Drug Safety: Preliminary Findings Indicate Persistent Challenges with FDA Foreign Inspections

More than 60 percent of establishments manufacturing drugs for the U.S. market were located overseas in fiscal year 2018. FDA has estimated that about 40 percent of finished drugs and 80 percent of active drug ingredients are manufactured overseas. FDA is responsible for overseeing the safety and effectiveness of all drugs marketed in the United States, regardless of where they are produced and conducts inspections of both foreign and domestic drug manufacturing establishments. GAO has had long-standing concerns about FDA's ability to oversee the increasingly global supply chain, an issue highlighted in GAO's High Risk Series for the last 10 years. GAO recommended in 2008 (GAO-08-970) that FDA increase the number of inspections of foreign drug establishments. GAO found in 2010 (GAO-10-961) and 2016 (GAO-17-143) that FDA was conducting more of these foreign drug inspections, but GAO also reported that FDA may have never inspected many establishments manufacturing drugs for the U.S. market.

This statement is based on ongoing work and provides preliminary GAO observations on 1) the number of foreign inspections FDA has conducted, 2) inspection staffing levels, and 3) challenges unique to foreign inspections. For this work, GAO examined FDA data, visited FDA foreign offices in China and India, and interviewed drug investigators based in these offices and in the United States.

GAO's preliminary analysis of Food and Drug Administration (FDA) data shows that from fiscal year 2012 through 2016, the number of foreign drug manufacturing establishment inspections increased. From fiscal year 2016 through 2018, both foreign and domestic inspections decreased—by about 10 percent and 13 percent, respectively. Howevever, the total number of foreign inspections surpassed the number of domestic inspections in 2015, and a growing percentage of FDA's foreign inspections (43 percent in 2018) were conducted in China and India, where most establishments that ship drugs to the United States were located. FDA officials attributed the decline, in part, to vacancies among investigators available to conduct inspections. GAO previously noted the vital role that inspections play in FDA's oversight of foreign establishments.

FDA has vacancies among each of the groups of investigators who conduct foreign inspections. FDA had 190 investigators in the United States who conduct the majority of foreign inspections, but an additional 58 positions were vacant. FDA was in the process of filling 26 of these vacancies, with 32 remaining. However, according to FDA officials, it could be 2 to 3 years before new staff are experienced enough to conduct foreign inspections. FDA also faces persistent vacancies among investigators in its foreign offices.

FDA investigators identified persistent challenges conducting foreign inspections, raising questions about the equivalence of foreign to domestic inspections. For example, while domestic inspections are almost always unannounced, FDA's practice of preannouncing foreign inspections up to 12 weeks in advance may give manufacturers the opportunity to fix problems. Investigators from FDA's China and India offices do conduct some unannounced inspections, but they are involved in a small percentage of inspections in these countries (27 percent and 10 percent, respectively). Further, FDA continues to rely on translators provided by the foreign establishments being inspected, which investigators said can raise questions about the accuracy of information FDA investigators collect.

GAO will continue to assess these issues as part of ongoing work, and make recommendations as appropriate.

I am pleased to be here today to discuss our ongoing work on the Food  and Drug Administration’s (FDA) oversight of drugs manufactured  overseas. More than 60 percent of establishments manufacturing  drugs—including brand-name, generic, and over-the-counter finished  drugs and their active ingredients—for the U.S. market were located  overseas in fiscal year 2018. FDA is responsible for overseeing the  safety and effectiveness of all drugs marketed in the United States,  regardless of where they are manufactured. FDA conducts several types  of inspections of foreign manufacturing establishments, as testing a drug  at the U.S. border cannot reliably determine whether the drug was  manufactured in compliance with FDA regulations.

We have had long-standing concerns about FDA’s ability to oversee the  increasingly global supply chain, an issue highlighted in our High Risk  Series. In 1998, and again in 2008, we found that FDA inspected  relatively few foreign drug manufacturing establishments—an estimated 8  percent of those subject to inspection for our 2008 report—and that  challenges unique to foreign inspections influenced the manner in which  FDA conducted such inspections. In our 2008 report we recommended  that FDA increase the number of foreign inspections it conducts, and FDA  agreed with our recommendation. We found in 2010, and again in 2016,  that FDA was conducting more inspections of foreign establishments  (inspecting about 11 percent and 21 percent of those subject to  inspection for our 2010 and 2016 reports, respectively). However, we also  reported that many establishments manufacturing drugs for the U.S.  market may never have been inspected by FDA. In addition, in the  summer of 2018, FDA began announcing recalls of blood pressure  medications manufactured overseas and tainted with a potential  carcinogen, raising further questions about FDA’s oversight of foreign- manufactured drugs.

