Medical Devices: FDA Faces Challenges in Conducting Inspections  
of Foreign Manufacturing Establishments (14-MAY-08, GAO-08-780T).
                                                                 
As part of the Food and Drug Administration's (FDA) oversight of 
the safety and effectiveness of medical devices marketed in the  
United States, it inspects certain foreign and domestic 	 
establishments where these devices are manufactured. To help FDA 
address shortcomings in its inspection program, the Medical	 
Device User Fee and Modernization Act of 2002 required FDA to	 
accredit third parties to inspect certain establishments. In	 
response, FDA has implemented two voluntary programs for that	 
purpose. This statement is based primarily on GAO testimonies	 
from January 2008 (GAO-08-428T) and April 2008 (GAO-08-701T). In 
this statement, GAO assesses (1) FDA's program for inspecting	 
foreign establishments that manufacture medical devices for the  
U.S. market and (2) FDA's programs for third-party inspections of
those establishments. For GAO's January and April 2008		 
testimonies, GAO interviewed FDA officials, analyzed information 
from FDA, and updated GAO's previous work on FDA's programs for  
inspections by accredited third parties. GAO updated selected	 
information for this statement in early May 2008.		 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-08-780T					        
    ACCNO:   A82110						        
  TITLE:     Medical Devices: FDA Faces Challenges in Conducting      
Inspections of Foreign Manufacturing Establishments		 
     DATE:   05/14/2008 
  SUBJECT:   Accountability					 
	     Certification and accreditation			 
	     Data integrity					 
	     Databases						 
	     Food and drug legislation				 
	     Foreign governments				 
	     Importing						 
	     Inspection 					 
	     International cooperation				 
	     International relations				 
	     Investigations by federal agencies 		 
	     Manufacturing industry				 
	     Medical equipment					 
	     Product evaluation 				 
	     Program evaluation 				 
	     Program management 				 
	     Quality control					 
	     Risk assessment					 
	     Program goals or objectives			 

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GAO-08-780T

   

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Testimony: 

Before the Subcommittee on Health, Committee on Energy and Commerce, 
House of Representatives: 

United States Government Accountability Office:
GAO: 

For Release on Delivery: 
Expected at 10:00 a.m. EDT:
Wednesday, May 14, 2008: 

Medical Devices: 

FDA Faces Challenges in Conducting Inspections of Foreign Manufacturing 
Establishments: 

Statement of Marcia Crosse:
Director, Health Care: 

GAO-08-780T: 

GAO Highlights: 

Highlights of GAO-08-780T, a testimony before the Subcommittee on 
Health, Committee on Energy and Commerce, House of Representatives. 

Why GAO Did This Study: 

As part of the Food and Drug Administrationï¿½s (FDA) oversight of the 
safety and effectiveness of medical devices marketed in the United 
States, it inspects certain foreign and domestic establishments where 
these devices are manufactured. To help FDA address shortcomings in its 
inspection program, the Medical Device User Fee and Modernization Act 
of 2002 required FDA to accredit third parties to inspect certain 
establishments. In response, FDA has implemented two voluntary programs 
for that purpose. 

This statement is based primarily on GAO testimonies from January 2008 
(GAO-08-428T) and April 2008 (GAO-08-701T). In this statement, GAO 
assesses (1) FDAï¿½s program for inspecting foreign establishments that 
manufacture medical devices for the U.S. market and (2) FDAï¿½s programs 
for third-party inspections of those establishments. For GAOï¿½s January 
and April 2008 testimonies, GAO interviewed FDA officials, analyzed 
information from FDA, and updated GAOï¿½s previous work on FDAï¿½s programs 
for inspections by accredited third parties. GAO updated selected 
information for this statement in early May 2008. 

What GAO Found: 

FDA faces challenges managing its program to inspect foreign 
establishments that manufacture medical devices. GAO testified in 
January 2008 that two databases that provide FDA with information about 
foreign medical device establishments and the products they manufacture 
for the U.S. market contained inaccurate information about 
establishments subject to FDA inspection. In addition, comparisons 
between these databasesï¿½which could help produce a more accurate 
countï¿½had to be done manually. Recent changes FDA made to its 
registration database could improve the accuracy of the count of 
establishments, but it is too soon to tell whether these and other 
changes will improve FDAï¿½s management of its foreign inspection 
program. Another challenge is that FDA conducts relatively few 
inspections of foreign establishments; officials estimated that the 
agency inspects foreign manufacturers of high-risk devices (such as 
pacemakers) every 6 years and foreign manufacturers of medium-risk 
devices (such as hearing aids) every 27 years. Finally, inspections of 
foreign manufacturers pose unique challenges to FDA, such as 
difficulties in recruiting investigators to travel to certain countries 
and in extending trips if the inspections uncovered problems. FDA is 
pursuing initiatives that could address some of these unique 
challenges, but it is unclear whether FDAï¿½s proposals will increase the 
frequency with which the agency inspects foreign establishments. 

Few inspections of foreign medical device manufacturing establishments 
have been conducted through FDAï¿½s two accredited third-party inspection 
programsï¿½the Accredited Persons Inspection Program and the Pilot Multi-
purpose Audit Program (PMAP). Under FDAï¿½s Accredited Persons Inspection 
Program, from March 11, 2004ï¿½the date when FDA first cleared an 
accredited organization to conduct independent inspectionsï¿½through May 
7, 2008, four inspections of foreign establishments had been conducted 
by accredited organizations. An incentive to participation in the 
program is the opportunity to reduce the number of inspections 
conducted to meet FDAï¿½s and other countriesï¿½ requirements. 
Disincentives include bearing the cost for the inspection, particularly 
when the consequences of an inspection that otherwise might not occur 
in the near future could involve regulatory action. The Food and Drug 
Administration Amendments Act of 2007 made several changes to program 
eligibility requirements that could result in increased participation 
by manufacturers. PMAP was established on September 7, 2006, as a 
partnership between FDA and Canadaï¿½s medical device regulatory agency 
and allows accredited organizations to conduct a single inspection to 
meet the regulatory requirements of both countries. As of May 7, 2008, 
two inspections of foreign establishments had been conducted by 
accredited organizations through this program. The small number of 
inspections completed to date by accredited third-party organizations 
raises questions about the practicality and effectiveness of these 
programs to quickly help FDA increase the number of foreign 
establishments inspected. 

To view the full product, including the scope and methodology, click on 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-780T]. For more 
information, contact Marcia Crosse at (202) 512-7114 or 
[email protected]. 

[End of section] 

Mr. Chairman and Members of the Subcommittee: 

I am pleased to be here today as you examine the Food and Drug 
Administration's (FDA) program for inspecting foreign manufacturers of 
medical devices for the U.S. market. FDA is responsible for the 
regulation of medical devices[Footnote 1] marketed in the United 
States, including those manufactured in foreign establishments. 
[Footnote 2] FDA classifies medical devices into one of three classes 
based on degree of potential risk and level of control needed to 
reasonably ensure safety and effectiveness.[Footnote 3] According to 
FDA data, a wide variety of class II (medium risk) and III (high risk) 
medical devices may be manufactured for the U.S. market by foreign 
establishments. Such devices include defibrillators, contact lenses, 
pacemakers, hip prostheses, and coronary stents.[Footnote 4] FDA is 
responsible for inspecting certain foreign and domestic establishments 
to ensure they meet required manufacturing standards; such inspections 
are FDA's primary means of assuring that the safety and effectiveness 
of medical devices are not jeopardized by poor manufacturing practices. 

