Medical Devices: FDA Faces Challenges in Conducting Inspections of Foreign Manufacturing Establishments
Published: 2008-05-14T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: As part of the Food and Drug Administration's (FDA) oversight of the safety and effectiveness of medical devices marketed in the United States, it inspects certain foreign and domestic establishments where these devices are manufactured. To help FDA address shortcomings in its inspection program, the Medical Device User Fee and Modernization Act of 2002 required FDA to accredit third parties to inspect certain establishments. In response, FDA has implemented two voluntary programs for that purpose. This statement is based primarily on GAO testimonies from January 2008 (GAO-08-428T) and April 2008 (GAO-08-701T). In this statement, GAO assesses (1) FDA's program for inspecting foreign establishments that manufacture medical devices for the U.S. market and (2) FDA's programs for third-party inspections of those establishments. For GAO's January and April 2008 testimonies, GAO interviewed FDA officials, analyzed information from FDA, and updated GAO's previous work on FDA's programs for inspections by accredited third parties. GAO updated selected information for this statement in early May 2008.
section_title: What GAO Found
paragraphs: FDA faces challenges managing its program to inspect foreign establishments that manufacture medical devices. GAO testified in January 2008 that two databases that provide FDA with information about foreign medical device establishments and the products they manufacture for the U.S. market contained inaccurate information about establishments subject to FDA inspection. In addition, comparisons between these databases--which could help produce a more accurate count--had to be done manually. Recent changes FDA made to its registration database could improve the accuracy of the count of establishments, but it is too soon to tell whether these and other changes will improve FDA's management of its foreign inspection program. Another challenge is that FDA conducts relatively few inspections of foreign establishments; officials estimated that the agency inspects foreign manufacturers of high-risk devices (such as pacemakers) every 6 years and foreign manufacturers of medium-risk devices (such as hearing aids) every 27 years. Finally, inspections of foreign manufacturers pose unique challenges to FDA, such as difficulties in recruiting investigators to travel to certain countries and in extending trips if the inspections uncovered problems. FDA is pursuing initiatives that could address some of these unique challenges, but it is unclear whether FDA's proposals will increase the frequency with which the agency inspects foreign establishments. Few inspections of foreign medical device manufacturing establishments have been conducted through FDA's two accredited third-party inspection programs--the Accredited Persons Inspection Program and the Pilot Multi-purpose Audit Program (PMAP). Under FDA's Accredited Persons Inspection Program, from March 11, 2004--the date when FDA first cleared an accredited organization to conduct independent inspections--through May 7, 2008, four inspections of foreign establishments had been conducted by accredited organizations. An incentive to participation in the program is the opportunity to reduce the number of inspections conducted to meet FDA's and other countries' requirements. Disincentives include bearing the cost for the inspection, particularly when the consequences of an inspection that otherwise might not occur in the near future could involve regulatory action. The Food and Drug Administration Amendments Act of 2007 made several changes to program eligibility requirements that could result in increased participation by manufacturers. PMAP was established on September 7, 2006, as a partnership between FDA and Canada's medical device regulatory agency and allows accredited organizations to conduct a single inspection to meet the regulatory requirements of both countries. As of May 7, 2008, two inspections of foreign establishments had been conducted by accredited organizations through this program. The small number of inspections completed to date by accredited third-party organizations raises questions about the practicality and effectiveness of these programs to quickly help FDA increase the number of foreign establishments inspected.

section_title: Letter
paragraphs: I am pleased to be here today as you examine the Food and Drug  Administration’s (FDA) program for inspecting foreign manufacturers of  medical devices for the U.S. market. FDA is responsible for the regulation  of medical devices marketed in the United States, including those  manufactured in foreign establishments. FDA classifies medical devices  into one of three classes based on degree of potential risk and level of  control needed to reasonably ensure safety and effectiveness. According  to FDA data, a wide variety of class II (medium risk) and III (high risk)  medical devices may be manufactured for the U.S. market by foreign  establishments. Such devices include defibrillators, contact lenses,  pacemakers, hip prostheses, and coronary stents. FDA is responsible for  inspecting certain foreign and domestic establishments to ensure they  meet required manufacturing standards; such inspections are FDA’s  primary means of assuring that the safety and effectiveness of medical  devices are not jeopardized by poor manufacturing practices.
