND COUNSEL, BULK PHARMACEUTICAL 

TASKFORCE, SYNTHETIC ORGANIC CHEMICAL MANUFACTURERS ASSOCIATION 

Mr. DUBECK. Mr. Chairman, and members of the subcommittee, 

on behalf of the Bulk Pharmaceutical Taskforce and the Synthetic 

Organic Chemical Manufacturers Association, SOCMA, I thank you 

for this opportunity to testify on two key points. First, the current 

system for regulating imported drugs is putting American consumers’ health and safety at risk. Second, there is a solution; more 

frequent and in-depth inspection of the foreign facilities making 

these drugs. 

The Bulk Pharmaceutical Taskforce submitted a citizens’ petition 

to FDA in January of last year, outlining the risks associated with 

imported drugs and providing suggested solutions. These risks 

have been well highlighted already, and I will not repeat them. We 

are disappointed that we have received no substantive response 

from the agency. 

The drug manufacturing industry today is structured vastly different than it was 30, 20, or even 10 years ago. No longer are drugs 

primarily manufactured in-house by the major pharmaceutical 


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companies. Rather, these companies have increasingly turned to 

outsourcing their ingredients and sometimes even the finished 

product. The suppliers of these outsourced products are overwhelmingly foreign manufacturers. FDA is required to inspect domestic 

drug establishments every 2 years. These inspections are unannounced, and a single inspection can extend over many weeks and 

may involve many separate visits. And I might add that on subsequent visits at a given inspection an inspector may call in other experts in specialties to assist in observing something that is seen 

during the first part of an inspection. 

This is no comparable obligation on FDA to inspect foreign facilities. Since FDA must be invited to perform its official duties on foreign soil, a foreign facility always receives several weeks’ notice of 

an impending inspection, and the length of the inspection is typically driven by travel schedules, rather than the compliance status 

of the facility, and it is impossible to bring additional expert investigations to review specific issues. As a practical matter, a foreign 

manufacturer is unlikely to be inspected for cGMP compliance, except in the context of a pre-approval inspection. If you wish, I can 

explain later the difference between pre-approval inspections and 

cGMP inspections and why the former is of little value in assuring 

the ongoing quality and purity of imported drugs. 

If routine cGMP inspections are unlikely to occur, it is very 

tempting for management to put a low priority on maintaining 

cGMP compliance. Statistics presented at a cGMP conference in 

2005 indicate that cGMP inspections of foreign firms result in significantly more violations than seen in domestic firms. When comparing data solely from pre-approval inspections, the same discrepancy is seen. Deviations from cGMP were more serious in foreign 

facilities than in U.S. facilities. These numbers cry out for FDA to 

conduct more frequent inspections of foreign facilities. They also 

underscore that the frequency of foreign cGMP inspections is so low 

that managers of foreign facilities have apparently made the business decision to spend less time, attention, and money on ensuring 

that their drug manufacturing operations comply with cGMP than 

is necessary to assure compliance. 

A dramatic and drastic overhaul of FDA’s approach to the risk 

posed by foreign manufactured drugs is long overdue. The manufacturing side of the pharmaceutical industry has changed substantially, and yet FDA’s allocation of inspection resources remains unchanged from an earlier era. In order for FDA to give cGMP inspections of foreign facilities the priority it deserves, the Bulk Pharmaceutical Taskforce proposed that FDA do three things. FDA should 

abandon its policy of prioritizing domestic and foreign facilities separately for inspection. FDA should rank domestic and foreign facilities together, based on the risks that the products from each facility pose to the American consumer. If there are 100 foreign facilities with higher risk profiles than the highest-ranked domestic 

firm, the American consumer is ill-served unless those 100 foreign 

facilities are inspected before the domestic firm. 

Foreign sites, particularly those owned by U.S. companies, would 

welcome more inspections of all foreign sites. This will only happen 

if FDA is required to have comparable inspection frequency for domestic and foreign facilities. 


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The U.S. market for pharmaceuticals is large and lucrative. 

FDA’s recent action to restrict imported vegetable protein unless 

and until it could be shown to be free of melamine is evidence of 

its broad authority to prohibit the importation of products that appear to be adulterated. Furthermore, this is where FDA has an enforcement advantage with regard to foreign facilities versus domestic. It has no need to prove in an enforcement action that a product 

is adulterated. Imported products can be refused admission if they 

merely appear to be adulterated. 

A second proposal is that FDA should consider a facility’s foreign 

status per se as a risk factor in its risk-based inspection program. 

As I noted earlier and explain in greater detail in attachments to 

my written presentation, all statistics indicate that drugs sourced 

from foreign facilities pose greater risks to America’s public safety. 

When a facility is inspected infrequently there is a natural tendency for management to become complacent. Maintaining cGMP 

compliance requires constant effort and vigilance, and it is a welltraveled road from minor deviations to serious quality failures. 

Importantly, even if FDA conducts more frequent inspections of 

foreign facilities, we believe an additional risk factor should still be 

assigned for foreign facilities. As a practical matter, any inspection 

that provides prior notice, is constrained by travel arrangements, 

and suffers from the communications problems inherent when dealing with documentation that is in a foreign language while using 

a translator provided by the facility, is bound to be less effective 

than an unannounced inspection of indeterminate duration, conducted in the investigator’s native tongue. 

The Bulk Pharmaceutical Taskforce’s third request is a stopgap 

measure that FDA could implement before it has the resources to 

conduct adequate foreign inspections. It could actively test and 

monitor the impurity profiles of active pharmaceutical ingredients 

produced in facilities that FDA has never inspected. 

Allow me to elaborate here. New drugs require prior approval. 

Pre-approval inspections are part of that prior approval process, 

but not all drugs are new drugs. Drugs that are not new drugs do 

not require prior approval and do not require a pre-approval inspection. These are the facilities that are likely to never have any 

inspection, not a GMP inspection, not a pre-approval inspection. 

Further, there have been many prescription-to-over-the-counter 

switches in the past few years. One of the earliest of those switches 

was ibuprofen. In August 2002, FDA proposed to move ibuprofen 

from new-drug to not-new-drug status. In response to the Chairman’s question about behind-the-counter drugs, and are we just 

moving more drugs into a non-approved status, the issue is really 

not whether it is Rx, OTC, or behind-the-counter, the issue is 

whether it is a new drug that at least has a prior approval inspection, or a not-new drug. And FDA’s proposal would move more 

drugs into this uninspected, not-new-drug category. 

To be sure, testing and monitoring would be a poor substitute for 

onsite inspections, but given budget and staffing considerations it 

would be a great improvement compared to doing nothing. Just as 

a stopped clock is correct twice a day, a non-GMP-compliant facility 

will periodically produce drugs that meet specifications. It is reasonable to assume that foreign manufacturers with sub-standard 


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cGMPs will cherry pick production lots and ship to the U.S. only 

ingredients that meet specifications. When different batches of 

products coming from the same facility have significantly different 

impurity profiles, it is reasonable to conclude that they did not 

come from a process that is in control. 

Mr. STUPAK. Mr. Dubeck, I am going to have to ask you to wrap 

it up here, please. 

Mr. DUBECK. Just that if FDA observes through monitoring of 

variable impurity profile, it could refuse admission on the basis 

that the products appear to be adulterated. We sympathize with 

FDA’s resource limitations, but it is imperative that foreign manufacturing facilities be inspected at the same rate. 

In closing, I note that although there are many economic factors 

that have resulted in nearly half of all drugs marketed in the U.S. 

being produced in foreign facilities, the fact that such production 

attracts less aggressive FDA oversight surely contributes to the 

trend. On behalf of SOCMA and the Bulk Pharmaceutical 

Taskforce, I thank you for your time and attention to this serious 

matter. I will be happy to answer questions. 

[The prepared statement of Mr. Dubeck follows:] 


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Mr. STUPAK. Thank you, Mr. Dubeck. Mr. Downey, please, for 

opening statement. Your full statement is in the record, so if you 

could summarize and keep it to five minutes, we would appreciate 

it. 

TESTIMONY OF BRUCE DOWNEY, CHAIRMAN AND CEO, BARR 

PHARMACEUTICALS, INC., AND CHAIRMAN, GENERIC PHARMACEUTICAL ASSOCIATION 

Mr. DOWNEY. Yes, thank you, Mr. Chairman. I am Bruce Downey. I am Chairman and CEO of Barr Pharmaceuticals. Barr produces hundreds of prescription drugs here in the United States and 

Europe, both brand and generic, both finished goods and APIs, so 

I think we have a broad range of experience that is relevant to the 

committee’s consideration today. In fact, in the U.S., we market 

nearly 5 to 6 billion tablets a year, so we have quite a bit of experience. I am also chairman of the GPhA, which is a generic trade association which represents companies that produce over 95 percent 

of the generic pharmaceuticals sold in the United States. 