The Medical Device User Fee and Modernization Act of 2002 (MDUFMA) 
addressed concerns about FDA's ability to meet its responsibilities for 
inspecting medical device manufacturing establishments.[Footnote 5] 
MDUFMA included provisions designed to (1) increase the number of 
inspected medical device manufacturing establishments and (2) help 
medical device manufacturers meet the inspection requirements of both 
the United States and foreign countries in a single inspection. 
Specifically, MDUFMA required FDA to accredit third-party organizations 
to conduct inspections of certain foreign and domestic establishments. 
[Footnote 6] In response, FDA implemented its Accredited Persons 
Inspection Program, which permits certain establishments to voluntarily 
request inspections from third-party organizations to meet inspectional 
requirements. In January 2007, we reported on the status of this 
program citing, among other things, concerns regarding its 
implementation and potential incentives and disincentives that may 
influence manufacturers' participation.[Footnote 7] Additionally, in 
partnership with Health Canada,[Footnote 8] FDA established in 
September 2006 another program for inspection by accredited third 
parties--the Pilot Multi-purpose Audit Program (PMAP)--that allows 
accredited organizations to conduct a single inspection to meet the 
regulatory requirements of both countries. 

My remarks today are based primarily on our January 2008 statement, 
which updated our January 2007 report, on FDA's management of its 
medical device inspection program and our April 2008 statement on a 
number of new FDA initiatives related to foreign inspections of FDA 
regulated products, including medical devices.[Footnote 9] My remarks 
will focus on our assessment of (1) FDA's program for inspecting 
foreign establishments that manufacture medical devices for the U.S. 
market and (2) FDA's programs for third-party inspections of foreign 
medical device manufacturing establishments. 

To address these objectives, we used work completed for our January 
2008 statement on FDA's medical device inspection program, for which we 
interviewed officials from FDA's Center for Devices and Radiological 
Health (CDRH) and Office of Regulatory Affairs (ORA), which have 
responsibilities for managing the medical device inspection program. 
[Footnote 10] To assess FDA's program for inspecting foreign 
establishments that manufacture medical devices, we obtained 
information from FDA's Device Registration and Listing System (DRLS), 
as of September 19, 2007; Field Accomplishments and Compliance Tracking 
System (FACTS) for fiscal year 2002 through fiscal year 2007; and 
Operational and Administrative System for Import Support (OASIS) for 
fiscal year 2007. We assessed the reliability of these data by (1) 
reviewing existing information about the data and the databases that 
produced them, (2) interviewing agency officials knowledgeable about 
the data, and (3) performing electronic testing of data elements from 
DRLS and FACTS. We found the data in the FACTS database sufficiently 
reliable for our purposes. We also found that DRLS was sufficiently 
reliable, to the extent that it accurately reflects information 
provided by foreign establishments that register to market medical 
devices in the United States. However, we determined that these data do 
not necessarily reflect the number of establishments that manufacture 
medical devices for the U.S. market. In addition, we found that OASIS 
is likely to overestimate the number of foreign establishments whose 
medical devices have been imported into the United States because of 
uncorrected errors in the data. Therefore, we present information from 
both DRLS and OASIS to illustrate the variability in information that 
FDA's databases provide on this topic. These data represent the best 
information available and are what FDA relies on to manage its foreign 
medical device inspection activities. In addition, in preparation for 
our April 2008 statement, we obtained information from FDA officials to 
learn about recent initiatives to improve the agency's program for 
inspecting establishments manufacturing FDA-regulated products, 
including medical devices. For today's statement, we obtained 
additional data from FDA to update selected information from our 
January 2008 statement. 

To examine FDA's programs for third-party inspections of foreign 
medical device manufacturing establishments, we updated work completed 
for our January 2008 statement. We obtained FDA data on the number of 
inspections conducted by accredited third parties from March 11, 2004-
-the date when FDA first cleared an accredited organization to conduct 
inspections--through May 7, 2008. For our January 2008 statement, we 
also obtained information from FDA about other critical aspects of its 
programs for inspections by accredited third parties. To gain 
perspective on recent changes to FDA's programs for inspections by 
accredited third parties, we contacted representatives of the same 13 
affected entities we interviewed for our January 2007 report on this 
topic.[Footnote 11] We received responses from 2 of 4 accredited 
organizations, 1 of 6 medical device manufacturers, and 2 of 3 
organizations that represent medical device manufacturers. We shared 
the facts contained in our current statement with FDA officials. FDA 
provided technical comments, which are appropriately addressed in the 
testimony. We conducted audit work for the January 2008 statement from 
December 2007 to January 2008; for our April 2008 statement, from March 
2008 through April 2008; and updated our work on medical devices in 
early May 2008 for this statement. We conducted this work in accordance 
with generally accepted government auditing standards. Those standards 
require that we plan and perform the audit to obtain sufficient, 
appropriate evidence to provide a reasonable basis for our findings and 
conclusions based on our audit objectives. We believe that the evidence 
obtained provides a reasonable basis for our findings and conclusions 
based on our audit objectives. 

In summary, we found that FDA faces challenges in its program to 
inspect foreign establishments manufacturing medical devices. In 
January 2008, we testified that two databases that provide FDA with 
information about foreign medical device establishments and the 
products they manufacture for the U.S. market contained inaccurate 
information about establishments subject to FDA inspection and could 
not exchange information. Since then, FDA has made changes to its 
registration process that could improve its database and provide the 
agency with a more accurate count of foreign establishments that 
manufacture medical devices. While the agency has initiated other steps 
to improve its databases, it is too soon to know if these changes will 
improve FDA's management of its foreign inspection program. Another 
challenge is that FDA conducts relatively few inspections of foreign 
establishments that manufacture medical devices. Officials estimated 
the agency had inspected foreign class II manufacturers every 27 years 
and foreign class III manufacturers every 6 years. Finally, inspections 
of foreign medical device manufacturing establishments pose unique 
challenges to FDA, such as difficulties in recruiting investigators to 
voluntarily travel to certain countries and in extending trips if 
problems are identified during inspections. FDA is pursuing initiatives 
that could address some of these challenges, but it is unclear whether 
the agency's proposals will increase the frequency with which FDA 
inspects foreign establishments. 

Few inspections of foreign medical device manufacturing establishments 
have been conducted through FDA's two programs for inspections by 
accredited third parties--the Accredited Persons Inspection Program and 
PMAP. Under FDA's Accredited Persons Inspection Program, from March 11, 
2004--the date when FDA first cleared an accredited organization to 
conduct inspections--through May 7, 2008, four inspections of foreign 
establishments had been conducted by accredited organizations. To 
participate in this program, manufacturers must decide to request an 
inspection by an accredited organization, and this decision might be 
influenced by both potential incentives and disincentives. An incentive 
to participation in the program is the opportunity to reduce the number 
of inspections conducted to meet FDA and other countries' requirements. 
Disincentives include bearing the cost for the inspection, particularly 
when the consequences of an inspection that otherwise may not occur in 
the near future could involve regulatory action. The Food and Drug 
Administration Amendments Act of 2007 (FDAAA) changed the requirements 
for inspections by accredited third parties in several ways, which 
could result in increased participation by manufacturers, although it 
is too soon to tell. For example, a requirement that foreign 
establishments be periodically inspected by FDA before being eligible 
for third-party inspections was eliminated. Device manufacturers may 
also request an inspection by an accredited third party through PMAP, 
which was established on September 7, 2006, and is limited to a 
partnership with Canada. As of May 7, 2008, two inspections of foreign 
establishments had been conducted by an accredited organization through 
PMAP. The small number of inspections completed by accredited third- 
party organizations raises questions about the practicality and 
effectiveness of these programs to help FDA conduct additional foreign 
inspections. 

