Drug Safety: FDA Has Improved Its Foreign Drug Inspection Program, but Needs to Assess the Effectiveness and Staffing of Its Foreign Offices
Published: 2016-12-16T00:00:00

Fast Facts:
Much of the U.S. drug supply is manufactured overseas. FDA inspects drug manufacturing facilities around the world to ensure that their drugs are safe for the U.S. market.
FDA uses a risk-based approach to select which manufacturing establishments to inspect—prioritizing those that make drugs which, if defective, pose the greatest public health risk.
In part to help its inspection efforts, FDA opened offices in China, India, Europe, and Latin America. Yet FDA has not assessed these offices' contributions to drug safety, and nearly half of their authorized positions are unfilled. We made recommendations on how FDA could improve in these areas.

Highlights:
section_title: Why GAO Did This Study
paragraphs: Globalization has complicated FDA's oversight of drugs marketed in the United States. FDA reports that more than 40 percent of finished drugs and 80 percent of active pharmaceutical ingredients are produced overseas. FDA inspects drug manufacturing establishments to ensure that the safety and quality of drugs are not jeopardized by poor manufacturing practices. Beginning in 2008, FDA established foreign offices to obtain better information on products coming from overseas and perform inspections, among other things.
In 2008 and 2010, GAO examined FDA's foreign drug inspection program and recommended it conduct more foreign inspections. In another 2010 report, GAO recommended the agency develop strategic and workforce plans for its foreign offices. GAO was asked to update its work with a focus on FDA's oversight of foreign drug establishments. This study examines (1) enhancements FDA has made to its foreign drug inspection program; and (2) FDA's assessment of its foreign offices, and the challenges they face in ensuring drug safety. GAO analyzed FDA's inspection data from fiscal year 2007 through June 30, 2016; reviewed agency planning documents; and interviewed FDA officials, including former foreign office employees.
section_title: What GAO Found
paragraphs: The Food and Drug Administration (FDA), an agency within the Department of Health and Human Services (HHS), has increased its foreign drug inspections and enhanced its ability to prioritize drug establishments for inspection. The number of foreign inspections has consistently increased each year since fiscal year 2009. Beginning in fiscal year 2015, FDA conducted more foreign than domestic inspections. FDA has also improved the accuracy and completeness of information on its catalog of drug establishments subject to inspection. It has also reduced its catalog of drug establishments with no inspection history to 33 percent of foreign establishments, compared to 64 percent in 2010. However, the number of such establishments remains large, at almost 1,000 of the approximately 3,000 foreign establishments. FDA plans to inspect all of these establishments over the next 3 years.
FDA has not yet assessed its foreign offices' contributions to drug safety. FDA has made progress in its strategic planning for its offices in China, Europe, India, and Latin America, but the lack of an assessment is inconsistent with federal standards for internal controls. Though FDA uses two performance measures to assess the foreign offices—number of medical product inspections and number of collaborative actions—the collaborative action measure does not capture the offices' unique contributions to drug safety. Moreover, the foreign offices face persistently high vacancy rates. As of July 2016, 46 percent of the foreign offices' authorized positions were vacant. Although FDA recently finalized a workforce plan, GAO identified several weaknesses with it. For example, the plan sets a workforce target that applies to both foreign and domestic international program offices, making it difficult to ascertain whether its goal of reducing foreign office staff vacancies is being met.
section_title: What GAO Recommends
paragraphs: GAO recommends that FDA assess the contributions of the foreign offices, and set a goal that distinguishes between the vacancy rates of staff in its foreign offices and those in its domestic international program office. HHS agreed with GAO's recommendations.

section_title: Letter
paragraphs: Oversight of the nation’s drug supply chain has become increasingly  complicated for the Food and Drug Administration (FDA), an agency  within the Department of Health and Human Services (HHS). Much of the  U.S. drug supply is manufactured overseas. FDA estimates that nearly 40  percent of finished drugs and approximately 80 percent of active  pharmaceutical ingredients (API) are manufactured in registered  establishments in more than 150 countries; yet, the agency is responsible  for overseeing the safety and effectiveness of all drugs marketed in the  United States, regardless of where they are produced. As testing a drug  at the border cannot reliably determine whether drugs were manufactured  in compliance with current good manufacturing practice (CGMP)  regulations, FDA conducts several types of inspections of establishments  that manufacture drugs for the U.S. market. FDA began opening offices  around the world in 2008 to obtain better information on the increasing  number of products coming into the United States from overseas, to build  relationships with foreign stakeholders, and to perform inspections.
We have had long-standing concerns with FDA’s role in the increasingly  global pharmaceutical supply chain. In 1998, we reported that FDA had  significant problems managing its foreign inspection data and conducted  infrequent inspections of foreign establishments. Ten years later, in  2008, we determined that, because of inaccurate information in FDA’s  databases, the agency did not know how many foreign drug  establishments were subject to inspection. In addition, we found that FDA  continued to inspect relatively few foreign establishments, and that most  such inspections were performed in response to an application to market  a new drug in the United States, rather than to assess the continued  quality of drugs already on the market. In January 2009, we added  FDA’s oversight of medical products (i.e., drugs and medical devices) to  our High-Risk Series, citing FDA’s inability to ensure the quality of  medical products manufactured overseas as an area of particular  concern. Although we found that FDA was conducting more inspections  of foreign establishments in 2010, we also reported that many  establishments may never have been inspected. We also identified  shortcomings in the operations of the agency’s foreign offices in that year  and again in 2015, raising questions about their effectiveness.
Given the persistent challenge of globalization for FDA, you asked us to  provide an update on the agency’s activities and accomplishments related  to its foreign drug inspection program and the operations of its foreign  offices. This report examines  1.  the enhancements FDA has made to its foreign drug inspection  program in recent years; and  2.  FDA’s assessment of its foreign offices, and the challenges the  foreign offices face in ensuring drug safety.
To examine the enhancements FDA has made to its foreign drug  inspection program in recent years, we reviewed FDA’s process for  prioritizing and selecting establishments for inspections, including  whether it incorporated certain factors into its selection process as  required in 2012 by the Food and Drug Administration Safety and  Innovation Act (FDASIA). We also interviewed FDA officials about the  sources of data the agency uses in this process, including any steps FDA  may have taken to improve the completeness and accuracy of its data on  foreign drug establishments. Additionally, we analyzed data from FDA’s  Field Accomplishments and Compliance Tracking System (FACTS),  which contains information on the number of the agency’s establishment  inspections. Specifically, we examined FACTS data from fiscal year 2010  through June 30, 2016, to determine: (1) the number of foreign and  domestic inspections conducted by FDA, (2) the type of inspections, and  (3) the country in which the inspections took place. We also reviewed  FACTS data presented in one of our prior reports on drug manufacturing  establishment inspections conducted from fiscal years 2007 to 2009. To  assess the reliability of the data from FACTS, we reviewed related  documentation, interviewed knowledgeable agency officials, and  compared the data to published information from the same database. On  the basis of these steps, we found these data sufficiently reliable for the  purposes of our reporting objectives. We also reviewed relevant  documentation related to FDA’s inspections of foreign drug  establishments, including staffing and funding information. To learn more  about FDA’s foreign drug inspection program, including the agency’s  progress toward improving its information on foreign drug establishments  and changes to the agency’s approach to selecting and prioritizing drug  establishment inspections, we interviewed officials from the Office of  Regulatory Affairs (ORA), who are responsible for conducting inspections  of foreign drug establishments, and from the Center for Drug Evaluation  and Research (CDER), who are responsible for determining which  establishments need inspection.
Our work focused on human drugs regulated by CDER and not on most  biologics, medical devices, veterinary medicines, or other items or  products for which FDA conducts inspections. Further, our work focused  on activities related specifically to the foreign drug inspection program. As  part of its oversight of imported drugs, FDA undertakes other activities,  such as working toward international harmonization of regulatory  requirements, which are beyond the scope of our review.
