[Senate Hearing 108-155]
[From the U.S. Government Publishing Office]
AGRICULTURE, RURAL DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR
FISCAL YEAR 2004
----------
THURSDAY, MAY 22, 2003
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 9:40 a.m., in room SD-192, Dirksen
Senate Office Building, Hon. Robert F. Bennett (chairman)
presiding.
Present: Senators Bennett, Cochran, Craig, Kohl, Dorgan,
and Johnson.
DEPARTMENT OF AGRICULTURE
STATEMENT OF ERIC M. BOST, UNDER SECRETARY FOR FOOD,
NUTRITION, AND CONSUMER SERVICES
ACCOMPANIED BY:
ELSA MURANO, UNDER SECRETARY FOR FOOD SAFETY
WILLIAM T. HAWKS, UNDER SECRETARY FOR MARKETING AND REGULATORY
PROGRAMS
Senator Bennett. The subcommittee will come to order. I
apologize to our witnesses and to those who have come to hear
them for the fact that we are a bit late. It reminds me, very
early in my Senate career, we were having a meeting and I said
to my secretary, ``Unless the White House calls, we don't want
to be interrupted.'' And a few minutes later, she came in and
said, ``You are not going to believe this, but the White House
is calling.''
So this morning, we had the President of the United States
speaking to us and that is what caused the delay, and I assure
you, it would require something of that level to cause us not
to be prompt and we apologize to you.
We appreciate very much the witnesses who are coming. This
will be our final budget hearing. We have heard from the other
under secretaries of the Department of Agriculture as well as
from Secretary Veneman and it has been a very interesting
series of hearings, and for me, coming new into this
assignment, very informative, and I am very grateful and expect
we will have the same kind of exchange here this morning.
We do meet against the background of considerable concern,
and I think we ought to use the hearing as a forum for
addressing this concern. It has been on the front page of the
newspapers and in the lead of various television shows, talking
about bovine spongiform encephalopathy. For those that don't
recognize that, and I will refer to it from now on as BSE, that
is what the press has labeled ``mad cow'' disease.
We should understand as we hold this hearing to talk about
the safety of food in the United States that BSE has been
discovered in a single cow in Alberta, Canada. We should
applaud the USDA as well as the Food and Drug Administration
for their diligence in monitoring this situation, and it is
critical that USDA and FDA provide the public with a clear and
consistent message. But I believe that message is being applied
and we need to underscore it here today.
The disease has been detected, it is being monitored, and
the determination of the various agencies involved is to see to
it that the United States is protected from the disease. We
should also understand that the way the animal who had this,
had BSE, was disposed of guarantees that it will not get into
human consumption. There may be some tiny, tiny risk to
animals, but there is no risk whatsoever to human beings as a
result of this situation. That is at least the way it has been
explained to me. If there is any correction that needs to be
made, I would appreciate it if our witnesses would correct it.
But the American consumer takes for granted that her food
is safe. Sometimes they take for granted too much and do not
give appropriate credit to people at the USDA and at FDA who
continually monitor the safety of food and the domestic food
supply. Their work goes unnoticed until some kind of emergency
like this comes along. We should take this occasion, first, to
assure the American people that their food is safe, and second,
to pay tribute to those who monitor the situation 24/7 so that
the American consumer can take it for granted that the food is
safe.
We will spend more time on that in the hearing this
morning. But as the hearing begins, I wanted to make that front
statement so that those who come for the opening of the hearing
and then rush to meet their deadlines will at least take away
the understanding that the discovery of BSE in a single cow in
Alberta, Canada, is not reason for everybody to panic, to give
up hamburgers or whatever else might be on their agenda for
their food consumption.
With that, Senator Craig, we would be happy to have
whatever opening statement you might have.
Senator Craig. Mr. Chairman, I will be brief, but I do
believe it is an opportunity to talk about the issue that you
have opened with this morning and I think it is important that
we visit it. I am pleased to see Dr. Murano here with Food
Safety and that is appropriate that we talk about BSE.
I think it is important to say several things about it
straightaway, and that is that we have been at the business of
monitoring and watching this very, very closely for a long
while. As we have been able to successfully declare our country
clean of this, there is a reason for that, and I think the
Department of Agriculture and USDA can be proud of that fact.
We started a surveillance program in 1990, I believe, and moved
forward and successfully banned when other countries have found
that their herds were infected by it.
One animal in Canada now, destroyed, did not get into the
food chain, and other animals apparently destroyed that were
with or in the same herd.
Now, having said that, it is also important to say that BSE
agent is not found in meat. Let me repeat that. It is not found
in meat. It is found in the central nervous system tissue, such
as brains and spinal cord and others. Those are not
incorporated in hamburger or in a New York strip and it is
important that we constantly repeat that. By the way, I had a
nice piece of filet last night and it was well prepared and I
enjoyed it.
It is not a time for this country to panic. It is a time
for this country to express some concern and to review it, as
you plan to, and for us to review our systems. I have several
questions I want to ask as it relates to the ban that we moved
quickly to do with Canada on products coming in until such time
as determinations are made. That sounds to me like the action
taken appropriately. It is not something that we have dawdled
about. It is something we have been involved in for a long
time.
What I think is important for this committee and for the
record, Mr. Chairman, is that we at least affirm that and move
forward based on what we know so that the American people can
have a degree of confidence in, beyond current levels, their
meat supply. What is important is for them to have a great deal
of confidence in the broad sense that our foods in this country
are safer and better prepared to arrive at the consumer's shelf
than nearly any country in the world, and for that, we ought to
be proud. Thank you.
Senator Bennett. Thank you very much.
Senator Kohl.
Senator Kohl. Thank you, Mr. Chairman, for holding this
propitious hearing this morning. I would like to welcome our
witnesses again to this hearing, which turns out to be of some
considerable importance, and a hearing that the American public
will be very much interested in hearing what you have to say.
I don't plan on making a long opening statement, but
considering the announcement of BSE from Canada just this past
Tuesday, this is clearly an important moment. Three of the most
important Federal agencies regarding this particular issue are
all in the same room together today and each of you play a key
role in keeping our food supply safe and preventing diseases,
such as BSE, from entering our country.
Therefore, I would like to request that each of you address
this issue in your opening statements and use this hearing as a
forum to explain to the American eating public, which, after
all, is everybody in our country, what this announcement means.
Questions like how serious is this issue? What precautions are
being taken? Should we, in fact, really be afraid? I think the
American people need some answers, and this hearing will
provide a unique opportunity for you to address them.
With that, I welcome you again and turn back to our
chairman.
Senator Bennett. Thank you, Senator Kohl.
Senator Johnson.
Senator Johnson. Thank you, Mr. Chairman and Senator Kohl.
I want to welcome Under Secretary Hawks, Under Secretary Bost,
Under Secretary Murano today, as well as FDA Commissioner
McClellan.
We have a lot of timely and important issues to discuss,
including one, implementation of country of origin labeling
with Under Secretary Hawks. Secondly, the recent case of BSE in
Canada, which deals with food safety, Under Secretary Murano,
and FDA's ban on animal parts in ruminant feed with FDA
Commissioner McClellan.
Given the development of new drugs, advanced medical
devices, and other products, I look forward to Commissioner
McClellan's analysis of how these products can be made
available to the public. And finally, the authorization of
child nutrition programs are key.
Let me address just very briefly the country of origin
implementation issue. I know that Under Secretary Hawks has
personally attended a number of the USDA listening sessions and
I hope that USDA keeps an open mind about finding a reasonable
method to, in good faith, implement country of origin labeling,
because as written, the law permits USDA to use a great deal of
discretion to implement labeling and model existing programs--
school lunch, USDA grading system, certified Angus beef system,
and so on, that have proven effective, workable, and
inexpensive.
Nevertheless, very frankly, there is a widely-held belief
that is growing in rural America that the Department of
Agriculture is not about to, in good faith, implement country
of origin labeling and we need to disprove that and to make
this system work, make it work effectively and inexpensively. I
am concerned that some in USDA seem all too willing to create a
new, unnecessary bureaucratic recordkeeping regime so that
labeling will implode under its own weight before it is even
implemented.
Some hard-working public servants in the USDA, especially
in the Ag Marketing Service, are moving ahead in good faith to
implement a common sense country of origin labeling program and
I commend these officials. On the other hand, I am very
disappointed that some seem to be trying to politicize this
effort and to cancel out the progress as we attempt to make
implementation work. I hope these strong anti-labeling forces
will let the real experts, our career officials at AMS, write a
sensible and workable final rule for implementation.
Let me say this about country of origin labeling and BSE.
While country of origin labeling obviously does not prevent
BSE, that is not the issue. The fact that consumers are unable
to differentiate between U.S., Canadian, and beef from other
nations is simply unacceptable. Country of origin labeling is
not a food safety issue directly, but it is a consumer
information issue and it is a consumer confidence issue. I was
pleased that today, the Consumer Federation of America
expressed their strong support for country of origin labeling.
Let me just quickly touch on the FDA feed ban issue. I
worked with Commissioner McClellan about the 1997 rule that
feed mills in the United States prevent the commingling of
animal proteins in ruminant feed. This has been a concern of
mine for some time, largely because contaminated feed consumed
by cattle is what we believe is a key causation for BSE in the
first place.
When I first began to examine the issue in 2001, I met with
Dr. Steven Sundloft, Director of FDA's Center for Veterinary
Medicine, and at our meeting, I learned at that time that 13
percent of the feed mills regulated by FDA did not have systems
in place to prevent the commingling of animal parts and feed.
Furthermore, 15 to 20 percent of the feed mills failed to
properly label feed, ``not approved for use with ruminants,''
as such. Moreover, 80 percent of feed mill inspections were
handled at the State level. FDA was not even doing most of the
inspections.
I believe FDA and the feed industry would agree with me
that we should have improved the compliance rate with this rule
since 2001. In fact, we ought to get 100 percent compliance.
Unfortunately, that goal has not been reached. Consumer groups
indicate that, currently, FDA has only ten of its own
inspectors and still heavily relies on States to do the
majority of the inspections of feed mills and rendering plants.
I hear and I have read reports that as of March 23,
inspections revealed that 14 percent of rendering facilities
handling material prohibited for ruminant feed still did not
have a system to prevent commingling of prohibited and non-
prohibited material. Inspections also revealed that 33 percent
of non-FDA-licensed feed mills had not labeled their products
with the required caution statement about not feeding
prohibited materials to ruminants, and that is unacceptable.
GAO recently issued a report stating that FDA had not acted
promptly to compel firms to comply with the feed ban rule. In
fact, GAO identified some non-compliant companies that have not
been reinspected for 2 or more years and instances where no
enforcement action had been taken.
Today, I call upon FDA to demand 100 percent compliance and
insist that FDA explain the rationale for failing to promptly
compel these feed mills to comply. The FDA needs to clarify how
many feed mills and renderers are complying with the ban and
whether firms are properly labeling prohibited material as
such. Furthermore, FDA needs to explain how they will ensure
universal 100 percent compliance with the ban, and if the
States and/or FDA need further assistance from this committee
and from Congress for that purpose.
I look forward to discussion of the medical device and
child nutrition issues.
Again, I share the comments of my colleague from Idaho that
American consumers can take great confidence in meat products
available to them and their families in this country. We have
the highest quality, safest food in the world, bar none. There
is no cause for panic. There is no cause for excessive concern.
But at the same time, we at the governmental level need to
make sure that that confidence is strengthened and that there
is no justification for a loss of confidence in the quality of
American meat products won by more aggressive action, I
believe, on the part of FDA, but secondly, also by empowering
American consumers to be able to make knowing choices about
whether they are consuming American meat products or not. That
is a very simple, inexpensive, easily done effort and I think
that we can get there.
I look forward to this hearing today and the insights
shared with us by this very distinguished panel, Mr. Chairman.
Senator Bennett. Thank you. Senator Dorgan.
Senator Dorgan. Mr. Chairman, thank you very much. I am
going to have to go to the Commerce Committee, but I want to
come back because I want to visit with the FDA. I believe that
is the second panel.
Senator Bennett. Yes, and we have asked the FDA
Commissioner to be in the audience during the first panel
because I think the combination of FDA and USDA in the present
atmosphere is important. While it is an imposition on his time,
I want him to hear the first testimony so that he can respond
during the second panel.
Senator Dorgan. I think that is an excellent idea and I
regret I can't be here during all of it, but we have a hearing
I have to be at over at Commerce, so I will be coming back.
But I wanted to mention just one quick point on something I
believe Senator Craig has said earlier, and I just heard my
colleague from South Dakota say, about our food supply, about
mad cow disease. Let me just say that what I heard in the last
couple of days about this angers me for one reason. The head
was cut off a slaughtered cow in January and we learn in the
month of May that that cow had mad cow disease. Four months is
an unforgivable amount of time.
I don't know the consequences of all of this, but in this
country, we have taken great steps. We made 20,000 tests,
examinations, pathologies last year in this country to make
sure that we have a safe supply of meat. Nine hundred such
examinations were made in Canada last year. I am not suggesting
the Canadian meat supply is unsafe, but I am saying that if
there is a cow that in January is killed that has mad cow
disease, then our country and the Canadians and consumers and
the beef industry ought not know about it 4 months later. They
ought to know about it 4 or 5 days later.
There are only a couple of explanations for this. One, they
knew about it earlier but didn't tell anybody. I doubt whether
that is the case. I think that is not the case. It looks like
the Canadians thought the cow had pneumonia and they either put
the cow's head in a freezer or in some solution. Several months
later, somebody drug it out and said, let us take a look at it,
tested it, and then sent it off to Britain or to England for
more testing.
I think that is gross incompetence. We need to make certain
that if there are ever questions about this, that there is
testing and it is done aggressively and routinely and we get
answers quickly and take actions immediately.
I just got off the phone with the Agriculture Secretary,
Ann Veneman, and I told her that yesterday I complimented her.
She took exactly the right action. She was decisive and quick.
We get a million head of cattle a year from Canada, a billion
pounds of beef a year into this country from Canada. She shut
it down right now, because at this point, we don't know all of
the circumstances. And so I appreciate what she has done. She
sent people to Canada immediately to be involved in this, and
let us hope that this is one single isolated instance. Let us
hope never again will we find that, in Canada or anywhere else,
there is a case of mad cow disease that no one knows about for
4 months. That is unforgivable.
So that is another side of this issue that I don't think my
colleague mentioned, but I certainly agree with all of his
comments. I did not hear all of Senator Craig's comments, but I
think I agree with what I heard he said and I think this timing
issue is just critical.
Senator Craig. I assure you, you always do agree with me,
Byron.
Senator Dorgan. Well, almost always, especially when we are
talking about beef.
Senator Craig. You have got it.
Senator Dorgan. When we get too far afield of beef, it is
not always the case.
But Mr. Chairman, thank you very much for giving me the
time.
Senator Bennett. Thank you.
We will now go to our witnesses. We will hear first from
Eric Bost, the Under Secretary for Food, Nutrition, and
Consumer Services, followed by Elsa Murano, Under Secretary for
Food Safety, followed by William Hawks, Under Secretary for
Marketing and Regulatory Programs.
Thank you again for being here and for your service. Mr.
Bost.
OPENING STATEMENT OF ERIC M. BOST
Mr. Bost. Good morning, Mr. Chairman, members of the
subcommittee. Thank you for this opportunity to present the
Food, Nutrition, and Consumer Services budget request for
fiscal year 2004. I have two of my staff members with me,
Suzanne Biermann, who is Deputy Under Secretary, and also
George Braley, who is the Associate Administrator for the Food
and Nutrition Service.
You have my written testimony, so I will try to be brief in
terms of hitting some of the really important issues that I
would like to talk about.
The President's budget for fiscal year 2004 requests $44.2
billion in new budget authority for the Department's nutrition
programs. The budget is a clear reflection of the
Administration's commitment to the nutrition safety net and to
the associated activities President Bush expects us to achieve.
The budget is constructed for results and the expectations are
very clear. One, ensure access for eligible persons to these
critical programs. Two, improve performance and program
integrity. Three, address nutritional issues related to the
problem of overweight and obesity in this country.
Let us talk about ensuring access, more specifically, the
Food Stamp Program. The Food Stamp Program request of $27.7
billion will serve an average of 21.6 million persons each
month, including restoration of eligibility to many legal
immigrants as provided for in last year's Farm Bill. The
Administration's budget continues the $2 billion reserve
appropriated last year.
The Child Nutrition Program's request of $11.4 billion
supports an increase in school lunch participation from 28
million children to over 29 million children and supports an
increase in school breakfast participation of over one million
children, from 8 million, which we are averaging this year, to
about 9 million.
The President's budget proposes $4.8 billion for the WIC
Program to provide food, nutrition, and education and a link to
health care to a monthly average of 7.8 million needy women and
their children, a very clear sign of the President's commitment
as he increased funding the second year in a row for this very
critical program. The request also provides for a $150 million
contingency fund, which we believe is unprecedented.
One of the issues that is very important to the Secretary
and I is to ensure program integrity in our programs. In terms
of food stamps, funding to maintain our level of effort to
reduce errors in the Food Stamp Program is also included in the
President's proposal. The payment accuracy rate for the Food
Stamp Program for fiscal year 2001 was 91.34, the best ever
accuracy rate in the history of the Food Stamp Program. We will
continue to work with our State partners to improve that.
In terms of the WIC Program, the President's request
provides for $30 million to support the enhancement and
modernization of the WIC State Information Systems that will
improve the management of this program, which I believe is long
overdue. The President's request also provides for improving
the eligibility determination system for the National School
Lunch Program.
One of the major issues we face in terms of nutrition in
this country is the issue of the number of Americans who are
overweight and obese. Sixty-two percent of all Americans in
this country are overweight, a significant increase over the
course of the last several years. As a part of the President's
HealthierUS Initiative, nutrition assistance programs play a
critical role in promoting good health and preventing diet-
related diseases.
As a part of the President's budget, this priority is
clear. Some of the things we are interested in doing include:
supporting breastfeeding promotion efforts and other activities
in WIC; providing peer counseling and demonstration projects to
evaluate how the program can be more efficiently used to combat
obesity among our children; expanding the successful ``Eat
Smart and Play Hard'' campaign to other nutrition programs;
developing an integrated family-oriented approach to nutrition
education that allows the Department to partner with multiple
Federal agencies; promoting nutrition to all Americans,
including resources to update and promote the Food Guide
Pyramid; and one of our most popular programs, funding for both
the WIC and Senior Farmers' Market Nutrition Programs.
In conclusion, the President's direction has been very
clear. The Administration's request has priorities to ensure
access, maintain and improve integrity, and support efforts to
address a public health threat of overweight and obesity. And
given that we have spent a lot of time this morning talking
about it, we truly believe we have one of the safest food
programs in the entire world in terms of the foods that we
provide to approximately 27 million children every day, as a
part of the National School Lunch Program. Also, I would like
to note, too, that there is a concerted, coordinated effort
among all three of us to ensure that occurs on a daily basis.
prepared statements
Thank you for your time and attention and I would be happy
to answer any questions that you may have.
Senator Bennett. Thank you very much.
Mr. Bost. Thank you, Mr. Chairman.
[The statements follow:]
Prepared Statement of Eric M. Bost
Thank you, Mr. Chairman, and members of the Subcommittee for
allowing me this opportunity to present our budget request for fiscal
year 2004.
With your permission I would also like to introduce three members
of the FNCS team accompanying me today. Suzanne Biermann, the Deputy
Under Secretary for Food, Nutrition, and Consumer Services, Roberto
Salazar, Administrator of the Food and Nutrition Service, and Dr. Eric
Hentges, the Executive Director of the Center for Nutrition Policy and
Promotion.
The President's Budget for fiscal year 2004 requests $44.2 billion
in new budget authority, reflecting the Administration's commitment to
the nutrition safety net that protects the Nation's children and low-
income households from hunger and malnutrition and motivates them to
make smart food choices and engage in physical activity to promote
their health and well-being. The purposes to which we will put this
substantial commitment are clearly defined and tightly focused on the
achievement of three critical outcomes. First, we intend to do our part
to address both within nutrition assistance programs and, through the
Center on Nutrition and Policy Promotion, in the general population,
the growing public health threat of obesity. Secondly, we seek not just
to maintain, but to improve the access of eligible persons to our
programs. Finally, we will continue our pursuit of improved performance
and program integrity.
COMBATING OBESITY
The choices that consumers make related to their diet and physical
activity have a major impact on their health. Poor diets and sedentary
lifestyles cost this Nation dearly in medical costs, in lost
productivity, and most sadly, in the premature deaths of over 300,000
citizens annually. We are committed to do our part, within the larger
framework of President Bush's HealthierUS initiative, to combat this
epidemic. Nutrition assistance programs play a critical role in
fostering good health and preventing diet-related health problems by
ensuring access to nutritious food to those who need it, and by
promoting better diets and physical activity through nutrition
education to program participants.
This budget request reflects this priority. We have requested $25
million for peer counseling to enhance our breastfeeding promotion
efforts in the WIC Program and demonstration projects to evaluate how
WIC can be used to combat obesity among our children. We are also
seeking to expand our very successful Eat Smart. Play Hard. campaign to
other FNS programs beginning with WIC and Food Stamps. Finally, we are
seeking resources to develop an integrated, family-oriented approach to
nutrition education that cuts across all our programs. These activities
allow the Department to partner with other Federal agencies as we work
across Departments to meet the President's challenges for a
HealthierUS.
The need to improve diets to fight overweight and obesity extends
to the general public as well. Our request also supports USDA's Center
for Nutrition Policy and Promotion, which works with the Department of
Health and Human Services and other agencies to promote good nutrition
to all Americans. Within this budget request are resources to update
and promote the Food Guide Pyramid, one of the foremost nutrition
education tools in the Nation, to develop the next revision of the
Dietary Guidelines for Americans and to support obesity prevention
efforts for the general public as part of the President's HealthierUS
initiative.
ENSURING PROGRAM ACCESS
Ensuring access to the nutrition assistance programs is a top
priority of this Administration. Our commitment is to ensure that every
eligible person has access to the benefits they need. The Department's
new Strategic Plan includes strategies to improve access to a number of
underutilized programs and to pursue education and outreach efforts to
make eligible people aware of nutrition assistance. At the most basic
level, we have consistently designed the budget to ensure that the
Programs are adequately funded to meet the demand for services. This
includes proposing record funding levels over the past 2 years for the
WIC Program and reinforcing that funding with a contingency fund. A
similar reserve in the Food Stamp Program prevented any disruption in
the flow of benefits to 19.8 million food stamp recipients last
September when program needs exceeded the base appropriation. We are
requesting the continuation of the Food Stamp reserve in fiscal year
2004.
As is clear in this budget request, we are committed to access as a
key principle in our effort to improve the design and administration of
the nutrition assistance programs.
STRENGTHENING INTEGRITY AND PROGRAM MANAGEMENT
We are ever conscious of our responsibility to protect the American
taxpayer's investment in the nutrition safety net. To maintain the
public's trust, we are committed to the sound stewardship of those
resources. This budget funds efforts to improve program management and
integrity both at the Federal level and by our State partners. Also
included is funding to maintain our level of effort to reduce errors in
the Food Stamp Program. Our payment accuracy rate for fiscal year 2001,
the most recent year with data available, was 91.34 percent. This is
the best payment accuracy rate that the Food Stamp Program has ever
experienced. We will continue our efforts and work with State partners
to reduce errors even further.
We are proposing targeted investment in new efforts to enhance
program management and stewardship. For example, in the WIC Program,
the President's request provides $30 million to support the enhancement
and modernization of the State-level information systems that have
become so important to proper management of the Program. This kind of
improvement is essential to strengthening program management,
maintaining a high level of program integrity and, to the extent
possible, preventing errors and other problems before they occur.
In the remainder of my remarks, I would like to highlight a few key
components of our request.
FOOD STAMP PROGRAM
The President's budget requests $27.7 billion for the Food Stamp
Program, enough to serve an average of 21.6 million people each month.
The request includes sufficient funds to support the changes enacted in
last year's Farm Bill including the restoration of eligibility to many
legal immigrants. Included in this amount, we also propose to continue
the $2 billion benefit reserve. The importance of this reserve is
especially critical in fiscal year 2004. While we anticipate a return
to strong economic growth, predicting the turning point of program
participation is challenging. The proposed contingency reserve will
ensure the availability of benefits for eligible households should
participation or food costs exceed current estimates.
CHILD NUTRITION PROGRAMS
The budget requests $11.4 billion for the Child Nutrition Programs,
which provide millions of nutritious meals to children in schools and
in child care settings every day. This level of funding will support an
increase in daily School Lunch Program participation from the current
28 million children to over 29 million children. This funding request
also supports an increase in daily School Breakfast Program
participation from the current 8 million to over 9 million children.
Requested increases in these programs also reflect rising school
enrollment, increases in payment rates to cover inflation, and higher
levels of meal service among children in the free and reduced price
categories.
WIC
The President's budget includes $4.8 billion for the Special
Supplemental Nutrition Program for Women, Infants and Children, the WIC
Program. This year's request will allow local communities to provide
food, nutrition education, and a link to health care to a monthly
average of 7.8 million needy women, infants and children during fiscal
year 2004. The request provides for a contingency fund of $150 million.
These resources can be used as needed if food costs or participation
exceed current estimates.
COMMODITY SUPPLEMENTAL FOOD PROGRAM (CSFP)
The budget requests $95.0 million for CSFP, which serves elderly
people and women with infants and young children. The funds requested
plus anticipated carry-over from fiscal year 2003, surplus donations
and commodities currently in inventory will be sufficient to maintain
this program in States that currently participate and those that join
the program in fiscal year 2003.
THE EMERGENCY FOOD ASSISTANCE PROGRAM (TEFAP)
As provided for in the Farm Bill, the budget requests $140 million
for food in this important program. Our request for States' storage and
distribution costs, a critical form of support for our Nation's food
banks, is $50 million. Secretary Veneman has committed to ensuring the
continuing flow of surplus commodities to TEFAP. Such donations
significantly increase the amount of commodities that are available to
the food bank community from Federal sources.
NUTRITION PROGRAMS ADMINISTRATION (NPA)
We are requesting $144.8 million in this account, which includes an
increase of $8 million and 13 staff years in our administrative budget.
This increase supports the child nutrition program integrity initiative
described earlier, as well as a number of initiatives under the Center
for Nutrition Policy and Promotion designed to combat obesity and
improve the dietary quality of all Americans. Our total request for
Federal administrative resources represents only about 0.5 percent of
the program resources for which we have responsibility and sustains the
program management and support activities of our roughly 1,700
employees nationwide. I believe that we need these modest increases in
funding in order to maintain accountability for our $44 billion
portfolio and to assist States to effectively manage the programs and
provide access to all eligible people.
CHILD NUTRITION ACT REAUTHORIZATION
As I stated in my testimony before this Committee last year, I
personally feel very fortunate to have the opportunity to participate
in the reauthorization of important programs such as the school
breakfast and lunch programs, the WIC Program, and the summer feeding
program. Congress and the Administration face a range of important
challenges in this reauthorization cycle. Among these is combating
obesity among our youth, ensuring access to our programs, improving the
nutritional content of meals, and enhancing program integrity and
administration.
Toward meeting these challenges, the Administration has established
a set of principles to guide the reauthorization process. Key among
these are:
--Ensuring that all eligible children have access to program
benefits--including streamlining the administration of programs
to minimize burdens and increase meal reimbursements to provide
support for quality program meals.
--Supporting healthy school environments--providing financial
incentives to schools that promote good nutrition, including
serving meals that meet the dietary guidelines, offer healthy-
choice alternatives, and provide nutrition education.
--Strengthening program integrity--the budget also makes clear that
if there are any savings resulting from integrity initiatives
these funds would be reinvested into the Program to ensure the
best outcomes for those in need.
In sum, our request sets the right priorities to ensure access to
the Federal nutrition assistance programs for the children and low-
income people who need them, while maintaining and improving their
integrity and supporting our efforts to address the growing public
health threat of obesity. Thank you for your attention; I would be
happy to answer any questions you may have.
______
Prepared Statement of Roberto Salazar, Administrator, Food and
Nutrition Service
Thank you, Mr. Chairman, and members of the Subcommittee for
allowing me this opportunity to present the budget request for the Food
and Nutrition Service for fiscal year 2004.
The mission of the Food and Nutrition Service is to increase food
security and reduce hunger together with cooperating organizations by
providing children and low-income people access to food and nutrition
education in a manner that inspires public confidence and supports
American agriculture. We are requesting a total of $44.2 billion to
fulfill this mission through the Federal nutrition assistance programs.
As the Under Secretary noted, the request for FNCS focuses on the
accomplishment of three critical outcomes:
--To address the emerging epidemic of obesity, especially among
America's youth, by improving our programs' ability to support
healthy eating and physical activity, including better
integration of nutrition education into Federal nutrition
assistance.
--To improve access to these programs, to ensure that all those
eligible are able to participate.
--To enhance performance and integrity in the programs, to strengthen
their operation and maximize their ability to serve eligible
children and low-income people while safeguarding the
taxpayer's investment in nutrition assistance. I'd like to
offer you some details from our request that provide the link
between the investments we intend to make and these important
goals.
COMBATING OBESITY
The budget request includes funding to promote healthy eating and
physical activity to prevent nutrition related illnesses in America.
These are core objectives of the nutrition assistance programs, as they
represent a unique opportunity to reach populations that experience a
disproportionate share of diet-related problems and risk factors
including overweight and obesity.
FNS is working on a number of fronts to harness the power of the
nutrition assistance programs to combat obesity, such as:
--As part of the President's HealthierUS initiative, we are pursuing
a vigorous nutrition promotion campaign, Eat Smart. Play Hard.
The campaign is designed to motivate healthy eating and more
physical activity;
--We are working to improve the nutritional content of school meals,
food packages and other benefits to ensure that they continue
to contribute to a healthful diet;
--We are expanding and improving program-based nutrition education,
such as Team Nutrition, and other nutrition services to improve
healthy eating skills of participants;
--We have made significant improvements in the nutritional quality of
school meals, lowering the percentage of calories from fat and
saturated fat as well as reducing levels of sodium and
cholesterol; and
--We are enhancing our support of breastfeeding, a proven strategy to
reduce the early incidence of obesity, through peer counseling
and exploring other ways in which WIC can assist in the battle
against childhood obesity.
In addition, FNS and the Center on Nutrition Policy and Promotion
are working in partnership with other USDA agencies, the National
Cancer Institute and the Centers for Disease Control and Prevention, to
increase the consumption of fruits and vegetables to 5 to 9 servings
per day for a healthier eating pattern.
ENSURING PROGRAM ACCESS
The budget request includes funding to support initiatives to
ensure access for low-income individuals who are eligible to
participate in our programs. While the Food Stamp Program reaches tens
of millions of low-income Americans every month, many others who are
eligible for benefits, including many seniors and the working poor, do
not participate. To better reach these eligible nonparticipants, we
have launched a major new public information campaign, ``Food Stamps
Make America Stronger'', awarded grants to 33 local and state
organizations over the last 2 years to assist the working poor,
elderly, legal immigrants, and other low-income families and
individuals, and are prepared to award another $5 million in grants
this year to help States improve the food stamp application process as
authorized by the Farm Bill.
To meet our commitment to improve access for all who are eligible,
we must work closely with our program partners--individuals and
organizations in communities across America who deliver the nutrition
assistance programs, and work to make them accessible and effective.
Faith-based organizations have long played an important role in raising
community awareness about program services, assisting individuals who
apply for benefits, and delivering benefits. President Bush has made
working with the faith-based community an Administration priority, and
we intend to continue efforts to reach out to that community in fiscal
year 2004.
STRENGTHENING INTEGRITY AND PROGRAM MANAGEMENT
We are requesting additional funding in the President's budget to
strengthen integrity and program management both at the Federal and
State levels. In the Food Stamp Program, FNS administers a quality
control system that encourages payment accuracy by establishing fiscal
liabilities and incentives based on State performance in benefit
determinations. In fiscal year 2001, the rate of overissuance was 6.47
percent ($1 billion) and the rate of underissuance was 2.19 percent
($340 million) for a combined payment error rate of 8.66 percent, the
lowest in the history of the program. We expect performance to have
improved in fiscal year 2002. But continued vigilance will be needed to
sustain and to continue to improve on this record. One factor as we
continue our commitment to performance is that food stamp caseloads in
virtually every State are rising, while at the same time many States
face significant budget deficits.
Another focus of our integrity efforts is improving the accuracy of
certifications for free and reduced price school meals. As you know,
FNS has been analyzing this problem for a number of years; while we do
not have a measure of its full extent, the indications are clear that
the problem is real, and may have worsened in recent years.
Inaccurate certifications represent a risk that free and reduced
price meals could be provided to ineligible participants. Furthermore,
certifications are used to distribute billions in Federal, State, and
local education aid; errors can undermine targeting of aid to those
most in need.
USDA has been working for a number of years to collect additional
information to learn more about the problem, and to identify potential
solutions. Current efforts include pilot-tests of alternative free and
reduced-price eligibility determination systems, administrative reviews
of the current verification process in a number of school districts,
and a study to assess the eligibility status of families selected for
income verification.
