Prescription Drugs: Enhanced Efforts and Better Agency		 
Coordination Needed to Address Illegal Importation (13-DEC-05,	 
GAO-06-175T).							 
                                                                 
This testimony summarizes a GAO report on federal efforts to	 
address the importation of prohibited prescription drugs through 
international mail and carrier facilities for personal use. U.S. 
Customs and Border Protection (CBP), in the Department of	 
Homeland Security (DHS), and the Food and Drug Administration	 
(FDA), in the Department of Health and Human Services (HHS), work
with other federal agencies at international mail and express	 
carrier facilities to inspect for and interdict these drugs. This
testimony addresses (1) available data about the volume and	 
safety of these drugs, (2) the procedures and practices used to  
inspect and interdict them, (3) factors affecting federal efforts
to enforce the laws governing these drugs, and (4) federal	 
agencies' efforts to coordinate enforcement of the prohibitions  
on personal importation of these drugs. 			 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-175T					        
    ACCNO:   A43117						        
  TITLE:     Prescription Drugs: Enhanced Efforts and Better Agency   
Coordination Needed to Address Illegal Importation		 
     DATE:   12/13/2005 
  SUBJECT:   Consumer protection				 
	     Controlled substances				 
	     Data collection					 
	     Drug trafficking					 
	     Drugs						 
	     Import regulation					 
	     Import restriction 				 
	     Inspection 					 
	     Interagency relations				 
	     Internet						 
	     Law enforcement					 
	     Pharmaceutical industry				 
	     Safety regulation					 
	     Search and seizure 				 
	     Policies and procedures				 
	     Prescription drugs 				 

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GAO-06-175T

Testimony

Before the Subcommittee on Oversight and Investigations, Committee on
Energy and Commerce, U.S. House of Representatives

United States Government Accountability Office

GAO

For Release on Delivery Expected at 1:00 p.m. EST

Tuesday, December 13, 2005

PRESCRIPTION DRUGS

Enhanced Efforts and Better Agency Coordination Needed to Address Illegal
Importation

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

GAO-06-175T

Mr. Chairman and Members of the Subcommittee:

I appreciate the opportunity to provide a summary of our recent report on
federal agencies' efforts to address the importation of prohibited
prescription drugs through international mail and carrier facilities.1

The advent of online Internet pharmacy services in early 1999, enabled
American consumers to order over the Internet a range of prescription
drugs from controlled substances,2 such as Valium, to noncontrolled
prescription drugs intended to improve an individual's quality of life by
addressing non-life-threatening conditions such as baldness, impotence,
and obesity. The broad reach and access of the Internet allow the easy
creation of online pharmacies that anonymously traverse state and national
borders to prescribe, sell, and dispense prescription drugs without
complying with traditional state or federal regulatory safeguards.

Under current law, the importation of prescription drugs, both controlled
and noncontrolled, for personal use is illegal, with few exceptions. In
recent years, Congress and others have debated whether Americans should be
allowed to purchase drugs from pharmacies located in foreign countries.
However, currently, consumers could be violating federal law, unknowingly
or intentionally, by having drugs shipped, in effect, imported, into the
United States through the international mail and private carriers. 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 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.

1See GAO, Prescription Drugs: Strategic Framework Would Promote
Accountability and Enhance Efforts to Enforce the Prohibitions on Personal
Importation, GAO-05-372 (Washington, D.C.: September 8, 2005).

Several federal agencies have responsibility for regulating the
importation of prescription drugs through the international mail and
private carriers. They include the Department of Homeland Security's (DHS)
U.S. Customs and Border Protection (CBP), which can inspect international
mail and packages for potentially illegal drugs entering the United States
through the U.S. Postal Service's (USPS) international mail facilities or
private carriers; the Department of Health and Human Services' (HHS) Food
and Drug Administration (FDA), which is responsible for ensuring the
safety, effectiveness, and quality of domestic and imported drugs; the
Department of Justice's Drug Enforcement Administration (DEA), which
regulates controlled substances; and the Department of Homeland Security's
U.S. Immigration and Customs Enforcement (ICE), which has law enforcement
responsibilities that include investigations of prescription drugs coming
into the United States through the mail and express carriers. Also, the
Office of National Drug Control Policy (ONDCP) formulates the nation's
drug control strategy and addresses policy issues concerning the illegal
distribution of controlled substances, as its authority does not extend
over noncontrolled substances.

2The Controlled Substances Act establishes a classification structure for
certain drugs and chemicals that are designated as controlled substances.
This structure places such 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. Controlled substances that may be prescribed by a
physician or used in medical facilities fall in schedules II through V
(e.g., Valium). For certain law enforcement purposes, however, schedule II
drugs are treated more like schedule I drugs.

This statement presents a summary of our latest work on federal efforts to
enforce prohibitions on personal importation of prescription drugs through
the international mail and carrier facilities, which was requested by the
Chairman of the Senate Permanent Subcommittee on Investigations, Committee
on Homeland Security and Governmental Affairs and the Ranking Minority
Member of the House Energy and Commerce Committee. My testimony today,
requested by the Chairman of this Subcommittee, provides a summary of our
report and will focus on the following issues:

           o  what available data show about the volume and safety of
           prescription drugs imported into the United States for personal
           use through the international mail and private carriers,
           o  what procedures and practices are used at selected facilities
           to inspect and interdict prescription drugs unapproved for import,
           o  what factors affect federal agency efforts to enforce the
           prohibition on prescription drug importation for personal use
           through international mail and carrier facilities, and
           o  what efforts federal agencies have undertaken to coordinate the
           enforcement of the prohibitions on personal importation of
           prescription drugs.

                                    Summary

Our report on illegal prescription drug importation notes that the
information currently available on the safety of illegally imported
prescription drugs is very limited, and neither CBP nor FDA systematically
collects data on the volume of these imports. Nevertheless, on the basis
of their own observations and limited information they have collected at
some mail and carrier facilities, both CBP and FDA officials said the
volume of prescription drugs imported into the United States is
substantial. For example, a December 2004 HHS report states that
approximately 10 million packages containing prescription drugs enter the
United States annually from all over the world. However, this estimate has
limitations, being partially based on extrapolations from limited FDA
observations at international mail branch facilities. Without reliable
estimates of the volume of importation of prescription drugs, federal
agencies cannot determine the full scope of the importation issue, which
is of particular concern because of access to potentially unsafe or risky
drugs, including highly addictive controlled substances. With regard to
safety, the FDA officials told us 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. Consistent with these
concerns, in June 2004, we reported that a sample of drugs purchased from
some foreign-based Internet pharmacies posed safety risks for consumers.3

