Prescription Drugs
Strategic Framework Would Promote Accountability and Enhance Efforts to Enforce the Prohibitions on Personal Importation Gao ID: GAO-05-372 September 8, 2005Consumers can be violating the law and possibly risking their health by purchasing imported prescription drugs over the Internet. 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 prescription drugs illegally imported for personal use. This report addresses (1) available data about the volume and safety of personal prescription drug imports, (2) the procedures and practices used to inspect and interdict prescription drugs unapproved for import, (3) factors affecting federal efforts to enforce the laws governing prescription drugs imported for personal use, and (4) efforts federal agencies have taken to coordinate enforcement efforts.
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. We identified three factors that have complicated federal enforcement of laws prohibiting the personal importation of prescription drugs. First, volume has strained limited federal resources at the 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 responded with 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.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-05-372, Prescription Drugs: Strategic Framework Would Promote Accountability and Enhance Efforts to Enforce the Prohibitions on Personal Importation
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Report to Congressional Requesters:
United States Government Accountability Office:
GAO:
September 2005:
Prescription Drugs:
Strategic Framework Would Promote Accountability and Enhance Efforts to
Enforce the Prohibitions on Personal Importation:
GAO-05-372:
GAO Highlights:
Highlights of GAO-05-372, a report to congressional requesters:
Why GAO Did This Study:
Consumers can be violating the law and possibly risking their health by
purchasing imported prescription drugs over the Internet. 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 prescription drugs illegally imported for personal use. This
report addresses (1) available data about the volume and safety of
personal prescription drug imports, (2) the procedures and practices
used to inspect and interdict prescription drugs unapproved for import,
(3) factors affecting federal efforts to enforce the laws governing
prescription drugs imported for personal use, and (4) efforts federal
agencies have taken to coordinate enforcement efforts.
What GAO Found:
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.
We identified three factors that have complicated federal enforcement
of laws prohibiting the personal importation of prescription drugs.
First, volume has strained limited federal resources at the 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 responded with 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.
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.
www.gao.gov/cgi-bin/getrpt?GAO-05-372.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Richard Stana at (202)
512-8777 or StanaR@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Volume of Prescription Drug Imports Is Unknown but Believed to Be
Substantial, and the Safety of These Drug Imports Is Not Assured:
Some Targeted Packages Containing Prescription Drugs Are Interdicted,
but Many Others Are Not:
Factors beyond Inspection and Interdiction Complicate Efforts to
Enforce the Prohibitions on Personal Importation of Prescription Drugs:
Federal Efforts to Coordinate Law Enforcement Activities Could Benefit
from a Strategic Framework:
Conclusions:
Recommendations:
Agency Comments and Our Evaluation:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: General Description of the Controlled Substance Products I
through V:
Appendix III: Federal Agencies Work with Credit Card Organizations to
Enforce Prohibitions on Prescription Drugs:
Investigations of Credit Card Purchases of Prescription Drugs Imported
from Internet Pharmacies Can Be Complicated by Legal and Practical
Considerations:
Federal Enforcement Agencies and Credit Card Associations Have
Discussed Credit Card Enforcement Issues:
Appendix IV: Comments from the Department of Homeland Security:
Appendix V: Comments from the Department of Justice, Drug Enforcement
Administration:
Appendix VI: Comments from the Department of Health and Human Services:
Appendix VII: Comments from the Office of National Drug Control Policy:
Appendix VIII: Comments from the U.S. Postal Service:
Appendix IX: GAO Contact and Acknowledgments:
Table:
Table 1: General Description of Controlled Substances, Schedules I-V:
Figures:
Figure 1: Acts Governing the Personal Importation of Prescription Drugs
into the United States and FDA, DEA, and CBP Roles Implementing Those
Acts:
Figure 2: Results of CBP's Laboratory Analysis of 180 Imported Drugs:
Figure 3: Drugs Sent without Labeling:
Figure 4: Bins Containing Packages of Suspected Prescription Drugs
Being Held for FDA Review and Possible Inspection:
Figure 5: Abandoned Schedule III through V Controlled Substances
Awaiting Destruction:
Figure 6: Interagency Pharmaceutical Task Force and Working Group
Goals:
Abbreviations:
CBP: Customs and Border Protection:
DEA: Drug Enforcement Administration:
DHS: Department of Homeland Security:
FDA: Food and Drug Administration:
HHS: Health and Human Services:
ICE: Immigration and Customs Enforcement:
ONDCP: Office of Drug Control Policy:
UPU: Universal Postal Union:
USPS: U.S. Postal Service:
United States Government Accountability Office:
Washington, DC 20548:
September 8, 2005:
The Honorable Norman Coleman:
Chairman:
Permanent Subcommittee on Investigations:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
The Honorable John D. Dingell:
Ranking Minority Member:
Committee on Energy and Commerce:
House of Representatives:
The first Internet pharmacies began online service in early 1999. Since
that time, American consumers have been increasingly drawn to the
convenience, privacy, and cost advantages that might be accrued by
purchasing prescription drugs over the Internet. Individual consumers
can order over the Internet a range of prescription drugs from
controlled substances,[Footnote 1] 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. Internet pharmacies, particularly those
pharmacies located in foreign countries, can operate outside the U.S.
regulatory process, which requires a licensed pharmacist to dispense a
prescription drug when presented with a valid prescription from a
licensed health care professional. According to FDA, there are
legitimate Internet pharmacies that comply with applicable federal and
state laws. However, the broad reach and access of the Internet allows
the easy creation of online pharmacies that can 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. However, in recent years, Congress and others have debated
whether Americans should be allowed to purchase drugs from pharmacies
located in foreign countries. Members of Congress have introduced
various bills related to this issue. Proponents argue that American
consumers should be allowed to import prescription drugs because drugs
purchased from some foreign pharmacies are viewed as safe and more
affordable. Opponents contend that drugs from unregulated sources are
not proven to be safe and effective and could be harmful. In addition,
some allege that packages of prescription drugs purchased on the
Internet and imported for personal use could be bundled together and
sold to others. 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.
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.
You expressed interest in learning how federal agencies are addressing
the importation of prohibited prescription drugs through international
mail and carrier facilities. In this report, we address the following
questions: (1) What do 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? (2)
What procedures and practices are used at selected facilities to
inspect and interdict prescription drugs unapproved for import? (3)
What factors affect federal agency efforts to enforce the prohibition
on prescription drug importation for personal use through international
mail and carrier facilities? (4) What efforts have federal agencies
undertaken to coordinate the enforcement of the prohibitions on
personal importation of prescription drugs?
To answer these questions, we reviewed current federal laws, available
studies and reports on the importation of prescription drugs and
controlled substances, CBP and FDA procedures and practices related to
prescription drugs and controlled substance importation, and applicable
importation volume and safety data. We conducted interviews with
officials from CBP, FDA, DEA, USPS, ONDCP, and ICE, as well as
representatives of MasterCard International and Visa U.S.A.,
Inc.[Footnote 2] We visited five facilities: three international mail
facilities located in California, Illinois, and New York and two
carrier facilities located in Ohio (for the DHL Corporation) and
Tennessee (for the FedEx Corporation). We selected these facilities to
include those with a high volume of processed packages and wide
geographic dispersion. At these locations, we observed inspection and
interdiction practices; met with CBP and FDA management, inspectors,
and investigators; and reviewed relevant documents on inspection and
interdiction procedures. At the international mail facilities, we also
met with officials from USPS regarding mail handling and processing
procedures. The information from our site visits is limited to the 3
international mail facilities and 2 carrier facilities and is not
generalizable to all 14 international mail facilities and 29 carrier
facilities. We conducted our review from April 2004 to August 2005 in
accordance with generally accepted government auditing standards.
Appendix I provides more details about our scope and methodology.
Results in Brief:
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 was 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.
[Footnote 3] Specifically, 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. We found
fewer problems among 47 other samples from U.S. and Canadian Internet
pharmacies, although most of the drugs obtained from Canada were
unapproved for the U.S. market.
Practices used at the mail and carrier facilities we visited to inspect
packages and interdict prohibited prescription drugs are evolving based
in part on procedures FDA issued 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 the
addressee. 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. Also, if CBP does not select packages containing
prescription drugs for inspection, the packages can bypass FDA review.
In our July 2004 testimony, we stated that FDA officials acknowledged
that tens of thousands of packages, containing drug products that may
violate current laws and pose health risks to consumers, have been
released.[Footnote 4] 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 needed to process 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. According to CBP
officials, treating imported prescription drugs that are controlled
substances as abandoned property has enabled them to process these
packages faster. However, they acknowledge that they do not know the
extent to which the policy is having an effect on the volume of these
drugs entering the country because packages can still bypass
inspection.
We identified 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, according to DEA
officials, foreign-based operations operate outside the U.S. regulatory
system and may be located in countries where some drugs, including
controlled substances, are legal; thus, U.S. law enforcement agencies
have been challenged in obtaining assistance from their foreign
counterparts in investigations. Internet sites can also 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 requires FDA to hold packages containing items
that appear unapproved for import and give the addressee the
opportunity to provide evidence of admissibility. FDA officials told us
that this notification process is time-consuming--it can take 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. Also, in a May
2001 correspondence to the Secretary of HHS, FDA proposed, among other
things, that the notification requirement be eliminated. FDA noted that
this change would likely require legislation, but as of July 2005,
according to an HHS official and FDA officials, the Secretary had not
responded with a legislative proposal to change FDA's notification
requirement. FDA officials said 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) they 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.
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.
Specifically, the task force may be missing opportunities to further
enhance its efforts because it has not defined the scope of the problem
(i.e., it has not estimated the volume of imported prescription drugs
entering specific international mail and carrier facilities),
established milestones and performance measures to gauge results, and
determined necessary resources and investments while balancing risk
reduction with costs and considering task force members' other law
enforcement priorities. Our past work has shown that a strategic
framework that includes these key elements, among others, 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.
To help ensure the government maximizes its ability to enforce laws
governing the personal importation of prescription drugs, we recommend
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. Also, in view of the FDA's continuing
concern about the statutory notification requirement and its impact on
enforcement, we also recommend 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.
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.
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.[Footnote 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.[Footnote 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.
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. (See
app. II for a general description of controlled substances.) 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.[Footnote 7] Figure 1 illustrates the two acts that
specifically govern the importation of prescription drugs into the
United States. It also presents the roles of FDA, DEA, and CBP in
implementing those acts.
Figure 1: Acts Governing the Personal Importation of Prescription Drugs
into the United States and FDA, DEA, and CBP Roles Implementing Those
Acts:
[See PDF for image]
[End of figure]
CBP is to seize illegally imported controlled substances it detects on
behalf of DEA.[Footnote 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.[Footnote 9] CBP is
to turn over packages suspected of containing prescription drugs that
are not controlled substances to FDA.[Footnote 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.[Footnote 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.
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.
Volume of Prescription Drug Imports Is Unknown but Believed to Be
Substantial, and the Safety of These Drug Imports Is Not Assured:
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. On the basis of their own observations and
limited information they obtained at selected mail and carrier
facilities, CBP and FDA officials believe the volume of prescription
drug importation into the United States is substantial and increasing.
However, neither agency has developed reliable estimates of the number
of prescription drugs imported into the country. Further, the available
information shows that some imported prescription drugs can pose safety
concerns. We reported in June 2004 that prescription drugs purchased
from some foreign-based Internet pharmacies posed safety risks for
consumers. FDA officials said that they cannot assure the public of the
safety and quality of drugs purchased from foreign sources that are
largely outside the U.S. regulatory system. Of particular concern is
the access to highly addictive controlled substances, which can be
imported by consumers of any age sometimes without a prescription or
consultation with a physician.