Background: 

FDA is responsible for overseeing the safety and effectiveness of 
medical devices that are marketed in the United States, whether 
manufactured in domestic or foreign establishments. All establishments 
that manufacture medical devices for marketing in the United States are 
required to register annually with FDA.[Footnote 12] As part of its 
efforts to ensure the safety, effectiveness, and quality of medical 
devices, FDA is responsible for inspecting certain foreign and domestic 
establishments to ensure that, among other things, they meet 
manufacturing standards established in FDA's quality system 
regulation.[Footnote 13] Within FDA, CDRH is responsible for assuring 
the safety and effectiveness of medical devices. Among other things, 
CDRH works with ORA, which conducts inspections of foreign 
establishments. FDA may conduct inspections before and after medical 
devices are approved or otherwise cleared to be marketed in the United 
States. 

* Premarket inspections are conducted before FDA approves U.S. 
marketing of a new medical device that is not substantially equivalent 
to one that is already on the market.[Footnote 14] Premarket 
inspections primarily assess manufacturing facilities, methods, and 
controls and may verify pertinent records. 

* Postmarket inspections are conducted after a medical device has been 
approved or otherwise cleared to be marketed in the United States and 
include several types of inspections: (1) Quality system inspections 
are conducted to assess compliance with applicable FDA regulations, 
including the quality system regulation to ensure good manufacturing 
practices and the regulation requiring reporting of adverse 
events.[Footnote 15] These inspections may be comprehensive or 
abbreviated, which differ in the scope of inspectional activity. 
Comprehensive postmarket inspections assess multiple aspects of the 
manufacturer's quality system, including management controls, design 
controls, corrective and preventative actions, and production and 
process controls. Abbreviated postmarket inspections assess only some 
of these aspects, but always assess corrective and preventative 
actions. (2) For-cause and compliance follow-up inspections are 
initiated in response to specific information that raises questions or 
problems associated with a particular establishment. (3) Postmarket 
audit inspections are conducted within 8 to 12 months of a premarket 
application's approval to examine any changes in the design, 
manufacturing process, or quality assurance systems. 

Requirements governing foreign and domestic inspections differ. 
Specifically, FDA is required to inspect domestic establishments that 
manufacture class II or III medical devices every 2 years.[Footnote 16] 
There is no comparable requirement to inspect foreign establishments. 
FDA does not have authority to require foreign establishments to allow 
the agency to inspect their facilities. However, if an FDA request to 
inspect is denied, FDA may prevent the importation of medical devices 
from that foreign establishment into the United States. In addition, 
FDA has the authority to conduct physical examinations of products 
offered for import and, if there is sufficient evidence of a violation, 
prevent their entry at the border.[Footnote 17] Unlike food, for which 
FDA primarily relies on inspections at the border, physical inspection 
of manufacturing establishments is a critical mechanism in FDA's 
process to ensure that medical devices are safe and effective and that 
manufacturers adhere to good manufacturing practices. 

FDA determines which establishments to inspect using a risk-based 
strategy. High priority inspections include premarket approval 
inspections for class III devices, for-cause inspections, inspections 
of establishments that have had a high frequency of device recalls, and 
other devices and manufacturers FDA considers high risk. The 
establishment's inspection history may also be considered. A provision 
in FDAAA may assist FDA in making decisions about which establishments 
to inspect because this law authorizes the agency to accept voluntary 
submissions of audit reports addressing manufacturers' conformance with 
internationally established standards for the purpose of setting risk- 
based inspectional priorities.[Footnote 18] 

FDA's programs for foreign and domestic inspections by accredited third 
parties provide an alternative to the traditional FDA-conducted 
comprehensive postmarket quality system inspection for eligible 
manufacturers of class II and III medical devices. MDUFMA required FDA 
to accredit third persons--which are organizations--to conduct 
inspections of certain establishments. In describing this requirement, 
the House of Representatives Committee on Energy and Commerce noted 
that some manufacturers have faced an increase in the number of 
inspections required by foreign countries and that the number of 
inspections could be reduced if the manufacturers could contract with a 
third-party organization to conduct a single inspection that would 
satisfy the requirements of both FDA and foreign countries.[Footnote 
19] Manufacturers that meet eligibility requirements may request a 
postmarket inspection by an FDA-accredited organization.[Footnote 20] 
The eligibility criteria for requesting an inspection of an 
establishment by an accredited organization include that the 
manufacturer markets a medical device in the United States and markets 
(or intends to market) a medical device in at least one other country 
and that the establishment to be inspected must not have received 
warnings for significant deviations from compliance requirements on its 
last inspection.[Footnote 21] 

MDUFMA also established minimum requirements for organizations to be 
accredited to conduct third-party inspections, including protections 
against financial conflicts of interest and assurances of the 
competence of the organization to conduct inspections. FDA developed a 
training program for inspectors from accredited organizations that 
involves both formal classroom training and completion of three joint 
training inspections with FDA. Each individual inspector from an 
accredited organization must complete all training requirements 
successfully before being cleared to conduct independent inspections. 
FDA relies on manufacturers to volunteer to host these joint 
inspections, which count as FDA postmarket quality system inspections. 

A manufacturer that is cleared to have an inspection by an accredited 
third party enters an agreement with the approved accredited 
organization and schedules an inspection. Once the accredited 
organization completes its inspection, it prepares a report and submits 
it to FDA, which makes the final assessment of compliance with 
applicable requirements. FDAAA added a requirement that accredited 
organizations notify FDA of any withdrawal, suspension, restriction, or 
expiration of certificate of conformance with quality systems standards 
(such as those established by the International Organization for 
Standardization) for establishments they inspected for FDA.[Footnote 
22] 

In addition to the Accredited Persons Inspection Program, FDA has a 
second program for accredited third-party inspections of medical device 
establishments. On September 7, 2006, FDA and Health Canada announced 
the establishment of PMAP. This pilot program was designed to allow 
qualified third-party organizations to perform a single inspection that 
would meet the regulatory requirements of both the United States and 
Canada. The third-party organizations eligible to conduct inspections 
through PMAP are those that FDA accredited for its Accredited Persons 
Inspection Program (and that completed all required training for that 
program) and that are also authorized to conduct inspections of medical 
device establishments for Health Canada. To be eligible to have a third-
party inspection through PMAP, manufacturers must meet all criteria 
established for the Accredited Persons Inspection Program. As with the 
Accredited Persons Inspection Program, manufacturers must apply to 
participate and be willing to pay an accredited organization to conduct 
the inspection. 

FDA relies on multiple databases to manage its program for inspecting 
medical device manufacturing establishments. 