The President's Budget proposes to improve the accuracy of
eligibility decisions and to reinvest any savings from improved payment
accuracy in ways that strengthen the program, ensure the access of all
eligible children and improve the nutritional quality of meals. We have
had a continuing dialogue with the Congress, the school food service
community and program advocates trying to find a solution to this
problem that does not deter eligible children from participation in the
program and does not impose undue burdens on local program
administrations. This will be an issue in the upcoming reauthorization
of the Child Nutrition Programs. In the meantime, we will soon be
issuing a final regulation that will require local agencies to report
certification verification results to State agencies. The States, in
turn, will use this information and meal data to target technical
assistance activities to school food authorities with the highest
levels of verification errors.
FNS is addressing Child and Adult Care Food Program (CACFP)
management weaknesses identified by Federal and State reviews and in
OIG audits. A regulatory proposal published in September 2000, proposed
changes to State and local monitoring and training requirements. An
interim rule that implemented statutory changes to the CACFP was
published in June 2002, and training on the rule was provided to State
and Federal CACFP staff during the fall of 2002. A second interim rule
will be published during the summer of 2003 to implement the remaining
provisions.
Now, I would like to review some of the components of our request
that relate to these outcomes under each program area.
FOOD STAMP PROGRAM
We are requesting $27.7 billion for the Food Stamp Program,
including a $2 billion benefit reserve as appropriated in fiscal year
2003. This proposed reserve would be available for eligible households
in case participation exceeds current estimates. Participation is
estimated to increase by 871,000 to a level of 21.6 million
participants in fiscal year 2004. This level of funding will also
support approximately 200,000 new recipients covered under the 2002
Farm Bill changes to eligibility requirements for legal immigrants and
other individuals.
CHILD NUTRITION PROGRAMS
For these programs, we are requesting a total of $11.4 billion. The
budget request will support the daily participation of over 29 million
children in the School Lunch Program and over 9 million children a day
in the School Breakfast Program. The cost of snacks served under the
after school National School Lunch Program is also included in this
request. We estimated 41 million meals above the fiscal year 2003
estimate in the Child and Adult Care Food Program. The request also
includes additional funding to support increases in school enrollment,
increases in payment rates to cover inflation, a higher proportion of
meals served to children in the free and reduced price categories and
to support efforts to improve integrity.
SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS AND CHILDREN
(WIC)
The President's request of $4.8 billion will enable us to provide
benefits to a monthly average of 7.8 million needy women, infants and
children during fiscal year 2004. This is a record-level request that
shows the Administration's commitment to this effective and critical
program for mothers and their young children. We believe this funding
will provide benefits and services to all who are eligible and wish to
participate. In October of 2002, WIC participation reached a record
high of over 7.66 million participants. Since then, participation has
fallen, consistent with historical trends toward lower participation in
the winter months than during the rest of the year. We expect program
demand to grow throughout the spring and summer. This request supports
a $150 million contingency fund to allow WIC to serve all eligible
persons seeking benefits should funding be insufficient for any reason.
THE EMERGENCY FOOD ASSISTANCE PROGRAM (TEFAP)
We are requesting $140 million, as provided for in the Farm Bill,
to purchase commodities for this program. Our funding of States and
local agencies costs associated with the distribution of commodities is
a vitally important part of our support of the TEFAP community and we
are requesting $50 million for this purpose. As Under Secretary Bost
has noted in his testimony, Secretary Veneman has committed the
Department to a continuing flow of surplus commodities to TEFAP at
levels comparable to recent years. These surplus commodities are an
essential resource to the food banks and significantly enhance their
ability to serve the needy in their communities.
NUTRITION PROGRAMS ADMINISTRATION
Our Nutrition Programs Administration (NPA) request for fiscal year
2004 is $144.8 million, an increase of approximately $8 million over
the fiscal year 2003 enacted level. We are requesting approximately
$2.9 million for pay cost increases and $1 million to fund 13
additional staff years to enhance program integrity in the Child
Nutrition Programs. The request also includes an increase of $4.0
million to enable us to expand our initiatives to combat obesity,
reduce diet-related disease among all Americans, and support the
President's HealthierUS intiative. The Center for Nutrition Policy and
Promotion, also included in this budget request, will continue the
process of updating the Food Guide Pyramid, one of the Nation's most
important nutrition education tools; updating the Interactive Healthy
Eating Index; working jointly with the Department of Health and Human
Services on the updated Dietary Guidelines for Americans; and begin
development of an obesity prevention campaign. As noted by Under
Secretary Bost, FNS will be expanding its very effective Eat Smart.
Play Hard. campaign to WIC, Food Stamp and possibly other nutrition
assistance programs. The agency will also initiate development of
family-oriented, nutrition education messages that are useful and
relevant across the full range of our programs.
Thank you for the opportunity to present this written testimony.
Senator Bennett. Dr. Murano.
STATEMENT OF ELSA MURANO
Dr. Murano. Good morning, Mr. Chairman, members of the
subcommittee. We have the safest food supply in the world, and
I say that with all confidence because I know when one looks at
the rates of illness per 100,000 people in a population in any
country, we do have the lowest. So I am very proud to say that
unequivocally here.
The safety of our food supply, as you have all stated, is
one of the most important issues that we face. The public
expects its food to be safe, and as a public health official, I
take very seriously my job to meet that expectation. I came to
Washington to do that job.
Providing consumers with a safe food supply is an ongoing
challenge, however. On the one hand, we must rapidly respond to
day-to-day events, such as product recalls, outbreaks of
foodborne illness, and reports of potential food safety
hazards, like we have this week. On the other hand, we must
have a solid food safety infrastructure, strong policies in
place, and the appropriate expertise available to handle these
day-to-day events. These cannot be developed in days, weeks, or
even months. They require long-term efforts and resources. In
other words, it is not enough to say that we are doing
everything we can to protect the public health. We must be able
to back up such statements with concrete actions.
So let me use BSE as an example. Our efforts to guard
against BSE in the United States began in 1989, as you know,
when FSIS, in cooperation with other government agencies that
are appearing before you today, APHIS and FDA, took a series of
preventive actions to protect against this animal disease,
which can potentially have human health implications. Mr.
Hawks, I am sure, will mention some of these, and certainly Mr.
Johnson has mentioned the ban on the use of ruminant materials
in animal feed, and also the ban on the import of animals from
countries that are known to have BSE.
In addition, FSIS is finalizing a rule to ban the use of
air-injected stunning and has also implemented a rigorous
process verification program of beef that is produced by
advanced meat recovery systems to ensure that high-risk
materials are absent from our beef supply.
So in the same manner, while outbreaks of foodborne illness
continue to occur, we have made significant improvements to our
food safety programs to minimize their occurrence and their
effects. For example, we are now using epidemiological evidence
to link cases of foodborne illness to specific products that we
regulate. This means that an outbreak can be traced to its
source more quickly, potentially reducing the number of
illnesses.
In March of 2003, the Centers for Disease Control and
Prevention reported that the rate of foodborne illness across
the board is down 16 percent over the last few years, and this
is good news, indeed.
The behind-the-scenes work that FSIS carries out is
detailed in my statement for the record, but let me just point
out a few highlights of our accomplishments this last year and
a half. We have introduced more highly skilled scientific
experts into our workforce, including consumer safety officers
and Public Health Service commissioned officers, and we have
taken the first steps towards revitalizing our training and
education programs to better prepare our inspectors, and our
employees, to function in a public health agency, which is what
FSIS is.
Recognizing that E. coli O157:H7 is more prevalent than
previously thought, we directed establishments to reassess
their HACCP plans for this pathogen, and we are verifying that
these reassessments have taken place.
We completed our risk assessment on Listeria monocytogenes
and issued a directive stating that FSIS would intensify its
testing program for this pathogen in instances where plants
either don't have adequate controls or have these controls but
don't share their data with us.
To improve the security of the food supply, we hired 20 new
import surveillance officers. We assessed vulnerabilities from
farm to table, developed and distributed guidelines to industry
on plant security, and have done many, many other functions
that I will be happy to visit with you about.
We are carrying out our reorganization of the Food Safety
and Inspection Service to better prepare the agency to meet its
public health goals. This includes a new internal review
office. It is our own quality control office, if you will, so
that we don't wait for OIG reports or GAO reports to tell us
where our vulnerabilities or weaknesses may be.
And last but not least, to take our food safety message
directly to the people who need it, we are sending our new USDA
Food Safety Mobile to strategic locations throughout the
country.
PREPARED STATEMENTS
Mr. Chairman, in the interest of time, I will not go on and
tell you the specifics of our budget request. I think you have
them before you. So I will close my comments and pledge to you
that we continue to do everything that we can to show the
public that they do have a safe food supply and that they can
rely on that fact, and so with that, I will yield to Mr. Hawks.
Senator Bennett. Thank you very much.
[The statements follow:]
Prepared Statement of Dr. Elsa Murano
Mr. Chairman and Members of the Subcommittee, I am pleased to
appear before you today to discuss the fiscal year 2004 budget for food
safety within the Department of Agriculture (USDA). I am Dr. Elsa
Murano, Under Secretary for Food Safety. With me today are Dr. Merle D.
Pierson, Deputy Under Secretary for Food Safety; Dr. Garry McKee,
Administrator of the Food Safety and Inspection Service (FSIS); and Ms.
Linda Swacina, Associate Administrator.
The safety of our food supply is one of the most important issues
we face not only at USDA, but as a nation: there is nothing more
personal or vital to all of us than the food we provide to our
families. President Bush's budget for fiscal year 2004 includes record-
level support for USDA's food safety programs and their basic mission
of providing continuous food safety inspection in each meat, poultry,
and egg products establishment in the country. The additional $42
million requested for FSIS will be used to fund several important
initiatives that I would like to review with you in a moment.
Before I cover those initiatives that will be implemented from the
additional $42 million requested for FSIS, I want to discuss what has
happened in the past year, our progress on the five goals to improve
food safety, our efforts to improve international food safety, and our
plans for the future.
What Has Happened During the Past Year
We have the best food production and processing systems in the
world, providing consumers with the most abundant and safest food
supply. However, last year was a testament that maintaining the safety
of our food is an ongoing challenge. We faced two major recalls, one
caused by Listeria monocytogenes, another caused by E. coli O157:H7.
We take our public health mission very seriously, and we will do
what is necessary to accomplish that mission. According to the Centers
for Disease Control and Prevention (CDC), over the past decade, there
has been a major Listeriosis outbreak associated with ready-to-eat
products in the United States every 2 to 4 years. In addition, E. coli
O157:H7 outbreaks due to consumption of undercooked hamburgers are
almost an annual occurrence.
Despite these challenges, we have made significant improvements to
our food safety program. We believe that the Pathogen Reduction/Hazard
Analysis and Critical Control Point (PR/HACCP) rule in 1996 has made
food safer. In May 2002, the CDC reported that the rate of foodborne
illnesses, across the board, is down 21 percent.
We have also made great strides in improving the technical and
scientific knowledge of our inspection force. With the introduction of
the Consumer Safety Officer corps we have introduced highly-skilled,
scientific experts into the field to reinforce our veterinarians and
front-line inspectors. We are driven by the fact that the enormity of
our responsibility cries out for a science-based system and we continue
to incorporate state-of-the-art science into the inspection process at
every opportunity.
Those strides are great, but we need to address how we are going to
protect public health further. Throughout my career as a researcher, I
have become keenly aware of the importance of sound scientific studies
and how these can help provide us with the critical information and
practical application of science we need to make decisions that will
truly reduce the risk of foodborne illness. I have also observed the
need for a proactive approach, one that does not simply react to food
safety crises, but rather anticipates risks and prepares to mitigate
their potential for harm. We need to improve across the board in
everything we do including our public education campaigns; laboratory
testing; inspector training; and in-plant inspection.
The Five Goals To Improve Food Safety
I want to review some of the achievements we have made in improving
food safety. Last year when I testified before this Committee, I
outlined to you five goals that I intended to pursue in the coming year
to ensure that we are proactive in protecting public health. We have
pursued these goals with vigor, and we continue to do so. I am proud to
report that much has been accomplished over the last year in our
pursuit of these goals to ensure the safety of the nation's food
supply.
Before I cover our accomplishments under each of the five goals, I
would like to review them quickly. They are:
--Ensure that policy decisions are based on science;
--Improve the management and effectiveness of FSIS programs;
--Improve coordination of food safety activities with other public
health agencies;
--Protect meat, poultry, and egg products against intentional harm;
and
--Enhance public education efforts.
Goal #1: Ensure that Policy Decisions are Based on Science
My first goal is to ensure that policy decisions are based on
science. As I mentioned earlier, employing science is the only way we
are going to break the cycle of foodborne illness. My background as a
researcher in food safety has shown me the importance of utilizing
science in formulating regulatory policy.
If we take a look at two of the pathogens that have recently been
on our radar screen--E. coli O157:H7 and Listeria monocytogenes--then
we see that these organisms are representative of the universe of
microbial hazards that pose the biggest threat to the safety of our
food supply.
The first one, E. coli O157:H7, comes to us through live animals
that may have the organism on their bodies or in their intestinal
tracts. Thus, its control hinges on minimizing its presence in the
intestinal tract of food animals and in preventing its contents from
reaching raw products derived from these animals.
The second pathogen, Listeria monocytogenes, is an environmental
pathogen carried by personnel, equipment and water, which can spread
the pathogen when they contact food. Thus, its control hinges on
finding where it might be harbored in the environment of the food
processing plant and eliminating it so as to prevent contamination of
food-contact surfaces.
Risk assessments help give us a picture of the pervasiveness of
these organisms. Risk assessments are scientifically-based processes of
estimating the likelihood of exposure to a hazard and the resulting
public health impact. They provide a solid foundation from which we
base policies on science.
The benefits of using them can be seen in our initiatives on E.
coli O157:H7 and Listeria monocytogenes last year. We learned from our
risk assessment on E. coli O157:H7 that the pathogen was not the
proverbial needle in a haystack we once believed. On the contrary, it
was much more prevalent than previously thought, which meant that we
had to take a hard, new look at our strategies to address its
occurrence. Not all establishments were implementing HACCP systems that
were effective for controlling E. coli O157:H7. Others were not
correctly validating the interventions used to control the pathogen. We
realized that simply focusing on grinding operations was not effective;
therefore, in order to be efficient, we also needed to focus on the
production process, the slaughter process, and trimmings as
contributors to the problem.
In November, we issued a directive to our inspectors to make sure
that establishments producing ready-to-eat meat and poultry products
are preventing Listeria monocytogenes contamination. This directive was
absolutely necessary given the gravity of the Northeastern Listeriosis
outbreak in the fall. Furthermore, we recently completed a draft risk
assessment on Listeria, which evaluates the factors that may contribute
to the overall risk to public health. The information developed during
the risk assessment process is critical to exploring a variety of risk
management scenarios and we plan to examine different combinations of
testing and intervention that present possibilities for future policy
making. We used the risk assessment as we worked on a final rule to
reduce Listeria in processing plants producing ready-to-eat meat and
poultry products. We have moved as rapidly as we can to develop this
final rule while using sound science as the basis and expect to publish
it in the Federal Register soon.
In a perfect world, risk assessments would be completed before risk
management strategies are developed. But in the real world, we may not
have this luxury. We must design risk management strategies based on
what we know today and improve them as more information becomes
available.
Another way we have based policy decisions on science has been
through a series of scientific symposia we hosted on specific issues
ranging from applied epidemiology, pathogen reduction, and Listeria.
These symposia offer an opportunity to hear from experts in academia
and government and allow for a dialogue on how we can improve the
scientific basis for our food safety programs and policies.
Most recently, on April 29, FSIS sponsored the Second Scientific
Symposium on Applied Epidemiology. This meeting was the second in a
series of meetings aimed at aiding FSIS in developing a framework for
how the agency will conduct public health investigations and integrate
the scientific principles of applied epidemiology into its food safety
activities. The successful meeting served as an open forum to discuss
the agency's approach to investigations of foodborne illnesses
associated with meat, poultry, and egg products and the progress the
agency has made using epidemiology as a basis for regulatory decision
making.
Goal #2: Improve the Management and Effectiveness of FSIS Programs
The second goal I'd like to discuss is improving the management and
effectiveness of FSIS programs. In order to fulfill this goal, we
needed to select a leader to head FSIS through one of its most profound
transformations toward a public health mission.
I was looking for certain traits in this individual. These included
a scientific background, strong management skills, a sense of
accountability to everybody in the organization, and most important, a
proven track record of public health service and commitment. This
person would also have to be a motivator.
I am truly proud to say that I have found all these traits in the
selection of Dr. Garry McKee, who started with FSIS on September 1,
2002. In this very short time he has made a very positive impression on
agency employees and constituents alike. Dr. McKee is a committed
public health professional with over 30 years of public health
experience and a proven leader in managing public health programs and
personnel. He brings unparalleled enthusiasm, determination, and
commitment toward public health to the helm of FSIS and I certainly
believe that his tenure will be regarded in the future as a significant
turning point in FSIS' long history.
The selection of an Administrator was critical, but so too was the
reorganization of the agency that began last year. This reorganization
will prepare the agency to better meet its public health and food
safety goals. The purpose for this reorganization is to increase
accountability, enhance communication, and improve overall efficiency.
This reorganization will also ensure that the principles of public
health and food safety cut across the entire spectrum of FSIS' work. We
have added four assistant administrators for Food Security; Program
Evaluation, Enforcement, and Review; Communications, Outreach and
External Review; and International Coordination to strengthen the
working relationship between our various offices.
With Dr. McKee's leadership, we are already seeing increased
accountability for all FSIS employees; improved communication and
cooperation that flows smoothly and quickly throughout the
organization, as well as laterally across all divisions and to outside
agencies; and increased efficiency in the agency's programs. As a
public health agency, lives depend on our programs and operations to
work as a well-oiled machine.
Another key to enhancing the consistency and effectiveness of FSIS
inspection entails a revitalization of training and education programs
conducted by the agency to instruct our workforce on HACCP sanitation
procedures and other regulatory measures. The agency is in the process
of redesigning current training programs to enhance distance learning
opportunities and improve hands-on training methods. We realize that
our workforce is the backbone of FSIS. We rely on our field employees
to be in every meat, poultry, and egg products plant, ensuring that the
plants are producing products that are safe, wholesome, and accurately
labeled. Our frontline employees are responsible for making the
critical determination that products are not adulterated and are safe
to eat. They are also responsible for identifying and preventing
intentional threats to the food supply. As a result, we believe that it
is absolutely necessary to have a scientifically- and technically-
trained workforce that is dedicated to ensuring a safe supply of meat,
poultry, and egg products. FSIS is refocusing and retooling its
training efforts because a well-trained and competent workforce is a
key element to the success of our critical food safety and public
health mission.
We have also strengthened our workforce's ability to enforce the
HMSA. All of the over 7,600 FSIS inspection personnel are expected to
enforce the Humane Methods of Slaughter Act (HMSA) and take enforcement
action for humane handling and slaughter violations. FSIS has
inspection personnel trained in humane methods of handling and
slaughter in all of the nearly 900 federally inspected U.S. livestock
slaughter establishments. In addition to their food safety-related
inspection responsibilities, these veterinarians and inspectors are
charged with observing the methods by which livestock are slaughtered.
FSIS inspectors and veterinarians, who provide continuous inspection in
every slaughter facility, are required to take immediate enforcement
action when a violation is observed. FSIS personnel who fail to enforce
the HMSA are considered negligent in their duties and are subject to
disciplinary action. FSIS has taken, and will continue to take,
enforcement actions against plants that do not follow humane handling
requirements.
In addition, FSIS used funding allocated in the fiscal year 2001
Supplemental bill to hire 17 veterinarians to serve as District
Veterinary Medical Specialists (DVMS) in each of the agency's
districts. The DVMS reported for duty on December 30, 2001. The DVMS
have been trained in all aspects related to humane handling and
slaughter, including antemortem inspection, humane handling
regulations, the HMSA, stunning methodologies, assessing consciousness,
enforcement procedures related to humane handling, and workplace
violence. They also serve as the program coordinators for all humane
handling issues within their districts and are providing training to
newly hired in-plant Veterinary Medical Officers on the agency's humane
handling and slaughter responsibilities.
In addition to our reorganization and training efforts, FSIS is
continuing the pilot inspection system, known as the HACCP-based
Inspection Models Project, or HIMP, to address the online slaughter
process. I view HIMP as a means of increasing the effectiveness of our
inspection force and the efficiency of our food safety systems, while
in no way compromising food safety or our process control system.
Under HIMP, one FSIS inspector inspects each carcass at the end of
the line, while other FSIS inspectors are given the freedom to move
throughout the facility and the slaughter line to ensure that the
plant's critical control points in its food safety system are
effectively preventing and stopping pathogens and other food safety
hazards, resulting in more intense and effective inspection and
verification activities. In June 2002, FSIS made data from the National
Alliance for Food Safety (NAFS) available comparing HIMP and
traditional inspection, which indicate that HIMP is at least equal to
the traditional inspection system. In September 2002, an independent
review of the HIMP data concluded that ``the HIMP system compared
favorably to the traditional system of inspection.'' FSIS is encouraged
by this data and we intend to use these results to further modernize
our inspection system to most effectively prevent and control food
safety hazards.
Goal #3: Improve Coordination of Food Safety Activities with Other
Public Health Agencies
We have also made progress with the third goal to improve
coordination of food safety activities with other public health
agencies. I am a strong believer that by working together, all the
agencies with public health responsibilities can best utilize our
resources to ensure a safe food supply.
An example of our progress in this area was an unprecedented
investigation that we coordinated with the CDC and other State and
local public health agencies on the Northeastern listeriosis outbreak
last year. FSIS dispatched seven teams beginning in early September to
affected Northeastern States and used information provided by CDC to
test products and visit plants that were suspected of being linked to
the outbreak. More than 400 tests were taken in the course of the
investigation. When we first suspected that a turkey product caused the
outbreak, we took the necessary steps to identify the plant. When the
plant was identified, FSIS immediately conducted a recall and sent a
team of specialists to the establishment to identify and help correct
any problems in the plant. We spent an enormous amount of time and
resources investigating this outbreak including creating a team of more
than 50 laboratory scientists, regional epidemiologists, consumer
safety officers, compliance officers, field personnel and headquarters
management to work closely with CDC and State and local public health
officials to locate the source.
This effort was enhanced by our cadre of FSIS epidemiologists, many
of which are Public Health Service (PHS) Commissioned Officers. We
believe so strongly in the significant role the PHS can play in helping
FSIS carry out its food safety mission that on April 17, 2003, we
signed a Memorandum of Agreement (MOA) with the U.S. Department of
Health and Human Services' PHS Commissioned Corps, to expand the role
and number of PHS Officers detailed to FSIS. The addition of these PHS
Commissioned Officers will enhance FSIS' capabilities for rapid
response during heightened security alerts or an actual threat to food
security.
Another example is our very close working relationship with the
Food and Drug Administration Commissioner, Dr. Mark McClellan. We have
established regular meetings with Dr. McClellan's office to increase
our interaction on issues of mutual concern and to discuss policy
positions of common interest.
States are also an integral part of the U.S. food safety system. We
are working to update and strengthen the Federal State review process
through a number of means. FSIS is working diligently to address the
congressional mandate in the 2002 Farm Bill requiring us to carry out a
comprehensive review of State Meat and Poultry Inspection programs. The
agency has also published voluntary security guidelines to help State-
inspected plants that produce meat, poultry, and egg products in
identifying ways to strengthen their security plans to protect against
acts of bioterrorism.
Another area in which we are making major strides is our
cooperation with States through the sharing of recall information. In
July 2002, FSIS published a final rule allowing the agency to share a
firm's distribution list with State and Federal agencies in the event
of a meat or poultry recall through a Memorandum of Understanding. This
change allows for better communication and coordination between FSIS
and the numerous State and Federal agencies that are involved in
product recalls.
Goal #4: Protect Meat, Poultry, and Egg Products Against Intentional
Harm
Close coordination with other public health agencies is also very
important in protecting the food supply against intentional harm, which
leads me to the fourth goal. Since the attacks on September 11, 2001,
FSIS has strengthened coordination and preparation efforts to prevent,
detect, and respond to food-related emergencies resulting from acts of
terrorism, and ensure the safety of meat, poultry, and egg products
that come to us from other countries. With a strong food safety
infrastructure already in place, FSIS has been able to focus on
strengthening existing programs and improving lines of communication,
both internally and externally.
We have implemented several measures to protect the public from
contaminated product entering the United States from abroad. In
addition to reinspecting imported product, FSIS continually assesses
foreign establishments to make sure their sanitation and inspection
procedures are equivalent to those in the United States.
To augment the efforts of traditional FSIS import inspectors, FSIS
has also added 20 new import surveillance liaison inspectors who are on
duty at ports-of-entry. Where traditional USDA import inspectors
examine each shipment and conduct reinspection activities, these new
import surveillance liaison inspectors conduct a broader range of
surveillance activities at each import facility and serve as liaisons
to improve coordination with other agencies concerned with the safety
of imported food products, such as the Department of Homeland Security.
Furthermore, FSIS introduced the new Automated Import Information
System (AIIS), which focuses on a foreign country's inspection system
as a whole, rather than on individual plants. This system, using
statistics, chooses imports for reinspection based on the annual volume
of shipments from the exporting country. Previously, for all countries
except Canada, reinspection was randomly assigned based on an
establishment's compliance history. The new system is user-friendly and
allows inspectors at all ports-of-entry to share data. It also allows
managers to have easier access to inspection reports. The new AIIS also
provides better tracking of shipments once they enter the United
States, and FSIS' next step is to integrate the system with USDA's
Animal and Plant Health Inspection Service (APHIS) and the U.S. Customs
systems to further strengthen the food safety system against
intentional attacks.
Besides our initiatives to screen imported products, we have
conducted a vulnerability assessment to be used as a tool for
determining the most vulnerable products, likely agents, and potential
sites for deliberate adulteration of domestically produced meat,
poultry, and egg products. The assessment was conducted using a farm-
to-table approach based on current knowledge of the industrial
processes used in the production of these products and the potential
biological and chemical agents that could be introduced. The assessment
was concluded in June 2002 and the information obtained is being used
to develop risk management strategies, including ensuring that our
laboratories are equipped with the methods and personnel necessary for
detecting agents of concern.
We are also developing a vulnerability assessment of the import
system to identify points in the production of imported products where
biological, chemical, and radiological contaminants could be
intentionally added to foods being brought into the United States. FSIS
used the risk analysis framework to conduct a relative risk ranking to
be used to allocate resources to monitor U.S. ports-of-entry for those
food commodities that pose the greatest risk, examine different
intervention strategies for preventing or reducing risks, develop
biohazard identification protocols, and target training of personnel
and develop educational campaigns to increase awareness. This
assessment is expected to be completed in September 2003.
We have taken preparation for food safety emergencies to a higher
level with simulation exercises. Earlier this year, we conducted an
exercise known as ``Crimson Winter'' to familiarize our managers and
staff with the operating environment that would exist during an
outbreak of foodborne disease--the cause being intentional or
unintentional. This exercise was very constructive for our senior
management, emergency response team, our partners in the Food Threat
Preparedness Network, and other relevant Federal and State agencies.
Goal #5: Enhance Public Education Efforts
Finally, goal number five is to engage in proactive education
programs. Food safety education is a critical element of the risk
analysis framework, which includes risk assessment, risk management,
and risk communication. It is a risk management strategy because
educating food preparers is an important way to reduce the risk of
foodborne illness. Education is also a risk communication function
because it serves to alert the public about a hazard that exists and
can be addressed by safe food handling and food selection.
As we continue to examine emerging and existing food safety
problems, it is important that we remember that reducing foodborne
illness requires numerous interventions all along the farm-to-table
chain. We must consider all the strategies available to us--and
education is one of them--to make the food supply safer. That is why we
continually look for the most cost-effective ways to get the food
safety message out to all food handlers from coast to coast.
I have been busy travelling around the Nation conducting media
interviews and delivering food safety education messages through an
aggressive campaign. This is why we have pursued an even greater amount
of coordination among government, industry, and consumer groups to
deliver food safety messages to all food handlers and preparers.
One of FSIS' key public health missions is to educate the public
about the hazards of foodborne illness, as well as to teach safe food
handling techniques to ensure the safety of meat, poultry, and egg
products. Since we are trying to share our food safety message with all
segments of the population, such as consumers, food preparers,
educators, children, physicians, public health officials, and industry,
this is a formidable task.
Because we are tasked with spreading our food safety message to so
many people with a limited amount of resources, FSIS is developing a
comprehensive and sustainable mass media campaign that leverages
traditional and non-traditional media outlets throughout the country to
get this important message out. To carry out this function, FSIS has
requested $1.5 million in the fiscal year 2004 budget for the
development of this food safety education campaign. Some of the funds
will be used to consult expert assistance on the design of a mass media
food safety campaign. The agency intends to combine the expertise of
the consultant with that of its traditional food safety education
partners, as well as others with expertise in the delivery of public
health and food safety messages.
The development of this food safety campaign is the next step in
the agency's efforts to continuously enhance the delivery of important
and life-saving food safety messages to the public. Currently, FSIS
Food Safety Education staff is working with traditional media sources,
food handlers and preparers, as well as other ``food safety education
audiences'' to refine food safety messages and lay the groundwork for
future development of a wider mass media education campaign.
To this end, the agency is sending the USDA Food Safety Mobile to
strategic locations throughout the country to research and develop this
important food safety education campaign. While delivering important
food safety messages to the public, the Mobile is providing valuable
first hand insight on how future mass media messages and education
campaigns should be constructed and delivered. FSIS will combine this
research with the expert consultation it will seek in fiscal year 2004
from food safety education professionals and develop a much broader and
sustainable mass media campaign.
Also last year, FSIS partnered with the Food and Nutrition Service
to provide new educational materials to schools and child care
facilities. We are also actively engaged in the Partnership for Food
Safety Education, which is a public-private coalition dedicated to
educating the public about safe food handling preparation to help
reduce foodborne illness.
We all have to realize as well that education is not just about the
basics of food handling. There are many new effective products and
technologies in the marketplace that can be used to reduce pathogens
and food preparers need to be educated about them. Basic and thorough
education is needed to inform and change possible misconceptions about
their applications.
Irradiation is a good example of a technology that is misunderstood
by the public. We were charged by Congress in the recent Farm Bill to
conduct an education program on the availability and safety of new
technologies, including irradiation, that eliminate or substantially
reduce the levels of pathogens in meat and poultry products. Last year
we convened a meeting with a group of the foremost experts on
pasteurization/irradiation to start developing an education program. We
expect much to come out of this group as we continue to develop and
deliver an effective education program for pasteurization/irradiation.
Efforts to Improve International Safety
The U.S. food safety system is the gold standard for the world.
Because we have the same safety requirements for the U.S. meat and
poultry produced for export and for products entering the United
States, our efforts to continually improve our food safety system have
a global impact.
We are fully committed to working with our international partners
in ensuring a safe global food supply. Under my direction, the Office
of Food Safety leads the U.S. office of the Codex Alimentarius
Commission, which is an international standard-setting body for food
safety. Our active leadership in Codex contributes to decisions that
have profound effects on national economies and the health and well
being of citizens around the world. That is why FSIS strives to educate
the public, our U.S. partners, and interested partners around the world
about the important role Codex plays in developing science-based global
food safety standards. It is in our national interest to maintain our
leadership role in Codex in order to ensure food safety regulations
around the world are reasonable, equitable, and achievable.
Another example of our commitment to international food safety is
through education. Last year, we cosponsored with the U.S. Department
of Health and Human Services the ``Thinking Globally--Working Locally:
A Conference on Food Safety Education.'' The conference included
breakout sessions, workshops, and tours focusing on the food safety
education implications of the global food supply. Over 600 participants
from the United States and abroad attended.
We also reached out to rural women worldwide through participation
in the Third International Congress on Women in Agriculture held in
Spain last year. We delivered our food safety education message at this
conference to help strengthen our message throughout the world.
Risk Assessment
While FSIS has been able to use risk assessments to better shape
our policy, we also need to make sure that the risk assessments that we
carry out address the agency's needs. Our talented and dedicated
leadership team has made it clear to the FSIS workforce and to industry
that science will dictate our food safety programs. At the moment,
there is no formal infrastructure for science-based policy making. We
are working hard to rectify this. You cannot craft a solution in this
highly complex food production world if you have not specifically
identified the problem.
We need a central, state-of-the-art source for the development of
risk assessment models. We are working now on designing such a plan. It
is getting increasingly difficult to manage a threat when we are unsure
of its pervasiveness. Risk assessment provides this vital data. The
benefits of using risk assessments can be seen in our recent
initiatives on E. coli O157:H7 and Listeria monocytogenes that I
discussed earlier. This process needs to be strengthened, formalized,
and continually supported in order to be used to its full potential. By
strengthening the agency's reliance on risk assessments to shape future
policy, we will be better prepared to fight the war on pathogens.
To be effective, we need to both analyze current threats to the
food supply and anticipate problems that may arise. There are times
when we work in a completely reactive mode and I do not think this
serves us well when we try to anticipate new challenges.
I am well aware that there are gaps in our current universe of food
safety research and until we close the gaps we will not be able to
fully understand, or control, the farm-to-table continuum. We need to
bring the brightest food safety minds from throughout the country
together in a way that will help the Federal government, industry,
foodservice and the American people.