Regarding the practices used at the mail and carrier facilities we visited
to inspect packages and interdict prohibited prescription drugs, our
report states that both FDA's and CBP's procedures are evolving. FDA
issued procedures in August 2004 to standardize the selection of packages
by CBP and the forwarding of them to FDA for inspection. These procedures
include guidelines for inspecting the packages and making admissibility
determinations. However, under the current procedures, similar to previous
practices, many packages that contain prescription drugs prohibited for
import are released to addressees. For example, packages that contain
prescription drugs prohibited for import that have not been processed by
FDA inspectors at the end of each workday are returned by FDA for delivery
by USPS to the recipient. CBP has also implemented a new policy to
expedite its handling of schedule III through V controlled substances
imported as prescription drugs. Until recently, CBP was required to seize
and begin forfeiture proceedings on packages of such controlled substances
it detected-a process CBP considered to be time-consuming given the volume
of controlled substances entering some facilities. In September 2004, CBP
determined it could treat schedule III through V controlled substances as
abandoned property, thereby (1) reducing the amount of information
recorded about the drugs and (2) enabling CBP to destroy the drugs 30 days
after notifying the addressee that the drugs would be treated as abandoned
property if not claimed.

3See GAO, Internet Pharmacies: Some Pose Safety Risks for Consumers,
GAO-04-820 (Washington, D.C.: June 17, 2004) and GAO, Internet Pharmacies:
Some Pose Safety Risks for Consumers and Are Unreliable in Their Business
Practices, GAO-04-888T (Washington, D.C.: June 17, 2004).

In our report, we also identify three factors beyond inspection and
interdiction issues that have complicated federal efforts to enforce laws
prohibiting the importation of prescription drugs for personal use. First,
the volume of importation has strained federal resources at the mail and
carrier facilities. According to officials we contacted, agencies have
multiple priorities, which can constrain the resources they are able to
allocate to the inspection and interdiction of prescription drugs and
controlled substances imported through mail and carrier facilities.
Second, the attributes of Internet pharmacies have posed challenges to law
enforcement efforts for multiple reasons. For example, Internet sites can
be installed, moved, or removed in a short period of time, making it
difficult for law enforcement agencies to identify, track, monitor, or
shut down those sites that operate illegally. Additionally, legal and
practical considerations can limit the nature and extent to which
commercial firms (e.g., Internet providers and credit card organizations)
can assist in federal law enforcement actions. Third, the notification
process in current law requiring FDA to hold packages containing items
that appear unapproved for import and give the addressee the opportunity
to provide evidence of admissibility is, according to FDA officials,
time-consuming -- taking up to 30 days per import -- and can
hinder their ability to quickly process packages containing potentially
unapproved prescription drugs. FDA and the Secretary of Health and Human
Services have expressed concerns about this process during testimony
before Congress. However, FDA officials told us that any legislative
change might necessitate consideration of some complicated issues,
including whether the government would want to forgo an individual's
opportunity to provide evidence of admissibility for the drug(s) that had
been ordered, or what imported prescription drugs and other imported
products within FDA's jurisdiction should be covered by the new law. In
addition, USPS indicated that any discussion of options to expedite the
processing and disposition of prescription drugs should consider
international postal obligations established by the Universal Postal Union
(UPU).4

We also report that CBP has organized a task force to coordinate the
activities of federal agencies responsible for enforcing laws prohibiting
the personal importation of prescription drugs. Among other things, the
task force has performed joint operations to gather data on the type and
source of unapproved drugs entering international mail facilities and
developed public service campaigns to inform the public about the risks of
buying prescription drugs from Internet providers in foreign countries.
Although the task force appears to be a step in the right direction,
efforts to address many of the challenges facing these agencies could be
further enhanced if the task force established a strategic framework to
promote accountability and guide resource and policy decisions. Our past
work has shown that a strategic framework is particularly useful in
addressing problems, such as prescription drug importation, that are
national in scope and involve multiple agencies with varying
jurisdictions. Without such a strategic framework, it will be difficult
for agency officials and congressional decision makers to oversee the
overall federal effort, hold agencies accountable for their individual
efforts, adjust to changing conditions, and ensure consistent and focused
attention to the enforcement of prescription drug importation laws.

4UPU is a specialized agency of the United Nations governing international
postal services. According to the USPS, the Universal Postal Convention
establishes a general rule that undeliverable items are to be returned to
sender. UPU regulations provide that where an item can neither be
delivered to the addressee nor returned to the sender, the Postal Service
must notify the postal administration of origin of how the item was dealt
with, including indicating the prohibition under which the item falls.
USPS noted that this is particularly important with respect to registered
or insured mail for which the Postal Service can be held financially
responsible if it is not delivered or returned.

Accordingly, our report recommends that the CBP Commissioner, in concert
with other agencies responsible for enforcing these laws, develop and
implement a strategic framework that, at a minimum, includes establishing
an approach to more reliably estimate the volume of prohibited
prescription drugs imported through international mail and carrier
facilities; determine resource needs and target resources based on
priorities; establish performance measures and milestones; and evaluate
progress, identify barriers to achieving goals, and suggest modifications.
DEA and ONDCP generally agreed with this recommendation. DHS generally
agreed with the contents of our report and said that CBP is convening a
task force meeting to discuss it. While generally concurring with this
recommendation, HHS questioned the need to include an approach to estimate
the volume of unapproved drugs entering the country, believing its current
estimates to be valid. We believe that developing more systematic and
reliable volume estimates might position agencies to better define the
scope of the problem so that decision makers can make informed choices
about resources. Considering FDA's continuing concern about the statutory
notification requirement, we also recommend that the Secretary of HHS
assess the ramifications of removing or modifying the requirement, report
the assessment results, and, if appropriate, recommend changes to
Congress. HHS generally agreed with this recommendation; USPS noted that
discussions of such options must consider international postal
obligations.

                                   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 14 USPS 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 noncontrolled 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 international mail 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.5
Under the act and implementing regulations, this includes foreign versions
of FDA-approved drugs if, 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 not interdict personal prescription drug imports that do not
contain controlled substances under specified circumstances, such as
importing a small quantity for treatment of a serious condition, generally
not more than a 90-day supply of a drug not available domestically.6 The
importation of prohibited 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.

5An 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: 351, 352, 355.

In addition, the Controlled Substances Import and Export Act, among other
things, generally prohibits personal importation of those prescription
drugs that are controlled substances, such as Valium. Under the act,
shipment of controlled substances to a purchaser in the United States from
another country is only permitted if the purchaser is registered with DEA
as an importer and is in compliance with the Controlled Substances Import
and Export Act and DEA requirements. As outlined in the act, it would be
difficult, if not impossible, for an individual consumer seeking to import
a controlled substance for personal use to meet the standards for
registration and related requirements.7

6According 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.