My testimony today is based on our ongoing examination of FDA’s foreign  drug inspection program and provides preliminary observations on  1.  the number of FDA’s foreign inspections,  2.  inspection staffing levels, and  3.  any challenges unique to foreign inspections.

To develop our preliminary observations, we analyzed data from FDA’s  Field Accomplishments and Compliance Tracking System, which contains  information on inspections of drug manufacturing establishments.  Specifically, we examined FDA data from fiscal year 2012 through fiscal  year 2018 to determine: (1) the number of foreign and domestic  inspections conducted by FDA, (2) the type of inspections, (3) the country  in which the inspections took place, and (4) inspection results. This date  range was selected to allow for an analysis of trends over time through  2018, the last full fiscal year of data available when we began our  analysis. To assess the reliability of these data, we reviewed related  documentation, interviewed knowledgeable agency officials, conducted  electronic data testing for missing data and outliers, 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 visited FDA’s foreign offices in China  and in India, the countries where FDA performs the largest number of  foreign drug inspections and which are FDA’s offices that have drug  investigators who conduct inspections—a unique aspect of these offices.  At these two offices we interviewed a nongeneralizable selection of the  six FDA drug investigators available in the offices at the time of our visits  about their inspection efforts. (We plan to interview the remaining drug  investigators deployed to these offices as part of our ongoing work.)  While in those countries, we also accompanied investigators to two drug  manufacturing establishments to observe inspection procedures. We also  interviewed all 12 members of FDA’s calendar year 2019 cadre of  investigators who are based in the United States but exclusively conduct  foreign drug inspections. Finally, we reviewed information from FDA on  their inspection staffing levels since our last report in 2016.

The ongoing work on which this statement is based is being conducted 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.

Drugs sold in the United States—including active pharmaceutical  ingredients and finished dosage forms—are manufactured throughout the  world. According to a May 2019 FDA report, in fiscal year 2018 about 40  percent of establishments manufacturing drugs for the U.S. market were  located domestically and more than 60 percent of establishments  manufacturing for the U.S. market were located overseas. As of March  2019, FDA data show that India and China had the most manufacturing  establishments shipping drugs to the United States, with about 40 percent  of all foreign establishments in these two countries. (See fig. 1.)

Drugs manufactured overseas must meet the same statutory and  regulatory requirements as those manufactured in the United States.  FDA’s Center for Drug Evaluation and Research (CDER) establishes  standards for the safety, quality, and effectiveness of, and manufacturing  processes for, over-the-counter and prescription drugs. CDER requests  that FDA’s Office of Regulatory Affairs (ORA) inspect both domestic and  foreign establishments to ensure that drugs are produced in conformance  with applicable laws of the United States, including current good  manufacturing practice (CGMP) regulations.

FDA investigators generally conduct three main types of drug  manufacturing establishment inspections: preapproval inspections,  surveillance inspections, and for-cause inspections, as described in table  1. At times, FDA may conduct an inspection that combines both  preapproval and surveillance inspection components in a single visit to an  establishment.

FDA uses multiple databases to select foreign and domestic  establishments for surveillance inspections, including its registration  database and inspection database. Because the establishments are  continuously changing as they begin, stop, or resume marketing products  in the United States, CDER creates an establishment catalog monthly.  The catalog is prioritized for inspection twice each year.

In our 2008 report we found that, because of inaccurate information in  FDA’s databases, the agency did not know how many foreign drug  establishments were subject to inspection. For example, some  establishments included in FDA’s registration database may have gone  out of business and did not inform FDA that they had done so or did not  actually manufacture drugs for the U.S. market. In our report, we noted  that some foreign establishments may register because, in foreign  markets, registration may erroneously convey an “approval” or  endorsement by FDA, when in fact the establishment may never have  been inspected by FDA. We recommended that FDA take steps to  improve the accuracy of this registration information. In our 2010 and  2016 reports we found that FDA had taken steps to improve the accuracy  and completeness of information in its catalog of drug establishments  subject to inspection, such as using contractors to conduct site visits to  verify the existence of registered foreign establishments and confirm that  they manufacture the products that are recorded in U.S. import records.