And I would like to comment on one part of the testimony earlier 

this morning. I think it is not correct to say that you can’t buy 

products that aren’t made in China. I mean, if you look at the largest members of our association, Barr, Watson, Teva, Mylan, 

Sandoz, none of those companies make finished goods in China, 

and the overwhelming majority are made either in the United 

States or Europe or Israel. So I think that part of the testimony 

wasn’t correct. 

But it is important to testify today on the committee’s issue of 

FDA foreign inspections, and I think one thing is clear to me, and 

I think it was clear to the panels before me, that there is no justification for having fewer inspections of foreign facilities than we 

have of domestic facilities. And I say that as someone who is responsible for both. They pose equal risks. There just simply is no 

justification for that. 

The question I think is most important is what is the appropriate 

level of oversight, and what are the different kinds of risks we are 

trying to manage? And I think there was some confusion this 

morning in testimony about two very different kinds of risks that 

require two very different kinds of responses. One risk is, in terms 

of number of incidents, is quite small. That is the risk of counterfeit. Compared to lawfully produced drugs, it is a quite small 

amount, but it is also the group that proposes the greatest risk. 

And inspection is not the answer to counterfeit drugs. People who 

make counterfeit products don’t register their facilities in the database at FDA, the 6,000 or 3,000-firm database. They try to avoid 

detection, so the response for counterfeiting is to discover the counterfeiter and put them out of business. I mean, inspection is really 

not the issue. And the second issue is how do you review the compliance of lawful manufacturers, who have registered with the 

FDA, who have gone through the FDA approval process, and what 

is the appropriate role of inspection in monitoring their compliance 

with their overall commitments? 

I think that, first and foremost, we have to allocate the amount 

of resources necessary to ferret out and put counterfeiters out of 

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eign inspectors so much as investigators, the criminal investigation 

group at FDA, international law enforcement authorities, and I 

think there we need to provide whatever resources are necessary 

to make sure that risk is completely covered. 

If you look at the second risk, the risk posed by FDA-regulated 

companies, I think today Mr. Hubbard mentioned, and I think he 

is right, we have an incredibly safe system. We have a system because testing and inspection is only one very small component of 

the overall FDA-regulated process. Now I would just like to go 

through it for you so you get a sense of how comprehensive it is. 

In the development area, for example, we inspect all of our raw 

material suppliers’ active ingredients before we even take in samples. Once we receive the samples, we work with the raw material 

manufacturers developing appropriate specifications for that compound, which are incorporated into our section of either the NDA 

or the ANDA file at FDA, and our raw material supplier incorporates that in the DMF, which is filed with the FDA. Those specifications and all the other components of the application are reviewed and approved by the FDA, and our commitment is to manufacture our products in conformity with those specifications and the 

processes that are part of our application. 

Once the application is approved, and we continue to market the 

product, we routinely inspect our raw material suppliers, on average about every 3 years. We have a staff of 12 inspectors, covering 

the globe, inspecting our raw material suppliers, and they are supported by support staff and the like. So we do that self-policing, 

and FDA expects us to do that self-policing. I think it is different 

in the toy industry or other kinds of industries. That is the requirement of part of our obligation to be in FDA compliance, and we 

take that very seriously. 

And once we are in production, as we receive lots of raw material, we receive a certificate of analysis from our producer, and we 

retest that lot so that we confirm the test results obtained by the 

raw material supplier, and then as that raw material is incorporated into finished goods, it is tested in process, and it is tested 

as finished good release and ultimately tested on stability to ensure 

that it remains potent through its shelf life. So there is an enormous amount of testing in the Rx system that ensures that products that we sell and present to consumers meet the requirements 

that we have in our applications. 

And then once we get into post-marketing, we have to monitor 

adverse events, we have to investigate complaints we receive from 

pharmacists, physicians, patients. We conduct annual reviews on 

all of our products which analyze the test results of all the batches 

from the previous year, compare them with batches from years before that. We look at any complaints we have received and the adverse events. So we have a comprehensive review on each, individual product to satisfy ourselves that the product is being made 

safely and appropriately. 

So I think in terms of inspections in the United States, we have 

five production facilities, and we have had seven inspections, GMP 

inspections, in the last 18 months. If you look abroad, I think you 

heard the testimony today, it is far less frequent, and I think the 

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ply no justification for that. I think that we have a very safe system because of all the safeguards built in. Inspections are one component, but not even the most important component of that system. 

It is important, but it should be spread evenly across the globe. 

I would say that, if I were in charge of the overall inspection program and I heard the testimony today, I would tomorrow morning 

reallocate resources that were being used to inspect domestically to 

foreign inspections, because there is no justification for that disparity, and I would then try and work to get the additional resources to have all the facilities inspected at the frequency that we 

thought would be appropriate. And I think there are different ways 

to raise those resources. One is the direct appropriations. Second 

is through a user fee program that could be expanded to generic 

products and to raw material suppliers. And then third is your legislation, Mr. Stupak. I would think that is a way to raise the funds. 

I don’t think it is probably the preferred way, and I would suggest 

that the focus not be on further testing of the material but in developing the infrastructure that was described this morning, the 

computer systems to monitor products as they move through the 

system, and ultimately to have enough inspectors to conduct the 

frequency of inspections you would like to have both here and 

abroad. 

Just one last point, I think there is no justification either for 

having a different standard for OTC products and Rx products. We 

are generally in the Rx business, but people take products either 

way, and I think they pose similar risks and should be similarly 

treated. 

[The prepared statement of Mr. Downey follows:] 


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Mr. STUPAK. Thank you, Mr. Downey. 

Mr. Villax, I understand you came from Europe to be with us, 

and we appreciate that. Thanks for being here, and we look forward to your testimony. If you would begin, please. Make sure your 

mike is on. 

TESTIMONY OF GUIDO VILLAX, IMMEDIATE PAST CHAIRMAN, 

PHARMACEUTICALS BUSINESS COMMITTEE, MEMBER OF 

THE BOARD OF DIRECTORS, EUROPEAN FINE CHEMICALS 

GROUP, BRUSSELS, BELGIUM 

Mr. VILLAX. Thank you. Good afternoon, Chairman Stupak, 

Ranking Member Whitfield, and members of the House Subcommittee on Oversight and Investigations. Thank you for inviting 

the European API industry to testify on the FDA’s foreign inspection program. I am here in representation of the European Fine 

Chemicals Group. I am Guido Villax, chief executive of Hovione, a 

producer of APIs based in Portugal, present in China and in the 

U.S.A. Hovione was founded by my father 50 years ago, so it has 

been about 40 years that I have had a front seat watching changes 

in the pharmaceutical industry. 

The European Union, like the U.S.A., has rules in place to assure 

that the active pharmaceutical ingredients used to make medicines 

meet cGMPs to assure that each medicine is identical to the product approved by the health authorities. Last century, medicines 

were either patented or branded and were manufactured mostly in 

the West, in-house, and in compliance with GMPs. 

The world has changed. Today, driven by the demand globally for 

lower healthcare costs, off-patent medicines make up the majority 

of pharmaceuticals we consume. 80 percent of the API volume used 

to make EU medicines comes from abroad, and not everyone is 

playing by the rules. This is putting the safety of our citizens at 

risk. Globalization has resulted in the emergence of off-patent API 

production in the low-cost economies where regulations and GMP 

requirements are very limited compared to those in the EU. More 

complex and fragmented supply chains increase the potential for 

contamination, mislabeling, or substitution of one substance for another, all of which increases the risk to patients. 

Unprecedented pressure on prices and profit margins drive generic and OTC companies to buy formulations and APIs at the lowest cost, sometimes from API plants that have never been inspected 

by any health authority from the EU or the U.S. This pits quality 

and ethics against profits, in an uneven fight. Without enforcement, the least scrupulous operator wins. In this new world, the 

West no longer produces the antibiotics that fight anthrax. The 

compliant industry has to meet ever growing, tougher regulations 

that add 25 percent to the cost. This makes cGMP-compliant plants 

uncompetitive versus non-compliant ones. 