Validated Decontamination Methods
We need to focus on the application of validated decontamination
methods in order to reduce pathogens. A conscious effort has been made
when drafting FSIS' Notices and Directives to encourage industry to
utilize new decontamination technologies. Scientific and technical
innovation that keeps our food safer should be encouraged. Therefore,
we intend to consider further ways to validate these technologies in
order to ensure their ability to reduce foodborne pathogens.
We believe that new technology provides a great opportunity to
enhance the safety of meat, poultry, and egg products. Thus, the agency
continues steps to encourage and provide opportunities for
technological advances and innovation under the PR/HACCP rules. We
recently announced new procedures for new technology intended for use
in establishments. These procedures were designed to encourage
innovation by eliminating undue delays in the development, testing, and
use of new technology. This will allow FSIS to respond efficiently and
expeditiously when technological innovations become available and help,
not hinder, in the implementation of these food safety tools.
Initiatives from the fiscal year 2004 Budget Request
At this time, I would like to focus on the initiatives of the
fiscal year 2004 food safety budget request and indicate how this
additional funding will help us reach our goals. I firmly believe these
resources will help us make the necessary improvements aimed at
protecting the health and safety of the public we serve.
The fiscal year 2004 budget request supports FSIS' basic mission of
ensuring continuous inspection in each meat, poultry, and egg products
establishment in our country and reinspection of imported product. It
also reflects President Bush's deep concern about ensuring a strong
food safety system. His record level budget request for food safety
programs will allow FSIS to continue working to fully implement the
goals we have laid out, but will also allow us to pursue new
initiatives.
USDA's food safety budget requests a program level of $899 million,
an increase of $42 million over the enacted level for fiscal year 2003.
This funding represents a $148 million, or 23 percent, increase for
USDA food safety activities since fiscal year 2000. The $42 million
increase in the fiscal year 2004 budget to strengthen FSIS' food safety
program encompasses $23.6 million in increases to cover raises in
employees' salaries and benefits, the costs of inflation, and FSIS'
support of State-inspection programs.
The other part of the budget increase covers $19.3 million in
initiatives to fund the hiring of more food safety inspectors, provide
specialized scientific and technical training for the inspection
workforce, increase microbiological testing and sampling, strengthen
foreign surveillance programs, and increase our public education
efforts.
As I mentioned, it is absolutely necessary that we use science to
improve food safety. One of the ways the President's budget helps us do
that is through the $1.7 million to do baseline studies on a variety of
pathogens, including E. coli O157:H7. This funding will strengthen the
backbone of effective policy making by allowing us to collect data on
the presence of microbial hazards, which is a crucial component used in
developing risk assessment models.
Another means of employing science is the strategy of equipping our
frontline workforce with scientific and technical expertise. The $5.7
million requested in the President's budget will help us expand our in-
depth HACCP and Sanitation Standard Operating Procedure (SSOP) training
to all of our veterinarians and inspectors. With these resources, we
will be able to increase consistency, effectiveness and accuracy of
food inspection, thus making our food safer.
Along with this notion of a well-trained inspection workforce, is
the fact that FSIS needs to have a full complement of inspectors. For
this purpose, the President's budget requested $4.3 million in funding
to increase our workforce to 7,680 in-plant staff by adding 80 new
positions. These 80 positions are necessary to ensure continuous
inspection of all meat, poultry, and egg products plants.
When a foodborne outbreak occurs, it is essential to identify the
source of the outbreak so that the agency can take swift action to
prevent further illnesses and warn the public of the adulterated
product. Therefore, the fiscal year 2004 budget request includes $4.5
million to provide additional microbiologists, chemists, laboratory
technicians, and other personnel to increase the agency's ability to
identify adulterants in meat, poultry, and egg products. This funding
will help the agency develop analytical methods to test food products
for chemical, biological, and radiological contamination. This
initiative will also increase sampling of ready-to-eat products for the
presence of bacteria such as Listeria monocytogenes and Salmonella.
With this funding, FSIS will increase sampling of these products from
10,000 to 15,000 annually and will add the capability to conduct 5,000
Listeria monocytogenes environmental samples annually. The agency also
plans to increase sampling of raw ground beef and raw ground beef
ingredients for E. coli O157:H7 from 7,000 to 15,000 samples annually.
Additionally, the President's budget includes $1.8 million to
increase the number of foreign program auditors, thereby strengthening
our oversight at the location where the food is actually produced or
manufactured for export to the United States. This augments our
existing strong system of ensuring that imported food is safe.
Our public education effort, which I discussed earlier in our five
goals, is one avenue we are aggressively taking to make sure that all
food handlers and preparers follow safe food handling practices to
reduce foodborne illness. The President's budget request for an
additional $1.5 million for food safety education will allow the agency
to continue to research and develop a sustainable and comprehensive
mass media campaign across the country.
Finally, the fiscal year 2004 budget request includes a proposal to
recover the costs of providing inspection services beyond an approved
eight-hour primary shift. FSIS already collects $102 million in
reimbursable fees to recover the costs associated with overtime,
holiday, and voluntary inspection services. FSIS has submitted
legislation to Congress to allow the agency to collect user fees for
inspection services beyond one approved eight-hour shift per day. If
approved by Congress, it will enable the agency to collect
approximately $122 million in user fees and reduce our appropriated
request from $797 million to $675 million. This will result in a
savings for the American taxpayer.
Closing
In closing, I want to emphasize that we already have a strong food
safety infrastructure in place. We have made great progress in
achieving the goals we have set for ourselves. We have a strong
leadership team to direct us toward improving our ultimate goal of
protecting public health.
The President's budget for fiscal year 2004 provides us with a
historic opportunity to--not only do what is right--but to do what is
needed, which is to employ science to its fullest potential to make
food in the United States as safe as possible. With the support and
assistance of this Administration and Congress, I am confident we can
do just that.
This concludes my written statement. I want to thank the Chairman
and Members of the Subcommittee for the opportunity to testify on
behalf of USDA's Office of Food Safety. I welcome your questions.
______
Prepared Statement of Garry L. McKee, Administrator, Food Safety and
Inspection Service
Mr. Chairman and Members of the Subcommittee, I am pleased to have
the opportunity to provide a statement on the current status of Food
Safety and Inspection Service (FSIS) programs and on the fiscal year
2004 budget request for food safety within the U.S. Department of
Agriculture (USDA).
Before I move into the details of my statement, I'd like to take
this opportunity to introduce myself, since this is my first time
before the Subcommittee. I've been with FSIS for a short period of
time. Although I came to FSIS from the Wyoming Department of Health, I
am a proud Oklahoman at heart. I graduated from Southwestern Oklahoma
State University and the University of Oklahoma, concentrating on
microbiology and public health. Having been in the public health field
for more than 30 years, I am very comfortable with the public health
mission of FSIS.
Today I would like share with you the steps FSIS is taking to
become a world-class public health agency. These will include:
--FSIS' Year in Review;
--Three Functions of a Successful Public Health Model;
--FSIS Accomplishments Towards Becoming a World-Class Public Health
Agency;
--FSIS Partnerships; and
--The proposed fiscal year 2004 FSIS Budget.
FSIS' YEAR IN REVIEW
If you would allow me a moment, I would like to share some of FSIS'
accomplishments over the past year so you can gain a better
understanding of the way our budget is structured. As you know, under
the Federal Meat Inspection Act, the Poultry Products Inspection Act,
and the Egg Products Inspection Act, FSIS inspects meat, poultry, and
egg products sold in interstate commerce and reinspects imported
products, to ensure that they meet U.S. food safety standards.
It is FSIS' mission to ensure that all meat, poultry, and egg
products for use as human food are safe, secure, wholesome, and
accurately labeled. More than 7,600 inspection personnel verify that
regulations regarding food safety, and other consumer protection
concerns, such as labeling, are met in over 6,300 Federal meat,
poultry, and egg processing plants, each and every day they are in
operation. FSIS has jurisdiction over products that generate more than
$120 billion in sales, which represents one-third of all consumer
spending on food. In addition, since September 11th, our workforce has
been on heightened alert and is diligently monitoring all of these
plants to ensure that there is no intentional biosecurity breach that
could harm our Nation's food supply.
Throughout 2002, FSIS was hard at work, protecting the safety of
meat, poultry, and egg products. In fiscal year 2002, FSIS inspectors
monitored the processing of 92.6 billion pounds of meat and poultry and
inspected 3.7 billion pounds of liquid egg products. Inspectors at our
110 import inspection stations monitored the importation of 3.9 billion
pounds of meat and poultry products from 27 of 33 foreign countries
meeting U.S. equivalency requirements and choosing to import to the
United States last year. FSIS also facilitated the exportation of over
11 billion pounds of meat and poultry products worth $7.5 billion to
over 100 countries. In addition, FSIS spread the food safety message to
approximately 90 million people through the media, the FSIS web site,
and the USDA Meat and Poultry Hotline. FSIS also diligently continued
its duty of protecting the public health, by overseeing the voluntary
recall of any meat, poultry, and egg products that may have been
potentially contaminated. As you can see, we have had quite a busy
year.
IMPROVING PUBLIC HEALTH
I have spent my entire career in this field and am devoted to
administering under its protocols and scientific foundations. Public
health is my number one priority. Thus, we are building FSIS into a
recognized, credible, world-class public health agency that is a model
for all other public health institutions.
What does a ``world-class'' public health agency mean? Frankly, it
means that we need to be the experts in improving the safety of meat,
poultry, and egg products for the American people. We must also ensure
that our food supply is safe and secure from bioterrorist attacks,
intentional tampering, or other forms of adulteration. While I believe
that FSIS has made considerable progress towards these goals, more can
be done to make this agency the top-notch public health regulatory
agency we envision it can be. All of the nearly 10,000 employees at
FSIS are committed to achieving this vision.
Three Functions of a Successful Public Health Model
In order to make FSIS a world-class public health agency, there are
three parts of a successful public health model that FSIS must
implement. First, FSIS must assess public health problems using
science, such as surveillance, data collection, monitoring, risk
assessment, and forecasting trends. Dr. Murano and I believe that
science is the absolute best and most reliable tool we have to address
the public health issue of food safety. In order to accomplish our
goals, we must continue to make significant, science-based policy
improvements that can measurably improve public health. By relying on
science in our decision-making, we take the guesswork out of our
policy-making process. Science is the weapon that will lead our
workforce to victory in our declared war on pathogens.
Our assessment activities will help FSIS carry out the second part
of a successful public health model, which is policy development. FSIS
must continue to develop and implement policies to reduce the risk of
foodborne illnesses using science-based knowledge. Once we identify a
problem or hazard, we need to craft an effective solution. As a public
health agency, we are equipped for this problem-solving role with our
technical knowledge and expertise. Policy development activities
include planning and priority-setting, the development of regulations,
directives, and other policy vehicles, mobilizing resources, training,
constituency building, distribution of public information, and
encouragement of public and private sector cooperation.
Finally, FSIS must assure the American public that we are carrying
out our jobs effectively through enforcement of established statutory
and regulatory responsibilities. We will hold industry, as well as
ourselves, responsible for ensuring that meat, poultry, and egg
products are safe, wholesome, and accurately labeled. By successfully
carrying out our food safety mission, we are assuring the public that
the USDA mark of inspection found on meat, poultry, and egg products
means what it says.
By carrying out these functions, FSIS is protecting the public from
foodborne illnesses. But, protecting public health also means ensuring
the security of our food, which is a vital component of Homeland
Security--a growing source of concern. The tragic events of September
11th, as well as current threat assessments, have made Americans more
aware that the unthinkable could become a reality. Biological,
chemical, and radiological threats to our Nation's food supply are
plausible from those intent on harming our Nation through any possible
means. Since the terrorist attacks on America, food security has been
the highest priority at FSIS and we continue to take steps to ensure
that we are prepared to prevent and respond to any potential or actual
threats to our Nation.
Now I'd like to share with you some specific examples of how FSIS
is ensuring the safety of our meat, poultry, and egg products.
BETTER ADDRESSING PATHOGENS
E. coli O157:H7
The issue of E. coli O157:H7 in ground beef emerged in the 1990s
and FSIS' microbiological testing program to detect E. coli O157:H7 in
raw ground beef began in October 1994. Since then, over 57,000 raw
ground beef samples have been analyzed. Each month, a random sample
from the approximately 1,700 establishments that produce ground beef
under FSIS inspection and the 100,000 retail stores that grind beef on
a regular basis, are selected for sample collection. In 2002, over
7,000 samples were analyzed for E. coli O157:H7. Since FSIS' E. coli
O157:H7 testing program began, it has been continuously amended to
incorporate the most up-to-date data and technologies.
Data from the Agricultural Research Service (ARS) and the Centers
for Disease Control and Prevention (CDC), as well as FSIS' draft risk
assessment of E. coli O157:H7, indicated that E. coli O157:H7 was more
prevalent than previously believed. The data led FSIS to further
strengthen its E. coli O157:H7 policies and implement additional
safeguards to increase food safety. In an October 2002 Federal Register
Notice, FSIS published a series of new measures designed to reduce the
incidence of E. coli O157:H7 contamination in raw ground beef. For
instance, all facilities handling raw ground beef must reassess their
Hazard Analysis and Critical Control Point (HACCP) plans and decide
whether E. coli O157:H7 is a pathogen reasonably likely to occur in
their products. In addition, establishments that receive product for
grinding may determine that no additional steps are necessary at
grinding facilities to address E. coli O157:H7, but only if appropriate
purchase specifications are built into their food safety system.
However, these specifications require that all suppliers must have one
or more validated critical control points to eliminate or reduce E.
coli O157:H7 below detectable levels and some means to ensure that
these specifications are met.
FSIS has set deadlines for completion of the reassessments, in
order to ensure that all plants have reassessed their HACCP plans to
account for E. coli O157:H7. Large plants, those with 500 or more
employees, were required to comply by December 6, 2002; small plants,
or those with less than 500, by February 4, 2003; and very small
plants, those having fewer than 10 employees or annual sales of less
than $2.5 million, were required to comply by April 7, 2003. FSIS
Consumer Safety Officers (CSO) are completing extensive scientific
reviews of plant HACCP plans and Sanitation Standard Operating
Procedures (SSOPs) to ensure the reassessments are successfully
addressing E. coli O157:H7 concerns, as well as all other aspects of
HACCP regulations.
FSIS is also modifying its current E. coli O157:H7 sampling and
testing program to include all plants. In the past, FSIS did not
typically collect raw ground beef samples at establishments that
conducted their own E. coli O157:H7 testing. However, FSIS has found
that, in spite of this private-sector testing, some of these
establishments have had problems with E. coli O157:H7 contamination. In
response, FSIS issued a notice on April 18, 2003, to revise its current
directive to discontinue all exemptions from FSIS sampling and testing
for E. coli O157:H7.
FSIS is also developing a risk-based verification program that
takes into account factors such as volume of production and
effectiveness of interventions in determining testing frequencies. In
addition to continuing to test for E. coli O157:H7 in ground beef, FSIS
is considering testing for E. coli O157:H7 in trimmings and other
intact materials used in non-intact product and beef carcasses and
parts that will be processed into non-intact product. We believe that
controls to reduce the risk of E. coli O157:H7 on intact product may be
among the most effective ways to control the hazard overall and that
these changes are critical to protecting public health.
Listeria Monocytogenes
Following a recent voluntary recall of ready-to-eat poultry
products due to potential contamination with Listeria monocytogenes,
FSIS implemented a new policy to improve testing programs for Listeria
monocytogenes in the environment of plants producing ready-to-eat
products, such as deli meats and hot dogs. In November 2002, the agency
released a directive announcing that plants producing high- and medium-
risk, ready-to-eat products that do not have a scientifically-based,
validated program in place for the control of Listeria monocytogenes,
will be subject to an intensified FSIS testing program. In December
2002, the agency completed a survey to identify plants that will be
considered for intensified testing. This new risk-based policy will
allow FSIS to confirm an establishment's commitment to zero tolerance
for Listeria monocytogenes on product and product contact surfaces.
On February 14, 2003, FSIS released its draft risk assessment that
provides a vital tool to estimate the public health impacts of various
control measures for reducing the risk of Listeria monocytogenes. This
draft risk assessment suggests that a combination of testing,
sanitation, and other interventions exhibited greater benefits than
when each step was used alone. It also suggests that product contact
testing, used in conjunction with enhanced sanitation procedures, can
lead to a reduction in Listeria-related illness. In addition, the risk
assessment demonstrated that the use of intervention steps, such as
post-packaging pasteurization or the introduction of growth inhibitors,
showed dramatic public health benefits.
FSIS utilized information gained from the risk assessment to
proceed on an effective regulatory approach to reduce Listeria
monocytogenes in processing plants producing ready-to-eat meat and
poultry products. FSIS is working to publish a final rule for Listeria
monocytogenes in ready-to-eat products and hopes to have it ready as
quickly as possible.
Scientific Symposia
We have also greatly increased our efforts to incorporate a broad
range of scientific thinking on food safety issues in order to
effectively combat harmful pathogens. In 2002, FSIS initiated a series
of nine scientific symposia aimed at generating dialogue on important
issues among public health experts, industry, advocacy groups,
consumers, academia, and the public. These meetings allowed the agency
to gather input on what scientific solutions would best address public
health concerns. For example, FSIS held a scientific symposium on
pathogen reduction in May 2002, to discuss the appropriate role of
microbial testing in food safety and other food safety concerns. In
November 2002, the agency held a Listeria summit to discuss the public
health impact of Listeria monocytogenes. In February, the agency held a
meeting to discuss the results of the draft risk assessment on Listeria
monocytogenes. And just last month, we held a public meeting to discuss
the agency's use of epidemiology as a basis for regulatory decision
making. We believe the symposia allowed us to be as inclusive as
possible, as well as gain valuable information and insight. Therefore,
the agency has planned additional symposia in fiscal year 2003 on such
topics as risk analysis, and HACCP and poultry processing.
PUBLIC HEALTH MANAGEMENT
A world-class public health agency must run like clockwork in order
to quickly and successfully prevent or respond to food safety
emergencies. This requires a common dedication and focus at all levels,
from headquarters management to the frontline employees in plants in
the most rural parts of America. Therefore, FSIS has implemented an
array of measures over the past year to enhance accountability, build
professionalism, and ensure a coordinated public health approach to
food safety.
FSIS Reorganization
On our way to becoming a world-class public health agency, it
became apparent that the structure of FSIS needed to be reorganized to
efficiently and effectively meet our goals, carry out our critical
functions, and protect public health. I have made it a top priority to
restructure the agency in a way that prepares FSIS to meet its public
health and food safety goals in a logical and streamlined fashion. This
reorganization will increase accountability for all FSIS employees and
refocus the duties of many employees.
The reorganization will ensure that the principles of public health
and food safety cut across the entire spectrum of FSIS' critical public
health mission. We have added four assistant administrators in key
areas--for Food Security; Program Evaluation, Enforcement, and Review;
Communication, Outreach, and External Affairs; and International
Coordination. These additions will strengthen the bonds between our
various offices and make our operational models more coherent and
responsive. For example, the assistant administrator of Food Security
will tie together all Homeland Security activities within the agency,
so that our policy makers, our scientists, our field staff, and our
management are all working together to ensure that we are prepared to
prevent and respond to any bioterrorist attack.
Program Evaluation, Enforcement and Review
In fiscal year 2002, FSIS created the Program Evaluation,
Enforcement and Review (PEER) office to serve as the agency's quality
control team. This office's mission is to ensure that effectiveness,
efficiency, consistency, and accountability become the rule at FSIS.
This new office will ensure that FSIS functions such as reviews of
plants for compliance and food safety investigations are carried out in
a way most conducive to protecting the public health. This office also
conducts program audits, reviews, assessments, and evaluations in an
effort to ensure that they are performing as needed or uncover
difficulties early on, before they reach the problem stage. Lastly,
this office also helps ensure that the agency has an effective,
efficient, timely, and aggressive program for dealing with those who
violate the meat and poultry laws.
Improved Communications
Our food safety message is most effective when every person along
the farm-to-table continuum is aware of its importance and, just as
importantly, understands it. As part of the FSIS reorganization, we
created the Office of Communication, Outreach, and External Affairs.
This office is tasked with spreading the food safety message to our
many constituents whether in Congress, industry, advocacy groups, the
public, or the media. We devote a great deal of energy and resources
into translating highly technical food safety information and making it
accessible and understandable at many different levels. But
communication is a two-way street and we make every effort to receive
and process input from our constituents so that we are aware of, and
sensitive to, their range of viewpoints. We are always looking to
improve our public health mission and communication is one of our most
critical tools.
Automated Import Inspection System
FSIS is also improving its management effectiveness on the
international level. All imported meat and poultry is inspected in its
country of origin, as well as visually reinspected by FSIS before being
released in the United States. Additionally, FSIS tests imported
products for residues, microbiology, and food chemistry. In fiscal year
2002, FSIS introduced the new Automated Import Information System
(AIIS). This system focuses on a foreign country's inspection system as
a whole, rather than on individual plants, to statistically choose
imports for reinspection based on the annual volume of shipments from
the exporting country. Previously, for all countries except Canada,
reinspection was randomly assigned based on an establishment's
compliance history. The new system is user-friendly and allows
inspectors at all ports-of-entry to share data. It also allows managers
to have instant access to inspection reports. The new AIIS system also
provides better tracking of shipments once they enter the United
States. The next step is for FSIS to integrate our system with USDA's
Animal and Plant Health Inspection Service (APHIS) and the U.S. Customs
systems to further strengthen the food safety system against
intentional attacks.
WORKFORCE AND TRAINING INITIATIVES
Our workforce is the backbone of FSIS. We rely on our field
employees to be in every meat, poultry, and egg products plant,
ensuring that the plants are producing products that are safe,
wholesome, and accurately labeled. Our frontline employees are the ones
we rely on to make the critical determination that products are not
adulterated and are safe to eat. They are also responsible for
identifying and preventing intentional threats to the food supply. For
this reason, I have made training my top priority as FSIS
Administrator. I am personally overseeing the changes the agency is
implementing in our training programs and believe it is absolutely
critical that we have a scientifically- and technically-trained
workforce that is dedicated to ensuring a safe supply of meat, poultry,
and egg products. A well-trained and competent workforce is a key
element to making any institution successful. I am committed to
achieving the aggressive public health goals we have set at FSIS
through improving our employees' skill level, which will in turn, make
us better guardians of the public health and safety.
Consumer Safety Officers
Let me give you an example. To achieve our public health goals,
FSIS recognized the need for frontline employees to have a scientific
and technical background. Therefore, the agency created the Consumer
Safety Officer (CSO) series to reflect our increasing reliance on
science and technology. CSOs have a scientific and technical background
and receive additional agency training that enables them to assess and
verify the design of food safety systems. FSIS trained 104 employees as
CSOs in fiscal year 2002, and plans to train an additional 105 in
fiscal year 2003. The agency is extending CSO training to its
Veterinary Medical Officers (VMOs) to raise scientific and technical
knowledge within the agency.
Humane Handling and Slaughter Initiatives
We have also strengthened our workforce's ability to enforce the
HMSA. All of the over 7,600 FSIS inspection personnel are expected to
enforce the Humane Methods of Slaughter Act (HMSA) and take enforcement
action for humane handling and slaughter violations. FSIS has
inspection personnel trained in humane methods of handling and
slaughter in all of the nearly 900 federally inspected U.S. livestock
slaughter establishments. In addition to their food safety-related
inspection responsibilities, these veterinarians and inspectors are
charged with observing the methods by which livestock are slaughtered.
FSIS inspectors and veterinarians, who provide continuous inspection in
every slaughter facility, are required to take immediate enforcement
action when a violation is observed. FSIS personnel who fail to enforce
the HMSA are considered negligent in their duties and are subject to
disciplinary action. FSIS has taken, and will continue to take,
enforcement actions against plants that do not follow humane handling
requirements.
In addition, FSIS used funding allocated in the fiscal year 2001
Supplemental bill to hire 17 veterinarians to serve as District
Veterinary Medical Specialists (DVMS) in each of the agency's
districts. The DVMS reported for duty on December 30, 2001. The DVMS
have been trained in all aspects related to humane handling and
slaughter, including antemortem inspection, humane handling
regulations, the HMSA, stunning methodologies, assessing consciousness,
enforcement procedures related to humane handling, and workplace
violence. They also serve as the program coordinators for all humane
handling issues within their districts and are providing training to
newly hired in-plant VMOs on the agency's humane handling and slaughter
responsibilities.
Chief Veterinarian
In fiscal year 2002, FSIS established a Chief Veterinary Medical
Officer position to promote the education, training, and professional
development of the agency's approximately 1,100 veterinarians. In
addition, FSIS veterinarians have completed a survey to determine what
skills they possess and to help the agency assess how it can harness
their skills to help meet its ever-evolving goals.
Inspection Coordinator Training
Becoming a world-class public health agency requires that FSIS
increase technical training and the scientific expertise of our
workforce. Inspection Coordinators (ICs) in each District were trained
to increase their HACCP expertise, particularly with respect to HACCP
plan design and scientific support for HACCP plans. The ICs often
participate in, or lead, in-depth verification reviews (IDVs) to assess
whether an establishment is carrying out activities that meet
requirements of the FSIS Pathogen Reduction (PR)/HACCP rule. This
training will enhance their ability to do a more effective job and will
also provide Districts with an additional resource capable of
conducting comprehensive food safety assessments. In response to a
Government Accounting Office recommendation that FSIS strengthen basic
training for its inspectors, the agency has begun to reinforce HACCP,
SSOPs, and Sanitation Performance Standards knowledge, through training
of its entire in-plant workforce. In April 2003, the agency's Consumer
Safety Inspectors began this food safety regulatory essentials
training. I will discuss in greater detail this key aspect of our
fiscal year 2004 budget request in a moment.
Compliance Officer Training
In fiscal year 2002, FSIS conducted a Compliance Officers (COs)
training program at the Federal Law Enforcement Training Center in New
Mexico. Nineteen Federal and three State COs completed the three-week
course on basic safety training. In addition, sixty-one COs and three
CSOs completed three specialized one-week safety courses, especially
designed for FSIS. Also, twelve COs completed a one-week Instructor
Verbal Judo Course designed to instruct them how to teach other
employees how to better handle stressful situations they may encounter
as part of their jobs. All of these training programs are the building
blocks to the model public health agency I envision for FSIS.
In-Plant Performance System In October 2002, FSIS implemented the
In-Plant Performance System (IPPS), which puts in place a formal
process so frontline supervisors can be sure that inspection personnel
carry out their assigned job responsibilities. All field supervisors
have been trained to use this system. Performance reviews have resulted
in several letters of caution and instruction to employees who were not
performing at the expected level. More importantly, the reviews have
highlighted what we are doing right, as well as steps we can take to
make even more improvements.
HIMP
As you know, in 1997, FSIS initiated the HACCP-based Inspection
Models Project (HIMP) pilot program. The goal of HIMP is to improve
public health by enabling FSIS to maintain the same level of consumer
protection with fewer inspectors tied to the slaughter line, thus
resulting in more intense and effective inspection and verification
activities. In June 2002, FSIS made data from the National Alliance for
Food Safety (NAFS) available comparing HIMP and traditional inspection,
which indicate that HIMP is at least equal to the traditional
inspection system. In September 2002, an independent review of the HIMP
data concluded that ``the HIMP system compared favorably to the
traditional system of inspection.'' FSIS is encouraged by this data and
we intend to use these results to further modernize our inspection
system to most effectively prevent and control food safety hazards.
Homeland Security Training FSIS has also initiated a comprehensive 2-
year training and education effort designed to ensure that every FSIS
employee fully understands his or her role and responsibility in
preventing or responding to an attack on the food supply. In addition,
FSIS has developed multimedia tools covering food security initiatives,
emergency response procedures, and guidelines for food processors for
use in training all frontline supervisors. These have been shared with
our State and local partners, as well as industry, to address their
biosecurity awareness and training needs.
In addition, FSIS personnel have been trained in the application of
the agency's voluntary food security guidelines. This guidance promotes
an exchange of information between FSIS, industry, and other agencies
such as the Food and Drug Administration (FDA), on the subject of food
security, as well as heightens industry's awareness of food security
practices. FSIS is also working in cooperation with other Federal and
State agencies such as APHIS, CDC, the Environmental Protection Agency,
and the Department of Defense to develop biosecurity plans and training
programs to identify and minimize food security risks.
HOMELAND SECURITY EFFORTS
The events of September 11th and subsequent vulnerability
assessments revealed the need for a more integrated and coordinated
plan to protect meat, poultry, and egg products. Immediately following
September 11th, FSIS established the Food Biosecurity Action Team (F-
BAT), charged with coordinating all activities pertaining to
biosecurity, countering terrorism, and emergency preparedness within
the agency. These activities are coordinated with USDA's Homeland
Security Council, other government agencies and industry.
Office of Food Security and Emergency Preparedness
The creation of the Office of Food Security and Emergency
Preparedness took over F-BAT's role as the centralized office within
the agency that serves as an interface with USDA's Homeland Security
Council and represents the agency on all food security matters
throughout the Federal government as well as State and local
activities. The Office's mission is to prepare for, prevent, and
coordinate a response to intentional acts and other major events
threatening the U.S. food supply. It is comprised of two staffs, an
External Relations and Emergency Preparedness Staff, in addition to a
Scientific and Technical Support Staff. The External Relations staff's
primary responsibility is to develop and maintain the extensive network
of Federal and State relationships necessary to mobilize for a food-
related emergency. The Scientific staff provides science-based support
for emergency response and prepares contingency plans for minimizing
risk to the safety and security of the food supply, as well as to first
responders.
Tabletop Exercises
FSIS has conducted a number of simulation exercises at the Federal,
State, and local levels to test its preparedness and response to an
attack on the food supply. These exercises give agency employees the
opportunity to simulate their actions in response to a threat on the
food supply. One exercise earlier this year, ``Crimson Winter,'' proved
very successful because it allowed the agency to recognize and correct
vulnerabilities in its Homeland Security response plans.
Bioterrorism Vulnerability Assessment for Domestic and Imported
Products
FSIS has conducted a food security vulnerability assessment to be
used for determining the most vulnerable products, likely agents, and
potential sites for deliberate adulteration of domestically produced
meat, poultry, and egg products. The assessment was conducted using a
farm-to-table approach based on current knowledge of the industrial
processes used in the production of these products and the potential
biological and chemical agents that could be introduced. The assessment
was concluded in June 2002, and the information obtained is being used
to develop risk management strategies, including ensuring that our
laboratories are equipped with methods and personnel for detecting
agents of concern.
A vulnerability assessment of the import system is also being
developed to identify points in the production of imported products
where biological, chemical, and radiological contaminants could be
intentionally added to foods being brought into the United States. FSIS
used the risk analysis framework to conduct a relative risk ranking to
be used to allocate resources to monitor U.S. ports of entry for those
food commodities that pose the greatest risk, examine different
intervention strategies for preventing or reducing risks, develop
biohazard identification protocols, and target training of personnel
and develop educational campaigns to increase awareness. This
assessment is expected to be completed in September 2003.
Import Surveillance Liaison Inspector
Soon after the terrorist attacks on the United States, FSIS
inspectors nationwide were placed on heightened alert, a condition that
remains in effect today. Using funds provided by the fiscal year 2001
Homeland Security Supplemental Appropriations bill, FSIS created a new
position, that of the import surveillance liaison inspector. As of
March 1, 20 new import inspectors are on duty at ports of entry to
augment the efforts of traditional FSIS import inspectors assigned to
the 146 import establishments in the country. Where traditional USDA
import inspectors examine each shipment and conduct reinspection
activities, these new import surveillance liaison inspectors conduct a
broader range of surveillance activities at each import facility, as
well as extensive records review. These inspectors not only improve the
agency's ability to ensure the safety of imported meat, poultry, and
egg products, but as liaisons, they also improve our coordination with
other agencies (e.g., U.S. Customs, APHIS) concerned with the safety of
imported food products. We are looking at ways, in the future, to both
increase the number of liaison officers and to expand and enhance their
roles.
FSIS Food Security Initiatives
In early February 2003, FSIS released a report titled, Protecting
America's Meat, Poultry and Egg Products. The report, prepared by the
Office of Food Security and Emergency Preparedness, outlines FSIS' food
security initiatives. Some of the initiatives included in the report
are assessing potential vulnerabilities along the farm-to-table
continuum, enhancing security features at all FSIS laboratories, and
strengthening FSIS coordination and cooperation with law enforcement
agencies.
FSIS PARTNERSHIPS
FSIS plays an essential role in ensuring that the meat, poultry,
and egg products that we eat are safe. While we mainly focus on the
processing of these products, we have a responsibility to the American
people to make sure that the entire food chain is strong. Food safety
is a team effort and we are always working to strengthen all the links
in this food chain. However, it requires that everyone involved in the
process, from the farmer to the consumer, carries out his or her
responsibility in ensuring that the food we eat is safe and safely
prepared. FSIS works with industry, consumers, and our sister agencies
on a daily basis in this effort to reduce to the greatest extent
possible foodborne contamination.