The Medical Device User Fee and Modernization Act of 2002 (MDUFMA)  addressed concerns about FDA’s ability to meet its responsibilities for  inspecting medical device manufacturing establishments. MDUFMA  included provisions designed to (1) increase the number of inspected  medical device manufacturing establishments and (2) help medical device  manufacturers meet the inspection requirements of both the United States  and foreign countries in a single inspection. Specifically, MDUFMA  required FDA to accredit third-party organizations to conduct inspections  of certain foreign and domestic establishments. In response, FDA  implemented its Accredited Persons Inspection Program, which permits  certain establishments to voluntarily request inspections from third-party  organizations to meet inspectional requirements. In January 2007, we  reported on the status of this program citing, among other things,  concerns regarding its implementation and potential incentives and  disincentives that may influence manufacturers’ participation.  Additionally, in partnership with Health Canada, FDA established in  September 2006 another program for inspection by accredited third  parties—the Pilot Multi-purpose Audit Program (PMAP)—that allows  accredited organizations to conduct a single inspection to meet the  regulatory requirements of both countries.
My remarks today are based primarily on our January 2008 statement,  which updated our January 2007 report, on FDA’s management of its  medical device inspection program and our April 2008 statement on a  number of new FDA initiatives related to foreign inspections of FDA  regulated products, including medical devices. My remarks will focus on  our assessment of (1) FDA’s program for inspecting foreign  establishments that manufacture medical devices for the U.S. market and  (2) FDA’s programs for third-party inspections of foreign medical device  manufacturing establishments.
To address these objectives, we used work completed for our January  2008 statement on FDA’s medical device inspection program, for which we  interviewed officials from FDA’s Center for Devices and Radiological  Health (CDRH) and Office of Regulatory Affairs (ORA), which have  responsibilities for managing the medical device inspection program. To  assess FDA’s program for inspecting foreign establishments that  manufacture medical devices, we obtained information from FDA’s Device  Registration and Listing System (DRLS), as of September 19, 2007; Field  Accomplishments and Compliance Tracking System (FACTS) for fiscal  year 2002 through fiscal year 2007; and Operational and Administrative  System for Import Support (OASIS) for fiscal year 2007. We assessed the  reliability of these data by (1) reviewing existing information about the  data and the databases that produced them, (2) interviewing agency  officials knowledgeable about the data, and (3) performing electronic  testing of data elements from DRLS and FACTS. We found the data in the  FACTS database sufficiently reliable for our purposes. We also found that  DRLS was sufficiently reliable, to the extent that it accurately reflects  information provided by foreign establishments that register to market  medical devices in the United States. However, we determined that these  data do not necessarily reflect the number of establishments that  manufacture medical devices for the U.S. market. In addition, we found  that OASIS is likely to overestimate the number of foreign establishments  whose medical devices have been imported into the United States because  of uncorrected errors in the data. Therefore, we present information from  both DRLS and OASIS to illustrate the variability in information that FDA’s  databases provide on this topic. These data represent the best information  available and are what FDA relies on to manage its foreign medical device  inspection activities. In addition, in preparation for our April 2008  statement, we obtained information from FDA officials to learn about  recent initiatives to improve the agency’s program for inspecting  establishments manufacturing FDA-regulated products, including medical  devices. For today’s statement, we obtained additional data from FDA to  update selected information from our January 2008 statement.
To examine FDA’s programs for third-party inspections of foreign medical  device manufacturing establishments, we updated work completed for our  January 2008 statement. We obtained FDA data on the number of  inspections conducted by accredited third parties from March 11, 2004— the date when FDA first cleared an accredited organization to conduct  inspections—through May 7, 2008. For our January 2008 statement, we  also obtained information from FDA about other critical aspects of its  programs for inspections by accredited third parties. To gain perspective  on recent changes to FDA’s programs for inspections by accredited third  parties, we contacted representatives of the same 13 affected entities we  interviewed for our January 2007 report on this topic. We received  responses from 2 of 4 accredited organizations, 1 of 6 medical device  manufacturers, and 2 of 3 organizations that represent medical device  manufacturers. We shared the facts contained in our current statement  with FDA officials. FDA provided technical comments, which are  appropriately addressed in the testimony. We conducted audit work for  the January 2008 statement from December 2007 to January 2008; for our  April 2008 statement, from March 2008 through April 2008; and updated  our work on medical devices in early May 2008 for this statement. We  conducted this work in accordance with generally accepted government  auditing standards. Those standards require that we plan and perform the  audit to obtain sufficient, appropriate evidence to provide a reasonable  basis for our findings and conclusions based on our audit objectives. We  believe that the evidence obtained provides a reasonable basis for our  findings and conclusions based on our audit objectives.
