Food and Drug Administration: Better Coordination Could Enhance Efforts to Address Economic Adulteration and Protect the Public Health
Published: 2011-10-24T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: In recent years, the United States experienced public health crises suspected to have been caused by the deliberate substitution or addition of harmful ingredients in food and drugs--specifically melamine in pet food and oversulfated chondroitin sulfate in the blood thinner heparin. These ingredients were evidently added to increase the apparent value of these products or reduce their production costs, an activity GAO refers to as economic adulteration. The Food and Drug Administration (FDA), an agency within the Department of Health and Human Services (HHS), has responsibility for protecting public health by ensuring the safety of a wide range of products that are vulnerable to economic adulteration. This report examines (1) the approaches that FDA uses to detect and prevent economic adulteration of food and medical products and (2) the challenges FDA faces in detecting and preventing economic adulteration and views of stakeholders on options for FDA to enhance its efforts to address economic adulteration. GAO reviewed FDA documents and interviewed FDA officials and stakeholders from academia and industry, among others..
section_title: What GAO Found
paragraphs: FDA primarily approaches economic adulteration as part of its broader efforts to combat adulteration in general, such as efforts to ensure the safety of imported products. Agency officials noted that the Federal Food, Drug, and Cosmetic Act does not distinguish among motives or require motive to be established to determine whether a product is adulterated. However, a senior FDA official told GAO that there is value in making a distinction between economic adulteration and other forms of adulteration to guide the agency's thinking about how to be more proactive in addressing this issue. An FDA official told GAO when the agency detects any form of adulteration that poses an adverse public health effect, it can conduct an investigation, request a recall to get the product off the market, and take enforcement action. In addition to these broader efforts, some FDA entities also have undertaken efforts that specifically focus on economic adulteration. For example, FDA's Office of Regulatory Affairs has contracted with a research center to model risk factors for improved detection of economic adulteration of food. However, FDA entities have not always communicated or coordinated their economic adulteration efforts. For example, FDA's Center for Veterinary Medicine was unaware of and did not participate in two other entities' economic adulteration efforts involving products the veterinary center regulates. FDA officials and stakeholders GAO interviewed cited several key challenges to detecting and preventing economic adulteration, including increased globalization and lack of information from industry. Globalization has led to an increase in the variety, complexity, and volume of imported food and drugs, which complicates FDA's task of ensuring their safety. In addition to globalization, an increase in supply chain complexity--the growth in the networks of handlers, suppliers, and middlemen--also complicates FDA's task, making it difficult to trace an ingredient back to its source. FDA officials and stakeholders also said that gathering information from industry, such as information on potentially adulterated ingredients, presents challenges for FDA in detecting and preventing economic adulteration due to industry's reluctance to share such information because it is proprietary. Stakeholders cited greater oversight and information sharing as options to improve FDA's ability to combat economic adulteration. Specifically, some stakeholders supported increased oversight, such as the use of technology to trace adulterated ingredients back to the point of contamination, as an option to obtain more information on supply chains. Many stakeholders also suggested that FDA increase its regulatory and enforcement actions to address economic adulteration, including in instances that may not have a large negative public health impact. Stakeholders also suggested that greater communication with industry, through such means as an information clearinghouse or more informal interactions, could enhance FDA efforts to gather information on economic adulteration.
section_title: What GAO Recommends
paragraphs: GAO recommends that FDA adopt a working definition of economic adulteration, enhance communication and coordination of agency efforts, and provide guidance to agency centers and offices on the means of addressing economic adulteration. HHS neither agreed nor disagreed with GAO's recommendations, but cited planned actions related to adopting a definition and enhancing communication and coordination.

section_title: Letter
paragraphs: In recent years, the United States experienced two crises suspected to  have been caused by the deliberate substitution or addition of harmful  ingredients in food and drugs. These ingredients were evidently added to  increase the apparent value of these products or reduce their production  costs, an activity we refer to as “economic adulteration.” Specifically, in  2007, vegetable protein products imported to the United States from  China were found to contain melamine, an industrial chemical, which later  investigation suggested had been added to give the appearance of higher  protein content. The products were used as ingredients in pet food,  sickening and killing an unknown number of dogs and cats. In 2008,  heparin—a commonly used blood thinner—was imported from China and  found to contain oversulfated chondroitin sulfate, a toxic contaminant that  mimics heparin. The contaminated heparin was linked to a number of  serious allergic reactions and deaths in the United States. In addition to  harming public health, such incidents can undermine confidence in the  safety of the nation’s food and medical products and have significant  economic consequences for industry. For example, the melamine incident  prompted pet food manufacturers to recall over 150 brands of dog and cat  food across the United States, and the heparin crisis prompted 16 drug  and device firms to recall at least 11 drug products and 72 heparin- containing medical devices.
The Food and Drug Administration (FDA), an agency within the  Department of Health and Human Services (HHS), has responsibility for  protecting public health by ensuring the safety of a wide range of food  and medical products (drugs, medical devices, and biologics) that are  vulnerable to, among other things, economic adulteration. With increasing  globalization of food production and medical product manufacturing, the  volume of imported goods regulated by FDA has more than doubled in  the last decade. As a result, according to FDA documents, from 10 to 15  percent of all food consumed in the United States is now imported, as are  about 80 percent of the active pharmaceutical ingredients in drugs, nearly  40 percent of finished drugs, and half of all medical devices. FDA expects  the growth in imports to continue. The FDA Commissioner has said that  globalization presents huge and growing challenges and that economic  adulteration remains a public health threat. She indicated that another  public health crisis like heparin or melamine seems inevitable unless FDA  is able to forge changes in how it ensures the safety and quality of food  and medical products. In part due to regulatory challenges posed by  increased globalization, we included federal oversight of both food and  medical products in our 2011 list of federal programs at high risk for  waste, fraud, abuse, or mismanagement that warrant attention by  Congress and the executive branch. We first added federal oversight of  food safety to our High-Risk list in January 2007 and federal oversight of  medical products in January 2009.
This report responds to your request that we review how FDA oversees  the safety of food and drugs in order to prevent and respond to economic  adulteration. This report examines (1) the approaches that FDA uses to  detect and prevent economic adulteration of food and medical products  and (2) the challenges, if any, FDA faces in detecting and preventing  economic adulteration and stakeholder views on options for FDA to  enhance its efforts to address economic adulteration.
