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Testimony: 

Before the Permanent Subcommittee on Investigations, Committee on 
Governmental Affairs, U.S. Senate: 

United States Government Accountability Office: 

GAO: 

For Release on Delivery Expected at 9: 00 a.m. EDT: 

Thursday, July 22, 2004: 

PRESCRIPTION DRUGS: 

Preliminary Observations on Efforts to Enforce the Prohibitions on 
Personal Importation: 

Statement of Richard M. Stana, Director, Homeland Security and Justice 
Issues: 

GAO-04-839T: 

GAO Highlights: 

Highlights of GAO-04-839T, a testimony before the Permanent 
Subcommittee on Investigations, Committee on Governmental Affairs, U.S. 
Senate

Why GAO Did This Study: 

American consumers are increasingly drawn to the convenience, privacy, 
and cost advantages that might be accrued by purchasing prescription 
drugs over the Internet. However, there is growing concern about the 
safety of the drugs and the lawfulness of shipping the drugs into the 
United States through international mail and private carriers. Under 
current law, the importation of prescription drugs for personal use is 
illegal, with few exceptions. All prescription drugs offered for import 
must meet the requirements of the Federal Food, Drug, and Cosmetic Act, 
and those that are controlled substances also must meet the 
requirements of the Controlled Substances Import and Export Act. 
According to the agencies responsible for enforcing these laws, 
prescription drugs imported for personal use generally do not meet 
these requirements. The Department of Homeland Security’s U.S. Customs 
and Border Protection (CBP) and the Department of Health and Human 
Service’s Food and Drug Administration (FDA) are responsible for 
inspecting and interdicting unapproved prescription drugs that are 
being illegally imported via the U.S. mail or private carrier. 

This testimony reflects our preliminary observations from ongoing work 
to assess federal efforts to enforce the prohibitions on personal 
importation of prescription drugs. 

What GAO Found: 

CBP and FDA officials said that the volume of imported adulterated, 
misbranded, or unapproved prescription drugs is large and increasing, 
but complete data do not exist to document these observations. FDA 
officials said that they cannot assure the public of the safety and 
quality of drugs purchased from foreign sources that are largely 
outside the U.S. regulatory system. GAO’s recent report on a sample of 
drugs purchased from Internet pharmacies echoed these concerns. 

CBP and FDA officials at mail and private carrier facilities inspect 
and interdict some packages that contain prescription drugs. However, 
according to officials, because of resource constraints, many other 
packages containing prescriptions drugs are either not inspected and 
are released to addressees or are released after an inspection. CBP and 
FDA target certain packages for inspection based on the packages’ 
countries of origin and whether the packages are suspected of 
containing certain prescription drugs. However, packages that are not 
targeted typically bypass inspection and are released to addressees 
without an assessment of their contents or admissibility. FDA officials 
have acknowledged that tens of thousands of packages, containing drug 
products that may violate current laws and pose health risks to 
consumers, have been released. They said that time-consuming processing 
requirements and resource constraints limit their ability to perform 
more inspections.

Agency efforts to deal with imported prescription drugs are evolving. 
Two interagency task forces were established to study prescription drug 
importation and address related law enforcement issues, respectively. 
Also, to overcome differences in the way officials target and interdict 
shipments of unapproved prescription drugs at various mail and private 
carrier facilities, FDA has begun implementing new procedures to 
promote more uniformity across facilities. It is too soon to tell if 
these efforts are sufficient to address various health, safety, and law 
enforcement issues associated with the importation of prescription 
drugs. 

Packages suspected of containing imported prescription drugs awaiting 
FDA review: 

[See PDF for image]

[End of figure]

www.gao.gov/cgi-bin/getrpt?GAO-04-839T.

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Richard Stana at (202) 
512-8777 or Stanar@gao.gov.

[End of section]

Mr. Chairman and Members of the Subcommittee: 

I appreciate the opportunity to be here today to participate in this 
hearing on prescription drug importation. American consumers are 
increasingly drawn to the convenience, privacy, and cost advantages 
that might be accrued by purchasing over the Internet such prescription 
drugs as Valium, cholesterol-lowering drugs, and Viagra. However, there 
is growing concern, reported in the media and elsewhere, that persons 
who purchase prescription drugs from Internet pharmacies, particularly 
those pharmacies located in foreign countries, run the risk of taking 
drugs that may be compromised or not the authentic product they 
intended to purchase. Thus, American consumers may be exposed to 
potential health and safety risks. Furthermore, consumers may also be 
violating the law, unknowingly or intentionally, by having these drugs 
shipped into the United States through the international mail and 
private carriers.