The EU regulatory framework has not kept pace with these dramatic changes. The lack of effective oversight, inspection, and no 

enforcement by the authorities has encouraged non-compliant, illegal trade, including the importation of APIs into the EU, mainly 

from Asia, via certain brokers and traders. This allows them to 

offer lower prices from a non-compliant cost base and to import 

substandard, often counterfeit APIs with a low chance of being 


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caught. Oddly, the EU inspects API plants based on proximity, not 

risk. In a year, European authorities may inspect 30 to 50 API 

plants in Asia, when Italy or France inspect a greater number in 

their own country alone. The few foreign inspections by the European Directorate of Quality of Medicines, EDQM, tell us something 

is broken. All the suspended approvals resulting from inspections 

were related to production in Asia. None were in the EU. All approvals that were withdrawn by EDQM related to filings in the 

name of middlemen. Some of the suspended approvals are of APIs 

for old OTC drugs that could well be exported to the U.S.A. and 

those facilities FDA would not have inspected. Some of the suspended approvals and FDA warning letters seem to be related to 

API producers that receive support from middlemen. 

Last month, EFCG asked the European Commission to improve 

the oversight and enforcement of the regulations for APIs by increasing inspection resources and enforcement sanctions by adopting some of the systems that the U.S. FDA has in place and that 

here have been quite strongly criticized, but I would like to emphasize that we don’t even have those in Europe. And the last thing 

we recommended to the European Commission is that they should 

take the leadership to regular middlemen and to seek international 

cooperation between agencies around the world. 

Several supranational bodies, the European Parliament, the 

USP, and the WHO have recently recognized that more inspections 

are key to stop non-compliant APIs from reaching the market. Unscrupulous players cannot be allowed to take advantage of uncoordinated jurisdictions that allow them to escape by crossing the 

State line. The generics and the OTC medicines that the world 

needs cannot continue to be regulated by 20th-century structures 

and resources. The answer lies in more, but especially smarter, enforcement and the global cooperation of national medicines agencies. Thank you. 

[The prepared statement of Mr. Villax follows:] 


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Mr. STUPAK. Thank you, Mr. Villax, for your testimony. I am 

going to start with questions. We will start with the chairman of 

the full committee, Mr. Dingell, for questions, please. 

Mr. DINGELL. Mr. Chairman, I thank you for your courtesy. Mr. 

Villax, yes or no, isn’t it true that in some places like China and 

India basic clean water and sanitation are major problems? 

Mr. VILLAX. I think that, absolutely, yes. However—— 

Mr. DINGELL. Doesn’t this then mandate that a higher level of 

care with regard to products of those countries, especially with regard to inspection of plants there, should be one of the guidelines 

of the United States’ policy with regard to imported foods and 

drugs? 

Mr. VILLAX. China has made tremendous progress. 

Mr. DINGELL. But the progress isn’t enough. They have still got 

lots of dirty water, polluted air, major problems with sanitation 

and health over there. And doesn’t require us to engage in much 

more careful inspection of products that are manufactured there? 

Yes or no. 

Mr. VILLAX. Yes. 

Mr. DINGELL. OK. And thank you for that. I don’t mean to be discourteous, but I have got 5 minutes, 1 minute of which is now gone. 

Now, gentlemen, these questions. Dr. Dubeck, isn’t it true that 

nearly half of all drugs marketed in the United States are produced 

or manufactured in foreign facilities and that that number is increasing? 

Mr. DUBECK. Those are statistics from FDA and GAO, correct? 

Mr. DINGELL. Isn’t it a fact that cGMP inspections of foreign 

firms result in significantly higher violation levels than are seen in 

domestic firms? 

Mr. DUBECK. That is what was reported at the Georgia GMP conference, correct? 

Mr. DINGELL. Isn’t it fair to say that foreign firms generally pose 

a greater risk with regard to quality and safety to consumers than 

do domestic firms? 

Mr. DUBECK. I think that necessarily follows from the above. 

Mr. DINGELL. Now, Mr. Downey, do you agree that the current 

imbalance between foreign and domestic inspections places U.S. domestic firms at a competitive disadvantage? 

Mr. DOWNEY. In some ways, yes. Other ways, no. 

Mr. DINGELL. In other words, we have got to meet high standards, and they don’t. 

Mr. DOWNEY. That is true, but it is also more difficult to get a 

pre-approval inspection for a product as a foreign manufacturer, so 

you are at a competitive disadvantage because you are inspected 

less frequently. 

Mr. DINGELL. And they can slip bad stuff in here, and get away 

with it and American firms can’t? 

Mr. DOWNEY. I don’t believe bad stuff is being slipped into the 

country. I don’t think that is so. 

Mr. DINGELL. Well, let us see about what the findings of this 

committee might be on that particular point. Now, do you think 

that it would be beneficial to have FDA open offices in those parts 

of the world that are significant exporters of production to the 

United States of prescription pharmaceuticals? 


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Mr. DOWNEY. I think there should be parity in inspections, and 

that is one way to increase the inspections in Asia. Yes, sir. 

Mr. DINGELL. Now, Mr. Downey, isn’t it true that if a facility is 

not inspected frequently, the safety of drugs coming from that 

plant could be affected? 

Mr. DOWNEY. Could be, but not necessarily would be. 

Mr. DINGELL. But there is a better chance if they are not inspected than if they are. 

Mr. DOWNEY. The inspection of the facility is one component of 

a very comprehensive regulatory system, and—— 

Mr. DINGELL. And it encourages good behavior and a right conscience, does it not? 

Mr. DOWNEY. I think responsibility of what we are doing encourages behavior, and that is the basis—— 

Mr. DINGELL. Now, isn’t it fair to say that as long as FDA’s foreign drug inspection program is so poorly funded and its IT systems in disarray that our medicine supply is at risk? 

Mr. DOWNEY. I believe we need better foreign inspections, more 

resources in that area, yes. 

Mr. DINGELL. Good. Mr. Villax, you had a comment. 

Mr. VILLAX. Yes, I think that there has been a lot of emphasis 

that we need more inspections, and I agree, but the fundamental 

impact of inspections is deterrence, and this is what is needed. You 

ought not to have areas of the industry that get zero inspections. 

You ought to have them spread out and probable. That is what 

causes the drive for compliance, and this is where Europe is catastrophically weak. 

Mr. DINGELL. Gentlemen, you can have inspections at the point 

of entry, you can inspect for efficacy and safety here, but you also 

have to inspect or you have to have knowledge of whether good 

manufacturing practices are carried forward in the country of origin, and also whether or not the different components that are exported here or the components that are included in that country 

are in fact safe. Is that not true? 

Mr. VILLAX. In fact, you must absolutely check the process. 

Mr. DINGELL. And not only the process but the components. 

Mr. VILLAX. Well, I was talking from an API perspective. When 

you make the active ingredient, you obviously have some accepted 

sources or approved sources of raw materials, but you need to 

make sure that it is GMP compliant, and you need to make sure 

it is regulatory compliant. What I mean by this is that you have 

to check two things. One, that you follow good manufacturing practices. 

Mr. DINGELL. Yes. 

Mr. VILLAX. The other thing is that you need to do what you 

have put in your filing. In other words, the inspectors need to make 

sure that what is in the filing in Washington is the same thing 

that actually is taking place in the plant. Because that is the only 

way you can actually guarantee traceability and that what you did 

in your bioequivalence test remains the same thing year after year. 

Mr. DINGELL. Gentlemen, I want to express my thanks to you. 

I apologize for being so brusque, but that clock is a harsh master. 

Thank you. 

Mr. STUPAK. Now Mr. Whitfield, for questions. 


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Mr. WHITFIELD. Thank you, Mr. Chairman. Mr. Villax? 

Mr. VILLAX. Villax. 

Mr. WHITFIELD. Villax, OK. Now, my understanding, you are actually the chief executive officer of a company that makes medicine, 

correct? 

Mr. VILLAX. We manufacture APIs, both for the generic industry 

and the innovator industry. 

Mr. WHITFIELD. OK. And so you import into Portugal—is the 

plant in Portugal? 

Mr. VILLAX. We manufacture in Portugal, and we had our first 

inspection by FDA in 1982 and export to the U.S. market. We also 

manufacture in Macao. It is in south China, and that, we had our 

first inspection there in 1987 and export into the U.S.A. 

Mr. WHITFIELD. Now, tell me again. You alluded to this a little 

bit. How would you compare the European system with our U.S. 

system as far as maximizing the safety for the consumer? 

Mr. VILLAX. Well, Europe has been late in bringing in systems 

that you have had for three, four, or five decades. Europe does not 

yet have a foreign inspection system, although the industry has 

been pushing them. 