* FDA's medical device registration and listing database contains 
information on domestic and foreign medical device establishments that 
have registered with FDA. Establishments that are involved in the 
manufacture of medical devices intended for commercial distribution in 
the United States are required to register annually with FDA. These 
establishments provide information to FDA, such as an establishment's 
name and its address and the medical devices it manufactures. Prior to 
October 1, 2007, this information was maintained in DRLS. As of October 
1, 2007, establishments are required to register electronically through 
FDA's Unified Registration and Listing System and certain medical 
device establishments pay an annual establishment registration fee, 
which in fiscal year 2008 is $1,706.[Footnote 23] 

* OASIS contains information on medical devices and other FDA-regulated 
products imported into the United States, including information on the 
establishment that manufactured the medical device. The information in 
OASIS is automatically generated from data managed by Customs and 
Border Protection (CBP). These data are originally entered by customs 
brokers based on the information available from the importer.[Footnote 
24] CBP specifies an algorithm by which customs brokers generate a 
manufacturer identification number from information about an 
establishment's name, address, and location. 

* FACTS contains information on FDA's inspections, including those of 
domestic and foreign medical device establishments. FDA investigators 
enter information into FACTS following completion of an inspection. 

According to FDA data, there are more registered establishments in 
China and Germany reporting that they manufacture class II or III 
medical devices than in any other foreign countries.[Footnote 25] 
Canada and the United Kingdom also have a large number of registered 
establishments. 

FDA Faces Challenges Conducting Inspections of Foreign Establishments 
That Manufacture Medical Devices: 

FDA faces challenges in its program to inspect foreign establishments 
manufacturing medical devices. The databases that provide FDA with data 
about the number of foreign establishments manufacturing medical 
devices for the U.S. market have not provided it with an accurate count 
of foreign establishments for inspection. In addition, FDA conducted 
relatively few inspections of foreign establishments. Moreover, 
inspections of foreign medical device manufacturing establishments pose 
unique challenges to FDA--both in human resources and logistics. 

FDA Lacks Accurate Data on the Number of Foreign Establishments Subject 
to Inspection, but Has Made Recent Attempts to Improve Its Data: 

FDA's databases on registration and imported medical devices have not 
provided an accurate count of establishments subject to inspection, 
although recent improvements to FDA's medical device registration 
database may address some weaknesses. In January 2008, we testified 
that DRLS provided FDA with information about foreign medical device 
establishments and the products they manufacture for the U.S. market. 
According to DRLS, as of September 2007, 4,983 foreign establishments 
that reported manufacturing a class II or III medical device for the 
U.S. market had registered with FDA.[Footnote 26] However, these data 
contained inaccuracies because establishments may register with FDA but 
not actually manufacture a medical device or may manufacture a medical 
device that is not marketed in the United States. In addition, FDA did 
not routinely verify the data within this database. 

Recent changes to FDA's medical device establishment registration 
process could improve the accuracy of its database. In fiscal year 
2008, FDA implemented, in addition to its annual user fee, electronic 
registration and an active re-registration process for medical device 
establishments.[Footnote 27] According to FDA, about half of previously 
registered establishments had reregistered using the new system as of 
April 11, 2008.[Footnote 28] While FDA officials expect that additional 
establishments will reregister, they expect that the final result will 
be the elimination of establishments that do not manufacture medical 
devices for the U.S. market and thus a smaller, more accurate database 
of medical device establishments. FDA officials indicated that 
implementation of electronic registration and the annual user fee 
seemed to have improved the data so FDA can more accurately identify 
the type of establishment registered, the devices manufactured at an 
establishment, and whether or not an establishment should be 
registered. According to FDA officials, the revenue from device 
registration user fees is applied to the process for the review of 
device applications, including premarket inspections.[Footnote 29] 

FDA has also proposed, but not yet implemented, the Foreign Vendor 
Registration Verification Program, which could also help improve the 
accuracy of information FDA maintains on registered foreign 
establishments. Through this program, FDA plans to contract with an 
external organization to conduct on-site verification of the 
registration data and product listing information of foreign 
establishments shipping medical devices and other FDA-regulated 
products to the United States. FDA has solicited proposals for this 
contract, but it is still developing the specifics of the program. For 
example, as of April 2008, the agency had not yet established the 
criteria it would use to determine which establishments would be 
visited for verification purposes or determined how many establishments 
it would verify annually. FDA plans to award this contract in June 
2008. Given the early stages of this process, it is too soon to 
determine whether this program will improve the accuracy of the data 
FDA maintains on foreign medical device establishments. 

FDA also obtains information on foreign establishments from OASIS, 
which tracks the importation of medical devices and other FDA-regulated 
products. While not intended to provide a count of establishments, 
OASIS does contain information about the medical devices actually being 
imported into the United States and the establishments manufacturing 
them. However, inaccuracies in OASIS prevent FDA from using it to 
develop a list of establishments subject to inspection. OASIS contains 
an inaccurate count of foreign establishments manufacturing medical 
devices imported into the United States as a result of unreliable 
identification numbers generated by customs brokers when the product is 
offered for entry.[Footnote 30] FDA officials told us that these errors 
result in the creation of multiple records for a single establishment, 
which results in inflated counts of establishments offering medical 
devices for entry into the U.S. market. According to OASIS, in fiscal 
year 2007, there were as many as 22,008 foreign establishments that 
manufactured class II medical devices for the U.S. market and 3,575 
foreign establishments that manufactured class III medical devices for 
the U.S. market.[Footnote 31] 

FDA has supported a proposal with the potential to address weaknesses 
in OASIS, but FDA does not control the implementation of this proposed 
change. FDA is pursuing the creation of a governmentwide unique 
establishment identifier, as part of the Shared Establishment Data 
Service (SEDS), to address these inaccuracies.[Footnote 32] Rather than 
relying on the creation and entry of an identifier at the time of 
import, SEDS would provide a unique establishment identifier and a 
centralized service to provide commercially verified information about 
establishments.[Footnote 33] The standard identifier would be submitted 
as part of import entry data when required by FDA or other government 
agencies. SEDS could thus eliminate the problems that have resulted in 
multiple identifiers associated with an individual establishment. The 
implementation of SEDS is dependent on action from multiple federal 
agencies, including the integration of the concept into a CBP import 
and export system under development and scheduled for implementation in 
2010. In addition, once implemented by CBP, participating federal 
agencies would be responsible for bearing the cost of integrating SEDS 
with their own operations and systems. FDA officials are not aware of a 
specific time line for the implementation of SEDS. Developing an 
implementation plan for SEDS was recommended by the Interagency Working 
Group on Import Safety.[Footnote 34] 

Although comparing information from its registration and import 
databases could help FDA determine the number of foreign establishments 
marketing medical devices in the United States, the databases do not 
exchange information to be compared electronically and any comparisons 
are done manually. FDA is in the process of implementing additional 
initiatives to improve the integration of its databases, and these 
changes could make it easier for the agency to establish an accurate 
count of foreign manufacturing establishments subject to inspection. 
The agency's Mission Accomplishments and Regulatory Compliance Services 
(MARCS) is intended to help FDA electronically integrate data from 
multiple systems. It is specifically designed to give individual users 
more complete information about establishments. FDA officials estimated 
that MARCS, which is being implemented in stages, could be fully 
implemented by 2011 or 2012. However, FDA officials told us that 
implementation has been slow because the agency has been forced to 
shift resources away from MARCS and toward the maintenance of current 
systems that are still heavily used, such as FACTS and OASIS. Taken 
together, changes to FDA's databases could provide the agency with more 
accurate information on the number of establishments subject to 
inspection. However, it is too early to tell whether this will improve 
FDA's management of its inspection program. 