Under current law, the importation of prescription drugs for personal 
use is illegal, with few exceptions. Two acts specifically regulate the 
importation of prescription drugs into the United States. That is, all 
prescription drugs offered for import must meet the requirements of the 
Federal Food, Drug, and Cosmetic Act and those that are controlled 
substances, as defined in the Controlled Substances Act,[Footnote 1] 
also must meet the requirements of the Controlled Substances Import and 
Export Act. Prescription drugs imported for personal use generally do 
not meet these requirements.

My testimony today reflects our preliminary observations from ongoing 
work to assess federal efforts to enforce the prohibitions on personal 
importation of prescription drugs, which was requested by the Chairman 
and Ranking Minority Member of this Subcommittee and the Ranking Member 
of the House Energy and Commerce Committee. Much of our work to date 
has focused on the efforts of the Department of Homeland Security's 
U.S. Customs and Border Protection (CBP) and the Department of Health 
and Human Service's Food and Drug Administration (FDA) to inspect and 
interdict prescription drugs that are being imported via the U.S. mail 
or private carrier, such as FedEx or DHL, for personal use. In this 
statement, I make the following points: 

* CBP and FDA officials said that the amount of unapproved prescription 
drugs illegally entering the country is large and increasing. The 
overall healthfulness and safety of these imported drugs is not 
assured, and limited testing showed that some of these drugs pose risks 
to consumers.

* CBP and FDA interdict some packages that contain prescription drugs, 
but many other packages containing these drugs are released to 
addressees--either not inspected and released or released after 
inspection. According to CBP and FDA officials, this is because of 
resource and other constraints.

* CBP and FDA officials told us that their respective requirements for 
inspecting and processing violative materials can be time-consuming and 
in some cases hamper their enforcement efforts.

* Agency efforts to address issues concerning the importation of 
prescription drugs are evolving, but it is still too early to tell 
whether these efforts will adequately address every aspect of the law 
enforcement and safety issues associated with the importation of these 
drugs.

My testimony is based on our ongoing review of federal laws and agency 
policies, procedures, and practices related to personal importation of 
prescription drugs; visits to three international mail facilities 
operated by the U.S. Postal Service and two private carrier facilities; 
and interviews with officials from CBP, FDA, the Department of 
Justice's Drug Enforcement Administration (DEA), the U.S. Postal 
Service, and the Department of Homeland Security's U.S. Immigration and 
Customs Enforcement. We did the work reflected in this statement from 
March to July 2004 in accordance with generally accepted government 
auditing standards. We plan to finish our work and issue a report later 
this year. Additional information on our scope and methodology can be 
found in appendix I.

Background: 

All international mail and packages entering the United States through 
the U.S. Postal Service and private carriers are subject to potential 
CBP inspection at the 13 International Mail Branches (IMBs) located at 
U.S. Postal Service international mail facilities and 29 express 
consignment carrier facilities operated by private carriers located 
around the country. CBP inspectors can target certain packages for 
inspection or randomly select packages for inspection. CBP inspects 
for, among other things, illegally imported controlled substances, 
contraband, and items--like personal shipments of prescription drugs--
that may be inadmissible. CBP inspections can include examining the 
outer envelope of the package, using x-ray detectors, or opening the 
package to physically inspect the contents. Each year the IMBs and 
carrier facilities process hundreds of millions of pieces of mail and 
packages. Among these items are prescription drugs ordered by consumers 
over the Internet, the importation of which is prohibited under current 
law, with few exceptions.

Two acts--the Federal Food, Drug, and Cosmetic Act and the Controlled 
Substances Import and Export Act--specifically regulate the importation 
of prescription drugs into the United States. Under the Federal Food, 
Drug, and Cosmetic Act, as amended, FDA is responsible for ensuring the 
safety, effectiveness, and quality of domestic and imported drugs and 
may refuse to admit into the United States, any drug that appears to be 
adulterated, misbranded, or unapproved for the U.S. market as defined 
in the act.[Footnote 2] Under the act and implementing regulations, 
this includes foreign versions of FDA-approved drugs because, for 
example, neither the foreign manufacturing facility nor the 
manufacturing methods and controls were reviewed by FDA for compliance 
with U.S. statutory and regulatory standards. The act also prohibits 
reimportation of a prescription drug manufactured in the United States 
by anyone other than the original manufacturer of that drug. According 
to FDA, prescription drugs imported by individual consumers typically 
fall into one of these prohibited categories. However, FDA has 
established a policy that allows local FDA officials to use their 
discretion to permit personal importation of prescription drugs that do 
not contain controlled substances under specified circumstances, such 
as importing for treatment of a serious condition a small quantity, 
generally not more than a 90-day supply, of a drug not available 
domestically.[Footnote 3] The importation of unapproved foreign 
versions of prescription drugs like Viagra (an erectile dysfunction 
drug) or Propecia (a hair loss drug), for example, would not qualify 
under the personal importation policy because approved versions are 
readily available in the United States.