For purposes of this report, we define economic adulteration as “the  fraudulent, intentional substitution or addition of a substance in a product  for the purpose of increasing the apparent value of the product or  reducing the cost of its production, i.e., for economic gain.  includes  dilution of products with increased quantities of an already-present  substance (e.g., increasing inactive ingredients of a drug with a resulting  reduction in strength of the finished product, or watering down of juice) to  the extent that such dilution poses a known or possible health risk to  consumers, as well as the addition or substitution of substances in order  to mask dilution.” This definition is the same as the working definition of  “economically motivated adulteration” that FDA developed for a May 2009  public meeting to raise awareness and solicit input on the topic.
To determine the approaches FDA uses to detect and prevent economic  adulteration, we interviewed FDA officials about the agency’s efforts to  address economic adulteration and reviewed relevant FDA documents.  We also reviewed our previous reports on FDA’s oversight of food and  medical products, as well as the agency’s strategic planning efforts. We  compared FDA’s efforts to address economic adulteration with federal  standards for internal control. To determine the challenges FDA faces in  detecting and preventing economic adulteration, we interviewed FDA  officials and stakeholders, including former FDA officials and some  representatives from academia, industry, and consumer groups who  made presentations at FDA’s May 2009 meeting on economically  motivated adulteration. We also interviewed the stakeholders to obtain  their views on options for FDA to enhance its efforts to address economic  adulteration. The views of these stakeholders are not representative of  and cannot be generalized to all stakeholders. Appendix I contains a  detailed discussion of the scope and methodology of our review.
We conducted this performance audit from September 2010 to October  2011 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: FDA is responsible for protecting public health by ensuring the safety and  efficacy of medical products marketed in the United States—including  drugs, medical devices, and biologics—and the safety of nearly all food  products other than meat and poultry, regardless of whether they were  manufactured domestically or overseas. The agency’s responsibilities for  overseeing food and medical products are divided among the following  five FDA product centers, each responsible for specific types of products:    The Center for Biologics Evaluation and Research (CBER) is  responsible for regulating biologics for human use, such as blood,  blood products, vaccines, and allergenic products, and ensuring that  biologics are safe and effective.   The Center for Devices and Radiological Health (CDRH) is  responsible for regulating firms that manufacture and import medical  devices and for ensuring that radiation-emitting products, such as  lasers and x-ray systems, meet radiation safety standards.   The Center for Drug Evaluation and Research (CDER) is responsible  for regulating over-the-counter and prescription drugs for human use,  including generic drugs.   The Center for Food Safety and Applied Nutrition (CFSAN) is  responsible for ensuring the safety of most foods for humans (except  meat and poultry and processed egg products, which are regulated by  the U.S. Department of Agriculture), including dietary supplements.   The Center for Veterinary Medicine (CVM) is responsible for  regulating the manufacture and distribution of drugs, devices, and  food given to, or used by animals.
Among other things, the centers monitor the safety and effectiveness of  marketed medical products and the safety of food, formulate regulations  and guidance, conduct research, communicate information to industry  and the public, and set their respective program priorities.
In addition to the work of the five centers, FDA’s Office of Regulatory  Affairs (ORA) conducts field work for the product centers to promote  compliance with agency requirements and applicable laws. ORA field  activities include inspecting domestic and foreign manufacturing facilities,  examining products offered for import, collecting and analyzing samples,  and taking enforcement action. ORA’s Office of Criminal Investigations is  responsible for investigating potential criminal violations involving FDA- regulated products and may refer cases to the Department of Justice for  prosecution.
FDA’s Office of the Commissioner is responsible for providing leadership  and direction to the product centers and ORA. FDA’s Office of  International Programs is responsible for leading, managing, and  coordinating all of FDA’s international activities and its recently  established overseas offices.
In July 2011, FDA created “directorates” that align similar functions under  common leadership within the Office of the Commissioner—the Office of  Medical Products and Tobacco, which oversees CBER, CDER, and  CDRH, as well as the Center for Tobacco Products; the previously  established Office of Foods, which oversees CFSAN and CVM; and the  Office of Global Regulatory Operations and Policy, which oversees ORA  and the Office of International Programs.
In recent years, we have reported on a variety of concerns related to  FDA’s resource management, strategic planning, and internal  communications and coordination. Specifically, in June 2009, we found  that FDA was unable to provide complete and reliable estimates of its  resource needs for its medical products. In February 2010, we reported  on management challenges the agency faces and FDA’s difficulties in  using practices for effective strategic and workforce planning.  Coordinating internally among its centers and offices and externally with  outside experts were among the agency’s major management challenges.  Also, in September 2010, we reported on FDA’s overseas offices and the  need for better coordination among the centers. For a list of these and  other related reports, see Related GAO Products at the end of this report.
subsections: section_title: Federal Law on the Adulteration of FDA- Regulated Food and Medical Products
paragraphs: The Federal Food, Drug, and Cosmetic Act prohibits the introduction of  adulterated food, drugs, and medical devices into interstate commerce.  However, the act does not define or use the term “economic adulteration”  or “economically motivated adulteration.” The act includes, but is not  limited to, the following:    A food is deemed to be adulterated if, among other circumstances, it  bears or contains any added poisonous or deleterious substance that  may render it injurious to health. A food is also deemed to be  adulterated (1) if any valuable constituent has been omitted in whole  or in part, or (2) if any substance has been substituted wholly or in  part, or (3) if damage or inferiority has been concealed in any manner,  or (4) if any substance has been added so as to increase its bulk or  weight, or reduce its quality or strength, or make it appear better or of  greater value than it is.   A drug is deemed to be adulterated if it purports to be a drug whose  name is recognized in an official compendium and its strength  differs from, or its quality or purity falls below, the standards set forth  in such compendium. If a drug does not purport to be a drug listed in  an official compendium, it is deemed to be adulterated if its strength  differs from, or its purity or quality falls below, that which it purports to  possess. A drug is also deemed to be adulterated if, among other  circumstances, any substance has been (1) mixed or packed with it so  as to reduce its quality or strength or (2) substituted wholly or in part.   A device is deemed to be adulterated if it is, or purports to be or is  represented as, a device which is subject to a performance standard  established or recognized under the act unless such device is in all  respects in conformity with such standard. It is also deemed  adulterated if, among other circumstances, the device was not  manufactured, packed, stored, or installed in conformity with good  manufacturing practices.
section_title: Economic Adulteration
paragraphs: Economic adulteration is not a new problem and ranges from simple  actions, such as adding material to increase a product’s weight, to more  sophisticated substitutions or additions that are designed to avoid  detection by tests known to be used to authenticate ingredients or  products. Economic adulteration differs from other forms of intentional  adulteration, such as bioterrorism or sabotage, whose primary purpose is  to cause harm. Because economic adulteration is intentional, it also  differs from unintentional adulteration, such as adulteration through failure  to follow good manufacturing practices.