In summary, we found that FDA faces challenges in its program to inspect  foreign establishments manufacturing medical devices. In January 2008,  we testified that two databases that provide FDA with information about  foreign medical device establishments and the products they manufacture  for the U.S. market contained inaccurate information about establishments  subject to FDA inspection and could not exchange information. Since  then, FDA has made changes to its registration process that could improve  its database and provide the agency with a more accurate count of foreign  establishments that manufacture medical devices. While the agency has  initiated other steps to improve its databases, it is too soon to know if  these changes will improve FDA’s management of its foreign inspection  program. Another challenge is that FDA conducts relatively few  inspections of foreign establishments that manufacture medical devices.  Officials estimated the agency had inspected foreign class II  manufacturers every 27 years and foreign class III manufacturers every   6 years. Finally, inspections of foreign medical device manufacturing  establishments pose unique challenges to FDA, such as difficulties in  recruiting investigators to voluntarily travel to certain countries and in  extending trips if problems are identified during inspections. FDA is  pursuing initiatives that could address some of these challenges, but it is  unclear whether the agency’s proposals will increase the frequency with  which FDA inspects foreign establishments.
Few inspections of foreign medical device manufacturing establishments  have been conducted through FDA’s two programs for inspections by  accredited third parties—the Accredited Persons Inspection Program and  PMAP. Under FDA’s Accredited Persons Inspection Program, from   March 11, 2004—the date when FDA first cleared an accredited  organization to conduct inspections—through May 7, 2008, four  inspections of foreign establishments had been conducted by accredited  organizations. To participate in this program, manufacturers must decide  to request an inspection by an accredited organization, and this decision  might be influenced by both potential incentives and disincentives. An  incentive to participation in the program is the opportunity to reduce the  number of inspections conducted to meet FDA and other countries’  requirements. Disincentives include bearing the cost for the inspection,  particularly when the consequences of an inspection that otherwise may  not occur in the near future could involve regulatory action. The Food and  Drug Administration Amendments Act of 2007 (FDAAA) changed the  requirements for inspections by accredited third parties in several ways,  which could result in increased participation by manufacturers, although it  is too soon to tell. For example, a requirement that foreign establishments  be periodically inspected by FDA before being eligible for third-party  inspections was eliminated. Device manufacturers may also request an  inspection by an accredited third party through PMAP, which was  established on September 7, 2006, and is limited to a partnership with  Canada. As of May 7, 2008, two inspections of foreign establishments had  been conducted by an accredited organization through PMAP. The small  number of inspections completed by accredited third-party organizations  raises questions about the practicality and effectiveness of these programs  to help FDA conduct additional foreign inspections.
subsections: section_title: Background
paragraphs: FDA is responsible for overseeing the safety and effectiveness of medical  devices that are marketed in the United States, whether manufactured in  domestic or foreign establishments. All establishments that manufacture  medical devices for marketing in the United States are required to register  annually with FDA. As part of its efforts to ensure the safety,  effectiveness, and quality of medical devices, FDA is responsible for  inspecting certain foreign and domestic establishments to ensure that,  among other things, they meet manufacturing standards established in  FDA’s quality system regulation. Within FDA, CDRH is responsible for  assuring the safety and effectiveness of medical devices. Among other  things, CDRH works with ORA, which conducts inspections of foreign  establishments. FDA may conduct inspections before and after medical  devices are approved or otherwise cleared to be marketed in the United  States.
Premarket inspections are conducted before FDA approves U.S. marketing  of a new medical device that is not substantially equivalent to one that is  already on the market. Premarket inspections primarily assess  manufacturing facilities, methods, and controls and may verify pertinent  records.
Postmarket inspections are conducted after a medical device has been  approved or otherwise cleared to be marketed in the United States and  include several types of inspections: (1) Quality system inspections are  conducted to assess compliance with applicable FDA regulations,  including the quality system regulation to ensure good manufacturing  practices and the regulation requiring reporting of adverse events. These  inspections may be comprehensive or abbreviated, which differ in the  scope of inspectional activity. Comprehensive postmarket inspections  assess multiple aspects of the manufacturer’s quality system, including  management controls, design controls, corrective and preventative  actions, and production and process controls. Abbreviated postmarket  inspections assess only some of these aspects, but always assess  corrective and preventative actions. (2) For-cause and compliance follow- up inspections are initiated in response to specific information that raises  questions or problems associated with a particular establishment.   (3) Postmarket audit inspections are conducted within 8 to 12 months of a  premarket application’s approval to examine any changes in the design,  manufacturing process, or quality assurance systems.