CBP is to seize illegally imported controlled substances it detects on
behalf of DEA.8 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.9 CBP is to turn over
packages suspected of containing prescription drugs that are not
controlled substances to FDA.10 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.11 If the addressee does not provide evidence that
overcomes the appearance of inadmissibility, then the item is refused
admission and returned to the sender.

7The 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.

8See 19 U.S.C. S: 1595a(c)(1)(B); 19 C.F.R. S:S: 162.23, 145.59, 145.58,
12.36. Controlled substances in schedules I and II are subject to summary
forfeiture without notice, but those in schedule III through V are not.

9See 19 C.F.R. S:S: 162.31, 162.32, 162.45, 162.45a, 162.46, 162.47,
162.63.

10See 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.

11See 21 U.S.C. S: 381(a); 21 CFR S:1.94.

Investigations that may arise from CBP and FDA inspections may fall within
the jurisdiction of other federal agencies. DEA, ICE, and FDA
investigators have related law enforcement responsibilities and may engage
in investigations stemming from the discovery of illegally imported
prescription drugs. Although USPS's Inspection Service does not have the
authority, without a federal search warrant, to open packages suspected of
containing illegal drugs, it may collaborate with other federal agencies
in certain investigations. Also, ONDCP is responsible for formulating the
nation's drug control strategy and has general authority for addressing
policy issues concerning the illegal distribution of controlled
substances. ONDCP's authority does not, however, include prescription
drugs that are not controlled substances.

     The Volume of Prescription Drug Imports Is Unknown but Believed to Be
        Substantial, and the Safety of These Drug Imports Is Not Assured

My statement will now focus on what the available data show about the
volume and safety of prescription drugs imported into the United States
for personal use through the international mail and private carriers.

CBP and FDA Do Not Know the Scope of Prohibited Prescription Drug Importation,
but They Believe it to Be Substantial

In our report, we state that CBP and FDA do not systematically collect
data on the volume of prescription drugs and controlled substances they
encounter at the mail and carrier facilities. CBP and FDA officials have
said that in recent years they have observed increasingly more packages
containing prescription drugs being imported through the mail facilities,
but neither agency has complete data to estimate the volume of
importation. FDA officials told us that CBP and FDA currently have no
mechanism for keeping an accurate count of the volume of illegally
imported drugs, because of the large volume of packages arriving daily
through the international mail and carriers. Furthermore, FDA officials
told us that FDA did not routinely track items that contained prescription
drugs potentially prohibited for import that they released and returned
for delivery to the recipient. However, they said that FDA had begun
gathering from the field information on the imported packages it handles,
but as of July 2005, this effort was still being refined.

We also report that CBP and FDA, in coordination with other federal
agencies, have conducted special operations targeted to identify and tally
the packages containing prescription drugs imported through a particular
facility during a certain time period and to generate information for
possible investigation. The limited data collected have shown wide
variations in volume. For example, at one mail facility CBP officials
estimated that approximately 3,300 packages containing prescription drugs
entered the facility in 1 week and at another mail facility CBP officials
estimated that 4,300 such packages entered the facility in 1 day. While
these data provide some insight regarding the number of packages
containing prescription drugs at a selected mail facility during a certain
time period, the data are not representative of other time periods or
projectable to other facilities.

Our report also notes that during congressional hearings over the past 4
years, FDA officials, among others, have presented estimates of the volume
of prescription drugs imported into the United States through mail and
express carrier facilities ranging from 2 million to 20 million packages
in a given year. Each estimate has its limitations; for example, some
estimates were extrapolations from data gathered at a single mail
facility. More recently, a December 2004 HHS report stated that
approximately 10 million packages containing prescription drugs enter the
United States-nearly 5 million packages from Canada and another 5 million
mail packages from other countries.12 However, these estimates also have
limitations, being partially based on extrapolations from limited FDA
observations at international mail branch facilities.13 Without an
accurate estimate of the volume of importation of prescription drugs,
federal agencies cannot determine the full scope of the importation issue.

12HHS Task Force on Drug Importation, Report on Prescription Drug
Importation, Department of Health and Human Services, December 2004.

The Safety of Prescription Drug Imports Is Not Assured

Regarding the safety of prescription drug imports, we report that FDA
officials have said 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. FDA officials also
said 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. While some consumers may purchase genuine
products, others may unknowingly purchase counterfeit products, expired
drugs, or drugs that were improperly manufactured.

In addition, we report on CBP's and FDA's limited analysis of the imported
prescription drugs identified during special operations. The results of
these efforts have raised questions about the safety of some of the drugs.
For example, during a special operation in 2003 to identify and assess
counterfeit and potentially unsafe imported drugs at four mail facilities,
CBP and FDA inspected 1,153 packages that contained prescription drugs.14
According to a CBP report, 1,019, or 88 percent, of the imported drug
products were in violation of the Federal Food, Drug, and Cosmetic Act or
the Controlled Substances Import and Export Act.

13FDA officials told us that FDA developed its estimate for Canadian drugs
entering the country using (1) IMS Health estimates (IMS Health is a
management consulting firm that provides information to pharmaceutical and
health care industries) that 12 million prescriptions sold from Canadian
pharmacies were imported into the United States in 2003 and (2) FDA's
experience during special operations at various locations from which it
concluded that there appeared to be about 2.5 prescriptions in each
package. According to FDA officials, the estimate for other countries was
an extrapolation using the estimated 5 million packages from Canada in
conjunction with FDA's observations, likewise made during special
operations, that 50 percent of the mail packages enter from countries
other than Canada.

Consistent with these concerns, we report on the findings of our June 2004
report in which we identified several problems associated with the
handling, FDA approval status, and authenticity of 21 prescription drug
samples we purchased from Internet pharmacies located in several foreign
countries-Argentina, Costa Rica, Fiji, Mexico, India, Pakistan, the
Philippines, Spain, Thailand, and Turkey.15 Our work showed that most of
the drugs, 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 or the foreign manufacturing facility, methods, and controls
were not reviewed by FDA. We observed during the site visits undertaken
for our current report that in addition to some prescription drugs
imported through the mail and carrier facilities not being shipped in
protective packages, some drugs also lacked product identifications,
directions for use, or warning labels. Furthermore, for some drugs, the
origin and contents could not be immediately determined by CBP or FDA
inspection.

14According to CBP officials, packages shipped through four mail
facilities 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 CBP's
historical experience.

15GAO-04-820 and GAO-04-888T.

Highly Addictive Controlled Substances Are Widely Available via the Internet

Our report also noted that federal agencies and professional medical and
pharmacy associations have found that consumers of any age can obtain
highly addictive controlled substances from Internet pharmacies, sometimes
without a prescription or consultation with a physician. Both DEA and
ONDCP have found that the easy availability of controlled substances
directly to consumers over the Internet has significant implications for
public health, given the opportunities for misuse and abuse of these
addictive drugs. In addition, the American Medical Association recently
testified that Internet pharmacies that offer controlled substances
without requiring a prescription or consultation with a physician
contribute to the growing availability and increased use of addictive
drugs for nonmedical purposes.