Although the primary driver of economic adulteration is financial gain  rather than causing harm, it can pose a variety of public health risks. The  actual risks will vary depending on the adulterant used, the person who  consumes the product, and the length of use or exposure. There is a  direct and immediate threat to public health when the adulterant is a toxic  or lethal substance, as was the case in the melamine and heparin  incidents. There are also risks that arise as a result of long-term, low- dosage exposure to a contaminant or as a result of using a product  whose nutritional value or efficacy has been compromised by an  adulterant. Certain populations, such as infants, the elderly, and persons  with compromised immune systems are particularly vulnerable to these  risks. In some cases, an adulterant may only pose a public health risk for  those who are allergic to it, such as fish substituted with a less expensive  fish to which a person is allergic. Furthermore, economic adulteration that  poses no known health risk may expose a vulnerability in the supply  chain—the network of handlers, suppliers, and middlemen involved in the  production of food and drugs—that could be further exploited in the  future, with serious consequences.
Following the melamine and heparin incidents, FDA formed an internal  work group focused on predicting and addressing what the agency  referred to as “economically motivated adulteration.” The work group,  comprising representatives from FDA’s food and medical product centers  and ORA, held a May 2009 public meeting on the topic. For purposes of  the meeting, FDA developed a working definition of economically  motivated adulteration. The meeting, attended by representatives of  academia, industry, and consumer groups, was designed to raise  awareness about the potential for this problem and gather information on  how to better predict, prevent, and address it. According to FDA officials,  the work group stopped meeting shortly after the public meeting was held.  FDA made a transcript of the meeting publicly available, but issued no  report.
section_title: FDA Has Many Efforts to Address Economic Adulteration but Has Missed Opportunities to Communicate and Coordinate
paragraphs: FDA primarily approaches economic adulteration as part of its broader  efforts to detect and prevent adulteration of food and medical products in  general. In addition, CDER, ORA, CFSAN, and CBER have undertaken  efforts specific to economic adulteration, while CVM and CDRH have not.  However, agency entities have missed opportunities to communicate and  coordinate efforts specifically directed at economic adulteration and  identify potential public health risks.
subsections: section_title: FDA Primarily Approaches Adulteration Broadly, but Some Centers and ORA Have Undertaken Efforts Specific to Economic Adulteration
paragraphs: According to FDA officials, the agency primarily approaches economic  adulteration as part of its broader efforts to combat adulteration in  general. Such efforts include, for example, the agency’s actions to ensure  the safety of imported products. According to FDA officials, these broad  efforts to combat adulteration could also combat economic adulteration.  Agency officials noted that the Federal Food, Drug, and Cosmetic Act  does not distinguish among motives or require motive to be established to  determine whether a product is adulterated. FDA adopted a working  definition of economically motivated adulteration for the purposes of  discussing the topic at its May 2009 public meeting. In its written  comments on our draft report, HHS told us that the recently formed FDA  Working Group on Economically Motivated Adulteration will use the  working definition proposed at the public meeting, enabling FDA centers  to focus their discussions and encouraging communication and  collaboration. According to an FDA official, the agency generally does not  expend resources to distinguish between economic and other motives for  adulteration. Rather, when the agency detects any form of adulteration  that poses an adverse public health effect, it can conduct an investigation,  request a recall to get the product off the market, and take enforcement  action. A senior FDA official told us there is value in making a distinction  between economic adulteration and other forms of adulteration to guide  the agency’s thinking about how to be more proactive in addressing this  issue.
Examples of broader FDA efforts to address adulteration include:    ORA’s Predictive Risk-Based Evaluation for Dynamic Import  Compliance Targeting (PREDICT). This tool generates a numerical  risk score for all FDA-regulated products by analyzing importers’  shipment information using sets of FDA-developed risk criteria based  in part on publicly available information, which may indicate  opportunities for economic adulteration. PREDICT then targets for  examination products that have a high risk score. As of September  2011, PREDICT was operating in ports of entry in 13 of 16 FDA  districts, and FDA officials said the agency expects PREDICT to be  operational in all ports of entry by the end of 2011.   CVM’s Pet Event Tracking Network (PETNet). In August 2011, CVM  launched PETNet, a secure, Internet-based network comprised of  FDA and other federal and state agencies with authority over pet food  that would allow them to exchange real-time information about  outbreaks of illness in animals associated with pet food and other pet  food-related incidents. PETNet members can elect to receive alerts  about pet food incidents and create alerts when they are aware of a  pet food incident within their jurisdiction. According to FDA, the  information would be used to help federal and state regulators  determine how best to use inspectional and other resources to either  prevent or quickly limit the adverse events caused by adulterated pet  food. Use of the system is voluntary.   CDER’s Secure Supply Chain Pilot Program. This program, which is  in the process of being implemented, is intended to help the agency  ensure the safety of imported drugs by enabling it to focus its  resources on preventing the importation of drugs that do not comply  with applicable FDA requirements. The program is intended to allow a  limited number of drug companies to import their products on an  expedited basis if, among other things, they can meet FDA criteria  showing that they maintain control over their products from  manufacture through entry into the United States. FDA expects to  announce the date on which it will begin accepting applications for the  pilot by the end of 2011.