To prioritize establishments for surveillance inspections, CDER applies a  risk-based site selection model to its catalog of establishments 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 several factors, including inherent product  risk, establishment type, inspection history, and time since last inspection,  to develop a list of establishments that FDA considers to be a priority for  inspection. Through this process, CDER develops a ranked list of  foreign and domestic establishments selected for inspection that is  submitted to ORA. To be efficient with its resources, according to FDA  officials, 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.

Investigators from ORA and, as needed, ORA laboratory analysts with  certain expertise are responsible for inspecting drug manufacturing  establishments. FDA primarily relies on three groups of investigators to  conduct foreign inspections:

ORA investigators based in the United States, who primarily conduct  domestic drug establishment inspections but may sometimes conduct  foreign inspections.

Members of ORA’s dedicated foreign drug cadre, a group of  domestically based investigators, who exclusively conduct foreign  inspections.

Investigators assigned to and living in the countries where FDA has  foreign offices, including staff based in the foreign offices full time and  those on temporary duty assignment to the foreign offices. 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. FDA full-time foreign office staff are posted  overseas for 2-year assignments. FDA staff can also be assigned to  the foreign offices on temporary duty assignments for up to 120 days.  In fiscal year 2019, there were full-time and temporary duty drug  investigators assigned to FDA foreign offices in China and India.

FDA’s process for determining whether a foreign establishment complies  with CGMPs involves both CDER and ORA. During an inspection, ORA  investigators are responsible for identifying any significant objectionable  conditions and practices and reporting these to the establishment’s  management. Investigators suggest that the establishment respond to  FDA in writing concerning all actions taken to address the issues  identified during the inspection.

Once ORA investigators complete an inspection, they are responsible for  preparing an establishment inspection report to document their inspection  findings. Inspection reports describe the manufacturing operations  observed during the inspection and any conditions that may violate U.S.  statutes and regulations. Based on their inspection findings, ORA  investigators make an initial recommendation regarding whether  regulatory actions are needed to address identified deficiencies using one  of three classifications: no action indicated (NAI); voluntary action  indicated (VAI); or official action indicated (OAI). Inspection reports and  initial classification recommendations for regulatory action are to be  reviewed within ORA. For inspections classified as OAI—where ORA  identified serious deficiencies—such inspection reports and classification  recommendations are to be reviewed within CDER. CDER is to review  the ORA recommendations and determine whether regulatory action is  necessary. CDER also is to review inspection reports and initial  classification recommendations for all for-cause inspections, regardless of  whether regulatory action is recommended by ORA.

According to FDA policy, inspections classified as OAI may result in  regulatory action, such as the issuance of a warning letter. FDA issues  warning letters to those establishments manufacturing drugs for the U.S.  market that are in violation of applicable U.S. laws and regulations and  may be subject to enforcement action if the violations are not promptly  and adequately corrected. In addition, warning letters may notify foreign  establishments that FDA may refuse entry of their drugs at the border or  recommend disapproval of any new drug applications listing the  establishment until sufficient corrections are made. FDA may take other  regulatory actions if it identifies serious deficiencies during the inspection  of a foreign establishment. For example, FDA may issue an import alert,  which instructs FDA staff that they may detain drugs manufactured by the  violative establishment that have been offered for entry into the United  States. In addition, FDA may conduct regulatory meetings with the  violative establishment. Regulatory meetings may be held in a variety of  situations, such as a follow-up to the issuance of a warning letter to  emphasize the significance of the deficiencies or to communicate  documented deficiencies that do not warrant the issuance of a warning  letter.

The Number Of Foreign Inspections Declined In Recent Years, And The Majority Of Such Inspections Identified Deficiencies

Total Number of FDA Foreign Drug Inspections Has Decreased Since Fiscal Year 2016 after Several Years of Increases

Our preliminary analysis of FDA data shows that from fiscal year 2012  through fiscal year 2016, the number of FDA foreign drug manufacturing  establishment inspections increased but then began to decline after fiscal  year 2016 (see fig. 2). In fiscal year 2015, the total number of foreign  inspections surpassed the number of domestic inspections. From fiscal  year 2016 to 2018, both foreign and domestic inspections decreased—by  about 10 percent and 13 percent, respectively.