FDA Inspects Relatively Few Foreign Medical Device Establishments: 

From fiscal year 2002 through fiscal year 2007, FDA inspected 
relatively few foreign medical device establishments and primarily 
inspected establishments located in the United States. During this 
period, FDA conducted an average of 247 foreign establishment 
inspections each year, compared to 1,494 inspections of domestic 
establishments.[Footnote 35] This average number of foreign inspections 
suggests that each year FDA inspects about 6 percent of registered 
foreign establishments that reported manufacturing class II or class 
III medical devices.[Footnote 36] FDA officials estimated the agency 
had inspected foreign class II manufacturers every 27 years and foreign 
class III manufacturers every 6 years. The inspected foreign 
establishments were in 44 foreign countries and more than two-thirds 
were in 10 countries. Most of the countries with the highest number of 
inspections were also among those with the largest number of registered 
establishments that reported manufacturing class II or III medical 
devices. The lowest rate of inspections in these 10 countries was in 
China, where 64 inspections were conducted in this 6-year period and 
568 establishments were registered as of May 6, 2008. (See table 1.) 

Table 1: Number of FDA Inspections of Foreign Medical Device 
Establishments, Fiscal Year 2002 through Fiscal Year 2007: 

Country: Germany; 
Number of inspections[A]: FY 2002: 39; 
Number of inspections[A]: FY 2003: 30; 
Number of inspections[A]: FY 2004: 34; 
Number of inspections[A]: FY 2005: 51; 
Number of inspections[A]: FY 2006: 25; 
Number of inspections[A]: FY 2007: 52; 
Number of inspections[A]: Total: 231; 
Number of registered class II or III manufacturing establishments[B]: 
460. 

Country: United Kingdom; 
Number of inspections[A]: FY 2002: 25; 
Number of inspections[A]: FY 2003: 31; 
Number of inspections[A]: FY 2004: 28; 
Number of inspections[A]: FY 2005: 14; 
Number of inspections[A]: FY 2006: 25; 
Number of inspections[A]: FY 2007: 43; 
Number of inspections[A]: Total: 166; 
Number of registered class II or III manufacturing establishments[B]: 
277. 

Country: Canada; 
Number of inspections[A]: FY 2002: 17; 
Number of inspections[A]: FY 2003: 17; 
Number of inspections[A]: FY 2004: 24; 
Number of inspections[A]: FY 2005: 11; 
Number of inspections[A]: FY 2006: 13; 
Number of inspections[A]: FY 2007: 26; 
Number of inspections[A]: Total: 108; 
Number of registered class II or III manufacturing establishments[B]: 
282. 

Country: Japan; 
Number of inspections[A]: FY 2002: 7; 
Number of inspections[A]: FY 2003: 8; 
Number of inspections[A]: FY 2004: 20; 
Number of inspections[A]: FY 2005: 21; 
Number of inspections[A]: FY 2006: 16; 
Number of inspections[A]: FY 2007: 25; 
Number of inspections[A]: Total: 97; 
Number of registered class II or III manufacturing establishments[B]: 
210. 

Country: Ireland; 
Number of inspections[A]: FY 2002: 15; 
Number of inspections[A]: FY 2003: 22; 
Number of inspections[A]: FY 2004: 13; 
Number of inspections[A]: FY 2005: 13; 
Number of inspections[A]: FY 2006: 16; 
Number of inspections[A]: FY 2007: 11; 
Number of inspections[A]: Total: 90; 
Number of registered class II or III manufacturing establishments[B]: 
62. 

Country: France; 
Number of inspections[A]: FY 2002: 16; 
Number of inspections[A]: FY 2003: 14; 
Number of inspections[A]: FY 2004: 17; 
Number of inspections[A]: FY 2005: 14; 
Number of inspections[A]: FY 2006: 12; 
Number of inspections[A]: FY 2007: 10; 
Number of inspections[A]: Total: 83; 
Number of registered class II or III manufacturing establishments[B]: 
154. 

Country: Switzerland; 
Number of inspections[A]: FY 2002: 6; 
Number of inspections[A]: FY 2003: 12; 
Number of inspections[A]: FY 2004: 19; 
Number of inspections[A]: FY 2005: 9; 
Number of inspections[A]: FY 2006: 7; 
Number of inspections[A]: FY 2007: 18; 
Number of inspections[A]: Total: 71; 
Number of registered class II or III manufacturing establishments[B]: 
108. 

Country: China[C]; 
Number of inspections[A]: FY 2002: 0; 
Number of inspections[A]: FY 2003: 0; 
Number of inspections[A]: FY 2004: 21; 
Number of inspections[A]: FY 2005: 19; 
Number of inspections[A]: FY 2006: 11; 
Number of inspections[A]: FY 2007: 13; 
Number of inspections[A]: Total: 64; 
Number of registered class II or III manufacturing establishments[B]: 
568[D]. 

Country: Mexico; 
Number of inspections[A]: FY 2002: 10; 
Number of inspections[A]: FY 2003: 7; 
Number of inspections[A]: FY 2004: 12; 
Number of inspections[A]: FY 2005: 8; 
Number of inspections[A]: FY 2006: 12; 
Number of inspections[A]: FY 2007: 11; 
Number of inspections[A]: Total: 60; 
Number of registered class II or III manufacturing establishments[B]: 
122. 

Country: Italy; 
Number of inspections[A]: FY 2002: 8; 
Number of inspections[A]: FY 2003: 7; 
Number of inspections[A]: FY 2004: 10; 
Number of inspections[A]: FY 2005: 6; 
Number of inspections[A]: FY 2006: 13; 
Number of inspections[A]: FY 2007: 11; 
Number of inspections[A]: Total: 55; 
Number of registered class II or III manufacturing establishments[B]: 
170. 

Country: All other countries; 
Number of inspections[A]: FY 2002: 66; 
Number of inspections[A]: FY 2003: 83; 
Number of inspections[A]: FY 2004: 102; 
Number of inspections[A]: FY 2005: 67; 
Number of inspections[A]: FY 2006: 69; 
Number of inspections[A]: FY 2007: 69; 
Number of inspections[A]: Total: 456; 
Number of registered class II or III manufacturing establishments[B]: 
1,871. 

Country: Total; 
Number of inspections[A]: FY 2002: 209; 
Number of inspections[A]: FY 2003: 231; 
Number of inspections[A]: FY 2004: 300; 
Number of inspections[A]: FY 2005: 233; 
Number of inspections[A]: FY 2006: 219; 
Number of inspections[A]: FY 2007: 289; 
Number of inspections[A]: Total: 1,481; 
Number of registered class II or III manufacturing establishments[B]: 
4,284. 

Source: GAO analysis of FDA data. 

