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Testimony: 

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

United States Government Accountability Office: 

GAO: 

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

Tuesday, December 13, 2005: 

Prescription Drugs: 

Enhanced Efforts and Better Agency Coordination Needed to Address 
Illegal Importation: 

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

GAO-06-175T: 

GAO Highlights: 

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

Why GAO Did This Study: 

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

What GAO 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. 

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

[End of section] 

Mr. Chairman and Members of the Subcommittee: 

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

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

Under current law, the importation of prescription drugs, both 
controlled and noncontrolled, for personal use is illegal, with few 
exceptions. In recent years, Congress and others have debated whether 
Americans should be allowed to purchase drugs from pharmacies located 
in foreign countries. However, currently, consumers could be violating 
federal law, unknowingly or intentionally, by having drugs shipped, in 
effect, imported, into the United States through the international mail 
and private carriers. Two acts specifically regulate the importation of 
prescription drugs into the United States. That is, all prescription 
drugs offered for import must meet the requirements of the Federal 
Food, Drug, and Cosmetic Act, and those that are controlled substances 
also must meet the requirements of the Controlled Substances Import and 
Export Act. Prescription drugs imported for personal use generally do 
not meet these requirements. 

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. 

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

* what available data show about the volume and safety of prescription 
drugs imported into the United States for personal use through the 
international mail and private carriers, 

* what procedures and practices are used at selected facilities to 
inspect and interdict prescription drugs unapproved for import, 

* what factors affect federal agency efforts to enforce the prohibition 
on prescription drug importation for personal use through international 
mail and carrier facilities, and: 

* what efforts federal agencies have undertaken to coordinate the 
enforcement of the prohibitions on personal importation of prescription 
drugs. 

Summary: 

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

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

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

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

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

Background: 

All international mail and packages entering the United States through 
the U.S. Postal Service and private carriers are subject to potential 
CBP inspection at the 14 USPS international mail facilities and 29 
express consignment carrier facilities operated by private carriers 
located around the country. CBP inspectors can target certain packages 
for inspection or randomly select packages for inspection. CBP inspects 
for, among other things, illegally imported controlled substances, 
contraband, and items--like personal shipments of noncontrolled 
prescription drugs--that may be inadmissible. CBP inspections can 
include examining the outer envelope of the package, using X-ray 
detectors, or opening the package to physically inspect the contents. 
Each year the international mail and carrier facilities process 
hundreds of millions of pieces of mail and packages. Among these items 
are prescription drugs ordered by consumers over the Internet, the 
importation of which is prohibited under current law, with few 
exceptions. 

Two acts--the Federal Food, Drug, and Cosmetic Act and the Controlled 
Substances Import and Export Act--specifically regulate the importation 
of prescription drugs into the United States. Under the Federal Food, 
Drug, and Cosmetic Act, as amended, FDA is responsible for ensuring the 
safety, effectiveness, and quality of domestic and imported drugs and 
may refuse to admit into the United States any drug that appears to be 
adulterated, misbranded, or unapproved for the U.S. market as defined 
in the act.[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. 
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] 

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. 

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

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

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

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

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

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

The Safety of Prescription Drug Imports Is Not Assured: 

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

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

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

Highly Addictive Controlled Substances Are Widely Available via the 
Internet: 

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

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

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

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

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

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

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

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

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

According to our report, CBP field personnel said they did not have the 
resources to seize all the controlled substances they detected. 
Officials said that the seizure process can be time-consuming, taking 
approximately 1 hour for each package containing controlled substances. 
According to CBP officials, when an item is seized, the inspector 
records the contents of each package--including the type of drugs and 
the number of pills or vials in each package. If the substance is a 
schedule I or II controlled substance, it is to be summarily forfeited 
without notice, after seizure. However, if it is a schedule III through 
V controlled substance, CBP officials are to notify the addressee that 
the package was seized[Footnote 19] 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 20] 

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

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

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

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

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

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

The Volume of Imports Can Strain Federal Resources: 

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

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

Internet Pharmacies Challenge Law Enforcement Efforts: 

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

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

In our report, we also note that FDA and DEA officials told us that 
they work with commercial firms, including express carriers, credit 
card organizations, Internet providers, and online businesses to obtain 
information to investigate foreign pharmacies, but these investigations 
are complicated by legal and practical considerations. FDA and DEA 
officials said that the companies have been willing to work with 
government agencies to stop transactions involving prescription drugs 
prohibited from import, and some have alerted federal officials when 
suspicious activity is detected. However, officials also identified 
current legal and practical considerations that complicated obtaining 
information from organizations, such as credit card organizations. For 
example, according to FDA, DEA, and ICE officials, credit card 
organizations[Footnote 24] and banks and other financial 
institutions[Footnote 25] 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 26] 

The Notification Process Challenges Enforcement Efforts: 

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

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

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

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

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

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

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

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

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

Figure 1: Interagency Pharmaceutical Task Force and Working Group 
Goals: 

[See PDF for image] 

[End of figure] 

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

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

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

A Strategic Framework Would Further Enhance Task Force Efforts: 

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

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

GAO Conclusions, Recommendations, and Agency Responses: 

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

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

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

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

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

GAO Contacts and Staff Acknowledgments: 

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

[End of section] 

Related GAO Products: 

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

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

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

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

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

FOOTNOTES 

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

[2] 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. 

[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] 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. 

[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. 

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

[14] 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. 

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

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

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

[18] GAO-04-839T. 

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

[20] 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. 

[21] 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. 

[22] 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 on 
September 1, 2004, refers to single packages, because these detentions 
are almost all personal use quantities. In contrast, CBP seizure data 
for schedules III, IV, and V controlled substances are most likely 
commercial shipments and, therefore, could include multiple packages. 

[23] HHS Task Force on Drug Importation, Report on Prescription Drug 
Importation, Department of Health and Human Services, December 2004. 
The Medicare Prescription Drug, Improvement, and Modernization Act of 
2003 directed the Secretary of Health and Human Services, in 
consultation with appropriate government agencies, to conduct a study 
of the importation of drugs into the United States, including, 
according to the conference report for the legislation, a review of the 
adequacy of federal agency resources to inspect and interdict drugs 
unapproved for import, and submit a report to Congress. Pub. L. No. 108-
173, § 1122, 117 Stat. 2066, 2469 (2003), H.R. Conf. Rep. No. 105- 39, 
at 833-34 (2003). 

[24] 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 do both. In contrast, full-service credit card 
companies, such as American Express and Discover, issue their own 
brands of cards directly to customers and authorize merchants to accept 
those cards. See also GAO, Money Laundering: Extent of Money Laundering 
through Credit Cards Is Unknown, GAO-02-670 (Washington, D.C.: July 22, 
2002), and Internet Gambling: An Overview of the Issues, GAO-03-89 
(Washington, D.C.: December 2, 2002). 

[25] 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. 

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

[27] 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." 

[28] 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.