CBP and FDA Do Not Know the Full Scope of Prohibited Prescription Drug
Importation, but Believe It to Be Substantial:
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. Without an accurate estimate of the volume of
importation of prescription drugs, federal agencies cannot determine
the full scope of the importation issue. Yet FDA officials have often
testified regarding the large and steadily increasing volume of
packages containing prohibited prescription drugs entering the United
States through the international 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. However, neither agency has complete data
to estimate volume of importation. For example, a CBP official recently
testified that the agency did not have data on the total number of
packages containing imported controlled substances. A CBP official at a
mail facility told us that to determine the total volume of
prescription drug importation would require that the CBP personnel
inspect each mail item--which they currently do not do, in part because
mail from certain countries bypasses inspection--and tally those that
were suspected of containing prescription drugs. This official said
that he did not have the resources at his facility for such an
undertaking. In addition, neither CBP nor FDA tracked the number of
packages suspected of containing prescription drugs that were held for
FDA review. 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.
CBP and FDA, in coordination with other federal agencies, have
conducted special operations to gain insight regarding the volume of
imported prescription drugs entering through selected mail facilities.
Generally, these were onetime, targeted efforts 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, CBP officials at one mail
facility estimated that approximately 3,300 packages containing
prescription drugs entered the facility in 1 week. CBP officials at
another mail facility estimated that 4,300 packages containing
prescription drugs 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.
Debate continues over the estimated volume of prescription drugs
entering the United States through mail and express carrier facilities.
During congressional hearings over the past 4 years, FDA officials,
among others, have presented estimates of the volume of imported
prescription drugs 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.[Footnote 12] However, these
estimates also have limitations, being partially based on
extrapolations from limited FDA observations at international mail
branch facilities. Specifically, FDA officials told us that FDA
developed its estimate for Canadian drugs entering the country using
(1) IMS Health[Footnote 13] estimates that 12 million prescriptions
sold from Canadian pharmacies were imported into the United States in
2003[Footnote 14] 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.
Safety of Prescription Drug Imports Is Not Assured:
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.
Additionally, FDA officials 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.
They further said that while some consumers may purchase genuine
products, others may unknowingly purchase counterfeit products, expired
drugs, or drugs that were improperly manufactured.
CBP and FDA have done limited analysis of the imported prescription
drugs identified during special operations, and the results 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.[Footnote
15] 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. Some of the
drugs were foreign versions of U.S.-approved drugs that are unapproved
for import, including Lipitor (a cholesterol-lowering drug), Viagra,
and Propecia. Other drugs never had FDA approval. For example, Taro-
warfarin, an apparent unapproved version of Warfarin, which is used to
prevent blood clotting, was imported from Canada. The drug raised
safety concerns because its potency may vary depending on how it is
manufactured, and it requires careful patient monitoring because it can
cause life-threatening bleeding if not properly administered. A CBP
laboratory analyzed 180 of the 1,153 drugs inspected, which showed that
many of the imported drugs could pose safety risks. The drugs tested
included some that were withdrawn from the U.S. market for safety
reasons, animal drugs not approved for human use, and drugs that carry
risks because they require careful dosing or initial screening. In
addition, other drugs tested were found to contain controlled
substances prohibited for import, and some of the drugs contained no
active ingredients. Figure 2 illustrates the results of the CBP
laboratory analysis.
Figure 2: Results of CBP's Laboratory Analysis of 180 Imported Drugs:
[See PDF for image]
[End of figure]
In a past review we found that prescription drugs ordered from some
foreign-based Internet pharmacies posed safety risks for consumers.
Specifically, in a June 2004 report, 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.[Footnote 16] 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. Of the 21 samples:
* None included dispensing pharmacy labels that provided instructions
for use, and only about one-third included warning information.
* Thirteen displayed problems associated with the handling of the drug.
For example, three samples that should have been shipped in a
temperature-controlled environment arrived in envelopes without
insulation, and five samples contained tablets enclosed in punctured
blister packs, potentially exposing them to damaging light or moisture.
* Two were found to be counterfeit versions of the products we ordered.
* Two had a significantly different chemical composition than that of
the product we had ordered.
We found fewer problems among 47 samples purchased from U.S. and
Canadian Internet pharmacies. Although most of the drugs obtained from
Canada were of the same chemical composition as that of their U.S.
counterparts, most were unapproved for the U.S. market. We said that it
was notable that we identified numerous problems among the samples we
received despite the relatively small number of drugs we purchased,
consistent with problems that had been recently identified by state and
federal regulatory agencies.
Similarly, during our current review, we observed that some
prescription drugs imported through the mail and carrier facilities
were not shipped in protective packages, including some wrapped in foil
or in plastic bags. In addition to being shipped without containers,
the drugs also lacked product identifications, directions for use, or
warning labels. For some drugs, the origin and contents could not be
immediately determined by CBP or FDA inspection. Figure 3 illustrates
an example of drugs that were sent without labeling.
Figure 3: Drugs Sent without Labeling:
[See PDF for image]
[End of figure]
Highly Addictive Controlled Substances Widely Available via the
Internet:
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. For example, a DEA
official recently testified that Internet pharmacies that offer to sell
controlled substances directly to consumers without a prescription and
without requiring consultation with a physician can increase the
possibility of addiction, access to counterfeit products, and adverse
reactions to medications. According to the Office of National Drug
Control Policy, Internet pharmacies that offer controlled substances
bypass traditional regulations and established safeguards and expose
consumers to potentially counterfeit, adulterated, and contaminated
products. 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.
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. To demonstrate the ease with which controlled substances can
be obtained via the Internet, the National Association of Boards of
Pharmacy received prescription drugs from four different Internet
pharmacies.[Footnote 17] From one of the Internet pharmacies, the
association reported it received a shipment of Valium--a schedule IV
controlled substance used to treat muscle spasm or anxiety--despite
providing no prescription and the height and weight information for a
small dog. The association also reported that 2 days after it received
its shipment of 30 tablets of Xanax--a schedule IV controlled substance
used to treat anxiety--the Internet pharmacy sent daily refill
reminders via electronic mail.
Some Targeted Packages Containing Prescription Drugs Are Interdicted,
but Many Others Are Not:
In our July 2004 testimony, we 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. At the time, 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 to
prioritize package selection, package examination, and admissibility
determinations. While the new procedures may encourage uniform
practices at the mail facilities, packages that contain potentially
prohibited prescription drugs continue to be released to the addressee.
Recently, CBP also issued a new policy for processing packages with
controlled substances without using time-consuming seizure and
forfeiture procedures. While the policy may reduce processing time and
encourage the interdiction of more controlled substances, CBP officials
do not know whether the new policy has had an impact on the volume of
prohibited prescription drug importation.
New Procedures Should Encourage Uniform Practices, but They Still Allow
Many Packages Containing Prescription Drugs to Be Released:
In our July 2004 testimony, 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.[Footnote 18] 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, CBP officials told us that the factors could also include
intelligence gained from prior seizures, headquarters, or other field
locations. Specifically, officials at one facility we visited targeted
packages on the basis of the country of origin. At this facility, FDA
provided CBP with a list of seven countries to target, the composition
of which changed periodically, and asked that CBP hold the packages
they suspected of containing prescription drugs from those countries.
Typically, CBP officials at this facility released packages to the
addressee containing prescription drugs that were not from one of the
targeted countries.
Officials at another facility targeted packages based on whether the
packages were suspected of containing a certain quantity of
prescription drugs. At this facility, CBP officials held packages
containing prescription drugs that appeared to exceed a 90-day supply-
-a violation of one of the criteria in FDA's personal importation
policy.[Footnote 19] If the package contained prescription drugs,
including in some cases controlled substances, that appeared to be 90
pills or less, it was typically released. FDA officials at this
facility told us that every week CBP turned over to FDA hundreds of
packages that contained quantities of prescription drugs that appeared
to exceed the 90-day supply. However, the FDA officials said that they
were able to process a total of approximately 20 packages per day and,
as a result, returned many of the packages for release to the
addressee. FDA officials explained that 20 packages a day is an
approximation because some packages can take longer than others to
inspect, particularly if the packages contain many different types of
drugs that need to be examined.
According to FDA officials and data, in fiscal year 2004, FDA field
personnel physically inspected approximately 20,800 packages containing
prescription drugs entering the United States through the international
mail facilities.[Footnote 20] Of the packages inspected, FDA's data
showed that 98 percent were refused entry and marked returned to sender
and the remaining, about 450, were released to the addressee. The FDA
data indicate the number of packages physically inspected by FDA
personnel and the results of that process; they do not specify the
number of individual prescription drugs or smaller packages of drugs
within a larger package. Most important, these data do not indicate the
universe of packages of prescription drugs coming through the mail
facilities.
Figure 4 shows bins containing packages of suspected prescription drugs
being held for FDA review and possible inspection at one mail facility.
Figure 4: Bins Containing Packages of Suspected Prescription Drugs
Being Held for FDA Review and Possible Inspection:
[See PDF for image]
[End of figure]
In August 2004, FDA issued standard operating procedures that,
according to FDA officials, have been adopted nationwide. According to
FDA, the purpose of the new procedures was to "provide a standard
operating environment for the prioritized selection, examination and
admissibility determination 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,[Footnote 21] that appear to contain prescription drugs. The
procedures outline how FDA personnel are to prioritize packages for
inspection, inspect the packages, and make admissibility
determinations. Deviations from the procedures must be requested by
facility personnel and approved by FDA management. 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.
CBP and FDA officials at two facilities 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. If this facility were to maintain that level of release,
about half a million packages per year would be delivered to
addressees.
New Controlled Substances Policy May Improve Interdiction Efforts, but
Impact on Importation Is Unclear:
In our July 2004 testimony, we reported that CBP officials were to
seize the illegally imported controlled substances they detected.
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. To keep the drugs
from entering U.S. commerce and to clear the backlog, a CPB official at
the facility said that CBP's headquarters office granted them
permission to send most of the drugs back to the sender.[Footnote 22]
CBP officials at another facility told us that certain controlled
substances were a priority and seized when detected; priority
substances included anabolic steroids (a category of schedule III drugs
that promote muscle growth and potentially boost athletic performance),
and gamma hydroxybutyrate (a schedule I drug that acts as a central
nervous system depressant). At this facility, other controlled
substances encountered that were not a priority and that were shipped
in small amounts, less than a 90-day supply, could be released to the
addressee. CBP officials at another facility we visited turned over
packages they suspected of containing controlled substances in small
amounts to FDA for processing. Neither returning an illegally imported
controlled substance to the sender nor releasing it to the addressee is
in accordance with federal law.
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 seized[Footnote 23] 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.[Footnote 24]
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.[Footnote 25] 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.[Footnote 26] From September 2004 to the end of June 2005, CBP
reported that 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.
Generally, CBP officials we interviewed told us that the recent policy
improved their ability to quickly process the volume of 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. Figure 5 shows
schedule III through V controlled substances that were abandoned during
a 1-month period at one mail facility and awaiting destruction.
Figure 5: Abandoned Schedule III through V Controlled Substances
Awaiting Destruction:
[See PDF for image]
[End of figure]
While the recent policy may have expedited processing, 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 had no data to support this claim.
One CBP official at a carrier facility told us that because the express
carrier environment is constantly changing with new routes, service
areas, and increasing freight volume and because smuggling trends shift
in response to past enforcement efforts, he could not ascertain the
quantities of packages containing controlled substances that are
undetected by CBP.
Packages Containing Prescription Drugs Can Bypass FDA Review at the
Carrier Facilities:
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.[Footnote
27] 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.
According to FDA officials, FDA field personnel are not continually on-
site at the two carrier facilities we visited. At the FDA field office
that has responsibility for inspecting packages at one carrier
facility, we observed FDA field personnel reviewing electronic
information regarding packages that were en route to the carrier
facility. The official said that the field office has electronic
information regarding an average of 400 packages per day available for
review. If the shipper does not provide enough information about its
package, FDA field personnel can request that the carrier detain the
package until more information is provided electronically or until the
FDA personnel can visit the facility to conduct a physical inspection
of the package. The number of physical inspections at the facilities we
visited varied depending on the number of packages electronically
reviewed. FDA field personnel, responsible for inspection at the other
carrier facility, reported that in September 2004 they electronically
requested that an average of 20 packages per day be held at the
facility for a physical inspection. However, on occasion when the FDA
personnel went to the facility to conduct the inspection, the packages
were unavailable because they could not be found, had been delivered to
the recipient by the carrier, or had been returned to the shipper.
