LegiStorm

What GAO Found

U.S.-funded global health programs have put regulatory and policy requirements in place to help prevent procurement of substandard drugs. USAID, for example, reviews quality assurance information for all drugs before they are procured. Specifically, USAID requires implementing partners to obtain written approval from the agency before purchasing drugs. Through its approval process, USAID determines whether there is sufficient information available to assure that the drug is of acceptable quality. Although USAID’s review process varies for some drugs, the type of information USAID reviews generally includes prior FDA approval of the drug or approval by a comparable stringent regulatory authority, as well as results of prior testing of the drug by an independent laboratory. As an additional quality assurance measure, USAID prequalifies selected wholesalers to procure drugs for U.S.-funded global health programs based on factors such as site visits to the wholesaler’s facility and a review of the wholesaler’s quality assurance practices and procedures. According to CDC officials, CDC requires its implementing partners to follow program-specific quality assurance requirements. For example, CDC’s implementing partners must follow the same requirements as the USAID/PMI program when procuring malaria drugs and as the PEPFAR program when procuring antiretroviral drugs. The Global Fund requires grant recipients to procure antiretroviral, tuberculosis, and malaria drugs that are prequalified by the World Health Organization or authorized by a stringent regulatory authority. When there is only one drug available or no drug meeting these requirements, grant recipients may procure drugs recommended for use by an independent expert review panel convened by the Global Fund.

Procedures for monitoring drug quality in supply chains used by global health programs vary based on the nature of the program and capacity of implementing partners. USAID takes a case-by-case approach to monitoring drug quality by considering factors such as the vulnerability of drugs to deterioration and the capacity of implementing partners to safeguard them. To monitor supply chains, USAID may maintain chain of custody until delivery, or conduct postshipment testing to verify the active ingredients of drugs. To help ensure drug quality, USAID may also provide assistance to implementing partners in host countries, such as technical assistance designed to improve management capacity. Officials told us CDC’s monitoring procedures vary based on the size and complexity of CDC’s agreement with an implementing partner. For example, for agreements covering large or multiple regions, CDC may require quarterly site-level reports on drug usage or on-site reviews of pharmacy records and storage. For smaller agreements, such as those covering a one-time purchase of drugs for a single country, CDC advises implementing partners on drug storage and usage. The Global Fund requires grant recipients to have quality assurance systems in place for procurement, warehousing, product testing, distribution, and monitoring of storage and distribution sites, and to ensure that drugs are randomly tested at different points in the supply chain. The Global Fund’s local agents verify these quality assurance practices before grant funds are disbursed.

A recent USAID initiative aims to increase drug procurement and supply by host governments and local organizations. However, as highlighted in recent reports, reliance on these implementing partners potentially introduces risks related to capacity and corruption. According to USAID global health officials, USAID is taking measures to mitigate theses risks by (1) conducting country assessments to identify risks to drug quality, program outcomes, and financial management and (2) taking steps to develop risk mitigation plans with implementing partners before funding malaria and reproductive health programs.

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