Requirements governing foreign and domestic inspections differ.  Specifically, FDA is required to inspect domestic establishments that  manufacture class II or III medical devices every 2 years. There is no  comparable requirement to inspect foreign establishments. FDA does not  have authority to require foreign establishments to allow the agency to  inspect their facilities. However, if an FDA request to inspect is denied,  FDA may prevent the importation of medical devices from that foreign  establishment into the United States. In addition, FDA has the authority to  conduct physical examinations of products offered for import and, if there  is sufficient evidence of a violation, prevent their entry at the border.  Unlike food, for which FDA primarily relies on inspections at the border,  physical inspection of manufacturing establishments is a critical  mechanism in FDA’s process to ensure that medical devices are safe and  effective and that manufacturers adhere to good manufacturing practices.
FDA determines which establishments to inspect using a risk-based  strategy. High priority inspections include premarket approval inspections  for class III devices, for-cause inspections, inspections of establishments  that have had a high frequency of device recalls, and other devices and  manufacturers FDA considers high risk. The establishment’s inspection  history may also be considered. A provision in FDAAA may assist FDA in  making decisions about which establishments to inspect because this law  authorizes the agency to accept voluntary submissions of audit reports  addressing manufacturers’ conformance with internationally established  standards for the purpose of setting risk-based inspectional priorities.
FDA’s programs for foreign and domestic inspections by accredited third  parties provide an alternative to the traditional FDA-conducted  comprehensive postmarket quality system inspection for eligible  manufacturers of class II and III medical devices. MDUFMA required FDA  to accredit third persons—which are organizations—to conduct  inspections of certain establishments. In describing this requirement, the  House of Representatives Committee on Energy and Commerce noted that  some manufacturers have faced an increase in the number of inspections  required by foreign countries and that the number of inspections could be  reduced if the manufacturers could contract with a third-party  organization to conduct a single inspection that would satisfy the  requirements of both FDA and foreign countries. Manufacturers that  meet eligibility requirements may request a postmarket inspection by an  FDA-accredited organization. The eligibility criteria for requesting an  inspection of an establishment by an accredited organization include that  the manufacturer markets a medical device in the United States and  markets (or intends to market) a medical device in at least one other  country and that the establishment to be inspected must not have received  warnings for significant deviations from compliance requirements on its  last inspection.
MDUFMA also established minimum requirements for organizations to be  accredited to conduct third-party inspections, including protections  against financial conflicts of interest and assurances of the competence of  the organization to conduct inspections. FDA developed a training  program for inspectors from accredited organizations that involves both  formal classroom training and completion of three joint training  inspections with FDA. Each individual inspector from an accredited  organization must complete all training requirements successfully before  being cleared to conduct independent inspections. FDA relies on  manufacturers to volunteer to host these joint inspections, which count as  FDA postmarket quality system inspections.
A manufacturer that is cleared to have an inspection by an accredited third  party enters an agreement with the approved accredited organization and  schedules an inspection. Once the accredited organization completes its  inspection, it prepares a report and submits it to FDA, which makes the  final assessment of compliance with applicable requirements. FDAAA  added a requirement that accredited organizations notify FDA of any  withdrawal, suspension, restriction, or expiration of certificate of  conformance with quality systems standards (such as those established by  the International Organization for Standardization) for establishments they  inspected for FDA.
In addition to the Accredited Persons Inspection Program, FDA has a  second program for accredited third-party inspections of medical device  establishments. On September 7, 2006, FDA and Health Canada announced  the establishment of PMAP. This pilot program was designed to allow  qualified third-party organizations to perform a single inspection that  would meet the regulatory requirements of both the United States and  Canada. The third-party organizations eligible to conduct inspections  through PMAP are those that FDA accredited for its Accredited Persons  Inspection Program (and that completed all required training for that  program) and that are also authorized to conduct inspections of medical  device establishments for Health Canada. To be eligible to have a third- party inspection through PMAP, manufacturers must meet all criteria  established for the Accredited Persons Inspection Program. As with the  Accredited Persons Inspection Program, manufacturers must apply to  participate and be willing to pay an accredited organization to conduct the  inspection.
FDA relies on multiple databases to manage its program for inspecting  medical device manufacturing establishments.