Industry Outreach
FSIS strives to maintain a healthy and direct relationship with the
meat, poultry, and egg products industries. We work with industry to
prevent harmful pathogens from entering the food supply. FSIS was there
to provide guidance when the HACCP program was first implemented, and
we continue to provide guidance to help plants correctly implement the
program through our veterinarians, on-line inspectors, and consumer
safety officers. But now that HACCP has been introduced and
implemented, we are in the next phase, which is enforcement. We will
hold industry, and ourselves, responsible for successfully operating
under the PR/HACCP model.
In fiscal year 2002, FSIS made significant achievements in its
Small and Very Small Plant Outreach Program. This program, introduced
in 1998, was designed to develop and provide technical guidance and
assistance to meet the specific needs of small plants, with ten or more
employees, but fewer than 500, and very small plants with fewer than 10
employees, or annual sales of less than $2.5 million. FSIS held more
than 30 courses targeting these segments of the industry across the
country. The courses focused on HACCP food safety systems and were
provided through cooperative agreements with nine universities.
Part of the agency's outreach effort also includes keeping the
meat, poultry, and egg products industry informed of changes and
innovations in food safety, as well as the standards and requirements
they must meet to operate a safe food production facility. In fiscal
year 2002, FSIS made improvements to the agency's labeling and
standards policy web site, which was introduced in 2002 as a new,
business-friendly web site providing essential information to small and
very small plants. The site is geared towards helping small businesses
understand the fundamentals of labeling and standards and to provide a
key contact on our staff to answer related questions. FSIS also
provides a staff liaison charged with facilitating resolution of small
business issues on a one-on-one basis. The Labeling Policy Staff
receive over 400 inquiries a month for labeling guidance.
In May 2002, FSIS published voluntary security guidelines to assist
Federal- and State-inspected meat, poultry, and egg products plants in
identifying ways to strengthen their security plans to protect against
acts of bioterrorism. FSIS provided these guidelines to field employees
who will assist plants that seek further clarification or advice. They
were designed for plants that may not have access to specialized
security planning advice. These voluntary guidelines are available in
English, Spanish, Vietnamese, Korean, and Mandarin Chinese, both in
print and on the FSIS web site.
Food Safety Education
While a meat processing plant might produce a perfectly safe
hamburger, innocent mistakes made by a food preparer could taint a
product with harmful bacteria and create a potentially unsafe meal.
Food can become contaminated at any step in the food chain. Thus, FSIS
is committed to spreading the food safety message in order to further
reduce the incidence of foodborne illness. Food safety education is
certainly not a substitute for, but rather a complement to, science-
based food safety policies. I would like nothing better than to tell
people that they do not need to worry about how they handle and prepare
their food because the government has taken care of the problem. But,
as I said before, food safety is a team effort and must be carried out
at all stages of the food production and preparation chain.
We will continue to strive for greater reductions in harmful
pathogens in meat, poultry, and egg products production facilities. But
regardless of what we can accomplish, food preparers always will have
an important role in keeping food safe. Because of this, we have
designed our FSIS food safety education programs to increase consumer
knowledge and change behaviors in order to prevent foodborne illness.
The agency develops educational materials based on up-to-date
scientific and consumer research. Our programs target the general
public, as well as those groups who face increased risks from foodborne
illness--the very young, the elderly, pregnant women, people with
chronic diseases, and people with compromised immune systems.
One of FSIS' key public health missions is to educate the public
about the hazards of foodborne illness, as well as to teach safe food
handling techniques to ensure the safety of meat, poultry, and egg
products. Since we are trying to share our food safety message with all
consumers, food preparers, educators, children, physicians, public
health officials, and industry, this is a formidable task.
Because we are tasked with spreading our food safety message to so
many with only a limited amount of resources, FSIS is developing a
comprehensive and sustainable mass media campaign to most effectively
utilize the agency's scarce resources. FSIS has requested $1.5 million
in its fiscal year 2004 budget to seek expert assistance from an
outside professional public relations firm to further develop and carry
out this campaign.
FSIS has already started to develop this campaign with the new USDA
Food Safety Mobile. The Food Safety Mobile is traveling the country to
educate the public about the importance of food safety, but at the same
time, we are learning important lessons about the best way to get our
message across in order to reach the most people through events and the
media. We will use the information that we learn from this new campaign
to determine how to best utilize our resources and best meet our food
safety education goals in the future.
FSIS also carried out a number of other food safety education
campaigns in fiscal year 2002. In September, the agency held the
``Thinking Globally--Working Locally: A Conference on Food Safety
Education.'' The conference included breakout sessions, workshops, and
tours focusing on the food safety education implications of the global
food supply. Over 600 participants from the United States and abroad
attended.
During its 18th year in existence, the USDA Meat and Poultry
Hotline handled nearly 86,000 calls concerning safe food handling
practices in the home. Last year, the Hotline expanded its service to
include recorded messages and live assistance in Spanish. In addition,
the agency's two main e-mail addresses received over 5,200 inquiries
and comments about food safety.
Coordination on International Activities
As one of several key U.S. agencies responsible for food safety,
FSIS actively participates in developing international food safety
standards through the Codex Alimentarius Commission. The U.S. Codex
Office, under the leadership of the Office of Food Safety, is located
within FSIS. The agency served as the head of U.S. Delegations to the
Executive Committee of the Codex Alimentarius Commission meeting and to
the Codex Committee on General Principles. In 2002, FSIS announced 17
public meetings on Codex standard setting activities and hosted foreign
government officials at various workshops about important Codex issues.
Our leadership at Codex is instrumental in realizing global food
safety standards are reasonable, equitable, and achievable. America is
the gold standard for food safety programs. Successful participation in
the Codex leadership is a vital national interest and will raise food
safety standards around the world. FSIS remains committed to working
through Codex to continue to stress the role of science in
international standard setting.
Other Public Health Agencies
Because food safety is important at each stage in the entire farm-
to-table continuum, FSIS works with other government agencies to make
sure the U.S. produces safe meat, poultry, and egg products. We have
partnerships with other Federal public health agencies, regulatory
agencies, State governments, and research institutions, in order to
share ideas and concerns, and maintain an open dialogue concerning food
safety. By doing so, we are helping each agency achieve its respective
vision, which ultimately helps us paint the big picture--improving
public health.
Ensuring public health depends on scientific research. Food safety
research carried out by ARS plays a critical role in assisting FSIS to
evolve into a model public health agency. This is especially true
because our environment is certainly not static. We constantly need to
study the factors that change the prevalence rate of pathogens. These
factors could be on the farm, around the farm, in transportation, at
the plant, or en route to the consumer. ARS and FSIS work cooperatively
to ensure that food safety research is appropriately addressed in
USDA's research agenda.
An integral part of the fight against foodborne illness is early
detection. In fiscal year 2002, FSIS completed its seventh full year of
a partnership with the Department of Health and Human Service's CDC and
FDA to track and respond to foodborne diseases in five States and parts
of four more. This effort, called FoodNet, serves as an early warning
system for foodborne illnesses. FoodNet, for the first time, identified
a downward trend in the incidence of foodborne disease from 1996-2001.
We look forward to continuing this partnership and learning more about
foodborne illnesses in order to strengthen our efforts against them.
On April 17, 2003, FSIS signed a Memorandum of Agreement (MOA) with
the U.S. Department of Health and Human Services' Public Health Service
(PHS) Commissioned Corps, to expand the role and number of PHS Officers
detailed to FSIS. PHS Officers are highly-trained health experts who
bring diverse backgrounds and experience in support of the FSIS public
health mission. Flexible deployment rules allow the PHS Officers to
instantly respond to emergencies, such as a foodborne illness outbreak,
and shifting priorities within the agency. This enhances FSIS
capabilities for rapid response during heightened security alerts or an
actual threat to food security. The new agreement will incorporate
approximately 30 additional PHS Officers nationwide across all program
areas in the agency where there is a greater demand for scientific
knowledge and judgment. The PHS Officers will work as permanent staff
members alongside their agency counterparts as veterinarians,
scientists, dietitians, environmental health officers, physicians and
nurses.
In fiscal year 2002, FSIS initiated eight cooperative agreements
with States to raise awareness and understanding of the risks of
handling meat, poultry, and egg products by retail stores and food
service establishments. These agreements benefit those State and local
agencies responsible for inspecting these establishments, as well as
managers and owners. Additionally, FSIS field epidemiologists assisted
local and State health departments with over 30 outbreak or emergency-
related investigations due to such causes as E. coli O157:H7, Listeria,
and Salmonella. Many of these investigations involved multiple States
and localities.
In addition, as of July 31, 2002, FSIS can now share product
distribution lists of establishments conducting recalls with State and
Federal agencies with which the agency has negotiated memoranda of
understanding. This new policy will allow FSIS to better work with its
partners throughout the Nation to more quickly and effectively carry
out recalls of potentially contaminated product.
FISCAL YEAR 2004 BUDGET REQUEST
Now that I have provided a synopsis of FSIS' progress, I would like
to present an overview of the fiscal year 2004 budget request for FSIS.
The budget request for fiscal year 2004 would fund those programs
previously discussed and will help FSIS reach the goal of becoming a
world-class public health agency. By incorporating the principles of
public health into all of our operations, we will be modernizing our
inspection system to meet the goals and challenges of food safety in
the 21st century. Implementation of these budget initiatives is
imperative to helping us attain the public health vision we have set
for FSIS. In fiscal year 2004, FSIS is requesting a program level of
$899 million, a net increase of about $42 million over the enacted
level for fiscal year 2003. Under current law, we are requesting an
appropriation of $797 million and $102 million in existing user fees.
Supporting FSIS' Basic Mission
The FSIS budget request for fiscal year 2004 supports the agency's
basic mission of providing continuous food safety inspection in each
meat, poultry, and egg products establishment in the United States. The
fiscal year 2004 budget includes $23.6 million in increases to cover
pay and employee benefit costs, inflation, and the agency's support of
State-inspection programs. The budget reflects the proposed fiscal year
2004 pay raise of 2.0 percent for Federal and State program personnel
and the annualized cost of the 4.1 percent pay increase for 2003. These
costs also include a total net increase of approximately $853,000 for
state food safety and inspection. This includes Federal control of the
Commonwealth of Virginia's inspection program beginning in July 2003,
as well as the initiation of Maine's State inspection program.
New Initiatives
The fiscal year 2004 request includes a $19.3 million increase for
new initiatives that support the Department's goals for FSIS. While the
implementation of the HACCP system has provided a solid base for FSIS
to carry out its goal of protecting the Nation's food supply, more can
be done to strengthen this foundation. Thus, the fiscal year 2004
budget requests an increase of $5.7 million to enhance the agency's
ability to train its workforce, which I mentioned earlier is my top
priority. This will allow FSIS to re-tool and expand its existing
training programs by incorporating a public health focus and
integrating scientific and technical principles, including HACCP
validation, with training on technical and regulatory approaches to
inspection. In addition to increasing the technical skills of our
employees, the agency intends to use training opportunities to
strengthen the management capabilities of our workforce as well.
Additionally, the agency plans to enhance training by taking the
training opportunities we offer into the field. Employees would have a
variety of training options, including the ability to take courses
taught by university professors near their work sites.
The fiscal year 2004 budget includes an increase of $4.3 million to
cover costs associated with funding 7,680 in-plant personnel in meat,
poultry, and egg products plants. This is an increase of 80 slaughter
inspectors and is necessary due to industry growth. The increase will
allow the agency to ensure continuous inspection in each meat, poultry,
and egg products establishment.
To achieve the agency's goal of applying science to all policy
decisions, the fiscal year 2004 budget includes a new $1.7 million
initiative to establish a continuous baseline program for risk
assessments and performance measurement. While the agency has
previously conducted baseline studies using its internal laboratory
resources, this new initiative would include laboratory analyses using
outside laboratories, would repeat each baseline study every 3 years to
provide longitudinal data to track performance, and would provide
scientific data needed for ongoing risk assessments. The use of
nationwide microbiological baseline studies will improve data quality
and help us further incorporate risk management into all regulatory and
policy actions.
When a foodborne outbreak occurs, it is essential to identify the
source of the outbreak so that the agency can take swift action to
prevent further illnesses and warn the public of the product
adulteration. Therefore, the fiscal year 2004 budget request includes
$4.5 million to provide additional microbiologists, chemists,
laboratory technicians, and other personnel to increase the agency's
ability to identify adulterants in meat, poultry, and egg products.
This funding will help the agency develop analytical methods to test
food products for chemical, biological, and radiological contamination.
This initiative will also increase sampling of ready-to-eat products
for the presence of bacteria such as Listeria monocytogenes and
Salmonella. FSIS will increase sampling of these products from 10,000
to 15,000 annually and will add the capability to conduct 5,000
Listeria monocytogenes environmental samples annually. The agency also
plans to increase sampling of raw ground beef and raw ground beef
ingredients for E. coli O157:H7 from 7,000 to 15,000 samples annually.
As I mentioned earlier, education and outreach have always been
important aspects of FSIS' mission and this is again reflected in the
fiscal year 2004 budget request. The agency is requesting a $1.5
million increase to design a mass media campaign aimed at improving
safe food handling practices of consumers at home. Emphasis will be
placed on a program that communicates with under-served groups and uses
mass media outlets to leverage limited education funding. Performance
measures will be incorporated to evaluate the effectiveness of the
campaign at spreading the food safety message.
It is important that foreign products meet U.S. standards.
Therefore, the fiscal year 2004 budget request includes $1.8 million to
increase FSIS equivalence reviews in exporting countries. In recent
years, FSIS has experienced a rise in applications from foreign
countries to export meat and poultry products to the United States.
This funding is necessary for the agency to hire additional foreign
auditors to meet the demands of increased foreign inspection system
audits. This will help ensure that foreign meat, poultry, and egg
products establishments are shipping product to the United States that
meets the same standard of safety required in U.S. establishments.
User Fee Proposal
FSIS' fiscal year 2004 budget also includes a legislative proposal
to recover the costs of providing inspection services beyond an
approved 8-hour primary shift. FSIS collects $102 million in user fees
annually to recover the costs of overtime, holiday, and voluntary
inspection. If enacted, the level of appropriated funds needed would be
reduced from $797 million to $675 million to reflect an increase in
user fee funding of $122 million. This will result in savings for the
American taxpayer.
CLOSING
Let me restate that we all have a role to play in improving public
health. We will continue to hold ourselves and industry to a higher
standard. This is not a pain-free process, but there will be tangible,
and measurable, benefits for the American people. Our workforce has
been reinvigorated by this challenge and we will deliver.
Mr. Chairman, this concludes my prepared statement. Thank you for
the opportunity to submit testimony to the Subcommittee on how FSIS is
working with Congress and other partners to become a first class public
health agency. It is my hope that we can work together to make further
improvements to our food safety system and continue to have the safest
food supply in the world. I look forward to working with you to ensure
that the vision of FSIS as a world-class public health agency is
realized.
Senator Bennett. Mr. Hawks
Mr. Hawks. Thank you, Mr. Chairman, members of the
Committee. It is a pleasure to be with you today to present the
Marketing and Regulatory Programs' budget for 2004 [sic]. That
budget represents the Animal and Plant Health Inspection
Service, Agriculture Marketing Service, and Grain Inspection,
Packers and Stockyards Administration. I am pleased to have
with me today my deputy, Dr. Chuck Lambert. I have Kevin Shea
representing the Administrator's Office from APHIS; Donna
Reifschneider, the Administrator of Grain Inspection, Packers
and Stockyards; and A.J. Yates, the Administrator of AMS.
We have a motto in MRP and that is ``Working together
works.'' In doing that, we have set several goals. The number
one goal is to build broader bridges. When we say build broader
bridges, we mean to help the outreach with the members of this
committee, members of Congress, and our constituents to work
through the issues that we have to deal with.
The next goal is to move more product. That one is pretty
self-evident. And the next one is, invest in infrastructure. We
feel that a healthy agriculture is an exportable and a saleable
agriculture.
The next one is to grow our people. We feel that we must
recruit, retain, and reward well-qualified people for our
mission area within USDA as well as all of USDA.
The last goal is to sell agriculture as a profession. So we
feel that that is very important, and I personally feel that
agriculture is a great profession.
The budget that we have presented to you is approximately
$1.2 billion. Three-hundred-and-eighty-two million dollars of
that is funded by user fees. I will, in light of your request,
this morning, deviate from my prepared remarks and address some
of the issues that you had raised.
The actions that we have taken, the reaction to the finding
of the BSE case in Canada, were immediate. I had an opportunity
to do an opening session for the Office of International
Epizootics in Paris on Sunday afternoon. We were there with the
chief veterinary officers from around the world. We, I think,
took appropriate action, immediate action. As you know, the
borders were closed at 1:30 Eastern Daylight Time on Tuesday.
We found out about the BSE case, the confirmed BSE case,
earlier that morning.
We in APHIS are doing an extensive surveillance program. We
had started that surveillance program last year. We tested
20,000 samples of the most likely candidates for BSE. That is
actually over four times what the Office of International
Epizootics recognizes as the standard.
So we feel that within APHIS, within USDA, we have a well-
coordinated effort and are moving forward to address this
situation, and I would concur with my colleagues and all of you
here. We do have the safest food supply anywhere in the world
and beef is what is for dinner tonight.
With the Grain Inspection, Packers and Stockyards, it is
our intent to have fair and competitive trade in grain and
poultry and meat. For Agriculture Marketing Service, it is our
goal to help market more products and to find ways to improve
the profitability of farmers.
PREPARED STATEMENTS
Mr. Chairman, in light of our time, I would like to close
with that and say I would be happy to respond to any questions
that this Committee has. Thank you, sir.
Senator Bennett. Thank you.
[The statements follow:]
Prepared Statement of William T. Hawks
Mr. Chairman and members of the Committee, I am pleased to appear
before you to discuss the activities of the Marketing and Regulatory
Programs of the U.S. Department of Agriculture and to present our
fiscal year 2004 budget proposals for the Animal and Plant Health
Inspection Service (APHIS), the Grain Inspection, Packers and
Stockyards Administration (GIPSA), and the Agricultural Marketing
Service (AMS).
With me today are Dr. Charles Lambert, Deputy Under Secretary for
MRP; Mr. Bobby Acord, Administrator of APHIS; Mrs. Donna Reifschneider,
Administrator of GIPSA, and Mr. A. J. Yates, Administrator of AMS. They
have statements for the record and will answer questions regarding
specific budget proposals.
Under my leadership, the Marketing and Regulatory Programs have
addressed several broad goals and objectives which demonstrate that
working together works.
Building Broader Bridges.--We strengthened cooperation and
strategic partnerships with farmers and ranchers, States, foreign
governments, congressional offices, agricultural commodity and industry
associations, agricultural scientific groups, and other interested
parties. We want to ensure that our policies and programs provide the
most benefits they can to the affected people.
Moving More Product.--We expanded domestic and international market
opportunities for U.S. agriculture products including value enhanced
products and products of biotechnology. We have worked closely with the
Foreign Agricultural Service and the U.S. Trade Representative to
aggressively and creatively resolve sanitary, phytosanitary,
biotechnology, grain inspection, commodity grading and other trading
issues that limit our potential for growth in international trade.
Investing in Infrastructure.--We invested in stronger border
security, pest and disease surveillance and monitoring, bricks and
mortar such as the National Veterinary Science Lab in Ames, Iowa. We
increased market news on export markets, made improvements in e-
Government, enhanced investigations of anti-competitive market
practices and provided greater support for biotechnology. Agriculture
that is healthy, both biologically and economically, is a marketable
agriculture.
Growing Our People.--We made a concerted effort to recruit,
recognize and reward accomplishment and inspire current and future
leaders within MRP. We are making MRP a place where the best and
brightest want to be, including promising men and women in diverse
fields such as journalism, accounting, and economics.
Selling Agriculture as a Profession.--We are creatively marketing
the vital role that agriculture plays in every American's life to
assist our efforts to recruit and retain the highest calibre workforce
for MRP and USDA.
FUNDING SOURCES
The Marketing and Regulatory Program activities are funded by both
the taxpayers and beneficiaries of program services. The budget
proposes that they carry out programs costing $1.2 billion; with $382
million funded by user fees paid by the beneficiaries of the services.
On the appropriation side, under current law, the Animal and Plant
Health Inspection Service is requesting $694.9 million for salaries and
expenses and $5 million for repair and maintenance of buildings and
facilities; the Grain Inspection, Packers and Stockyards Administration
is requesting $41.7 million, and the Agricultural Marketing Service is
requesting $102.9 million.
Legislation will be submitted, which if enacted would recover $36.5
million more in user fees. This legislation would authorize new license
fees to recover the cost of administering the Packers and Stockyards
(P&S) Act, additional license fees for facilities regulated under the
Animal Welfare Act and additional grain inspection fees for developing
grain standards. I will use the remainder of my time to highlight the
major activities and their budget requests for the Marketing and
Regulatory Programs.
ANIMAL AND PLANT HEALTH INSPECTION SERVICE
The fundamental mission of APHIS is to anticipate and respond to
issues involving animal and plant health, conflicts with wildlife,
environmental stewardship, and animal well-being. Together with their
customers and stakeholders, APHIS promotes the health of animal and
plant resources to facilitate their movement in the global marketplace
and to ensure abundant agricultural products and services for U.S.
customers. The APHIS mission satisfies five strategic goals. They
include:
--Safeguarding plant and animal resources from foreign pests and
diseases;
--Minimizing production losses and export market disruptions by
quickly detecting and responding to outbreaks of agricultural
pests and diseases;
--Minimizing risks to agricultural production, natural resources, and
human health and safety by effectively managing pests and
diseases and wildlife damages;
--Ensuring the humane care and treatment of animals; and
--Developing safe and effective scientific pest and disease control
methods.
APHIS builds bridges by working in concert with its stakeholders--
States, industry, and the public--to maintain and expand export market
opportunities and to prevent the introduction and/or to respond to new
threats of plant and animal pests and diseases. APHIS invests in the
agricultural marketing infrastructure that helps protect the
agricultural sector from pests and diseases while at the same time
helping move more U.S. product.
APHIS' charge is a difficult one to meet and their excellence has
been recognized. Progressive Farmer, one of America's best known
agricultural publications, has always selected an individual as its
``Person of the Year.'' This year, however, Progressive Farmer selected
8,700 of them--all the men and women of APHIS--to receive the 2003
People of the Year award. I am proud of their efforts, and appreciate
the recognition bestowed upon them.
I would like to highlight some key aspects of the APHIS programs:
Homeland Security and Agricultural Border Protection.--
Traditionally, APHIS' Agricultural Quarantine Inspection (AQI) program
has had responsibility for excluding agricultural health threats.
Annually, thousands of inspectors have inspected hundreds of thousands
of cargo shipments and tens of millions of passengers' baggage arriving
in the United States. They have intercepted tons of materials whose
entry could jeopardize the agricultural sector. They have successfully
excluded such threats as foot-and-mouth disease (FMD) and bovine
spongiform encephalopathy (BSE), which could have devastated not only
the agricultural sector, but other sectors of the economy as well.
That responsibility is now shared with the Department of Homeland
Security (DHS). While most AQI staff are reassigned to the new
Department, USDA retains the responsibility for promulgating
regulations related to entry of passengers and commodities into the
United States. We intend to work closely with our counterparts in DHS.
USDA retains the direct role of ensuring that passengers and cargoes
traveling from Hawaii and Puerto Rico comply with specified regulations
to protect the health of the agricultural sector on the Mainland,
including necessary quarantines. We retain responsibility for
collecting the user fees and will be periodically reimbursing DHS for
their inspection services.
Emergency Pest and Disease Programs.--The Administration is
concerned about rising Federal costs of emergency pest and disease
control activities, and the budget request assumes cost-sharing for
such outbreaks. Cost-sharing levels are set by consideration of several
factors applied to specific outbreaks. A proposed rule is expected to
be published which will improve the Federal/cooperator partnership by
establishing consistent criteria for determining Federal and non-
Federal responsibilities, providing a more equitable and justifiable
allocation of responsibility among all parties, and permitting State
and local governments to better anticipate and plan for future needs.
Without additional support on the part of cooperators in some programs,
however, program operations could be reduced.
Moving More Product.--The Trade Issues Resolution and Management
efforts are key to ensuring fair trade of all agricultural products.
APHIS' staff negotiates sanitary and phytosanitary (SPS) standards,
resolves SPS issues, and provides clarity on regulating imports and
certifying exports which improves the infrastructure for a smoothly
functioning market in international trade. Ensuring that the rules of
trade are based on science helps open markets that have been closed by
unsubstantiated SPS concerns. APHIS' efforts contributed to the opening
or retention of $1.1 billion in export markets in fiscal year 2001 by
helping resolve individual trade issues abroad. In 2002, APHIS resolved
problems facing shipments of about $52 million of U.S. agricultural
products held at ports of entry in foreign countries. This included
about $16 million for fruit; $10 million for grain; $10 million for
oilseeds and oilseed products; $5 million for animals and animal
products; $4 million for cotton; $2 million for vegetables; and $5
million in other products.
Biotechnology.--Recent developments in biotechnology underscore the
need for effective regulation to ensure protection of the environment
and food supply, reduce market uncertainties, and to encourage
development of a technology that holds great promise. APHIS has
recently established a new Biotechnology Regulatory Services unit to
consolidate and better coordinate our services and activities in this
area. The new unit focuses on both plant-based biotechnology and
transgenic arthropods. We also will be examining ways to regulate
transgenic animals. By consolidating these activities into one unit, we
will bring greater focus to our domestic and international policy
coordination and development as well as our risk assessment,
permitting, and compliance programs.
APHIS' 2004 BUDGET REQUEST
In a year of many pressing high-priority items for taxpayer
dollars, the budget request proposes about $695 million for salaries
and expenses. Notable shifts in budget priorities include:
A total of about $156 million for Foreign Pest and Disease
Exclusion.--Efforts will be enhanced to exclude Classical Swine Fever
from the United States and to improve our means of tracking animal and
animal products entering and leaving the country. Decreases include
those in Agricultural Quarantine Inspection activities and, in keeping
with cost-sharing provisions, reductions in fruit fly exclusion and
detection activities.
A total of about $142 million for Plant and Animal Health
Monitoring.--Experience gained from abroad about FMD and BSE highlights
the need for rapid detection and response to agricultural health
threats. Long-standing efforts have kept those diseases and others out
of the United States, and vigilant surveillance and monitoring will
still be done by APHIS. Increases would boost the availability of FMD
vaccines from 19.5 million doses to 20.75 million doses, and support
efforts to address increased incidence of smuggling and other threats
from regulatory violations.
A total of $302 million for Pest and Disease Management Programs.--
Once pests and disease are detected, prompt eradication reduces overall
damages. In cases where eradication is not feasible (e.g., European
gypsy moth), attempts are made to slow the advance, and damages, of the
pest or disease. APHIS provides technical and financial support to help
control or eradicate a variety of agricultural threats.
The budget includes a doubling of funding for efforts against
chronic wasting disease, and other increases for low-pathogenic avian
influenza and golden nematode activities. The budget also proposes a
slight increase for wildlife services operations to enhance control
over hazardous materials used in wildlife control activities.
Successes in boll weevil eradication and plum pox efforts allow
some program reductions. The decrease stems from greater cost-sharing
expected to be provided by cooperators and a 35 percent reduction in
the estimate of planned program acres. Such cost-sharing would reduce
Federal funding by about $32 million for efforts against Asian
Longhorned Beetle, citrus canker, Mediterranean fruit fly (as mentioned
above), plum pox virus, scrapie, and tuberculosis. However, the Federal
Government would still pay over 50 percent of the cost of these
programs.
A total of $15 million for the Animal Care Programs-- APHIS will
maintain its animal welfare and horse protection programs. The budget
includes a proposal, similar to fiscal year 2003, to collect $7.8
million in additional fees charged to facilities and establishments
required to be registered under the Animal Welfare Act but not
currently subject to a fee. This includes research facilities,
carriers, and in-transit handlers of animals.
A total of about $69 million for Scientific and Technical
Services.--APHIS develops methods and provides diagnostic support to
prevent, detect, control, and eradicate agricultural health threats,
and to reduce wildlife damages (e.g., coyote predation). It also works
to prevent worthless or harmful animal biologics from reaching
consumers. The request would enhance biosecurity activities, the
national animal health laboratory network, and physical security at
select facilities.
Increased funds of $6.6 million for Biotechnology.--The budget
includes a crosscutting trade-related and biotechnology proposal in the
Office of the Secretary. The Department anticipates a growing demand
for trade negotiating efforts and biotechnology activities, including
regulatory, market access and removal of trade barriers. Increased
APHIS efforts related to biotechnology may be funded from these
appropriations.
GRAIN INSPECTION, PACKERS AND STOCKYARDS ADMINISTRATION
GIPSA's mission is to facilitate the marketing of livestock, meat,
poultry, cereals, oilseeds, and related agricultural products and to
promote fair and competitive trade for the benefit of consumers and
American agriculture. It helps move more U.S. product both domestically
and abroad by investing in domestic infrastructure that supports
marketing within the grain and livestock industry. GIPSA fulfills this
through both service and regulatory functions in two programs: the
Packers and Stockyards Programs (P&SP) and the Federal Grain Inspection
Service (FGIS).
Packers and Stockyards Programs. The strategic goal for the Packers
and Stockyards Programs (P&SP) is to promote a fair, open and
competitive marketing environment for the livestock, meat, and poultry
industries. Currently, with 169 employees, P&SP monitors the livestock,
meatpacking, and poultry industries, estimated by the Department of
Commerce to have an annual wholesale value of over $115 billion. Legal
specialists and economic, financial, marketing, and weighing experts
work together to monitor emerging technology, evolving industry and
market structural changes, and other issues affecting the livestock,
meatpacking, and poultry industries that the Agency regulates.
We conducted over 1,400 investigations in fiscal year 2002 to
enforce the Packers and Stockyards Act for livestock producers and
poultry growers. More than 90 percent of identified violations were
corrected (or issues resolved) within one year of the investigation's
starting date.
The Swine Contract Library, mandated in the 2000 Appropriations
Act, is in the final testing stage. The web-based computer system will
be capable of receiving contracts, extracting unique contract
provisions and posting summary information. GIPSA is making the
necessary revisions to the final rule which would implement the Swine
Contract Library. It is a sizable and complex undertaking to assure
that the confidentiality requirements of the Act are maintained. For
example, a single type of contract, received from less than 10 packers,
can include more than 300 unique contract provisions to capture all of
the ledger contracts priced off swine or pork market prices.
Federal Grain Inspection Service.--GIPSA(s Federal Grain Inspection
Service (FGIS) facilitates the marketing of U.S. grain and related
commodities under the authority of the U.S. Grain Standards Act (USGSA)
and the Agricultural Marketing Act of 1946 (AMA). As an impartial,
third-party in the market, we advance the orderly and efficient
marketing and effective distribution of U.S. grain and other assigned
commodities from the Nation's farms to domestic and international
buyers. We are part of the infrastructure that undergirds the
agricultural sector.
GIPSA created a long-term temporary assignment in Malaysia to
assist the Southeast Asian agricultural attaches and cooperator
organizations by providing technical assistance and education to
customers of U.S. grain which would maintain and expand U.S. grain
markets. This and other technical trade assistance, such as that
provided to Mexico, facilitate the marketing of U.S. grain exports.
GIPSA works with government and scientific organizations to
establish internationally recognized methods and performance criteria
and standards to reduce the uncertainty associated with testing for the
presence of biotechnology grains and oil seeds.
GIPSA received almost 3,000 comments on the advance notice of
proposed rulemaking regarding how USDA can best facilitate the
marketing of grains, oilseeds, fruits, vegetables, and nuts in today's
evolving marketplace. A Process Verification Program is being
considered for applying internationally-recognized quality management
standards to verify that a biotech related quality control process has
been used to produce a product rather than relying on end product
testing. This would allow producers, marketers, suppliers, and
processors to assure customers of their processes to provide consistent
quality products.
Our efforts to improve and streamline our programs and services are
paying off for our customers, both in terms of their bottom lines and
in greater customer satisfaction. FGIS' service delivery costs
(adjusted for inflation), decreased from $0.29 per metric ton in fiscal
year 1998 to $0.26 per metric ton in fiscal year 2002. With the USDA
export certificates that grain exporters received at this cost,
exporters marketed over $15 billion worth of cereals and oilseeds.
Likewise, here at home, buyers and handlers requested over 1.8 million
domestic inspections that facilitated the trading of more than 131
million metric tons of cereals and oilseeds.
One indicator of the success of our outreach and educational
initiatives is the number of foreign complaints lodged with FGIS
regarding the quality or quantity of U.S. grain exports. In fiscal year
2002, FGIS received only 9 quality complaints and no quantity
complaints from importers on grains inspected under the U.S. Grain
Standards Act. These involved 197,423 metric tons, or about 0.2 percent
by weight, of the total amount of grain exported during the year.
GIPSA'S 2004 BUDGET REQUEST
For 2004, the budget proposes a program level for salaries and
expenses of $41.7 million. Of this amount, about $18.1 million is
devoted to grain inspection activities for standardization, compliance,
and methods development and approximately $23.5 million is for Packers
and Stockyards Programs. The 2004 budget includes:
An increase of about $1 million to implement a new Pilot Audit
Program.--The P&SP has never audited a large packer. As a pilot, this
initiative would audit the top four steer and heifer meatpackers who
handle 80 percent of the slaughter. The audits are anticipated to
result in substantially better understanding of their financial
operations to the regulated industry and lead to better financial
protection of producers.