FDA officials attributed this decrease to vacancies in the number of  investigators available to conduct inspections (which we discuss later in  this testimony statement) and to inaccurate data used to select  establishments for inspection in fiscal years 2017 and 2018. Despite  steps taken to improve the accuracy and completeness of FDA data on  foreign establishments, data challenges we identified in our 2008 report  continue to make it difficult for FDA to accurately identify establishments  subject to inspection. Specifically, since 2017, FDA has pursued an  initiative to inspect approximately 1,000 foreign establishments that  lacked an inspection history and, as of November 2019, officials said all  of these establishments had either been inspected or were determined to  not be subject to inspection. However, officials told us that this effort  contributed to the decline in the number of foreign inspections conducted  because of how data inaccuracies affected the process for selecting  establishments for inspection. Specifically, after selecting uninspected  foreign establishments for inspection, FDA determined that a sizeable  percentage of these establishments were not actually subject to  inspection (e.g., about 40 percent of those assigned to the China Office in  fiscal years 2017 and 2018). These foreign establishments were thus  removed from the list for inspection for the given year. FDA officials told  us that the next highest priority establishments identified through the risk- based model to replace those establishments were domestic. As a result,  the number of foreign establishments actually inspected decreased. As  part of our ongoing work, we plan to examine the accuracy and  completeness of information FDA maintains about foreign establishments  and the application of its risk-based site selection process.

FDA continues to conduct the largest number of foreign inspections in  India and China, with inspections in these two countries representing  about 40 percent of all foreign drug inspections from fiscal year 2016  (when we last reported on this issue) through 2018. (See table 2.) In  addition to India and China, the rest of the countries in which FDA most  frequently conducted inspections has generally been the same since our  2008 report.

Most Foreign Inspections Are Surveillance Inspections

Our preliminary analysis of FDA data shows that each year from fiscal  year 2012 through 2018, at least 50 percent of FDA’s foreign inspections  were surveillance inspections. In contrast to preapproval inspections,  surveillance inspections are used to ensure drugs already on the market  are manufactured in compliance with FDA regulations. In recent years,  the proportion of foreign surveillance inspections has increased. As figure  3 shows, in fiscal year 2012, 56 percent of foreign inspections were  surveillance-only inspections; in contrast, from fiscal year 2016 through  2018, about 70 percent of foreign inspections were surveillance-only,  which was comparable to the percentage for domestic inspections during  that period. This is a significant increase from the 13 percent of foreign  inspections that were surveillance-only when we made our 2008  recommendation that FDA inspect foreign establishments at a  comparable frequency to their domestic counterparts (85 percent of which  were surveillance-only at that time).

FDA has implemented changes to its foreign drug inspection program  since our 2008 report that may have contributed to the increase in  surveillance inspections. Prior to 2012, FDA was required to inspect  domestic establishments that manufacture drugs marketed in the United  States every 2 years, but there was no similar requirement for foreign  establishments. As a result, and as we reported in 2008, foreign  inspections were often preapproval inspections driven by pending  applications for new drugs. FDA thus conducted relatively few  surveillance-only inspections to monitor the ongoing compliance of  establishments manufacturing drugs that were already on the market,  with just 13 percent of foreign inspections conducted for surveillance  purposes at the time of our 2008 report. However, in 2012, the Food and  Drug Administration Safety and Innovation Act eliminated the 2-year  requirement for domestic inspections, directing FDA to inspect both  domestic and foreign establishments on a risk-based schedule  determined by an establishment’s known safety risks, which was  consistent with our 2008 recommendation.

FDA Identified Deficiencies during the Majority of Foreign Inspections

Our preliminary analysis of FDA data shows that from fiscal year 2012  through 2018, FDA identified deficiencies in approximately 64 percent of  foreign drug manufacturing establishment inspections (3,742 of 5,844  inspections). This includes deficiencies necessitating a classification of  VAI or the more serious OAI, as described in the text box.

Inspection Classifications  Based on their inspection findings, FDA investigators make an initial recommendation  regarding the classification of each inspection:

No action indicated (NAI) means that insignificant or no deficiencies were identified  during the inspection.  Voluntary action indicated (VAI) means that deficiencies were identified during the  inspection, but the agency is not prepared to take regulatory action, so any  corrective actions are left to the establishment to take voluntarily.

Official action indicated (OAI) means that serious deficiencies were found that  warrant regulatory action.

About 59 percent of domestic inspections (3,702 out of 6,291) identified  deficiencies during this time period. (See fig. 4.) This proportion is similar  to what we found when we last looked at this issue in 2008, when FDA  identified deficiencies in about 62 percent of foreign inspections and 51  percent of domestic inspections from fiscal years 2002 through 2006.