To examine FDA’s assessment of its foreign offices and the challenges  the foreign offices face in contributing to the safety of drugs entering the  United States, we reviewed documents pertaining to the foreign offices  and their activities provided by FDA’s Office of International Programs  (OIP), of which the foreign offices are a part and which is responsible for  overseeing FDA’s overseas activities. Specifically, we examined OIP’s  strategic plan and strategic workforce plan for the foreign offices to  identify the offices’ goals, mission, and desired long-term results. We also  reviewed the operational plans of the foreign offices, which are completed  quarterly by each office and include the performance measures and  targets used to assess their activities. We also reviewed the report of a contractor retained by FDA to develop new performance measures for the  foreign offices, as well as data from FDA’s agency-wide performance  tracking system, including some of the agency’s performance measures  and outcomes. We examined documentation pertaining to FDA’s policies  and procedures for staff deploying to and returning from the foreign  offices, including materials related to the reintegration of staff into FDA’s  domestic offices upon their completion of their terms abroad.
Additionally, we analyzed the most recently complete FDA data on the  number and type of authorized, filled, and vacant positions for each of  OIP’s foreign and domestic offices, as well as data on the number of staff  assigned to the foreign offices on a temporary basis. This included data  on the number of drug inspections conducted by foreign office personnel.  To supplement this information, we interviewed FDA officials in OIP,  which includes the China, India, Latin America, and Europe foreign  offices, as well as officials in CDER and ORA, to obtain information on the  foreign offices’ contributions to drug safety and how these contributions  are assessed by the agency. In addition, we interviewed 13 former foreign  office staff who had responsibilities pertaining to drug safety—including  those who were still with FDA and those who have since left the agency— about their experiences deploying to and working overseas, and, in some  cases, returning to a domestic post with the agency. Finally, to identify  criteria to evaluate FDA’s assessment of its foreign offices’ performances,  we reviewed our previous reports on performance measures and  standards for internal control in the federal government.
We conducted this performance audit from February 2016 to December  2016 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: Several FDA centers and offices play key roles in helping to ensure the  safety and effectiveness of drugs marketed in the United States:
CDER establishes standards for the safety, quality, and effectiveness  of and manufacturing processes for over-the-counter and prescription  drugs.
OIP, which is part of FDA’s Office of Global Regulatory Operations  and Policy, leads, manages, and coordinates FDA’s foreign offices’  activities, such as performing inspections in the countries in which the  offices reside. OIP also engages with international health and  regulatory partners on a variety of issues, including establishing  confidentiality agreements with regulatory counterparts for sharing  information on regulated products, and collaborates with the staff in  FDA’s centers and ORA.
ORA inspects establishments and reviews imported products offered  for entry into the United States to ensure compliance with applicable  laws and regulations, among other things. ORA is also part of FDA’s  Office of Global Regulatory Operations and Policy.
subsections: section_title: Types of Drug Inspections
paragraphs: FDA conducts several types of inspections of drug manufacturing  establishments to protect the drug supply. Drugs manufactured overseas  must generally meet the same statutory and regulatory requirements as  those produced in the United States. CDER and ORA are primarily  responsible for the agency’s human drug inspection program. CDER  requests ORA to inspect both domestic and foreign establishments to  ensure that drugs are produced in conformance with federal statutes and  regulations, including CGMP regulations. ORA investigators (based  domestically and in the foreign offices) and, as needed, laboratory  analysts are responsible for conducting the inspections. Investigators generally conduct three types of drug manufacturing establishment  inspections:  1.  Preapproval inspections of domestic and foreign establishments may  be conducted before FDA approves a new drug to be marketed in the  United States. These inspections are triggered by FDA’s receipt of a  new drug application or an abbreviated new drug application, and  focus on the manufacture of a specific drug. Preapproval inspections  are designed to verify the accuracy and authenticity of the data  contained in these applications to determine that the establishment is  following commitments made in the application. Preapproval  inspections also assess whether the establishment can manufacture  the product in the application in conformance with CGMPs. FDA’s  decision to inspect a particular establishment listed on the application  is based on multiple factors, including the establishment’s compliance  history—that is, the results of previous inspections, product recalls,  and other compliance information—and the attributes of the product  being proposed for manufacture.  2.  Surveillance inspections are conducted at establishments after drugs  are already marketed in the United States and focus on compliance  with system-wide controls for ensuring that the manufacturing  processes produce high-quality drugs. Establishments are prioritized  for surveillance inspections through a process using a risk-based site  selection model. Systems examined during these inspections include  those related to materials, quality control, production, facilities and  equipment, packaging and labeling, and laboratory controls. These  systems may be involved in the manufacture of multiple drugs. FDA  can use the results of a surveillance inspection to make decisions in  the future if the establishment is listed on another application, as the  results of a surveillance inspection can often be generalized to all  drugs manufactured in a similar manner at a particular establishment.  3.  For-cause inspections are conducted to investigate consumer  complaints, reports of product quality defects submitted by consumers  or health care professionals, or indications of potential manufacturing  problems submitted by the manufacturers themselves through field  alert reports, among other reasons. Additionally, these inspections  may also be conducted as follow-up to warning letters or import alerts  issued to manufacturers.
While FDA may conduct a preapproval-only inspection or a surveillance- only inspection, FDA may also conduct an inspection that combines both  preapproval and surveillance inspection components in a single visit to an  establishment.
section_title: FDA’s Process for Prioritizing Establishments for Surveillance Inspection
paragraphs: FDA uses multiple databases to select foreign and domestic  establishments for surveillance inspections, including
The electronic Drug Registration and Listing System (eDRLS)  contains information on foreign and domestic drug establishments that  have registered with FDA to market their drugs in the United States.  Establishments are required to register annually with FDA. Information  in eDRLS includes the company’s name, address, and the drugs they  manufacture for commercial distribution in the United States, as  reported by the establishment.
FACTS contains information on domestic and foreign establishments  inspected by ORA, the type of inspection conducted, and the outcome  of those inspections. Investigators and laboratory analysts enter  information into FACTS following completion of an inspection.
CDER relies on these and other databases to select establishments for  surveillance inspections. CDER primarily uses data from eDRLS, which  provides information on all registered establishments at a given point in  time, and FACTS, which provides information about additional  establishments that may not appear in eDRLS, to annually compile a  catalog of establishments that are to be prioritized for inspection.  Because the establishments to be prioritized are continuously changing  as they begin, stop, or resume marketing products in the United States,  FDA does not maintain a single list of them; rather, the annual catalog  provides a snapshot in time of such establishments. Based on these  databases, as of June 2016, CDER’s catalog consisted of approximately  2,000 domestic and 3,000 foreign drug establishments.
Until 2012, requirements governing FDA’s selection of domestic and  foreign establishments to inspect differed. Until then, FDA was required to  inspect domestic establishments that manufacture drugs marketed in the  United States every 2 years, but there was no comparable requirement  for inspecting foreign establishments. However, FDASIA eliminated this  distinction, instead directing FDA to take a risk-based approach to  inspecting both domestic and foreign drug manufacturing establishments,  consistent with a recommendation we made to FDA in 2008.
To prioritize establishments for surveillance inspections, CDER applies its  risk-based site selection model to its catalog of establishments each year  to identify those establishments (both domestic and foreign) that, based  on the characteristics of the drugs being manufactured, pose the greatest  potential public health risk should they experience a manufacturing  defect. This model analyzes three major factors—facility score, product  score, and time since last inspection—to develop a list of establishments  that FDA considers to be a priority for inspection. Establishments may  also be selected for surveillance inspections for other reasons, such as  FDA’s focus on a particular product. Through this process, CDER  develops a priority list of establishments selected for inspection that is  then ranked and submitted to ORA. To be efficient with its resources,  ORA staff may shift the order of establishments to be inspected on  CDER’s prioritized list based on geographic proximity to other planned  inspection trips.
section_title: FDA’s Foreign Offices
paragraphs: FDA opened its foreign offices in 2008 to engage with foreign  stakeholders to develop information that FDA officials can use to make  better decisions about products manufactured in foreign countries for the  U.S. market. To accomplish this, the foreign offices focus on the following  activities:  1.  establishing relationships with U.S. agencies located overseas and  foreign stakeholders, including regulatory counterparts and industry,  to facilitate collaborations that will streamline and enhance global drug  development and regulation;  2.  gathering better information locally on product manufacturing and  transport to U.S. ports;  3.  expanding FDA’s inspectional capacity to include inspections of FDA- regulated commodities, such as drugs, medical devices, and food  products, conducted by investigators based in the foreign offices; and  4.  providing assistance to strengthen the regulatory systems of FDA’s  foreign counterparts to better assure the safety of the products  manufactured and exported from their countries to the United  States.