According to FDA headquarters officials, since our visit, FDA field
personnel may now be visiting the carrier facility on a more routine
basis.
In contrast, CBP inspectors are located on-site at the carrier
facilities we visited. As a result, CBP personnel are able to inspect
packages upon arrival of the shipment. In addition, according to CBP
officials at the facility, CBP's on-site presence allows the inspectors
to conduct random inspections, on a routine basis, of packages as they
are processed at the facility. Instead of relying solely on the
information provided by the shipper, CBP personnel said they conduct
random inspections, on a daily basis, as another means to identify
items that may be unapproved for import. CBP officials told us that
they conduct these inspections because the shipper's information can be
inaccurate. During our visit we observed the CBP personnel randomly
inspect several hundred packages selected. During these random
inspections, CBP inspectors told us that they often come across
packages containing noncontrolled prescription drugs, which they will
set aside for FDA inspectors. For example, during a random inspection,
CBP officials found and held for FDA 13 packages containing a human
growth hormone--prohibited from import--that were inaccurately
described as glassware. In contrast, according to FDA field personnel
with inspection responsibility at the two carrier facilities we
visited, few random inspections of packages were performed and when
they occurred they were typically part of a special operation. For
example, an FDA field official told us that FDA personnel planned to
perform one random inspection effort per year.
CBP officials told us that they would like to have FDA personnel on-
site to improve coordination efforts. One CBP Port Director said that
he would like to have FDA personnel on-site to share data, perform
analysis to identify trends from CBP's referrals, and be available to
immediately review prescription drugs. A CBP headquarters official also
said that it would be helpful if FDA personnel were on-site to enable
CBP officials to confer with them to identify controlled substances
that are not clearly labeled. FDA officials told us that because FDA
personnel review information regarding the packages electronically,
there was no advantage to being physically on-site. Further, they said
the responsible district can supply personnel to physically work at a
given carrier facility for field examinations on an as-needed basis.
FDA officials also noted that FDA is not reimbursed by the carriers to
maintain staff on-site. By contrast, private express carriers reimburse
the federal government for the personnel and equipment costs of the CBP
staff located on-site. FDA officials said that there is not a provision
under current law that would enable carriers to reimburse FDA so that
it could maintain an on-site presence.
Factors beyond Inspection and Interdiction Complicate Efforts to
Enforce the Prohibitions on Personal Importation of Prescription Drugs:
We identified three factors beyond inspection and interdiction that
have complicated federal efforts to enforce the prohibitions on
prescription drugs imported for personal use: (1) the volume of
importation has strained limited federal resources; (2) Internet
pharmacies, particularly foreign-based sites, can operate outside of
the U.S. regulatory system for noncontrolled and controlled
prescription drugs and can evade federal law enforcement actions; and
(3) current law requires that FDA notify addressees that their packages
have been detained because they appear unapproved for import and give
them the opportunity to provide admissibility evidence regarding their
imported items.
Volume of Imports Can Strain Federal Resources:
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 increased incidence of American consumers ordering drugs
over the Internet in recent years has significantly contributed to the
increase in imports 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. In 2004, FDA testified that
each day thousands of individual packages containing prescription drugs
are imported illegally into the United States. FDA officials have said
that the large volume of imports has overwhelmed the resources they
have allocated to the mail facilities. Officials add that 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.
Agencies have multiple priorities, which can affect the resources they
are able to allocate to the mail and carrier facilities. For example,
FDA has multiple areas of responsibility, which 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.
FDA and CBP personnel operate in multiple venues, such as land border
crossings and seaports. DEA's multiple priorities include interdicting
illicit drugs such as heroin or cocaine, investigating doctors and
prescription forgers, and pursuing hijackings of drug shipments. DEA
officials told us that they have limited resources and often have to
balance efforts to address prescription drug importation with their
other priorities.
The Medicare Prescription Drug, Improvement, and Modernization Act of
2003 required the HHS Secretary to conduct a study on the importation
of drugs that included a review of the adequacy of federal agency
resources to inspect and interdict drugs unapproved for
import.[Footnote 28] The report, issued in 2004, states that
substantial resources are needed to prevent the increasing volume of
packages containing small quantities of drugs from entering the
country. 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.
Internet Pharmacies Challenge Law Enforcement Efforts:
Internet pharmacies, particularly foreign-based sites, which operate
outside the U.S. regulatory system, pose a challenge for regulators and
law enforcement agencies. In our 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 requirement that drugs be prescribed and dispensed by
licensed professionals helps ensure patients receive the proper dose,
take the medication correctly, and are informed about warnings, side
effects, and other important information about the drug. However, 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. Recently, FDA officials have testified
that inadequately regulated foreign Internet sites have become portals
for unsafe and illegal prescription drugs. FDA officials state that if
a consumer has an adverse drug reaction or other problem, he or she may
have little to no recourse because the operator of the pharmacy is
often not known and FDA has limited authority to take action against
foreign operators.
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. FDA officials said that one Internet site can be
composed of multiple related sites and links, thereby making their
investigations complex and resource intensive. This fluidity makes it
difficult for law enforcement agencies to identify, track, monitor, or
shut down those sites that operate illegally. Further, FDA officials
said that some Internet pharmacies do not disclose enough information
on their Web sites to allow consumers to determine if the drugs they
purchased were approved in the United States and dispensed according to
state and federal laws. Some Internet pharmacies also do not disclose
enough or accurate information regarding the source of the drugs they
offer. An Internet pharmacy can claim that the drugs they offer
originate in one country, but the drugs may actually be manufactured in
another country. Similarly, the anonymous nature of the Internet allows
consumers of any age to obtain drugs without a legitimate medical need.
According to FDA, when the Internet is used for an illegal sale of
prescription drugs, to conduct an investigation they may need to work
with the Department of Justice to establish grounds for a case, develop
charges, and take action as they would if another sales medium, such as
a store or magazine, had been used. 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 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 the agency introduced a resolution at the March
2004 International Narcotics Control Board conference in Vienna,
Austria, to encourage member states to work cooperatively on Internet
pharmacy issues. However, the DEA official told us that it was
difficult to convince some foreign governments that the illegal sales
of prescription drugs over the Internet is a global problem and not
restricted to the United States.
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. These considerations
included privacy laws; federal law enforcement agencies' respective
subpoena authority, priorities, and jurisdictions; and the ease with
which merchants engaged in illegal activity can enter into a new
contract with a different bank to use the same payment system.
For example, privacy laws sometimes limit the extent to which companies
(e.g., credit card organizations) will provide information to federal
agencies about parties to a transaction. According to FDA, DEA, and ICE
officials, credit card organizations[Footnote 29] and banks and other
financial institutions[Footnote 30] 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.[Footnote 31] (See app. III for information on
federal enforcement agencies' work with credit card organizations to
enforce prohibitions on prescription drug importation.)
Notification Process Challenges Enforcement Efforts:
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.
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 process
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 it was designed to focus resources on
packages containing drugs considered to be among the highest risk.
FDA concerns about the notification process are not new. In testimony
before Congress, FDA and the Secretary of HHS raised concerns about the
notification process, noting that it is time-consuming and resource
intensive. However, FDA's testimony did not propose any legislative
changes to address the concerns it 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, they said that one of the
arguments against eliminating the notification requirement is the
importance of providing due process, which basically gives individuals
the opportunity to present their case as to why they should be entitled
to receive the property, in this case prescription drugs that they
ordered from a foreign source. Another is to what 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).[Footnote 32] 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.
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:
Federal agencies have been taking steps to address Internet sales of
prescription drugs since 1999, but these efforts have not positioned
them to successfully prevent the influx of prescription drugs that are
being imported through foreign pharmacies. CBP has recently organized a
task force to coordinate federal efforts related to prescription drugs
imported for personal use. This task force appears to be a step in the
right direction. However, its efforts could be further enhanced if the
task force established a strategic framework to promote accountability
and guide resource and policy decisions. In January 2004, CBP organized
an interagency task force to address various issues associated with
unapproved prescription drugs entering the United States from foreign
countries. Although CBP, FDA, ONDCP, DEA, and ICE appear to be working
together to address these very complex issues, their efforts could be
enhanced by a strategic framework that guides resource and policy
decisions and promotes accountability. Such a framework that
establishes measurable, quantifiable goals and strategies for achieving
these goals, including a determination of resources needed to achieve
the goals, would enhance the ability of agency officials and
congressional decision makers to ensure accountability and consistent
and focused attention to enforcing the prohibitions on personal
importation.
Congress enacted the Government Performance and Results Act of 1993 to
have agencies focus on the performance and results of programs, rather
than on program resources and activities. The principles of the act
include (1) establishing measurable goals and related measures, (2)
developing strategies for achieving results, and (3) identifying the
resources that will be required to achieve the goals. The act does not
require agencies to use these principles for individual programs, but
our work related to the act and the experience of leading organizations
have shown that a strategic approach or framework is a starting point
and basic underpinning for performance-based management--a means to
strengthen program performance. A strategic framework can serve as a
basis for guiding operations and help policy makers, including
congressional decision makers and agency officials, make decisions
about programs and activities.
Our work has also shown that a strategic framework can be useful in
providing accountability and guiding resource and policy decisions,
particularly in relation to issues that are national in scope and cross
agency jurisdictions, such as prescription drug importation.[Footnote
33] When multiple agencies are working to address aspects of the same
problem, there is a risk that overlap and fragmentation among programs
can waste scarce funds, confuse and frustrate program customers, and
limit overall program effectiveness.[Footnote 34] Use of a strategic
framework may help mitigate this risk.
Federal Agencies Have Recently Begun to Coordinate Efforts to Focus on
Prescription Drugs Imported for Personal Use:
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. This official said that although
FDA had established working groups and advanced media campaigns to
address problems associated with drugs purchased over the Internet from
domestic sources, imported drugs have added a new dimension that was
only incidentally recognized during efforts begun in 1999. He said that
the plans developed by FDA in 1999 are still viable as far as domestic
sales are concerned, but they have not been refocused to reflect
concerns about imported prescriptions and did not position federal law
enforcement agencies to anticipate the increased volume of drugs that
are imported by individuals.
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 6 shows the task force goals, the five
working groups, and the goals of each working group.
Figure 6: Interagency Pharmaceutical Task Force and Working Group
Goals:
[See PDF for image]
[End of figure]
A CBP official told us that the task force is designed to foster
cooperation among the agencies responsible for enforcing the laws
governing prescription drugs imported for personal use. The task force
was created to go beyond interdiction at the mail and carrier
facilities. The official also said that the task force was fashioned to
deal with supply and demand issues, thereby reducing the volume of
drugs entering these facilities. For example, on the demand side, the
public awareness working group is responsible for conveying information
about the health and safety risks of imported prescription drugs, and
on the supply side, the working cooperatively with industry group is
responsible for, among other things, ways of identifying rogue Internet
sites. CBP officials and other members of the task force provided
examples of activities being carried out or planned by task force
working groups that are discussed below.
* 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. Among other things, task force members gather
data about the source, type, and recipients of the drugs and test the
contents of the parcels to determine whether they are counterfeit or
otherwise prohibited. These operations are expected to continue during
the remainder of 2005 at all of the remaining mail facilities and some
of the carrier facilities.
* The working group on targeting/data research is using the results of
special operations to analyze data retrieved during the special
operations and determine how these data can be used to guide future
operations and enforcement efforts. Also, ICE was working with CBP and
the government of an Asian country to identify and track controlled
substances destined for the United States. ICE plans to use this
approach to identify and take possible law enforcement action against
illegal enterprises.
* The working group on increasing public awareness has been developing
and disseminating public service announcements on the risks associated
with purchasing drugs over the Internet. The working group has placed
public service announcements on the FDA and CBP Web sites and is
coordinating with FDA on its efforts, ongoing since 1999, to
disseminate similar material in magazines, online, and in pharmacies.
Also, the working group has entered into an agreement with a major
Internet service provider and others to have a public service
announcement link on screen when someone tries to access online
pharmacy sites.