Our preliminary analysis showed that serious deficiencies identified  during foreign drug inspections classified as OAI—which represented 8  percent of inspections from fiscal year 2012 through 2018—include  CGMP violations such as those related to production and process  controls, equipment, records and reports, and buildings and facilities. For  example:

Failure to maintain the sanitation of the buildings used in the  manufacturing processing, packing, or holding of a drug product  (21 C.F.R. § 211.56(a) (2019)). At an establishment in India producing  finished drug products, the investigator reported observing a live moth  floating in raw material used in the drug production, and that the  facility staff continued to manufacture the drug products using the raw  material contaminated by the moth, despite the investigator pointing  out its presence.

Failure to perform operations relating to the manufacture,  processing, and packing of penicillin in facilities separate from  those used for other drug products (21 C.F.R. § 211.42 (d)  (2019)). At an establishment in Turkey that manufactured penicillin  and other drugs, the investigator reported that the manufacturer had  detected penicillin outside the penicillin manufacturing area of the  establishment multiple times. According to FDA, penicillin  contamination of other drugs presents great risk to patient safety,  including potential anaphylaxis (even at extremely low levels of  exposure) and death.

The identification of serious deficiencies is not unique to foreign  inspections. For example, at a domestic establishment producing finished  drug products, the investigator observed brown stains, white residues,  and brown stagnant water in manufacturing equipment.

Some investigators who conduct foreign inspections expressed concern  with instances in which ORA or CDER reviewers reclassify the  investigator’s initial inspection classification recommendations of OAI to  the less serious classification of VAI. We plan to examine this issue as  part of our ongoing work.

FDA Continues To Face Challenges Filling Vacancies Among Staff Conducting Foreign Inspections

Our ongoing work showed FDA’s foreign inspection workforce has staff  vacancies, which FDA officials said contributed to the recent decline in  inspections. As previously mentioned, FDA uses multiple types of staff  resources to conduct foreign drug inspections—including ORA  investigators based in the United States, members of ORA’s dedicated  foreign drug cadre based in the United States, and investigators assigned  to FDA’s foreign offices. However, each of these groups has current  vacancies. According to FDA officials, the agency is trying to fill vacancies  in each of these groups, but the lower staff numbers may limit FDA’s  ability to conduct more foreign inspections.

ORA investigators based in the United States. This group of  investigators conducts the majority of foreign inspections; about 76  percent of foreign inspections in fiscal year 2018 involved an ORA  investigator based in the United States who conducts both foreign and  domestic inspections. FDA officials said that the more experienced  investigators from this group are expected to conduct three to six foreign  inspections per year, and investigators hired using generic drug user fees  are expected to inspect nine to 12 foreign establishments per year. As  of June 2019, there were 190 investigators eligible to conduct foreign  drug inspections, but officials said that as of November 2019, the agency  had an additional 58 vacancies in this group. Officials said that the  agency was in the process of hiring 26 ORA investigators based in the  United States to fill these vacancies, with 32 vacancies remaining. FDA  officials attributed the vacancies to multiple factors: investigator  retirements, investigator movement to other parts of FDA, and the need to  hire to additional investigator positions using generic drug user fees.  Officials also said that a reorganization within ORA led to a reduced  number of investigators who conduct drug manufacturing establishment  inspections. While FDA recently filled several of the vacancies, officials  told us that new investigators are not typically used for foreign inspections  until they have been with the agency for 2 to 3 years.

ORA dedicated foreign drug cadre. About 15 percent of foreign  inspections in fiscal year 2018 involved an investigator from ORA’s  dedicated foreign drug cadre—a group of ORA investigators based in the  United States who exclusively conduct foreign inspections. FDA officials  said that members of the cadre are expected to conduct 16 to 18 foreign  inspections each year. According to FDA, the cadre had 20 investigators  in 2012 and 15 investigators in 2016. However, the cadre had only 12  investigators as of November 2019, out of 20 available slots. According to  FDA officials, the agency is attempting to fill these positions from the  current ORA investigator pool, but officials are not confident that all 20  slots will be filled.

Investigators assigned to FDA’s foreign offices. Approximately 7  percent of foreign inspections in fiscal year 2018 involved investigators  from FDA’s foreign offices. The investigators conducting these  inspections are those based in the China and India foreign offices—the  countries where most drug inspections occur— and also include those on  temporary duty assignment to these offices. According to FDA officials,  these investigators are expected to conduct 15 foreign inspections each  year. We have noted high vacancy rates for these foreign offices in past  reports. While these vacancy rates have decreased over time,  vacancies persist. As of November 2019, FDA’s China office had three of  10 drug investigator positions vacant (a 30 percent vacancy rate), while  FDA’s India office had two of six drug investigator positions vacant (a 33  percent vacancy rate).