Currently, FDA has foreign offices in China, Europe, India, and Latin  America. Some offices have more than one office location, also known as  a post. (See fig. 1.) FDA previously had foreign offices located in Africa  and the Middle East, but these offices have since closed and been  consolidated under the Office of Regional and Country Affairs, an OIP  office based domestically in FDA’s headquarters. For fiscal year 2016,  FDA budgeted approximately $35.2 million for the China, Europe, India,  and Latin America offices, an increase over the $29.9 million budgeted for  them in fiscal year 2009.
As of July 2016, FDA had 29 staff members assigned to work in the  foreign offices, including a director and deputy director in each office. The  offices also have international program and policy analysts who analyze  the impact of foreign issues on FDA programs and activities, and other  staff who are responsible for engaging with foreign stakeholders and  gathering information. There are also investigators who conduct  inspections of establishments manufacturing food or medical products in  the China, India, and Latin America offices. The offices also have locally  employed staff, who are non-U.S. citizens employed by the FDA foreign  offices. Finally, OIP staff based in its domestic offices assist the foreign  offices in addition to performing other duties related to advancing FDA’s  global mission.
FDA foreign office staff are posted overseas for two-year assignments. In  addition, FDA may send staff to the foreign offices to perform temporary  duty assignments of up to 120 days. HHS policy requires that its overseas  staff commit to assignments of no more than 2 years per tour; however,  staff have the option to renew in increments of one or two years, for up to  a total of 6 years in one country, subject to strategic goals and  management concurrence on performance. Staff can then rotate to a new  country, but HHS requires that staff spend no more than 12 consecutive  years overseas before returning to the United States for at least 1 year.
section_title: FDA Has Increased Its Foreign Drug Inspections and Enhanced Its Ability to Prioritize Drug Establishments for Inspection
paragraphs: Since fiscal year 2009, FDA has increased the number of all foreign drug  inspections conducted each year. Additionally, the agency has taken  steps to improve the accuracy and completeness of its catalog of foreign  drug establishments, although FDA still lacks inspection history for 33  percent of this catalog. FDA has also strengthened the management of its  process for prioritizing drug establishments for surveillance inspection, in  particular its risk-based site selection model.
subsections: section_title: FDA Has Increased the Number of Foreign Drug Inspections Since Fiscal Year 2009
paragraphs: FDA has consistently increased the total number of foreign drug  inspections—which include surveillance, preapproval, and for-cause  inspections—conducted each year since fiscal year 2009, as shown in  figure 2. This is consistent with a recommendation we made in 2008,  when we recommended that FDA conduct more inspections to ensure  that foreign drug establishments are inspected at a frequency comparable  to domestic establishments with similar characteristics. Beginning in  fiscal year 2015, FDA conducted more foreign than domestic inspections.
According to FDA officials, the agency has leveraged multiple staff  resources to enable it to increase the number of foreign drug inspections  conducted by the agency in recent years.
ORA investigators based in FDA’s domestic district offices continue to  represent the majority of people participating in FDA’s foreign  inspections (approximately 49 percent of the total number of  inspections conducted).
As we previously reported, though, FDA established a dedicated  foreign drug cadre in January 2009. The group of 15 domestically  based ORA staff exclusively participate in foreign drug inspections.  FDA told us that the agency increased the number of staff assigned to  the foreign cadre to 20 in 2012. Currently, the foreign cadre  represents the next highest percent of staff participating in foreign  inspections (approximately 31 percent of total inspections).
Additionally, the Generic Drug User Fee Amendments Act (GDUFA)  of 2012 authorized FDA to collect user fees from manufacturers of  generic drugs, providing the resources to hire 80 additional  investigators focused on inspecting generic drug manufacturers.  FDA officials said that these investigators have primarily been  assigned to foreign inspections, but during the period we reviewed,  they participated in a relatively small percentage of the total number of  foreign drug inspections conducted (approximately 8 percent of  inspections).
Investigators assigned full-time to FDA’s foreign offices have also  participated in inspections of foreign drug establishments  (approximately 5 percent of inspections).
Since fiscal year 2012, the foreign offices have also made use of  temporary duty assignments from ORA to assist the foreign offices in  completing their work priorities, including inspections. Staff on  temporary duty assignments have participated in approximately 2  percent of foreign drug inspections.
In addition, there are a variety of other FDA staff who, on occasion,  may participate in an inspection if certain subject matter expertise is  needed.
In addition to using various FDA staff to conduct foreign inspections, the  agency has increased funding dedicated to conducting foreign  inspections. According to FDA officials, the agency obligated  approximately $53 million to foreign inspections in fiscal year 2010. This  amount has increased each year since, to $92 million in fiscal year  2015. The average cost of a foreign drug inspection has slightly  decreased over the years. FDA had estimated that the average cost of a  foreign inspection was between $60,000 and $62,500 for fiscal year 2009;  for fiscal year 2015, the average cost was $57,600.
The locations where FDA has conducted foreign inspections have largely  remained the same from what we previously reported. Specifically, FDA  conducted drug inspections in 68 total countries from fiscal year 2010 and  June 30, 2016, with 76 percent of these inspections conducted in 10  countries. Establishments in India were the most frequently inspected,  followed by ones in China and Germany. (See table 1.) This mirrors what  we previously found in 2010.
Since 2009, FDA has changed the types of inspections it primarily  conducts at foreign drug establishments. Specifically, more than half (55  percent) of all foreign inspections conducted from fiscal year 2010  through June 30, 2016, were surveillance-only inspections rather than  preapproval inspections. (See fig. 3.) This is a significant increase since  fiscal year 2009, when we found that 17 percent of foreign inspections  were surveillance inspections, with the vast majority conducted in  response to an application to market a new drug in the United States.  FDA officials acknowledged that foreign inspection priorities had  previously been driven by pending applications for new drugs. However,  this was prior to the enactment of FDASIA, when FDA was required to  inspect all domestic establishments every 2 years, and also before an  increase in funding available for foreign inspections provided for by  generic drug user fees. FDA officials also said the agency eliminated a  policy whereby inspections conducted for preapproval purposes often  drove the selection of foreign establishments for inspections. As a result,  FDA officials said that the selection of foreign establishments for routine  surveillance inspections is now entirely driven by the risk-based site  selection model. (See app. I for information on the number and types of  foreign drug inspections conducted from fiscal year 2010 through June  30, 2016.)
section_title: FDA Has Improved Information on Its Catalog of Foreign Drug Establishments, but Lacks Inspection History on One- Third of Them
paragraphs: Since 2010, FDA has taken steps to improve the accuracy and  completeness of its catalog of foreign drug establishments. These steps  are intended to address what FDA acknowledged as a challenge as early  as 1988, following an internal evaluation that recommended that the  agency develop a comprehensive catalog of all foreign establishments  shipping drugs to the United States that could be used to improve long- range inspection planning and scheduling. We also highlighted this  challenge in our previous reports. Most recently, in 2010, we found that  a majority (64 percent) of foreign establishments in FDA’s catalog may  never have been inspected by the agency. Since then, FDA officials said  that the agency has taken steps to improve the accuracy and  completeness of its catalog by
Requiring establishments to use a unique, numeric identifier. FDASIA  required establishments to provide a unique facility identifier during  their annual registration with FDA, and FDA elected to require  establishments to use the Dun and Bradstreet Data Universal  Numbering System (D-U-N-S®) number. Using this number allows  FDA to automatically validate data from every registration submission  against the Dun and Bradstreet database to ensure the accuracy of  the information. Any mismatch may result in rejection of a registration  submission. The D-U-N-S® number also allows FDA to determine  whether a firm has gone out of business or relocated. FDA officials  said that it has also helped FDA improve the interoperability of the  agency’s data systems that collect or use registered facility  information, as well as the interoperability of other agencies’ systems.
Adding two foreign inventory coordinators in 2013 tasked with  incorporating foreign registrations and annual updates into FDA’s  master inventory. Additionally, these coordinators are responsible for  updating FDA’s inspection data to reflect accurate inventory updates.
Establishing a data governance board to define standards, best  practices, and policies for inventory data management. According to  FDA officials, the governance board, which was created in May 2015,  meets biweekly to examine the databases responsible for storing  information about drug establishments. Officials said the board has  developed guidance for merging data processes and is working  toward defining data metrics to determine whether they have  improved on their reporting. The board has also defined data  standards for storing key attributes of establishments, such as  companies’ names, and continues to examine best practices for  sharing establishment data across FDA.
