Prescription Drugs: Preliminary Observations on Efforts to	 
Enforce the Prohibitions on Personal Importation (22-JUL-04,	 
GAO-04-839T).							 
                                                                 
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.								 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-04-839T					        
    ACCNO:   A11069						        
  TITLE:     Prescription Drugs: Preliminary Observations on Efforts  
to Enforce the Prohibitions on Personal Importation		 
     DATE:   07/22/2004 
  SUBJECT:   Consumer protection				 
	     Crimes or offenses 				 
	     Drugs						 
	     Food and drug law					 
	     Health care cost control				 
	     Health hazards					 
	     Import regulation					 
	     Import restriction 				 
	     Importing						 
	     Inspection 					 
	     Internet						 
	     Product safety					 
	     Safety regulation					 
	     Safety standards					 
	     Controlled substances				 
	     Prescription drugs 				 

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GAO-04-839T

United States Government Accountability Office

GAO Testimony

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

For Release on Delivery

Expected at 9:00 a.m. EDT PRESCRIPTION DRUGS

Thursday, July 22, 2004

  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

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

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.

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 [email protected].

July 22, 2004

PRESCRIPTION DRUGS

Preliminary Observations on Efforts to Enforce the Prohibitions on Personal
Importation

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 timeconsuming 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

Source: GAO with permission of CBP and FDA.

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,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

1The 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.

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:

o  	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.

o  	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.

o  	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.

o  	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.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

2An 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. S:S: 811, 812 S:S: 351, 352, 355.

drug not available domestically.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.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.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.6 CBP is to turn over

3According 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.

421 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.

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

619 CFR S:S: 162.31, 162.32, 162.45, 162.45a, 162.46, 162.47, 162.63.

packages suspected of containing prescription drugs that are not
controlled substances to FDA.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.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.

7 21 U.S.C. S: 381(a); 19 C.F.R. S:S: 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. S: 381(a); 21 CFR S:1.94.

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

Source: GAO analysis of 19 U.S.C. S: 1595a(c); 21 U.S.C. S:S: 381, 956,
957; U.S. Food and Drug Administration, Regulatory Procedures Manual,
Chapter 9, Subchapter: Coverage of Personal Importations.

  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.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

9According to CBP officials, packages shipped through four IMBs were
examined over a 3day 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.

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

Drugs with no active ingredients

Drugs that contained controlled substances prohibited for import

Drugs that were not FDA approved Source: GAO analysis of CBP information.

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.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

10See 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).

U.S. market because, for example, the labeling11 or the foreign
manufacturing facility, methods, and controls were not reviewed by FDA. Of
the 21 samples:

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

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

o  	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

11The 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.
S: 321(m).

Packages Not Targeted for Inspection and Released

Packages Released after Inspection

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.

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.

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.

Source: GAO with permission of CBP and FDA.

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

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.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,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.

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.

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

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

Figure 4: Drugs Sent without Labeling.

Source: FDA.

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

Source: FDA.

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

Source: GAO with permission of CBP and FDA.

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

  Agency Efforts to Address the Importation of Prescription Drugs Are Evolving

sender because the backlog would have taken months to resolve.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.

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. 108173). The
conference report (House Report 108-391) enumerated questions to be
addressed in this study including, among other things:

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

o  	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

14According 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.

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 For further information about this testimony, please
contact Richard

Stana, Director, Homeland Security and Justice Issues, on (202) 512-8777
Staff or at [email protected]. Major contributors to this testimony included
Acknowledgments John Mortin, Yelena Harden, Barbara Stolz, Frances Cook,
and

James Russell.

                       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.

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 Description of substances in the schedule Examples

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.

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

Substances that have a potential for abuse that is less than those

                            listed in Schedule III.

Barbital, alprazolam (Xanax), Cathine- constituent of the "Khat" plant,
and Diazepam (Valium)

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

Source: GAO analysis of Drug Enforcement Administration information

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

Appendix III: CBP Public Service Announcement Posted on the Internet

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