FDA’s medical device registration and listing database contains  information on domestic and foreign medical device establishments that  have registered with FDA. Establishments that are involved in the  manufacture of medical devices intended for commercial distribution in  the United States are required to register annually with FDA. These  establishments provide information to FDA, such as an establishment’s  name and its address and the medical devices it manufactures. Prior to  October 1, 2007, this information was maintained in DRLS. As of   October 1, 2007, establishments are required to register electronically  through FDA’s Unified Registration and Listing System and certain  medical device establishments pay an annual establishment registration  fee, which in fiscal year 2008 is $1,706.
OASIS contains information on medical devices and other FDA-regulated  products imported into the United States, including information on the  establishment that manufactured the medical device. The information in  OASIS is automatically generated from data managed by Customs and  Border Protection (CBP). These data are originally entered by customs  brokers based on the information available from the importer. CBP  specifies an algorithm by which customs brokers generate a manufacturer  identification number from information about an establishment’s name,  address, and location.
FACTS contains information on FDA’s inspections, including those of  domestic and foreign medical device establishments. FDA investigators  enter information into FACTS following completion of an inspection.
According to FDA data, there are more registered establishments in China  and Germany reporting that they manufacture class II or III medical  devices than in any other foreign countries. Canada and the United  Kingdom also have a large number of registered establishments.
section_title: FDA Faces Challenges Conducting Inspections of Foreign Establishments That Manufacture Medical Devices
paragraphs: FDA faces challenges in its program to inspect foreign establishments  manufacturing medical devices. The databases that provide FDA with data  about the number of foreign establishments manufacturing medical  devices for the U.S. market have not provided it with an accurate count of  foreign establishments for inspection. In addition, FDA conducted  relatively few inspections of foreign establishments. Moreover, inspections  of foreign medical device manufacturing establishments pose unique  challenges to FDA—both in human resources and logistics.
subsections: section_title: FDA Lacks Accurate Data on the Number of Foreign Establishments Subject to Inspection, but Has Made Recent Attempts to Improve Its Data
paragraphs: FDA’s databases on registration and imported medical devices have not  provided an accurate count of establishments subject to inspection,  although recent improvements to FDA’s medical device registration  database may address some weaknesses. In January 2008, we testified that  DRLS provided FDA with information about foreign medical device  establishments and the products they manufacture for the U.S. market.  According to DRLS, as of September 2007, 4,983 foreign establishments  that reported manufacturing a class II or III medical device for the U.S.  market had registered with FDA. However, these data contained  inaccuracies because establishments may register with FDA but not  actually manufacture a medical device or may manufacture a medical  device that is not marketed in the United States. In addition, FDA did not  routinely verify the data within this database.
Recent changes to FDA’s medical device establishment registration  process could improve the accuracy of its database. In fiscal year 2008,  FDA implemented, in addition to its annual user fee, electronic  registration and an active re-registration process for medical device  establishments. According to FDA, about half of previously   registered establishments had reregistered using the new system as of   April 11, 2008. While FDA officials expect that additional establishments  will reregister, they expect that the final result will be the elimination of  establishments that do not manufacture medical devices for the U.S.  market and thus a smaller, more accurate database of medical device  establishments. FDA officials indicated that implementation of electronic  registration and the annual user fee seemed to have improved the data so  FDA can more accurately identify the type of establishment registered, the  devices manufactured at an establishment, and whether or not an  establishment should be registered. According to FDA officials, the  revenue from device registration user fees is applied to the process for the  review of device applications, including premarket inspections.
FDA has also proposed, but not yet implemented, the Foreign Vendor  Registration Verification Program, which could also help improve the  accuracy of information FDA maintains on registered foreign  establishments. Through this program, FDA plans to contract with an  external organization to conduct on-site verification of the registration  data and product listing information of foreign establishments shipping  medical devices and other FDA-regulated products to the United States.  FDA has solicited proposals for this contract, but it is still developing the  specifics of the program. For example, as of April 2008, the agency had not  yet established the criteria it would use to determine which establishments  would be visited for verification purposes or determined how many  establishments it would verify annually. FDA plans to award this contract  in June 2008. Given the early stages of this process, it is too soon to  determine whether this program will improve the accuracy of the data  FDA maintains on foreign medical device establishments.