As a result of these steps, FDA has reduced its catalog of establishments  that may never have had a surveillance inspection. Currently, FDA lacks  information on the inspection history of 33 percent of the foreign  establishments in its catalog, compared to the 64 percent for which it  lacked inspection history in 2010. According to FDA officials, the  establishments that are subject to inspections are continuously changing.  For example, they said that some of the establishments without an  inspection history may be newly registered with the agency, thus  accounting for their lack of an inspection history; others could be  establishments that are not subject to inspection, such as those that may  have gone out of business or that have never shipped products to the  United States. Although this may be the case for some—or even many— of these establishments, the fact remains that FDA does not know  whether or for how long these establishments have or may have supplied  drugs to the U.S. market, and has little other information about them.  While the agency has made progress in reducing this knowledge gap, it is  important to note that the overall number of foreign establishments with  no surveillance inspection history (about 1,000 of the approximately  3,000) remains large. (See app. II for information on the numbers and  locations of the establishments for which FDA lacks an inspection  history.)
To address this persistent concern, the agency plans to inspect all  establishments in its catalog with no prior surveillance inspection history  over the next 3 years (approximately one-third each year), beginning in  fiscal year 2017. FDA will consider these establishments’ risk scores as  determined by the agency’s risk-based site selection model to prioritize  them for inspection, starting with those establishments having the highest  risk scores. Some recent FDA inspections have uncovered significant  issues at foreign drug manufacturing establishments, including raw  material storage rooms that had never been cleaned and the presence of  pests in a controlled processing area, underscoring the importance for  FDA to fill this knowledge gap.
section_title: FDA Has Strengthened the Management of Its Risk-Based Site Selection Model
paragraphs: FDA has strengthened the management of its process for selecting drug  establishments (domestic and foreign) for surveillance inspection. First,  FDA generated a combined list of foreign and domestic establishments  for use with the fiscal year 2016 risk-based sited selection model. Using a  combined list of establishments with the risk-based site selection model  reflects the agency’s full implementation of the 2012 FDASIA provision  that directed FDA to take a risk-based approach to inspecting both foreign  and domestic establishments. This is also consistent with a  recommendation we made to the agency in 2008. For fiscal year 2016  and beyond, FDA officials said that ORA will only select establishments  for surveillance inspection from the combined prioritized list—beginning  with those establishments with the highest risk score, regardless of  whether they are foreign or domestic—until they have exhausted their  surveillance inspection capacity for that year. Prior to fiscal year 2016,  foreign and domestic establishments were selected for inspection from  separate prioritized lists, and in different manners. As a result, during  this time, FDA officials said that a one-for-one match between the lists of  foreign establishments prioritized for inspection and the final list of actual  inspections conducted would be unlikely. Officials said that the prioritized  lists of foreign establishments for fiscal year 2010 through fiscal year  2015 provided a framework for planning surveillance inspections, but that  ORA was given discretion as to which specific establishments from the  priority list would be inspected each year. Collectively, FDA officials said  that the results from the priority list, the needs of the centers, and any  unforeseen events dictated the final list of foreign establishments  inspected prior to fiscal year 2016, and the final list could differ from the  priority list generated by the risk-based site selection model.
Second, in 2015, the agency formalized its process for selecting  establishments for inspection according to an establishment’s known  safety risks, based on certain risk factors specified by FDASIA. These  factors are an establishment’s compliance history, recall history, inherent  product risk, inspection frequency and history, and whether the  establishment has been inspected by a foreign government or agency.  FDA officials said that the agency has long considered certain FDASIA  factors in selecting establishments to inspect, such as an establishment’s  inspection history. However, its risk-based site selection model has  become increasingly sophisticated in factoring in specific details about  establishments, the products they make, and other elements into the site  selection process. Officials acknowledged that FDA cannot yet  systematically determine whether an establishment has been subject to  inspection by a foreign government or agency, because this requires the  agency to negotiate agreements with foreign regulators to obtain  meaningful foreign inspection results. Officials stated that FDA is in the  process of doing so. However, FDA has been working on pursuing such  agreements and determining how they may help the agency to assess the  risk of foreign establishments when prioritizing them for almost a  decade. As they continue to explore these agreements, FDA officials  said the agency does, on a case-by-case basis, review and exchange  information with certain foreign regulators, which may result in the agency  re-prioritizing its inspection schedule to address emergent issues.
Third, in fiscal year 2017, FDA plans for the first time to allow no more  than 5 years to elapse between surveillance inspections at a specific  establishment. That is, if an establishment included in FDA’s catalog of  establishments subject to inspection has not been inspected in 4 years,  the establishment is automatically included on the inspection list for the  fifth year. According to FDA officials, the agency previously did not  include a “hard stop” of a predetermined time in its model. For fiscal year  2017, after FDA inspects one-third of the establishments with no  inspection history the agency will prioritize for inspection these  establishments that have not had a surveillance inspection within the past  5 years. Once these inspections are completed, FDA plans to inspect  establishments that were prioritized by the risk-based site selection model  through its annual process. Should FDA complete inspections of all of the  establishments prioritized through the risk-based site selection model, the  agency plans to conduct additional inspections of as many of the  remaining two-thirds of establishments with no inspection history as  possible, given remaining inspection resources.
Fourth, FDA recently formalized its process for developing, evaluating,  and documenting key decisions about its model each year. Prior to this  effort, FDA lacked a formal approach to evaluating its model and  documenting key decisions. As a result, in some cases, FDA was unable  to recall or explain how the model—or the process to update it—had  changed over time. Officials said that our prior reviews reinforced the  need for a written procedure and a formal governance structure to  support the development of the risk-based site selection model. In fiscal  year 2016, FDA instituted a formalized process for developing and  evaluating its fiscal year 2017 model and documenting key decisions  made as a result of this evaluation. As part of this process, FDA created a  review board that features multiple levels of input of the model’s design  from FDA experts and senior management, and in October 2016 finalized  a document that outlines roles and responsibilities related to the model,  and that indicates how it is to be annually updated and implemented. FDA  also incorporated best practices learned from its first experience using the  review board to guide the development of the model. Officials said the  document, going forward, will chronicle the decisions officials make  regarding which factors were included in the model for a particular year  and why. FDA’s formalized process for evaluating and updating its risk- based site selection model may improve the agency’s ability to monitor  whether establishments that pose the greatest risk to public health, were  they not to comply with CGMPs, are being selected for inspection. FDA is  performing monitoring activities through its formalized process by  annually updating the factors and weights included in the model through  its newly formalized governance structure. This process allows subject  matter experts to provide input each year on the relative importance of  each factor and whether the factor should be included in the model.
section_title: FDA Has Not Yet Assessed Its Foreign Offices’ Contributions to Drug Safety, and Their Efforts are Impeded by High Vacancy Rates
paragraphs: FDA has begun to take steps to enhance the agency’s strategic planning  for the foreign offices and has developed two performance measures.  However, FDA could not readily cite the effectiveness of the offices’  contributions, which began opening in 2008. High vacancy rates in the  foreign offices threaten to impede the offices’ efforts to ensure drug  safety.
subsections: section_title: FDA Has Made Progress in Strategic Planning for Its Foreign Offices
paragraphs: FDA has made progress in its strategic planning efforts for its foreign  offices since we last reported on them in 2010. For example, FDA has  standardized how the foreign offices relay information about their  activities. Specifically, each foreign office now completes an annual  operational plan—updated quarterly—to ensure their activities are  consistently reported and to facilitate tracking the outcomes of their  efforts. Foreign office officials said that they worked closely together to  align the core activities listed in the operational plans with OIP’s strategic  goals to improve officials’ understanding of how each foreign office  contributes to fulfilling OIP’s mission of helping protect public health. For  example, the plans include examples of activities related to data  gathering, analysis, and information sharing, which support one of OIP’s  strategic goals of collecting and sharing intelligence and information.  Officials said they use the operational plans to track whether the foreign  offices’ annual accomplishments are fulfilling OIP’s goals, and noted that  having a common operational plan across the offices allows for a  common language amongst officials when discussing their efforts.