[A] We were unable to differentiate inspections according to medical 
device classification. FDA's inspection database contains the most 
recent information available to FDA about the class of device 
manufactured at the establishment and consequently does not contain 
readily available information about the class of devices manufactured 
at the time of a specific inspection. As a result, the data we present 
include all inspections, regardless of the classification of the 
manufactured device or devices. According to FDA officials, FDA 
primarily conducts inspections of establishments manufacturing class II 
or III medical devices. 

[B] These counts represent the number of registered establishments as 
of May 6, 2008. 

[C] The inspection counts for China do not include inspections 
conducted in Hong Kong or Taiwan because these inspections are tracked 
separately in FACTS. 

[D] Counts of registered establishments in China do not include 
establishments registered in Hong Kong or Taiwan because these 
establishments are tracked separately. 

[End of table] 

FDA's inspections of foreign medical device establishments were 
primarily postmarket inspections. While premarket inspections were 
generally FDA's highest priority, relatively few have had to be 
performed in any given year.[Footnote 37] Therefore, FDA focused its 
resources on postmarket inspections. From fiscal year 2002 through 
fiscal year 2007, 89 percent of the 1,481 foreign establishment 
inspections were for postmarket purposes. 

FDA Faces Unique Challenges in Conducting Foreign Inspections: 

Inspections of foreign establishments pose unique challenges to FDA-- 
both in human resources and logistics. FDA does not have a dedicated 
cadre of investigators that only conduct foreign medical device 
establishment inspections; those staff who inspect foreign 
establishments also inspect domestic establishments. Among those 
qualified to inspect foreign establishments,[Footnote 38] FDA relies on 
staff to volunteer to conduct inspections. FDA officials told us that 
it has been difficult to recruit investigators to voluntarily travel to 
certain countries. However, they added that if the agency could not 
find an individual to volunteer for a foreign inspection trip, it would 
mandate the travel. Logistically, foreign medical device establishment 
inspections are difficult to extend even if problems are identified 
because the trips are scheduled in advance.[Footnote 39] Foreign 
medical device establishment inspections are also logistically 
challenging because investigators do not receive independent 
translational support from FDA or the State Department and may rely on 
English-speaking employees of the inspected establishment or the 
establishment's U.S. agent to translate during an inspection. 

FDA recently announced proposals to address some of the challenges 
unique to conducting foreign inspections, but specific steps toward 
implementation and associated time frames are unclear. FDA noted in its 
report on revitalizing ORA that it was exploring the creation of a 
cadre of investigators who would be dedicated to conducting foreign 
inspections.[Footnote 40] However, the report did not provide any 
additional details or time frames about this proposal. In addition, FDA 
announced plans to establish a permanent presence overseas, although 
little information about these plans is available. FDA intends that its 
foreign offices will improve cooperation and information exchange with 
foreign regulatory bodies, improve procedures for expanded inspections, 
allow it to inspect facilities quickly in an emergency, and facilitate 
work with private and government agencies to assure standards for 
quality. FDA's proposed foreign offices are intended to expand the 
agency's capacity for overseeing, among other things, medical devices, 
drugs, and food that may be imported into the United States. The extent 
to which the activities conducted by foreign offices are relevant to 
FDA's foreign medical device inspection program is uncertain. 
Initially, FDA plans to establish a foreign office in China with three 
locations--Beijing, Shanghai, and Guangzhou--comprised of a total of 
eight FDA employees and five Chinese nationals. The Beijing office, 
which the agency expects will be partially staffed by the end of 2008, 
will be responsible for coordination between FDA and Chinese regulatory 
agencies. FDA staff located in Shanghai and Guangzhou, who are to be 
hired in 2009, will be focused on conducting inspections and working 
with Chinese inspectors to provide training as necessary. FDA noted 
that the Chinese nationals will primarily provide support to FDA staff, 
including translation and interpretation. The agency is also 
considering setting up offices in other locations, such as India, the 
Middle East, Latin America, and Europe, but no dates have been 
specified. While the establishment of both a foreign inspection cadre 
and offices overseas have the potential for improving FDA's oversight 
of foreign establishments, it is too early to tell whether these steps 
will be effective or will increase the number of foreign medical device 
establishment inspections. 

Few Inspections of Foreign Establishments Have Been Conducted Through 
FDA's Third-Party Programs, but Recent Changes Could Eliminate Some 
Obstacles to Manufacturers' Participation: 

Few inspections of foreign medical device manufacturing establishments-
-a total of six--have been conducted through FDA's two accredited third-
party inspection programs, the Accredited Persons Inspection Program 
and PMAP. FDAAA specified several changes to the requirements for 
inspections by accredited third parties that could result in increased 
participation by manufacturers. 

Few inspections have been conducted through FDA's Accredited Persons 
Inspection Program since March 11, 2004--the date when FDA first 
cleared an accredited organization to conduct independent inspections. 
Through May 7, 2008, four inspections of foreign establishments had 
been conducted independently by accredited organizations.[Footnote 41] 

As of May 7, 2008, 16 third-party organizations were accredited, and 
individuals from 8 of these organizations had completed FDA's training 
requirements and been cleared to conduct independent 
inspections.[Footnote 42] FDA and accredited organizations had 
conducted 44 joint training inspections. As we previously reported, 
fewer manufacturers volunteered to host training inspections than have 
been needed for all of the accredited organizations to complete their 
training,[Footnote 43] and scheduling these joint training inspections 
has been difficult. FDA officials told us that, when appropriate, staff 
are instructed to ask manufacturers to host a joint training inspection 
at the time they notify the manufacturers of a pending inspection. FDA 
schedules inspections a relatively short time prior to an actual 
inspection,[Footnote 44] and as we previously reported, some accredited 
organizations have not been able to participate because they had prior 
commitments. 

We previously reported that manufacturers' decisions to request an 
inspection by an accredited organization might be influenced by both 
potential incentives and disincentives. According to FDA officials and 
representatives of affected entities, potential incentives to 
participation include the opportunity to reduce the number of 
inspections conducted to meet FDA and other countries' requirements. 
For example, one inspection conducted by an accredited organization was 
a single inspection designed to meet the requirements of FDA, the 
European Union, and Canada. Another potential incentive mentioned by 
FDA officials and representatives of affected entities is the 
opportunity to control the scheduling of the inspection by an 
accredited organization by working with the accredited organization. 
FDA officials and representatives of affected entities also mentioned 
potential disincentives to having an inspection by an accredited 
organization. These potential disincentives include bearing the cost 
for the inspection,[Footnote 45] doubts about whether accredited 
organizations can cover multiple requirements in a single inspection, 
and uncertainty about the potential consequences of an inspection that 
otherwise may not occur in the near future--consequences that could 
involve regulatory action. 

Changes specified by FDAAA have the potential to eliminate certain 
obstacles to manufacturers' participation in FDA's programs for 
inspections by accredited third parties that were associated with 
manufacturers' eligibility. For example, a requirement that foreign 
establishments be periodically inspected by FDA before being eligible 
for third-party inspections was eliminated. Representatives of the two 
organizations that represent medical device manufacturers with whom we 
spoke about FDAAA told us that the changes in eligibility requirements 
could eliminate certain obstacles and therefore potentially increase 
manufacturers' participation. These representatives also noted that key 
incentives and disincentives to manufacturers' participation remain. 
FDA officials told us that they were revising their guidance to 
industry in light of FDAAA and expected to issue the revised guidance 
during fiscal year 2008.[Footnote 46] It is too soon to tell what 
impact these changes will have on manufacturers' participation. 