Mr. WHITFIELD. So Europe does not have any foreign inspection 

system? 

Mr. VILLAX. Well, we don’t have a foreign inspection system, but 

we have certain authorities around Europe that make a special effort to go abroad and check. We have especially something called 

the EDQM, the European Directorate for Quality of Medicines, that 

is associated to the European Pharmacopoeia, and they have been 

the agency that have tried hardest to go abroad. But I think the 

numbers that I have is that in 7 years they have done 80 inspections internationally, which is very small. 

Mr. WHITFIELD. In 7 years. Wow. So I know it is difficult to summarize this, but as bad as our system is in the U.S., I mean with 

our shortcomings, I am going to say—— 

Mr. VILLAX. You are way ahead. 

Mr. WHITFIELD. We are way ahead. 

Mr. VILLAX. And you are the gold standard. 

Mr. WHITFIELD. All right. 

Mr. VILLAX. In other words, if GMPs were developed, with 

thanks to FDA, and Europe has been free riding on what FDA has 

been doing. 

Mr. WHITFIELD. Really? 

Mr. VILLAX. Absolutely. 

Mr. WHITFIELD. So despite our shortcomings, we are the gold 

standard, and Europe has been free riding with us, then. That is 

good. Now, let me ask you, you discussed in your testimony some 

of the—no, actually it wasn’t you. I guess it was Mr. Dubeck. You 

discussed in your testimony some of the risks presented by the fact 

that over-the-counter drugs are not subject to any pre-approval 

barriers, especially with regard, and I think you mentioned 

ibuprofen, and how would you propose that FDA remedy that problem? 

Mr. DUBECK. Well, ibuprofen is currently a new drug and is 

under all of the inspection and reporting that Mr. Downey summarized. The FDA proposal is to make it a not-new drug. Once it does 


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that, all of the additional precautions that Mr. Downey mentioned 

disappear, and all you really have left is cGMP monitoring. So 

there needs to be the same level of inspection of OTC facilities because even though they may not have some of the same inherent 

risk as some very new prescription drugs, they are consumed by 

the public in much larger quantities. 

Mr. WHITFIELD. Right. 

Mr. DUBECK. And so impurities in those products wind up causing much greater exposure to the American public, and there is no 

inspection. 

Mr. WHITFIELD. Which is hard to believe, really. 

Mr. DUBECK. Our members that make these APIs and try to compete also find that hard to believe. 

Mr. WHITFIELD. Now, the foreign establishments that produce 

these active pharmaceutical ingredients are not required by Federal Law to register with the FDA if their products are not directly 

imported into the U.S. Now, considering that more of these manufacturers are being outsourced, you would recommend that all the 

establishments be registered with the FDA? 

Mr. DUBECK. If they are—I mean, under the Law, a drug includes finished-dosage form and components of drugs. The registration requirement includes APIs, so right now registration is required for all the API manufacturers. 

Mr. WHITFIELD. Even if they are not directly imported into the 

U.S.? 

Mr. DUBECK. No, only if they are imported into the United 

States. 

Mr. WHITFIELD. OK. All right. Now, Mr. Villax, would you please 

describe the European Union Law that requires a qualified person 

employed by a drug company to assure the quality of APIs used in 

medicines? 

Mr. VILLAX. Yes, this is a very recent legislation. 

Mr. WHITFIELD. All right. 

Mr. VILLAX. It came into force in October 2005, and what that 

legislation says is, first, it is based on the fact that we do have now 

as Law something that in the industry we refer to as in other 

words, there is well-defined law that defines what are GMPs, and 

the Law that came in, in 2005, states that the QP, the qualified 

person, that is, the person that releases batches of finished product 

in the marketplace, this person has to make sure that they only 

use APIs that meet GMP. So this is a bit of self-regulation. In 

other words, Europe doesn’t really believe in inspections, I think 

wrongly, and what they are expecting is that the QP takes personal 

responsibility for checking that the APIs meet GMP, and how this 

QP is expected to meet these obligations is by developing a close 

relationship with the producer of API. Like Mr. Downey said, he 

has a team of six auditors that go round the world producing audits so that the QP is expected to have audit reports that satisfy 

him that the producer of the API meets the GMP. 

Mr. WHITFIELD. And are there significant sanctions if a company 

improperly assures the quality of the API? 

Mr. VILLAX. I have written a couple of articles that compare or 

that say that the liability of the QP is substantially lower than that 

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holders are better protected than patients, and one of the requests 

that we have made to the EU Commission is that they have to 

somehow come up with personal liability for the QPs, because otherwise we have the purchasing department fighting with the quality unit. 

Mr. WHITFIELD. Right. 

Mr. VILLAX. And we all know who is going to win. 

Mr. WHITFIELD. Thank you very much. 

Mr. STUPAK. Mr. Inslee, for questions. 

Mr. INSLEE. Thank you. To put it in the vernacular of the peasantry, this is a fine kettle of fish that we have got. 80 percent of 

our active ingredients coming in from imports. It is doubling the 

amount every 5 years, and we find out we just don’t have a meaningful inspection protocol. It is most troublesome, and I just want 

to ask if my understanding is correct that we are proposing that 

that actual situation is going to get worse. As I understand it, I am 

told that the full-time equivalents, the FTEs of the FDA’s foreign 

inspection program, was 149 in 2002. By fiscal year 2008, the FDA 

estimates that number will actually drop to 102. Now, we have 

tried to remedy that in our budget by increasing some of these appropriations. The president has threatened to veto our budgets, 

didn’t have a veto pen for the first 6 years of his presidency, and 

all of a sudden he wants to veto these budgets. My understanding 

is that essentially, even though we already have a pathetically indifferent system to these imports, they are wildly less protective of 

the American public than our domestic production. I am told we 

can’t even find out who these manufacturers are to have a really 

good compilation of them. Even though we are already bad, we are 

going to get worse unless we can override this president’s veto on 

these appropriations bills. Could you gentlemen help us in understanding if that is correct or not? 

Mr. DOWNEY. I wouldn’t agree with a good deal of your comments. I will say this, that we have 12 full-time auditors that audit 

our raw material suppliers, and we are a very small part of our 

drug supply system, so I think having 100 or 150 is definitely inadequate. But I don’t agree—— 

Mr. INSLEE. I am sorry. Did you say inadequate? 

Mr. DOWNEY. Absolutely, inadequate. I don’t think you can properly fulfill the role that inspection plays in the overall regulatory 

process with that number of inspectors. I just don’t think it can be 

done. But, on the other hand, I think we have in place a very large 

number of safeguards that I explained in my testimony that I think 

protect and ensure that we have high-quality, safe pharmaceuticals. I think the biggest risk are counterfeiters who don’t register, don’t subject themselves to inspection, and we really need to 

make sure that the first priority is allocating the resources to discover the people who are blatantly and in criminal violation of our 

statutes bringing products into the United States and supplement 

that with appropriate levels of inspection for those who are regulated. 

Mr. INSLEE. Well, foreign field inspectors would help on the counterfeit problem, would they not, as well? 

Mr. DOWNEY. I don’t think they have a very large role in that 

at all. 


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Mr. INSLEE. OK. Well, let us talk about the first problem. I 

thought I heard Mr. Downey say that there is no legitimate reason 

to have a lesser standard of inspection for foreign manufacturers 

than for domestic manufacturers? 

Mr. DOWNEY. I absolutely think that is true. 

Mr. INSLEE. You totally agree with that? Well, if you look at the 

chart up here that I am holding, showing the FDA foreign field 

funding, you see a constant decline that we are trying to remedy 

in our appropriation that the president has threatened to veto. 

Now, I want to make sure that I understand your testimony. I 

thought you were telling us that you want, you thought we should 

have the same level of inspections—— 

Mr. DOWNEY. Absolutely. 

Mr. INSLEE. For foreign productions as domestic. We are not 

doing that right now, and we have a decreasing number of people 

that are going to do that, so I would assume you agree with me 

that that is a bad state of affairs, and we should increase the number of inspections and we should override the president’s veto if we 

have to, to get that done. 

Mr. DOWNEY. I think we should increase the number of inspections. As I said, I think my recommendation would be that, starting 

tomorrow, you reallocate inspectors to the foreign inspections because relative to domestic inspections they are too infrequent, and 

simultaneously work to increase the resources to have enough inspectors to conduct the appropriate number of inspections of both. 

Mr. INSLEE. Well, I think this hearing is instructive, because I 

think it is important for the American public to know that we have 

got a president who is threatening to veto a bill that will increase 

protections of Americans against foreign imports that do not meet 

accepted standards, and I am hoping this hearing can help remedy 

that situation. Thank you. 

