Drug Safety: FDA Faces Challenges Overseeing the Foreign Drug Manufacturing Supply Chain
Released: 2011-09-14T00:00:00

Letter

Background

As part of its efforts to ensure the safety and quality of imported drugs, FDA may conduct inspections of foreign establishments manufacturing drugs, including APIs, that are imported into the United States. FDA relies on these establishment inspections to determine compliance with current good manufacturing practice regulations (GMP). The purpose of these inspections is to ensure that foreign establishments meet the same requirements as domestic establishments to ensure the quality, purity, potency, safety, and efficacy of drugs marketed in the United States.

Requirements governing FDA’s inspection of foreign and domestic establishments differ. Specifically, FDA is required to inspect every 2 years those domestic establishments that manufacture drugs in the United States, but there is no comparable requirement for inspecting foreign establishments that market their drugs in the United States. However, drugs manufactured by foreign establishments that are offered for import may be refused entry to the United States if FDA determines— through the inspection of an establishment, a physical examination of drugs when they are offered for import at a point of entry, or otherwise— that there is sufficient evidence of a violation of applicable laws or regulations.

FDA conducts two primary types of drug manufacturing establishment inspections. Preapproval inspections of domestic and foreign establishments may be conducted before FDA will approve a new drug to be marketed in the United States. In addition, FDA conducts GMP inspections at establishments manufacturing drugs already marketed in the United States to determine ongoing compliance with laws and regulations.

FDA Conducts Relatively Few Inspections of Foreign Drug Establishments

Although inspections of foreign drug manufacturing establishments— which are intended to assure that the safety and quality of drugs are not jeopardized by poor manufacturing practices—are an important element of FDA’s oversight of the supply chain, our previous work has shown that FDA conducts relatively few inspections of the establishments that it considers subject to inspection. Specifically, in our 2008 report, we estimated that FDA inspected 8 percent of such foreign drug establishments in fiscal year 2007. At this rate, we estimated that it would take FDA about 13 years to inspect all foreign establishments the agency considers subject to inspection. In 2010, we reported that FDA had increased its inspection efforts in fiscal year 2009. We estimated that FDA inspected 11 percent of foreign establishments subject to inspection and it would take FDA about 9 years to inspect all such establishments at this rate. FDA’s inspection efforts in fiscal year 2009 represent a 27 percent increase in the number of inspections the agency conducted when compared to fiscal year 2007—424 and 333 inspections, respectively. In contrast, FDA conducts more inspections of domestic establishments and the agency inspects these establishments more frequently. For example, in fiscal year 2009, FDA conducted 1,015 domestic inspections, inspecting approximately 40 percent of domestic establishments. We estimated that at this rate FDA inspects domestic establishments approximately once every 2.5 years. To address these discrepancies, we recommended that FDA conduct more inspections to ensure that foreign establishments manufacturing drugs currently marketed in the United States are inspected at a frequency comparable to domestic establishments with similar characteristics. FDA agreed that the agency should be conducting more foreign inspections, but FDA officials have since acknowledged that the agency is far from achieving foreign drug inspection rates comparable to domestic inspection rates and, without significant increases to its inspectional capacity, the agency’s ability to close this gap is highly unlikely.

In addition to conducting few foreign drug manufacturing inspections, the types of inspections FDA conducts generally do not include all parts of the drug supply chain. For example, FDA officials told us during our review of the contaminated heparin crisis that the agency typically does not inspect manufacturers of source material—which are not required to be listed on applications to market drugs in the United States—and generally limits its inspections to manufacturers of the finished product and APIs. Furthermore, once FDA conducts an inspection of a foreign drug manufacturer, it is unlikely that the agency will inspect it again, as the majority of the foreign inspections FDA conducts are to inform decisions about the approval of new drugs before they are marketed for sale in the United States.