In addition, the Controlled Substances Import and Export Act, among 
other things, generally prohibits personal importation of those 
prescription drugs that are also controlled substances, such as Valium 
or codeine. (See app. II for general description of controlled 
substances.) Under the act, the importation of controlled substances is 
prohibited unless the importer is registered with DEA, and such 
registration is generally not available for importation for personal 
use. The act and implementing regulations permit an individual traveler 
under certain circumstances to carry a personal use quantity of a 
controlled substance (except a substance in Schedule I) across the U.S. 
border, but they do not make a similar exception for importation by 
mail or private carrier.[Footnote 4]

CBP inspects packages for prescription drugs on behalf of DEA and FDA. 
Upon inspection, CBP is to seize illegally imported controlled 
substances on behalf of DEA.[Footnote 5] CBP may take steps to destroy 
the seized and forfeited substance or turn the seized substance over to 
other federal law enforcement agencies for further 
investigation.[Footnote 6] CBP is to turn over packages suspected of 
containing prescription drugs that are not controlled substances to 
FDA.[Footnote 7] FDA investigators may inspect such packages and hold 
those that appear to be adulterated, misbranded, or unapproved, but 
must notify the addressee and allow that individual the opportunity to 
present evidence as to why the drug should be admitted into the United 
States.[Footnote 8] If the addressee does not provide evidence that 
overcomes the appearance of inadmissibility, then the item is refused 
admission.

Figure 1 illustrates the two acts that specifically govern the 
importation of prescription drugs into the United States. It also 
presents the roles of FDA, DEA, and CBP in implementing those acts.

Figure 1: Acts Governing the Personal Importation of Prescription Drugs 
into the United States and FDA, DEA, and CBP Roles Implementing Those 
Acts: 

[See PDF for image]

[End of figure]

Volume of Prescription Drug Imports Is Said to be Large and Increasing, 
and the Health and Safety of these Drug Imports is Not Assured: 

CBP and FDA officials said that the volume of unapproved prescription 
drugs illegally imported through the IMBs or carrier facilities is 
large and steadily increasing. However, complete data do not exist to 
document this observation. During special operations, CBP and FDA have 
attempted to determine the volume of imported prescription drugs 
entering through selected IMBs. Generally, these were one-time, 
targeted efforts to identify and tally all of the packages containing 
prescription drugs at certain time periods. The limited data collected 
have shown wide variations in volume. For example, CBP officials at one 
IMB estimated that approximately 3,300 packages containing prescription 
drugs entered the facility in one week. In 2004, CBP officials at 
another IMB determined that 4,300 packages containing prescription 
drugs entered the facility in one day. While these data may provide 
estimates regarding the volume entering selected IMBs for certain time 
periods, the data may not be representative of other time periods or 
projectable to other locations.

FDA officials have stated that they cannot provide assurance to the 
public regarding the safety and quality of drugs purchased from foreign 
sources, which are largely outside of their regulatory system. 
Additionally, FDA officials indicated that consumers who purchase 
prescription drugs from foreign-based Internet pharmacies are at risk 
of not fully knowing the safety or quality of what they are importing. 
FDA officials also have stated that while some consumers may purchase 
genuine products, others may unknowingly purchase counterfeit products, 
expired drugs, or drugs that were improperly manufactured.

CBP and FDA have conducted special operations to do limited assessments 
of the nature of some imported prescription drugs, and these operations 
have raised questions about the safety of some of the drugs analyzed. 
For example, during an operation undertaken in 2003 at four IMBs, CBP 
and FDA inspected 1,153 packages that contained prescription 
drugs.[Footnote 9] According to a CBP report, 1,019, or 88 percent, of 
the drug products were violative because they were prohibited for 
import, including Lipitor (a cholesterol-lowering drug), Viagra, and 
Propecia. A CBP laboratory analyzed 180 drug samples. This analysis 
showed that the majority of the drugs were never approved by FDA. 
Furthermore, the operation showed that many of the unapproved drugs 
could pose safety risks. The samples included drugs that were withdrawn 
from the U.S. market for safety reasons; animal drugs not approved for 
human use; and drugs that carry risks because they require careful 
dosing, initial screening, or periodic patient monitoring. In addition, 
other drugs tested were found to contain controlled substances 
prohibited for import, and some of the drugs contained no active 
ingredients. Figure 2 illustrates the results of the CBP laboratory 
analysis.