In addition, FDA officials noted they have taken the step of convening the  foreign office directors and deputy directors at FDA headquarters at least  once a year since 2010 to discuss their ongoing efforts and exchange  best practices with each other, with the most recent convening occurring  in April 2016. FDA officials also said that communication between the  foreign offices and other FDA offices, including CDER and ORA, has  increased over the years. For example, officials told us that OIP  management and the foreign office directors and deputy directors have  been meeting three times per month to ensure that the foreign offices are  obtaining the types of information that would be most helpful in ensuring  the safety of drugs entering the United States.
section_title: Since 2010, FDA Has Developed Two Performance Measures, but They Do Not Meaningfully Assess the Foreign Offices’ Contributions to Drug Safety
paragraphs: FDA has begun to take steps in response to two recommendations we  previously made to enhance the agency’s strategic planning for the  foreign offices. Specifically, we recommended in 2010 that FDA develop  (1) performance goals and measures that can be used to demonstrate the  offices’ contributions to long-term outcomes related to imported FDA- regulated products; and (2) a strategic workforce plan for the foreign  offices to help ensure that the agency is able to recruit and retain staff  with the experience and skills necessary for the foreign offices, and to  reintegrate returning staff from overseas into FDA’s domestic offices.  Since then, OIP has developed two performance measures with  established targets—number of inspections conducted by full-time  medical product investigators at foreign offices and number of  collaborative actions by OIP—that are used to assess the foreign offices’  contributions. According to FDA, the agency met its collective targets for  these measures for fiscal year 2015.
First, regarding the number of inspections by foreign office staff, FDA set  a performance measure in fiscal year 2016 for full-time medical product  investigators assigned to the China, India, and Latin America offices for  each to conduct 15 medical product inspections. In other words, if there  were two medical product investigators assigned to the China office, their  target for the year would be 30 medical product inspections. Moreover,  according to FDA, this goal applies to not only drugs, but all FDA medical  product inspections, including medical devices and bioresearch  monitoring inspections. There is not a specific “drug inspection”  performance measure, although in practice, foreign office investigators  are assigned a specific commodity (for example, food, drugs, or medical  devices) to inspect. Depending on the current staffing composition,  foreign office investigators could meet their target of 15 medical product  inspections by inspecting establishments manufacturing medical products  other than drugs.
Although FDA opened foreign offices abroad, in part, to help improve  FDA’s capacity to conduct foreign inspections, the staff in those offices  have conducted relatively few drug inspections since fiscal year 2010.  Specifically, of the total number of drug inspections conducted between  fiscal year 2010 and June 30, 2016 (4,384), investigators assigned full- time to the foreign offices participated in 241 (5 percent) of these  inspections. The total number of drug inspections conducted each year by  these full-time investigators ranged from 29 to 52, with the India office  investigators conducting about two-thirds of the total number of  inspections. See table 2 for more information on the number of drug  inspections conducted by the foreign offices in India, China, and Latin  America.
We previously reported in 2010 that FDA did not have a goal for how  many inspections it would like foreign office investigators to conduct— although this has since changed with its inspection targets—but that the  agency would like to see overall increases in the number of inspections  conducted in both China and India. However, in the case of drug  inspections, this goal has not yet been fully realized, as the number of  inspections conducted by the India office has decreased since fiscal year  2013 and the number of inspections conducted by the China office has  only just reached a new high in fiscal year 2016. We understand and  previously reported that the China office had difficulty in obtaining visas  from the Chinese government for its staff to deploy overseas for several  years, which may have contributed to the low number of inspections  conducted by the office during these years. FDA appears to have been able to overcome this particular challenge in 2014, and FDA officials told  us there has been an overall increase in the total number of authorized  foreign office staff who can perform foreign inspections since we reported  in 2010. Specifically, in 2010 there were four investigators in the China  office and three in the India office. As of July 2016, there were 11 of 18  authorized investigators in China, 3 of 13 authorized investigators in  India, and 1 of 2 authorized investigators in the Latin America office,  although these additional investigators may be conducting inspections of  establishments that manufacture other FDA-regulated products, such as  food. For example, according to FDA, in fiscal year 2015, foreign office  investigators conducted 150 inspections of food establishments; 79  medical product inspections; and 8 veterinary medicine inspections; for a  total of 237 inspections. FDA has also authorized 18 additional  investigators for its foreign offices that the agency has yet to fill and of  which at least 9 are intended to be assigned to performing drug  inspections.
Drug inspections may also be conducted by temporary duty staff who are  deployed to the foreign offices for 30-, 60-, 90-, or 120-day assignments  to, in part, supplement the number of inspections conducted by the  foreign offices. From fiscal year 2012, when staff began serving  temporary duty in the foreign offices, through June 30, 2016, these staff  participated in an additional 105 foreign drug inspections—bringing the  total number of inspections in which full-time and temporary foreign office  staff participated to 346. (For more information on the number of foreign  drug inspections temporary duty staff have performed by year, see app.  III.)
Regarding the second measure, collaborative actions, FDA set a target of  completing 25 such actions for all of OIP for fiscal year 2016, according to  FDA officials. The outcomes of this measure have been tracked internally  by OIP since fiscal year 2014, when the measure was first implemented.  OIP officials told us they use specific criteria to determine whether an  activity qualifies as a collaborative action. For example, activities qualify  only if they include collaboration with an external stakeholder or U.S.  government agency other than FDA. Similarly, inspections conducted by  foreign office investigators are excluded (as these are tracked separately)  unless a foreign regulatory counterpart participates in the inspection with  FDA staff. In addition, activities are excluded if no tangible deliverable or  result was identified. FDA reported exceeding its goal of 25 collaborative  actions in fiscal year 2015 by 2, for a total of 27 collaborative actions.
We identified shortcomings with using the collaborative action measure to  assess the foreign offices’ performances. First, the measure and its target  are not unique to the foreign offices. According to FDA officials, this  measure applies to all of OIP’s offices—both foreign and domestic. When  asked about its decision to expand this target to all of OIP, rather than  specifically focusing on the foreign offices, officials said that they prefer to  adopt a holistic approach to assessing OIP’s contributions. However, in  adopting this approach, the measure does not reflect the unique  contributions of the foreign offices as they are not distinguished from  those made by OIP as a whole. Second, the target of 25 collaborative  actions for all OIP does not necessarily target actions that are specific to  drug safety-related efforts. FDA officials said the efforts could be focused  on any commodity regulated by FDA, such as food and medical devices,  meaning that the target could potentially be met without performing a  single activity related to enhancing drug safety. Third, the measure is not  expressed in terms of an end outcome. End outcomes are the results of  programs and activities compared to their intended purpose. In this  case, FDA’s collaborative action measure is not expressed in terms of the  foreign offices’ purpose of enhancing drug safety. Furthermore, FDA  officials—those in the foreign offices who engage in collaborative actions  and those at FDA headquarters—acknowledge that it can be difficult to  link the results of a foreign office’s actions to enhanced drug safety.
Beyond the shortcomings of the collaborative action measure, FDA could  not readily cite the overall effectiveness of the offices’ contributions, and it  has not completed a thorough assessment of their accomplishments,  despite the implementation of the two performance measures within the  last six years. Standards for internal control in the federal government call  for agencies to have control activities that are designed appropriately to  (1) conduct top-level reviews of actual performance, (2) review activities  at the activity level, and (3) review performance measures and  indicators. While the foreign office staff may be engaged in meaningful  activities, the activities cannot be systematically tracked by FDA using the  two performance measures currently in place nor, according to officials,  does the agency have a process in place to formally assess the offices’  contributions. For example, FDA has not systematically tracked how  information obtained from the foreign offices, and subsequently shared  with FDA’s centers and offices, contributed to increased drug safety, as  such information would only be tracked if obtained in collaboration with  foreign stakeholders. Additionally, FDA’s two current performance  measures do not capture a range of activities specifically undertaken by  the foreign offices that resulted in drug safety related outcomes. Such  outcomes could include additional inspections of foreign establishments  in their host countries, warning letters to manufacturers in violation of  CGMPs, or import alerts for products that appear in violation of FDA  regulations. However, we found that the foreign offices were engaging in  activities that produced potentially positive outcomes. When asked, FDA  officials provided us with the following examples:  In 2012, the India office discovered that an Indian establishment had  manufactured and distributed API from one of its sites without fulfilling  FDA’s registration requirements. The India office shared this  information with FDA’s domestic offices and received concurrence to  conduct an inspection at the firm’s unregistered establishment, along  with the firm’s establishment that was registered with FDA.  Inspections at both establishments revealed significant CGMP  deficiencies. As a result, FDA issued a warning letter to the firm  emphasizing the deficiencies and criticizing, among other things, its  lack of oversight. Both establishments are on import alert.