* The working group on working cooperatively with industry has met with
Internet businesses, such Internet service providers and companies that
operate search engines, to discuss how task force members can work with
Internet businesses to stem the flow of imported drugs coming into the
country, including discussing standards for identifying legitimate Web
sites. It has also met with representatives of express carriers and
plans to meet with representatives of credit card organizations in late
summer 2005.
In addition, 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.[Footnote 35] 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. An ONDCP official said that participants at these meetings
included officials from CBP, USPS, and DEA.
Finally, USPS is exploring what additional steps it can take to further
help the task force. Although USPS has participated in task force
activities, USPS officials said USPS is concerned about a conflict
between its mission to keep the mail moving and whether it is
positioned to determine the admissibility of mail. 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.[Footnote 36] A U.S. Postal Service official
told us that USPS is awaiting a response to a letter it sent to FDA
last year requesting FDA's views on the proposed changes. The official
said that, without FDA input, USPS does not have the expertise to
determine whether the proposed changes are accurate. In August 2005,
FDA officials said that after receiving the letter last year, they met
with USPS officials regarding drug importation, including this
proposal. However, according to FDA officials, USPS had not
subsequently engaged FDA on this particular issue, and FDA did not
believe USPS was awaiting a formal written response. FDA officials
stated that if USPS would like to discuss this matter further, they
would be happy to work with USPS.
Strategic Framework Would Further Enhance Task Force Efforts:
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.
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. The challenges
identified in this report 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.
Our review showed that the task force has already begun to establish
some elements of a strategic framework, but not others. For example:
* In light of the Commissioner's January 2004 memo discussed earlier,
the task force has a clear picture about its purpose 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. Without
doing so, it is difficult to assess what resources are necessary to
effectively inspect parcels and interdict those that contain unapproved
drugs.
* Whereas 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. A CBP
official said that the goals are intended to be guidelines rather than
goals to be measured; he would expect progress or results to be
measured within the context of strategic plans prepared by individual
agencies. However, without task force-specific milestones and
performance measures, it is difficult to measure improvement over time
and ensure accountability, particularly if the goals and measures of
individual task force members do not directly address, or are not in
harmony with, the goals of the task force.
* 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. Nonetheless, the absence of cost
and resource assessments makes effective implementation harder to
achieve because over time, alternative agency priorities and resource
constraints may hinder the ability of the task force to meet its goals.
We acknowledge that such a strategic framework needs to be flexible to
allow for changing conditions, but it could be helpful to organize it
in a logical flow, from conception to implementation. Specifically, the
strategy's purpose leads to definition of the problems and risks it
intends to address, which in turn leads to specific actions for
tackling those problems and risks, allocating and managing appropriate
resources, identifying different organizations' roles and
responsibilities, and finally integrating action among all the relevant
parties and implementing the strategy.
Advancing a strategic framework could establish a mechanism for
accountability and oversight and set the stage for defining specific
activities needed to achieve results and specific performance measures
for monitoring and reporting on progress. In so doing, task force
officials could measure progress over time, identify new and emerging
barriers or obstacles to carrying out goals and objectives, develop
strategies to overcome them, and inform decision makers about the
implications of taking or not taking specific actions. For example,
CBP, FDA, and the other agencies could work jointly to develop
statistically valid estimates of the number of parcels suspected of
containing imported prescription drugs entering particular facilities
and begin to develop realistic risk-based estimates of the number of
CBP and FDA staff needed to interdict parcels at mail facilities.
Task force members could also take steps to explore how they can work
more collaboratively and strategically with private organizations, such
as credit card organizations and express carriers. In doing so, task
force members and representatives of these organizations could examine
what can be done within the context of current law and establish
strategies and goals for overcoming any practical considerations that
act as barriers to enforcing the prohibition on imported
pharmaceuticals, including controlled substances. They could also
identify any legislative barriers they face in aggressively enforcing
the prohibition and work together to develop legislative proposals
aimed at stemming the flow of imported prescription drugs into the
country.
In addition, agencies could work collaboratively among themselves to
examine the resources and investments needed to address particular
strategies. Any effort to implement task force objectives would require
sustained high-level leadership and commitment to ensure that resources
are available to carry out task force goals, commensurate with the
goals and priorities of the individual agencies involved with the task
force. According to a CBP official involved in the task force, agencies
have made a high-level commitment to supporting the task force.
Nonetheless, in the absence of a strategic framework and, in
particular, measurable goals and milestones, there is little assurance
that this commitment will continue as the goals and priorities of
individual agencies change.
A strategic framework could also enable the task force to adjust to
changing conditions. As mentioned earlier, FDA had developed plans and
initiated steps in 1999 to deal with Internet sales of prescription
drugs, but most of those efforts focused on domestic sales. However,
plans to address Internet sales had not been refocused to reflect
prescriptions imported from foreign countries for personal use, partly
because FDA and other agencies did not anticipate that the volume of
imported drugs would overwhelm available resources. A strategic
framework, with ongoing problem definition and risk assessment, might
help task force members, including FDA and others to identify the
impact of this emerging threat and give the task force members the
opportunity to adjust their enforcement strategies to address the
threat on a proactive, rather than a reactive, basis. It also might
help them consider interrelationships between the enforcement
strategies and priorities of the task force and their own strategies
and priorities.
Furthermore, a strategic framework could help agencies adjust to
potential changes in the law governing the importation of prescription
drugs for personal use. During recent sessions of Congress, members
introduced a number of bills that could have changed how personal
prescription drug imports were treated under the law. Some proposals
would have allowed importation of selected prescription drugs under
certain conditions, for example, allowing importation from certain
countries, such as Canada. Another proposal would have maintained the
current prohibitions, but would have allowed for expedited disposal of
illegally imported prescription drugs, such as controlled substances
available by prescription. Those bills that would have allowed some
personal importation also included provisions for expediting the
process of disposing of those drugs that still may not be imported for
personal use. Although none of these changes were adopted, continued
congressional interest could prompt changes in the future. If that
occurred, a strategic framework could better position agencies to
adjust to any changes; identify any new threats or vulnerabilities; and
redefine strategies, roles, and responsibilities.
Conclusions:
Enforcing the laws governing prescription drug imports for personal use
is a complex undertaking that involves multiple agencies with various
jurisdictions and differing priorities. We acknowledge these
complexities, but 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. Although agencies
responsible for enforcing these laws have a mechanism in place to
jointly address the threat posed by prohibited and sometimes addictive
drugs entering the country via the international mail and express
carriers, many packages that may contain these drugs enter the United
States daily. Furthermore, according to officials, resources are
strained as the volume of prescription drugs entering the country is
large and increasing.
Our past work has shown how a strategic framework can be useful in
promoting accountability and guiding policy and resource decisions. In
the case of the task force, a strategic framework that facilitates
comprehensive enforcement of prescription drug importation laws and
measures results would provide it an opportunity to better focus agency
efforts to stem the flow of prohibited prescription drugs entering the
United States. The task force could become more effective as it becomes
more accountable. An assessment of the scope of the problem would help
the task force prioritize activities and help ensure that resources are
focused on the areas of greatest need. With milestones and performance
measures, it could be able to better monitor progress and assess
efforts to enforce the laws. An analysis of resources and investments
is critical because of current resource constraints, a point
highlighted by the Secretary of Health and Human Services' report under
the Medicare Modernization Act. Moreover, without these elements
culminating in concrete plans for implementation, it will be difficult
for the task force to maximize effectiveness in reducing the flow of
prohibited imported prescription drugs into the United States.
In addition to the broader issues being addressed by the task force,
FDA has said it faces a significant challenge handling the substantial
volume of prescription drugs imported for personal use entering
international mail facilities. Specifically, in recent years, FDA has
expressed continuing concern to Congress that it encounters serious
resource constraints enforcing the law at mail facilities because
packages containing personal drug imports cannot automatically be
refused. Instead, under current law, FDA is to notify recipients that
they are holding packages containing drugs that appear to be prohibited
from import and give them the opportunity to provide evidence of
admissibility. FDA has stated that it cannot effectively enforce the
law unless the requirement to notify recipients is changed. FDA has
suggested that the HHS Secretary consider proposing changes to this
requirement, but the HHS Secretary has not yet responded with a
legislative proposal. Although there may be complex issues associated
with changing the requirement to notify, including an individual's due
process right to provide evidence of admissibility and consideration of
Universal Postal Union requirements, assessing the ramifications of
such a proposal would help decision makers as they consider how best to
address FDA's resource constraints and responsibility to enforce the
law and protect the health and safety of the American public.
Recommendations:
To help ensure that the government maximizes its ability to enforce
laws governing the personal importation of prescription drugs, we
recommend 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:
* 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;
* establishment of objectives, milestones, and performance measures and
a methodology to gauge results;
* 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:
* an evaluation component to assess progress, identify barriers to
achieving goals, and suggest modifications.
In view of the FDA's continuing concern about the statutory
notification requirement and its impact on enforcement, we also
recommend 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.
Agency Comments and Our Evaluation:
We requested comments on a draft of this report from the Secretary of
Homeland Security, Attorney General, Director of the Office of National
Drug Control Policy, Secretary of Health and Human Services, and
Postmaster General. DHS, DEA, ONDCP, HHS, and USPS provided written
comments, which are summarized below and included in their entirety in
appendixes IV through VIII.
DHS generally agreed with the contents of our report. Since our
recommendation that the CBP-led task force develop and implement a
strategic framework to address prescription drug importation issues
affects other agencies, DHS said that CBP would convene a task force
meeting to discuss our report and recommendation and is to provide us
with additional information after the meeting.
Responding for DOJ, DEA generally agreed with our recommendation that
the CBP task force develop and implement a strategic framework.
Specifically, DEA agreed that a strategic framework can be useful in
promoting accountability and guiding policy and resource decisions, but
it said that the interagency task force is a cooperative initiative and
DEA must balance priorities in accordance with agency mandates. DEA
also said that its strategic plan clearly establishes a framework to
articulate agency priorities and assess its performance. Noting that
our report acknowledges that such a framework needs to be flexible to
allow for changing conditions, DEA stated that, in concert with other
task force agencies, it will support the CBP Commissioner's strategic
framework for the interagency task force.
ONDCP generally concurred with our recommendation that the CBP-led task
force develop and implement a strategic framework. ONDCP also
"strongly" suggested that the ONDCP-led Synthetic Drug Interagency
Working Group play a significant role in integrating prescription drug
considerations with all of the other synthetic drug concerns that
potentially inflict harm on our society. ONDCP noted that our report
documented well the problems associated with effectively policing
Internet purchases and identified the significance played by credit
card use as a facilitator of the problem. In addition, ONDCP stated
that it encouraged law enforcement proposals that may curtail some of
these dangerous practices and concurred with our identification of the
cumbersome nature of currently required enforcement practices dealing
with the use of the mails to transfer illicit narcotics.
HHS generally concurred with both recommendations. With regard to the
strategic framework, HHS said that it would work with its federal
partners to discuss the development of a more formalized approach for
addressing the issues associated with the importation of unapproved
drugs. However, HHS questioned whether the framework should include an
approach for developing more reliable volume estimates, because HHS
believes the volume estimates already provided in HHS's December 2004
report on drug importation are valid. HHS said that volume may depend
on the incentive for the public to import unapproved drugs, as well as
other external factors, and said that, short of opening and counting
each package as it enters the United States, the reliability of
estimates would always be in question given the fluid nature of
unapproved prescription drug imports and the number of mail and courier
facilities involved. HHS also stated that volume estimates would not
alter the resource calculations articulated in HHS's December 2004
report, which, according to HHS, were derived from special operations,
called blitzes, by CBP and FDA at various international mail
facilities. According to HHS, these calculations were based on
personnel time and salaries needed to process each package. HHS further
noted that 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 that FDA is not always able to process the current
number of packages set aside by CBP. In addition, HHS said that FDA
must always be cognizant of competing priorities regardless of
fluctuations in the volume of illegally imported prescription drugs.
We recognize that any number of factors can influence the volume of
unapproved drugs entering the country at any point in time or location.