Figure 2: Results of CBP's Laboratory Analysis of 180 Imported Drugs: 

[See PDF for image]

[End of figure]

In a recent report and testimony before this Subcommittee, we found 
that prescription drugs ordered from some foreign-based Internet 
pharmacies posed safety risks for consumers.[Footnote 10] Specifically, 
we identified several problems associated with the handling, FDA 
approval status, and authenticity of 21 prescription drugs samples 
purchased from Internet pharmacies located in several foreign 
countries--Argentina, Costa Rica, Fiji, Mexico, India, Pakistan, 
Philippines, Spain, Thailand, and Turkey. Our work showed that most of 
these drug samples, all of which we received via consignment carrier 
shipment or the U.S. mail, were unapproved for the U.S. market because, 
for example, the labeling[Footnote 11] or the foreign manufacturing 
facility, methods, and controls were not reviewed by FDA. Of the 21 
samples: 

* None included dispensing pharmacy labels that provided instructions 
for use, and only about one-third included warning information.

* Thirteen displayed problems associated with the handling of the drug; 
three samples that should have been shipped in a temperature-controlled 
environment arrived in envelopes without insulation; and five samples 
contained tablets enclosed in punctured blister packs, potentially 
exposing them to damaging light or moisture.

* Two were found to be counterfeit versions of the products we ordered, 
and two had a significantly different chemical composition than that of 
the product we had ordered.

We found fewer problems among 47 samples purchased from U.S. and 
Canadian Internet pharmacies. Although most of the drugs obtained from 
Canada were of the same chemical composition as that of their U.S. 
counterparts, most were unapproved for the U.S. market. We stated that 
it was notable that we identified numerous problems among the samples 
received despite the relatively small number of drugs we purchased, 
consistent with problems recently identified by state and federal 
regulatory agencies.

Some Packages Containing Prescription Drugs Are Interdicted, but Others 
Are Released: 

Our work thus far shows that while CBP and FDA interdicted some 
packages that contain prescription drugs, other similar packages were 
released--either not inspected and released or released after 
inspection. CBP officials told us that certain packages were targeted 
for inspection. However, packages that were not targeted typically 
bypass inspection and are released to the addressee without an 
assessment of their contents or admissibility. Many packages that were 
held by CBP officials for FDA at the IMBs were also subsequently 
released to the addressee. FDA has acknowledged that tens of thousands 
of packages have been released, although they may contain drug products 
that violate current laws and pose health risks to consumers. FDA 
officials at the IMBs said that the packages were released to the 
addressee because FDA investigators were unable to process the volume 
of packages turned over to them. FDA headquarters officials told us 
that this occurred because of limited available resources relative to 
the volume of unapproved prescription drugs entering the country.

Packages Not Targeted for Inspection and Released: 

According to CBP and FDA officials at the IMBs we visited, CBP and FDA 
use various approaches to target certain incoming international mail 
packages for inspection. These include targeting packages from certain 
countries and/or packages suspected of containing certain prescription 
drugs. For example, at one IMB we visited, FDA provided CBP with a list 
of targeted countries--the composition of which changed periodically. A 
recent list targeted seven countries and specific areas in one other 
country. FDA officials asked that CBP hold the packages they suspected 
of containing prescription drugs that were from the targeted countries. 
Typically, CBP officials told us that when packages containing 
prescription drugs were detected, but were not from one of the targeted 
countries, they were released to the addressee without an assessment of 
their admissibility. Accordingly, CBP officials stated that packages 
containing prescription drugs unapproved for import were released daily 
without FDA review.

According to CBP and FDA officials at the carrier facilities we 
visited, packages containing prescription drugs sent through these 
facilities may also be released without inspection. Unlike packages at 
IMBs, packages arriving at carrier facilities we visited were preceded 
by advance manifest information, which included the shipper's 
declaration describing the contents and its value. CBP and FDA 
officials review the manifest information to target packages for 
inspection before their arrival. Agency officials at two carrier 
facilities we visited told us that FDA officials were not typically on-
site and electronically reviewed the manifests and targeted incoming 
packages declared as prescription drugs. FDA officials noted that 
packages containing prescription drugs could potentially avoid their 
review if the manifest information was not accurate. CBP and FDA 
officials told us there were no assurances that the shipper's 
declarations were accurate. For example, CBP and FDA officials at the 
carrier facility found eight packages containing a human growth 
hormone--unapproved for import--that were inaccurately manifested as 
glassware.

Packages Released after Inspection: 

FDA officials said that some packages that were inspected and 
determined to contain prescription drugs at the IMBs were released 
because they could not process them. For example, at one IMB, CBP 
officials held 16 bins containing roughly 3,000 packages for FDA 
investigators on a weekly basis. However, the FDA officials estimated 
that in one week, they could open and fully inspect about 140 packages. 
In making the decision regarding what to inspect, two FDA investigators 
considered whether the packages contained prescription drugs considered 
to be an enforcement priority, including injectable drugs and certain 
controlled substances, such as steroids. The FDA officials told us that 
they typically released packages that did not contain a priority drug, 
even though the packages were believed to contain other prescription 
drugs that were not approved for import. Figure 3 shows bins containing 
packages of suspected prescription drugs being held for FDA review and 
possible inspection.