FDA also obtains information on foreign establishments from OASIS,  which tracks the importation of medical devices and other FDA-regulated  products. While not intended to provide a count of establishments, OASIS  does contain information about the medical devices actually being  imported into the United States and the establishments manufacturing  them. However, inaccuracies in OASIS prevent FDA from using it to  develop a list of establishments subject to inspection. OASIS contains an  inaccurate count of foreign establishments manufacturing medical devices  imported into the United States as a result of unreliable identification  numbers generated by customs brokers when the product is offered for  entry. FDA officials told us that these errors result in the creation of  multiple records for a single establishment, which results in inflated  counts of establishments offering medical devices for entry into the U.S.  market. According to OASIS, in fiscal year 2007, there were as many as  22,008 foreign establishments that manufactured class II medical devices  for the U.S. market and 3,575 foreign establishments that manufactured  class III medical devices for the U.S. market.
FDA has supported a proposal with the potential to address weaknesses in  OASIS, but FDA does not control the implementation of this proposed  change. FDA is pursuing the creation of a governmentwide unique  establishment identifier, as part of the Shared Establishment Data Service  (SEDS), to address these inaccuracies. Rather than relying on the  creation and entry of an identifier at the time of import, SEDS would  provide a unique establishment identifier and a centralized service to  provide commercially verified information about establishments. The  standard identifier would be submitted as part of import entry data when  required by FDA or other government agencies. SEDS could thus eliminate  the problems that have resulted in multiple identifiers associated with an  individual establishment. The implementation of SEDS is dependent on  action from multiple federal agencies, including the integration of the  concept into a CBP import and export system under development and  scheduled for implementation in 2010. In addition, once implemented by  CBP, participating federal agencies would be responsible for bearing the  cost of integrating SEDS with their own operations and systems. FDA  officials are not aware of a specific time line for the implementation of  SEDS. Developing an implementation plan for SEDS was recommended by  the Interagency Working Group on Import Safety.
Although comparing information from its registration and import  databases could help FDA determine the number of foreign establishments  marketing medical devices in the United States, the databases do not  exchange information to be compared electronically and any comparisons  are done manually. FDA is in the process of implementing additional  initiatives to improve the integration of its databases, and these changes  could make it easier for the agency to establish an accurate count of  foreign manufacturing establishments subject to inspection. The agency’s  Mission Accomplishments and Regulatory Compliance Services (MARCS)  is intended to help FDA electronically integrate data from multiple  systems. It is specifically designed to give individual users more complete  information about establishments. FDA officials estimated that MARCS,  which is being implemented in stages, could be fully implemented by 2011  or 2012. However, FDA officials told us that implementation has been slow  because the agency has been forced to shift resources away from MARCS  and toward the maintenance of current systems that are still heavily used,  such as FACTS and OASIS. Taken together, changes to FDA’s databases  could provide the agency with more accurate information on the number  of establishments subject to inspection. However, it is too early to tell  whether this will improve FDA’s management of its inspection program.
section_title: FDA Inspects Relatively Few Foreign Medical Device Establishments
paragraphs: From fiscal year 2002 through fiscal year 2007, FDA inspected relatively  few foreign medical device establishments and primarily inspected  establishments located in the United States. During this period, FDA  conducted an average of 247 foreign establishment inspections each year,  compared to 1,494 inspections of domestic establishments. This average  number of foreign inspections suggests that each year FDA inspects about  6 percent of registered foreign establishments that reported manufacturing  class II or class III medical devices. FDA officials estimated the agency  had inspected foreign class II manufacturers every 27 years and foreign  class III manufacturers every 6 years. The inspected foreign  establishments were in 44 foreign countries and more than two-thirds  were in 10 countries. Most of the countries with the highest number of  inspections were also among those with the largest number of registered  establishments that reported manufacturing class II or III medical devices.  The lowest rate of inspections in these 10 countries was in China, where  64 inspections were conducted in this 6-year period and 568  establishments were registered as of May 6, 2008. (See table 1.)
FDA’s inspections of foreign medical device establishments were primarily  postmarket inspections. While premarket inspections were generally  FDA’s highest priority, relatively few have had to be performed in any  given year. Therefore, FDA focused its resources on postmarket  inspections. From fiscal year 2002 through fiscal year 2007, 89 percent of  the 1,481 foreign establishment inspections were for postmarket purposes.
section_title: FDA Faces Unique Challenges in Conducting Foreign Inspections
paragraphs: Inspections of foreign establishments pose unique challenges to FDA— both in human resources and logistics. FDA does not have a dedicated  cadre of investigators that only conduct foreign medical device  establishment inspections; those staff who inspect foreign establishments  also inspect domestic establishments. Among those qualified to inspect  foreign establishments, FDA relies on staff to volunteer to conduct  inspections. FDA officials told us that it has been difficult to recruit  investigators to voluntarily travel to certain countries. However, they  added that if the agency could not find an individual to volunteer for a  foreign inspection trip, it would mandate the travel. Logistically, foreign  medical device establishment inspections are difficult to extend even if  problems are identified because the trips are scheduled in advance.  Foreign medical device establishment inspections are also logistically  challenging because investigators do not receive independent translational  support from FDA or the State Department and may rely on English- speaking employees of the inspected establishment or the establishment’s  U.S. agent to translate during an inspection.