Despite increases in foreign drug establishment inspections in recent years, FDA continues to face unique challenges conducting inspections abroad. Specifically, as we identified in our 2008 report on FDA’s foreign drug inspections, FDA continues to experience challenges related to limits on the agency’s ability to require foreign establishments to allow the agency to inspect their facilities. For example, while inspecting establishments in China during the heparin crisis, Chinese crude heparin consolidators refused to provide FDA full access during inspections—in particular, one consolidator refused to let FDA inspectors walk through its laboratory and refused FDA access to its records. As a result, FDA officials said they focused on the manufacturers’ responsibilities to ensure that these establishments could trace their crude heparin back to qualified suppliers that produce an uncontaminated product and requested that manufacturers conduct their own investigations of any heparin products for which they received complaints or that did not meet specifications. Furthermore, FDA faces other challenges conducting foreign inspections, such as logistical issues that necessitate the agency notifying the manufacturer of the agency’s intention to inspect the establishment in advance. In contrast to domestic inspections which are conducted without prior notice, FDA contacts foreign manufacturers prior to inspection to ensure that the appropriate personnel are present and that the establishment is manufacturing its product during the time of the inspection. In some cases, FDA must obtain permission from the foreign government of the country in which an establishment is located in order to conduct an inspection. FDA officials report that inspections may be conducted several months after an establishment has been notified of FDA’s intent to conduct an inspection due to the need to obtain visas and other delays. As a result of such advance notice, FDA staff conducting inspections may not observe an accurate picture of the manufacturer’s day-to-day operations.

FDA Lacks Complete Information on Foreign Drug Establishments

Our previous reports indicated that FDA has experienced challenges maintaining complete information on foreign drug manufacturing establishments. This lack of information, which is critical to understanding the supply chain, hampers the agency’s ability to inspect foreign establishments. In 2008, we reported that FDA did not maintain a list of foreign drug establishments subject to inspection, but rather the agency relied on information from their drug establishment registration and import databases to help select establishments for inspection. However, we found that these databases contained incorrect information about foreign establishments and did not contain an accurate count of foreign establishments manufacturing drugs for the U.S. market. For example, in our 2008 report, we identified that for fiscal year 2007, FDA’s registration database contained information on approximately 3,000 foreign drug establishments that registered with FDA to market drugs in the United States, while the import database contained information on about 6,800 foreign establishments that offered drugs for import into the United States. Some of the inaccuracies in the registration database reflected the fact that, despite being registered, some foreign establishments did not actually manufacture drugs for the U.S. market. Additionally, the inaccurate count of establishments in the import database was the result of unreliable manufacturer identification numbers generated by customs brokers when a drug is offered for import. As a result of these inaccuracies, FDA did not know how many foreign establishments were subject to inspection. To address these inaccuracies, we recommended that FDA enforce the requirement that establishments manufacturing drugs for the U.S. market update their registration annually and establish mechanisms for verifying information provided by the establishment at the time of registration.

Since then, FDA has taken steps to address these deficiencies and improve the information it receives from both the registration and import databases, though these efforts have not yet fully addressed the concerns we raised in 2008. For example, in June 2009, FDA began requiring all drug establishments marketing their products in the United States to submit their annual registration and listing information electronically, rather than submitting the information on paper forms to be entered into the registration database. FDA indicated that, as of September 2011, the implementation of this requirement has eliminated the human error that has been associated with the transcription of information from paper forms to electronic files. As part of electronic registration, FDA has also requested the each establishment provide a unique identification number—a Dun and Bradstreet Data Universal Numbering System (D-U-N-S®) Number—as a way to help avoid duplications and errors in FDA’s data systems. In addition, in September 2011, FDA officials reported that the agency had begun to take steps to enforce its annual registration requirement. They indicated that FDA will now conduct outreach to establishments that have not submitted an annual registration to confirm that they are no longer producing drugs for the U.S. market or to ensure they register, as required, if they are continuing to manufacture drugs for the U.S. market. They said that if an establishment does not respond to FDA’s outreach, it is to be removed from the registration database. To further address concerns with the import database, FDA has an initiative underway to eliminate duplicate information by taking steps to identify and remove all duplicate drug establishment records from existing import data over the next few years.

Recent FDA Initiatives to Improve Oversight of the Supply Chain

Given the difficulties that FDA has faced in inspecting and obtaining information on foreign drug manufacturers, and recognizing that more inspections alone are not sufficient to meet the challenges posed by globalization, the agency has begun to explore other initiatives to improve its oversight of the drug supply chain. We reported that FDA’s overseas offices had engaged in a variety of activities to help ensure the safety of imported products. These included establishing relationships with foreign regulators, industry, and U.S. agencies overseas; gathering information about regulated products to assist with decision making; and, in China and India, conducting inspections of foreign establishments. Although we noted that the impact of the offices on the safety of imported products was not yet clear, FDA staff, foreign regulators, and others pointed to several immediate benefits, such as building relationships. However, they also described challenges related to some of their collaborations with domestic FDA offices and the potential for increasing demands that could lead to an unmanageable workload. We reported that FDA was in the process of long-term strategic planning for the overseas offices, but had not developed a long-term workforce plan to help ensure that it is prepared to address potential overseas office staffing challenges, such as recruiting and retaining skilled staff. We recommended that FDA enhance its strategic planning and develop a workforce plan to help recruit and retain overseas staff and FDA concurred with our recommendations. In September 2011, FDA indicated that it had developed a 2011 to 2015 strategic plan and was in the process of updating it, and it had initiated a workforce planning process.