In addition to these broader efforts, some FDA entities have undertaken  efforts specific to economic adulteration. For example, in the aftermath of  the melamine and heparin incidents, CDER, ORA, CFSAN, and CBER  have taken the following steps to specifically address economic  adulteration:    CDER has developed a model to rank the 1,387 active  pharmaceutical ingredients (API) known to be in current use  according to their susceptibility to economic adulteration. According  to CDER officials, the ranking model incorporates various risk factors,  such as estimates for volume of use, cost per unit of the API, and  reliance on testing methods to check quality that are known to be less  accurate than more modern methods developed for other APIs. CDER  officials told us the center sampled and tested 20 of the 77 higher- ranked APIs in 2010 and found no evidence of any significant  contamination suggesting intentional adulteration. According to  agency officials, after this pilot program is completed, FDA will  determine if the program was valuable and, if so, whether the model’s  risk factors may need to be adjusted.   CDER is leading efforts to work with United States Pharmacopeia  (USP) to focus on the vulnerability of drugs to economic adulteration.  USP is a nonprofit organization that sets standards for medicines,  food ingredients, and dietary supplements. USP’s drug standards are  enforceable under the Federal Food, Drug, and Cosmetic Act. Actions  CDER officials say they have taken include selecting 20 USP  standards for updating that include certain over-the-counter drugs,  inactive ingredients used in high volume, and APIs that use outdated  technology or for which there are no procedures to identify impurities.  The goal of this modernization effort is to replace outdated USP  standards with more modern, accurate, and specific ones. CDER has  also worked closely with USP in revising the heparin testing standard  and the standards for glycerin and five other similar drug product  ingredients to prevent economic adulteration with diethylene glycol, a  cheaper, but deadly ingredient often substituted for glycerin.   ORA, along with the Department of Homeland Security and the  Department of Agriculture’s Food Safety and Inspection Service,  contracted in 2010 with the University of Minnesota’s National Center  for Food Protection and Defense to model risk factors for improved  detection of economic adulteration. The contract consists of three  phases: (1) a survey of U.S. companies to collect information on prior  or potential economic adulteration experiences and identify  characteristics of potential targets of economic adulteration; (2) the  development of strategies to group test methods to identify those  methods that pose the greatest potential risk for economic  adulteration, including the level of technical sophistication required to  exploit the test method; and (3) the development of supply chain  models in order to identify shifts in these supply chains that may  indicate the potential for economic adulteration.   CFSAN formed a work group on the economic adulteration of food,  which started meeting in February 2008. CFSAN officials said the  group, which includes representatives from CVM and ORA, generally  meets monthly and is looking at the impact of economic adulteration  on food safety and whether there is other work that FDA could  undertake to mitigate that impact. Among other things, the group has  proposed creating a page on FDA’s website on economic  adulteration, and it has developed a methodology for the testing of  pomegranate juice, which officials said they chose to focus on  because it is expensive and because its health benefits have been  widely touted. CFSAN officials said the group is also looking at ways  to make industry more comfortable with providing information to FDA  on possible economic adulteration.    CFSAN has a number of efforts under way to develop analytical tests  and tools for detecting economic adulteration. For example, the center  has developed a method for analyzing nitrogen-containing  compounds similar to melamine that might be used to boost apparent  nitrogen content in milk and other protein products. CFSAN’s research  office has a project to develop methods to detect the adulteration of  powdered milk products and fruit juices. One element of this project  involves the creation of a library of powdered milk signatures, against  which new samples can be compared (and adulterants identified)  using modern statistical methods. This project is slated for completion  over the next 2 years.   CBER established a process in late 2008 to extract relevant product  component information from regulatory applications and input this  data into a database. The center has since expanded its process of  extracting product component information from applications to include,  for example, ingredients that may be subject to contamination. The  database includes nonproprietary, unique ingredient identifiers and  other information designed to facilitate faster identification of products  made from components suspected of being economically adulterated.
In contrast to the other entities, senior CVM officials we spoke with said  that although the center has broad initiatives designed to prevent and  detect adulteration in general (i.e., PETNet), CVM has undertaken no  efforts targeted to economic adulteration and has no plans to do so.  Officials said that the melamine incident gave them greater awareness  that products with high-value ingredients could be susceptible to  economic adulteration and that this was the only lesson they learned from  the melamine incident. Officials said they recognize that CVM-regulated  products may be vulnerable to economic adulteration because they are  composed of numerous byproducts, any one of which could be  adulterated. Nevertheless, they said that they do not believe economic  adulteration is a growing problem because of industry’s overall  awareness of its supply chain through efforts such as verifying certificates  of analysis of ingredients from suppliers.
Officials from CDRH told us that, other than its broader efforts to combat  adulteration in general, the center had no initiatives specifically directed at  addressing economic adulteration, but indicated they are responsible for  products that are vulnerable to economic adulteration. For example,  CDRH officials said that they have found that a manufacturer of imported  sunglass lenses may have been substituting inferior material. However,  center officials were unaware of any actual cases of economic  adulteration involving products for which they are responsible.
section_title: Agency Entities Have Not Communicated or Coordinated on Economic Adulteration Efforts
paragraphs: We found two instances in which CVM did not know about or participate  in efforts on economic adulteration that involved CVM-regulated products.  First, the director of the University of Minnesota’s National Center for  Food Protection and Defense told us that, as part of the center’s contract  with ORA, it will be drafting a list of foods at high risk of economic  adulteration and that the list will likely include foods that are also used as  animal feed ingredients. The director noted that, with the exception of  certain kinds of fats, the global supply chain for animal food and feed is  the same as that for human foods. The director said that, for this reason,  his center had considered finding ways to make its work for FDA even  more applicable to animal feed. Although CVM provided developmental  input, direction, and technical support with regard to the contract, CVM  officials said they were not aware of the center’s work under the contract  to develop this list of high-risk foods. Second, CFSAN has a research  project that focuses primarily on developing methods for authenticating  protein-based foods and ingredients, detecting the presence of  adulterants, and identifying chemical hazards in protein-based products.  Among other things, this project is to develop methods for screening skim  milk powder, which can be found in both food and animal feed, for the  presence of soy or other vegetable protein. Senior CVM officials said they  were unaware of this research project, but they stated that CVM has been  involved in developing methods to identify contaminants of protein-based  ingredients.