In 2013, the India office collected intelligence about an Indian  company manufacturing APIs that had been linked to deaths in  another country. The company and an affiliate were thought to be  manufacturing sub-standard and fraudulent APIs, although FDA could  not corroborate this through its own inspections since the U.S.  embassy prohibited the agency from doing so due to security  concerns. However, the India office followed up with the local  government and obtained information about the company’s  establishments from the local government inspections. The local  government in India had found the company not complying with  CGMPs. As a result of the India office’s intelligence gathering, the  company and its affiliate were placed on import alert.  (See app. IV for examples of activities from each foreign office that may  have helped ensure the safety of drugs entering the United States.)
However, positive examples such as these are not systematically tracked  as they do not meet FDA’s criteria of what constitutes a collaborative  action. FDA’s exclusion of activities that may enhance drug safety  because they must be performed with a foreign counterpart or other U.S.  government agency, for example, is not adequate as it does not include  accomplishments made exclusively by foreign office staff, and leaves the  agency with no reason to track them. While foreign office investigators  have participated in for-cause inspections, for example, FDA officials said  there is no tracking of the foreign offices’ actions that led to such  inspections in the first place. Therefore, if foreign office staff collect and  share intelligence about an establishment in a host country with  domestically based FDA staff that results in an action, which spurs a for- cause inspection or detaining a product at the border, this contribution is  not assessed by any performance measure. An internal evaluation  completed by FDA’s Office of Planning in July 2016 similarly described  the need for the foreign offices to make efforts to measure their benefits  by recording instances of, for example, shortened recall time, signed  FDA-relevant treaties, and other outcome measures. Without tracking  how information collected by the foreign offices has resulted in these  types of outcomes, FDA does not have reasonable assurance that the  foreign offices’ activities have helped ensure the safety of drugs entering  the United States.
Furthermore, without evidence on the types of outcomes that resulted  from information collected by the foreign offices, FDA cannot consider  these outcomes and plan accordingly as the agency continues to test new  performance measures for the foreign offices. FDA also cannot ensure  that it has the correct number of staff deployed with the appropriate skills  to perform such activities and enable the foreign offices to help fulfill  FDA’s mission overseas. FDA officials explained to us that the foreign  offices have not existed for very long and that the changes and progress  they have undergone since opening have been “remarkable.” However,  the limitations of FDA’s two current performance measures to  demonstrate such contributions reinforces the need for FDA to continue  exploring new performance measures that will better assess the  contributions of the foreign offices. FDA’s July 2016 internal evaluation  also described the need for OIP to establish performance measures that  are aligned with selected outcomes for each foreign office, and that are  tracked on a consistent basis to allow for continuous improvement and  management oversight. FDA officials said they are considering using five  other measures to assess the performance of its foreign offices that are  currently included in the foreign offices’ operational plans. However, these  measures have not yet been adopted. FDA considered these measures  to be in the testing phase for fiscal year 2016, and said it plans to  evaluate them in fiscal year 2017.
section_title: FDA Continues to Experience High Vacancy Rates in Its Foreign Offices, Limiting Its Ability to Ensure Drug Safety
paragraphs: Persistently high vacancy rates in FDA’s foreign offices threaten to  impede the offices’ efforts to ensure drug safety. Our concerns extend  back to 2010, when we reported that FDA had experienced challenges in  staffing some of the foreign offices. For example, at that time, FDA had 2  vacant staff positions in the Latin America office out of a total of 14  positions (14 percent), and 4 vacancies in the India office out of a total of  15 positions (27 percent). In subsequent years, the number of vacancies  in the foreign offices has increased. We later found that these rates were  considerably higher—44 percent overall—as of October 2014. This high  vacancy rate has persisted. As of July 2016, the foreign offices were  authorized to have 54 full-time positions overseas, but 25 of these  positions (46 percent) were vacant. The India office has the highest  vacancy rate at 68 percent (13 vacancies), followed by the Latin America  office at 43 percent (3 vacancies), the Europe office at 33 percent (1  vacancy), and the China office at 32 percent (8 vacancies). (See fig. 4 for  an analysis of vacancies by foreign office.)
Across all foreign offices, the position with the greatest proportion of  vacancies is international program policy analysts, who analyze the  impact of foreign issues on FDA programs and activities (6 of 10  authorized positions are vacant), followed by investigators, who conduct  inspections (18 of 33 authorized positions are vacant). (See table 3.)
Given that one of the reasons for opening the foreign offices was to  conduct inspections, the large number of vacant investigators is  concerning. FDA officials have stressed that there are significant benefits  to having investigators stationed overseas. For example, officials noted  that foreign office investigators can remain at an inspection site longer, if  necessary, as they are not limited by travel arrangements to return to the  United States. They can also initiate for-cause inspections more quickly  than their domestic counterparts, as they are already in country. Former  foreign office staff that we spoke with noted that the ability of foreign  office investigators to conduct inspections quickly in response to  emergencies is a great advantage of having FDA offices overseas.  Former foreign office staff also said that it was valuable for investigators  to be able to focus on their host country’s manufacturers, and to better  understand how they satisfy CGMPs or their difficulties with doing so.
FDA acknowledged that recruiting and hiring staff for OIP, especially for  the foreign offices, can be challenging, but that it is critical for achieving  FDA’s global mission. FDA’s Office of Planning recently proposed a  process for selecting foreign office locations and determining the correct  mix of staffing and position types for them. However, the Office of  Planning’s proposal did not contain suggestions for overcoming high  vacancy rates in the foreign offices.  OIP has yet to implement this  proposed process. OIP officials based in the United States and in the  foreign offices cited several factors contributing to the foreign offices’  persistently high vacancy rate. Although some of these factors may be  beyond the agency’s ability to resolve, others are issues we cited in our  2010 and 2015 reports that continue to challenge FDA. Specifically,  FDA officials said the following factors contribute to FDA’s difficulty in  filling its full-time positions overseas:
Length of time to be cleared for deployment: Officials estimated that it  takes approximately 9 to 12 months to complete the overseas  deployment process, which includes, among other things, obtaining  the appropriate security clearance for the employee, as well as  medical clearances for the employee and any dependents who will be  accompanying the employee overseas. Former foreign office staff that  we spoke with confirmed that the deployment process could be quite  lengthy, and two former staff specifically mentioned experiencing  challenges navigating the process. We reported on these challenges  in both 2010 and 2015. FDA officials explained that there is little  they can do to expedite this timeframe given the length of time  involved to obtain necessary security and medical clearances required  to work abroad. Furthermore, the process involves other government  stakeholders, such as the Department of State, which is responsible  for the medical clearances, limiting FDA’s ability to control the  deployment timeframe.
Reintegration into FDA’s domestic offices: Our discussions with  former foreign office staff who have since returned to FDA’s domestic  offices or left the agency following their time spent overseas confirm  that challenges reintegrating into FDA persist. For example, some  former foreign office staff reported having to find a job in a domestic  office on their own, or who faced considerable uncertainty about what  their new role in the agency would be. Several also noted that the  skills they developed abroad were not being leveraged, and indicated  that there was no effort by FDA management or OIP to debrief them  upon their return. For example, a former policy analyst said he  developed a unique set of skills for working with foreign regulators on  potential drug safety issues that were no longer being leveraged by  the agency once he returned to a domestic position. A former  investigator, meanwhile, said he had developed a unique set of skills  for determining whether establishments were falsifying their records,  but it was unclear how he could best share these skills with other  investigators upon his return to the United States. We reported on  concerns about such challenges in both 2010 and 2015, and  recommended in 2010 that FDA develop a strategic workforce plan to,  in part, help ensure that the agency was able to reintegrate returning  foreign office staff into FDA’s domestic offices. FDA developed and  finalized such a plan in 2016, and prior to this implemented a formal  reintegration policy in 2015. However, FDA officials have not been  formally debriefing returning foreign office staff. Of the 13 former  foreign office staff we interviewed, only 3 of them reported being  debriefed by OIP. When asked why OIP has not debriefed with  returning foreign office staff, FDA officials said that they are  developing a formal exit interview process for returning staff to be  implemented in fiscal year 2017. However, officials also said that the  offices are still “young and evolving,” despite having been in operation  for eight years. These challenges may discourage FDA officials from  applying for a foreign office position and thus contribute to the foreign  offices’ vacancies.