Mr. DOWNEY. I have very little power over the veto. 

Mr. INSLEE. We have some. We might need a few more votes. If 

you have any friends, you might talk to them. Mr. Villax, did you 

want to say something? 

Mr. VILLAX. Yes. The plants located abroad that make APIs find 

these inspections very important because it is tough to meet the requirements of an inspection, and we need these inspections to 

make sure we have a level playing field. And the members of our 

association, we have gone on record to say we are happy user fees 

for these inspections. These are important inspections to have. 

Mr. INSLEE. Thank you. And when the EU gets a role in Congress we know you are going to help us override this veto. 

Mr. VILLAX. Well, I think you should approach the EU and say 

that you want to set up some kind of, or FDA needs to agree with 

them, to recognize each other’s inspection reports. This is what I 

meant by more smarter enforcement, because they do between 20 

and 50 inspections in Asia. 

Mr. INSLEE. I think that is an interesting proposal. Thank you. 

Mr. STUPAK. Thank you, Mr. Inslee. Actually, that has been a 

proposal the committee has made to the FDA, that why don’t we 

recognize the inspections that the EU may be making, provided 

your regulatory scheme, which is same or similar to the FDA? It 

doesn’t make any sense for the EU to do one, and 6 months later 


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the FDA comes in. We could do that—Do you share information? 

Does the EU share information with the FDA? Let us say you go 

to a place, and you inspect, and you find a problem here. In this 

country we call them 483s, a violation on inspection. Do you share 

that information? 

Mr. VILLAX. As I understand it, the Europeans approached FDA 

many years ago to do these memorandums, or these mutual recognitions, but since we didn’t have a Law about what were the 

standards of GMPs, it never moved forward. And I think until such 

time as we have a foreign inspection program in Europe it won’t 

work, because you can’t talk to 27 agencies. You have to talk to a 

single one. Now, I understand that informally there is quite a bit 

of information that goes backwards and forwards. 

Mr. STUPAK. Well, good, but do you agree you don’t know what 

it would be on inspections of foreign plants? 

Mr. VILLAX. This is very complicated, and it is very political. 

Mr. STUPAK. I understand. The QP you talked about, this quality 

person within the plant, the company that is manufacturing the 

API, they are responsible for that individual? 

Mr. VILLAX. No, no. No, the pharmaceutical company that makes 

the pills that go into the market—— 

Mr. STUPAK. But not the API? 

Mr. VILLAX. The API company—— 

Mr. STUPAK. You don’t have any QPs in your plant in Portugal. 

Mr. VILLAX. Not for the role that you are describing. 

Mr. STUPAK OK. So it is just the pharmaceutical that makes the 

finished product? 

Mr. VILLAX. Yes. 

Mr. STUPAK. And then that individual is responsible to make 

sure the ingredients, the API ingredients, going into the final product is—— 

Mr. VILLAX. Were made according to GMP, yes. 

Mr. STUPAK. OK. 

Mr. VILLAX. So that is why they audit. 

Mr. STUPAK. And then that standard would be based upon the 

country in which they are shipping it to? 

Mr. VILLAX. The GMP standards that have to be met and that 

the QP has to certify are the GMP standards of the market where 

the pills are going to be sold, and—— 

Mr. STUPAK. Correct. 

Mr. VILLAX. In Europe we now have the same standards. 

Mr. STUPAK. OK. 

Mr. DUBECK. Chairman Stupak? 

Mr. STUPAK. Yes, Mr. Dubeck. 

Mr. DUBECK. I would like to comment that all the inspections 

that the U.S. pharmaceutical companies do of imported APIs do 

provide a high degree of quality assurance, and so the mere fact 

that APIs made overseas don’t get inspected very much, that would 

include Mr. Villax’s products, does not mean we don’t have high 

confidence in them. You will see, however, that many more approval applications are now being filed by foreign companies, which 

means that what is coming in are finished-dosage forms, and you 

don’t have the U.S. manufacturer analyzing, reanalyzing the API 


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and all the quality steps that have been described when it comes 

in as a finished-dosage form. 

Mr. STUPAK. Well, my question is going to be, and I don’t know 

if Mr. Downey or to you, Mr. Dubeck, if you have a quality person, 

you have the same thing at Barr Pharmaceuticals, I take it? Or 

not—— 

Mr. DOWNEY. In our European facilities, for products made for 

sale in Europe, they are released by the QP. 

Mr. STUPAK. What about here in the United States then? 

Mr. DOWNEY. Well, they are released by our quality control—— 

Mr. STUPAK. OK. Do you have any plants overseas and not in 

Europe, not in the United States? 

Mr. DOWNEY. No, all of our plants are in—well, we have a plant 

in Croatia, which is not part of the EU, but it is European. 

Mr. STUPAK. Do you have a quality person there? 

Mr. DOWNEY. Yes, we have QPs. Actually, the QP for release into 

the EU is in our polish facility, because not only does the QP have 

to be there, but the actual release testing for the European Union 

must be done in a European Union country, and so our release 

testing for product made in Croatia is Poland. 

Mr. STUPAK. OK. Well, let me ask you this question. Our committee staff was both in India and China during the August break 

to check on the manufacturing practices at some of the facilities 

over there. Our staff met with senior government and industry officials in India, and both expressed strong support to have the FDA 

locate a permanent office in India. China, we got just the opposite. 

We got a push-back about having permanent offices in China. Do 

you think it would be beneficial for the FDA to open offices in those 

parts of the world where significant drug production or APIs for 

the U.S. market is taking place? 

Mr. DOWNEY. That is one way to address the need to have parity 

in inspection, is to have people on the ground. That would certainly 

reduce travel time, would probably be less expensive, and I would 

say that that reaction, I am not surprised, and I think the Indian 

pharmaceutical industry is more advanced in terms of its quality 

systems, its exposure to Western regulation, more modern regulation than our Chinese suppliers. So I am not at all surprised by 

that. In fact, I mentioned earlier, our Indian members of the GPhA 

complain that they can’t get inspected fast enough for their new 

product approvals. As we mentioned earlier, there has to be an inspection prior to a new approval, and they can’t get people on the 

ground there, and it is very frustrating to them. 

Mr. STUPAK. Right, and the Indian government officials felt that 

if we had a permanent office there that those inspections would 

take place much quicker. 

Mr. DOWNEY. It is certainly an idea that is worth exploring. I 

can’t comment as to whether it is the right way or not. 

Mr. STUPAK. Mr. Dubeck, would you care to comment? 

Mr. DUBECK. I think it would make a whole lot of sense. If we 

have overseas U.S. personnel for Customs and Immigration and for 

USDA, it makes sense it should be there for FDA. 

Mr. STUPAK. Well, let me ask you this, Mr. Dubeck. In your testimony, it says that cooperative arrangements with foreign governments to determine the safety of drugs for the U.S. market are, 


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and I quote now, ‘‘a poor substitute for a visit by the FDA’’. The 

FDA is currently negotiating a memorandum of agreement with 

China with regards to product safety. Are you saying that this type 

of arrangement won’t protect the safety of the drugs as much as 

a FDA inspection of a plant in that country? 

Mr. DUBECK. Correct. I mean, these memorandum provide for 

sharing of information, so that FDA would at least have access to 

whatever inspection reports the Chinese may conduct, but, as it 

has been commented, FDA is the gold standard. The FDA inspectors, when they get there, they do the best inspections, and so, I 

mean, that is part of the problem of relying upon inspections by 

other government agencies. They are not the same. 

Mr. STUPAK. GAO indicated and also our staff has reported back 

that when you go to a foreign country, let us say like India or 

China, you are under a time limit of how much time you actually 

have, which is really counter-productive to— in the United States, 

if it takes a month, it takes a month. In foreign countries, if you 

only have 3 days, you get in what you can in 3 days. 

Mr. DUBECK. Yes, and when it takes a month in the U.S., it is 

usually not a month, every single day of the month. 

Mr. STUPAK. Right. 

Mr. DUBECK. They come for a few days, they go back, they get 

caught up on their paperwork, then they come back, they may 

bring other people with them when they come back. And so it is 

much more conducive to doing a thorough, competent job than 

when you are on the road, going from hotel to hotel. 

Mr. STUPAK. I agree. Mr. Villax, in discussions with committee 

staff, you expressed concern that the U.S. does not sufficiently inspect foreign production of over-the-counter medications or the ingredients that go into them. Why is this important? What dangers 

come from the failure to inspect this class of medicines? 