Figure 3: Bins Containing Packages of Suspected Prescription Drugs 
Being Held for FDA Review and Possible Inspection.

[See PDF for image]

[End of figure]

At another IMB, CBP officials said that they usually released packages 
containing prescription drugs that appeared to be a 90-day supply or 
less--in line with one of the criteria in FDA's personal importation 
policy.[Footnote 12] For example, after viewing an x-ray image of a 
package, CBP performed a visual inspection of the outer container of a 
medication, labeled as a treatment for ulcers,[Footnote 13] determined 
that it appeared to contain 90 pills, and released it. At this same 
facility, FDA officials told us that every week CBP turned over to FDA 
hundreds of packages. CBP told us that these packages contained 
quantities of prescription drugs that appeared to be more than a 90-day 
supply. However, the FDA officials stated that they were able to 
process a total of approximately 20 packages per day. As a result, the 
FDA officials told us they returned many of the packages to CBP, citing 
an inability to process every package. The CBP officials said that most 
of the returned packages were released to the addressees. For example, 
CBP officials told us that several packages suspected of containing 
generic Viagra, unapproved for import, were returned by FDA and were 
released.

Officials Said Process Requirements Are Time-Consuming and Can Hamper 
Enforcement Effort: 

FDA officials told us that for packages found to contain prescription 
drugs, processing requirements are time-consuming and can hamper their 
ability to process all of the packages that are detained by CBP. FDA 
processing requirements include identifying the drugs, measuring the 
volume, entering this information into a FDA database, taking pictures 
of the drugs, preparing the drugs for temporary storage, and sending 
notification to the addressees to provide evidence regarding the 
admissibility of the drug. Processing time varies depending on the 
quantity and variety of drugs in the package.

In addition, processing time increases if research is required to 
determine the drug type. For example, FDA officials at one IMB stated 
that some prescription drugs are not immediately identifiable, 
particularly when shipped without labels or with labels in a foreign 
language. Figure 4 illustrates an example of drugs that was sent 
without labeling.

Figure 4: Drugs Sent without Labeling.

[See PDF for image]

[End of figure]

FDA officials at the IMBs we visited stated that considering these many 
factors, processing a single package can take anywhere from a few 
minutes to several hours. FDA officials who are responsible for 
reviewing manifest information for drugs shipped through the private 
carriers stated that it can take several days to process a package, 
particularly if they need to obtain additional information regarding 
the shipment.

FDA headquarters officials said that packages that contain prescription 
drugs that appear to be unapproved for import cannot be automatically 
refused and returned because of the statutory requirement that FDA hold 
the package and give the addressee the opportunity to provide evidence 
of admissibility. Officials said that this requirement applies to all 
drug imports with few exceptions. According to FDA investigators, in 
most instances, the addressees did not present evidence to support the 
drugs' admissibility, and the drugs were ultimately provided to CBP or 
the U.S. Postal Service for return to sender.

CBP officials at two IMBs told us that they could not turn over all 
packages they suspected of containing prescription drugs because FDA 
officials were not able to process all of the packages. FDA officials 
at one IMB stated that the processing time affected the number of 
packages they could inspect and was the reason many of the packages 
that were held up by CBP were ultimately released to the addressee 
without inspection. A FDA headquarters official stated that 
considerable storage space is needed to hold the detained packages, 
while the notice, opportunity to respond, and the agency's decision are 
pending. For example, one FDA IMB official told us that space 
limitations have affected the number of packages they are able to 
store, including those packages held on-site awaiting a response from 
the addressee. Figure 5 shows drugs stored at one IMB as they pass 
through FDA's process, including those awaiting addressees' responses.

Figure 5: Drugs in Storage as They Pass through FDA's Process at One 
IMB: 

[See PDF for image]

[End of figure]

Processing requirements for controlled substances can also be 
burdensome if an IMB receives a high volume of controlled substances in 
the mail. According to CBP officials, the seizure process requires that 
CBP inspectors record the contents of each package--including the type 
of drugs and the number of pills or vials in each package--before it is 
turned over to seized property staff for possible investigation by 
Immigration and Customs Enforcement, forfeiture, and eventual 
destruction. CBP officials at one IMB told us that in recent months 
they have observed substantial increases in the volume of prescription 
drugs containing controlled substances being sent through the 
international mail because, in their view, of the increased incidence 
of consumers ordering drugs over the Internet. Although CBP officials 
had been seizing substantially more of these drugs in recent months, 
they had also accumulated a sizable backlog of controlled substances 
awaiting seizure because, according to officials, they did not have the 
resources to begin the seizure process. By June 2004, CBP at this IMB 
had accumulated 123 bins of mail, containing over 40,700 packages of 
Schedule IV controlled substances--including the tranquilizer Valium, 
antidepressants, and painkillers. Figure 6 shows some of the bins of 
controlled substances that were being held awaiting formal seizure, as 
of May 14, 2004.