FDA recently announced proposals to address some of the challenges  unique to conducting foreign inspections, but specific steps toward  implementation and associated time frames are unclear. FDA noted in its  report on revitalizing ORA that it was exploring the creation of a cadre of  investigators who would be dedicated to conducting foreign inspections.  However, the report did not provide any additional details or time frames  about this proposal. In addition, FDA announced plans to establish a  permanent presence overseas, although little information about these  plans is available. FDA intends that its foreign offices will improve  cooperation and information exchange with foreign regulatory bodies,  improve procedures for expanded inspections, allow it to inspect facilities  quickly in an emergency, and facilitate work with private and government  agencies to assure standards for quality. FDA’s proposed foreign offices  are intended to expand the agency’s capacity for overseeing, among other  things, medical devices, drugs, and food that may be imported into the  United States. The extent to which the activities conducted by foreign  offices are relevant to FDA’s foreign medical device inspection program is  uncertain. Initially, FDA plans to establish a foreign office in China with  three locations—Beijing, Shanghai, and Guangzhou—comprised of a total  of eight FDA employees and five Chinese nationals. The Beijing office,  which the agency expects will be partially staffed by the end of 2008, will  be responsible for coordination between FDA and Chinese regulatory  agencies. FDA staff located in Shanghai and Guangzhou, who are to be  hired in 2009, will be focused on conducting inspections and working with  Chinese inspectors to provide training as necessary. FDA noted that the  Chinese nationals will primarily provide support to FDA staff, including  translation and interpretation. The agency is also considering setting up  offices in other locations, such as India, the Middle East, Latin America,  and Europe, but no dates have been specified. While the establishment of  both a foreign inspection cadre and offices overseas have the potential for  improving FDA’s oversight of foreign establishments, it is too early to tell  whether these steps will be effective or will increase the number of foreign  medical device establishment inspections.
section_title: Few Inspections of Foreign Establishments Have Been Conducted Through FDA’s Third- Party Programs, but Recent Changes Could Eliminate Some Obstacles to Manufacturers’ Participation
paragraphs: Few inspections of foreign medical device manufacturing  establishments—a total of six—have been conducted through FDA’s two  accredited third-party inspection programs, the Accredited Persons  Inspection Program and PMAP. FDAAA specified several changes to the  requirements for inspections by accredited third parties that could result  in increased participation by manufacturers.
Few inspections have been conducted through FDA’s Accredited Persons  Inspection Program since March 11, 2004—the date when FDA first  cleared an accredited organization to conduct independent inspections.  Through May 7, 2008, four inspections of foreign establishments had been  conducted independently by accredited organizations.
As of May 7, 2008, 16 third-party organizations were accredited, and  individuals from 8 of these organizations had completed FDA’s training  requirements and been cleared to conduct independent inspections. FDA  and accredited organizations had conducted 44 joint training inspections.  As we previously reported, fewer manufacturers volunteered to host  training inspections than have been needed for all of the accredited  organizations to complete their training, and scheduling these joint  training inspections has been difficult. FDA officials told us that, when  appropriate, staff are instructed to ask manufacturers to host a joint  training inspection at the time they notify the manufacturers of a pending  inspection. FDA schedules inspections a relatively short time prior to an  actual inspection, and as we previously reported, some accredited  organizations have not been able to participate because they had prior  commitments.
We previously reported that manufacturers’ decisions to request an  inspection by an accredited organization might be influenced by both  potential incentives and disincentives. According to FDA officials and  representatives of affected entities, potential incentives to participation  include the opportunity to reduce the number of inspections conducted to  meet FDA and other countries’ requirements. For example, one inspection  conducted by an accredited organization was a single inspection designed  to meet the requirements of FDA, the European Union, and Canada.  Another potential incentive mentioned by FDA officials and  representatives of affected entities is the opportunity to control the  scheduling of the inspection by an accredited organization by working  with the accredited organization. FDA officials and representatives of  affected entities also mentioned potential disincentives to having an  inspection by an accredited organization. These potential disincentives  include bearing the cost for the inspection, doubts about whether  accredited organizations can cover multiple requirements in a single  inspection, and uncertainty about the potential consequences of an  inspection that otherwise may not occur in the near future—consequences  that could involve regulatory action.