Mr. VILLAX. I was referring very much to the issue that John 

Dubeck raised, and this is related to the older drugs that, as I understand it, are not in the realm of probability to be inspected, and 

I think that the deterrence factor of FDA inspections is the critical 

aspect and therefore every single drug establishment ought to have 

a probability of being inspected. 

Mr. STUPAK. OK. 

Mr. VILLAX. And if I could add something on the inspections. 

Mr. STUPAK. Sure. 

Mr. VILLAX. Inspections abroad and inspections in the U.S. are 

really very different. When FDA inspectors come to Hovione, we invite them, and they are pre-announced, and they do not last as 

long—it probably lasts 3 days or 5 days—but we have had inspectors that have changed plans because they wanted to stay longer. 

But they also start at 8 o’clock in the morning and probably stay 

until 7 o’clock in the evening, and one of the reasons why these inspections can go much faster is that in the U.S. inspection, they 

have to collect data and have proof in case they are taken to Court. 

In Europe, they have no need to collect proof because if they don’t 

like it they pick up the telephone, they call Washington and say, 

tell Customs to hold everything from Hovione. And we can’t take 

them to Court, so it is probably more effective and faster. 

Mr. STUPAK. The unadulterated drug angle of it. OK. 


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Mr. DOWNEY. I would agree on that point that the problem is the 

frequency of inspection, not the quality of the inspection, at least 

as we experience it. I don’t know about the language barrier so 

much in Asia, but in European inspections, I would say that they 

are quite comparable between the U.S. FDA inspections conducted 

there and those conducted here in our facilities. 

Mr. VILLAX. One of the—— 

Mr. STUPAK. Well, that is one of the things that we are asking 

the GAO to follow up on, and then what happens to a 483 when 

it hits the FDA? What I understand, they are basically deep sixed. 

Nothing ever happens to them on a foreign one, so—well, those are 

things we are asking GAO to continue, and that is why Dr. Crosse 

and her group did a great job given what they had, but we are following up. Go ahead, Mr. Villax. 

Mr. VILLAX. One of the benefits of having offices in India or 

China is to bridge the culture. The culture distance between the 

U.S. and Europe exists. But there is a much greater distance, and 

I think having inspectors that gain an understanding of these cultural differences is probably very helpful in an inspection. 

Mr. STUPAK. Well, thank you, and thank you to this panel for 

your insight and your assistance on this problem that has been 

going on for some time. We are trying to address it. We appreciate 

you coming. Mr. Villax, thank you for coming over from Europe and 

sharing your insight on what you are doing in Europe. Mr. Downey, Mr. Dubeck, thank you. We will excuse this panel, and we will 

call up our third and final panel. 

Our witness to come forward is the Honorable Dr. Andrew von 

Eschenbach, Commissioner of the Food and Drug Administration. 

Accompanying the Commissioner is Ms. Margaret Glavin, Associate 

Commissioner for Regulatory Affairs at the FDA. It is the policy of 

this subcommittee to take all testimony under oath. Please be advised that witnesses have the right under the rules of the House 

to be advised by counsel during their testimony. Dr. von 

Eschenbach or Ms. Glavin, do you wish to be represented by counsel today? Both witnesses indicate they did not. Therefore we will 

take the oath, and we will begin. 

Dr. VON ESCHENBACH. Mr. Chairman, may I? Also at the table, 

joining me is Deborah Autor, our Director of the Office of Compliance, and would you swear her in as well, sir? 

Mr. STUPAK. OK. 

Dr. VON ESCHENBACH. Thank you. 

Mr. STUPAK. Would you spell that for the record, please, just, 

Dr.—— 

Dr. VON ESCHENBACH. A-u-t-o-r. 

Mr. STUPAK. A-u-t-o-r? OK. OK. Raise your hand, then. 

[Witnesses sworn.] 

Mr. STUPAK. Let the record reflect that all three witnesses have 

indicated the affirmative. That means they are under oath. Dr. von 

Eschenbach, you are the only one going to be giving an opening 

statement? 

Dr. VON ESCHENBACH. Yes, sir, I will give the sole opening statement for this panel. 

Mr. STUPAK. Welcome, and please, whenever you are ready. 


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TESTIMONY OF ANDREW C. VON ESCHENBACH, M.D., COMMISSIONER, FOOD AND DRUG ADMINISTRATION, U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES; ACCOMPANIED 

BY MARGARET O’K. GLAVIN, ASSOCIATE COMMISSIONER 

FOR REGULATORY AFFAIRS, FOOD AND DRUG ADMINISTRATION, U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES. 

Dr. VON ESCHENBACH. Thank you, Mr. Chairman and members 

of the subcommittee, Mr. Whitfield. I very much appreciate the endurance and the attention that the panel and the committee has 

given to this very important issue. I very much appreciate the opportunity to engage in a dialog about FDA inspections of foreign 

pharmaceutical managers. But I think it is also apparent from everything we have heard this morning and this afternoon that we 

realize what the FDA has known for some time, and that is, this 

problem is much bigger than the number of FDA inspections that 

occur abroad. This is a problem that really addresses a much more 

global issue, and I want to begin by applauding the work of the 

committee and the committee’s staff, particularly the counsel, who 

is present with us today. I want to appreciate the time that they 

have taken to update the FDA on the observations that they made 

during their recent foreign inspections, on which they accompanied 

FDA inspectors in China and in India. I find this dialogue to be 

very helpful to me and to the FDA staff. 

We are well aware that, whether it is China or India, the fact 

of the matter, Mr. Chairman, is the world is and has radically and 

rapidly changed around us. We have heard about the enormous 

challenges but also the great opportunities that are now confronting us with regard to the issue of globalization. Mr. Whitfield 

was very kind this morning in commenting on his support of leadership at FDA to effect the kind of changes that we must effect if 

we are going to be responsive to these new challenges and these 

new opportunities. And it is not only with regard to leadership as 

it relates to identifying the need for and the application of resources through a budget process, but even more importantly our 

responsibility to present to you, to the administration, and most 

important to the American people a strategy and a plan as to how 

we would, in fact, begin to utilize these precious resources in the 

most effective way. And so I would like this afternoon to highlight 

just a few of the things that we are doing at the FDA to not simply 

build our capacity to better assure the safety of medical products 

or components that are produced abroad or that Americans use at 

home but also what we are doing to modernize the entire function 

and structure that is needed at the FDA if we are going to continue 

to be what we have just heard from our witness from Europe. We 

have been and are the world’s gold standard, and we intend to continue to maintain that standard of excellence, but it will require 

change. 

Mr. Chairman, we all know that, given the scale and scope of the 

problems that have been defined by you and other members of the 

committee, the solution to assuring the quality of imports does not 

reside only in increasing the number of inspections we perform 

abroad or even at our border. In fact, we agree, we must revamp 

our entire strategy, our entire game plan, and we are doing this as 

it relates to the importation of drugs and components of drugs from 


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other countries in exactly the same way that we are adapting our 

strategy and our approach to all other FDA-regulated products. We 

are adopting an entire life-cycle management and engagement 

process, from the very production, all the way through to consumption. And so much of our production now comes from outside our 

borders, we must be global in our regulatory approach. 

This total life-cycle engagement is consistent with the first report 

of the President’s Import Safety Working Group, on which FDA, 

along with other members of the Cabinet, is an integral part of the 

process. This import safety working group report emphasizes the 

key components of FDA’s new strategy. We will be engaged in the 

total life cycle of these products through implementation of initiatives that address prevention, intervention, and our ability to respond. And we will do this in a way that first and foremost assures 

quality is built in to the products before they ever reach our borders, and we will use greater resources and more modern sources 

of science and technology to further enhance our efforts at both inspection and verification, as well as leverage those resources 

through collaboration and partnership with other government 

agencies, other governments abroad, other regulatory agencies, 

and, most importantly, the industry. 

Let me give you one example of one of the tactics or implementations that we have incorporated in this approach, and that is our 

ability to use information technology, which is critical across the 

entire spectrum of prevention, intervention, and response. We recognize as the GAO pointed out that information technology infrastructure was a problem at FDA 10 years ago, and it is a problem 

today. But unlike 10 years ago, today we have technologies and capabilities that didn’t exist in 1997. None of us is using the same 

model of computer or cell phone today that we did 10 years ago. 

We also have recognized the development in other spheres of data 

mining techniques and the ability to crosswalk through different 

data systems, and our opportunity to adapt these new technologies 

and these new strategies in IT is exactly how we will approach and 

are approaching the modernization of IT. 