FDA has also implemented collaborative efforts with foreign regulatory authorities to exchange information about planned inspections as well as the results of completed inspections. In December 2008, FDA, along with its counterpart regulatory authorities of the European Union and Australia, initiated a pilot program under which the three regulators share their preliminary plans for and results of inspections of API manufacturing establishments in other countries. For example, FDA could receive the results of inspections conducted by these regulatory bodies and then determine if regulatory action or a follow-up inspection is necessary. FDA contends that prospectively sharing this information could allow these regulatory bodies to more efficiently use their resources by minimizing the overlap in their inspection plans. According to agency officials, the agency had used inspection reports from the other regulators to improve its knowledge of a small number of API manufacturing establishments, most of which had not been inspected in the last 3 years, but that it was interested in inspecting due to a pending drug application.

FDA has also taken other steps to improve the information that the agency maintains on foreign establishments shipping drugs to the United States. In August 2008, FDA contracted with two external organizations to implement the Foreign Registration Verification Program. Through this program, contractors conduct site visits to verify the existence of foreign establishments that are registered with FDA and confirm that they manufacture the products that are recorded in U.S. import records. According to FDA officials, establishments that are new to the U.S. market or are importing products not typically manufactured at the same establishment are considered candidates for the verification program. For example, FDA officials told us about an establishment that was selected for the program because, according to agency records, it was offering for import into the United States pickles and an API—two products not normally manufactured at the same establishment. As of September 2011, the contractors had visited 142 foreign drug establishments located in Asia, Australia, Africa, Canada, and Europe, 27 of which did not appear to exist at the address provided by the establishments at the time of registration. According to FDA, the agency uses the information obtained from the contractors as screening criteria to target drug products from those establishments for review at the border.

FDA is also developing initiatives that would assist its oversight of products at the border. For example, FDA is in the process of establishing its Predictive Risk-based Evaluation for Dynamic Import Compliance Targeting (PREDICT) import screening system. The system is intended to automatically score each entry based on a range of risk factors and identify high-risk items for review. FDA piloted this system on seafood products in the summer of 2007. FDA determined that the system expedited the entry of lower-risk products, while identifying a higher rate of violations among products that were tested when they were offered for import. The agency planned to have the system implemented in all locations and for all FDA-regulated products by June 2011, although its deployment has been delayed. According to FDA, full deployment of PREDICT is currently slated for December 2011.

FDA also identified statutory changes that would help improve its oversight of drugs manufactured in foreign establishments. These include authority to (1) suspend or cancel drug establishment registrations to address concerns, including inaccurate or out-of-date information; (2) require drug establishments to use a unique establishment identifier; and (3) implement a risk-based inspection process, with flexibility to determine the frequency with which both foreign and domestic establishments are inspected, in place of the current requirement that FDA inspect domestic establishments every 2 years.

Concluding Observations

Globalization has fundamentally altered the drug supply chain and created regulatory challenges for FDA. In our prior reports we identified several concerns that demonstrate the regulatory difficulties that FDA faces conducting inspections of, and maintaining accurate information about, foreign drug establishments. While inspections provide FDA with critical information, we recognize that inspections alone are not sufficient to meet all the challenges of globalization. FDA should be credited for recent actions, such as collaborating with and exchanging information on drug establishments with foreign governments, that represent important initial steps toward addressing these challenges. However, as the agency has acknowledged, there are additional steps that it still needs to take. We have previously made recommendations to address some challenges, such as poor information and planning, and the agency has identified additional authorities that could provide it with necessary enforcement tools. In light of the growing dependence upon drugs manufactured abroad and the potential for harm, FDA needs to act quickly to implement changes across a range of activities in order to better assure the safety and availability of drugs for the U.S. market.

Chairman Harkin, Ranking Member Enzi, and Members of the Committee, this concludes my prepared statement. I would be pleased to respond to any questions you may have at this time.

GAO Contact and Staff Acknowledgments

For further information about this testimony, please contact Marcia Crosse at (202) 512-7114 or crossem@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this testimony. GAO staff who made key contributions to this testimony include Geraldine Redican-Bigott, Assistant Director; William Hadley; Cathleen Hamann; Rebecca Hendrickson; and Lisa Motley.

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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.

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