FDA has taken steps to address vacancies in the foreign offices, but  continues to face challenges. In our 2010 report, we recommended that  FDA develop a strategic workforce plan to help recruit and retain foreign  office staff. FDA released such a plan in March 2016, but the long- standing vacancies in the foreign offices raise questions about its  implementation. FDA officials told us that one challenge in recruiting  investigators for the foreign offices is that well-qualified investigators for  those positions need foreign inspection experience. For example, an  official in FDA’s India office told us that foreign inspections can be  challenging and the India office does not have the resources to develop  or train new investigators. Therefore, it is important to recruit investigators  who have experience conducting foreign inspections, and such  investigators are recruited from ORA. Thus, vacancies in the other two  groups of investigators can influence the number of staff available to  apply for positions in the foreign offices. Further, according to FDA  officials, after employees have accepted an in-country position, the  agency can experience significant delays before they are staffed in the  office due to delays in processing assignments. For example, an official in  FDA’s India office said that investigators need to complete a week-long  security training program and must obtain the security clearance needed  to work at the U.S. Embassy, which is where FDA’s foreign office is  located. However, the official told us that there are limited availabilities for  that training and background checks for security clearances can take  time. According to this official, FDA investigators do not usually receive  first priority for the training. FDA estimates that it can take as little as 1  year to over 2 years to clear background and medical checks and arrive  at a foreign office. For example, an investigator in FDA’s China office told  us that as a result of these requirements and other issues, it took nearly 2  years for the investigator to arrive at the office after FDA had accepted  the investigator’s application. According to FDA’s own strategic workforce  plan for the foreign offices, these types of delays have resulted in staff  changing their decision after accepting a position in the foreign offices.

Persistent Challenges Unique To Foreign Inspections Raise Questions About Their Equivalence To Domestic Inspections

Our preliminary analysis indicates that FDA continues to face unique  challenges when inspecting foreign drug establishments—as compared to  domestic establishments—that raise questions about the equivalence of  these inspections. Specifically, based on our interviews with drug  investigators in the dedicated foreign drug cadre and FDA’s foreign  offices in China and India, we identified four challenge areas related to  conducting foreign inspections, which are described below. Of the four  challenge areas identified, three areas—preannouncing inspections,  language barriers, and lack of flexibility—were also raised in our 2008  report.

Preannouncing Inspections. As we reported in 2008, the amount of  notice FDA generally gives to foreign drug establishments in advance of  an inspection is different than for domestic establishments. Domestic  drug establishment inspections are almost always unannounced, whereas  foreign establishments generally receive advance notice of an FDA  inspection. According to FDA officials, FDA is not required to  preannounce foreign inspections. However, they said the agency  generally does so to avoid wasting agency resources, obtain the  establishment’s assistance to make travel arrangements, and ensure the  safety of investigators when traveling in country.

FDA does conduct some unannounced foreign inspections, particularly if  the investigators conducting the inspection are based in FDA’s foreign  offices. However, FDA officials told us that FDA does not have data on  the frequency with which foreign drug inspections are unannounced, nor  the extent to which the amount of notice provided to foreign  establishments varies. According to FDA officials, this is because FDA  does not have a data field in its database to systematically track this  information. However, the officials estimated that the agency generally  gives 12 weeks of notice to establishments that investigators are coming  when investigators are traveling from the United States. While  investigators in FDA’s China and India offices do conduct unannounced  or short-notice inspections, these staff do not perform most of the  inspections in these countries. (See table 3).

Our preliminary work indicates that preannouncing foreign inspections  can create challenges and raises questions about the equivalence to  domestic inspections. Of the 18 investigators we interviewed, 14 said that  there are downsides to preannouncing foreign inspections, particularly  that providing advance notice gives foreign establishments the  opportunity to fix problems before the investigator arrives. For example,  when an inspection is preannounced, it gives establishments time to  clean up their facility and update or generate new operating procedures.  However, establishments are expected to be in a constant state of  compliance and always ready for an FDA inspection, and several  investigators told us seeing the true day-to-day operating environment for  an establishment is more likely during an unannounced inspection.