However, HHS's current estimates are based on estimates of drugs
imported from Canada during 2003 and, in part, on extrapolations from
FDA's limited observations during special operations at international
mail branch facilities. We believe a more reliable and systematic
approach might begin by using information already being collected by
CBP and FDA at the various field locations, including the number of
packages deemed abandoned by CBP and the number of imported packages
FDA handles. With regard to resource calculations, as more reliable
estimates are developed, FDA and other task force agencies would be
better positioned to define the scope of the problem so that the task
force and other decision makers can make informed choices about
resources devoted to this problem, especially in light of competing
priorities.
Regarding our recommendation that the HHS Secretary assess FDA's
statutorily required notification process, HHS said that it intends to
pursue an updated assessment. HHS observed that, given the increased
volume of illegally imported prescription drugs since its initial
request for modification of FDA's notification process, other actions
might be needed, and HHS would work with its federal partners to
determine the actions required. HHS also provided technical comments
that have been included, as appropriate.
USPS did not state whether it agreed or disagreed with our
recommendations but expressed a concern about possible procedural and
legislative changes to the current notification requirements governing
the processing and disposition of imported pharmaceuticals.
Specifically, USPS requested that the report acknowledge the United
States's international postal obligations and stated that any
discussion of options to expedite the processing and disposition of
prescription drugs should consider these obligations. USPS further
noted that recognizing these obligations 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. We
acknowledge USPS's concerns and have added language to the report
accordingly.
As arranged with your offices, unless you publicly announce its
contents earlier, we plan no further distribution of this report until
30 days after its issue date. At that time, we will send copies of this
report to the Secretary of the Department of Homeland Security, the
Secretary of Health and Human Services, and interested congressional
committees. We will also make copies available to others upon request.
In addition, the report will be available at no charge on GAO's Web
site at http://www.gao.gov.
If you or your staff have any questions concerning this report, please
contact me on (202) 512-8777 or stanar@gao.gov. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on
the last page of this report. Major contributors to this report are
listed in appendix IX.
Signed by:
Richard M. Stana, Director:
Homeland Security and Justice Issues:
[End of section]
Appendix I: Objectives, Scope, and Methodology:
This report addresses the following questions: (1) What do 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? (2) What procedures and practices are used at
selected facilities to inspect and interdict prescription drugs
unapproved for import? (3) What factors affect federal agency efforts
to enforce the prohibition on prescription drug importation for
personal use through international mail and carrier facilities? (4)
What efforts have federal agencies undertaken to coordinate the
enforcement of the prohibitions on personal importation of prescription
drugs?
We performed our work at the Department of Homeland Security's U.S.
Customs and Border Protection (CBP) and U.S. Immigration and Customs
Enforcement (ICE), the Department of Health and Human Services' (HHS)
Food and Drug Administration (FDA), the Department of Justice's Drug
Enforcement Administration (DEA), the U.S. Postal Service (USPS), and
the Office of National Drug Control Policy (ONDCP). We also carried out
work at 3 of the 14 international mail facilities--New York, Los
Angeles, and Chicago--and 2 of the 29 carrier facilities--Cincinnati
(DHL Corporation) and Memphis (FedEx Corporation). We selected the New
York and Los Angeles mail facilities because they (1) processed among
the highest overall number of packages,[Footnote 37] representing 27
percent of the total number of estimated packages going through
international mail facilities in 2002 and (2) also received
prescription drugs.[Footnote 38] The Chicago facility was selected
because it received prescription drugs and provided geographic
dispersion. The 2 carrier facilities selected were (1) different
companies; (2) handled the highest overall number of packages,
according to data provided by CBP; and (3) were located near each
other. At each of these locations, we collected and reviewed available
relevant importation and interdiction data from FDA and CBP; observed
inspection and interdiction practices; met with CBP and FDA management,
inspectors, and investigators to discuss issues related to inspection
and pharmaceutical importation volume; and reviewed relevant documents
on inspection and interdiction procedures. At the international mail
facilities, we also met with USPS officials to discuss mail handling
and processing procedures. The information from our site visits is
limited to the 3 international mail facilities and 2 carrier facilities
and is not generalizable to the remaining 10 international mail
facilities and 27 carrier facilities.
To determine what the available data show about the volume and safety
of imported prescription drugs, we interviewed CBP, FDA, DEA, ICE, and
USPS headquarters officials and CBP and FDA officials at the 3
international mail facilities and 2 carrier facilities. We obtained and
analyzed available data on the volume and safety of imported
prescription drugs (1) collected from the facilities we visited and (2)
gathered through multiagency special operations at selected mail
facilities and provided to us by CBP headquarters. The available CBP
and FDA information on the volume and safety of prescription drugs
imported through the mail and carrier facilities we visited was
primarily based on estimates and limited to observations at these
locations. To obtain additional views on the overall volume or safety
of imported prescription drugs, we reviewed ONDCP and HHS reports and
testimony from the American Medical Association. We discussed with FDA
officials the methodology used to develop the volume estimates
presented in the 2004 HHS report on prescription drug
importation[Footnote 39] and we reviewed the methodology to determine
any limitations. In addition, we interviewed an official and reviewed
documents from the National Association of Boards of Pharmacy to obtain
the association's findings on the safety of prescription drugs imported
from foreign-based Internet pharmacies. We also relied on existing GAO
work on the safety of prescription drugs imported from some foreign-
based Internet pharmacies.
To understand procedures and practices, we reviewed current federal law
and CBP and FDA policies, procedures, and guidance regarding or
applicable to prescription drugs and controlled substance importation.
We interviewed officials at CBP, FDA, DEA, ICE, and USPS headquarters.
To understand inspection procedures and practice, at each of 3
international mail facilities and 2 carrier facilities, we carried out
site visits, observing the inspection process and interviewing CBP and
FDA officials. At the selected international mail facilities, we also
interviewed USPS officials to obtain information about their procedures
and practices. In addition, when FDA and CBP implemented new procedures
at the international mail facilities and carrier facilities, we carried
out additional interviews at FDA and CBP headquarters, pursued
telephone interviews with CBP and FDA officials at the facilities we
had visited, and revisited 2 of the mail facilities to determine how
the new procedures were being implemented, working in practice; and
being monitored and evaluated. We also obtained from FDA fiscal year
data on the number of mail packages containing prescription drugs it
processed. From CBP we obtained data on the number of packages
interdicted using its new procedures for processing schedule III
through V controlled substances. Because these data were used for
contextual purposes, we did not assess the reliability of these data.
However, we discussed the scope of the FDA and CBP data with the
respective agency officials and have noted the limitations in the
report.
To determine what factors affect federal agency efforts to enforce the
prohibitions on prescription drug importation for personal use through
international mail and carrier facilities, we interviewed CBP, FDA,
DEA, ICE, and USPS officials. We asked these officials to identify any
factors that affected their respective agency's efforts to process or
interdict prescription drugs imported through the mail and carriers.
The information presented in this report is limited to the views
expressed by the officials interviewed. In addition, we met with
representatives from MasterCard International and Visa U.S.A., Inc.,
the two credit card associations identified by DEA as the organizations
used by the majority of Internet drug sites. These associations also
testified in July 2004 at congressional hearings on matters related to
the illegal importation of prescription drugs. We discussed with them
each association's efforts to assist federal enforcement of the
prohibitions on prescription drug importation.
To determine what efforts federal agencies have undertaken to
coordinate the enforcement of the prohibitions on personal importation
of prescription drugs, we interviewed CBP, USPS, FDA, DEA, ICE, and
ONDCP headquarters officials. We obtained and reviewed documents
describing these initiatives, their status, and any studies or data
describing the results of the initiatives. These documents included
agency guidelines and memorandums, indicating changes to agency
policies and procedures; congressional hearings; and selected
legislative proposals. We obtained these documents from agency
officials; agency Web sites, as directed by agency officials; and
congressional Web sites. We also interviewed CBP and FDA field
officials at the selected international mail facilities and private
carrier facilities to ascertain the status of the implementation of
these initiatives. We analyzed and synthesized the information gathered
from the interviews and documents.
In addition, in appendix III of this report, we used data from FDA on
the number of open and closed investigations it had undertaken related
to Internet drug sales and imported prescription drugs. We also used
data from DEA on the number of arrests related to the illegal diversion
of pharmaceuticals. Because these data were used for contextual
purposes, we did not assess their reliability.
We conducted our review between April 2004 and August 2005 in
accordance with generally accepted government auditing standards.
[End of section]
Appendix II: General Description of the Controlled Substance Schedules
I through V:
The drugs and drug products that come under the Controlled Substances
Act are divided into five schedules. A general description and examples
of the substances in each schedule are outlined below.
Table 1: General Description of Controlled Substances, Schedules I-V:
Schedule: I;
Description of substances in the schedule: Substances that have no
accepted medical use in the United States and have a high potential for
abuse;
Examples: Heroin, lysergic acid diethylamide (LSD), marijuana, and
gamma hydroxybutyric acid (GHB).
Schedule: II;
Description of substances in the schedule: Substances that have a high
potential for abuse with severe psychic or physical dependence
liability--certain narcotic, stimulant, and depressant drugs;
Examples: Opium, morphine, codeine, methadone, and meperidine
(Demerol).
Schedule: III;
Description of substances in the schedule: Substances that have a
potential for abuse that is less than those in schedules I and II and
include compounds containing limited quantities of certain narcotic
drugs and non-narcotic drugs;
Examples: Anabolic steroids; derivatives of babituric acid (except
those listed in another schedule); benzphetamine; and any compound,
mixture, preparation or suppository dosage form containing amobarbital,
secobarbital, or pentobarbital.
Schedule: IV;
Description of substances in the schedule: Substances that have a
potential for abuse that is less than those listed in schedule III;
Examples: Barbital, alprazolam (Xanax), Cathine-- constituent of the
"Khat" plant--and Diazepam (Valium).
Schedule: V;
Description of substances in the schedule: Substances that have a
potential for abuse that is less than those listed in schedule IV and
consist primarily of preparations containing limited quantities of
certain narcotic and stimulant drugs;
Examples: Pyrovalerone (Centroton, Thymergix).
Source: GAO analysis of Drug Enforcement Administration information:
[End of table]
[End of section]
Appendix III: Federal Agencies Work with Credit Card Organizations to
Enforce Prohibitions on Prescription Drugs:
During congressional hearings in July 2004, representatives from
MasterCard International and Visa U.S.A., Inc., testified on issues
concerning the use of credit cards to purchase prescription drugs for
importation from Internet pharmacies, including discussions with
federal law enforcement agencies to address these issues.[Footnote 40]
Accordingly, we met with Drug Enforcement Administration (DEA), Food
and Drug Administration (FDA), and Immigration and Customs Enforcement
(ICE) officials, as well as representatives from MasterCard
International and Visa U.S.A., Inc.to more fully understand how these
organizations are working together to address prohibitions on
prescription drug importation.[Footnote 41] The agency officials and
credit card association[Footnote 42] representatives described their
working relationship as cooperative, but complicated by legal and
practical considerations. The following section summarizes our
discussions.
Investigations of Credit Card Purchases of Prescription Drugs Imported
from Internet Pharmacies Can Be Complicated by Legal and Practical
Considerations:
According to FDA, DEA, and ICE officials, their agencies have worked
with credit card organizations to obtain information to investigate the
importation of prescription drugs purchased with a credit card from
Internet pharmacies, but these investigations were complicated by legal
and practical considerations. Such considerations included privacy
laws; federal law enforcement agencies' respective subpoena authority,
priorities, and jurisdictions; and the ease with which merchants
engaged in illegal activity can enter into a new contract with a
different bank to use the same payment system. In addition, according
to the two credit card associations we contacted, their respective
associations have also undertaken searches of the Internet for Web
sites that appeared to be selling problematic materials and accepting
their respective payment cards, but these investigations can also be
complicated by legal considerations.
Privacy laws can sometimes limit the extent to which companies,
including credit card organizations, will provide information to
federal law enforcement agencies about parties to a transaction. FDA
and DEA officials told us that credit card organizations and/or banks
and other financial institutions, when they have the direct contractual
relationship with the merchants, have provided to the agencies
information regarding transactions involving prescription drugs
prohibited from import, as well as alerting federal officials when
suspicious activity is detected. However, they said that the companies
do not provide information about the parties involved in the
transaction without a subpoena. Representatives from the two
associations with whom we met explained that law enforcement usually
needs to issue a subpoena because of company concerns about possible
legal action by the subject of the investigation (for example, if the
subject asserted that information was provided by the association or
bank to law enforcement in violation of federal privacy laws). They
further noted, however, that their respective associations would
provide law enforcement information without a subpoena, when properly
requested under certain circumstances, including matters of national
security or when a human life was in immediate jeopardy.