Figure 6: Controlled Substances Accumulated and Awaiting Seizure at One 
IMB: 

[See PDF for image]

[End of figure]

According to CBP officials at this facility, as the controlled 
substances continued to accumulate, they became concerned that they 
would not be able resolve the backlog. In June, a CPB official said 
that CBP IMB officials asked CBP headquarters for permission to send 
the products back to the senders as an alternative to seizure, and to 
keep these drugs from entering U.S. commerce. According to this 
official, CBP's headquarters office granted them permission to send 
most of the drugs back to the sender because the backlog would have 
taken months to resolve.[Footnote 14] One CBP official said that the 
ability to return the controlled substances enabled CBP to clear the 
backlog in two to three weeks rather than the one to two years they 
projected it would have taken had CBP been required to begin seizure 
proceedings for each item. Officials at the facility said that they are 
now seizing controlled substances as they arrive at the facility.

Agency Efforts to Address the Importation of Prescription Drugs Are 
Evolving: 

Our preliminary work revealed a number of efforts, including 
interagency initiatives that are being undertaken in response to 
concerns raised about the importation of prescription drugs. For 
example, the Medicare Prescription Drug, Improvement, and Modernization 
Act of 2003 directed the Secretary of Health and Human Services, in 
consultation with appropriate government agencies, to conduct a study 
of the importation of drugs into the United States and submit a report 
to Congress (P.L. 108-173). The conference report (House Report 108-
391) enumerated questions to be addressed in this study including, 
among other things: 

* assessing the scope, volume, and safety of unapproved drugs, 
including controlled substances, entering the United States via mail 
shipment; and: 

* estimating agency resources, including additional field personnel, 
needed to adequately inspect the current amount of pharmaceuticals 
entering the country.

In February 2004, the Secretary of Health and Human Services appointed 
a task force, chaired by the Surgeon General, on drug importation. It 
included members representing the department, CBP, DEA, Department of 
Justice trial attorneys, and the Office of Management and Budget. 
Between March and May, the task force held public hearings to gather 
information to address the questions posed by Congress. According to an 
FDA official, as of July 2004, the task force staff was reviewing the 
testimony from the public hearings and the comments sent to the Federal 
Register docket to answer the questions posed in the conference report. 
The official said that the task force report is expected to be 
completed by this fall so that the Secretary of Health and Human 
Services can meet his December 2004 deadline for reporting to Congress.

In addition, a CBP official told us that CBP is leading an interagency 
pharmaceutical task force, established in January 2004 to address 
various law enforcement issues related to the importation of 
prescription drugs and miscellaneous pharmaceuticals. The task force, 
which includes managers and senior managers from CBP, FDA, DEA, the 
Office of National Drug Control Policy, U.S. Immigration and Customs 
Enforcement, as well as legal counsel from the Department of Justice 
and other agencies, meets every two months. According to the CBP 
official, the task force has established five interagency working 
groups designed to tackle specific issues identified by the task force. 
The working groups, which meet more frequently, are focused on 
improving information sharing and law enforcement targeting criteria, 
increasing public awareness of potential dangers of imported 
pharmaceuticals, reviewing and enhancing mail and express mail 
consignment procedures, working cooperatively with industry, and legal 
issues. The groups report the results of their enforcement efforts to 
the task force, which makes suggestions for future efforts.

Our preliminary discussions with CBP about the activities of the 
working groups revealed initiatives currently under way by two of the 
groups. In one instance, the working group on mail and express mail 
consignment procedures has been involved in recent interagency 
enforcement operations at selected international mail facilities. 
During these operations, the interagency group targeted and found mail 
containing nonscheduled prescription drugs as well as controlled 
substances. According to the CBP official, these operations resulted in 
investigations of commercial shipments of the prescription drugs by 
agents from the task force and working group and helped the law 
enforcement agencies identify Internet addresses for purposes of future 
investigations. The CBP official told us that, in another instance, the 
working group focused on increasing public awareness of the potential 
dangers of imported pharmaceuticals had developed public service 
announcements that are to be posted on the Internet. Appendix III shows 
one of these announcements that was recently posted on the CBP web 
site.