We also found an instance where FDA entities engaged in similar efforts  on economic adulteration but did not communicate or coordinate about  those efforts. Specifically, as we mentioned earlier, ORA and CDER are  engaged in similar efforts to determine which human foods and drugs,  respectively, are at greatest risk for economic adulteration. However,  according to ORA and CDER officials, they have not coordinated those  efforts or communicated about them, even though they are using some of  the same risk factors in their efforts—including price fluctuations and  reliance on less specific test methods. Officials from both entities said that  such communication and coordination could be beneficial to both efforts.
In addition, we have previously identified internal coordination—among  FDA’s centers and offices—as one of the agency’s major management  challenges based on a review of evaluations of FDA by HHS and the FDA  Science Board, among others. Also, in our 2009 survey of FDA  managers, 70 percent reported that better internal coordination and  communication would greatly improve their ability to contribute to FDA’s  goals and responsibilities, though 28 percent reported that FDA was  making great progress in this area. Furthermore, we asked FDA  managers in our survey to identify the top priorities that FDA leadership  should address to achieve agency goals and responsibilities, and the  second most commonly identified issue was improving coordination within  FDA. In detailed written responses in our survey, some managers noted  that better coordination among FDA’s centers could increase  effectiveness and decrease redundancy.
Furthermore, a recommendation made by FDA’s work group on economic  adulteration in August 2009 related to communication—that FDA  designate a lead office and develop standard operating procedures for  information sharing—was not implemented. A senior FDA official told us  that there has been some work across FDA centers on economic  adulteration but that the centers did not see a lot of value in additional  coordination because of the differences between the products each  center oversees. However, the issue of economic adulteration cuts across  the agency, and without communicating about and coordinating on  economic adulteration efforts, FDA may not be making the best use of  scarce resources.
In August 2011, FDA officials told us that the agency’s Compliance Policy  Council, which consists of senior representatives of ORA and the FDA  centers, met in July 2011 and discussed whether and how the agency  should coordinate work on economic adulteration. The council directed  risk management staff from ORA and the centers to form a group to  discuss opportunities to share intelligence and approaches to economic  adulteration and then report back to the council. According to FDA  officials, the proposed agenda included discussion about the  development of standard operating procedures. In its written comments  on our draft report, HHS told us that the work group held its first meeting  on September 23, 2011, while our report was at the agency for comment.
The Commissioner and other senior FDA officials have often spoken  publicly about the threat posed by economic adulteration. In its July 2011  report entitled Pathway to Global Product Safety and Quality, FDA  stated that globalization has fundamentally altered the economic and  security landscape, requiring FDA to transform itself into a global agency  prepared to regulate in an environment in which product safety and  quality know no borders. The report also called economically motivated  harms perhaps the most serious challenge on the horizon for the agency  and noted that the heparin and melamine incidents underscore how  serious the potential danger can be. The report also noted that FDA  needs to move beyond its current efforts and think strategically across the  agency. However, FDA officials told us that the Office of the  Commissioner has not issued specific written guidance on how FDA  centers and offices should approach or address their economic  adulteration efforts. The Office of the Commissioner’s role is to provide  policy making, program direction, coordination, liaison, and expert advice  for agency programs. According to federal standards for internal control,  agencies should have documented policies and procedures in place to  carry out management’s directives. This documentation should be  readily available for examination in management directives, administrative  policies, or operating manuals in paper or electronic form. In addition, the  federal standards call for effective communication, with information  flowing down, across, and up the organization.
section_title: FDA Faces Challenges in Addressing Economic Adulteration, and Stakeholders Identified Options That May Help Agency Efforts
paragraphs: FDA officials and stakeholders we interviewed cited several key  challenges the agency faces in detecting and preventing economic  adulteration, and stakeholders identified options for enhancing the  agency’s efforts to address economic adulteration.
subsections: section_title: Key Challenges Include Increased Globalization and Lack of Information from Industry
paragraphs: FDA officials and stakeholders told us that responding to increased  globalization and the expanding complexity of the supply chains for both  food and medical products is a key challenge in addressing economic  adulteration. Globalization has led to an increase in the variety,  complexity, and volume of imported food and drugs, which complicates  FDA’s task of ensuring their safety. In addition to globalization, an  increase in supply chain complexity—the growth in the networks of  handlers, suppliers, and middlemen—also complicates FDA’s task.  According to FDA, the market for outsourcing portions of pharmaceutical  production has more than doubled in the past 9 years. FDA noted in its  July 2011 Pathway report that more products are following increasingly  complex paths through multi-step supply chains before reaching the  United States. Figure 1 illustrates the complex supply chain of a single  commodity, canned tuna. As the figure shows, after the tuna is caught in  East Asia, it can travel through many countries for processing and  canning before the finished product finally reaches store shelves in the  United States.
FDA officials gave several reasons that this increasing complexity poses  a challenge. For example, CFSAN officials told us that food companies  can change ingredients and suppliers at will without having to notify FDA  of those changes, making it difficult to track or trace an ingredient back to  its source or supplier. However, many food manufacturers are required to  keep records of the immediate previous sources of all foods received.  Similarly, CDER officials said that it is increasingly difficult to trace  ingredients through drug supply chains due to the increasing number of  parties involved and the increase in transfers between parties in other  countries. Stakeholders from associations representing the food and  medical product industries agreed that the large number of imported  ingredients and foreign establishments, as well as the difficulties related  to tracking an ingredient back to the original source, are of particular  concern.
FDA officials and stakeholders said that obtaining information on potential  instances of economic adulteration is critical to addressing the problem,  but they also agreed that the agency faces challenges in gathering such  information from industry. Industry may be a source of information on  potential incidents of adulteration because companies regularly test  ingredients from suppliers. The responsible party for a firm that introduces  into commerce an article of food containing an adulterated ingredient that  could cause serious adverse health consequences or death must report  this information to FDA through the Reportable Food Registry. However,  agency officials and industry representatives said industry is often  reluctant to share such information when an adulterated ingredient has  not entered into commerce. For example, a company may be concerned  that it could provoke a lawsuit if it reported a supplier for intentionally  adulterating products and the accusation was subsequently determined to  be unfounded. They said that a wrongful accusation can have serious  consequences, such as compromising the integrity of the company’s  brands and products if certain information became public.