DEA, ICE, and FDA officials confirmed that they are able to obtain
information from credit card companies and/or banks and other financial
institutions through subpoenas, although the agencies have different
subpoena authority with regard to entities, such as banks and credit
card companies. DEA and ICE have the authority to subpoena information
directly from such entities, but FDA must ask a U.S. Attorney to obtain
a grand jury subpoena requesting the information.[Footnote 43] DEA and
ICE may also use grand jury subpoenas. For example, DEA officials told
us that usually they are able to obtain needed information using
administrative subpoenas; however, they may use a grand jury subpoena
if a company will not provide the requested information or a U.S.
Attorney prefers that approach. DEA, FDA, and ICE could not readily
provide data on the number of subpoenas served because (1) data on DEA
and ICE administrative subpoenas were maintained at the field office
requesting the subpoena and were not organized according to payment
method and (2) none of the agencies could share grand jury
information.[Footnote 44]
Agencies' priorities also affect their ability to conduct
investigations of credit card purchases of prescription drugs for
importation. According to FDA, DEA, and ICE officials, their
investigations, including those involving imported prescription drugs,
focused on commercial quantities, rather than quantities to be consumed
for personal use.[Footnote 45] DEA officials also said that DEA seeks
to dismantle major drug supply and money laundering organizations;
therefore, its investigations of prescription drug violations focused
on the suppliers of Internet pharmacies, not individual consumers. DEA
reported no active cases on individuals who were illegally importing
controlled substance pharmaceuticals over the Internet for personal
consumption.[Footnote 46] FDA, DEA, and ICE officials said that
investigations involving smaller quantities may be handled by state and
local law enforcement.
In addition to the quantity of drugs being imported, federal
enforcement agencies consider jurisdiction when determining whether to
pursue an investigation, including investigations of Internet
pharmacies using credit card payment systems that cross U.S. borders.
For a federal enforcement agency to determine whether it has
jurisdiction to investigate potential illegal activity outside the
United States, it generally needs to consider whether (1) the federal
statute or statutes violated apply to activity outside the country and
(2) there is sufficient evidence of an intent to produce effects in the
United States or some other connection to the United States, such as a
U.S. distributor. Pursuit of investigations of Internet pharmacies
using credit card payment systems presents both jurisdictional and
practical limitations, when some or all of the operations (e.g.,
pharmacies, Web sites, and bank accounts) are located in foreign
countries and there is no U.S. distributor. According to FDA officials,
in cases that FDA does not have jurisdiction to pursue, it may ask its
foreign counterparts for assistance.[Footnote 47] ICE officials told us
that they focused on transporters of commercial quantities across U.S.
borders from a foreign country into the United States.
By contrast, DEA enforces a statute that specifically applies to
manufacturers or distributors of certain prescription drugs who are
located in foreign countries. Specifically, DEA has jurisdiction over a
manufacturer or distributor of schedule II controlled substances in a
foreign country who knows or intends that such substances will be
unlawfully imported into the United States.[Footnote 48] However, the
relevant statute does not apply to prescription drugs that are
schedules III through V controlled substances. Therefore, according to
a DEA official, to pursue such investigations, DEA has to devise other
ways to reach those operating outside the United States.
A DEA official said that another practical consideration affecting
investigations of credit card purchases of imported prescription drugs
was the ease with which merchants engaged in illegal activities were
able to open new merchant credit card accounts. Credit card association
representatives confirmed that the reappearance of the same violators
using a different name or bank, or even disguising the illegal activity
as a different and legal activity, can be a problem. They said that
unlike law enforcement, credit card organizations do not have the
authority to arrest the violators, and some of the merchants engaged in
such illegal activities are skilled at moving from bank to bank and
masking their illegal activities.
In addition to investigations by federal law enforcement agencies, each
of the credit card associations we contacted had also undertaken
searches of the Internet for Web sites that appeared to be selling
problematic materials and using its payment cards.[Footnote 49] One
association used a vendor to carry out the searches and then provided
the information to its member banks regarding their merchants who
appear to have been involved in selling controlled substances. The
other association's security personnel conducted the Internet search,
identified the sites, and then attempted to contact the member bank
that had contracted with the merchant. Representatives of the latter
association told us that as a result of this effort, at the
association's request, contracts with approximately 500 merchants had
been terminated by the member banks that had authorized the particular
merchants to accept the association's credit card.
Representatives from both associations agreed that federal law
enforcement agencies were in the best position to enforce the
prohibition on prescription drug importation, because they have arrest
authority and can remove the violators. However, these representatives
had differing opinions concerning the desirability of their taking any
additional enforcement steps in this area. Representatives of one
association told us they did not want the authority to make purchases
to confirm that illegal transactions were occurring. They said once
their investigators identified a site willing to sell drugs, they
contacted the bank that authorized the merchant's account so that the
bank could take appropriate action. Further, they told us that the
association was not set up to make such purchases safely and its mail
room was not structured to take delivery. Representatives of the other
association told us that their association would like the authority to
make such purchases, noting that their investigations were complicated
by the inability of the association's security personnel to purchase
controlled substances. However, these representatives told us that, if
they were allowed to make such transactions, they would expect to turn
over the controlled substances to federal law enforcement immediately
upon receipt.
A DEA official told us that currently credit card organizations are not
exempt from the general prohibition against possessing controlled
substances,[Footnote 50] and therefore it is illegal for them to
purchase controlled substances from an Internet pharmacy to show that
the pharmacy is acting illegally. He also said that even if the law
were changed to allow such transactions, executing them could be
unmanageable, because the companies would have to comply with federal
regulations for handling and storing controlled substances.[Footnote
51] For example, federal regulations require that controlled substances
be stored in a safe, vault, steel cabinet, or cage. The regulations
also specify the methods and materials to be used to construct the
storage facility, as well as the type of security system (alarms,
locks, and anti-radiation devices) required to prevent entry. Even if a
credit card company planned to turn over purchased controlled
substances to federal law enforcement upon receipt, it would need to
have a facility as prescribed by federal regulations to hold and store
the substances until a DEA agent could take possession of them.
Federal Enforcement Agencies and Credit Card Associations Have
Discussed Credit Card Enforcement Issues:
Federal enforcement agencies and credit card organizations have had
periodic discussions about credit card enforcement issues involving
purchases of prescription drugs for importation from Internet
pharmacies. In addition, the associations told us that they had
provided information about this issue to banks and other financial
institutions.
According to FDA and DEA officials and representatives of the two
credit card associations we contacted, meetings have been held
periodically, between individual agencies (e.g., DEA and FDA) or as
part of the Customs and Border Protection (CBP) Interagency Task Force
(discussed earlier in this report) and with representatives of one or
more companies present. Association representatives told us that they
believed that the meetings, which began in late 2003, have provided an
educational opportunity for both the credit card companies and the
federal law enforcement agencies. For example, the representatives of
one association said that during the meetings they had described how
the association's payment system operated, explaining (1) the
relationship among the association, the banks and other financial
institutions, merchants, and cardholders, and (2) which entities
maintained the transactional information needed by law enforcement for
investigations of Internet pharmacies. They said that DEA and FDA had
explained federal laws related to the importation of prescription
drugs, both controlled and noncontrolled substances. Representatives of
the other association said that the meetings helped to educate its
officials about issues, concerns, and risks related to the illegal
importation of prescription drugs. In addition, agency officials and
association representatives said that they had discussed the role
credit card organizations can play with regard to illegal importation.
No minutes of these meetings are maintained.
According to association representatives, information obtained at these
meetings was disseminated to the banks and other financial institutions
through bulletins. Through association bulletins, both credit card
associations provided to banks and other financial institutions
information concerning the illegal importation of prescription drugs.
The bulletins reminded the recipients of their obligation to ensure
that the credit card system was not to be used for illegal activity,
alerted them to the risk of illegal activity involving transactions for
prescription medications purchased over the Internet, and underscored
the need for due diligence to ensure that merchants were not engaged in
illegal activities. One association also issued a press release that,
according to the association's representatives, was to communicate to
the public information similar to that which had been sent to the
banks.
FDA and DEA officials and association representatives said that the
dialogue was continuing and described the relationship between the
agencies and associations as good. A meeting between credit card
organizations and the CBP task force is to be held in late summer 2005.
Moreover, they noted that informal contacts between the agencies and
the credit card organizations occurred, as needed, on specific matters
related to prescription drug importation. However, agency officials
confirmed that they had no plan or written strategy for dealing with
credit card organizations related to the illegal importation of
prescription drugs purchased with a credit card.
[End of section]
Appendix IV: Comments from the Department of Homeland Security:
U.S. Department of Homeland Security:
Washington, DC 20528:
August 22, 2005:
Mr. Richard M. Stana:
Director, Homeland Security and Justice Issues:
U.S. Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Dear Mr. Stana:
RE: Draft Report GAO-05-372, Prescription Drugs: Strategic Framework
Would Promote Accountability and Enhance Efforts to Enforce the
Prohibitions on Personal Importation (GAO Job Code 440282):
The Department of Homeland Security (DHS) appreciates the opportunity
to review and comment on the Government Accountability Office's draft
report. We generally agree with the contents of the report. The report
acknowledges that enforcing laws governing prescription drug imports
for personal use is a complex undertaking involving multiple agencies
with various jurisdictions and differing priorities. The draft credits
DHS's U.S. Customs and Border Protection (CBP) with establishing an
interagency task force in January 2004 to address challenges discussed
in the report, and recognizes CBP's effort to expedite the handling of
certain controlled substances imported as prescription drugs. It also
discusses resource limitations associated with the significant volume
of imports.
The task force is designed to foster cooperation among the agencies
responsible for enforcing the laws governing prescription drugs
imported for personal use and goes beyond interdiction at mail and
carrier facilities. Your report includes examples of on-going
activities by task force working groups and notes that the task force
had established some elements of a strategic framework. The task force
is composed of CBP, U.S. Immigration and Customs Enforcement (ICE), the
Department of Health and Human Services' Food and Drug Administration
(FDA), the Department of Justice's Drug Enforcement Administration
(DEA), the Office of National Drug Control Policy (ONDCP) as well as
legal counsel. Working groups were established to accomplish specific
task force goals including developing: (1) a mutually agreed upon
strategy for enforcement, interdiction, and disposition of unlawful
narcotics entering the United States; (2) mutually agreed upon policies
relative to unauthorized imports; (3) proposals for joint enforcement
operations at ports of entry; and (4) agreements for committing
resources to carry out the task force's strategy and policies.
The Government Accountability Office (GAO) makes two recommendations,
only one of which involves the DHS. Specifically, you recommend that
the CBP Commissioner, in concert with ICE, FDA, DEA, ONDCP, and the
United States Postal Service, develop and implement a strategic
framework for the task force that would promote accountability and
guide resource and policy decisions. The recommendation also discusses
what the framework should include.
A task force meeting with the concerned agencies has been scheduled for
August 31 to discuss the GAO report and the recommendation. Since the
recommendation affects task force members as well as CBP, we will
provide GAO with additional information after the meeting.