An increase of $500,000 to enhance compliance and review the
Packers and Stockyards Act.--Efforts will respond to a GAO
recommendation to provide industry participants with clarification of
GIPSA's views on competitive activities. Further, given changes in the
livestock sector, the P&SP is preparing to undertake a complete review
of the Packers and Stockyards Act and its regulations. These activities
may result in a future increase in the number of investigations
conducted and monies recovered or returned to the regulated industries.
Biotechnology Funds. Some of the $6.6 million requested to support
crosscutting trade and biotechnology activities in the Office of the
Secretary may be applied to GIPSA's trade and biotechnology efforts.
New User fees.--New user fees, similar to those proposed for fiscal
year 2003, would be charged to recover the costs of developing,
reviewing, and maintaining official U.S. grain standards used by the
grain industry. Those who receive, ship, store, or process grain would
be charged fees estimated to total about $5 million to cover these
costs. Also, the Packers and Stockyards program would be funded by new
license fees of about $24 million that would be required of packers,
live poultry dealers, stockyard owners, market agencies and dealers, as
defined under the Packers and Stockyards Act.
AGRICULTURAL MARKETING SERVICE
The mission of AMS is to facilitate the marketing of agricultural
products in the domestic and international marketplace, ensure fair
trading practices, and promote a competitive and efficient marketplace
to the benefit of producers, traders, and consumers of U.S. food and
fiber products. We accomplish this mission through a variety of
voluntary fee-based services and publicly funded activities that help
our customers find ways to better market food and fiber products and
improve their profitability.
AMS continually monitors the needs of the agricultural industry,
develops strong partnerships with cooperating State agencies, and
identifies new technology that can be used to improve their
effectiveness. AMS depends on strong cooperative partnerships with
State programs and other Federal agencies to facilitate the collection
and dissemination of information, provide inspections, and otherwise
maximize the value of State and Federal programs by sharing and
coordinating the use of available resources. Through increased
cooperation, AMS has been able to achieve a number of programmatic
goals.
Global Agricultural Marketing.--AMS offers a range of services that
give sellers of agricultural products a competitive advantage in the
global marketplace. In 2002, AMS initiated the Global Market Expansion
program to strengthen the support of export marketing for U.S.
agricultural products. Under this activity, AMS experts served on, and
in several cases headed, U.S. delegations to meetings of international
food and fiber standards-setting organizations. AMS also provided
technical expertise to the U.S. trade officials in negotiations on
international standards. As an example of the critical role AMS plays
in the development of international standards, AMS provided the
technical support necessary to dissuade China from adopting cotton
standards that lack recognized measurement technologies and could have
posed a barrier to U.S. cotton exports. AMS also led the development of
lamb and poultry quality standards that will serve as models for
government and industry throughout Europe. Through such participation,
AMS is able to influence the design of food quality standards and model
inspection protocols so that they are fair to U.S. shippers and they do
not become barriers to U.S. agricultural trade. In 2004, AMS will
continue to do its part in helping to reduce trade barriers relating to
commodity standards and product testing by serving as delegates and by
leading international committees and organizations.
Science and Technology Programs.--Through cooperative relationships
with the States, AMS is in a unique position to effectively and
efficiently develop scientific data that is needed to support domestic
and export marketing of U.S. food products. The Pesticide Data Program
(PDP) is a unique and valuable source of statistically valid data on
pesticide residues in food and water. The program provides information
to the Environmental Protection Agency that is vital for realistic
assessments of dietary risk from pesticides on food commodities
available in the marketplace. PDP is instrumental in providing data
that addresses domestic and international public concerns about the
effects of agricultural pesticides on human health and environmental
quality. Exporters use PDP data to verify for foreign governments and
buyers that U.S. agricultural commodities are safe for consumption.
Importantly, PDP is built on Federal-State partnerships with 10
States--California, Colorado, Florida, Maryland, Michigan, New York,
Ohio, Texas, Washington and Wisconsin. These States collect and test
commodities for pesticide residues.
AMS' experience with PDP provided the foundation for initiating the
Microbiological Data Program. MDP is designed to gather baseline data
to assess the risks of microbial contamination of fruits and
vegetables, if any. Using the PDP programmatic framework, AMS collects
information regarding the incidence, number and species of foodborne
pathogens and indicator organisms on domestic and imported fresh fruits
and vegetables. In fiscal year 2002, AMS worked with cooperating States
and interested industry parties to initiate microbiological data
collection and testing. AMS developed operating procedures with FDA,
the Centers for Disease Control and Prevention, and State laboratories.
During 10 months of sample testing, approximately 19,000 analyses were
performed on 9,400 samples. The first report will be published this
year with calendar year 2002 data. The data will be provided to public
health agencies and the food industry for decision-making and
evaluation of procedures intended to reduce or eliminate harmful
microorganisms from foods.
National Organic Certification Program.--On October 21, 2002, the
Secretary launched the implementation of AMS' National Organic
Standards Program, which for the first time provides consistent
labeling of agricultural products coast to coast. The organic standards
were developed with extensive industry input and hundreds of thousands
of public comments. Thanks to this effort, any organic agricultural
product must meet USDA standards in order to be sold as ``organic.''
Today, consumers know the exact organic content of the food they buy.
Consumers can tell organically produced food from conventionally
produced food by looking at package labels and watching for signs in
the supermarket.
On August 23, 2002, AMS announced that Federal funds appropriated
in the Agriculture Risk Protection Act of 2000 and those made available
by the Farm Bill were available to defray the cost of organic
certification. AMS has entered into cooperative agreements with 45
States to distribute the funds. The remaining 5 States do not charge
fees for organic certification and are not eligible for cost-sharing
funds.
As directed by the Farm Bill, AMS is drafting a report to Congress
on the availability of key inputs into organic production, including
the availability of organically produced feedstuffs for the organic
production of livestock. AMS has contracted with Iowa State University
to survey grain producers and dealers in Midwestern States to ascertain
planting and harvesting intentions for the years 2002-2004. This report
should be completed this spring.
Country of Origin Labeling.--The 2002 Farm Bill requires USDA to
issue country of origin labeling guidelines for use by retailers who
wish to voluntarily notify their customers of the country of origin of
beef, lamb, pork, fish, perishable agricultural commodities, and
peanuts. AMS published the guidelines for voluntary country of origin
labeling in October 2002 and is collecting comments on their utility
through April of this year. We have already conducted six of the twelve
listening sessions held throughout the country regarding the
implementation of these guidelines. After these comments are evaluated,
the program will begin developing the mandatory requirements, which are
to be published by September 30, 2004.
AMS' 2004 BUDGET REQUEST
For AMS, the budget proposes a program level of $297 million, of
which over 65 percent will be funded through user fees. The budget
requests an appropriation of $76 million for Marketing Services and
Payments to States, including increased funding for paycosts, in order
to maintain existing program operations. The budget includes a request
for $26.4 million in Section 32, including increases for paycosts,
associated with administering marketing agreements and orders and
commodity procurement programs.
CONCLUSION
This concludes my statement. I am looking forward to working with
the Committee on the 2004 budget for the Marketing and Regulatory
Programs. We believe the proposed funding amounts and sources of
funding are vital to protecting American agriculture from pests and
diseases and for moving more product to foreign markets. It will
provide the level of service expected by our customers--the farmers and
ranchers, the agricultural marketing industry, and consumers. We are
happy to answer any questions.
______
Prepared Statement of Bobby R. Acord, Administrator, Animal and Plant
Health Inspection Service
Mr. Chairman and members of the Subcommittee, it is indeed a
pleasure for me to represent the Animal and Plant Health Inspection
Service (APHIS) before you today. Since appearing before you last year,
APHIS continued its vigilant effort to prevent foreign agricultural
pests and diseases from entering the United States. We also heightened
our efforts to keep American agricultural products moving overseas. It
is in the context of these two broad objectives that I want to report
on our fiscal year 2002 highlights, and our fiscal year 2004 budget
request.
APHIS' mission has been constantly evolving--right along with the
evolution of food production and marketing practices of the past 100
plus years and the Federal government's involvement in protecting and
serving U.S. agriculture. APHIS currently relies on a set of
interlocking protection strategies to meet the expectations of its
traditional agricultural stakeholders and to ensure that it has the
capacity to address the needs of non-agricultural stakeholders. These
strategies enable us to achieve our two main goals--to safeguard the
health of animals, plants, and ecosystems in the United States and to
facilitate safe agricultural trade. Hence our mission--To protect the
health and value of America's agricultural and natural resources.
safeguarding the health of america's agricultural and natural resources
American Agriculture can produce abundantly and export food and
fiber to the rest of the world only if it is healthy and free of the
many pests and diseases that plague most of the world. Other countries
will accept our exports only if the products are believed to be free of
pests and diseases. It is APHIS' responsibility to provide leadership
in agricultural health. There are five components in this first goal of
our mission. The first component is to keep foreign pests and diseases
far away from the U.S. border.
Conduct Offshore Threat Assessment and Risk Reduction. APHIS is
building bridges with foreign countries to prevent the import of pests
and diseases by allowing only healthy plants and animals and related
products to the United States. APHIS' staff is a vital link between
U.S. markets and foreign businesses that want to trade in these
commodities.
Our Foreign Animal Diseases (FAD) and Foot-and-Mouth Disease (FMD)
program works to detect and control outbreaks of animal diseases in
foreign countries, again far from our shores. APHIS' key strategy to
prevent the movement of FMD northward from South America is to maintain
an FMD-free area along the Colombia-Panama border. Our efforts have
effectively prevented a reintroduction of FMD into Mexico and the
United States. That Central America has never had an outbreak of FMD
demonstrates the effectiveness of the prevention activities throughout
the region. Also, the FAD program has been expanding to address
additional geographical areas and diseases. For example, animal health
experts have been stationed in China and southern Africa to address
potential threats from those regions.
Our Fruit Fly Exclusion and Detection program is working towards
establishing and maintaining a fly-free barrier in Central America to
prevent the spread of Medfly into the United States. In 1999, program
personnel quickly and effectively responded to an emergency situation
in Mexico that could have resulted in the establishment of Medfly in
the United States by 2005. Since then, APHIS has been working in
cooperation with Mexico and Guatemala to carry out Medfly eradication
and control activities in those countries to prevent the spread of
Medfly through Mexico into the United States. The economic significance
of keeping this foreign pest at bay is apparent from the costs that
could result from the establishment of Medfly into the United States.
For example, the total cost to Florida's agricultural producers if
Medfly were to become established in that state could total $33 million
annually.
We continue significant progress towards protecting the United
States from overland transmission of screwworm, a parasite that
produces flesh-eating larvae. Screwworm infestations decrease the value
of and can eventually even kill livestock. The Screwworm program
consists of cooperative programs with Mexico, countries of Central
America, and Panama. The goal of eradicating the pest to the Darien Gap
in Panama is nearly complete, and the time has come to establish a
permanent barrier against the pest. Once the barrier is in place, U.S.
livestock producers will be securely protected against this costly
pest.
APHIS works closely with foreign countries to set up preclearance
programs. These preclearance programs facilitate the smooth trade of
agricultural products to U.S. markets and ensure that the products are
pest- and disease-free before they touch U.S. shores. One of the most
successful of these preclearance programs is in Holland, where APHIS
officials have been inspecting tulips, daffodils, and other flower
bulbs since 1951. In Chile, APHIS has been inspecting all fruits and
vegetables destined for U.S. consumers since 1981.
APHIS is participating in the first passenger pre-departure
inspection program with a foreign government in the Dominican Republic
to mitigate the risk of Classical Swine Fever. Working with the
government of the Dominican Republic, APHIS inspects air and ferry
passengers destined for the United States mainland and Puerto Rico to
ensure they are not carrying prohibited plant and animal products or
animal byproducts. So far, the program has been an effective means of
protecting the multi-billion dollar U.S. pork industry. By performing
inspections off shore, we reduce the chance of the disease being
brought to the United States mainland.
In our Tropical Bont Tick program, APHIS employees are preventing
the introduction of heartwater and increased levels of dermatophilosis
into the livestock industry and wildlife populations of the United
States from Caribbean islands infested with tropical bont ticks. The
cooperative program has eradicated ticks from 6 of the 9 islands
involved so far, towards a goal of eradicating this pest from the
Western Hemisphere.
Regulate and monitor to reduce the risk of introduction of exotic
invasive species While our first component includes offshore
activities, the second component requires vigilant monitoring efforts
at first points of entry into the United States. We must have intensive
searches and aggressively enforce our regulations.
To reduce the threat of agricultural pests and diseases reaching
the mainland United States, APHIS screens passengers and passenger
baggage in Hawaii and Puerto Rico prior to departure. In fiscal year
2002, APHIS inspected over 1.5 million passengers before their
departures from Hawaii and Puerto Rico. Again, by inspecting passengers
offshore, we reduce the chance of them bringing pests or disease from
those areas. In addition, passenger preclearance programs exist in
Canada, the Bahamas, Bermuda, and Aruba. Program activities include
inspecting aircraft and passenger baggage for prohibited agricultural
products and ensuring passengers and crew departing from these foreign
locations are in compliance with our regulatory requirements. APHIS
works in coordination with the other U.S. Federal Inspection Service
(FIS) Agencies--Customs and Immigration--to insure all passengers are
in compliance with the U.S., FIS laws and regulations at these
locations. Because these passengers go through the thorough FIS
inspection, they arrive in the United States at a domestic terminal;
they are not subject to FIS inspectional activities upon arrival.
Operations of these programs were transferred to the Department of
Homeland Security, along with other FIS components. APHIS also
cooperates with the U.S. Department of Defense in inspecting military
passengers and equipment prior to their returning from overseas. During
fiscal year 2002, the military preclearance program expanded to include
personnel stationed overseas in Afghanistan and Uzbekistan as part of
Operation Enduring Freedom. In total, APHIS inspectors cleared over 9
million passengers en route to the United States.
Part of APHIS' strategy is to respond to threats of intentional
introduction of illegal products. We have increased the capacity of the
Smuggling Interdiction and Trade Compliance (SITC) staff and field
personnel. The staff analyzes pathways, prosecutes smugglers, and
provides outreach to increase industry compliance with our regulatory
requirements. APHIS personnel have worked closely with other Federal
agencies and local cooperators, focusing specifically on the illegal
movement of agricultural plant and animal products into the United
States. SITC began expanding their activities in fiscal year 2001 to
respond to the spread of foot-and-mouth disease worldwide.
The program used supplemental funding in fiscal year 2002 to
further increase staffing and apply new methods towards smuggling
reduction. APHIS seized nearly 2.7 million prohibited plant and animal
products, at markets, warehouses, and ports of entry. When we detect a
prohibited item, we identify the item's origin and the responsible
shippers, importers, and broker. By maintaining relevant information in
databases, the program can target specific commodities and importers.
SITC also worked with private industry on five national recalls of
prohibited commodities, including South African and Argentine lemons
and Mexican lemon grass and mangoes.
APHIS, through its Animal and Plant Health Regulatory Enforcement
program ensures uniform compliance with Federal laws and regulations
through a combination of sound enforcement and strong educational
efforts. We investigate violations, collect evidence, issue and collect
civil penalties, and develop alleged violation cases for formal
prosecution.
APHIS continues to work to improve the timeliness and quality of
investigations despite a continuing increase in the number and scope of
violations. APHIS personnel conducted 927 investigations involving
plant quarantine violations in fiscal year 2002 resulting in 139
warnings, 363 civil penalty stipulations, 21 Administrative Law Judge
decisions, and approximately $508,000 in fines. APHIS also conducted
widespread market surveillance activity to intercept prohibited foreign
fruits and vegetables illegally smuggled into the United States.
Significant cases involved the illegal importation of Mexican avocados
into the United States and tracing the distribution of Spanish
Clementine oranges infested with Mediterranean fruit fly.
We conducted 413 investigations involving animal health programs in
fiscal year 2002, resulting in 114 warnings, 34 civil penalty
stipulations, 9 Administrative Law Judge decisions, and approximately
$46,000 in fines. In addition, APHIS took several hundred
administrative actions on animal health program violations disclosed at
the border ports by agricultural quarantine inspectors. The alleged
violations were concentrated in veterinary accreditation, animal
identification, brucellosis, pseudorabies, and import/export programs.
We provided significant enforcement support during the Avian Influenza
eradication effort in Virginia poultry and at New York live bird
markets.
Using supplemental funds, APHIS hired additional investigators to
address the growing threats to our nation's agriculture and food supply
from bioterrorism threats, illegal activities such as smuggling, and
violations of the Swine Health Protection Act, principally in Puerto
Rico, Arkansas, Hawaii, and Florida. Violations of the Act can have
huge ramifications--foreign officials identified illegal practices
associated with prohibited feeding of garbage to swine as the source of
the devastating Foot-and-Mouth Disease outbreak in the United Kingdom
in fiscal year 2001.
Ensure safe research, release, and movement of agricultural
biotechnology events, veterinary biologics, and other organisms The
third component of our safeguarding goal addresses the rapidly moving
advances in laboratory practices and biotechnology. The United States
leads the world in the safe development and commercialization of
biotechnology-derived crops. Along with the Environmental Protection
Agency and the Food and Drug Administration, APHIS works to ensure that
these products will not harm agriculture, the environment, or human
health. Specifically, APHIS regulates the movement, importation, and
field testing of bioengineered plants and microorganisms through
permitting to ensure that field testing of transgenic plants does not
lead to unwanted environmental effects.
APHIS has recently established a new biotechnology unit and is
proposing a shift in the program line item structure to consolidate and
better coordinate our services and activities in this area. The new
unit and program line item, Biotechnology Regulatory Services, is
responsible for programs focusing on both plant-based biotechnology and
transgenic arthropods. We also will be examining ways to regulate
transgenic animals. By consolidating these activities into one unit, we
will bring greater focus to our domestic and international policy
coordination and development and our risk assessment, permitting, and
compliance programs.
Our Veterinary Biologics program works to provide pure, safe,
potent, and effective veterinary biological products in the United
States. Program activities include licensing veterinary biological
products, inspecting licensed manufacturing facilities, testing
statistically based samplings of licensed products, and issuing permits
for product importation. In fiscal year 2002, APHIS issued 106 product
licenses. Veterinarians and animal owners now have 19 new products for
the diagnosis, prevention, or treatment of animal diseases. The Agency
also terminated 76 product licenses for obsolete products.
APHIS provided oversight to over 2,512 active licensed or permitted
products for the control of 196 animal diseases in fiscal year 2002.
APHIS approved 16,796 serials of veterinary biologics in fiscal year
2002, while rejecting 28 serials for failing to meet Agency
requirements. The Agency conducted 831 tests on 228 of the 12,059
serials eligible for testing. APHIS performed 58 regulatory actions and
28 investigations of possible regulation violations. APHIS shipped
4,272 vials of reagents to facilitate testing consistency and quality
by biologics manufacturers and other regulatory authorities. In
addition, APHIS developed 4 new reagents.
In APHIS' Plant Methods Development Laboratories program, the
Center for Plant Health Science and Technology provides advanced
scientific and technological capabilities to protect and improve our
nation's agriculture and public health. Methods development supports
APHIS programs by optimizing existing pest management practices and by
developing new technologies for pest exclusion, detection, survey, and
management. We accomplish this by evaluating biocontrol organisms,
evaluating new biological and chemical materials, adapting or inventing
equipment, providing technical consultation and training, collecting
and disseminating pertinent information, participating in strategic and
tactical planning, serving as a liaison with the research community,
and integrating technological advancements into integrated pest
management systems. This system maintains both rapid response and long
range capabilities for serving APHIS and stakeholders.
Manage issues related to the health of U.S. animal and plant
resources and conflicts with wildlife. The fourth safeguarding
component involves diligent control and eradication efforts relating to
pest, disease, and wildlife conflicts that already exist in the United
States. In cooperation with the States, APHIS works to improve the
general health of our Nation's multi-billion dollar agriculture
industry through management techniques designed to eradicate harmful
pests and diseases, or, if eradication is not feasible, minimize their
economic impact. We monitor endemic diseases and pests through surveys
to detect their location and through inspections aimed at preventing
their spread into noninfested parts of the country. We also monitor and
enforce compliance with requirements of the Animal Welfare Act and the
Horse Protection Act.
The Boll Weevil Eradication Program (BWEP)--which has been a model
of cooperation between Federal and State regulatory officials,
extension and research personnel, and cotton producers--continued
reducing and ultimately eliminating losses caused by the boll weevil.
This program's fiscal year 2002 performance target was 7 million
cumulative weevil-free acres of the 16 million acres of U.S. cotton
produced. The actual number of weevil-free acres in fiscal year 2002
was 6.5 million. This result was attributable to a slight reduction in
acres planted and interruptions in aerial treatments resulting from the
events of September 11, 2001. The 6.5 million acres are in the
program's post-eradication phase, while 9.2 million acres are in the
active phase, and the remaining 300,000 acres are expected to join the
BWEP by fiscal year 2005.
The cooperative pink bollworm exclusion program continued
protecting 700,000 cotton acres in the San Joaquin Valley of California
through extensive surveys and preventative sterile moth releases. As a
result of the efforts of local growers and APHIS personnel, no new
infestations have been found outside the regulated area since fiscal
year 2000. APHIS is continuing to work with collaborators in
universities, industry, and the Agricultural Research Service to refine
a biologically based pink bollworm eradication system. In addition,
APHIS began a cooperative area-wide Pink Bollworm/Boll Weevil
Eradication Program with growers, State, and Federal cooperators in
parts of New Mexico, Texas, and northern Mexico, where the pests are
still present.
The State-Federal Cooperative Brucellosis Program works to
eradicate Brucella abortus from the bovine population and Brucella suis
from the swine population of the United States. This program protects
the cattle and swine industries. In fiscal year 2002, the National
Brucellosis Eradication Program continued to center around finding and
eliminating the last vestiges of brucellosis in the United States. The
program increased emphasis on surveillance and the testing of adjacent,
contact, and community herds. There were 9 affected cattle herds
disclosed in fiscal year 2002, compared to 6 in fiscal year 2001, and
14 in fiscal year 2000. The nine affected herds were in Texas,
Missouri, South Dakota, Oklahoma, and Idaho.
We also continued the Accelerated Pseudorabies Eradication Program,
Scrapie Flock Certification Program, and Bovine Tuberculosis
Eradication Program, among other animal health programs.
Before I move on to describe our Wildlife Services program, let me
emphasize how important APHIS' relationships are with our State and
Tribal partners in conducting these eradication and control programs.
Federal-State-Tribal cooperation is essential for these types of
programs to succeed, in addition to the support we receive from
academia and industry.
APHIS' Wildlife Services (WS) operation provides Federal leadership
in managing wildlife conflict. Part of the program's mainstay is
protecting American agricultural resources. In fiscal year 2002, APHIS
carried out various activities related to Bovine Tuberculosis (TB) in
wildlife populations. We began a pilot project providing fencing around
feed storage areas on farms to prevent the transmission of bovine TB
between cattle and deer. The goal of the pilot project is to determine
fencing designs that are both effective and practical. Additionally we
recorded observations of wildlife patterns on many of the bovine TB
positive farms to determine what activities may contribute to
transmission.
Protecting human health and safety also is a part of APHIS/WS
operations. APHIS assisted the Colorado Division of Wildlife and the
Wisconsin Department of Natural Resources with surveillance and disease
management strategies to reduce the prevalence of Chronic Wasting
Disease (CWD) in wild cervid populations. APHIS worked closely with
State wildlife agencies, the U.S. Fish and Wildlife Service, and local
governments in addressing increased problems with non-migratory,
resident Canada geese in fiscal year 2002. With the current population
exceeding 2 million geese and increasing exponentially, this growing
bird population is a primary concern in the eastern and the central
United States and increasing in the west. Problems include threats to
public safety at airports and air bases, contamination of water
supplies and recreational beaches, and damage to lawns, turf areas, and
agricultural resources such as seed production.
To protect both humans and livestock, APHIS/WS also continued an
oral rabies vaccination (ORV) program. The goal of this program is to
establish and maintain immunization barriers to contain specific
strains of rabies in wildlife populations. To stop the spread of
raccoon rabies westward, APHIS extended an older ORV barrier in the
northeastern States and Ohio into West Virginia, through western
Virginia, and into eastern Tennessee. Program officials also continued
to distribute ORV baits in the Northeast. To stop the disease's spread
in coyotes and gray foxes in Texas, program officials also continued
the ORV program in that state.
APHIS also works to protect natural resources and property. In
Maryland, APHIS is cooperating with several governmental and private
partners in managing nutria. Nutria are non-native to North America and
are impacting sensitive marshes of the Chesapeake Bay. APHIS continues
to cooperate with various State and Federal agencies to protect
reintroduced black-footed ferrets from predators and to monitor for
diseases that may impact ferrets in Montana, Wyoming, Colorado, and
other States where they have been reintroduced. The Agency's beaver
damage management activities in Alabama, Florida, Georgia, Kentucky,
Louisiana, Maine, Mississippi, North Carolina, South Carolina,
Tennessee, Wisconsin, and Virginia throughout fiscal year 2002 averted
impending beaver damage to forest and agricultural resources,
waterways, and highway infrastructures. Humans and wildlife continue to
compete for habitat as both populations increase. In fiscal year 2002,
APHIS provided technical assistance to approximately 60,000 individuals
in urban and suburban areas concerned with wildlife damage to property;
we now have a 1-800 Nuisance Wildlife Hotline services in cooperation
with State Agencies in four States.
APHIS' Wildlife Services (WS) Methods Development program conducts
programs to develop new or improved methods for reducing wildlife/
agriculture conflicts. The National Wildlife Research Center (NWRC) of
APHIS' Wildlife Services program provides scientific information for
the development and implementation of effective, practical, and
socially acceptable methods for wildlife damage management. This helps
ensure that high-quality technical and scientific information on
wildlife damage management is available for the protection of crops,
livestock, natural resources, property, and public health and safety.
WS methods development activities include methods to manage and
resolve wildlife disease impacts on agriculture and methods to reduce
invasive species damage to agriculture and natural resources. For
example, the program has developed methods to mitigate blackbird damage
to sunflowers and rice, methods to reduce bird hazards to aviation,
techniques to control mountain beaver and bear damage to western
forests, methods to reduce rat damage to sugarcane and macadamia nuts,
methods for reducing cormorant depredation at aquaculture facilities;
and approaches to reduce coyote damage to livestock. APHIS develops
analytical chemistry methodology to support the registration and re-
registration of chemicals for small mammals, for bird and predator
control, and for the identification of potential repellents to support
non-lethal wildlife damage management control strategies. During fiscal
year 2002, approximately 75 percent of WS methods development resources
went toward non-lethal approaches to wildlife damage management.
APHIS' Animal Welfare program continues to focus its resources on
conducting quality inspections under the Animal Welfare Act at USDA
licensed and registered facilities. The use of the program's risk-based
inspection system concentrates activities on facilities where animal
welfare concerns are the greatest. With the funding increase in fiscal
year 2002, APHIS hired 16 new animal care inspectors who, by the end of
the fiscal year, were being trained and had started to conduct
inspections. As a result, the number of inspections increased by 1
percent, continuing the upward trend in inspections that began in
fiscal year 2001, following a sustained period of decline throughout
the 1990s. By the end of fiscal year 2002, the number of animal care
inspectors stood at 98, an increase of 53 percent from the low of 64 at
the end of fiscal year 1998.
In the Horse Protection program, APHIS has been working for nearly
a decade with Horse Industry Organizations (HIOs) certified under the
Horse Protection Act to develop a partnership whereby the HIOs can
assume greater responsibility for self-regulation. The current plan
began with the 2001 horse show season and ends in December 2003. APHIS
plans to continue offering the plan in fiscal year 2003, possibly with
some modifications, for those HIOs wishing to use it.
Respond to emergencies and emerging issues--surveillance, quick
detection, containment, and eradication. The fifth component of APHIS'
safeguarding system requires that we move quickly when an outbreak or
other emergency situation does occur. Quick action will help safeguard
other resources and will reduce adverse trade implications for our
products. APHIS' Emergency Management System (EMS) is a joint Federal-
State-industry effort to improve the ability of the United States to
deal successfully with animal health emergencies, ranging from natural
disasters to introductions of foreign animal diseases. In addition to
unintentional introductions of foreign animal diseases, the EMS
addresses intentional introductions and emerging diseases that could
pose a threat to animal agriculture. With full readiness to deal with
animal health outbreaks, we can reduce the threat of the outbreak on
the Nation's food supply and economic well-being. While APHIS conducts
the majority of its work related to animal emergency management within
this program, activities such as foreign animal disease investigations
and training are funded within the animal health monitoring and
surveillance program.
In fiscal year 2002, APHIS developed and participated in many
State-level test exercises to increase the confidence and capability of
the first responders to an animal health emergency in the United
States. APHIS also participated in the development and implementation
of an international animal health test exercise in Australia.
In addition, APHIS initiated the distribution of $18.5 million in
Homeland Security Supplemental funds to States and Tribal Nations to
help bolster their emergency preparedness and surveillance efforts. Of
this, $11 million went to States and Tribal Nations to enhance
emergency preparedness efforts, $4.5 million went to States to enhance
animal health surveillance, and $3 million is going toward the purchase
of carcass disposal systems for three States: California, Wisconsin,
and Texas.
Through the Pest Detection program, APHIS and the States
participate in the Cooperative Agricultural Pests Survey (CAPS)
program, which provides the domestic infrastructure necessary for early
detection of plant pests and weeds that enter into the United States or
expand into new areas. Survey targets include weeds, plant diseases,
insects, nematodes, and other invertebrate organisms. Program
activities include evaluating pest risks, conducting detection surveys,
responding to detections in a timely manner, collecting and reporting
data, developing State Pest Lists, assessing risk and analyzing
pathways, and communicating with the public.
Using funds provided in the fiscal year 2002 Homeland Security
Supplemental appropriation, APHIS has begun efforts to significantly
strengthen our pest detection capabilities. We are in the process of
hiring 26 personnel trained in pest detection technologies at key U.S.
locations to coordinate and oversee early detection surveys in
cooperation with the States. In addition, we obligated $4 million in
fiscal year 2002 to expand cooperative agreements for implementation of
the CAPS surveys within all the States. We have also begun to train
identifiers and procure up-to-date surveillance equipment to ensure
that data are of high quality and standardized across the country. This
equipment will also allow us to conduct research to develop better
survey tools and techniques and undertake pathway analyses to
facilitate interception. We obligated an additional $4.5 million from
the Homeland Security supplemental appropriation for fiscal year 2003
CAPS agreements to sustain these efforts. The States are using this
money to build survey infrastructure. These activities include hiring
survey coordinators and purchasing equipment.
APHIS' Animal Health Monitoring and Surveillance program maintains
a cadre of trained professionals to quickly detect potential animal
health emergencies. APHIS continually evaluates its means and methods
for safeguarding American agriculture from foreign animal disease, such
as bovine spongiform encephalopathy (BSE). To date, no case of BSE has
ever been detected in the United States although more than 46,475
samples have been tested. This program also surveys for poultry,
miscellaneous equine, and other animal diseases.
Through early detection and rapid response programs, APHIS is
prepared to respond immediately to potential animal and plant health
emergencies. In fiscal year 2002, APHIS took quick action on the
following plant and animal situations: Asian Longhorned Beetle, Low
Pathogenic Avian Influenza, Chronic Wasting Disease, Citrus Canker,
Classical Swine Fever, Infectious Salmon Anemia, Karnal Bunt,
Mediterranean Fruit Fly, Pierce's Disease/Glassy-winged Sharpshooter,
Rabies, and Scrapie. The Secretary used her authority to transfer in
2002 over $200 million to battle these pests and diseases. Without the
quick detection and early, rapid response, the cost to control the
outbreak would have undoubtedly been higher. As of May 2, 2003, the
Secretary has transferred over $276.67 million to quickly detect,
control the spread of, and eliminate pests and diseases such as
tuberculosis, exotic Newcastle disease, Mediterranean fruit fly,
chronic wasting disease, and Glassy-winged Sharpshooter, Spring Viremia
of Carp, and Emerald Ash Borer.
Facilitate Safe Agricultural Trade
The second goal in our mission is to facilitate agricultural trade.
The key to assuring trading partners of the health of our products is a
credible system to assess American agriculture and document that it is
healthy and that other countries have nothing to fear from our exports.
This is the first component in facilitating trade. We must also certify
the health of our agricultural exports, resolve trade barriers, and
provide expertise and training in animal and plant health.
Document the health status of U.S. agriculture and related
ecosystems. The World Trade Organization and the North American Free
Trade Agreement commit countries to recognizing disease- and pest-free
areas within a country even if a particular pest or disease exists
elsewhere in the nation. This concept of regionalization is founded on
the long-standing idea that import requirements should be based on
geography and science rather than on politics.
APHIS' Pest Detection program provides documentation of our pest
status in plant resources. Examples of observations include taking
grain samples for Karnal bunt, setting traps for fruit flies, or
checking trees for citrus canker and plum pox. A ``negative''
observation is registered when we do not find the plant pest; a
``positive'' observation is recorded when we do. Both positive and
negative results yield valuable and useful information for trade
discussions, as can be seen with Leek moth, which affects onions and
garlic. We continue to show that the United States does not have this
pest based on continuing negative survey results.