I would like to point out on the panel’s charts that will be presented to you, if we could please put them up. The graphs are on 

your screen, and if we could put the charts up, that would be helpful. 

[Slide] 

Mr. Chairman, I would point out that this particular schematic 

is a very complex display of the various components of the information technology processes and components that are operative in our 

ability to oversee the diverse portfolio that FDA is responsible for 

regulating. As you can see on your left-hand side, the current state 

is, and as has been pointed out, there are multiple systems addressing multiple needs, but they have been developed independently for specific missions, and what has been absent is the ability 

to further integrate and coordinate those systems. We have been 

engaged in a very aggressive effort to migrate those systems into 

a unified, coherent, single FDA approach to IT technology. 

Once we have accomplished that, on the right-hand side, all of 

those various applications will be able to have a degree of interoperability of information sharing and information analysis and 


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outcome assessment that literally has not been capable or able before, both because of technological limitations as well as, as we indicated, structural changes that needed to occur within FDA. In 

2007, we brought in a Chief Operating Officer and a Chief Information Officer, both of whom had extraordinary experience in modernizing complex information technology infrastructures. We created 

the Bioinformatics Board at FDA to bring the operating components together to find opportunities for synergy and interoperability, and we are working with our external partners, particularly, for example, as it relates to inspections, our colleagues in the 

Department of Homeland Security-Customs and Border Protection, 

to further enhance our opportunities for interoperability and modernization of IT. 

And we are allocating resources to this important issue. Our 2008 budget request, currently before Congress, includes $247 million for such efforts, and that actually accounts for 11 percent of 

the agency’s budget, devoted and committed to modernizing and 

implementing the kind of information technology infrastructure 

that you and other members of the committee have been calling 

for. 

In addition to just simply looking at the infrastructure, it is 

mostly and critically important to look at how we interact with, collaborate, and cooperate with our partners. This is a global problem, 

and it will require a global solution. Inspections will verify quality, 

but they don’t create quality. Technology can exist, but it will never 

be able to replace the ability of people interacting with other people 

to create the kind of quality that Americans expect and will continue to depend upon. 

And so FDA is taking a very aggressive approach in our effort 

to further enhance our own resources as it relates to our ability to 

expand our workforce with the great, qualified, talented people, as 

well as to collaborate more effectively with our partners abroad so 

that we can collectively address a problem that truly, as you heard 

from our colleague from Europe, is something that everyone in the 

world is concerned about. 

Some of those opportunities are to expand FDA’s international 

presence beyond its borders. We are committed to finding the kinds 

of options that you have discussed, namely, placing FDA staff on 

long-term assignments in key locations around the world, on a permanent basis. Our staff onsite in those locations would have a 

number of important advantages that weren’t necessary in the past 

but are critical to the future. They will be able to, number one, 

work very closely, hand in hand, on an ongoing basis with our 

counterpart agencies, who must be important partners in this global effort. They will help build capacity in developing areas in which 

they have not had the fruits and the benefits of the kind of support 

that we have achieved or experienced here in the United States 

with regard to your support of the FDA. We will be able to provide 

technical assistance to foreign manufacturers to build quality in 

and improve products long before they come to us, and we will be 

able, as has also been indicated, on an ongoing basis to create opportunities for partnership that transcend cultural barriers, language barriers, and those things that separate us rather than unite 

us. And we will have the opportunity to leverage the impact of a 


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global industry expecting to produce and deliver global products 

around the world. 

We will be able to continue to expand our government-to-government and agency-to-agency activities. Both Secretary Leavitt, myself, and many, many FDA staff have been engaged in substantial 

interactions with our counterparts, especially in China. I personally 

visited China and interacted with my counterparts, the Minister of 

Health, the head of the State Food and Drug Administration in 

China, and leadership of its export agency. We will continue these 

relationships to build and assure the kind of quality that is necessary and to be able to create the infrastructure that will assure 

that quality. 

No one wants to live in the past, and neither you nor I, nor any 

member of the committee, is satisfied with the status quo of today. 

Together, I believe we can build for tomorrow the FDA that will 

continue to be the gold standard of protecting and promoting the 

health of not just Americans but everyone else in the world as well. 

I look forward to the opportunity to respond to any questions that 

you have. 

[The prepared statement of Dr. von Eschenbach follows:] 


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Mr. STUPAK. Thank you, doctor, and thank you for being here 

today and for listening to the first two panels, their statements and 

their questions. The last time you were here at the end of the 

meeting, it was on food safety. You indicated at the meeting that 

it was important for you to hear the witnesses and what they have 

to say on issues affecting the FDA, and I appreciate that, and I appreciate your taking time to be here. 

Dr. VON ESCHENBACH. Thank you, sir. 

Mr. STUPAK. If I may, put up chart No. 3, the GAO chart. This 

was GAO’s chart earlier today—right there—— 

[Slide] 

Mr. STUPAK [continuing]. That they testified to and is part of 

their testimony. If you would take a look, the first country there 

listed is China, 714 plants with 13 inspections. How do we close 

that gap? And you can go right up the line to any country you 

want, but China and India are the biggest two exporters to the 

United States. How are we going to close this gap? I guess that is 

the whole question before this committee. 

Dr. VON ESCHENBACH. Mr. Chairman, I think we have a number 

of strategies that must be and are being employed to close that 

gap. Number one, as I indicated in my oral testimony, we are engaged in government-to-government, minister-to-minister, regulatory-agency-to-regulatory-agency interactions to build capacity. 

Mr. STUPAK. Right. We are glad to hear you say that, because 

when we met, committee staff met with Bill Steiger, he is your Director of Office of Global Health Affairs and Special Assistant to 

the Secretary of HHS, they told us basically they weren’t interested. They just pushed back on every suggestion we have, like 

putting people in there, using other countries’ inspectors to help us, 

so we are very glad to hear that. In fact, our staff on this committee, we are pleased to hear that. We think that is a good start. 

We think India is a country in particular that really wants the 

United States in there. The only question I would have, then, as 

you do these agreements, whether it is China, India, the UK, wherever, that country must have some kind of regulatory scheme, then, 

for drug safety and standards, much as ours, like—— 

Dr. VON ESCHENBACH. Yes. 

Mr. STUPAK. Correct me if I am wrong, but China doesn’t have 

any standards like that. 

Dr. VON ESCHENBACH. Well, one of the important parts that you 

are pointing out, and I think it is an important part of this entire 

hearing’s testimony, is that our presence in these foreign countries 

gives us the opportunity to build capacity. Build capacity, not just 

as it relates to our ability to inspect more effectively this growing 

portfolio of producers, but, even more importantly, to build capacity 

within those regulatory agencies. 

Mr. STUPAK. Does that include putting people on the ground 

there permanently? 

Dr. VON ESCHENBACH. Yes, sir. Yes, sir. As a matter of fact, we 

look forward to that as being a very key element—— 

Mr. STUPAK. We are glad to hear that, because we just think that 

is one of the ways to go. We are going to do five votes, and I don’t 

want to keep you here with 45 minutes or waiting for us for an 

hour to vote, so let us try to buzz through some of these, if I may. 


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Earmarks chart that you had up there, in fact, the one that was 

up there before—— 

Dr. VON ESCHENBACH. Yes, sir. 

[Slide] 

Mr. STUPAK. The only caution I have on that is, we heard all that 

before in 1998 and the 2000 hearing. Because everybody was always worried about Y2K, and the FDA and all of them came in 

with these same things. They said, we will guarantee all these 

databases will talk to us. We are going to fix the Y2K problem, and 

these will all talk to each other. They will be integrated, and we 

won’t have the problems. We still have the same problems today, 

so excuse me if I am a little skeptical, but why—my question, 

though, is, we heard from the previous panel that this PREDICT 

which is a program going on right now, you are using it for seafood, 

is doing all this, sort of getting interoperable, grabbing the key 

words from different databases, bringing it together. From what 

Mr. Nielsen said, who used to be in your Office of Regulatory Affairs, it is working, and it is working well. Why wouldn’t you just 

expand that instead of create a whole new computer regimen that 

I am a little skeptical will work? If you have got one that is working now, why would you disregard that and go to a different system? 