Individual agencies are also taking steps to enhance their ability to 
deal with inspection and interdiction issues associated with imported 
prescription drugs. As discussed earlier, during our visits to the 
three IMBs, we noted that CBP and FDA officials at those facilities had 
adopted different approaches for targeting and interdicting 
prescription drugs. FDA headquarters officials also recognized this and 
in response indicated that a more uniform approach was needed. 
According to these officials, FDA has drafted a set of standard 
operating procedures that will apply to the handling of imported 
prescription drugs consistently across the 13 International Mail 
Branches. FDA officials said that these procedures have been developed 
to apply to the handling of prescription drugs nationwide, but will 
also give officials at individual facilities some flexibility to adopt 
procedures that address uniquely local conditions. FDA headquarters 
officials told us they have begun implementing the procedures at 
selected IMBs and plan to implement them at more locations. FDA 
officials also said that they were developing a similar set of standard 
operating procedures that would apply to the inspection and 
interdiction of imported prescription drugs at the consignment carrier 
facilities. CBP officials told us that CBP expects that these 
guidelines will also discuss CBP responsibilities for handling imported 
prescription drugs.

In closing, Mr. Chairman, it has been discussed in the media and 
elsewhere that American consumers are purchasing prescription drugs for 
importation in increasing numbers. Our preliminary observations 
indicate that CBP and FDA face considerable challenges inspecting and 
interdicting these drugs to help ensure compliance with current law. 
Currently data are unavailable to estimate the volume of prescription 
drugs entering the country, and the overall health and safety risks of 
these drugs are unknown. CBP and FDA are inspecting and interdicting 
some of the unapproved prescription drugs that are entering the 
country, but others bypass inspection and are sent to consumers who 
purchased them, often because, according to CBP and FDA officials, 
time-consuming processing requirements and staffing constraints limit 
their ability to perform more inspections. Although agencies like CBP, 
FDA, and DEA have begun initiatives to deal with various aspects of the 
drug importation issue, it is too early to tell whether these efforts 
will adequately address every dimension of the law enforcement and 
safety issues associated with the importation of prescription drugs.

This concludes my prepared statement. In the next several weeks we plan 
to follow up with CBP and FDA officials on their plans to enhance their 
enforcement activities. I would be pleased to answer any questions you 
and the Subcommittee members may have.

GAO Contacts and Staff Acknowledgments: 

For further information about this testimony, please contact Richard 
Stana, Director, Homeland Security and Justice Issues, on (202) 512-
8777 or at stanar@gao.gov. Major contributors to this testimony 
included John Mortin, Yelena Harden, Barbara Stolz, Frances Cook, and 
James Russell.

[End of section]

Appendix I: Scope And Methodology: 

To understand importation restrictions and enforcement requirements, we 
reviewed current federal laws on the importation of prescription drugs 
and controlled substances. We reviewed current CBP and FDA policies, 
procedures, and guidance related to prescription drugs and controlled 
substance importation. We reviewed applicable importation and 
interdiction data from CBP and FDA. We conducted interviews with 
officials at CBP, FDA, U.S. Postal Service, U.S. Immigration and 
Customs Enforcement, and DEA.

To understand inspection procedures, we visited three IMBs in Chicago, 
Los Angeles, and New York and two carrier facilities in Cincinnati (for 
the DHL Corporation) and in Memphis, (for the FedEx Corporation). We 
judgmentally selected these facilities based on the overall number of 
packages processed at the facilities and their geographic dispersion. 
At these locations, we observed inspection and interdiction practices; 
met with CBP and FDA management, inspectors, and investigators to 
discuss issues related to inspection, manifest reviews, and 
pharmaceutical importation volume; and reviewed relevant documents on 
inspection and interdiction procedures. At the IMBs we also met with 
officials from the U.S. Postal Service regarding mail handling and 
processing procedures.

We did the work reflected in this statement from March to July 2004 in 
accordance with generally accepted government auditing standards.

[End of section]

Appendix II: General Description of the Controlled Substance Schedules 
I-V: 

The drugs and drug products that come under the Controlled Substances 
Act are divided into five schedules. A general description and examples 
of the substances in each schedule are outlined below in table 1.

Table 1: General Description of Controlled Substance Schedules I-V: 

Schedule: I; 
Description of substances in the schedule: Substances that have no 
accepted medical use in the United States and have a high potential 
for abuse; 
Examples: Heroin, lysergic acid diethylamide (LSD), marijuana, and 
gama hydroxybutyric acid (GHB).

Schedule: II; 
Description of substances in the schedule: Substances that have a high 
potential for abuse with severe psychic or physical dependence 
liability--certain narcotic, stimulant, and depressant drugs; 
Examples: Opium, morphine, codeine, methadone, and meperidine 
(Demerol).

Schedule: III; 
Description of substances in the schedule: Substances that have a 
potential for abuse that is less than those in Schedules I and II and 
include compounds containing limited quantities of certain narcotic 
drugs and non-narcotic drugs; 
Examples: Anabolic steroids; derivatives of babituric acid (except 
those listed in another schedule); benzphetamine; and any compound, 
mixture, preparation or suppository dosage form containing 
amobarbital, secobarbital, or pentobarbital.

