Mr. Chairman, the entry of counterfeit drugs into our drug supply chain poses a grave public health threat. Time and again, we have read stories about patients getting drugs from Internet pharmacies -- or even their doctors or local pharmacies -- that were unsafe or ineffective counterfeits, or that were stolen and not stored properly so they no longer worked.
We have taken legislative steps to address this problem. In 2012, we passed the bipartisan FDA Safety and Innovation Act, or FDASIA. The law requires companies to notify FDA of drug thefts and counterfeit or adulterated drugs that could cause serious harm. It requires manufacturers and importers to register annually with FDA and provide unique facility identifiers so that FDA knows who and where they are. It bans imports of drugs from foreign facilities that delay, deny, or limit FDA inspection. And it enhances criminal penalties for intentionally counterfeiting or adulterating a drug in a way that could cause serious adverse health consequences.
Last year we passed the bipartisan Drug Quality and Security Act. This law gives FDA and industry new tools to deter, discover, and remedy the entry of illegal drugs into the supply chain. However, the legislation was not designed for sophisticated criminal enterprises intent on evading the law. And the most useful of the new tools, an electronic unit-level tracking and tracing system, is not required to be in place until 2023.
I believe more needs to be done. Today, the government has to prove an intent to violate the law before it can win a criminal case.
And even then, the maximum penalty for some violations with potentially life-threatening consequences is only three years. We need a stronger, surer deterrent.
We also need to consider what to do about the fact that so many of our drugs are sourced from abroad. This can create serious drug safety and security issues.
In India, where FDA inspections have tripled since FDASIA, FDA is finding serious lapses in quality. As the New York Times reported recently, even India's top drug regulator concedes that most of the drug facilities supplying the domestic Indian market do not meet FDA standards. This is serious problem because India is the second largest exporter of drugs to the U.S., supplying 40% of our generic and over-the-counter drugs.
In China, the U.S. government had to negotiate for almost a full year just to get visas for the additional inspectors that FDA needs to conduct more frequent and timely inspections. If China is resistant to FDA inspections, it could put much of our drug supply at risk because the crucial ingredients for nearly all antibiotics, steroids, and many other lifesaving drugs are now made exclusively in China.
I look forward to hearing our witnesses today, and thank the Chairman for holding this important hearing. I hope it is a first step towards passing legislation that will effectively deter and punish those who put Americans' health at risk with counterfeit pharmaceuticals.