Financial concerns: Our discussions with former foreign office staff  also show that financial concerns with working overseas persist. For  example, FDA staff posted overseas do not receive locality pay, so  staff may have a reduction in their purchasing power when they are  assigned to a foreign office. However, staff at certain locations may  receive hardship pay, a cost of living adjustment, and other benefits.  We reported on this challenge in 2010. Additionally, staff may  experience an increase in pay when they move overseas and may  receive a promotion while abroad, but such pay increases and  promotions are considered temporary and staff must return to their  original salaries and roles when they return to the United States.  Some former foreign office staff said that these temporary promotions  were disincentives to working overseas. When asked about this issue,  FDA officials said they are considering how the agency might be able  to make the promotions permanent by taking into account experience  gained while working overseas.
Environmental and security concerns: FDA has noted that some of  FDA’s foreign offices are in countries that make recruitment difficult  due to environmental concerns (such as poor air quality) or security  concerns (such as dangerous locations). Although hardship pay  accompanies some of these places, staff may still be hesitant to live in  these locations for extended periods of time. We reported on this  challenge in 2010.
Personal reasons: Officials said that personal reasons affect the  willingness of staff to spend time living overseas, such as whether  spouses will be able to find a job abroad and concerns about the  educational opportunities available for their children.
Unfamiliarity with FDA’s global mission: According to FDA officials,  some FDA staff do not fully understand FDA’s global mission and the  importance of FDA’s presence overseas. Over the years, FDA has  been transforming from a domestically focused agency operating in a  globalized economy to an agency operating in a regulatory  environment that functions across borders. FDA noted that some  agencies, such as the Centers for Disease Control and Prevention,  have a longstanding foreign presence. In contrast, FDA’s foreign  posts are still relatively new, which presents a number of challenges,  the agency noted. FDA officials described some of their recruitment  efforts aimed at educating staff about its increasingly global mission.  For example, the foreign offices have published blog postings  highlighting the activities of their offices overseas and how they  contribute to FDA’s mission. FDA officials also told us they have met  with selected FDA staff located across the country to advocate foreign  offices as career considerations.
Another step FDA has taken to help reduce its vacancy rates in its foreign  offices is to encourage staff to apply for a temporary duty rotation of 30-,  60-, 90-, or 120-days. In addition to helping the offices fulfill their mission,  according to FDA, these rotations are a recruitment mechanism that  allows staff to experience working overseas in the hope that they will  eventually apply for a full-time position in a foreign office. Since 2011, 37  FDA staff have completed at least one drug-related temporary rotation in  an FDA foreign office—some of these people completed more than one  rotation. Of these 37 staff, 9 (24 percent) went on to work in a full-time  position overseas.
In addition, to address these challenges, OIP finalized its strategic  workforce plan in March 2016. The plan offers a strategic and long-term  view of the challenges OIP faces, and addresses the agency’s plan to  recruit, hire, retain, and develop employees with the skills and abilities to  fulfill the agency’s global mission, consistent with a recommendation we  made in 2010. We previously recommended that FDA develop a  strategic workforce plan to help ensure that the agency was able to recruit  and retain staff with the experience and skills necessary for the foreign  offices, and to reintegrate returning foreign office staff into FDA’s  domestic offices. The plan outlines OIP’s activities, performance  measures, and timeline for addressing its workforce planning challenges.  The activities are categorized by specific focus areas and include, for  example, developing a hiring strategy, ensuring that employees  separating from the agency participate in exit surveys to determine  actions for improving retention, establishing a succession plan for  anticipated vacancies, and working to maximize a returning foreign office  employee’s new skill set from his or her deployment. FDA’s workforce  plan also addresses reintegration challenges and determining how the  agency can better leverage the skills staff develop while working abroad,  which reflects concerns expressed to us by former foreign office staff. For  example, one activity in the workforce plan is to evaluate FDA’s new  reintegration policy, which the agency issued in 2015, to determine  whether it can be made more strategic and career enhancing for  overseas deployment. Given that this plan has been recently developed,  FDA has yet to evaluate it, but plans to do so in fiscal year 2017, and, if  necessary, revise the activities or performance measures specified in the  plan.
We reviewed OIP’s workforce plan and identified concerns with some of  the six performance measures OIP developed for the focus areas it plans  to assess first. For example, the recruitment and hiring performance  measure calls for OIP to reduce its vacancy rate by 5 percent—taking it  from 32 percent (its vacancy rate at the conclusion of fiscal year 2015) to  27 percent at the beginning of fiscal year 2017. However, this goal is not  targeted to the vacancy rates in the foreign offices. Instead, the measure  targets the OIP-wide vacancy rate. As of July 2016, OIP’s domestic  offices had a vacancy rate of 34 percent, in contrast to the foreign offices’  collective vacancy rate of 46 percent. Because the 5 percent reduction to  OIP’s vacancy rate is a combined goal for both domestic and foreign  offices, OIP could theoretically hire 8 new staff members in its domestic  offices and achieve its goal without reducing any vacancies in the foreign  offices.
Meanwhile, the development of a concept paper on how FDA can better  leverage the skills of employees returning from overseas, intended as the  reintegration performance measure, is a positive step, but it does not  constitute a performance measure. It may serve as a guide, but it does  not measure FDA’s outcomes in this area. Some of the other  performance measures identified by FDA also do not measure outcomes.  For example, the implementation of a new employee orientation program  may help new foreign office staff better acclimate to their new positions,  but such a program does not measure outcomes in this area.
A final concern with the workforce plan is that it does not take into  account the recommendations of the 2016 internal evaluation of the  foreign offices or the summaries of the operating states and workforce  compositions of the China, Europe, India, and Latin American offices that  were completed in 2014. For example, the workforce plan does not reflect  the recommended foreign office staffing and position types specified in  the 2016 evaluation, or address how these specifications might be  achieved.
We have previously reported on the importance of workforce planning,  which is utilized by agencies to align their workforce with current and  emerging mission and program goals, and develop long-term strategies  for acquiring, developing, and retaining staff. Workforce planning helps  agencies think strategically about how to put the right people with the  right skills in the right places at the right time. We have previously  identified key approaches for effective strategic workforce planning.  These approaches may vary with each agency’s particular needs and  mission, but should share certain principles, such as identifying skills and  competencies to fill critical workforce gaps and the strategies needed to  recruit them; developing specific strategies that are tailored to address  gaps in number, deployment, and alignment of human capital; and  monitoring and evaluating the agency’s progress toward its human capital  goals. Similarly, federal internal control standards require agencies to  establish and operate monitoring activities, evaluate results, and  remediate deficiencies on a timely basis—which could be done when staff  are returning from overseas deployments. Without a specific focus on  reducing the number and types of foreign office vacancies, OIP may find  it difficult for the foreign offices to fulfill their mission. Furthermore, by not focusing specifically on the foreign offices’ vacancies by position type  FDA may be missing an opportunity to determine why particular positions  are more difficult to fill than others and take appropriate action in  response.
section_title: Conclusions
paragraphs: The United States’ increasing dependence on global markets has been  challenging for FDA. The rapid pace of globalization has complicated the  agency’s efforts to ensure the safety of our drug supply. Our concerns  with FDA’s response to globalization go back two decades. In that time  we have made multiple recommendations to help the agency tackle this  challenge. The enactment of FDASIA also provided the agency with new  flexibility to help FDA cope with the growth of drug manufacturing  overseas. To its credit, FDA has made important strides. It has  implemented some of our 2008 and 2010 recommendations and is taking  steps to address others. FDASIA has further enhanced the agency’s  efforts. To date, FDA has increased the number of foreign drug  inspections, improved information on foreign establishments  manufacturing drugs for the U.S. market, and opened offices overseas.
While FDA has made progress on some fronts, it has been incremental  on others. FDA is now using a single risk-based model to select domestic  and foreign establishments to inspect so that those that pose the greatest  risk are prioritized for inspection, but the agency still lacks inspection  history on approximately 33 percent of foreign establishments. While FDA  has a plan to fill this knowledge gap over the next few years, this is an  issue it has been aware of since at least 1988. Given the longevity of this  issue, it will be important for the agency to fully execute its plan to inspect  those remaining establishments for which it has no inspection history over  the next three years.