Schedule: IV; 
Description of substances in the schedule: Substances that have a 
potential for abuse that is less than those listed in Schedule III; 
Examples: Barbital, alprazolam (Xanax), Cathine-- constituent of the 
"Khat" plant, and Diazepam (Valium).

Schedule: V; 
Description of substances in the schedule: Substances that have a 
potential for abuse that is less than those listed in Schedule IV and 
consist primarily of preparations containing limited quantities of 
certain narcotic and stimulant drugs; 
Examples: Pyrovalerone (Centroton, Thymergix). 

Source: GAO analysis of Drug Enforcement Administration information. 

Note: Schedule I substances are not the subject of this report.

[End of table]

[End of section]

Appendix III: CBP Public Service Announcement Posted on the Internet: 

[See PDF for image]

[End of image]

[End of section]

FOOTNOTES

[1] The Controlled Substances Act establishes a classification 
structure for certain drugs and chemicals that are designated as 
controlled substances. This structure places controlled substances in 
one of five schedules, based on their medicinal value, risk to public 
health, and potential for abuse and addiction, among other factors. 
Schedule I is reserved for the most dangerous drugs that have no 
currently accepted medical use, such as heroin and ecstasy. 
Prescription drugs that are also controlled substances, such as Valium 
or codeine, fall in schedules II through V.

[2] An unapproved drug includes one that has not been demonstrated to 
be safe and effective and for which the manufacturing facility, 
methods, and controls have not been shown to meet FDA standards. 
Failure to meet other statutory and regulatory standards relating to 
labeling, handling, and packaging may result in a drug being considered 
adulterated or misbranded. See 21 U.S.C. §§ 811, 812 §§ 351, 352, 355.

[3] According to the policy, other conditions should be met as well, 
such as (1) provision of the name and address of the doctor licensed in 
the United States responsible for the importer's treatment with the 
product or evidence that the product is for continuation of treatment 
begun in a foreign country and (2) the absence of any known 
commercialization or promotion to persons residing in the United States 
by those involved in the distribution of the product at issue. 
Alternatively, in the case of a drug that is not for a serious 
condition, the policy also permits FDA officials to use their 
discretion to allow importation of that drug if the intended use is 
identified, and the product is not known to represent a significant 
health risk. A complete description of FDA's personal importation 
policy can be found in chapter 9 of FDA's Regulatory Procedures Manual, 
which is available on the agency's web site.

[4] 21 U.S.C. 956(a), 957(b)(1)(C); 21 C.F.R. 1301.26. The controlled 
substance must be in the original container in which it was dispensed 
to the individual. The individual must declare that it is possessed for 
personal use or for an accompanying animal and provide the trade or 
chemical name and schedule of the substance. If the traveler is a U.S. 
resident, he or she may bring no more than 50 dosage units of the 
substance without a prescription.

[5] 19 USC § 1595a(c)(1)(B); 19 C.F.R. §§ 162.23, 145.59, 145.58, 
12.36. Schedule I and II controlled substances are subject to summary 
forfeiture. 

[6] 19 CFR §§ 162.31, 162.32, 162.45, 162.45a, 162.46, 162.47, 162.63. 

[7] 21 U.S.C. § 381(a); 19 C.F.R. §§ 12.1(a), 145.57; see also Chapter 
9 of FDA's Regulatory Procedures Manual, Subchapter Coverage of 
Personal Importations, "Mail Shipments" http://www.fda.gov/ora/
compliance_ref/rpm_new2/ch9pers.html. Downloaded May 18, 2004.

[8] 21 U.S.C. § 381(a); 21 CFR §1.94.

[9] According to CBP officials, packages shipped through four IMBs were 
examined over a 3-day period. Approximately 100 parcels (each of which 
may have contained multiple drug products) per day per facility were 
selected based upon their country of origin and historical experience.

[10] See U.S. General Accounting Office, Internet Pharmacies: Some Pose 
Safety Risks for Consumers, GAO-04-820 (Washington, D.C.: June 17, 
2004) and U.S. General Accounting Office, Internet Pharmacies: Some 
Pose Safety Risks for Consumers and Are Unreliable in Their Business 
Practices, GAO-04-888T (Washington, D.C.: June 17, 2004).

[11] The term "labeling" is broader than the term "label" and includes 
all labels and other written, printed, or graphic matter upon an 
article or its container or wrapper, or that accompanies the article. 
See 21 U.S.C. § 321(m). 

[12] For a description of some of the other criteria in FDA's personal 
importation policy, see note 3 and the accompanying text.

[13] This medication was labeled as a Canadian drug, although it had a 
New Zealand return address. 

[14] According to a CBP official, most of the drugs returned were 
Schedule IV controlled substances. They said that a small number of the 
packages contained nonschedule prescription drugs that were referred to 
FDA. Also, CBP seized a small number of items that did not have a 
return address. 

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