Sincerely,
Signed for:
Steven Pecinovsky:
Director:
Departmental GAO/OIG Liaison Office:
[End of section]
Appendix V: Comments from the Department of Justice, Drug Enforcement
Administration:
U.S. Department of Justice:
Drug Enforcement Administration:
Washington, D.C. 20537:
AUG 22 2005:
MEMORANDUM:
TO: Richard M. Stana:
Director, Homeland Security and Justice Issues:
Government Accountability Office:
FROM: Michele M: Leonhard (signed by)
Deputy Administrator:
SUBJECT: Draft Audit Report: PRESCRIPTION DRUGS. Strategic Framework
Would Promote Accountability and Enhance Efforts to Enforce
Prohibitions on Personal Importation, (GAO-05-372):
The Drug Enforcement Administration (DEA) has reviewed the Government
Accountability Office's (GAO) draft audit report entitled PRESCRIPTION
DRUGS. Strategic Framework Would Promote Accountability and Enhance
Efforts to Enforce Prohibitions on Personal Importation. The report
addresses the available data about the volume and safety of personal
prescription drug imports, the procedures and practices used to inspect
and interdict prescription drugs unapproved for import, factors
affecting federal efforts to enforce the laws governing prescription
drugs imported for personal use, and efforts federal agencies have
undertaken to coordinate enforcement efforts. DEA submits the following
information for consideration in conjunction with GAO's report.
The Internet has brought drug dealers from the back alleys directly
into every American home wired for email and the World Wide Web.
Extremely dangerous, addictive, and potentially life-threatening drugs
are now sold illegally every day, just one click beyond virtually every
email box. These drugs are peddled by multimillion dollar organizations
every bit as sophisticated as international cartels.
The scope of this problem is too broad for DEA or any single agency to
tackle alone. DEA has enlisted the support of the private sector, the
legitimate businesses essential to the on-line trade in diverting
pharmaceutical drugs through the Internet. For example, DEA is working
with FedEx and UPS, who are acutely aware that their businesses are
being exploited and alert us with any unusual patterns. Similarly,
consistent with DEA's emphasis on denying revenue and financial
services to drug trafficking organizations, both Visa and MasterCard
are assisting us in investigations and with financial leads. Both
shippers and credit card companies have agreed to shut down sites
determined to be conducting illegal activities.
A significant aspect of the pharmacy problem is located abroad. DEA is
cooperating with our Federal and foreign counterparts and we have
assumed a leadership role in the international forum on Internet
diversion. DEA also is increasing staffing and resources dedicated to
the problem of diversion over the Internet to improve our capacity to
identify and stop illicit Internet pharmacy operations, and working
more closely with agencies and companies inside and outside the
government to coordinate and improve our efforts. DEA's voluntary role
on the interagency task force on pharmaceuticals is testament to its
commitment in this area.
GAO recommends the Customs and Border Protection (CBP) Commissioner
develop and implement a strategic framework for the interagency task
force on pharmaceuticals. DEA agrees that strategic frameworks can be
useful in promoting accountability and guiding policy and resource
decisions but shares similar concerns reported to GAO by other
agencies' officials. The interagency task force on pharmaceuticals is a
cooperative initiative, and DEA must balance priorities in accordance
with agency mandates. Additionally, DEA's Strategic Plan clearly
establishes a framework to articulate agency priorities and assess its
performance.
DEA notes that GAO "acknowledges that such a strategic framework needs
to be flexible to allow for changing conditions, but could be helpful
to organize it in a logical flow, from conception to implementation."
Allowing for this flexibility, in concert with the Immigration and
Customs Enforcement, Food and Drug Administration, Office of National
Drug Control Policy, and United States Postal Service, DEA will support
the CBP Commissioner's strategic framework for the interagency task
force on pharmaceuticals.
DEA appreciates the opportunity to provide comments on the draft
report. If you have any questions regarding this information, please
contact Sheldon Shoemaker, Audit Liaison at (202) 307-4205.
Cc: Richard P. Theis:
Acting Assistant Director, Audit Liaison Group:
Management and Planning Staff:
[End of section]
Appendix VI: Comments from the Department of Health and Human Services:
DEPARTMENT OF HEALTH & HUMAN SERVICES:
Office of Inspector General:
Washington, D.C. 20201:
AUG 18 2005:
Mr. Richard M. Stana:
Director, Homeland Security and Justice:
U.S. Government Accountability Office:
Washington, DC 20548:
Dear Mr. Stana:
Enclosed are the Department's comments on the U.S. Government
Accountability Office's (GAO's) draft report entitled, "PRESCRIPTION
DRUGS: Strategic Framework Would Promote Accountability and Enhance
Efforts to Enforce the Prohibitions on Personal Importation" (GAO-05-
372). These comments represent the tentative position of the Department
and are subject to reevaluation when the final version of this report
is received.
The Department provided several technical comments directly to your
staff.
The Department appreciates the opportunity to comment on this draft
report before its publication.
Sincerely,
Signed by:
Daniel R. Levinson:
Inspector General:
Enclosure:
The Office of Inspector General (OIG) is transmitting the Department's
response to this draft report in our capacity as the Department's s
designated focal point and coordinator for U.S. Government
Accountability Office reports. OIG has not conducted an independent
assessment of these comments and therefore expresses no opinion on
them.
HHS COMMENTS ON THE U.S. GOVERNMENT ACCOUNTABILITY OFFICE'S DRAFT
REPORT ENTITLED. "PRESCRIPTION DRUGS: STRATEGIC FRAMEWORK WOULD PROMOTE
ACCOUNTABILITY AND ENHANCE EFFORTS TO ENFORCE THE PROHIBITIONS ON
PERSONAL IMPORTATION" (GAO-OS-372):
The Department of Health and Human Services (HHS) appreciates the
opportunity to comment on the U.S. Government Accountability Office's
(GAO) draft report.
General Comments:
The HHS, Food and Drug Administration (FDA) is responsible for helping
to ensure that the U.S. drug supply is safe, secure, and reliable for
the American public. For decades, the Federal Food, Drug, and Cosmetic
Act has ensured that Americans can be confident that, when they use an
FDA-approved drug, the medicine will be safe and effective and will
work as intended in treating their illness.
Since 1999, FDA has taken many steps to prevent the illegal importation
of unapproved drugs, including coordination of activities with other
Federal agencies, enhanced enforcement, coordination with international
entities, partnerships with professional organizations, and development
of public outreach and education campaigns. FDA continues to engage in
these activities in addition to participating in the multi-agency task
force cited in the GAO report.
The substantial volume of personal drug importations presents a
difficult challenge for FDA field personnel at ports-of-entry,
international mail facilities, and international courier hubs. FDA
remains strongly concerned about unapproved, imported drugs for which
safety cannot be assured because they are outside of the FDA drug
approval system.
GAO Recommendation #1:
To help ensure that the Government maximizes its ability to enforce
laws governing the personal importation of prescription drugs, we
recommend that the CBP Commissioner, in concert with ICE, FDA, DEA,
ONDCP, and USPS, develop and implement a strategic frameworkfor the
task force that would promote accountability and guide resource and
policy decisions. Among other issues, GAO recommended that the
strategic framework include an approach to estimate the scope of the
problems including the volume of drugs entering the country through the
mail and carrier (courier) facilities and determination of the
resources and investments needed to address the flow of prescription
drugs illegally imported for personal use.
HHS Comment:
We appreciate GAO's recommendation that the task force develop and
implement a strategic framework. As GAO knows, CBP Commissioner Bonner
set out clearly delineated goals for the task force when it was
established. These goals provide a general framework for the work of
the task force; however, a more formalized approach may be useful to
address the issues associated with the importation of unapproved drugs.
We will work with our Federal partners to discuss the development of a
more formalized approach.
The recommendation to include an approach to estimate the scope of the
problems including the volume of drugs entering the country through the
mail and carrier (courier) facilities in the strategic framework does
raise questions. We believe that the volume estimates provided in the
HHS Task Force Report (which included CBP and DEA as part of the Task
Force) are valid. If other members of the pharmaceutical task force
develop a better way to estimate the volume of illegal drug
importation, we are willing to use those estimates in evaluating
current resource and staffing demands. We do have concerns, however,
about the ability to obtain any more valid estimates than these
contained in the HHS Task Force Report. The estimate of total packages
per year was calculated using a variety of figures from IMS Health
data, specific counts of packages reviewed, overall import line entry
data, and courier line entries from FDA's Operational and
Administrative System for Import Support (OASIS). No matter what method
is used to estimate the current or future volume, it is difficult to
anticipate the volume of illegal activity. The volume may depend on the
incentive for the public to import unapproved drugs, as well as other
external factors that change over time. Thus, short of opening and
counting each package as it enters the U.S., the reliability of an
estimate will always be in question given the fluid nature of illegal
prescription drug imports and the number of mail and courier facilities
involved.
In addition, it is worth noting that the volume estimates will not
alter the resource calculations already provided in the HHS Task Force
Report. The calculations for what FDA resources are needed per package
are well formed and will not be impacted by a change in the overall
volume of illegal drug importation. The resource estimate in the HHS
Task Force Report was derived from the mail blitzes conducted by FDA
and CBP at various international mail facilities. During these blitzes,
packages that were reviewed by FDA personnel were counted, identified
as containing or not containing unapproved drugs, and the personnel
time devoted to these activities and the follow-up activities of
notification to the individual addressees was derived from FDA work
records. Personnel salaries were used to calculate the resources
devoted to all of the work done during the processing of each package.
Even if a new volume estimate differs from the estimate provided in the
HHS Task Force Report, FDA resources needed for a per package review
will not change. GAO's statement that "statistically valid estimates"
would allow us to develop "realistic risk-based estimates" of the
number of staff needed to "interdict parcels at mail facilities" does
not recognize that FDA is not always able to process the current number
of packages already set aside by CBP. The HHS Task Force found that
"there is no realistic level of resources that could ensure that
personally imported drugs are adequately inspected to assure their
safety since visual inspection, testing, and oversight of all
personally imported prescription drugs are not feasible or practical at
this time." Although we currently devote a significant amount of FDA
resources to illegal mail importation, we must always be cognizant of
competing priorities regardless of fluctuations in volume.
GAO Recommendation #2:
In view of the FDA's continuing concern about the statutory
notification requirement and its impact on enforcement, we also
recommend 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.
HHS Comment:
We agree with this recommendation and intend to pursue an updated
assessment. As is noted in the GAO report, the original proposal was
submitted in 2001. Although we still believe that modifications to the
statutory notification requirement will assist in our efforts to handle
the mail importation of illegal prescription products once they are in
the United States, it will not solve or prevent the problem of illegal
importation. In addition, given our current estimates of the volume are
greater than the estimates made when we requested modification of the
notification requirement, other actions may need to be considered to
address the importation of illegal prescription products. We will work
with our Federal partners to detennine the actions required.
[End of section]
Appendix VII: Comments from the Office of National Drug Control Policy:
EXECUTIVE OFFICE OF THE PRESIDENT:
OFFICE OF NATIONAL DRUG CONTROL POLICY:
WASHINGTON, DC 20503:
August 19, 2005:
Mr. Richard M. Stana:
Director:
Homeland Security and Justice Issues:
United States General Accountability Office:
Washington, DC 20549:
Deem Mr. Stana:
The purpose of this letter is to provide Agency comment on GAO's draft
report on "Prescription Drugs-Strategic Framework Would Promote
Accountability and Enhance Efforts to Eaforce the Prohibitions on
Personal Importation" (GAO-05-372). We appreciate the opportunity to
comment on this important issue involving one aspect of drug diversion.
Although prescription drug abuse can also he influenced by "doctor
shopping" and other means, such as thefts from pharmacies and other
legitimate outlets; the availability of drugs on the internet from
sources outside the United States remains a constant concern of our
National Drug Control Policy.
The problems associated with effectively policing internet purchases
are well documented in the report. Additionally, the report identifies
the significance played by credit card use as a facilitator of the
problem. We , likewise, encourage law enforcement proposals that may
curtail these dangerous practices. Further, we concur in your
identification of the cumbersome nature of currently required
enforcement practices dealing with the use of the mails to transfer
illicit narcotics.
In addition to the recommendation that the CUP Commissioner develop and
implement a strategic framework for a task force, we would strongly
suggest that the currently established Synthetic Drug Interagency
Working Group (SDIWG), led by our office, play a significant role in
integrating these considerations with all of the other synthetic drug
concerns that inflict potential harm on our society.