In addition to a need for more information about industry suppliers, FDA  officials told us that they need more information about substances that  could be used to adulterate products. These officials said that new, more  precise testing methods need to be developed to detect these adulterants  because some current tests are outdated or insufficiently specific. Recent  cases of melamine contamination in pet food illustrate the need for such  tests. The presence of melamine in pet food was not initially discovered  by the standard test for protein because that test was designed to detect  nitrogen and could not distinguish between protein and melamine. The  contamination was ultimately discovered when FDA scientists developed  a specific test to identify melamine. FDA and others determined that  melamine was apparently selected as an adulterant to evade the original  testing and increase the apparent protein content.
CDER officials also told us that it is difficult to detect instances of  economic adulteration because the potential adulterant is often unknown  or has not yet been identified. For example, during the heparin incident,  the available test methods for heparin were not able to detect the  contaminant oversulfated chondroitin sulfate. FDA collaborated with  scientists outside the agency to identify the contaminant and develop new  tests to detect it. Industry may be the best source of tests to detect  adulteration because companies develop such tests to monitor the  products they receive from their suppliers; however, industry officials  indicated that they are often reluctant to share such information because  it is proprietary.
Stakeholders cited additional challenges that FDA faces in addressing  economic adulteration, including its legal authorities. For example, one  stakeholder said that FDA does not have the authority to accredit, or  approve third parties to inspect establishments that make drugs; the  stakeholder said that if FDA did have that authority, such inspections may  help decrease FDA’s inspection workload and could increase the total  number of facilities inspected. FDA recently received authority to  recognize, in certain situations, accreditation bodies that may then  accredit qualified third parties to inspect food establishments. The FDA  Food Safety Modernization Act provides that, no later than January 2013,  FDA is to establish a program to recognize these accreditation bodies. It  is worth noting, though, that FDA has had the authority to accredit third  parties to conduct inspections of certain domestic and foreign medical  device manufacturing establishments since 2002. FDA implemented its  accreditation programs, permitting eligible establishments to voluntarily  request inspections from third-party organizations, but relatively few  establishments have chosen to take advantage of this program.
Some stakeholders also told us that FDA’s limited resources, including  staffing, present a challenge. Specifically, they said FDA has limited  ability to investigate potentially economically adulterated products  because such investigations are resource-intensive. They also told us  that FDA does not have the range of expertise among staff that is needed  to address economic adulteration, in particular staff with a background in  intelligence gathering or law enforcement. We have previously reported  on FDA’s own concerns about its staffing levels and oversight  responsibilities for certain activities, such as its oversight of medical  devices and inspections of establishments that manufacture approved  drugs.
section_title: Some Stakeholders Cited Greater Oversight and Information Sharing as Options to Address Economic Adulteration
paragraphs: Some stakeholders supported increased oversight by FDA, in particular,  as an option to obtain more information on supply chains—information  that is useful in tracing the source of economic adulteration. For example,  one stakeholder suggested that the use of track-and-trace technology— such as using standard numerical identifiers on prescription drug  packages—could facilitate FDA’s oversight of the supply chain by making  it easier for FDA and industry to trace adulterated ingredients back to the  point of contamination. Under the new FDA Food Safety Modernization  Act, the Secretary of HHS, acting through FDA, is directed to establish a  system that will improve its ability to rapidly track and trace both domestic  and imported foods. Similarly, the Food and Drug Administration  Amendments Act of 2007 required FDA to develop a unique device  identifier system to adequately identify a medical device through  distribution and use. According to FDA officials, the agency expects to  publish a proposed rule on the establishment of this system by the end of  2011.
Many stakeholders also suggested that FDA increase its regulatory and  enforcement actions to address economic adulteration. These  stakeholders said that public health risk should be FDA’s priority in taking  such actions, but many also told us that FDA should pursue those who  adulterate for economic gain, including in instances that may not have a  large negative public health impact. For example, some stakeholders  suggested building criminal cases against those who adulterate for  economic gain and prosecuting them swiftly and visibly to help ensure  that companies are complying with laws and regulations. In addition,  these stakeholders said that, even when the adulteration has little health  impact, such actions could help protect public health by deterring future  instances, some of which may pose a significant health threat. Depending  on the circumstances, such as the type of violation and product involved,  a range of enforcement actions or penalties could be pursued. However,  in February 2009, we reported that FDA has taken few actions in pursuing  instances of economic fraud in seafood. In that report, we found that  FDA did not issue any regulatory letters to companies regarding seafood  fraud from 2005 through 2008, and according to a senior FDA official, the  agency had not taken any enforcement actions for seafood fraud since  2000.
Even with the challenges related to the disclosure of proprietary  information, stakeholders also suggested that greater communication with  industry could enhance FDA efforts to gather information on economic  adulteration. One option for greater communication that several  stakeholders identified was the creation of an information clearinghouse,  through which companies could anonymously share information on  adulterated ingredients with FDA and other companies. Stakeholders  noted that the clearinghouse could enhance FDA’s ability to disseminate  information on adulterated products quickly, facilitate secure information  sharing across industries, and enable FDA and industry to respond more  rapidly to potential instances of adulteration. For example, they said that a  clearinghouse could allow the sharing of information, such as information  on market price fluctuations, environmental disasters, or other  macroeconomic factors. In the view of these stakeholders, this type of  information may help both industry and FDA better target their efforts to  detect and prevent economic adulteration. One stakeholder said that such  a clearinghouse was an opportunity for industry and FDA to share  information from various sources in a central location, which would help  them draw conclusions about the authenticity of ingredients or raw  materials. This stakeholder suggested that if an information clearinghouse  had existed prior to the heparin incident, it could have contained critical  information—such as the sudden increase or decrease in the price of  ingredients for food or drugs —to alert FDA and industry to the potential  for adulteration.
One stakeholder noted that because some of the industries affected by  economic adulteration are small, some companies might easily be  identified by the information reported, even if they reported it  anonymously. Consequently, some stakeholders suggested engaging a  neutral third party to operate the information clearinghouse, thus helping  to ensure that the information shared was free of specific company  identifiers. FDA officials said that they are examining various ways to  facilitate information sharing with industry and have discussed the idea of  a clearinghouse, but they have no plans to develop one.