 Some Targeted Packages Containing Prescription Drugs Are Interdicted, but Many
                                 Others Are Not

My statement will now focus on the procedures and practices used at
selected facilities to inspect and interdict prescription drugs unapproved
for import.

New Procedures Should Encourage Uniform Practices, but They Still Allow Many
Packages Containing Prescription Drugs to Be Released

With regard to procedures and practices used at selected facilities to
inspect and interdict prescription drugs unapproved for import, our report
cites our July 2004 testimony in which we reported that CBP and FDA
officials at selected mail and carrier facilities used different practices
and procedures to inspect and interdict packages that contain prescription
drugs. 16 While each of the facilities we visited targeted packages for
inspection, the basis upon which packages were targeted could vary and was
generally based on several factors, such as the inspector's intuition and
experience, whether the packages originated from suspect countries or
companies, or were shipments to individuals. At that time, we also
reported that while some targeted packages were inspected and interdicted,
many others either were not inspected and were released to the addressees
or were released after being held for inspection. FDA officials said that
because they were unable to process the volume of targeted packages, they
released tens of thousands of packages containing drug products that may
violate current prohibitions and could have posed a health risk to
consumers.

In August 2004, FDA issued standard operating procedures outlining how FDA
personnel are to prioritize packages for inspection, inspect the packages,
and make admissibility determinations of FDA-regulated pharmaceuticals
imported into the United States via international mail. Under the
procedures, CBP personnel are to forward to FDA personnel any mail items,
from FDA's national list of targeted countries and based on local
criteria,17 that appear to contain prescription drugs. Deviations from the
procedures must be requested by facility personnel and approved by FDA
management. According to FDA officials, these procedures have been adopted
nationwide. While the new procedures should encourage processing
uniformity across facilities, many packages that contain prescription
drugs are still released. Specifically, according to the procedures, all
packages forwarded by CBP but not processed by FDA inspectors at the end
of each workday are to be returned for delivery by USPS to the recipient.
However, according to the procedures, packages considered to represent a
significant and immediate health hazard may be held over to the next day
for processing.

16See GAO, Prescription Drugs: Preliminary Observations on Efforts to
Enforce the Prohibitions on Personal Importation, GAO-04-839T (Washington,
D.C.: July 22, 2004).

Our report cites CBP and FDA officials at two facilities who told us that
the new procedures resulted in an increase in the number of packages CBP
personnel refer to FDA. Officials at one facility estimated that CBP
referrals have increased from approximately 500 to an average of 2,000
packages per day. The FDA officials noted that the procedures did not
resolve the heavy volume of prescription drug importation or FDA's ability
to deal with the volume, nor were they designed to do so. While the
packages that are not targeted are released without inspection, so are
many packages that are targeted and referred to FDA personnel. At one
facility, FDA officials estimated that each week they return without
inspection 9,000 to 10,000 of the packages referred to them by CBP. They
said these packages were given to USPS officials for delivery to the
addressee.

17Local criteria can include other targeted countries and additional
intelligence.

New CBP Controlled Substances Policy May Improve Interdiction Efforts, but
Impact on Importation Is Unclear

Regarding the procedures and practices used to inspect and interdict
certain controlled substances, our report cites our July 2004 testimony in
which we reported that CBP officials were to seize the illegally imported
controlled substances they detected.18 However, at that time, some
illegally imported controlled substances were not seized by CBP. For
example, CBP officials at one mail facility told us that they experienced
an increased volume of controlled substances and, in several months, had
accumulated a backlog of over 40,700 packages containing schedule IV
substances.

According to our report, CBP field personnel said they did not have the
resources to seize all the controlled substances they detected. Officials
said that the seizure process can be time-consuming, taking approximately
1 hour for each package containing controlled substances. According to CBP
officials, when an item is seized, the inspector records the contents of
each package-including the type of drugs and the number of pills or vials
in each package. If the substance is a schedule I or II controlled
substance, it is to be summarily forfeited without notice, after seizure.
However, if it is a schedule III through V controlled substance, CBP
officials are to notify the addressee that the package was seized19 and
give the addressee an opportunity to contest the forfeiture by providing
evidence of the package's admissibility and trying to claim the package at
a forfeiture hearing.20

18GAO-04-839T.

Our report goes on to say that to address the seizure backlog and give CBP
staff more flexibility in handling controlled substances, in September
2004, CBP implemented a national policy for processing controlled
substances, schedule III through V, imported through the mail and carrier
facilities. According to the policy, packages containing controlled
substances should no longer be transferred to FDA for disposition,
released to the addressee, or returned to the sender. CBP field personnel
are to hold the packages containing controlled substances in schedules III
through V as unclaimed or abandoned property as an alternative to a
seizure.21 According to a CBP headquarters official, processing a
controlled substance as abandoned property is a less arduous process
because it requires less information be entered into a database than if
the same property were to be seized. Once CBP deems the controlled
substance to be unclaimed property, the addressee is notified that he or
she has the option to voluntarily abandon the package or have the package
seized. If the addressee voluntarily abandons the package or does not
respond to the notification letter within 30 days, the package will be
eligible for immediate destruction. If the addressee chooses to have the
package seized, there would be an opportunity to contest the forfeiture
and claim the package, as described above. CBP also instituted an on-site
data collection system at international mail and express carrier
facilities to record schedule III through V controlled substances
interdicted using this new process.22 CBP reported that from September
2004 to the end of June 2005, a total of approximately 61,700 packages of
these substances were interdicted, about 61,500 at international mail
facilities and 200 at express carrier facilities.

19The seized package could also be submitted to ICE for possible
investigation of the addressee and the sender.

20Since schedule I and schedule II controlled substances are subject to
summary forfeiture without notice, there is no opportunity to contest the
forfeiture of these drugs.

21Under the policy, unless accompanied by a valid DEA Import Permit or DEA
Declaration, schedules I and II controlled substances are to be seized
pursuant to 19 U.S.C S: 1595a(c)(1)(B) and processed in accordance with
established seized asset procedures.

22CBP officials emphasized that these data only include schedule III
through V controlled substances interdicted through its new process and do
not include those schedule III through V controlled substances seized.
According to a CBP headquarters official, the number of interdictions made
using the controlled substance policy implemented on September 1, 2004,
refers to single packages, because these detentions are almost all
personal use quantities. In contrast, CBP seizure data for schedules III,
IV, and V controlled substances are most likely commercial shipments and,
therefore, could include multiple packages.