Sincerely,
Signed by:
Stephen A. Katsiuinis:
Chief of Staff:
[End of section]
Appendix VIII: Comments from the U.S. Postal Service:
MARY ANNE GIBBONS:
SENIOR VICE PRESIDENT, GENERAL COUNSEL:
UNITED STATES POSTAL SERVICE:
August 19, 2005:
Mr. Richard M. Stana:
Director, Homeland Security and Justice Issues:
United States Government Accountability Office:
441 G Street, NW MS-6Q26H:
Washington, DC 20548-0001:
Dear Mr. Stana:
Thank you for providing the U.S. Postal Service with the opportunity to
review and comment on the draft report titled Prescription Drugs:
Strategic Framework Would Promote Accountability and Enhance Efforts to
Enforce the Prohibitions on Personal Importation (GAO-05-372).
We wish to express a concern with possible procedural and legislative
changes dealing with revisions to the current notification
requirements. The report discusses the effects of notification of the
addressee on the process of interdicting prescription drugs that are
not on Schedules I and II of the Controlled Substances list. The report
further indicates that federal agencies have considered the merits of
legislation to change existing procedures governing the processing and
disposition of imported pharmaceuticals.
While we understand the government's interest in devising effective
solutions to stem illegal trade in pharmaceuticals, we believe it is
important that the report also acknowledge the United States'
international obligations under the Universal Postal Union (UPU) Acts.
Article RE 501 of the UPU Letter Post Regulations and article RE 302 of
the UPU Parcel Post Regulations establish a general rule that items
that are not admitted to the post for delivery are to be returned to
the sender. In those cases 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 the disposition of the
article. This notice must also clearly indicate the prohibition under
which the item falls. 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, in any discussion of options that might expedite the
processing and disposition of prescription drugs, the international
legal requirement that postal administrations of origin be notified
when items have not been delivered as addressed and the reasons
therefor need to be taken into account.
If you or your staff wish to discuss any of these comments further, I
am available at your convenience.
Sincerely,
Signed for:
Mary Anne Gibbons:
[End of section]
Appendix IX: GAO Contact and Acknowledgments:
GAO Contact:
Richard M. Stana (202) 512-8777:
Acknowledgments:
In addition to the above, John F. Mortin, Assistant Director; Leo M.
Barbour; Frances A. Cook; Katherine M. Davis; Michele C. Fejfar; Yelena
T. Harden; James R. Russell; and Barbara A. Stolz made key
contributions to this report.
FOOTNOTES
[1] The 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. See appendix II for a general description of the
controlled substance schedules I-V.
[2] Representatives of these two card credit associations testified at
congressional hearings in July 2004 on matters related to the illegal
importation of prescription drugs. In addition, a DEA official
identified these associations as the organizations used by the majority
of Internet drug sites.
[3] See 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).
[4] See GAO, Prescription Drugs: Preliminary Observations on Efforts to
Enforce the Prohibitions on Personal Importation, GAO-04-839T
(Washington, D.C.: July 22, 2004).
[5] An unapproved drug includes one that has not been demonstrated to
be safe and effective and for which the manufacturing facility,
methods, and controls have not been shown to meet FDA standards.
Failure to meet other statutory and regulatory standards relating to
labeling, handling, and packaging may result in a drug being considered
adulterated or misbranded. See 21 U.S.C. §§ 351, 352, 355.
[6] According to the policy, other conditions should be met as well,
such as (1) provision of the name and address of the doctor licensed in
the United States responsible for the importer's treatment with the
product or evidence that the product is for continuation of treatment
begun in a foreign country and (2) the absence of any known
commercialization or promotion to persons residing in the United States
by those involved in the distribution of the product at issue.
Alternatively, in the case of a drug that is not for a serious
condition, the policy also permits FDA officials to use their
discretion to allow importation of that drug if the intended use is
identified and the product is not known to represent a significant
health risk. A complete description of FDA's personal importation
policy can be found in chapter 9 of FDA's Regulatory Procedures Manual,
which is available on the agency's Web site.
[7] The act and implementing regulations permit an individual traveler
under certain circumstances to carry a personal use quantity of a
controlled substance (except a substance in schedule I) across the U.S.
border, but they do not make a similar exception for importation by
mail or private carrier.
[8] See 19 U.S.C. § 1595a(c)(1)(B); 19 C.F.R. §§ 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. (See app. II for general description of controlled
substances schedules I through V.)
[9] See 19 C.F.R. §§ 162.31, 162.32, 162.45, 162.45a, 162.46, 162.47,
162.63.
[10] See 21 U.S.C. § 381(a); 19 C.F.R. §§ 12.1(a), 145.57; see also
Chapter 9 of FDA's Regulatory Procedures Manual, Subchapter Coverage of
Personal Importations, "Mail Shipments" http://www.fda.gov/ora/
compliance_ref/rpm_new2/ch9pers.html.
[11] See 21 U.S.C. § 381(a); 21 CFR §1.94.
[12] HHS Task Force on Drug Importation, Report on Prescription Drug
Importation, Department of Health and Human Services, December 2004.
[13] IMS Health is a management consulting firm that provides
information to pharmaceutical and health care industries. It operates
in more than 100 countries and receives data from data suppliers around
the world.
[14] FDA officials stated that while IMS's survey of pharmacies was not
100 percent comprehensive, the data were adjusted for the pharmacies
not included in its survey.
[15] According 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.
[16] GAO-04-820 and GAO-04-888T.
[17] In December 2003 and January 2004, the association ordered eight
different drugs from five Web sites and received drugs from four of the
sites. All of the drugs received were labeled in a foreign language.
[18] See GAO, Prescription Drugs: Preliminary Observations on Efforts
to Enforce the Prohibitions on Personal Importation, GAO-04-839T
(Washington, D.C.: July 22, 2004).
[19] For a description of some of the other criteria in FDA's personal
importation policy, see footnote 6.
[20] These data are collected in FDA's OASIS database. According to
FDA, information in OASIS is collected as an "entry," which for
international mail usually represents a single package. However, within
each package, there may be more than one drug product.
[21] Local criteria can include other targeted countries and additional
intelligence.
[22] According to a CBP official, most of the drugs returned were
schedule IV controlled substances. They said that a small number of the
packages contained nonscheduled prescription drugs that were referred
to FDA. Also, CBP seized a small number of items that did not have a
return address.
[23] The seized package could also be submitted to ICE for possible
investigation of the addressee and the sender.
[24] Since 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.
[25] Under 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 § 1595a(c)(1)(B) and processed in
accordance with established seized asset procedures.
[26] CBP 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
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.
[27] According to FDA officials, express carrier facility personnel
electronically enter information into a CBP database that automatically
transfers relevant data to FDA's OASIS database. For carrier
facilities, FDA said that a data entry is an accounting vehicle that
represents all products within a shipment. However, importers have the
option to report a single shipment as more than one entry. For fiscal
year 2004, approximately 45,000 shipments containing prescription drugs
entering the United States were reported by express carrier facilities
and recorded in OASIS. FDA officials said that FDA field personnel
primarily reviewed this information electronically but physically
inspected some packages, with the number physically inspected varying
by facility. Approximately 2,000 were refused entry by FDA after
physical inspection and marked return to sender. Almost 43,000 were
released to the addressee, usually after electronic review. However,
FDA officials noted that the information on prescription drugs entered
into OASIS at express carrier facilities could vary by carrier, site
for the same carrier, CBP local criteria at a site, or local
arrangements between FDA and CBP. Accordingly, it is difficult to
determine from these data the proportion imported for personal use.
Most important, these data do not indicate the universe of shipments of
prescription drugs coming through the express carrier facilities.
[28] The Medicare Prescription Drug, Improvement, and Modernization Act
of 2003 directed the Secretary of Health and Human Services, in
consultation with appropriate government agencies, to conduct a study
of the importation of drugs into the United States and submit a report
to Congress. Pub. L. No. 108-173, § 1122, 117 Stat. 2066, 2469 (2003).
[29] Two 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 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).
[30] When 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.
[31] According to a DEA official, the majority of Internet drug sites
used the payment systems of the two associations we contacted.
[32] UPU 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.
[33] GAO, Combating Terrorism: Evaluation of Selected Characteristics
in National Strategies Related to Terrorism, GAO-04-408T (Washington,
D.C.: February 2004).
[34] GAO, Agencies Annual Performance Plans under the Results Act: An
Assessment Guide to Facilitate Congressional Decisionmaking, GAO/GGD/
AIMD-10.1.18 (Washington D.C.: February 1998).
[35] ONDCP, 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."
[36] The 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.
[37] Data on the number of packages process were provided to us by CBP
from the U.S. Postal Service.
[38] On January 27, 2005, CBP began operations at one additional
international mail facility in San Juan, Puerto Rico. We did not
include the San Juan facility as part of our original selection because
it was not in operation when we began our review.
[39] HHS Task Force on Drug Importation, Report on Prescription Drug
Importation, Department of Health and Human Services, December 2004.
[40] Buyer Beware: The Danger of Purchasing Pharmaceuticals over the
Internet: Federal and Private Sector Responses: Hearing Before the
Permanent Subcomm. on Investigations of the Senate Comm. on Government
Affairs, 108th Cong. (July 22, 2004).
[41] According to a DEA official, the majority of Internet drug sites
used these two companies' payment systems.
[42] Two 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 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, Internet Gambling: An Overview of the
Issues, GAO-03-89 (Washington, D.C.: December 2, 2002)
[43] FDA has the authority to inspect certain records of those entities
processing drugs under section 704 of the Federal Food, Drug, and
Cosmetic Act, such as, a drug manufacturer, but not the records of
third parties, such as credit card organizations. However, section 704
is an administrative authority, and it may not be relied upon when the
agency is solely interested in obtaining evidence for a criminal
prosecution. According to FDA, when criminal Internet/importation
investigations mature to the point that a grand jury becomes involved,
FDA's Office of Criminal Investigations (OCI) routinely uses grand jury
subpoenas to obtain information from credit card companies and banks.
Use of a grand jury subpoena to obtain this kind of information is a
standard investigatory practice. FDA stated that when served with grand
jury subpoenas, the banks and credit card companies have consistently
been cooperative and have provided OCI with the information requested.
[44] Rule 6(e) of the Federal Rules of Criminal Procedure codifies the
traditional practice of grand jury secrecy. With certain limited
exceptions, Rule 6(e) generally prohibits disclosure of "matters
occurring before the grand jury."
[45] FDA officials noted, however, that in matters of public health and
safety, FDA would seek a prosecution no matter what the quantity of
illegal drugs involved.
[46] According to DEA, as of June 21, 2005, it had made 560 arrests
related to the diversion of pharmaceuticals; those arrested included
retailer dealers, leaders within organizations, and heads of
organizations, among others. However, DEA data do not include
information on which of the arrests involved Internet sales for
importation or use of credit card payment systems.
[47] According to FDA, as of June 2005, FDA's OCI has closed 24 full-
scale investigations related to Internet drug sales and imported
prescription drugs. These 24 investigations resulted in 7 judicial
cases where a defendant was brought before a court; each of these cases
may include one or more prosecutions. During 5 of the 24
investigations, FDA worked cooperatively with foreign governments. In
addition, FDA reported that as of June 2005, OCI had 23 pending full-
scale investigations related to Internet drug sales and imported
prescription drugs, 5 of which had matured into pending prosecutions.
In 7 of the 23 investigations, OCI was working cooperatively with
foreign governments.
[48] 21 U.S.C. § 959.
[49] The associations' role in the day-to-day management of their
operations includes responsibilities for, among other things, (1)
establishing standards and procedures for the acceptance and settlement
of each of their members' transactions on a global basis; (2)
conducting the due diligence for the financial soundness of potential
members and requiring periodic reporting of members on fraud,
chargeback, counterfeit card, and other matters that may impact the
integrity of the association as a whole; and (3) operating the security
and risk systems to minimize risk to the member banks, including
operating fraud controls to allow members to monitor transactions with
their cardholders and establishing specific design features of the
bankcard to enhance security features. See also GAO, Money Laundering:
Extent of Money Laundering through Credit Cards Is Unknown, GAO-02-670
(Washington, D.C.: July 22, 2002).
[50] 21 U.S.C. § 844(a).
[51] The official emphasized that the current U.S. system for handling
controlled substances is a closed system of distribution. It can
account for every tablet produced from raw product coming into the
country to the final tablet.
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