In addition to formal information sharing, some stakeholders suggested  more informal interaction between industry and FDA. Stakeholders noted  that increased dialogue could provide opportunities for FDA to  communicate to industry its overall strategy on economic adulteration.
Some stakeholders told us that FDA’s communication during adverse  public health events was clear and timely but that at other times they  were unsure what FDA was doing to address potential economic  adulteration. Some stakeholders expressed a willingness to work with  FDA on the issue but said that they need to better understand FDA’s  expectations of industry. For example, one stakeholder suggested a  forum where FDA officials can talk to industry directly and engage in  dialogue to clarify the agency’s strategy.
Some stakeholders from food industry groups also said that they believe  the recent passage of the FDA Food Safety Modernization Act provides  new opportunities for both FDA and industry to address economic  adulteration. One stakeholder noted that the new law may give FDA more  opportunities to include economic adulteration in its inspection program.  In addition, stakeholders told us that they believe the law provides a  science- and risk-based approach for companies to verify their ingredient  suppliers, including multiple ways of assuring the public and FDA that  industry has processes in place to detect economic adulteration.  Specifically, under the act, certain facilities are required to identify  reasonably foreseeable hazards and to prepare written control plans that  illustrate reasonable approaches to looking for intentional adulteration.
Lastly, one stakeholder said that FDA may need additional authority to  require the drug industry to provide the agency with information critical to  securing the medical product supply chain. Additional authority may  include, for example, allowing FDA to require enhanced documentation  from industry on its supply chains to increase transparency. In its  comments on one of our recent reports, HHS also mentioned legislation  previously under consideration by Congress that it believed would, if  enacted, provide FDA with helpful tools to further secure the nation’s drug  supply chain. For example, according to the agency, the proposed  legislation would have provided FDA authority to require foreign and  domestic drug manufacturers to implement quality systems and adopt  plans to identify and mitigate hazards. In its comment letter, FDA said that  such legislation could ensure that the agency can hold industry  accountable for the security and integrity of its supply chains and quality  control systems.
section_title: Conclusions
paragraphs: Economic adulteration is not a new problem. It can undermine confidence  in the safety of the nation’s food and medical products and have  significant economic consequences for industry. The recent crises  involving the contamination of pet food with melamine and the  adulteration of heparin with oversulfated chondroitin sulfate showed that  economic adulteration continues to be a problem and can have serious  public health consequences. Senior FDA officials, including the  Commissioner, have often spoken publicly about the threat posed by  economic adulteration. However, FDA does not have a definition of  economic adulteration. Without such a definition, when FDA detects  adulteration, it is more difficult for the agency to make a distinction  between economic adulteration and other forms of adulteration to guide  the agency’s thinking about how to be more proactive about this issue. In  addition, FDA has not provided guidance to its centers and offices on how  they should approach or address their economic adulteration efforts. This  is not consistent with federal standards of internal control, which state that  agencies should have documented policies and procedures in place to  carry out management’s directives. Some entities have undertaken efforts  that specifically focus on economic adulteration, but they have not always  communicated or coordinated their efforts with other FDA entities.  Without such communication and coordination, in these times of  economic uncertainty, FDA may not be making the best use of its scarce  resources. As food and medical product supply chains become increasing  global and complex, economic adulteration will continue to remain a  threat.
section_title: Recommendations for Executive Action
paragraphs: To enhance FDA’s efforts to combat the economic adulteration of food  and medical products, we recommend that the Commissioner of FDA  take the following three actions:    adopt a working definition of economic adulteration,    provide written guidance to agency centers and offices on the means  of addressing economic adulteration, and   enhance communication and coordination of agency efforts on  economic adulteration.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to HHS for review and comment. We  received written comments from HHS, which are reproduced in appendix  II. HHS neither agreed nor disagreed with our recommendations. In its  comments, HHS stated that FDA views the term “economically motivated  adulteration” as describing a subset of cases within the broader concept  of adulteration, and believes that a holistic approach toward  understanding and addressing adulteration generally is the best course  forward. HHS also said that this approach will best serve the agency as it  strives to protect the health and well-being of the American people by  preventing, detecting, and taking appropriate responses to all  adulterations of food and medical products. As we note in our report,  however, agency entities have missed opportunities to communicate and  coordinate efforts specifically directed at economic adulteration and  identify potential public health risks. At the same time, FDA said that it  recognizes the importance of sharing and leveraging information relevant  to economically motivated adulteration and the utility of a mechanism for  facilitating such sharing and collaboration at FDA. The department  provided additional information in its written comments on planned  actions of FDA’s Working Group on Economically Motivated Adulteration  that are consistent with two of the three recommendations we made in  our draft report. The additional comments related to our  recommendations that FDA adopt a working definition of economic  adulteration and enhance communication and coordination of agency  efforts on economic adulteration are as follows:    Adopt a working definition of economic adulteration. HHS stated that  the Working Group on Economically Motivated Adulteration will use  the working definition of economically motivated adulteration that FDA  proposed at its May 2009 public meeting on the topic.   Enhance communication and coordination of agency efforts on  economic adulteration. HHS stated that FDA expects the efforts of the  working group will result in enhanced collaboration and  communication at FDA on ways to approach and address situations of  economically motivated adulteration.
We have included this additional information in our report.
HHS also provided technical comments, which we incorporated as  appropriate.
As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies of this report to the  appropriate congressional committees, the Secretary of Health and  Human Services, the Commissioner of the Food and Drug Administration,  and other interested parties. In addition, the report will be available at no  charge on the GAO website at http://www.gao.gov.