We report that generally, CBP officials we interviewed told us that the
recent policy improved their ability to record information about and
destroy schedule III through V controlled substances they detected. A CBP
official at one facility said that the abandonment process is faster than
the seizure process, as it requires much less paperwork. A CBP
headquarters official told us that the abandonment process takes an
inspector at a mail facility about 1 minute to process a package. He added
that the new policy was intended to eliminate the backlog of schedule III
through V controlled substances at the facilities. However, we also report
that CBP officials in the field and in headquarters said that they do not
know whether the new policy has had any impact on the volume of controlled
substances illegally entering the country that reach the intended
recipient. Generally, CBP officials do not know the extent of packages
that contain controlled substances that are undetected and released. For
example, CBP officials at one facility told us that they used historical
data to determine the countries that are likely sources for controlled
substances and target the mail from those countries. They do not know the
volume of controlled substances contained in the mail from the nontargeted
countries. A CBP official at another facility said that he believed the
volume of controlled substances imported through the facility had begun to
decrease, but he had no data to support his claim.

Packages Containing Prescription Drugs Can Bypass FDA Review at the Carrier
Facilities

According to our report, packages containing prescription drugs can also
bypass FDA inspection at carrier facilities because of inaccurate
information about the contents of the package. Unlike packages at mail
facilities, packages arriving at carrier facilities we visited are
preceded by manifests, which provide information from the shipper,
including a description of the packages' contents. While the shipments are
en route, CBP and FDA officials are to review this information
electronically and select packages they would like to inspect when the
shipment arrives. FDA officials at two carrier facilities we visited told
us they review the information for packages described as prescription
drugs or with a related term, such as pharmaceuticals or medicine. CBP and
FDA officials told us that there are no assurances that the shipper's
description of the contents is accurate. The FDA officials at the carrier
facilities we visited told us that if a package contains a prescription
drug but is inaccurately described, it would not likely be inspected by
FDA personnel.

  Factors beyond Inspection and Interdiction Complicate Efforts to Enforce the
           Prohibitions on Personal Importation of Prescription Drugs

My statement will now focus on the three factors that our report
identified as affecting federal agency efforts to enforce the prohibition
on prescription drug importation for personal use through international
mail and carrier facilities.

The Volume of Imports Can Strain Federal Resources

In our report, we state that the current volume of prescription drug
imports, coupled with competing agency priorities, has strained federal
inspection and interdiction resources allocated to the mail facilities.
CBP and FDA officials told us that the recent increase in American
consumers ordering drugs over the Internet has significantly contributed
to increased importation of these drugs through the international mail.
CBP officials said that they are able to inspect only a fraction of the
large number of mail and packages shipped internationally. FDA officials
have said that the large volume of imports has overwhelmed the resources
they have allocated to the mail facilities and they have little assurance
that the available field personnel are able to inspect all the packages
containing prescription drugs illegally imported for personal use through
the mail. In addition, agencies have multiple priorities, which can affect
the resources they are able to allocate to the mail and carrier
facilities. For example, FDA's multiple areas of responsibility include,
among other things, regulating new drug product approvals, the labeling
and manufacturing standards for existing drug products, and the safety of
a majority of food commodities and cosmetics, which, according to FDA
officials, all go to FDA's mission of protecting the public health while
facilitating the flow of legitimate trade. CBP's primary mission is
preventing terrorists and terrorist weapons from entering the United
States while also facilitating the flow of legitimate trade and travel.
DEA's multiple priorities include interdicting illicit drugs such as
heroin or cocaine, investigating doctors and prescription forgers, and
pursuing hijackings of drug shipments.

We also report on HHS and CBP assessments of resources needed to address
the volume of illegally imported drugs coming into the country. In a 2004
report on the importation of prescription drugs, the Secretary of HHS
stated that substantial resources are needed to prevent the increasing
volume of packages containing small quantities of drugs from entering the
country.23 The Secretary found that despite agency efforts, including
those with CBP, FDA currently does not have sufficient resources to ensure
adequate inspection of the current volume of personal shipments of
prescription drugs entering the United States. CBP is also in the early
stages of assessing the resources it needs at the mail facilities to
address the volume of controlled substance imports. However, CBP officials
admit that an assessment of resource needs is difficult because they do
not know the scope of the problem and the impact of the new procedures. A
CBP official told us that CBP has a statistician working on developing
estimates on the volume of drugs entering mail facilities; however, he was
uncertain whether this effort would be successful or useful for allocating
resources. Likewise, in March 2005, FDA officials told us that they had
begun to gather from the field information on the imported packages it
handles, such as the number of packages held, reviewed, and forwarded for
further investigation. However, as of July 2005, they could not provide
any data because, according to the officials, this effort was new and
still being refined.

23HHS Task Force on Drug Importation, Report on Prescription Drug
Importation, Department of Health and Human Services, December 2004. 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, including, according to the conference
report for the legislation, a review of the adequacy of federal agency
resources to inspect and interdict drugs unapproved for import, and submit
a report to Congress. Pub. L. No. 108-173, S: 1122, 117 Stat. 2066, 2469
(2003), H.R. Conf. Rep. No. 105-39, at 833-34 (2003).

Internet Pharmacies Challenge Law Enforcement Efforts

According to our report, Internet pharmacies, particularly foreign-based
sites, which operate outside the U.S. regulatory system, pose a challenge
for regulators and law enforcement agencies. In an earlier 2004 report, we
described how traditionally, in the United States, the practice of
pharmacy is regulated by state boards of pharmacy, which license
pharmacists and pharmacies and establish and enforce standards. To legally
dispense a prescription drug, a licensed pharmacist working in a licensed
pharmacy must be presented a valid prescription from a licensed health
care professional. The Internet allows online pharmacies and physicians to
anonymously reach across state and national borders to prescribe, sell,
and dispense prescription drugs without complying with state requirements
or federal regulations regarding imports.

In addition, we report that the nature of the Internet has challenged U.S.
law enforcement agencies investigating Internet pharmacies, particularly
foreign-based sites. Internet sites can easily be installed, moved, or
removed in a short period of time. This fluidity makes it difficult for
law enforcement agencies to identify, track, monitor, or shut down those
sites that operate illegally. Moreover, investigations can be more
difficult when they involve foreign-based Internet sites, whose operators
are outside of U.S. boundaries and may be in countries that have different
drug approval and marketing approaches than the United States has. For
example, according to DEA officials, drug laws and regulations regarding
controlled substances vary widely by country. DEA officials told us their
enforcement efforts with regard to imported controlled substances are
hampered by the different drug laws in foreign countries. Internet
pharmacy sites can be based in countries where the marketing and
distribution of certain controlled substances are legal. Steroids, for
example, sold over the Internet may be legal in the foreign country in
which the online pharmacy is located. Federal agencies can also face
challenges when working with foreign governments to share information or
develop mechanisms for cooperative law enforcement. For example, FDA
officials have testified that they possess limited investigatory
jurisdiction over sellers in foreign countries and have had difficulty
enforcing the law prohibiting prescription drug importation when foreign
sellers are involved. A DEA official told us that it was difficult to
convince some foreign governments that the illegal sale of prescription
drugs over the Internet is a global problem and not restricted to the
United States.