Of the 18 investigators we interviewed, 12 said that unannounced  inspections are generally preferable to preannounced inspections. One  investigator told us that, although they believe the best way to ensure  industry compliance to CGMPs is for establishments to not know when  FDA is coming for an inspection, there is no data that would allow the  agency to evaluate whether unannounced inspections are better than  preannounced inspections. In addition, some investigators told us that it is  still possible to identify serious deficiencies during preannounced  inspections. For example, investigators can still identify issues by looking  at the firm’s electronic records, including time-stamped data relating to  the creation, modification, or deletion of a record. Three investigators also  told us that in some cases there can be benefits to announcing  inspections in advance. For example, for preapproval inspections,  announcing the inspection in advance gives the establishment time to  organize the documentation and staff needed to conduct the inspection.

Language Barriers. Our preliminary work indicates that language  barriers—which we first reported as a challenge to conducting foreign  inspections in our 2008 report—can add time to inspections and raise  questions about the accuracy of information FDA investigators collect and  thus about the equivalence to domestic inspections. FDA generally does  not send translators on inspections in foreign countries. Rather,  investigators rely on the drug establishment to provide translation  services, which can be an English-speaking employee of the  establishment being inspected, an external translator hired by the  establishment, or an English-speaking consultant hired by the  establishment.

Of the 18 investigators that we interviewed, 14 said that language barriers  can be a challenge to conducting foreign inspections and were especially  challenging in parts of Asia, including China and Japan. Seven  investigators told us this is less of a challenge for inspections conducted  in other foreign countries, including India and countries in Europe,  because workers at establishments in these countries are more likely to  speak English, and documentation is also more likely to be in English.  Investigators told us that compared to domestic inspections, it can be  more challenging and take longer to complete typical inspection-related  activities, such as reviewing documentation or interviewing employees, if  the investigator needs to rely on translation.

Fourteen of the 18 investigators we interviewed said that there can be  concerns related to relying on establishment staff and independent  translators. Specifically, 11 investigators told us there can be  uncertainties regarding the accuracy of the information being translated,  particularly when investigators rely on the translation provided by an  employee of the establishment being inspected. For instance, one  investigator said that there is more risk of conflict of interest if the  establishment uses its own employees to translate. Another investigator  said that they went to a drug establishment in China that told FDA it had  English-speaking employees to translate the inspection, but that this was  not the case, and the investigator had to use an application on their  phone to translate the interviews. In addition, the firm representative  providing the translation may be someone that does not have the  technical language needed, which can make it harder to communicate  with firm staff and facilitate the inspection. One investigator told us that  the independent translators hired by firms are sometimes consultants  and, in those instances, it can seem like the consultants are coaching the  firm during the inspection.

FDA officials told us that when they conduct unannounced for-cause  inspections in China, investigators bring locally employed staff who work  in FDA’s China office to act as translators. The investigators we  interviewed said that in such instances, they valued knowing that the  translation they were getting was accurate. However, FDA does not have  the resources to provide locally employed staff on every inspection,  according to an FDA official. We will continue to examine this issue with  FDA as part of our ongoing work.

Lack of Flexibility. Our preliminary work indicates that, as we first  reported in 2008, the overseas travel schedule can present unique  challenges for FDA’s domestically based investigators—including both  ORA investigators and members of the dedicated foreign dug cadre— who conduct the majority of foreign inspections. Eight of the 12  dedicated foreign drug cadre investigators that we interviewed told us that  there is little flexibility to extend foreign inspections conducted by  domestically based investigators because the inspections they conduct  on an overseas trip are scheduled back-to-back in 3-week trips that may  involve three different countries. This raises questions about their  equivalence to domestic inspections. For instance, extending one  inspection would limit the amount of time the investigator has to complete  their other scheduled inspections, some investigators told us. In addition,  eight investigators told us that domestically based staff are generally  unable to extend the total amount of time spent on an overseas trip—one  investigator told us that an investigator would have to find something  really bad to justify an extension. In contrast, FDA officials told us that  inspections conducted by in-country investigators in China or India, and  domestic inspections in the United States, are generally scheduled one at  a time and can thus more easily be extended if the investigator needs  additional time to pursue potential deficiencies. However, in-country  investigators are not involved in the majority of inspections conducted in  China or India.

Three investigators from the dedicated foreign drug cadre told us that  when they travel overseas, they adjust their inspection approach to help  ensure they finish foreign inspections on time. For example, one  investigator told us an investigator may start the inspection in an area of  the establishment that was noted as having issues during the last  inspection. However, one investigator said that sometimes it is not  possible to cover everything in depth during a foreign inspection. Another  investigator told us that they focus on identifying the most serious issues  during a foreign inspection, and that less serious issues can be identified  in the establishment inspection report for reference in the next inspection.  Five investigators also noted that they work long hours during their  inspection to ensure they can complete the needed work. While FDA  may assign more than one investigator to an inspection to complete  needed work, one investigator said that FDA does not usually assign  more than one person to an inspection because investigators are  expected to have the experience to conduct inspections by themselves.  From fiscal years 2012 to 2018, the majority of both foreign and domestic  inspections were conducted by one person—77 percent and 66 percent,  respectively.