Dr. VON ESCHENBACH. We are not disregarding that, Mr. Chairman. As a matter of fact, PREDICT is one of the important models 

that we are beta testing, which I think has great promise because 

of the kind of data that it acquires and puts into our risk management system. In the interest of time, Mr. Chairman, I would like 

to submit for the record a much more detailed assessment of the 

specific steps that we are taking that I think will demonstrate to 

you that this isn’t just same-old, same-old, or more planning, more 

ideas, but rather actual implementation of many of the things that 

you have been expecting and looking for. We heard this morning 

that there was a plan that was developed by some of the members 

of the first panel—— 

Mr. STUPAK. ISP, correct. 

Dr. VON ESCHENBACH. And they seemed to indicate that nothing 

had been done. I had not had the opportunity to hear that before 

and respond to that, but I will be able to respond to you with regard to the fact of the matter is, many things have been done since 

that particular plan was put in place. 

Mr. STUPAK. Is the ISP plan being implemented? 

Dr. VON ESCHENBACH. Many parts and pieces of it are being implemented, and in fact many parts and pieces of that have been a 

core element of what is our more global import strategy that is a 

part of the presidential import quality initiative. 

Mr. STUPAK. OK. You mentioned you are to spend—— 

Dr. VON ESCHENBACH. I will submit that for the record. 

Mr. STUPAK. $247 million on this MARCS system to go to—— 

Dr. VON ESCHENBACH. IT, and I want—— 

Mr. STUPAK. Just in IT. Go to No. 4, if you would, chart No. 4, 

from GAO. 

[Slide] 

Mr. STUPAK. And here is what I want to know is, what resources 

is it going to take to implement your full plan, your IT plan, your 


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increased inspections? If you look at this chart right there, on the 

right-hand side of that chart as I am looking at it, that is 2007, 

that is the lowest line. The next one is 2008, where you predict a 

40 percent increase in inspections. Where are you going to get the 

resources? Have you asked for additional resources for 2008? If so, 

how much is it going to take to get back to where we are actually 

doing inspections, which technically should be about 1,200 a year, 

not 300? 

Dr. VON ESCHENBACH. We have asked and allocated in both the 

2007 and have asked, and it is under consideration by Congress, 

in the 2008 budget, increases in our resources to be able to respond 

to this need, and we are continuing to build that business plan as 

we are in the process of preparing our 2009—— 

Mr. STUPAK. Will this be part of this presidential group you have 

looking at food safety and drug safety? 

Dr. VON ESCHENBACH. Yes. 

Mr. STUPAK. And they will put in a specific request for resources, 

then? 

Dr. VON ESCHENBACH. We are building and have presented, and 

are in the process of building and presenting our 2009 budget request, and as I indicated we already had increases in the 2008 

which hopefully when we move beyond the continuing resolution 

will have those resources to be able to be applied. What I also want 

to continuously emphasize, Mr. Chairman, is not only the absolute 

amount of resources, but, more importantly, how we are allocating 

them strategically, because I think we can leverage these resources 

to get more outcomes and just measures. 

Mr. STUPAK. I agree. And I have to compliment the FDA today 

that while we are talking about foreign drugs and import into this 

country, you had a press release today saying the FDA raided a 

place today because the place they were producing the drug lacked 

FDA approval and remained under grossly unsanitary conditions 

by General Therapeutics Corporation of St. Louis, Missouri. So the 

problem isn’t just other countries. It is even right here in our own 

country. And with that, let me turn it to Mr. Whitfield. 

Mr. WHITFIELD. Thank you, and Dr. von Eschenbach, we are delighted you are here with us today. The first panel today, we had 

some distinguished panel with a lot of experience at FDA, and they 

talked about this internal import strategic plan that was developed 

at FDA, and that was about 3 years ago. From your understanding, 

why has this plan not been implemented as of today? 

Dr. VON ESCHENBACH. Mr. Whitfield, I am going to ask Ms. 

Glavin to specifically comment on the number of initiatives that we 

have underway, as we speak, and have been underway at the FDA 

to do exactly that, to implement that plan. I regret that the people 

on the earlier panel commented that we are not aware of this, but 

I am pleased to present this to you. 

Ms. GLAVIN. Well, we have already instituted a program to 

evaluate the accuracy of import filer information so that we can 

make sure that those filers are giving us accurate information. We 

have just posted on our contracting site a request for bids for 

verification of the registration data worldwide. This is to have an 

independent organization go out and actually see every one of these 

places so we have an accurate registration database. We are testing 


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the automated system that has already been talked about, the 

PREDICT system. We have developed a new—— 

Mr. WHITFIELD. Ma’am, what did you say about the PREDICT 

system? 

Ms. GLAVIN. We are testing that. That is a system to automatically identify high-risk seafood imports for closer examination. 

Mr. WHITFIELD. And you all have been operating that as a pilot 

program for, like, 3 years. 

Ms. GLAVIN. No, no, no, sir. Just for a couple of months. We 

started this back in the summer. We have been developing it for 

about 3 years, but we have actually gotten it to the test phase at 

this point. 

Mr. WHITFIELD. You have been developing it for 3 years. 

Dr. VON ESCHENBACH. The software programs, and now they are 

being beta tested in—— 

Mr. WHITFIELD. But the information I had is that it had been operating as a pilot for 3 years, but you are saying it is—OK. 

Ms. GLAVIN. That is right. It has just recently been put into a 

pilot phase. We have also developed a new screening test for use 

at ports of entries. It is a very important part of looking at imports. 

This gives more like rapid screening tests. We have a very interesting one that has just gone online. We are—— 

Mr. WHITFIELD. Well, let me just say that—I am sorry to interrupt you, but we have votes on the floor, and we have a very limited time, and—on this import strategic plan that was developed 

internally, and you were kind enough to go through it pretty precisely, are you saying that the majority of that plan will be implemented? Is that what you are saying? 

Ms. GLAVIN. We are working on almost all of the recommendations in that plan and some of them have already come to fruition, 

but there is still many more that are in earlier stages. The ones 

I have mentioned are ones that are online. 

Mr. WHITFIELD. And can you tell us as a part of the forthcoming 

President’s Working Group on import safety whether you will be 

proposing a separate foreign inspection program? 

Dr. VON ESCHENBACH. It will not be part of the import safety 

strategy per se—— 

Mr. WHITFIELD. Will not. 

Dr. VON ESCHENBACH. But it is a part of FDA’s strategy. 

Mr. WHITFIELD. All right. Of the FDA’s. OK. Now, you had also 

provided us with a graph of the IT program that you all are working on right now, which appeared to be pretty complicated—— 

Dr. VON ESCHENBACH. Yes, sir. 

Mr. WHITFIELD. Which I am sure it is. Do you have any time 

table on that of when we—— 

Dr. VON ESCHENBACH. Yes, sir. 

Mr. WHITFIELD. Could you—— 

Dr. VON ESCHENBACH. That is a 3- to 5-year implementation 

plan. It is mapped with milestones and outcomes. It has got a business plan underneath of it in terms of building our resources to 

support it, and it does require a cultural change, as was brought 

up earlier today, in terms of interoperability of cross-functional 

units, whether we call them stove pipes or silos, but that is all part 

of and integrated into the plan. 


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Mr. WHITFIELD. OK. But do you feel like when it is complete it 

should at least have the information necessary to assess the risk 

of foreign drug suppliers? 

Dr. VON ESCHENBACH. We will have a plan that, number one, 

will get us better data in the first place, and that is critical. We 

must have quality data to start with and verification of the data. 

Two, better ability to acquire, integrate, and assemble that data, 

better opportunities to analyze and mine that data for information 

that we can then take regulatory action on. 

Mr. WHITFIELD. Thank you, Mr. Chairman. 

Mr. STUPAK. Well, thank you. I wish we had more time for questions, but I am afraid if we went and voted, we have five votes, 

that we would be there for an hour. So in lieu of keeping you for 

another hour, we will go vote. We will submit questions for the 

record and ask for your assurance that they will be answered in 

a timely manner. 

Dr. VON ESCHENBACH. Yes, sir. 

Mr. STUPAK. We would appreciate it. And thank you again for 

being , and thank you for sitting through this hearing. 

Dr. VON ESCHENBACH. Thank you, sir. 

Mr. STUPAK. That concludes all questioning. I want to thank all 

of our witnesses for coming today and for your testimony. I ask 

unanimous consent that the hearing record will remain open for 30 

days for additional questions for the record. With no objection, the 

record will remain open. 

I ask unanimous consent that the contents of our document binder be entered in the record, except for No. 9 and No. 11. We will 

scratch those two. So, without objection, those documents will be 

entered in the record. 

That concludes our hearing. Without objection, this meeting of 

the subcommittee is adjourned. Thank you all. 

[Whereupon, at 2:05 p.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 


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