We also conduct delimiting surveys for plant pests that have
invaded the United States and may be expanding their range. These
include apple ermine moth, cereal leaf beetle, citrus leaf miner, pine
shoot beetle, and several other bark beetles. The program manages data
for other species including gypsy moth, imported fire ant,
Mediterranean fruit fly, pink bollworm, giant Salvinia, golden
nematode, and other regulated, cooperative program pests. Surveys for
these pests also assist in the export of U.S. agricultural commodities.
APHIS continued using the CAPS network to conduct the Karnal Bunt
(KB) National Survey in response to the 1996 detection of the disease
in Arizona and the 2000 detection in northern Texas. By collecting
extensive survey data demonstrating the limited distribution of KB in
the United States, APHIS provides assurance to all trade partners that
KB is not present in major wheat-producing areas of the United States,
thereby insuring annual agricultural exports of up to $3.5 billion.
Plum pox is another project in which the collection of national data
has helped to keep budwood markets open by showing the absence of the
pest from various areas around the United States.
The Agency's proactive National Animal Health Monitoring and
Surveillance (NAHMS) program produced and interpreted scientifically
valid information for policy makers, producers, and consumers. NAHMS
delivered objective information addressing animal health as it pertains
to U.S. trade, agricultural productivity, public health, and on-farm
quality assurance. Collaborative information sharing and producer
confidentiality are cornerstones of the program. Through effective
partnerships with animal commodity producer groups, State governments,
university researchers, and other Federal agencies, the program met
producers' and the U.S. public's information demands in a cost-
effective, collaborative manner while minimizing duplication of effort.
Certify the health of animals and plants and related products for
export and interstate commerce APHIS' Import/Export program regulates
the importation of animals and animal products and promotes markets
abroad by ensuring that U.S. origin animals and animal products meet
health and welfare requirements of recipient countries. The program
issued point of origin certificates for the export of approximately 909
thousand head of livestock, 30.2 million live poultry, 74.8 million
eggs, 30 million day-old chicks, 9.3 million live fish, 103.2 million
aquatic embryos and eggs, 10.3 million doses of semen, and 11,908 non-
aquatic embryos.
Because international standards are science-based, several
countries--including Argentina, Brazil, the Dominican Republic,
Ecuador, Mexico, and Peru--placed restrictions on U.S. horses and birds
in fiscal year 2002 due the presence of West Nile Virus in the United
States. Other disease events, such as the diagnosis of Low Pathogenic
Avian Influenza in several Eastern states in fiscal year 2002 and
Exotic Newcastle Disease in California, Nevada, and Arizona in late
2002 and early 2003, also resulted in restrictions, significantly
impacting live animal exports.
Through the Agricultural Quarantine Inspection program's EXCERT
(export certification) system, APHIS facilitates the export of
agriculture shipments. Over 4,000 certifying officials can access the
information on certification requirements online. In fiscal year 2002,
APHIS issued over 380,000 certificates for agriculture shipments. APHIS
export certifications ensure that U.S. products meet the agricultural
requirements of the country of destination. In fiscal year 2002, APHIS
began the pilot phase of the Phytosanitary Certificate Issuance and
Tracking database. This database captures export application
information, documents inspection and certification information, and
prints an original phytosanitary certificate on secure paper. The pilot
phase involves 10 field locations, representing several State and
County cooperators. APHIS will retain this certification responsibility
while inspection operations are transferred to the Department of
Homeland Security.
In fiscal year 2002, APHIS' Veterinary Biologics program issued
4,385 official certificates that indicate licensed production and
testing facilities and products have met or exceeded marketing
requirements. The regulated industry used these certificates to
register their products for sale in foreign countries. The confidence
that foreign regulators have in the U.S. veterinary biologics
licensing, testing, and inspection system is reflected in their
readiness to accept our products. Center for Veterinary Biologics (CVB)
officials provided informational presentations at international
conferences to bolster foreign regulators' confidence.
Resolve trade barrier issues related to animal and plant health. As
modern trade agreements prohibit onerous tariffs and similar trade
barriers, some countries may resort to ``sanitary and phytosanitary''
concerns--that is, claims that American agricultural exports carry
pests and diseases not present in their countries. Those claims may not
be science-based. APHIS fills the crucial role of gathering and
analyzing the scientific evidence to refute such claims or recommend
measures to reduce the impact of other country's SPS concerns.
Officials with the Trade Issue Resolution and Management program
work to minimize trade disruptions caused by animal and plant health
issues. Personnel overseas participate in negotiations, work with
standard-setting organizations, and facilitate the capacity of
countries to recognize and respond to agriculture health issues that
restrict trade. They coordinate these activities with domestic staff
who resolve issues that trading partners may have with U.S. products or
handle negotiations on bilateral or multilateral issues. APHIS' efforts
contributed to the opening or retention of $1.1 billion in export
markets in fiscal year 2001, the latest data available. These
accomplishments related to products as diverse as cherries, tobacco,
and poultry.
The job of ensuring that animal and plant health issues are not
used unfairly as barriers to trade gets more complicated as trade
increases. Recent agreements and the efforts of the World Trade
Organization have reduced the traditional barriers to trade in
agricultural products. Countries wishing to protect their markets from
competition may turn to sanitary and phyosanitary (SPS) barriers. To
retain or open markets, APHIS technical experts must be ready to
respond to challenges involving new animal and plant health issues.
Even though USDA, with APHIS assistance, persuades other countries
to accept American exports in principle, the importing country may
attempt to stop the entry on actual shipments. Attaches are uniquely
positioned to respond to day-to-day problems with individual shipments
that are detained in ports overseas. Sometimes the problems arise from
a misunderstanding of a regulation, or the problem may be as simple as
an incorrect notation on a phytosanitary certificate. Having these
shipments detained could be costly for the exporter, whose product may
spoil while the importing country is deciding on what to do with it. In
fiscal year 2002, attaches' actions saved more than $53.2 million worth
of products for agricultural exporters. For example, in May 2002, an
APHIS attache resolved an issue causing the detention of a $3 million
shipment of rice to Costa Rica.
During fiscal year 2002, APHIS negotiated 44 new or revised export
protocols for exporting poultry, livestock, and germplasm to numerous
countries in the Americas, including Argentina, Bolivia, Brazil, Chile,
the Dominican Republic, Ecuador, Guatemala, Mexico, Panama, and Peru.
In addition, APHIS negotiated protocols with the Czech Republic for
bovine semen and embryos, and with Lithuania, Hungary, and Estonia, for
bovine embryos. Currently, APHIS is negotiating protocols with Peru and
Nicaragua.
Increased trade in and concerns over genetically engineered
products--particularly crops--have heightened international initiatives
to harmonize and address assessments of products from both
environmental and food safety perspectives. This has also led to
discussion of mechanisms to address trade in these products, both
bilaterally and multilaterally. A primary objective of APHIS'
harmonization efforts is to maintain and enhance the use of science-
based decision making, and to promote the credibility of U.S.
regulatory bodies as independent, objective evaluators of product
safety. APHIS has participated in the development of guidance and
technical approaches in the Codex Alimentarius, the International Plant
Protection Organization (IPPC), the North American Plant Protection
Organization (NAPPO), the Cartagena Protocol on Biosafety, and the
Organization for Economic Cooperation and Development (OECD). APHIS
continued a joint project under the Transatlantic Economic Partnership
(TEP) aimed at European Union and U.S. regulatory authorities accepting
common data requirements as the basis for approval of biotechnology
products. Success in the TEP process will facilitate a harmonized
approval process for genetically modified organisms between North
America and Europe.
Provide expertise and training in animal and plant health To
facilitate agricultural trade, APHIS must provide technical services
and information about animal and plant health to USDA's Foreign
Agricultural Service and the U.S. Trade Representative, who have
primary responsibility to negotiate trade agreements with other
countries. We also need to help developing countries meet SPS Agreement
requirements--which include having regulatory mechanisms in place to
ensure the safe release and movement of agricultural products--and we
need to help these countries build better animal and plant surveillance
capacity. Only through actively helping build health infrastructures
can we be assured that other countries are sending healthy agricultural
products to the United States. With the increasing volume of trade and
movement of passengers, APHIS will likely have to rely more on the
sanitary and phytosanitary export certificates of our trading partners.
Trade is a two-way street; we cannot increase exports and
simultaneously engage in protectionist practices. APHIS must protect
U.S. agriculture from incursions of foreign pests and diseases without
restricting trade. Trade agreements and the World Trade Organization
oblige us to move quickly on foreign countries' requests to import into
the United States. We also put together or participate in technical
assistance projects with trading partners and potential trading
partners. These technical assistance projects serve two roles. First,
they assure trading partners that U.S. products are safe because they
clearly explain U.S. sanitary and phytosanitary procedures. Secondly,
they help other countries develop a regulatory infrastructure that will
make it possible to safely take part in trade. Particularly aimed at
developing countries, these projects aim to build new markets for U.S
products while helping those countries build their own agricultural
industries.
The technical assistance projects we administer vary worldwide in
terms of the means of information dispersal. Examples include
epidemiology training for visitors from overseas or distance learning
modules on SPS principles. The modules, which are available in a
variety of media, are administered via attaches worldwide. APHIS also
participates in the Foreign Agricultural Service's Cochran Fellowship
program, which funds training programs for senior- and mid-level
agriculturists from middle income countries and emerging democracies.
In recent years, the Cochran program has funded numerous training
programs related to the SPS issues of food safety, animal health, and
plant quarantine.
The Veterinary Biologics program continued efforts to reduce trade
measures limiting the sale of veterinary biological products overseas.
Program officials continued technical and harmonization discussions
with representatives of the American, Asian, European and U.S.
biologics industries and regulatory officials. APHIS held individual
meetings with regulatory officials from Australia and New Zealand to
facilitate exchange of information and encourage discussions of
regulatory issues.
A part of APHIS' Veterinary Diagnostics program assists foreign
governments in the diagnosis of animal diseases by maintaining national
and international laboratory recognition with the highest quality
reference assistance and by conducting developmental projects for
rapidly advancing technologies.
In fiscal year 2002, the Agency's National Veterinary Services
Laboratories (NVSL) continued efforts in the veterinary diagnostics
program to safeguard the United States from adverse animal health
events. APHIS, along with the Cooperative State Research, Education,
and Extension Service, the American Association of Veterinary
Laboratory Diagnosticians Executive Board, and State laboratory
directors, developed a pilot program of the National Animal Health
Laboratory Network. The network is a national strategy to meld the
nation's Federal, State, and local resources in order to respond to any
type of animal health emergency, including bioterrorist events, newly
emerging diseases, and foreign animal disease agents that threaten the
nation's food supply and public health. During fiscal year 2002, USDA
provided a total of $15.25 million in Homeland Security funding to 12
State diagnostic laboratories to use for improving biosecurity of
facilities, communicating results, buying equipment, standardizing
methods, and quality assurance.
During fiscal year 2002, NVSL provided training to 798 State,
Federal, private, and foreign participants for a total of approximately
303 training days. This included 13 formal APHIS training courses
focusing on scrapie, tuberculosis, equine infectious anemia, blue
tongue, bovine leukosis virus, brucellosis, leptospirosis, and lab
biosafety. Six foreign animal disease training schools were also
conducted at the Foreign Animal Disease Diagnostic Laboratory on Plum
Island for a total of 197 participants. In addition to the formal
courses, NVSL also provided bench training in EIA, brucellosis,
Johne's, Salmonella, pseudorabies, scrapie, avian influenza (AI), West
Nile virus, and contagious equine metritis.
FISCAL YEAR 2004 BUDGET REQUEST
American agriculture is a tremendous resource. To protect this
resource, we must safeguard the health of our animals, plants, and
ecosystems. The value of this resource is increased when you consider
the economic benefits of trading our agricultural products overseas for
other goods and services. Safeguarding our agricultural wealth and
facilitating safe agricultural trade go hand in hand and require
several activities. To carry out these activities, we request $694.9
million for the salaries and expenses account. We request a pay
increase of $9.3 million and a decrease of slightly more than $1
million because of information technology procurement efficiencies. Our
requested program level changes are outlined below. In our building and
facilities account, we request $5 million, a decrease of $5 million for
a one-time project from fiscal year 2003 level, to carry out basic
maintenance and repair activities.
The proposed funding for the Agricultural Quarantine Inspection
(AQI) appropriated program reflects funding of future activities for
the Automated Targeting System through mandatory, rather than
discretionary funding. In addition, the $21.3 million request for AQI
excludes the border inspection programs that have been transferred to
the Department of Homeland Security (DHS). The fiscal year 2004 budget
also recognizes the transfer of the Plum Island Animal Disease Center
to DHS, which will receive some program funds and necessary funding to
operate the facility. Both USDA and DHS will share program funds to
reflect their needs, working closely to keep agricultural pests and
diseases out of the United States.
Funding for ongoing programs to combat pests and disease is based
on the recognition that the Federal Government, and affected States and
localities, as well as producers and other private cooperators benefit
from eradication. Therefore, we will be proposing a rule in the Federal
Register to solicit public comment prior to finalizing before October
1, 2003 which establishes criteria to share program responsibilities in
a reasonable manner. For that reason, the fiscal year 2004 budget
allocates funding among the Federal Government and cooperators based on
consistent program criteria which recognizes a significant Federal
responsibility, and takes into account cooperator ability to pay as
well as other risk based factors. Federal funding for these ongoing
programs would still range from 57 percent to 70 percent, and could in
other circumstances be as great as 100 percent.
The budget includes a total of $26.7 million for the boll weevil
program, based on a 20 percent Federal cost share and a reduction of 35
percent in program acres based on long-term program goals.
To successfully safeguard the health of agricultural animals,
plants, and ecosystems in the United States, we must begin overseas
where those pests and diseases currently exist. To enhance our offshore
threat assessment and risk reduction activities, APHIS requests a total
of $1 million for classical swine fever eradication in the Dominican
Republic and Haiti and $2.9 million to eradicate tropical bont tick
from Antigua and prevent its spread to other islands.
To reduce the risk of introduction of exotic invasive species, we
must enhance our regulatory enforcement and monitoring activities. We
request $881,000 for an aerial sterile Medfly preventive release
program in California and Florida. A total of $9.6 million is proposed
for the animal and plant health regulatory enforcement program
including funds to continue Homeland Security Supplemental funded
investigations of alleged violations, search garbage feeding
operations, and document enforcement actions. An import/export program
increase of $2.8 million will allow us to complete and maintain an
animal tracking system and place database managers to identify pathways
of exotic animal disease. We request $2.9 million to make a number of
improvements associated with biosecurity. These include connecting
field activities electronically to our Emergency Management Operations
Center, enhancing identification protocols and analytical capabilities,
developing a network of Foreign Animal disease diagnosticians, and
conducting biosecurity awareness campaigns. We are proposing a total of
$6.3 million to continue increased security at mission critical
facilities.
To address the threat of biological terrorism directed at the
nation's animal food supply, the Agency proposes an increase of $1.4
million in the veterinary biologics program and an increase of $3.3
million in the veterinary diagnostics program for enhanced laboratory
network activities, anthrax diagnostics, and security clearances.
To prepare for the unlikely event of foot-and-mouth (FMD) entering
the United States, we request $560,000 to increase the North American
FMD vaccine bank doses by 1.25 million to 20.75 million.
The continued existence of pests and diseases in the United States
hurts the American producer in several ways. First, their existence
reduces yields and increases costs. Second, other countries will cite
them as reasons to prohibit or place restrictions on our exports. APHIS
has requests to address some of the most devastating pests and
diseases. We propose $15 million in our chronic wasting disease program
to increase grants to States and to assist in surveillance, disease
management, diagnostic testing, communications, and information
management. We need an additional $329,000 in the golden nematode
program for increased surveillance, equipment, and cooperative
agreement funding. We request $2 million to assist States in a long-
range low pathogenic avian influenza control and prevention program. To
ensure we can account for all hazardous materials used in our wildlife
services operations program, we request $1 million to create a
hazardous materials database. We request a total of $3.5 million in the
plum pox virus program to continue recent program success in
eliminating and not finding any more disease.
The APHIS request does not contain an increase in the trade issues
resolution and management program to enhance our ability to resolve
trade barrier issues related to animal and plant health or in the
biotechnology regulatory services program to improve existing products
and spawn new technologies. The Office of the Secretary requests $6.6
million to be allocated among USDA Agencies for negotiating and
monitoring trade agreements and for technical trade support in the
areas of biotechnology regulatory services and sanitary and phyto-
sanitary issues.
We also propose a reduction of $7.7 million associated with animal
welfare user fees. This will allow the industry to cover an estimated
50 percent of the cost of enforcing the animal welfare regulations.
CONCLUSION
Simply stated, APHIS' mission is to protect the health and value of
America's agricultural and natural resources. This mission carries two
goals--to safeguard the health of animals, plants, and ecosystems in
the United States and to facilitate safe agricultural trade. Our
safeguarding goal requires us to: (1) conduct offshore threat
assessment and risk reduction, (2) regulate and monitor to reduce the
risk of introduction of exotic invasive species, (3) ensure safe
research, release, and movement of agricultural biotechnology events,
veterinary biologics, and other organisms, (4) manage issues related to
the health of U.S. animal and plant resources and conflicts with
wildlife, and (5) respond to emergencies and emerging issues--
surveillance, quick detection, containment, and eradication. Our
facilitating trade goal requires that we: (1) document the health
status of U.S. agriculture and related ecosystems, (2) certify the
health of animals and plants and related products for export and
interstate commerce, (3) resolve trade barrier issues related to animal
and plant health, and (4) provide expertise and training in animal and
plant health. There is a continuum between the goals and a connected,
inseparable relationship among the objectives. We cannot improve, or
strengthen one goal without improving or strengthening the other.
I am proud of the APHIS mission, its goals, and its objectives. I
also am proud of all of the men and women of APHIS who have dedicated
their careers to improving the health and profitability of America's
animal and plant resources. Their dedicated efforts, coupled with the
Committee's unwavering support, have truly helped American agricultural
producers overcome pests, diseases, and economic uncertainty. I will
close by saying that Progressive Farmer, one of America's oldest and
most widely circulated agricultural publications selected ``The People
of APHIS'' as winners of the 2003 People of the Year recognition. Since
1937, this is the first time the award has gone to a group of people.
This indeed is quite an honor and recognizes the character and
dedication of everyone at APHIS.
On behalf of APHIS, I appreciate all of your past support and look
forward to even closer working relationships in the future. We are
prepared to answer any questions you may have.
______
Prepared Statement of A.J. Yates, Administrator, Agricultural Marketing
Service
Mr. Chairman and Members of the Committee, I am pleased to have
this opportunity to represent the Agricultural Marketing Service--AMS--
in presenting our fiscal year 2004 budget proposal.
MISSION
AMS activities support agricultural marketing. Formally stated, the
Agency's mission is to facilitate the marketing of agricultural
products in the domestic and international marketplace, ensure fair
trading practices, and promote a competitive and efficient marketplace
to the benefit of producers, traders, and consumers of U.S. food and
fiber products. We accomplish this mission through a variety of
voluntary fee-based services and publicly funded activities that help
our customers find ways to better market food and fiber products and
improve their profitability. AMS helps to make the Nation's
agricultural markets work efficiently by making sure that all producers
and traders have equal access to market information; by assuring them
that quality and other product representations are accurately
described; by providing pesticide residue and microbiological data that
support science-based risk assessment; by providing ``how to''
technical expertise to growers, shippers, and market facilities; by
helping to develop improved or alternative market outlets; and by
helping producers adjust to consumer trends.
To be successful, we continually monitor the needs of our customers
in the agricultural industry, develop strong partnerships with
cooperating State agencies, and adopt new technology to improve our
effectiveness. Since most of our user-funded services are voluntary, we
always remain conscious of cost while being responsive to customer
needs.
AMS depends on strong cooperative partnerships with States and
other Federal agencies. Our Market News, Shell Egg Surveillance,
Pesticide Data, Microbiological Data, Pesticide Recordkeeping, and
Federal Seed programs all depend on their State partners to help
collect and disseminate information, provide inspections, and otherwise
maximize the value of State and Federal programs by sharing and
coordinating the use of available resources.
One of the ways we continue to improve our service is through
public electronic access to information and services. AMS offers online
application for services, filing for protection under the Perishable
Agricultural Commodities Act, public comment on rulemaking, and bidding
on Federal commodity purchases. Market news users can now access all
current market news reports through the AMS Internet home page
(www.ams.usda.gov), use search engines to retrieve recent historical
data from an 18-month archive, and link to other Internet sites that
carry related information.
For fiscal year 2004, AMS will maintain a high level of program
delivery while continuing to implement program enhancements without an
increase in funding. Therefore, I would like to describe some of AMS'
significant accomplishments during fiscal year 2002 and our activities
in 2003.
GLOBAL AGRICULTURAL MARKETING
AMS offers a range of services that give sellers of agricultural
products a competitive advantage in the global marketplace. For
example, our Transportation Services and Pesticide Data Programs
provide information to facilitate agricultural commodity exports. Our
AMS grading and laboratory testing programs offer product, production
process, and equipment certifications to support compliance with export
specifications.
We initiated our Global Market Expansion program in fiscal year
2002 to strengthen our support of export marketing for agricultural
products. Under this activity, AMS participates in international
standards organizations such as United Nations Codex Alimentarius
Commission committees, International Dairy Federation Standing
Committees, U.N. Economic Commission for Europe, Organization for
Economic Cooperation and Development Seed Scheme, International
Standards Organization, International Seed Testing Association, North
American Free Trade Agreement Working Groups, World Meat Congress,
International Calibration Cotton Standards Committee, International
Textile Manufacturers Federation, U.S. National Committee for the
International Institute of Refrigeration Working Committees, and
several bilateral Consultative Committees on Agriculture. AMS experts
served on, and in several cases headed, U.S. delegations to meetings of
these international food and fiber standards-setting organizations.
AMS also provides technical expertise in negotiations on
international standards. In 2002, we worked with U.S. trade officials
to delay China's adoption of cotton standards that lack recognized
measurement technologies and could have posed a barrier to U.S. cotton
exports. AMS led the development of lamb and poultry quality standards
that will serve as models for government and industry throughout
Europe. We actively participated in developing a model export
certificate for milk and milk products, international dairy standards
and a code of hygienic practices for milk and milk products. We
provided expertise on finalizing the technical requirements for testing
meat products for hormones and veterinary drugs destined for export to
the European Union and helped develop the U.S./Chile free trade
agreement that will make U.S. beef eligible for export to Chile.
Through such participation, AMS is able to influence the design of
food quality standards and model inspection protocols so that they are
fair to U.S. shippers and they do not become barriers to U.S.
agricultural trade. The Agency will continue to do its part in helping
to reduce trade barriers relating to commodity standards and product
testing by serving as delegates and by leading international committees
and organizations.
For fiscal year 2003, AMS is expanding Market News reporting on
international markets so that U.S. growers and traders have the
information they need to make informed production and sales decisions.
Market news reports provide access to a centralized, consistent, public
source of timely information on international prices and trade volume.
The foundation for enhanced reporting from Western Hemisphere countries
has already been laid through AMS' initiation of the Market Information
Organization of the Americas (MIOA). The MIOA brings together market
reporting services from 18 countries in North, South, and Central
America to harmonize product definitions, reporting formats, and
information exchange.
PESTICIDE DATA
AMS supports domestic and export marketing of U.S. food products
through its Pesticide Data Program (PDP). PDP is a unique and valuable
source of statistically valid data on pesticide residues in food and
water. The program provides information to the Environmental Protection
Agency that is vital for realistic assessments of dietary risk from
pesticides on food commodities available in the marketplace. The data
collected benefits growers by enabling regulators to make better-
informed decisions on pesticides. Furthermore, PDP is instrumental in
providing data that addresses domestic and international public
concerns about the effects of agricultural pesticides on human health
and environmental quality. Exporters use PDP data to verify for foreign
governments and buyers that U.S. agricultural commodities are safe for
consumption.
Over the past 11 years, the program has tested 57 commodities,
including fruit and vegetables, grains, milk, peanut butter, poultry,
beef, juices, and drinking water. The results from PDP testing provide
comparative pesticide residue data between fresh versus processed
commodities, and an in-depth comparison for selected domestic versus
imported commodities. Of the more than 12,000 samples tested in
calendar year 2001, 82 percent were domestically produced and 18
percent were imported. PDP procedures are designed to detect, verify,
and report low-level pesticide concentrations. Pesticide residues only
exceeded established tolerance levels in three-tenths of 1 percent of
the samples, although residues were detected on 56 percent of all
samples. In fiscal year 2002, the program performed over 100,000
analyses on 13,000 samples.
In March 2001, the program began testing finished drinking water
samples. During fiscal year 2002, the drinking water survey was
expanded to include sampling in Colorado, Kansas and Texas, while
continuing sampling of municipal water systems in California and New
York.
Importantly, PDP is built on Federal-State partnerships with 10
States--California, Colorado, Florida, Maryland, Michigan, New York,
Ohio, Texas, Washington and Wisconsin. These States collect and test
commodities for pesticide residues. In 2003, AMS received additional
funding for PDP. Most of the increase will be used to offset rising
operational costs at the State level. These funds will support
infrastructure improvements and allow the Pesticide Data Program to add
data on new commodities and residues. We also plan to complete the
effort to achieve International Standards Organization accreditation
for our PDP laboratories.
MICROBIOLOGICAL DATA
Our experience in establishing a successful data collection program
was of enormous assistance in initiating our Microbiological Data
Program. MDP is designed to gather baseline data to assess the risks of
microbial contamination of fruits and vegetables, if any. The program
collects information regarding the incidence, number and species of
foodborne pathogens and indicator organisms on domestic and imported
fresh fruits and vegetables.
In fiscal year 2002, AMS worked with cooperating States and
interested industry parties to initiate microbiological data collection
and testing. AMS developed operating procedures with FDA, the Centers
for Disease Control and Prevention (CDC), and State laboratories.
Samples of five commodities were collected in the ten cooperating
States and were tested in State and Federal laboratories. During 10
months of sample testing, approximately 19,000 analyses were performed
on 9,400 samples. The first report will be published during 2003 with
calendar year 2002 data. The data will be provided to public health
agencies and the food industry for decision-making and evaluation of
procedures intended to reduce or eliminate harmful microorganisms from
foods.
NATIONAL ORGANIC CERTIFICATION PROGRAM
The purpose of AMS' National Organic Certification program is to
facilitate trading of organic products by verifying for buyers and
consumers across the United States and internationally that U.S.
organic food labeling is accurate and consistent. The program
established national standards for organic production and handling, and
is accrediting certification agents who can now conduct annual on-site
inspections to verify that organic products meet these standards. The
program has received 134 applications for accreditation. Fifty-three of
the applicants were private domestic certification agents; 20 were
State certification agents; and 61 were foreign. Through March 14,
2003, AMS has accredited 84 applicants, 37 of whom have been site-
evaluated for compliance with the program. AMS has also implemented a
program to approve State organic programs for production and handling
operations within that State. State organic programs will administer a
compliance program for enforcement of the National Organic Program and
any more restrictive requirements approved by the Secretary. Six States
have applied and are under review or are providing more information.
AMS entered into cooperative agreements with 14 States to
distribute to organic producers the cost share funds authorized under
the Federal Crop Insurance Act. The National Organic Certification
Cost-Share Program, authorized by the Farm Security and Rural
Investment Act of 2002, made funds available to assist certified
organic producers and handlers in all States. To date, we have
agreements with 44 States to distribute these cost share funds.
As of October 21, 2002, use of the official USDA organic seal is
permitted for certified organic fresh and processed products. Also,
during 2002, AMS developed procedures for enforcement, appeals,
international recognitions, and authorization to issue export
certificates. Consequently, the organic seal can be used as a marketing
tool for exported products. AMS has recognized the conformity
assessment programs of four foreign governments, worked with the
Foreign Agricultural Service to negotiate recognition of the U.S.
organic program by the Japanese Ministry of Agriculture and begun
equivalency negotiations with the European Union.
MANDATORY PRICE REPORTING SYSTEM
AMS' Livestock Mandatory Price Reporting (LMPR) program addresses
concerns about market concentration in the livestock industry and
resulting price discovery problems in the marketplace. On April 2,
2001, AMS implemented the LMPR system to meet the requirements of the
Livestock Mandatory Reporting Act.
Mandatory reporting provides marketing information on 80 to 95
percent of the volume of all cattle, boxed beef, slaughter hogs, sheep,
lamb meat and imported lamb meat traded. Large volume packers and
importers report the details of their transactions to AMS. Mandatory
reports include information on pricing, contracting for purchase, and
other market transaction data for livestock and livestock products.
Specifically, mandatory market news covers the prior day swine market;
forward contract and formula marketing arrangement cattle purchases;
packer-owned cattle and sheep information; and sales of imported boxed
lamb cuts.
LMPR is an ambitious effort to provide livestock market information
on a near real-time basis over the Internet. Packers submit data by
lot, several times a day to AMS via a secure Internet connection. AMS'
automated system processes thousands of pieces of market information
from the livestock industry and generates market news reports within
one hour after receipt of the data. During 2002, AMS was able to
release data through the electronic system within an hour of receipt 95
percent of the time.
The system is designed to protect the confidentiality of packers.
No data has been released that compromised the identity of source
packers. The confidentiality provisions were modified in August 2002,
which resulted in the release of 95 percent, or 86 of the originally
anticipated 91 mandatory reports. The remaining reports represent
thinly traded items and we continue to search for ways to report the
data while maintaining confidentiality. In addition to the original set
of reports, AMS has developed and begun releasing 16 new reports that
improve the marketing information available on the cattle and boxed
beef markets. In November 2002, the program began releasing cattle
reports utilizing new formats to provide the industry with more
regional information and volume accumulation data. AMS developed the
new formats based on incoming data and feedback from the industry
concerning the data most important in assessing market conditions. AMS
continues to work to improve security and expand or improve on existing
reports. Authorization for mandatory reporting expires at the end of
fiscal year 2004.
COUNTRY OF ORIGIN LABELING
The 2002 Farm Bill (Farm Security and Rural Investment Act of 2002)
required USDA to issue voluntary country of origin labeling guidelines
for use by retailers who wish to notify their customers of the country
of origin of beef, lamb, pork, fish, perishable agricultural
commodities, and peanuts. The voluntary country of origin labeling
guidelines were published in October 2002 and comments on their utility
were received until April 2003. Over 1000 comments were received.
The country of origin labeling provisions of the 2002 Farm Bill
also require USDA to publish regulations implementing a mandatory
country of origin labeling program by September 30, 2004. AMS has begun
the process of developing the mandatory regulations. To assist in this
process, USDA has scheduled a series of 12 listening and education
sessions across the United States to receive input from interested
parties. USDA plans to publish the regulations implementing the
mandatory program as a proposed rule and will provide a 90-day comment
period for interested parties.
WHOLESALE, FARMERS AND ALTERNATIVE MARKETS
AMS supports direct marketing to help growers sell their farm
products directly to consumers, enhancing the farmers' ability to
thrive in their businesses. Direct marketing includes farmers markets,
pick-your-own farms, roadside stands, subscription farming, community-
supported agriculture, and catalog sales. Direct marketing has been
gaining in popularity and especially benefits small and medium-sized
farm operators. Farmers markets, for example, are an integral part of
the urban/farm marketing chain. In 2002, the National Farmers Market
Directory listed over 3,100 farmers markets in the U.S. AMS has been
working with FNS to coordinate AMS' farmers market development
activities with FNS' nutrition programs. A report on this effort is
nearing completion and will be forwarded to Congress upon final
approval.
SECURITY INITIATIVES
In cooperation with Departmental planners, AMS has developed a
comprehensive strategy to address homeland security issues. AMS has a
fully-developed and tested Continuity of Operations Plan and two fully
equipped emergency relocation sites. We have identified our mission
critical facilities and have strengthened the security of those
facilities by installing emergency power generators, access control
systems, intrusion detectors, and additional exterior lighting. The
Agency has expanded its written instructions and is developing a
training program for inspectors, auditors, and graders on monitoring
for and reporting contamination or tampering of food products. AMS is
currently establishing a small office of safety and security to focus
on these issues and to coordinate improvements in security measures.
ELECTRONIC GOVERNMENT
AMS has taken a leadership role in the transition to electronic
government. We are working closely with USDA partners to establish
electronic access to core services. AMS led the business case for the
Department's web portal project and is conducting an Agency portal
pilot for market news information. We have also worked to create real-
time interaction with our customers. A system known as e-Work allows
customers to electronically submit information forms to AMS. The system
then processes the forms and generates messages to the customer
advising them of the status of their request. In other initiatives, AMS
was one of the first agencies in USDA to use electronic authentication
in its Livestock Mandatory Price Reporting system. Our Food Quality
Assurance program is creating a website for use by institutional food
service professionals to learn about sources of new products or find
locations approved to further process USDA-purchased commodities. In
addition, AMS is working with FNS and FSA to modernize the current
commodity purchase management system to a web-based supply chain
management system. We will continue to look for ways to provide our
customers with better access to our services.