In our report, we also note that FDA and DEA officials told us that they
work with commercial firms, including express carriers, credit card
organizations, Internet providers, and online businesses to obtain
information to investigate foreign pharmacies, but these investigations
are complicated by legal and practical considerations. FDA and DEA
officials said that the companies have been willing to work with
government agencies to stop transactions involving prescription drugs
prohibited from import, and some have alerted federal officials when
suspicious activity is detected. However, officials also identified
current legal and practical considerations that complicated obtaining
information from organizations, such as credit card organizations. For
example, according to FDA, DEA, and ICE officials, credit card
organizations24 and banks and other financial institutions25 that issue
credit cards will not provide to the agencies information about the
parties involved in the transaction without a subpoena. Representatives
from the credit card companies we contacted explained that these issues
generally are resolved if the agency issues a properly authorized subpoena
for the desired information.26

The Notification Process Challenges Enforcement Efforts

We also report that FDA headquarters officials said that packages that
contain prescription drugs for personal use that appear to be prohibited
from import pose a challenge to their enforcement efforts because these
packages cannot be automatically refused. Before any imported item is
refused, the current law requires FDA to notify the owner or consignee
that the item has been held because it appears to be prohibited and give
the product's owner or consignee an opportunity to submit evidence of
admissibility. If the recipient does not respond or does not present
enough evidence to overcome the appearance of inadmissibility, then the
item can be returned to the sender, or in some cases destroyed.

24Two types of credit card organizations handle the four major U.S. credit
cards. Credit card associations, such as Visa and MasterCard, license
their member banks to issue bank cards, authorize merchants to accept
those cards, or do both. In contrast, full-service credit card companies,
such as American Express and Discover, issue their own brands of cards
directly to customers and authorize merchants to accept those cards. See
also GAO, Money Laundering: Extent of Money Laundering through Credit
Cards Is Unknown, GAO-02-670 (Washington, D.C.: July 22, 2002), and
Internet Gambling: An Overview of the Issues, GAO-03-89 (Washington, D.C.:
December 2, 2002).

25When banks and financial institutions, rather than the credit card
company, have the direct relationship with the merchants and credit
cardholders, the former are the primary source of transactional
information needed for law enforcement purposes.

26According to a DEA official, the majority of Internet drug sites used
the payment systems of the two associations we contacted.

FDA officials told us that this requirement applies to all drug imports
that are held under section 801(a) of the Federal Food, Drug, and Cosmetic
Act. Nonetheless, they said that they believe this notification process is
time consuming because each package must be itemized and entered into a
database; a letter must be written to each addressee; and the product must
be stored. The process can take up to 30 days per import-and can hinder
their ability to quickly handle packages containing prescription drugs
prohibited from import. According to FDA investigators, in most instances,
the addressee does not present evidence to support the drugs'
admissibility, and the drugs are ultimately provided to CBP or the U.S.
Postal Service for return to sender. FDA headquarters officials told us
that the Standard Operating Procedures, introduced in August 2004 and
discussed earlier in this report, were an attempt to help FDA address the
burden associated with the notification process because the procedures
were designed to focus resources on packages containing drugs considered
to be among the highest risk.

Our report further indicates that FDA and the Secretary of HHS have raised
concerns about FDA's notification process, noting that it is
time-consuming and resource intensive, in testimony before Congress, but
did not propose any legislative changes to address the concerns
identified. In May 2001, FDA's Acting Principal Deputy Commissioner wrote
a memorandum to the Secretary of HHS expressing concern about the growing
number of drugs imported for personal use and the dangers they posed to
public health. The memorandum explained that because of the notice and
opportunity to respond requirements, detaining and refusing entry of mail
parcels was resource intensive. The Acting Principal Deputy Commissioner
proposed, among other things, the removal of the requirement that FDA
issue a notice before it could refuse and return personal use quantities
of FDA-regulated products that appear violative of the Food, Drug, and
Cosmetic Act. He noted that removal of the notification requirement would
likely require legislation, but without this change, FDA could not
effectively prohibit mail importation for personal use. As of July 2005,
according to FDA officials and an HHS official, the Secretary had not
responded with a specific legislative proposal to change FDA's
notification requirement. FDA officials said that there are some
complicating issues associated with eliminating the notification
requirement; for example, the importance of providing due process, which
basically gives individuals the opportunity to present the case as to why
they should be entitled to receive the property (e.g., prescription drugs
that they ordered from a foreign source), and/or the extent the law should
be changed to cover all imported prescription drugs and other products. In
addition, USPS indicated that any discussion of options to expedite the
processing and disposition of prescription drugs must consider
international postal obligations, specifically the requirements of the
Universal Postal Union (UPU). FDA officials said that currently, the
notification requirement also applies to large commercial quantities of
prescription drugs and other nonpharmaceutical products for which the
requirement is not a problem. They said it has become a burden only
because FDA and CBP are overwhelmed with a large volume of small packages.

Furthermore, we report that FDA officials said that they have considered
other options for dealing with this issue, such as summarily returning
each package to the sender without going through the process. However,
they said that the law would likely need to be changed to allow this, and,
as with the current process, packages that are returned to the sender
could, in turn, be sent back by the original sender to go through the
process again. They said that another option might be destruction, but
they were uncertain whether they had the authority to destroy drugs FDA
intercepts; they indicated that the authority might more likely lie with
CBP. Regardless, FDA officials said that whatever approach was adopted,
FDA might continue to encounter a resource issue because field personnel
would still need to open and examine packages to ascertain whether they
contained unapproved prescription drugs.

 Federal Efforts to Coordinate Law Enforcement Activities Could Benefit from a
                              Strategic Framework

My statement will now focus on efforts federal agencies have undertaken to
coordinate the enforcement of the prohibitions on personal importation of
prescription drugs.

Federal Agencies Have Recently Begun to Coordinate Efforts to Focus on
Prescription Drugs Imported for Personal Use

According to our report, since 1999, federal law enforcement and
regulatory agencies have organized various task forces and working groups
to address issues associated with purchasing prescription drugs over the
Internet; however, recent efforts have begun to focus particular attention
on imported prescription drugs. For example, according to an FDA official,
many of FDA's efforts, started in 1999, focused on Internet pharmaceutical
sales by illicit domestic pharmacies and the risks associated with
purchasing those drugs, rather than drugs that are being imported from
foreign countries. As our report discusses, more recent efforts have
focused on prescription drugs entering international mail and express
carrier facilities.