Changes specified by FDAAA have the potential to eliminate certain  obstacles to manufacturers’ participation in FDA’s programs for  inspections by accredited third parties that were associated with  manufacturers’ eligibility. For example, a requirement that foreign  establishments be periodically inspected by FDA before being eligible for  third-party inspections was eliminated. Representatives of the two  organizations that represent medical device manufacturers with whom we  spoke about FDAAA told us that the changes in eligibility requirements  could eliminate certain obstacles and therefore potentially increase  manufacturers’ participation. These representatives also noted that key  incentives and disincentives to manufacturers’ participation remain. FDA  officials told us that they were revising their guidance to industry in light  of FDAAA and expected to issue the revised guidance during fiscal   year 2008. It is too soon to tell what impact these changes will have on  manufacturers’ participation.
FDA officials have acknowledged that manufacturers’ participation in the  Accredited Persons Inspection Program has been limited. In   December 2007, FDA established a working group to assess the successes  and failures of this program and to identify ways to increase participation.  Representatives of two organizations that represent medical device  manufacturers told us that they believe manufacturers remain interested  in the Accredited Persons Inspection Program. The representative of one  large, global manufacturer of medical devices told us that it was in the  process of arranging to have 20 of its domestic and foreign device  manufacturing establishments inspected by accredited third parties.
As of May 7, 2008, two inspections of foreign establishments had been  conducted through PMAP, FDA’s second program for inspections by  accredited third parties. Although it is too soon to tell what the benefits of  PMAP will be, the program is more limited than the Accredited Persons  Inspection Program and may pose additional disincentives to participation  by both manufacturers and accredited organizations. Specifically,  inspections through PMAP would be designed to meet the requirements of  the United States and Canada, whereas inspections conducted through the  Accredited Persons Inspection Program could be designed to meet the  requirements of other countries. In addition, two of the five  representatives of affected entities whom we spoke to for our January  2008 statement noted that in contrast to inspections conducted through  the Accredited Persons Inspection Program, inspections conducted  through PMAP could undergo additional review by Health Canada. Health  Canada will review inspection reports submitted through this pilot  program to ensure the inspections meet its standards. This extra review  poses a greater risk of unexpected outcomes for the manufacturer and the  accredited organization, which could be a disincentive to participation in  PMAP that is not present with the Accredited Persons Inspection Program.
section_title: Concluding Observations
paragraphs: Americans depend on FDA to ensure the safety and effectiveness of  medical devices manufactured throughout the world. A variety of medical  devices are manufactured in other countries, including high-risk devices  designed to be implanted or used in invasive procedures. However, FDA  faces challenges in inspecting foreign establishments. Weaknesses in its  database prevent it from accurately identifying foreign establishments  manufacturing medical devices for the United States and prioritizing those  establishments for inspection. In addition, staffing and logistical  difficulties associated with foreign inspections complicate FDA’s ability to  conduct such inspections. The agency has recently taken some positive  steps to improve its foreign inspection program, such as initiating changes  to improve the accuracy of the data it uses to manage this program and  announcing plans to increase its presence overseas. However, it is too  early to tell whether these steps will ultimately enhance the agency’s  ability to select establishments to inspect and increase the number of  foreign establishments inspected. To date, FDA’s programs for inspections  by accredited third parties have not assisted FDA in meeting its regulatory  responsibilities nor have these programs provided a rapid or substantial  increase in the number of inspections performed by these organizations,  as originally intended. Recent statutory changes to the requirements for  inspections by accredited third parties may encourage greater  participation in these programs. However, the lack of meaningful progress  in conducting inspections to this point raises questions about the  practicality and effectiveness of these programs to help FDA conduct  additional foreign inspections.
Mr. Chairman, this completes my prepared statement. I would be happy to  respond to any questions you or the other Members of the subcommittee  may have at this time.
section_title: Contacts and Acknowledgments
paragraphs: For further information about this statement, please contact   Marcia Crosse at (202) 512-7114 or crossem@gao.gov. Contact points for  our Offices of Congressional Relations and Public Affairs may found on  the last page of this statement. Geraldine Redican-Bigott, Assistant  Director; Kristen Joan Anderson; Katherine Clark; William Hadley;  Cathleen Hamann; Julian Klazkin; and Lisa Motley made key contributions  to this statement.
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