BUDGET REQUEST SUMMARY
AMS has proposed no funding increases for program activities for
fiscal year 2004. Instead, we will continue our efforts to improve our
efficiency and customer service with the funding currently available.
Our total budget request includes $75 million for Marketing Services,
which includes an increase for pay costs, partially offset by a
decrease for savings associated with information technology
centralization and improvement. We also include a decrease of $1
million for the Pesticide Data Program. This funding was provided in
fiscal year 2003 for increased testing of drinking water.
We are requesting the current funding level of $1.3 million for
Federal-State Marketing Improvement Program grants under Payments to
States and Possessions. Our request for $26.4 million in Section 32
Administrative funds includes an increase for pay costs.
AMS will continue its mission to assist the agricultural industry
by facilitating domestic and international marketing. Thank you for
this opportunity to present our budget proposal.
______
Prepared Statement of Donna Reifschneider, Administrator, Grain
Inspection, Packers and Stockyards Administration
Mr. Chairman and Members of the Committee, I am pleased to
highlight the accomplishments of the Grain Inspection, Packers and
Stockyards Administration (GIPSA), and to discuss the fiscal year 2004
budget proposal.
GIPSA is part of USDA's Marketing and Regulatory Programs, which
works to ensure a productive and competitive global marketplace for
U.S. agricultural products. GIPSA's mission is to facilitate the
marketing of livestock, poultry, meat, cereals, oilseeds, and related
agricultural products, and to promote fair and competitive trading
practices for the overall benefit of consumers and American
agriculture.
GIPSA serves in a regulatory capacity, with an emphasis on service
to the regulated industries. The Packers and Stockyards Programs
promote a fair, open, and competitive marketing environment for the
livestock, meat, and poultry industries. The Federal Grain Inspection
Service provides the U.S. grain market with Federal quality standards,
a uniform system for applying these standards, and impartial, accurate
grain quality measurements that promote an equitable and efficient
grain marketing system. Overall, GIPSA helps promote and ensure fair
and competitive marketing systems for all involved in the merchandising
of livestock, meat, poultry, and grain and related products.
ORGANIZATION
GIPSA supervises 14 State and 43 designated private agencies for
grain inspection and weighing services at domestic locations; provides
supervision and other services from 20 field offices; and handles
appeals of grain inspection services in Kansas City, Missouri. GIPSA
also maintains 3 Packers and Stockyards Programs regional offices that
specialize in poultry, hogs, and cattle/sheep.
For fiscal year 2004, the budget proposes a program level for
salaries and expenses of about $42 million. Of this amount, $18 million
is devoted to grain inspection activities for standardization,
compliance, and methods development, and $24 million is for Packers and
Stockyards Programs.
The 2004 budget includes two program increases. I will mention
these now, but expand on these increases when I discuss the budget in
more detail.
About $1 million of the increase is to implement a new pilot
program to audit the steer and heifer meatpackers. The Packers and
Stockyards Programs have never audited a large packer. We anticipate
that an audit of large meatpackers will result in substantially better
protection to the regulated industries. $0.5 million of the increase is
to conduct a comprehensive, industry-wide review of the Packers and
Stockyards Act and regulations. Given dramatic structural changes in
the industries covered under the P&S Act, the Packers and Stockyards
Programs are preparing to undertake a complete review of the Packers
and Stockyards Act and its regulations, something that has not been
done to date.
In addition to these increases, the Administration proposes an
increase in the budget of the Office of the Secretary to support
crosscutting trade and biotechnology activities of the Department,
including regulatory, market access and trade barrier removal
activities. Increased GIPSA efforts related to biotechnology may be
funded from the proposed Office of the Secretary funds.
The Administration also proposes that GIPSA implement two new user
fee proposals. New user fees would be charged to recover the costs of
developing, reviewing, and maintaining official U.S. grain standards
used the by the grain industry. Those who receive, ship, store, or
process grain would be charged fees estimated to total about $5 million
to cover these costs. Also, the Administration proposes that the
Packers and Stockyards Programs be funded by new license fees of about
$24 million that would be required of packers, live poultry dealers,
poultry processors, stockyard owners, market agencies, and dealers, as
defined under the Packers and Stockyards Act.
I would like to discuss the activities of the Packers and
Stockyards Programs and Federal Grain Inspection Service relative to
the fiscal year 2004 budget.
PACKERS AND STOCKYARDS PROGRAMS
GIPSA's Packers and Stockyards Programs (P&SP) administers the
Packers and Stockyards Act (P&S Act) to promote fair and open
competition, fair trade practices, and financial protection in the
livestock, meat packing, meat marketing, and poultry industries. The
objective of the P&S Act is to protect producers, growers, market
competitors, and consumers against unfair, unjustly discriminatory, or
deceptive practices that might be carried out by those subject to the
P&S Act. To meet this objective, GIPSA seeks to deter individuals and
firms subject to the P&S Act from engaging in anti-competitive
behavior, engaging in unfair, deceptive, or unjustly discriminatory
trade practices, and failing to pay livestock producers and poultry
growers. GIPSA initiates appropriate corrective action when there is
evidence that firms or individuals have engaged in anti-competitive,
trade, payment or financial practices that violate the P&S Act.
The livestock, meatpacking, and poultry industries are important to
American agriculture and the Nation's economy. With only 169 employees,
GIPSA regulates these industries, estimated by the Department of
Commerce in fiscal year 2002 to have an annual wholesale value of $118
billion. At the close of fiscal year 2002, 6,024 market agencies and
dealers, and 2,064 packer buyers were registered with GIPSA. In
addition, there were 1,510 facilities that provided stockyard services,
with an estimated 6,000 slaughtering and processing packers, meat
distributors, brokers and dealers, and 205 poultry firms operating
subject to the P&S Act.
Our regulatory responsibilities are the heart of our mission to
administer the P&S Act. To this end, GIPSA closely monitors practices
that may violate the P&S Act. Our top priority continues to be
investigating complaints alleging anti-competitive, unjustly
discriminatory, or unfair practices in the livestock, meat, and poultry
industries. Last year, GIPSA conducted over 1,400 investigations. As a
result of these investigations, the Packers and Stockyards Programs
helped restore over $37 million to the livestock, meatpacking, and
poultry industries. This is the largest amount GIPSA has ever reported
to Congress and constitutes more than double the amount that P&SP
received in appropriated funding.
GIPSA divides its regulatory responsibilities into three areas:
financial protection, trade practices, and competition. In the area of
financial protection, GIPSA continued to provide payment protection to
livestock producers and poultry growers in a year where the livestock,
meatpacking, and poultry industries faced tremendous financial
pressures. Financial investigations last year resulted in $4.3 million
being restored to custodial accounts that are established and
maintained for the benefit of livestock sellers. Livestock sellers
recovered over $3.2 million under the P&S Act's packer trust
provisions. During fiscal year 2002, 81 insolvent dealers, market
agencies and packers corrected or reduced their insolvencies by $26.6
million. In addition, GIPSA's financial investigator's analyzed eight
complex packer trusts and one poultry trust in which filed claims
exceeded $15 million; GIPSA also analyzed more than 800 bond claims
exceeding $30 million. I would note that GIPSA provides its analysis as
a courtesy to the industry; it has no statutory authority to compel
payment by the trustee or bond surety.
In its Trade Practices Programs, GIPSA continued to promote fair
trading between industry participants and, in fiscal year 2002,
targeted its resources at working with industry members to secure
appropriate bonding levels. While the overall numbers of individuals
required to be bonded under the P&S Act dropped, the total value of
bonds available to unpaid sellers increased by $13 million. Much of
GIPSA's work in the Trade Practices Program focuses on insuring
accurate weights and prices. GIPSA continued to work with local States
weights and measures programs to provide scale training and to secure
State assistance in testing every scale used to weight livestock or
live poultry twice a year. In addition, GIPSA initiated or completed 63
investigations of weight and price manipulation of livestock. Some of
these investigations are on-going. GIPSA also investigated the
operations of 53 live poultry dealers; most of these investigations
examined whether live poultry dealers were in compliance with contracts
entered into with poultry growers. We are continuing to work with
members of the regulated industries to develop industry standards on
new technologies that are entering the marketplace to evaluate and
price livestock purchased on a carcass merit basis.
GIPSA continues to develop its Competition Program, and GIPSA's
Competition Program is starting to yield results. Last year, GIPSA
hired a new Competition Branch Chief who works very closely with the
Deputy Administrator, the Office of the General Counsel, and the
competition units in the field office to fully implement the
recommendations contained in the September 2000 General Accounting
Office report. During fiscal year 2002, the Competition Branch
evaluated complaints regarding attempted restriction of competition,
failure to compete, buyers acting in concert to purchase livestock,
apportionment of territory, unlawful price discrimination, and
predatory pricing. Of these complaints, two resulted in a letter of
notice that brought the firm into compliance with the P&S Act; the
remaining complaints were not supported by evidence. In addition to
these investigations, the Competition Program, with the Commodities
Futures Trading Commission (CFTC), investigated the sharp decline of
livestock prices that followed the events of September 11, 2001 to
determine if packers were taking advantage of the situation in
violation of the P&S Act. GIPSA and the CFTC also conducted a joint
review of the cash and futures markets based on rumors of foot and
mouth disease in Kansas. GIPSA continues to work closely with the CFTC,
attending CFTC Commissioner briefings on the cattle, hog, and meat
markets.
Competition investigations are complex, and the results are not
immediately visible. P&SP often attempts to resolve competitive issues
informally, rather than go through the litigation process because of
the resources, cost, and time involved. For example, the USDA's
Judicial Officer just issued a decision in which he found that a major
packer violated the P&S Act as we alleged in a complaint filed in 1999.
While this may seem like a long time to resolve a complaint, it is
comparable to private litigation. The competition program currently has
several major investigations on-going. In addition to these
investigations, the Competition Program is working more closely with
the regulated industries, especially packers, to address the
competitive implications of new practices prior to their
implementation.
GIPSA's Rapid Response Teams remain a powerful tool to address
urgent industry issues that place the industries in imminent financial
harm. For example, after one of the major meatpackers declared
bankruptcy on a Friday afternoon, we had rapid response teams in place
at each of its plants and in its corporate offices on Monday morning to
ascertain the financial condition of its slaughter operations. Last
year, GIPSA rapid response teams investigated 40 situations across the
Nation. During fiscal year 2002, these rapid response investigations
contributed to returning $4.2 million to livestock producers and
poultry growers.
GIPSA continues to work with violating firms to achieve voluntary
compliance, and GIPSA continues to initiate appropriate corrective
action when we discover evidence that the P&S Act has been willfully
violated. During fiscal year 2002, GIPSA, with assistance from the
Office of the General Counsel, filed 23 administrative or justice
complaints alleging violations of the P&S Act. This represents more
than a 50 percent increase over the number of complaints filed in
fiscal year 2001.
GIPSA also has cooperative agreements with qualified researchers
and research institutions that contribute valuable information to
GIPSA's economic understanding of the livestock, meatpacking, and
poultry industries. Two reports were completed in fiscal year 2002.
Four cooperative agreements remain on-going.
GIPSA completed three additional reports that were submitted to
Congress: ``Assessment Report of the Cattle and Hog Industries,
Calendar Year 2001,'' ``Captive Supply of Cattle and GIPSA's Reporting
of Captive Supply,'' and ``Packers and Stockyards Programs Statistical
Report 2000.'' Each of these reports is available on the GIPSA website.
To ensure that producers and growers are aware of the protections
the P&S Act provides, the Agency provides a hotline (1-800-998-3447) by
which stakeholders and others may anonymously voice their concerns.
Last year GIPSA responded to and investigated issues raised by 118
callers. These calls were in addition to calls received in our regional
offices. GIPSA also increased its outreach activities. GIPSA conducted
32 orientation sessions for new auction market owners and managers and
12 feed mill orientations to educate them about their fiduciary and
other responsibilities under the P&S Act. GIPSA's Deputy Administrator
met with top officials from the largest six steer and heifer packers to
discuss issues of concern to the Agency and to the packers. These
visits protect livestock producers and poultry growers who rely on P&SP
to promote a fair, competitive, and financially sound marketplace.
GIPSA personnel regularly participate in meetings with industry
associations at the local, State, and national levels. During these
meetings, GIPSA officials share our concerns, and listen to the
concerns expressed by industry participants to ensure that we continue
to remain abreast of problems and concerns in the livestock, meat, and
poultry industries, and to better understand the marketing options and
constraints these industries face. On the front lines, GIPSA's resident
agents, situated at 28 locations across the Nation, maintain open
communications with State officials to discuss areas of overlapping
jurisdiction.
GIPSA is now in the process of updating memoranda of understanding
with all 50 States to ensure that we maintain solid working
relationships with our State partners. GIPSA recognizes that it is
essential to stay in touch with growers, producers, and Federal and
State representatives to understand, stay abreast of, and anticipate
issues confronting the industries it regulates. To this end, GIPSA
officials participated in several committees, including a commission
established by the Governor of Missouri to address marketing issues on
livestock and a task force established by the National Pork Producers
Council to address hog marketing issues. GIPSA's outreach efforts have
fostered a broader base of understanding with those we regulate and
those intended to benefit from the protections of the P&S Act. We will
continue and expand this effort.
FEDERAL GRAIN INSPECTION SERVICE
The Federal Grain Inspection Service (FGIS), provides the U.S.
grain market with Federal quality standards and a uniform system for
applying these standards. FGIS has both service and regulatory roles,
and was founded to provide impartial, accurate quality and quantity
measurements to create an environment that promotes fairness and
efficiency. GIPSA administers uniform, national grain inspection and
weighing programs established by the U.S. Grain Standards Act, as
amended.
Under provisions of the Grain Standards Act, most grain exported
from the United States must be officially weighed. A similar
requirement exists for inspection, except for grain which is not sold
or described by grade. Inter-company barge grain received at export
port locations also must be officially weighed. And, the Act requires
that all corn exported from the United States be tested for aflatoxin
prior to shipment, unless the contract stipulates that testing is not
required.
Mandatory inspection and weighing services are provided by GIPSA on
a fee basis at 38 export elevators, including 5 floating elevators.
Under a cooperative agreement with GIPSA, the Canadian Grain Commission
provides official services, with GIPSA oversight, at seven locations in
Canada exporting U.S. grain. Eight delegated States provide official
services at an additional 19 export elevators under GIPSA oversight.
Grain exporters shipping less than 15,000 metric tons of grain
abroad annually are exempt from mandatory official inspection and
weighing requirements. Grain exported by train or truck to Canada or
Mexico also is exempt from official inspection and weighing
requirements.
Official inspection and weighing of U.S. grain in domestic commerce
are performed upon request and require payment of a fee by the
applicant for services. Domestic inspection and weighing services are
provided by 58 designated agencies that employ personnel licensed by
GIPSA to provide such services in accordance with regulations and
instructions.
Under the Agricultural Marketing Act of 1946, GIPSA administers and
enforces certain inspection and standardization activities related to
rice, pulses, lentils, and processed grain products such as flour and
corn meal, as well as other agricultural commodities. Services under
the Agricultural Marketing Act are performed upon request on a fee
basis for both domestic and export shipments by either GIPSA employees
or individual contractors, or through cooperative agreements with
States.
GIPSA knows that customers also want more information about the
products they are purchasing and consuming. Some of the attributes that
they want are impossible, impractical, or expensive to be determined by
traditional testing. That is why GIPSA is developing a process
verification program that should help us mirror some of the identity
preservation and marketing systems currently used in the private
sector.
Field dried corn would be one example of a quality attribute that
can't be determined by testing. Process verification is one way that
GIPSA could meet the demand for this kind of information. That does not
eliminate the need for our traditional testing, but adds important
information to the marketing of the product.
In a recent customer survey, 20 percent of industry folks consider
the need to handle identity preserved grain important today. But more
than two-thirds of the same folks think this will be important in five
years. The message here is clear. The changing market demands a way to
document and validate product differentiation in the very near future.
We have received inquiries from a wide range of agri-businesses. We
have been contacted by individual producers, national and State
producer associations, feed manufacturers, coop and multi-national
grain companies and others. The underlying theme is that they're
seeking to preserve their differences in the marketplace by getting
third-party verification of their quality management systems.
Today, protecting the identity of a specialty corn or other process
has some value. In the future, this ability will be very important to a
growing part of the marketplace.
The change in customer wants and needs leads us to continually
examine how we support and facilitate the grain markets. As the grain
markets evolve in response global trade, increased consumer demands,
and technological advances, GIPSA is working with market participants
to ensure that the inspection system and grain standards best reflect
the overall market needs.
To achieve this, we will introduce new internet-based services to
improve the internal efficiencies of our operations and to deliver our
customers with high speed, quality grain inspection results. At the
touch of a button, buyer and seller will have the necessary quality
information to process sales transactions effectively and efficiently.
Our aim is to be able to provide internet-based service that connects
us, the official system, and our customers in an electronic business
environment where we can interact with greater speed and efficiency.
We are also working with market participants to determine how best
the grain standards can reflect the market value of future products.
Breeders are working with end users to tailor corn for specific end
uses. These advances have already created value-added markets, such as
nutritionally dense corn and high extractable starch corn. Further
developments could lead to the subdivision of traditional commodity
corn into multiple end-use types, such as poultry, swine or cattle feed
corn. The standards will help the market assess the value of the
commodity in light of specific end uses.
And most of all, our aim is to be flexible, so that we can serve a
larger portion of the grain markets. Reacting to market conditions that
we face today is insufficient. Anticipating what the market will need
tomorrow is necessary. Our efforts are focused on the future as we work
to anticipate marketing needs in a rapidly changing environment.
Further, from the almost 3,000 comments received on our advance
notice of proposed rulemaking that sought public comment on how USDA
can best facilitate the marketing of grains, oilseeds, fruits,
vegetables, and nuts in today's evolving marketplace, GIPSA is
considering proposing a Process Verification Program to apply
internationally-recognized quality management standards to verify the
quality process, whether related to biotechnology or not, used to
supply a product rather than testing the actual grain itself (e.g.,
non-genetically-modified corn). This would allow producers, marketers,
suppliers, and processors to assure customers of their processes to
provide consistent quality products.
2004 BUDGET REQUEST
To fund these initiatives, GIPSA's budget request for fiscal year
2004 is $41.7 million under current law for salaries and expenses and
$42.5 million for our Inspection and Weighing Services. There is an
increase of $612,000 for pay costs contained in the budget. GIPSA will
also be submitting legislation to collect $28.8 million in new user
fees in fiscal year 2004, $5.2 million for the grain standardization
activities and $23.5 million for the Packers and Stockyards Programs.
The President's fiscal year 2004 budget proposes a current law
request for grain inspection of $18.1 million. The only changes from
fiscal year 2003 budget levels are an increase of $282,000 for pay
costs and a decrease of $56,000 for Information Technology savings.
The President's fiscal year 2004 budget proposes a current law
request for Packers and Stockyards Programs of $23.5 million. As I
mentioned before, there are proposed increases of $994,000 to implement
a pilot program to audit the steer and heifer meatpackers to be offset
by proposed user fees, and $500,000 to enhance compliance and review
the Packers and Stockyards Act. Additional changes from fiscal year
2003 budget levels are an increase of $330,000 for pay costs and a
decrease of $67,000 for Information Technology savings.
A credible auditing program is an essential and cost-effective tool
that P&SP needs to successfully administer the Packers and Stockyards
Act. A credible auditing program is one that audits submitted financial
information to determine whether: (1) the information is supported by
the firm's records, (2) the firm is in compliance with the P&S Act's
reporting and financial requirements, and (3) the financial information
raises any concerns under the P&S Act's competition provisions. This is
why P&SP proposes to do this by establishing a more formal ``Task Force
to Audit the Annual Reports of the Steer and Heifer Meatpackers,'' as a
pilot program.
Although P&SP's monitoring program results in correcting many
bonding and solvency problems, it is critically important to note that
P&SP has never audited a large packer. Since the four largest packers
account for more than 80 percent of the steers and heifers purchased
for slaughter annually, this represents a significant vulnerability in
the program's resident expertise. As a result of this, the industry is
vulnerable to repercussions that can follow from any incorrect
reporting submitted by a large packer, whether or not intentional, that
P&SP does not have the ability to address.
To fill this void, P&SP proposes to hire a specialized group of
eight staff, consisting of seven accountants and one economist, which
will develop a program to conduct these audits within two fiscal years.
During the first fiscal year, P&SP will focus on identifying, hiring,
and training individuals with the necessary expertise. The training
will be obtained from a credible accounting firm with expertise in the
meatpacking industry.
Through our increasingly frequent and substantive conversations
with industry, we have been able to build relationships that allow us
the opportunity to help firms steer clear of difficulties they may
encounter with the P&S Act. Too often, our intervention in a firm's
financial difficulties comes at a stage too late for us to protect the
interests of the producers. Through a credible audit program, GIPSA can
help industry avoid larger problems later on, as well as better protect
producers.
P&SP does anticipate that this pilot program will result in a small
increase in the number of investigations and an increase in the monies
recovered or returned to the regulated industries. But that is not the
goal of this proposal. It is not our intent to engage in these audits
just to see what we can find. Even if P&SP is unable to show actual
monies returned to the industry, the audits are anticipated to result
in substantially better financial protection to the regulated
industries through heightened scrutiny of the financial instruments
that these meatpackers have in place to protect producers in the event
of financial failures.
The second increase is for $500,000 to allow GIPSA to engage in a
comprehensive internal and external review of the Packers and
Stockyards Act and regulations.
The Packers and Stockyards Act of 1921 has not undergone any
significant reviews since its enactment, despite substantial and
controversial structural changes experienced by the regulated
industries during the same time period. To conduct a comprehensive
review of the P&S Act, P&SP must incorporate individual industry
members and industry groups in the process. P&SP will sponsor industry-
wide meetings to hear more about the challenges, concerns, and problems
facing those directly involved in the livestock, meat, and poultry
industries within the context of the Packers and Stockyards Act.
Packers and Stockyards Programs anticipates that building bridges
and reviewing the Packers and Stockyards Act with market participants
will result in a better understanding of the P&S Act and regulations by
industry, as well as offer the Agency a better understanding of the
industry's needs in the changing marketplace. By working with all
segments of the regulated industry, P&SP feels it can be better
positioned to meet the current and future needs of market participants,
and help the Agency become more relevant to current and future industry
operations.
In a September 2000 report to Congress by the General Accounting
Office titled ``Actions Needed to Improve Investigation of Competitive
Practices'' (GAO/RCED-00-242), a recommendation was included that GIPSA
provide industry participants with clarification and views on
competitive activities. P&SP responded rapidly to that recommendation,
dramatically increasing its presence and participation at industry
events and meetings. The requested funds will further allow P&SP to
meet this demand for clear, concise information that can be shared with
industry stakeholders.
CONCLUSION
Mr. Chairman, Members of the Committee, I would like to conclude my
testimony on the fiscal year 2004 budget proposal for the Grain
Inspection, Packers and Stockyards Administration with an observation.
Technological advances in new products and in business practices
create remarkable opportunities and challenges for producers,
marketers, and consumers. GIPSA is uniquely situated to facilitate the
marketing of products at a time when assurances of product content or
production processes are in demand. Further, GIPSA helps ensure that
market power by some is not abused. Responding effectively to the needs
of our stakeholders requires dynamic activity.
We continue to adapt our efforts, look toward our capabilities,
work to understand and accommodate the changes, and serve American
agriculture through our efforts to ensure a productive and competitive
global marketplace for U.S. agricultural products.
I would be pleased to address any issues or answer any questions
that you may have at this time.
Thank you.
Senator Bennett. Senator Cochran
Senator Cochran. Mr. Chairman, I simply wanted to join you
in welcoming this panel of witnesses and congratulating them
for the fine work they are doing to help assure that we do
maintain the safest food supply in the world. I am convinced
they are doing a good job and I am here to find out if the
budget request is adequate to enable them to continue their
fine work. Thank you.
Senator Bennett. Thank you very much.
OBESITY IN AMERICA
Mr. Bost, you told us that combatting obesity was one of
the three main issues you were addressing and gave a statistic
that I had not heard before, that 62 percent of Americans are
obese. Now, I hesitate to do this, but I am going to do it
anyway because I think there is a great deal of confusion, and
frankly, it includes some members of this subcommittee. I have
mentioned that I am going to do this to some members of the
subcommittee and they said, good.
The pyramid that you and--I say ``you,'' I mean the USDA--
has been pushing among school children, it is on display
everywhere. It is on just about every cereal box that gets
sold. It is, if I can mix metaphors a little, the Good
Housekeeping Seal of Approval for the way to eat, and it calls
for a substantial consumption of carbohydrates.
We have got the Atkins diet that has millions of people
believing that carbohydrates make you fat. Recently, the Zone
came out. That got introduced in my family and there are
members of my family who follow the Zone and have lost
substantial amounts of weight as they have cut down on their
consumption of carbohydrates.
I have brought along, perhaps as the most provocative one,
a recent one that has come to my attention called the
Schwartzbein Principle. Not to tout this particular one, but to
outline the claims that are being made, lose body fat and
transform body composition. Improve metabolism. Prevent and
correct chronic conditions and diseases. Reverse accelerated
metabolic aging. Quit addictions and food cravings and cure
depression and mood swings.
The doctor who started out, as she says in her opening
chapters, urging people to follow the food pyramid and
discovered that her patients were getting sicker, and then went
in a different direction and now attacks the food pyramid as
the problem, gives case studies here, admittedly anecdotal, of
how cutting back on carbohydrates and increasing consumption of
the right kinds of fat and protein did, indeed, all of the
things that are listed on the front of this book.
Now, I am not going to in any sense suggest that this is,
indeed, the patent medicine to solve all those problems. But
coming again and again from a wide variety of folks who look at
our eating habits, the assertion that Americans consume too
many carbohydrates and that too many carbohydrates are, in
fact, responsible for Americans' obesity is something that I
think needs to be examined.
Now, you are talking about sending out the pyramid for
comment, and I think that is a salutary thing because it
implies that you are open-minded about the pyramid and open to
further evidence with respect to it. Dr. Murano, you talked
about getting the best science possible to deal with food
safety, and what I am raising with you here this morning is can
we get the best science to deal with this issue of how we eat.
If, in fact, we as Americans have been moving in the
direction of the food pyramid starting in the very early years
of grade school, and it is included in all of the literature
around and Americans do, indeed, go in this direction, and if,
in fact, 62 percent of us are obese, I think there is at least
an indication that we ought to look for the possibility of a
cause-and-effect relationship here.
As I say, there is a member of this subcommittee, and I
will let him speak for himself when he returns if he decides to
get into this, who has accepted the notion that carbohydrates
make you fat and has himself lost 20 to 30 pounds as he has
gone in that direction and says he feels better than he has
felt for a long time.
I don't think this is a trivial issue and I don't think it
is an issue of fad diets, because there is empirical evidence
in the millions of people who have abandoned a high-
carbohydrate diet in favor of more protein and more fat in
their diet who have, in fact, conquered the obesity situation.
Are they endangering their lives? I know there are some
physicians who say they are by moving in this other direction.
This is the bottom line of what I am saying. The place
where I would like to be able to go to get a definitive answer
to this question based on the soundest science, the most
comprehensive tests over the widest range of people, so that it
is not anecdotal, it is not a doctor saying, ``I treated 12
people and produced this kind of result,'' but a test that
stands or passes the challenge of being scientifically sound
says, this is the way to eat in order to avoid obesity.
Now, do you have enough budget flexibility to address this
kind of challenge and do you have access to the kinds of
scientists who would do these sorts of tests, or are these
sorts of tests out there so that we can, in fact, turn to USDA
and say, you are the final word and if you eat the way USDA
says to eat, you won't get fat and you won't get sick. You will
improve your metabolism. You will quit addictions and food
cravings and whatever and you don't need to buy a fad diet
book.
Mr. Bost. Mr. Chairman, this is a highly complex and a
significantly difficult issue, but let me respond to some of
the things that you talked about. First and foremost, the
statistics would indicate that 62 percent of all Americans are
overweight. That means over their ideal body weight. Thirty
percent are obese. The troubling thing about the 30 percent
figure is that it took us almost 15 years to go from 20 to 30
percent. We are anticipating that it is only going to take us
about 5 or 6 years to go from 30 to 40 percent which is
essentially 30 pounds over our ideal body weight.
Senator Bennett. Thank you for correcting me on that. I got
the wrong statistic.
FOOD GUIDE PYRAMID AND DIETARY GUIDELINES
Mr. Bost. Right. In terms of the Food Guide Pyramid itself,
it is a guide along with the Dietary Guidelines--they go hand-
in-hand. The Dietary Guidelines are summarized in a book, that
has as many as 20 or 30 pages and is currently in the review
process. The request to nominations to the Review Board just
went to the Federal Register. The Secretary of Health and Human
Services and Secretary Veneman will essentially appoint
scientists, the leading experts in the field, to start the
process now of reviewing the Dietary Guidelines. That process
will flow into a review of the Food Guide Pyramid itself, which
essentially will come under review the latter part of 2004 and
2005.
With that said, I think it is really important to note that
you made reference to three or four different diets. If we go
into a bookstore today, you will see hundreds of books in terms
of diets, and the thing that it says to me is the fact that one
specific diet does not work for everyone. There are some people
that talk about the Atkins diet, and that works for some
people. That diet doesn't work for everyone.
If you decrease what you eat, increase your level of
physical activity, increase your consumption of fresh fruits
and vegetables, you will lose weight and you will move toward a
healthy lifestyle.
The problem with us as Americans is this. We love to eat.
We love a good deal--super-size it. We don't like for people to
tell us what to do, and we don't exercise enough. Instead of
walking up one flight of stairs, we will catch the elevator.
Instead of parking at the farthest parking lot when we go to
the mall, we will drive around for 30 minutes to try to get the
closest one.
All of those things contribute to the types of health
problems that we are experiencing. Last year alone, we spent
$117 billion in terms of obesity-related health problems
because we are overweight in this country.
There are some steps that we are taking, but it comes down
to essentially this. We need to look at doing some things that
will result in a behavioral change among all of us, especially
among adults who essentially make purchases for our children,
so they can provide healthier alternatives in the National
School Lunch Program.
In terms of the Dietary Guidelines, they are currently
under review. We will bring the best scientists the world has
to offer to come to the table to have this discussion and to
provide us with recommendations.
But the problem is this, and I use this example all the
time when I go around the country and talk about it. We could
do a survey this morning in this room and I would guarantee you
that at least 95 percent of all the people in this room could
answer this question. What has more calories and fat, a
doughnut or an apple? But, what are you going to eat?
The issue is us making informed decisions, striking that
balance in terms of what we can do to start this issue. It has
to be a behavior change. All of the diets that you have, all of
the guidebooks, all of the information that USDA provides, all
of the information experts provide, is not going to do any good
unless we follow it, and that is what it comes down to.
OVERWEIGHT CHILDREN
One final point, and specifically regarding our children.
When we look at the statistics in terms of what has
significantly contributed to the issues of our children being
overweight, it comes down to a couple of things, increased TV
watching and increased computer use. There is only one State in
the country right now that has mandated physical education in
schools K through 12, Illinois. Our kids don't go outside and
play and there is a limited level of physical activity among
them. They don't walk to school anymore and they eat all the
wrong things. As parents, we have to take some responsibility
for that because we buy the food that our children eat at home.
All of those factors contribute to the types of health problems
that we are experiencing.
I don't want to paint the picture that we are not doing
some things and that we are not taking some steps to address
this issue because in the National School Lunch Program and the
reauthorization of the Child Nutrition Programs, we put some
recommendations forward to Chairman Cochran's committee that I
know they are considering. But it starts with adults taking
some personal responsibility for addressing this issue, and
that is what we are trying to achieve in terms of having that
behavioral change.
A personal example, 3 years ago, I lost 70 pounds. I could
not do the Atkins diet. It did not work for me. I went to a
low-calorie diet where I decreased the amount of calories that
I took, and increased my physical activity. Not everything
works for everyone, and that is why it is called Dietary
Guidelines.
In the Food Guide Pyramid itself, it says serving size.
There was an article just this week alone talking about the
average serving size for some things is less than 2 or 3
ounces, but as an American--the perfect example, and I promise
I will be quiet on this, is people say, well, I have stopped
eating that doughnut for breakfast. I eat a bagel now. Have you
seen the size of bagels in this country?
Five hundred, 600 calories. You are not going to lose any
weight by eating a 700-calorie bagel in the morning as opposed
to a doughnut. In some instances, it would be better for you to
eat the one doughnut.
Senator Bennett. I can see that----
Mr. Bost. I know more about this subject than I want to
know.
Senator Bennett. I can see that I touched a hot button.
I want to observe the time limit more strictly than I did
in my previous hearing, so I will wait for a later chance to
follow up, but thank you for your attention to this issue and
for your personal passion to see to it that we address it.
Again, my only closing comment is I want to be able to look to
USDA as the real expert rather than the bookshelf, where there
are dozens of experts shouting for my attention. I would hope
that the pyramid and the guidelines would be based on the very
best information and that people would be open-minded to some
of the suggestions that we take a look at how many
carbohydrates we do have recommended.
Senator Kohl.