In January 2004, the CBP Commissioner initiated an interagency task force
on pharmaceuticals, composed of representatives from CBP, FDA, DEA, ICE,
and ONDCP as well as legal counsel from the Department of Justice.
According to the Commissioner, the proposal to create the task force was
prompted by "intense public debate and congressional scrutiny, which has
resulted in increasing pressure being applied to regulatory and law
enforcement agencies to develop consistent, fair policies" to address
illegal pharmaceuticals entering the United States. The Commissioner
proposed that the task force achieve five specific goals, and according to
a CBP official, five working groups were established to achieve these
goals. Figure 1 shows the task force goals, the five working groups, and
the goals of each working group.

Figure 1: Interagency Pharmaceutical Task Force and Working Group Goals

CBP officials and other members of the task force provided examples of
activities being carried out or planned by task force working groups. For
example, the working group on mail and express consignment operator
facilities procedures has carried out special operations at five
international mail and three express carrier facilities to examine parcels
suspected of containing prohibited prescription drugs over specific
periods of time, such as 2 or 3 days. While similar operations have
occurred since 2000, a CBP official told us that those conducted under the
task force are multiagency efforts; they are expected to continue during
the remainder of 2005 at all of the remaining mail facilities and some of
the carrier facilities. Our report describes activities of the other
working groups.

In addition, we report that the task force members are working with ONDCP
to address the importation of controlled substances through international
mail and carrier facilities. In October 2004, ONDCP issued a plan for
addressing demand and trafficking issues associated with certain man-made
controlled substances-such as pain relievers, tranquilizers, and
sedatives.27 Among other things, ONDCP recommended that DEA, CBP, ICE,
State Department, National Drug Intelligence Center, and FDA work with
USPS and private express mail delivery services to target illegal mail
order sales of chemical precursors, synthetic drugs, and pharmaceuticals,
both domestically and internationally. ONDCP officials said that a
multiagency working group is meeting to discuss what can be done to
confiscate these controlled substances before they enter the country.

27ONDCP, National Synthetic Drugs Action Plan: The Federal Government
Response to the Production, Trafficking, and Abuse of Synthetic Drugs and
Diverted Pharmaceutical Products (Washington D.C.; October 2004).
According to ONDCP, the Action Plan is to provide a blueprint for action
under the President's National Drug Control Strategy and "focuses
primarily on illicitly manufactured synthetic drugs which are not of
primarily organic origin" and "selected pharmaceutical products which are
sometimes diverted from legitimate commerce."

Finally, we report that USPS is exploring what additional steps it can
take to further help the task force. USPS officials said that they
proposed, during a July 2004 hearing, the possibility of cross-designating
U.S. Postal Inspectors with Customs' authority so that Postal Inspectors
can conduct warrant-less searches, at the border, of incoming parcels or
letters suspected of containing illegal drugs. According to USPS
officials, such authority would facilitate interagency investigations.
They said that their proposal has yet to be finalized with CBP. In
addition, internationally, USPS has drafted proposed changes to the U.S.
listing in the Universal Postal Union List of Prohibited Articles.28 This
action is still pending.

A Strategic Framework Would Further Enhance Task Force Efforts

In our report, we state that although the task force has taken positive
steps toward addressing issues associated with enforcing the laws on
personal imports, it has not fully developed a strategic framework that
would allow the task force to address many of the challenges we identify
in this report. Our review showed that the task force has already begun to
establish some elements of a strategic framework, but not others. For
example, the Commissioner's January 2004 memo laid out the purpose of the
task force and why it was created. However, it has not defined the scope
of the problem it is trying to address because, as discussed earlier, CBP
and FDA have yet to develop a way to estimate the volume of imported
prescription drugs entering specific international mail and carrier
facilities. In addition, while the task force and individual working
groups have goals that state what they are trying to achieve, the task
force has not established milestones and performance measures to gauge
results. Furthermore, the task force has not addressed the issue of what
its efforts will cost so that it can target resources and investments,
balancing risk reduction with costs and considering task force members'
other law enforcement priorities. Instead, according to a CBP official,
working group projects are done on an ad hoc basis wherein resources are
designated for specific operations.

28The Universal Postal Union List of Prohibited Articles is a listing of
articles prohibited for importation into the United States, as well as
other member countries of the UPU. The listing is shared with foreign
postal administrations to enable them to educate their customers on
country prohibitions for international mail.

Carrying out enforcement efforts that involve multiple agencies with
varying jurisdictions is not an easy task, especially since agencies have
limited resources and often conflicting priorities. According to our
report, the challenges we identify could be more effectively addressed by
using a strategic framework that more clearly defines the scope of the
problem by estimating the volume of drugs entering international mail and
carrier facilities, establishes milestones and performance measures,
determines resources and investments needed to address the flow of
imported drugs entering the facilities and where those resources and
investments should be targeted, and evaluates progress. Advancing such a
strategic framework could establish a mechanism for accountability and
oversight. Our report acknowledges that such a strategic framework needs
to be flexible to allow for changing conditions and could help agencies
adjust to potential changes in the law governing the importation of
prescription drugs for personal use.

             GAO Conclusions, Recommendations, and Agency Responses

While acknowledging the complexities of enforcing the laws governing
prescription drug imports for personal use, including the involvement of
multiple agencies with various jurisdictions and differing priorities, our
report concludes that current inspection and interdiction efforts at the
international mail branches and express carrier facilities have not
prevented the reported substantial and growing volume of prescription
drugs from being illegally imported from foreign Internet pharmacies into
the United States. CBP and other agencies have taken a step in the right
direction by establishing a task force designed to address many of the
challenges discussed in this report. However, a strategic framework that
facilitates comprehensive enforcement of prescription drug importation
laws and measures results would provide the task force with an opportunity
to better focus agency efforts to stem the flow of prohibited prescription
drugs entering the United States. In addition to the issues addressed by
the task force, FDA has also expressed continuing concern to Congress that
it encounters serious resource constraints enforcing the law at mail
facilities because packages containing personal drug imports must be
handled in accordance with FDA's time-consuming and resource-intensive
notification process. FDA has stated that it cannot effectively enforce
the law unless the requirement to notify recipients is changed.

Accordingly, to help ensure that the government maximizes its ability to
enforce laws governing the personal importation of prescription drugs, our
report recommends that the CBP Commissioner, in concert with ICE, FDA,
DEA, ONDCP, and USPS, develop and implement a strategic framework for the
task force that would promote accountability and guide resource and policy
decisions. At a minimum, this strategic framework should include

           o  establishment of an approach for estimating the scope of the
           problem, such as the volume of drugs entering the country through
           mail and carrier facilities;
           o  establishment of objectives, milestones, and performance
           measures and a methodology to gauge results;
           o  determination of the resources and investments needed to
           address the flow of prescription drugs illegally imported for
           personal use and where resources and investments should be
           targeted; and
           o  an evaluation component to assess progress, identify barriers
           to achieving goals, and suggest modifications.