If you or your staffs have any questions about this report, please contact  Lisa Shames at (202) 512-3841 or shamesl@gao.gov or Marcia Crosse  at (202) 512-7114 or crossem@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this report. GAO staff who made key contributions to this report are  listed in appendix III.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: This report examines (1) the approaches the Food and Drug  Administration (FDA) uses to detect and prevent economic adulteration of  food and medical products, and (2) the challenges, if any, FDA faces in  detecting and preventing economic adulteration and stakeholder views on  options for FDA to enhance its efforts to address economic adulteration.  For this report, we define economic adulteration as “the fraudulent,  intentional substitution or addition of a substance in a product for the  purpose of increasing the apparent value of the product or reducing the  cost of its production, i.e., for economic gain.  includes dilution of  products with increased quantities of an already-present substance (e.g.,  increasing inactive ingredients of a drug with a resulting reduction in  strength of the finished product, or watering down of juice) to the extent  that such dilution poses a known or possible health risk to consumers, as  well as the addition or substitution of substances in order to mask  dilution.” Our definition of economic adulteration is the same as the  working definition of “economically motivated adulteration” that FDA  developed for a May 2009 public meeting to raise awareness and solicit  input on the topic. We did not include counterfeiting of a finished product  because counterfeiting concerns the unauthorized use of intellectual  property rights.
To determine the approaches FDA uses to detect and prevent economic  adulteration of food and medical products, we interviewed officials from  the five FDA centers responsible for food and medical products, including  the Center for Food Safety and Applied Nutrition, the Center for  Veterinary Medicine, the Center for Drug Evaluation and Research, the  Center for Devices and Radiological Health, and the Center for Biologics  Evaluation and Research, as well as FDA’s Office of Regulatory Affairs,  Office of International Programs, and Office of the Commissioner. We  also interviewed former FDA officials and representatives of organizations  that have been assisting FDA in its efforts to detect and prevent economic  adulteration, including the United States Pharmacopeia, the University of  Minnesota’s National Center for Food Protection and Defense, and New  Mexico State University’s Center for Animal Health, Food Safety and Bio- Security. We reviewed relevant FDA documents, including regulations,  compliance manuals and inspection guides, sampling surveillance results,  statements and presentations by agency officials, a contract to fund a  research project at the National Center for Food Protection and Defense,  and communications with industry and the public. We also reviewed  published information from FDA, including its Strategic Priorities 2011- 2015 report, its Pathway to Global Product Safety and Quality report, and  Federal Register notices. We also reviewed previous GAO reports and  recommendations on FDA’s oversight of food and medical products, as  well as the agency’s strategic planning efforts. We compared FDA’s  efforts to address economic adulteration with federal standards for  internal control.
To determine the challenges FDA faces in detecting and preventing  economic adulteration, we interviewed and obtained the views of FDA  officials and stakeholders about the challenges the agency faces in  addressing economic adulteration. Stakeholders included members of  academia and representatives of industry and consumer groups who  made presentations at FDA’s May 2009 meeting on economically  motivated adulteration, as well as former FDA officials who were involved  in agency efforts that led to that meeting. We also interviewed and  obtained the views of the stakeholders on options for FDA to enhance its  efforts to address economic adulteration. The views of these stakeholders  are not representative of and cannot be generalized to all stakeholders. In  addition, we reviewed FDA and stakeholder documents related to  challenges and options, as well as portions of the FDA Food Safety  Modernization Act.
We conducted this performance audit from September 2010 to October  2011 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
section_title: Appendix II: Comments from the Department of Health and Human Services
section_title: Appendix III: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
section_title: Staff Acknowledgments
paragraphs: In addition to the contacts named above, Jose Alfredo Gomez (Assistant  Director), Geraldine Redican-Bigott (Assistant Director), Cheryl Williams  (Assistant Director), Kevin Bray, Mollie Hertel, Sherrice Kerns, Susan  Malone, Michael Rose, Cynthia Saunders, Ben Shouse, and Kiki  Theodoropoulos made key contributions to this report.
section_title: Related GAO Products
paragraphs: High-Risk Series: An Update. GAO-11-278. Washington, D.C.: February  2011.
subsections: section_title: Reports and Testimonies
paragraphs: Drug Safety: FDA Faces Challenges Overseeing the Foreign Drug  Manufacturing Supply Chain. GAO-11-936T. Washington, D.C.: Sept. 14,  2011.
Medical Devices: FDA Should Enhance Its Oversight of Recalls.  GAO-11-468. Washington, D.C.: June 14, 2011.
Seafood Safety: FDA Needs to Improve Oversight of Imported Seafood  and Better Leverage Limited Resources. GAO-11-286. Washington, D.C.:  April 14, 2011.
Federal Food Safety Oversight: Food Safety Working Group Is a Positive  First Step but Governmentwide Planning Is Needed to Address  Fragmentation. GAO-11-289. Washington, D.C.: March 18, 2011.
Food Labeling: FDA Needs to Reassess Its Approach to Protecting  Consumers from False or Misleading Claims. GAO-11-102. Washington,  D.C.: January 14, 2011.
Food and Drug Administration: Response to Heparin Contamination  Helped Protect Public Health; Controls That Were Needed for Working  With External Entities Were Recently Added. GAO-11-95. Washington,  D.C.: October 29, 2010.
Drug Safety: FDA Has Conducted More Foreign Inspections and Begun  to Improve Its Information on Foreign Establishments, but More Progress  Is Needed. GAO-10-961. Washington, D.C.: September 30, 2010.
Food and Drug Administration: Overseas Offices Have Taken Steps to  Help Ensure Import Safety, but More Long-Term Planning Is Needed.  GAO-10-960. Washington, D.C.: September 30, 2010.
Food Safety: FDA Could Strengthen Oversight of Imported Food by  Improving Enforcement and Seeking Additional Authorities.  GAO-10-699T. Washington, D.C.: May 6, 2010.
Food and Drug Administration: Opportunities Exist to Better Address  Management Challenges. GAO-10-279. Washington, D.C.: February 19,  2010.
Food Safety: Agencies Need to Address Gaps in Enforcement and  Collaboration to Enhance Safety of Imported Food. GAO-09-873.  Washington, D.C.: September 15, 2009.
Food and Drug Administration: FDA Faces Challenges Meeting Its  Growing Medical Products Responsibilities and Should Develop  Complete Estimates of Its Resource Needs. GAO-09-581. Washington,  D.C.: June 19, 2009.
Seafood Fraud: FDA Program Changes and Better Collaboration among  Key Federal Agencies Could Improve Detection and Prevention.  GAO-09-258. Washington, D.C.: February 19, 2009.
Dietary Supplements: FDA Should Take Further Actions to Improve  Oversight and Consumer Understanding. GAO-09-250. Washington,  D.C.: January 29, 2009.