FDA officials have acknowledged that manufacturers' participation in 
the Accredited Persons Inspection Program has been limited. In December 
2007, FDA established a working group to assess the successes and 
failures of this program and to identify ways to increase 
participation. Representatives of two organizations that represent 
medical device manufacturers told us that they believe manufacturers 
remain interested in the Accredited Persons Inspection Program. The 
representative of one large, global manufacturer of medical devices 
told us that it was in the process of arranging to have 20 of its 
domestic and foreign device manufacturing establishments inspected by 
accredited third parties. 

As of May 7, 2008, two inspections of foreign establishments had been 
conducted through PMAP,[Footnote 47] FDA's second program for 
inspections by accredited third parties. Although it is too soon to 
tell what the benefits of PMAP will be, the program is more limited 
than the Accredited Persons Inspection Program and may pose additional 
disincentives to participation by both manufacturers and accredited 
organizations. Specifically, inspections through PMAP would be designed 
to meet the requirements of the United States and Canada, whereas 
inspections conducted through the Accredited Persons Inspection Program 
could be designed to meet the requirements of other countries. In 
addition, two of the five representatives of affected entities whom we 
spoke to for our January 2008 statement noted that in contrast to 
inspections conducted through the Accredited Persons Inspection 
Program, inspections conducted through PMAP could undergo additional 
review by Health Canada. Health Canada will review inspection reports 
submitted through this pilot program to ensure the inspections meet its 
standards. This extra review poses a greater risk of unexpected 
outcomes for the manufacturer and the accredited organization, which 
could be a disincentive to participation in PMAP that is not present 
with the Accredited Persons Inspection Program. 

Concluding Observations: 

Americans depend on FDA to ensure the safety and effectiveness of 
medical devices manufactured throughout the world. A variety of medical 
devices are manufactured in other countries, including high-risk 
devices designed to be implanted or used in invasive procedures. 
However, FDA faces challenges in inspecting foreign establishments. 
Weaknesses in its database prevent it from accurately identifying 
foreign establishments manufacturing medical devices for the United 
States and prioritizing those establishments for inspection. In 
addition, staffing and logistical difficulties associated with foreign 
inspections complicate FDA's ability to conduct such inspections. The 
agency has recently taken some positive steps to improve its foreign 
inspection program, such as initiating changes to improve the accuracy 
of the data it uses to manage this program and announcing plans to 
increase its presence overseas. However, it is too early to tell 
whether these steps will ultimately enhance the agency's ability to 
select establishments to inspect and increase the number of foreign 
establishments inspected. To date, FDA's programs for inspections by 
accredited third parties have not assisted FDA in meeting its 
regulatory responsibilities nor have these programs provided a rapid or 
substantial increase in the number of inspections performed by these 
organizations, as originally intended. Recent statutory changes to the 
requirements for inspections by accredited third parties may encourage 
greater participation in these programs. However, the lack of 
meaningful progress in conducting inspections to this point raises 
questions about the practicality and effectiveness of these programs to 
help FDA conduct additional foreign inspections. 

Mr. Chairman, this completes my prepared statement. I would be happy to 
respond to any questions you or the other Members of the subcommittee 
may have at this time. 

Contacts and Acknowledgments: 

For further information about this statement, please contact Marcia 
Crosse at (202) 512-7114 or [email protected]. Contact points for our 
Offices of Congressional Relations and Public Affairs may found on the 
last page of this statement. Geraldine Redican-Bigott, Assistant 
Director; Kristen Joan Anderson; Katherine Clark; William Hadley; 
Cathleen Hamann; Julian Klazkin; and Lisa Motley made key contributions 
to this statement. 

[End of testimony] 

Footnotes: 

[1] Medical devices include instruments, apparatuses, machines, and 
implants that are intended for use to diagnose, cure, treat, or prevent 
disease, or to affect the structure or any function of the body. 21 
U.S.C. ï¿½ 321(h). 

[2] FDA regulations define an establishment as a place of business 
under one management at one general physical location at which a device 
is manufactured, assembled, or otherwise processed. 21 C.F.R. ï¿½ 
807.3(c) (2007). Medical device manufacturers may have more than one 
establishment. We use the term "manufacture" to refer to activities 
including manufacturing, preparing, and processing devices. 

[3] 21 U.S.C. ï¿½ 360c. Medical devices are classified into one of three 
classes. Class I includes "low risk" devices, such as tongue 
depressors, elastic bandages, and bedpans. Class II includes "medium 
risk" devices, such as syringes, hearing aids, and electrocardiograph 
machines. Class III includes "high risk" devices, such as heart valves, 
pacemakers, and defibrillators. 

[4] A coronary stent is a small tube that is placed within a coronary 
artery to keep the vessel open. 

[5] See Pub. L. No. 107-250, ï¿½ 201, 116 Stat. 1588, 1602-09 (2002) 
(codified as amended at 21 U.S.C. ï¿½ 374(g)). 

[6] In this report, unless otherwise noted, when we discuss 
inspections, we are referring to those conducted by FDA investigators. 

[7] GAO, Medical Devices: Status of FDA's Program for Inspections by 
Accredited Organizations, [hyperlink, 
http://www.gao.gov/cgi-bin/getrpt?GAO-07-157] (Washington, D.C.: Jan. 5, 2007). 

[8] Health Canada is the governmental entity that regulates medical 
devices marketed in Canada. 

[9] GAO, Medical Devices: Challenges for FDA in Conducting Manufacturer 
Inspections, [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-428T] 
(Washington, D.C.: Jan. 29, 2008) and GAO, Drug Safety: Preliminary 
Findings Suggest Recent FDA Initiatives Have Potential, but Do Not 
Fully Address Weaknesses in Its Foreign Drug Inspection Program, 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-701T] 
(Washington, D.C.: Apr. 22, 2008). 

[10] Within FDA, the Center for Biologics Evaluation and Research 
regulates medical devices involved in human immunodeficiency virus 
(HIV) testing and the collection, processing, testing, manufacture, and 
administration of licensed blood, blood components, and cellular 
products. We did not include medical devices regulated by this center 
in the scope of our work. 

[11] These affected entities included accredited organizations, 
organizations that represent medical device manufacturers, and medical 
device manufacturers. 

[12] 21 U.S.C. ï¿½ 360(b), (i). 

[13] 21 C.F.R. pt. 820 (2007). The quality system regulation requires, 
among other things, that domestic or foreign manufacturers have a 
quality system in place to implement current good manufacturing 
practices in the design, manufacture, packaging, labeling, storage, 
installation, and servicing of finished medical devices intended for 
human use in the United States. A quality system includes the 
organizational structure, responsibilities, procedures, processes, and 
resources for implementing quality management. 

[14] Currently, most medical devices are cleared for marketing in the 
United States because they are determined to be "substantially 
equivalent" to a marketed device. FDA generally does not conduct 
premarket inspections of establishments manufacturing these types of 
medical devices. 

[15] 21 C.F.R. pt. 803 (2007). 

[16] 21 U.S.C. ï¿½ 360(h). There is no statutory requirement for 
inspection of class I medical device manufacturing establishments, and 
FDA does not routinely inspect them. However, FDA periodically inspects 
establishments manufacturing surgeon's gloves and patient examination 
gloves, which are both class I medical devices, due to ongoing problems 
with leakage. FDA also periodically inspects manufacturers of randomly 
selected class I devices. 