In view of FDA's continuing concern about the statutory notification
requirement and its impact on enforcement, our report also recommends that
the Secretary of HHS assess the ramifications of removing or modifying the
requirement, report on the results of this assessment, and, if
appropriate, recommend changes to Congress.

In commenting on our report, DEA and ONDCP generally agreed with our
recommendation that the CBP task force develop a strategic framework. DEA
agreed that such a framework needs to be flexible to allow for changing
conditions and said DEA will, in concert with other task force agencies,
support the CBP Commissioner's strategic framework for the interagency
task force. DHS generally agreed with the contents of our report and said
that CBP is convening a task force meeting to discuss our recommendation.
While generally concurring with our recommendation for a strategic
framework, HHS questioned the need to include an approach for estimating
the volume of unapproved drugs entering the country, because it believed
its current estimates are valid. HHS also said our statement that the task
force agencies could develop statistically valid volume estimates and
realistic risk-based estimates of the number of staff needed to interdict
parcels at mail facilities did not recognize FDA's current level of effort
at these facilities relative to its competing priorities. We believe that
developing more systematic and reliable volume estimates might position
agencies to better define the scope of the problem so that decision makers
can make informed choices about resources, especially in light of
competing priorities. Regarding our recommendation to assess the
ramifications of removing or modifying FDA's statutorily required
notification process, HHS generally agreed and stated that it intended to
pursue an updated assessment. USPS did not state whether it concurred with
our recommendations, but it noted that discussions of options to expedite
the processing and disposition of prescription drugs must consider
international postal obligations.

Mr. Chairman, this concludes my prepared testimony. I would be happy to
respond to any questions you or other members of the committee may have at
this time.

GAO Contacts and Staff Acknowledgments

For further information about this testimony, please contact me at (202)
512-8816. John F. Mortin, Leo M. Barbour, Frances A. Cook, Katherine M.
Davis, Michele C. Fejfar, and Barbara A. Stolz made key contributions to
this statement.

Related GAO Products

Prescription Drugs: Strategic Framework Would Promote Accountability and
Enhance Efforts to Enforce the Prohibitions on Personal Importation.
GAO-05-372. Washington, D.C.: September 8, 2005.

Prescription Drugs: Preliminary Observations on Efforts to Enforce the
Prohibitions on Personal Importation. GAO-04-839T. Washington, D.C.: July
22, 2004.

Internet Pharmacies: Some Pose Safety Risks for Consumers. GAO-04-820.
Washington, D.C.: June 17, 2004.

Internet Pharmacies: Some Pose Safety Risks for Consumers and Are
Unreliable in Their Business Practices. GAO-04-888T. Washington, D.C.:
June 17, 2004.

Combating Terrorism: Evaluation of Selected Characteristics in National
Strategies Related to Terrorism. GAO-04-408T. Washington, D.C.: February
2004.

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Highlights of GAO-06 175T, a testimony before the Subcommittee on
Oversight and Investigations, Committee on Energy and Commerce, U.S. House
of Representatives

December2005

PRESCRIPTION DRUGS

Enhanced Efforts and Better Agency Coordination Needed to Address Illegal
Importation

This testimony summarizes a GAO report on federal efforts to address the
importation of prohibited prescription drugs through international mail
and carrier facilities for personal use. U.S. Customs and Border
Protection (CBP), in the Department of Homeland Security (DHS), and the
Food and Drug Administration (FDA), in the Department of Health and Human
Services (HHS), work with other federal agencies at international mail and
express carrier facilities to inspect for and interdict these drugs. This
testimony addresses (1) available data about the volume and safety of
these drugs, (2) the procedures and practices used to inspect and
interdict them, (3) factors affecting federal efforts to enforce the laws
governing these drugs, and (4) federal agencies' efforts to coordinate
enforcement of the prohibitions on personal importation of these drugs.

What GAO Recommends

GAO recommends that (1) CBP and other task force agencies develop a
strategic framework to enhance their enforcement efforts and (2) HHS
assess the effect of modifying the requirement that FDA notify addressees
about unapproved drug imports. DHS and most task force agencies generally
supported the idea of a strategic framework. HHS agreed to assess
modifying the notification requirement, and the U.S. Postal Service said
that any proposal should consider international postal obligations.

The information currently available on the safety of illegally imported
prescription drugs is very limited, and neither CBP nor FDA systematically
collects data on the volume of these imports. Nevertheless, on the basis
of their own observations and limited information they collected at some
mail and carrier facilities, both CBP and FDA officials said that the
volume of prescription drugs imported into the United States is
substantial and increasing. FDA officials said that they cannot assure the
public of the safety of drugs purchased from foreign sources outside the
U.S. regulatory system.

FDA has issued new procedures to standardize practices for selecting
packages for inspection and making admissibility determinations. While
these procedures may encourage uniform practices across mail facilities,
packages containing prescription drugs continue to be released to the
addressees. CBP has also implemented new procedures to interdict and
destroy certain imported controlled substances, such as Valium. CBP
officials said the new process is designed to improve their ability to
quickly handle packages containing these drugs, but they did not know if
the policy had affected overall volume because packages may not always be
detected.

GAO identified three factors that have complicated federal enforcement of
laws prohibiting the personal importation of prescription drugs. First,
the volume of imports has strained limited federal resources at mail
facilities. Second, Internet pharmacies can operate outside the U.S.
regulatory system and evade federal law enforcement actions. Third,
current law requires FDA to give addressees of packages containing
unapproved imported drugs notice and the opportunity to provide evidence
of admissibility regarding their imported items. FDA and HHS have
testified before Congress that this process placed a burden on limited
resources. In May 2001, FDA proposed to the HHS Secretary that this legal
requirement be eliminated, but according to FDA and HHS officials, as of
July 2005, the Secretary had not respondedwith a proposal. FDA officials
stated that any legislative change might require consideration of such
issues as whether to forgo an individual's opportunity to provide evidence
of the admissibility of the drug ordered.

Prior federal task forces and working groups had taken steps to deal with
Internet sales of prescription drugs since 1999, but these efforts did not
position federal agencies to successfully address the influx of these
drugs imported from foreign sources. Recently, CBP has organized a task
force to coordinate federal agencies' activities to enforce the laws
prohibiting the personal importation of prescription drugs. The task
force's efforts appear to be steps in the right direction, but they could
be enhanced by establishing a strategic framework to define the scope of
the problem at mail and carrier facilities, determine resource needs,
establish performance measures, and evaluate progress. Absent this
framework, it will be difficult to oversee task force efforts; hold
agencies accountable; and ensure ongoing, focused attention to the
enforcement of the relevant laws.
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