Post-Inspection Classification Process. According to FDA officials,  starting in fiscal year 2018, FDA implemented a new post-inspection  classification process: when an ORA investigator recommends an OAI  classification following an inspection, ORA compliance is required to send  that inspection report to CDER for review within 45 calendar days from  the inspection closeout. Among other things, the process was intended to  help ensure FDA can communicate inspection results to domestic and  foreign establishments within 90 days of the inspection closeout, as  committed to under the Generic Drug User Fee Amendments of  2017(GDUFA II). FDA officials told us that the changes also required an  additional ORA review for foreign inspection reports to align that process  with the process for domestic inspection reports. Although the 45-day  reporting time frame for potential OAI classifications is a requirement for  both domestic and foreign inspections, adding the additional level of  review within ORA effectively shortened the amount of time investigators  have to document findings for foreign inspections.

Our preliminary work indicates that the post-inspection reporting time  frames can create challenges for domestic investigators that conduct  foreign inspections and raise questions about the equivalence to  domestic inspections. Eight of the 18 investigators that we interviewed  said shortening the time for completing reports and adding a level of  review has made it more challenging to meet reporting requirements,  especially if serious deficiencies are identified during the inspection.  Investigators told us that for a potential OAI inspection, they now need to  send the inspection report to their supervisor for endorsement within 10  days of the closeout of a foreign inspection, regardless of when the  investigator’s next inspection is scheduled for, or whether the investigator  has to travel from overseas back to the United States after the inspection.  For example, if a domestic investigator finds serious deficiencies on the  first inspection, thus indicating an initial OAI classification, the investigator  needs to write and send the related inspection report to the ORA  supervisor for endorsement before returning home from the 3-week  overseas trip to meet the required time frame. One investigator told us  that, as a result of the time pressures, post-inspection reports may be  less thorough, and that some inspection observations could be better  supported if investigators had more time to write the reports.

In conclusion, foreign manufacturing establishments continue to be a  critical source of drugs for millions of Americans, and FDA inspections are  a key tool to ensure the quality of these drugs. Over the years since we  first examined this issue, FDA has made significant changes to adapt to  the globalization of the drug supply chain and has greatly increased the  number of inspections that it conducts of foreign establishments. Notably,  it has markedly increased the percentage of foreign inspections  conducted to monitor drugs already on the market, which we previously  noted were vital to FDA oversight of foreign establishments. However, the  agency continues to be faced with many of the same challenges in the  oversight of foreign establishments that we identified in our 2008 report.  Our preliminary work has identified inspection decreases, related in part  to FDA challenges filling investigator vacancies. We have also identified a  variety of unique challenges that investigators face in foreign inspections.  As we continue to conduct our work, we will further examine the  cumulative effect of these challenges that raise questions about FDA’s  ability to conduct equivalent inspections in foreign establishments. We will  examine the extent to which FDA has assessed its oversight of drugs  manufactured overseas and the steps it is taking to mitigate any risks,  and make recommendations as appropriate.

Chair DeGette, Ranking Member Guthrie, and Members of the  Subcommittee, this completes my prepared statement. I would be  pleased to respond to any questions that you may have at this time.

If you or your staff have any questions about this testimony, please  contact Mary Denigan-Macauley, Director, Health Care at (202) 512-7114  or DeniganMacauleyM@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this statement. GAO staff who made key contributions to this testimony  are William Hadley (Assistant Director); John Lalomio (Analyst-in- Charge); Katherine L. Amoroso; George Bogart; Zhi Boon; Derry Henrick;  Laurie Pachter; and Vikki Porter.

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More than 60% of drug manufacturers for the U.S. market are located overseas. The Food and Drug Administration inspects foreign and domestic drug manufacturers to ensure drug safety and effectiveness.

The number of inspections of foreign drug manufacturers has declined since FY 2016, which FDA attributes in part to fewer inspectors and difficulty filling jobs abroad

Most foreign inspections are preannounced, giving manufacturers time to prepare for inspections

We have long-standing concerns about FDA’s ability to oversee the global supply chain, a High Risk Series issue for 10 years.