FDA has also made progress in its strategic planning for the foreign  offices, but despite these efforts, the agency has yet to determine  whether the foreign offices meaningfully contribute to drug safety,  because FDA has no formal process for assessing the offices’  contributions. In 2008, the agency determined that opening foreign offices  was an instrumental part of its response to globalization. Our  recommendation that FDA develop performance goals and measures for  these offices followed in 2010, two years after the first office was opened.  We believe this recommendation has not been fully implemented. The  two performance measures currently used to assess the foreign offices  do not fully capture the specific contributions these offices have made.  While FDA officials shared examples of the foreign offices’  accomplishments, they do not systematically track such information, nor  have they fully assessed the extent to which the offices are helping to  ensure drug safety. We believe it is important for FDA to track these types  of results-oriented outcomes, and for the agency to determine how their  performance measures—whether the existing ones or those currently  being tested—can be used to demonstrate such results. Having  performance measures that demonstrate results-oriented outcomes will  better enable FDA to meaningfully assess the foreign offices’  contributions to ensuring drug safety.
FDA should also consider including an examination of the appropriate  staffing levels for its current foreign offices in its assessment of them.  FDA’s internal evaluation proposed a process for determining the correct  mix of staffing and position types for the foreign offices, but as OIP has  yet to implement and apply the process to the foreign offices, such an  examination has not yet been completed.  While the agency’s progress  overseas may be aggravated by the difficulties it faces in decreasing their  vacancy rates, the agency must determine what outcomes it is working to  achieve through these offices and then consider the appropriate staffing  to reach those goals. Regardless, the current overall foreign office  vacancy rate of 46 percent could easily undermine even the best strategic  plan and precludes the offices from being as effective as possible. As we  also recommended in 2010, FDA has now completed a strategic  workforce plan for the foreign offices to help ensure that the agency is  able to recruit and retain staff with the necessary experience. We  recognize the value of the completion of this plan. However, FDA has not  fully addressed our recommendation, because some of the reasons for  the high vacancy rates in the foreign offices are not addressed. While  FDA may not be able to address some of these reasons, such as time to  deployment, it is all the more important that it addresses those within its  span of control, such as addressing the financial concerns raised by staff  and discussed in our 2010 report, as doing so may contribute to a  decrease in its foreign office vacancy rate. It is also imperative that FDA  fully implement its new reintegration program as outlined in the plan. The  difficulties staff have experienced upon their return to domestic positions  is one that former foreign office staff repeatedly shared with us when we  prepared this and our 2010 reports. While the workforce plan contains  goals and measures, the plan circumvents the high foreign office vacancy  rate, rather than directly tackling it, by targeting a 5 percent reduction in  OIP vacancies overall, rather than applying this goal exclusively to the  foreign offices. The plan also does not target vacancies by specific  position types. In essence, the current goal targeting OIP vacancies  overall obscures the underlying challenges the agency faces of staffing  people overseas and for particular positions. Without targeting the foreign  offices specifically or the types of positions most likely to have vacancies,  FDA will not have a meaningful measure reflecting its true staffing  position overseas.
FDA’s response has been, in part, that the offices are still new and  evolving, and it is too soon to expect more than it has already  accomplished. We believe sufficient time has elapsed for the agency to  address its remaining challenges. Otherwise, given their significance,  FDA may not know the extent to which its foreign offices are actually  assisting the agency it in its efforts to ensure drug safety.
section_title: Recommendations for Executive Action
paragraphs: To help ensure that FDA’s foreign offices are able to fully meet their  mission of helping to ensure the safety of imported products, we  recommend that the Commissioner of FDA take the following two actions  as the agency continues to test performance measures and evaluate its  OIP strategic workforce plan:  1.  Assess the effectiveness of the foreign offices’ contributions by  systematically tracking information to measure whether the offices’  activities specifically contribute to drug safety-related outcomes, such  as inspections, import alerts, and warning letters.  2.  Establish goals to achieve the appropriate staffing level for its foreign  offices, which would include separating foreign office vacancies from  the OIP-wide vacancy rate, and setting goals by position type.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to HHS for comment. In its written  comments, reproduced in appendix V, HHS concurred with our two  recommendations and said it is taking immediate steps to address them.  For example, starting in fiscal year 2017, FDA plans to conduct internal  reviews of its foreign offices’ performances annually, review the offices’  programs and efforts at the activity level, and review performance  indicators. To accomplish this, HHS said that OIP has recently hired two  designated full-time employees to work on strategic planning, operational  plans, and performance measures. HHS also said that OIP plans to,  among other things, adjust its performance measures to track the foreign  offices’ measures separately from its domestic offices, and characterize  the offices’ contributions by type of commodity, including drugs.  Additionally, HHS said that OIP’s strategic workforce plan will be updated  to reflect the disaggregation of performance measures that track foreign  office vacancy rates and targets by position type. Furthermore, FDA said  it is developing recruitment, hiring, retention, and reintegration strategies  to enable the agency to utilize the unique experiences that foreign office  employees develop overseas. 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 to the Secretary of Health  and Human Services and the appropriate congressional committees. In  addition, the report will be available at no charge on the GAO website at  http://www.gao.gov.
If you or your staff have any questions about this report, please contact  me 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 VI.
section_title: Appendix I: Types of Foreign Drug Establishment Inspections Conducted, Fiscal Year 2010 through June 30, 2016
section_title: Appendix II: Drug Establishments that the Food and Drug Administration May Never Have Inspected
section_title: Appendix III: Number of Foreign Drug Inspections in which Temporary Duty Staff Participated
section_title: Appendix IV: Efforts by the Food and Drug Administration’s Foreign Offices to Enhance Drug Safety
paragraphs: The Food and Drug Administration’s (FDA) foreign offices have helped  ensure drug safety by collaborating with foreign counterparts in their host  countries. According to FDA officials, each foreign office had examples of  collaborative activities with their respective foreign counterparts that may  have increased drug safety. For example, FDA’s China and India offices  both conducted workshops on the importance of data integrity for industry  representatives and foreign regulators, while the Latin America office  sponsored a training session for Mexican regulators on current good  manufacturing practices and inspections. See table 7 for examples of  activities from each foreign office provided by FDA officials that may have  helped ensure the safety of drugs entering the United States.
section_title: Appendix V: Comments from the Department of Health and Human Services
section_title: Appendix VI: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Geri Redican-Bigott (Assistant  Director), Kaitlin Coffey (Analyst in Charge), Nick Bartine, George Bogart,  Zhi Boon, Muriel Brown, Drew Long, and Michael Rose made key  contributions to this report.
section_title: Related GAO Products
paragraphs: High-Risk Series: An Update. GAO-15-290. Washington, D.C.: February  2015.
High-Risk Series: An Update. GAO-13-283. Washington, D.C.: February  2013.
High-Risk Series: An Update. GAO-11-278. Washington, D.C.: February  2011.
High-Risk Series: An Update. GAO-09-271. Washington, D.C.: January  2009.
Food Safety: Additional Actions Needed to Help FDA’s Foreign Offices  Ensure Safety of Imported Food. GAO-15-183. Washington, D.C.:  January 30, 2015.
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.
Drug Safety: Better Data Management and More Inspections Are Needed  to Strengthen FDA’s Foreign Drug Inspection Program. GAO-08-970.  Washington, D.C.: September 22, 2008.
Drug Safety: Preliminary Findings Suggest Recent FDA Initiatives Have  Potential, but Do Not Fully Address Weaknesses in Its Foreign Drug  Inspection Program. GAO-08-701T. Washington, D.C.: April 22, 2008.
Drug Safety: Preliminary Findings Suggest Weaknesses in FDA’s  Program for Inspecting Foreign Drug Manufacturers. GAO-08-224T.  Washington, D.C.: November 1, 2007.
Human Capital: Key Principles for Effective Strategic Workforce Planning,  GAO-04-39. Washington, D.C.: December 11, 2003.
Food and Drug Administration: Improvements Needed in the Foreign  Drug Inspection Program. GAO/HEHS-98-21. Washington, D.C.: March  17, 1998.