[17] 21 U.S.C. ï¿½ 381(a); 21 C.F.R. ï¿½ 820.1(d) (2007). 

[18] Pub. L. No. 110-85, ï¿½ 228, 121 Stat. 823, 858 (2007). 

[19] H.R. Rep. No. 107-728, pt. 1, at 32-36 (2002). Some foreign 
countries have accredited, certified, or otherwise recognized 
organizations to conduct inspections. We use the term "single 
inspection" to mean a complete inspection that covers all requirements 
of two or more countries, without repeating those activities covered 
under more than one set of requirements. A complete inspection can be 
conducted during a single block of time or in multiple phases. Two or 
more separate inspection reports could be generated on the basis of 
that single inspection. 

[20] Accredited organizations may conduct comprehensive postmarket 
quality system inspections, but not other types of inspections of 
establishments that FDA has the authority to conduct, such as premarket 
or for-cause inspections. FDA may conduct its own inspections of 
establishments even after inspection by an accredited organization. 

[21] See 21 U.S.C. ï¿½ 374(g)(6). FDAAA eliminated certain previously 
established eligibility requirements. For example, it eliminated a 
limitation on the number of consecutive inspections allowed by an 
accredited organization and a limitation that foreign establishments 
must be inspected periodically by FDA. 

[22] 21 U.S.C. ï¿½ 374(g)(3)(F). 

[23] 21 U.S.C. ï¿½ï¿½ 360(i)(1), (p), 379i(13), 379j(a)(3), (b), (h). The 
registration user fee will increase by 8.5 percent per year, to $2,364 
in fiscal year 2012. Fees are available for obligation only to the 
extent and in the amount provided in advance in annual appropriations 
acts. FDA's authority to assess registration fees terminates on October 
1, 2012. Pub. L. No. 110-85, ï¿½ 217; 121 Stat. 823, 852 (2007). 

[24] Customs brokers are private individuals, partnerships, 
associations, or corporations licensed, regulated, and empowered by CBP 
to assist in meeting federal requirements governing imports and 
exports. 

[25] Counts of registered establishments in China do not include 
establishments registered in Hong Kong or Taiwan as these 
establishments are tracked separately. 

[26] DRLS contained one additional registered establishment for which 
location information was not available. 

[27] FDA indicated that it will deactivate the registrations of those 
establishments that fail to complete the annual registration. Officials 
noted that many establishments that had previously registered had not 
updated those registrations in several years. 

[28] According to FDA, the agency sent letters on April 11, 2008 and 
April 14, 2008 to establishments that had registered in the past but 
had not completed their registration for fiscal year 2008 advising them 
that they must register using the new system and must pay the 
registration fee, if applicable, to be considered registered. 
Establishments that do not reregister within a month of those letters 
would be considered inactive. As of May 6, 2008, prior to the mid-May 
deadline, FDA reported that 4,284 registered foreign establishments 
reported that they manufacture class II or class III medical devices. 
This total also includes some establishments that may not reregister. 

[29] See 21 U.S.C. ï¿½ï¿½ 379i(8), 379j(h)(1), (2). 

[30] The algorithm currently used by customs brokers to assign the 
manufacturer identification number does not provide for a number that 
is reliably reproduced or inherently unique. 

[31] According to FDA officials, a single establishment could be 
manufacturing more than one class of device. 

[32] The SEDS concept was developed by a working group with 
representatives from FDA, the Environmental Protection Agency, and the 
departments of Agriculture, Commerce, Defense, and Homeland Security. 

[33] If an establishment did not already have an identification number, 
it would request an identification number through SEDS, which would 
verify the data about the establishment through a commercial service. 
This commercial service would provide researched and validated records 
on domestic and foreign establishments. 

[34] Interagency Working Group on Import Safety, Action Plan for Import 
Safety: A Roadmap for Continual Improvement (Nov. 2007) [hyperlink, 
http://www.importsafety.gov/report/actionplan.pdf], accessed May 6, 
2008). 

[35] We were unable to differentiate inspections according to medical 
device classification. FDA's inspection database contains the most 
recent information available to FDA about the class of device 
manufactured at the establishment and consequently does not contain 
readily available information about the class of devices manufactured 
at the time of a specific inspection. As a result, the data we present 
include all inspections, regardless of the classification of the 
manufactured device or devices. According to FDA officials, FDA 
primarily conducts inspections of establishments manufacturing class II 
or III medical devices. 

[36] This calculation is based on the 4,284 registered establishments 
that reported that they manufacture class II or III medical devices, as 
of May 6, 2008. 

[37] Currently, most medical devices are cleared for marketing in the 
United States because they are determined to be "substantially 
equivalent" to a marketed device. FDA generally does not conduct 
premarket inspections of establishments manufacturing these types of 
medical devices. 

[38] Staff members must meet certain criteria in terms of their 
experience and training to conduct inspections of foreign 
establishments. For example, they are required to take certain training 
courses and have at least 3 years of experience conducting domestic 
inspections before they can be considered qualified to conduct a 
foreign inspection. 

[39] Typically, FDA investigators travel abroad for about 3 weeks at a 
time, during which they inspect approximately three establishments. 

[40] See, for example, Food and Drug Administration, Revitalizing ORA: 
Protecting the Public Health Together In a Changing World (Rockville, 
Md.: January 2008). 

[41] Two inspections of domestic establishments were also conducted 
through FDA's Accredited Persons Inspection Program. 

[42] Specific foreign jurisdictions that have certified, accredited, or 
otherwise recognized one or more of the FDA-accredited organizations 
that have been cleared to conduct independent inspections include all 
member states of the European Community, Australia, Canada, New 
Zealand, Norway, Taiwan, and the United Kingdom. Of the eight third- 
party organizations that have been cleared to conduct independent 
inspections through the Accredited Persons Inspection Program, four may 
conduct inspections through PMAP. 

[43] As we reported in January 2007, some representatives of affected 
entities speculated that manufacturers might not have volunteered to 
host training inspections because they believed that training 
inspections would require more time and effort for their staff (and 
would thus be more disruptive) than inspections conducted by fully 
trained personnel, or that manufacturers might have believed that 
training inspections would be more rigorous than nontraining 
inspections if the trainees and FDA personnel were to take particular 
care to demonstrate their thoroughness to each other. 

[44] FDA generally notifies manufacturers about a week in advance of 
postmarket quality system inspections of domestic establishments and 
about 6 to 8 weeks in advance of postmarket quality system inspections 
of foreign establishments. 

[45] In January 2007, we reported that representatives of accredited 
organizations indicated that the cost to manufacturers would vary 
depending on such factors as the size of the manufacturer and how much 
extra time would be required to assess compliance with FDA 
requirements. Representatives suggested that covering FDA's 
requirements could take 2 or more days in addition to the time spent 
assessing other countries' requirements, plus time for advance 
preparation and writing the inspection report. They speculated that 
they would probably charge manufacturers from $1,700 to $2,500 per day, 
plus the cost of travel and living expenses. 

[46] As of May 6, 2008, this guidance had not been issued. 

[47] Three inspections of domestic establishments were conducted 
through PMAP. 

[End of section] 

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