CHRONIC WASTING DISEASE
Senator Kohl. Thank you very much, Senator Bennett.
Mr. Hawks, in February of 2002, chronic wasting disease was
discovered, as you know, in Wisconsin deer, and today, we have
more than 200 positive cases identified. Last year, this
subcommittee provided nearly $15 million in APHIS funding to
respond to this disease all across the country, and Wisconsin's
share of it was a little bit more than $800,000 out of the $15
million.
Wisconsin officials are in constant contact with us here
and they have informed us that they need over $5 million in
fiscal year 2004 for continued chronic wasting disease testing
and monitoring. Do you intend to respond to their needs?
Particularly now with the outbreak of something like mad cow,
we understand how important it is to ensure the safety of our
animals in this country, and testing, diagnosis, and research,
as you know, are the most critical factors here. Money is what
it takes to get that done. How do you respond?
Mr. Hawks. Senator Kohl, I certainly enjoyed being in
Wisconsin with you last year and doing a press conference with
you there in Madison as this became high on all of our radar
screens. As you are aware, we worked with you and other members
of the delegation from Wisconsin, with Wisconsin being a high
prevalent State, a State that causes great concern to all of
us.
We will take the appropriate action, but the amount of
funds that we have, the resources, Wisconsin will certainly--we
will respond to your needs.
Senator Kohl. I know it is hard for you to be specific and
I know how tight money is, but you can expect, and I am sure
you can appreciate, how I will be on you and at you with a
sense of urgency to try and find some way to increase the
amount of funding that we can get in Wisconsin.
Mr. Hawks. I certainly understand and certainly appreciate
that, Senator, and I look forward to working with you. As this
Committee goes through the appropriation process, we will make
sure that it is appropriately addressed.
Senator Kohl. Thank you, Mr. Hawks.
BSE
Mr. Hawks. Thank you.
Senator Kohl. To get back to BSE, exporting beef from
Canada into the United States is a huge industry up there. In
fact, almost 80 percent of the beef that they raise winds up
getting exported to the United States for our consumption. So
their testing procedures, of course, are critical, and now we
have found out that a test that was administered in January
finally evidenced a result in May, that there is at least one
case up there of mad cow disease. But how they test and how
frequently they test, how accurately they test is of enormous
importance to us. It is at the same level of importance to us
as how we test here in the United States.
So Mr. Hawks, you must have some great concerns about that,
and perhaps you do also, Dr. Murano, and I think we would like
to hear about your thoughts and what your intentions are with
respect to ensuring the American eating public that the beef
that is imported here from Canada, which is, as I said, an
enormous quantity, is safe. Mr. Hawks?
Mr. Hawks. Yes, sure, Senator Kohl. We do have concerns
which obviously show in the actions that we took just the day
before yesterday. From USDA, we have five veterinarians that
are in Canada or that will be there today. Four of them is from
APHIS. One of them is from FSIS to try to work with our
counterparts in Canada to look at their testing protocols and
to make sure that we are doing everything we can to assist in
this situation.
So we do have those concerns, but the fact of the matter
is, here in this country, we feel extremely confident of our
testing regimens, our protocols that we have in place. As I
stated in my opening comments, last year, we did a little over
20,000 tests on the most likely candidates for BSE, and they
were all negative. We are on track to do a few more tests than
that this year. Compared to standards recognized by the Office
of International Epizootics, we are testing four times the
amount.
So we feel real confident, but also recognize that we must
work with our Canadian counterparts to make sure that their
testing is appropriate, as well. I will ask Dr. Murano to
address the food safety issue because I deal with the animal
disease component, so I will get Dr. Murano to answer that.
Senator Kohl. Dr. Murano.
IMPORT REINSPECTION
Dr. Murano. Senator Kohl, certainly, you know that import
inspection, or reinspection, as we call it, of meat and poultry
that is imported into the United States is an extremely high
priority with us at FSIS.
When this incident happened this week, I will tell you that
I was on the phone with our counterparts in the Canadian Food
Inspection Agency telling them, first of all, to explain to us
what took so long to get that test result, and the basic answer
for them is that it was in the pipeline for them to get the
sample analyzed. So it wasn't that they held onto it or
anything to that effect, but that is not good enough. If they
have a backlog with their testing, they have got to do
something about it, and if we need to help them, then that is
what we need to do. That is on the animal testing.
On testing that we do to ensure that there is no central
nervous system tissue in products, they are also responsible
for doing that and this is something that I have personally
spoken to them about to say, this is something you must do. You
must be on top of it. We will lend you all the assistance that
we can. If you need us to help you with the training of your
laboratory people so that you have more people to do this,
whatever it takes is what we will do.
Senator Kohl, in our budget request, for example, for this
year, we have requested $1.8 million to increase the number of
foreign program auditors from FSIS. It is because of that
commitment that we have to ensure that it shouldn't matter
where your food came from that is at your table at dinnertime.
It is the USDA's responsibility to make sure that the food
supply is as safe as possible, and that includes, obviously,
making sure that what is imported undergoes the same rigorous
oversight and scrutiny as the food that we make for ourselves
right here in the United States.
FOREIGN FOOD SAFETY SYSTEMS
Senator Kohl. I would agree, no question as a matter of
principle. Would you say, based on all the information you
have, that the beef that is imported from Canada undergoes the
same safety inspection as the beef that we raise here?
Dr. Murano. It does, and I can tell you that because we
audit their program on at least annual basis, not only in
Canada but other countries. We are in Mexico this week, for
example, as part of our regular auditing function.
So that is our responsibility, to make sure that these
countries that export meat and poultry to the United States
have equivalent systems. That means they have to have an
inspector in every plant, every day. They have to have a HACCP-
based system, which is a preventative system that our meat and
poultry plants here in the United States have to have, with our
verification being conducted through microbiological testing
and so forth. They have to have all of that the same as we have
here in the United States, and they do in Canada.
Senator Kohl. Well, not to pursue it unduly, but we have a
testing system that gives us a result in how many days? Mr.
Hawks.
Mr. Hawks. Yes, sir, Senator Kohl. I probably should have
responded to that one. Eight days, and we have no backlog, so
when----
Senator Kohl. That is great.
Mr. Hawks [continuing]. We take a sample here, we get the
result within 8 days.
BSE TESTING
Senator Kohl. But they apparently have a testing procedure
that yields a result in several months? Or is there something
here that we are not tracking?
Dr. Murano. No, as I was explaining, and Mr. Hawks can tell
you more, the test that you are referring to is on the animal.
It is not something we do at FSIS. It is akin to the APHIS
surveillance that they do on animals.
So my understanding from the Canadians is that they had a
backlog of samples to analyze. It is not that their test is any
different than ours. It is the same test. But their backlog
caused their delay in having that sample collected in January,
not analyzed until now.
Senator Kohl. But that kind of a backlog would not be
tolerated by you here.
Dr. Murano. No.
Senator Kohl. So that the fact that they have it up there
is as intolerable as it would be if it were true here in the
United States, because as I said, 80 percent of the cattle that
they raise winds up being exported to us. So whatever problems
they have are our problems, isn't that true?
Dr. Murano. I think you are absolutely right. The testing
of the products, of the meat and poultry that I referred to,
they have the same systems that we have, with no backlog. This
is a testing of the animal, and I will defer to Mr. Hawks to
get his comments as to what he believes in terms of their
programs in animal health, what should be the equivalence that
is expected of other countries.
Mr. Hawks. Yes, sir. I think they have adequate testing in
place, but obviously, this cow was actually slaughtered on the
31st of January. The conditions of the cow--it was not
suspected, it was not showing neurological signs--so it was a
routine surveillance method.
Having said that, I will back up and say again that we do
our routine surveillance within 8 days of the sample being
taken. So it is something that obviously we should be
addressing with our counterparts in Canada.
Senator Kohl. Thank you. Thank you, Mr. Chairman.
Senator Bennett. Thank you. Senator Cochran?
FSIS BUDGET REQUEST
Senator Cochran. Mr. Chairman, I am impressed with what we
have heard this morning, particularly with respect to food
safety issues. I am interested to know, however, whether or not
the budget request is going to be sufficient for us to continue
to maintain the high-quality procedures and processes that we
now have in place and are using to ensure that our food supply
is safe and wholesome and fit for human consumption. Mr. Bost,
I guess we should ask you that, or Dr. Murano.
Dr. Murano. Certainly, Mr. Chairman, you know that this
2004 budget request is really a record-level increase in our
budget that the President is requesting. It is $42 million over
what we had before, and so in these times of budgetary
constraints and fiscal conservatism, if you will, it shows a
commitment of this Administration that we are putting so much
importance in food safety that we are asking for record level
funding for the Food Safety and Inspection Service.
It has to do not only with adequately being able to pay the
salaries of our inspectors, who do the work of food safety out
in the field and are the ones who deserve all the credit for
our accomplishments.
But also, we are requesting money to conduct baseline
studies, to continue the science-based policy making that we
have been undertaking over the last couple of years and money
to really overhaul the training of our inspectors, which is
very much needed. That is money that is so crucial to have
because it will ensure that our inspectors continue to be the
best trained and that they continue to avail themselves of the
state-of-the-art knowledge in food safety implementation so
that they can continue to do a good job. We are also requesting
money for additional microbiologists and laboratory personnel
so that we can continue to do all the work that needs to be
done in laboratory sample analysis and so forth.
So, we are very confident that these requests are certainly
what we need to meet the challenges that I mentioned in my
opening remarks.
Senator Cochran. Thank you.
FOOD SAFETY
Mr. Bost. And Senator Cochran, let me add to that. We all
have a very important part of the food safety picture in this
country and we want to ensure that all the food, that is
supplied to our school children is safe. For my piece of it, by
the time we get it, most of the issues are directly related to
the handling of the food itself.
As I testified in front of you, I guess about a month or so
ago, what we want to do is to ensure that staff who work in the
National School Lunch Program receive a high level of training
so that they can ensure that the food that they receive remains
safe. And so our request is to ensure that we do that. We
believe that we have the resources to do that. We can always--I
am not going to say that you ever have enough, but we could
always use more, but we think we have adequate funding to start
that process for food safety persons.
Senator Cochran. Mr. Hawks.
Mr. Hawks. Yes, sir, Senator Cochran. It is certainly a
pleasure to be here and to respond to questions from a friend
from Mississippi. We feel like this Committee and this Congress
have been extremely generous with us over the past 2 years.
Since coming here for the supplemental defense appropriation,
we were able to take those funds to improve our laboratory
conditions, to improve our surveillance methods. We were able
to work with the States. So we think that we have adequate
funding. The President's budget is adequate to continue this
process.
I would like to, if I may, take the time to go back just a
little bit to the BSE and say that, for the record----
Senator Cochran. Can you tell us how to pronounce what that
stands for?
Mr. Hawks. Bovine spongiform encephalopathy, you have got
it, Senator. I pronounced that in Paris on Sunday and my staff
that was with me told me that I need to practice, so I have
been practicing before coming here today.
But that particular animal did not go into the food chain.
While there was a delay in testing, that animal did not go in
the food chain, so I think that is important for me to point
out. It's just an oversight on my part earlier.
Senator Cochran. Thank you very much. I appreciate the good
job you continue to do, as well.
Senator Bennett. Senator Johnson?
CANADIAN LIVESTOCK PROHIBITION
Senator Johnson. Thank you, Mr. Chairman.
Would it not make sense to maintain the prohibition on
Canadian livestock and meat exports into the United States
until the United States can be comfortable that they have
eliminated their backlog and that their inspection regime is
essentially on a par with that in the United States?
Dr. Murano. Well, Senator, let me make sure that everybody
understands. Their inspection of products, beef and poultry
products, is the same as the United States. The issue at hand
here is on the live animal, and the animal disease surveillance
program that they have. And certainly, we need to make sure
that there is no question in anybody's mind as to whether all
the facts have been ascertained in terms of any cases of BSE
anywhere in the world, Canada, or any other countries.
And so I will venture to say that the Secretary of
Agriculture will certainly be very cautious in lifting that
ban. She will take all the information that is available as it
comes in terms of the samples that are still in the backlog and
other information that is appropriate and will not do anything
until she is confident that it is safe to lift that ban, and I
will guarantee you that that is exactly what she is thinking.
Senator Johnson. Well, it concerns me that they may use the
same science ultimately as we use in the United States, but if
there is a 4-month backlog in this particular instance, that
gives rise to great concern that what would have happened if
that animal had been exported into the United States during
that interim period.
Dr. Murano. Well, that animal would not have, because
remember, it was an animal that had pneumonia and when the
animal was put down, the normal thing that happens, just like
we do here in the United States, those animals are condemned.
Any animal that is diseased is not allowed in the food supply,
whether it is BSE, pneumonia, or anything. So that animal would
not have entered the food supply anyway. It just so happens
that as they tested it, it came out positive for BSE.
Senator Johnson. When we say the animal is not in the food
supply, just so I understand this, it is my understanding that
the carcass of this animal was, in fact, ground up and used as
animal feed. Is that correct or not correct?
Dr. Murano. I understand, that it did not enter the human
food supply. So let me allow Mr. Hawks to tell you more about
that.
Mr. Hawks. Senator, I am under the impression that that
animal, as we said, did not go into the food chain. I would
have to clarify what actually happened, in the rendering
process. So I apologize for not having that answer.
Dr. Murano. But it certainly did not----
Senator Johnson. One of my concerns would be if that did,
in fact, wind up as animal feed, that, in turn, then, was--
whether there are animals that could have fed on that.
Dr. Murano. I follow you, and that would not happen because
Canada has a feed ban, just like we do.
Senator Johnson. All right. I appreciate your response
here. It would appear to me that because of the 4-month
backlog, however, our Canadian friends have some work to do----
Dr. Murano. Yes, they do.
Senator Johnson [continuing]. In order to allow our
consumers to have the confidence they deserve to have, and I
would hope that our USDA will be very aggressive in working
with Canada in that regard.
COUNTRY OF ORIGIN LABELING
Mr. Hawks, on the country of origin labeling issue, in
general terms, the United States only imports around 2 million
head of live cattle but slaughters 28 million head. Obviously,
most of the cattle we slaughter are of U.S. origin. Doesn't it
make sense to USDA that tracking of 2 million imported cattle
would be less costly than keeping track of the 28 million
within the United States?
Mr. Hawks. Senator, I certainly understand your question,
and having been through several of these country of origin
listening sessions, I will say to you that I am committed. I
will personally be at those sessions, or my Administrator of
AMS will be at every one of those to listen and to hear the
comments.
But to be very candid with you, it is the assessment of our
attorneys that we could not do that as the law is written
simply because it requires all products to be labeled with
country of origin. So the law does not allow us to do that, as
written.
Senator Johnson. It would seem--many of my constituents
have suggested if you label imported animal, then it is obvious
that the other animals are, in fact, United States animals.
Mr. Hawks. That is understood, but as we have had numerous
sessions with our attorneys to help us interpret the law as
written, it requires every product in the retail market to be
labeled. And then it is the specificity of the law--born,
raised, and slaughtered. It is giving us great difficulty to
look at it from that perspective.
Senator Johnson. The country of origin labeling law gave
USDA discretion to create an audit verification system, but not
a mandatory system, to help verify the origin of livestock. We
included many existing industry practices and USDA programs to
model in order to achieve voluntary audits. Some of these
models include the USDA grade stamp program, that is to say,
``choice,'' ``select,'' et cetera, ``certified Angus beef'' and
other breed programs, beef quality assurance, Hazard Analysis
Critical Control Points, HACCP, the National School Lunch
Program, the Market Access Program, and the voluntary born and
raised in the USA label used by Carolyn Kerry of California.
To what extent is USDA looking at using these existing
models rather than reinventing the wheel to implement country
of origin labeling?
Mr. Hawks. Senator, as I said, as we go around the country,
we are listening to all of the concerns, the issues that are
being raised. So we are evaluating everything that is out
there. However, the requirement is a retail labeling law, so it
is controlled more from the retail, and the law also goes on to
say that everyone that is supplying product into that retail
market is required to provide the verifiable information as to
the country of origin.
So we will be continuing to look at all of these and try to
come up with something that is reasonable, but it is actually
the retail market that is going to drive that.
ANIMAL IDENTIFICATION
Senator Johnson. Would you agree that the law prohibits on-
farm mandatory animal identification and does not permit third-
party mandates by packers?
Mr. Hawks. I will agree that it absolute prohibits
mandatory identification for the purpose of country of origin
labeling. As to the third-party audits, I would say that that
is a proven practice. It is something that is not unreasonable
and I would say the retailer would have the right to require
that in that case.
Senator Bennett. The time is expired----
Senator Johnson. My time is expired. I will continue with
some other questions and we may submit at a later time, as
well. Thank you, Mr. Chairman.
Senator Bennett. We can come back to this. I want to pursue
this same question on a quick second round because I think
Senator Johnson is focusing on one of the most contentious
problems we deal with. A number of producers are in favor of a
system that would allow farmers to self-certify. In your
opinion, is self-certification legal?
Mr. Hawks. In my opinion, self-certification in and of
itself would not fulfill the requirement.
Senator Bennett. Congress made the law. Congress can unmake
the law. If we should amend the law to allow self-
certification, do you think that would be adequate to achieve
the goals that we are looking for here?
Mr. Hawks. Senator, as you say, Congress makes the law. It
is my job to implement it. So as you move forward, any
decisions that you make, I would be happy to work with you to
help implement those provisions that you put in.
Senator Bennett. You are beginning to sound a little bit
like Mr. Greenspan who testified before us yesterday at the
Joint Economic Committee.
But let us assume that Congress changes the law and allows
self-certification. Do you have any idea of how farmers' would
handle animals that are commingled?
Mr. Hawks. The animals that are commingled would cause a
real serious problem as I see it. If you have animals coming in
from Canada, if you have animals coming in from Mexico and then
you have a self-certification, I think it would be very
difficult because it is ultimately the farmers responsibility
to provide that chain of custody, that information up through
the system to the retailer. So it could potentially be
problematic.
Senator Bennett. And the $10,000 fine per violation, it is
the retailer, not the----
Mr. Hawks. The fine would hit the retailer, that is
correct, but that fine would also fall back on the supply chain
as you go up, as well, because the law also requires those in
the chain to provide information to that retailer--it actually
mandates that they provide that information to the retailer. So
then they would be subject to fines, as well. So it is sort of
like a domino effect.
Senator Bennett. I see. So the retailers probably would not
accept self-certification?
Mr. Hawks. It would be probably difficult. If I was a
retailer, I would be very cautious in accepting that.
Senator Bennett. Okay. Thank you.
Does anyone else want a second round on this panel?
FRESH FRUIT AND VEGETABLE PILOT PROJECTS
Senator Kohl. I would just like to ask Mr. Bost one quick
question, Mr. Chairman. Mr. Bost, the 2002 farm bill provided
$6 million for a fresh fruit and vegetable pilot program for
the 2002-2003 year. The program provided fresh fruits and
vegetables free to children in 107 elementary and secondary
schools across four States. Preliminary evaluation of the
program by USDA indicated that it was a very successful program
and that, overwhelmingly, the schools hope that it could be
continued as well as expanded to other schools. Do you have
plans to do that?
Mr. Bost. The formula, as you noted, essentially provided
us with the authority to do it this year and it was supposed to
end. I believe that both the House and the Senate have approved
an extension of the $6 million that was appropriated, so the
program will go on until it is complete.
As a part of the Child Nutrition reauthorization, as I
testified in front of Chairman Cochran about a month or so ago,
we are looking at the possibility of extending these pilot
projects in those existing States and also adding two or three
additional States. The question is going to be where we get the
money from. It was very well received by administrators,
educators and teachers. The children loved it. It has been one
of the most successful nutrition programs that we have
implemented since I have been Under Secretary in terms of the
positive feedback that we have received.
In addition the program is also being implemented and
carried out on one of our Indian reservations, and very well
received there, too.
Senator Kohl. If you are as enthusiastic as you say you
are, and I believe that is true, I would like to work with you
to see that we get some additional funding, not only to
continue with the program but to expand it and grow it.
Mr. Bost. We are always happy to work with you.
Senator Kohl. Thank you.
Mr. Bost. Thank you.
Senator Bennett. Senator Johnson, do you want to----
Senator Johnson. No.
Senator Bennett. Thank you all. We appreciate, again, your
testimony and we appreciate your willingness to render public
service to the citizens of the country.
Mr. Bost. Thank you, Mr. Chairman.
Dr. Murano. Thank you.
Mr. Hawks. Thank you.
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
STATEMENT OF HON. MARK B. McCLELLAN, COMMISSIONER
ACCOMPANIED BY JEFFREY WEBER, ASSOCIATE COMMISSIONER FOR MANAGEMENT AND
SYSTEMS
Senator Bennett. We will now proceed to hear from the
Commissioner of the Food and Drug Administration, who has been
very patient with us listening this morning.
We are happy to welcome the Honorable Mark McClellan, who
is the Commissioner of Food and Drugs, accompanied by Jeffrey
Weber, the Associate Commissioner for Management and Systems at
the Food and Drug Administration.
Mr. McClellan, thank you very much for your willingness to
sit through the earlier conversation. I am grateful to you for
your willingness to do that. I think given the concern about
food and safety that is currently highlighted in the news, it
is important that we demonstrate that FDA and USDA are both on
the same page. We need to have something of a calming effect,
if we can, on some of the hysteria that seems to arise whenever
the media gets something of this kind.
Thank you for being with us and we look forward now to your
testimony.
Dr. McClellan. Thank you, Mr. Chairman. I am happy to be
here. I enjoyed the opportunity to sit with very capable staff
from USDA that we work with very closely.
It is a pleasure to be here with you today, Mr. Chairman,
Senator Kohl, Senator Johnson, for my first Senate
Appropriations hearing on FDA's budget, and I understand it is
your first as Chairman of the subcommittee, as well. Hopefully,
this is the start of a great new tradition. I am sure that you
are enjoying your new responsibilities as much as I am enjoying
mine. We are all making a very real difference in people's
lives.
FDA is a vitally important public health agency. All
Americans have long depended on us to have confidence and the
safety and security of many products they use every day and
many that they depend on for improving or even saving their
lives.
Mr. Chairman, you have a detailed statement for the record.
This morning, I would just like to highlight some of my top
priorities for the agency. These priorities are from the FDA's
new strategic action plan, which reflects the ideas of our own
staff, the public health priorities of the Secretary and the
President, and special concerns that I have heard about from
many of you and your very capable staffs.
First, to do the most effective job possible, FDA must base
its regulatory work on the principle of efficient risk
management. That is kind of a mouthful for a principle, but the
idea is to use the latest biomedical science and risk
management science to find the best ways to reduce the risk
facing the public and to do it as efficiently as possible.
Since our challenges and the new opportunities we face are
greater than ever, this use of up-to-date science is essential
in enabling the agency to fulfill its mission.
We are regulating more and more complex food products than
ever before. Over the past decade, the number of food import
shipments has increased more than four-fold. We are expecting
over six million shipments in 2004. Americans are eating more
diverse fresh, uncooked products than ever, and we have got to
focus not just on the safety of our food supply, but on its
security against deliberate attack.
We are facing a broader array of more complex medical
products than ever before. The traditional distinctions between
drugs and devices are breaking down as we see more products
that include both. The traditional methods of bringing
blockbuster drugs to market are in the process of being
replaced with more sophisticated methods based on new
breakthroughs in genomics and proteomics that will lead to more
individualized patient treatments in the years ahead. The
doubling of the NIH budget over the past 5 years promises the
development of even more valuable treatments going forward.
The products that we regulate, including foods and medical
treatments, are increasingly important in international trade
negotiations and in steps to make the global markets for
medical products more efficient. This is all potentially very
good news for Americans. More diverse and innovative products
hold the promise of better, longer, more fulfilling lives, but
that promise will only be fulfilled if the agency continues to
fulfill its responsibilities to help make sure that all of
these products are safe and can do what they are supposed to
do.
As we face these increasing responsibilities, it is
critical for the agency to get the most out of our limited
resources through regulatory processes that do as much as
possible to reduce the risk facing the public and to get the
most bang for our regulatory buck. Recent legislation supported
by your appropriations in the 2003 budget provide new
opportunities for us to do this through our expanded food
security authorities and personnel, through newly implemented
legislation on pharmaceutical and medical device user fees, and
through other new initiatives on such critical topics as
patient safety. We owe it to the American public to make the
most of these new opportunities.
We are seeking to improve the quality and efficiency of the
process of developing new medical technologies. We are also
conducting a major overhaul of our oversight of the processes
that medical manufacturers rely on to help ensure that medical
products are safe and effective and of high quality. We are
implementing a new risk-based import security strategy. We are
taking new steps on many other pressing issues, ranging from
bioengineered products, to dietary supplements including
ephedra, to generic drugs, to veterinary medicines, in all
cases using the best science and our statutory authorities to
make sure the agency is having the maximum impact on the public
health that is possible under the law.
At your request this morning, I want to add some remarks
about bovine spongiform encephalopathy, BSE. It is a good
example of our use of risk management techniques quickly and
effectively to be prepared for new public threats. Since the
early days of this disease, FDA and USDA have worked
aggressively to protect Americans from BSE and to develop and
evaluate contingency plans for further developments in the
course of the disease. With the most recent news of a single
BSE-positive cow in Northern Alberta, we are responding
immediately with additional steps for the protection of the
American public.
These include, first, adding Canada to the list of
countries in FDA's import alerts related to BSE. Under these
alerts, FDA stops a wide variety of products, such as animal
feed and human food with bovine-derived materials from being
imported into the United States from BSE countries.
Second, we are using the FDA's BSE response plan, which has
already been developed, for guidance on responding to this
threat quickly and effectively.
Third, we are communicating closely with Canadian
officials. We have offered to send FDA experts to Canada, as
well, to assist them in their investigation and to learn from
this case. As we learn more of the facts of this incident in
Canada, we will continue to act promptly to assure that
scientifically-appropriate safeguards in place in the United
States will protect the public health as effectively as
possible.
As you know, BSE does not spread naturally from cow to cow.
Instead, the infectious agent is passed only when a BSE prion-
infected protein from a rendered BSE-infected animal is added
to animal feed and subsequently fed to cows. So fourth, and
most importantly in our response, our animal feed rule
prohibits the use of most mammalian protein in feeds for use in
ruminant animals, such as cow. This rule has become one of the
essential firewalls against the spread of BSE in the United
States, as Senator Johnson noted. Even if an infected animal
were ever to be found in the United States, and none have been,
this rule would prevent the spread of the disease.
In the past several years since the data was collected that
the GAO report relied on, the report that Senator Johnson
mentioned from 2002, we have taken a number of steps to respond
to the concerns raised there. I agree with you, Senator
Johnson, that we need to be extremely vigilant on this issue.
So we have ramped up our inspections of animal feed
manufacturers, feed mills, all other firms responsible for
keeping--that use ruminant protein to make sure that it stays
out of cattle feed, and at this point this morning, I can
report to you that we have 99.3 percent compliance. That is 0.7
percent of the inspections of all of these firms, this entire
universe of firms handling the bovine material related to feed,
that may be out of compliance, and for those small fraction
that are out of compliance, we are following up very quickly.
We have had follow-up visits within 30 days to these firms. We
have issued 59 warning letters involving 42 product recalls
involving 241 products.
So we are very much concerned with making sure this program
works effectively. We are spending $22 million on this program
this year. Our inspectors are working with the States closely.
We have conducted a number of training sessions. We have
developed a standardized form. We are implementing checks to
make sure that all of the inspectors doing these activities,
the Federal inspectors from FDA as well as our State partners,
are following consistent and appropriate procedures in their
inspectional activities.
And just to be clear, these inspections cover all of the
issues that you raise. There can be no commingling of
materials, no mislabeling of foods containing prohibited
materials in order for a firm to be in compliance, and we
expect 100 percent compliance. We are pushing and aiming for
full compliance. We are inspecting every plant every year to
make sure they are in compliance and we are doing rapid follow-
ups on the small number of plants that are not.
Our work on BSE underscores the fact that FDA is, above
all, a public health agency. So let me mention again a few of
the other top priorities here at FDA.
One of these areas is patient safety, preventing adverse
events. Improper use of pharmaceuticals alone accounts for
thousands of deaths, millions of hospitalizations, and many
billions of costs and avoidable medical complications each
year. FDA has recently announced a set of new programs to
reduce preventable adverse events involving the products that
we regulate, and that includes preventable food illnesses and
reactions as well as medical adverse events.
A third priority for us is getting better information to
consumers about how they can improve their own health, and you
all have already touched on that in the previous panel this
morning. We all know that informed consumers are our greatest
public health asset. By making the right decisions, individual
Americans can do more to improve their health and their quality
of life than the newest medical technology can do for them
overall from a public health standpoint, as powerful as those
new technologies may be. And we are taking many new steps to
help the public get the best science-based information about
the health consequences of the products that we regulate.
The fourth priority involves protecting the country against
terrorism. There is no challenge more urgent in this post-
September 11 world than to engage in the steps needed to
protect our citizens from deliberate attacks that may involve
the food supply and to provide good medical countermeasures for
the agents of terrorism. We are putting in extra hours in many
of our medical products centers to make available safer, more
effective treatments and prevention methods for biological,
chemical, and radiological attacks. We are also an integral
part of the President's proposal for Project BioShield to
create the next generation of better, safer medical
countermeasures as quickly as possible.
Of course, our largest anti-terrorism program involves the
security of our food supply. Through new statutory authorities
and new regulations that we are in the process of issuing right
now, as quickly as possible, and new personnel as well as new
strategies to make our food supply not only safer, but more
secure, we are trying to provide a new level of security for
the American food supply against deliberate kinds of attacks on
it.
Finally, the most important resource our agency possesses
is its talented and dedicated professional staff. Some of our
most important dedicated professionals are with me here this
morning a couple rows behind me. There are some new faces in
our program. There is Jeff Weber's face, which is not new but
is a very effective one in working with us and working with
your Committee. We are working hard to attract support and
retain highly qualified professionals in order for the agency
to be able to adapt and carry out all of the activities that I
have outlined. We need to provide the most public health
protection for every public health dollar invested and our
staff is the first and the most important part of fulfilling
that mission.
So I appreciate your attention this morning to FDA. I can
assure you that the priorities that we discuss are going to
guide our agency's actions during my tenure as Commissioner. We
have a budget request of $1.7 billion to support these top
priorities as well as our other safety and security mission
activities. It includes a set of proposals, new initiatives
that I won't go through in any more detail now. You have got
them in front of you.
But I want to conclude by saying that I very much look
forward to continuing to work with this subcommittee to achieve
our mutual goal of moving FDA forward, because that is so
important for protecting and promoting the health of Americans.
Thank you for your time this morning.
PREPARED STATEMENT
Senator Bennett. Thank you very much and for your response
to the issue that we discussed in such detail with the first
panel. That is very helpful.
[The statement follows:]
Prepared Statement of Mark B. McClellan
Mr. Chairman and distinguished members of the Subcommittee, I am
honored to be with you today as we discuss FDA's 2004 budget request. I
want to thank you for your interest in the Food and Drug Administration
and to reaffirm the importance of the FDA and its enormous contribution
to our nation's health.
As a practicing internist and a former professor of both economics
and medicine I was well aware of the importance of the FDA and its
enormous contribution to our nation's health. Now, as the Commissioner
of FDA, I have quickly come to understand that ensuring adequate and
properly targeted resources is vital to the continued success of the
agency and the success of the President's efforts to promote quality
health.
I find it a rewarding and exciting time to be at the FDA. The
challenges we face in promoting and protecting the public health are
greater than ever. The agency is charged with regulating activities
which have increased in volume and complexity, a trend likely to
continue. There are additional drugs and medical devices available to
save and improve lives, and even more to come. There are increasingly
diverse food products--giving consumers more food options to meet their
needs more productively than ever. And we are adding to these choices
by importing a larger volume and greater diversity of foods than ever
before. There are also broader choices in cosmetics.
The result is, Americans have more opportunities to improve and
enjoy their lives--and these are good things for Americans. At the same
time, however, they present unprecedented challenges for FDA in meeting
our regulatory responsibilities. Even as the complexity of these
products increases, we must continue our commitment to making sure safe
and effective new food and drug products reach consumers in a timely
fashion. We have responsibilities over 20 percent of the consumer
economy--an amount that's growing every year. All of this has immensely
complicated FDA's mission. The FDA also must think critically and
carefully about how it uses its resources to improve the public health.
Mastering this great responsibility in the 21st Century requires FDA to
meet some unprecedented challenges.
I believe there are five major steps we need to take to conquer the
challenges we face. A strong FDA that attracts and retains the most
talented scientists; dynamic and responsive regulation utilizing new
and better ways to reduce risks to the public health; promoting quick
access to new medical technologies that are safe and effective thus
helping to reduce adverse events involving FDA-regulated products;
helping consumers get truthful and non-misleading information about the
products they use; and, quick responses to the more pressing challenges
of bioterrorism and food security. These are among the many critical
steps the agency must take as it looks forward into the 21st century. I
would like to first cover the challenges and our strategic planning
effort, which include these steps, and then will discuss the specifics
of FDA's budget request.
Strategic Planning
To meld it all together--the new challenges, the new opportunities
and the steps to be taken, we have undertaken a major strategic action
plan within the agency utilizing creative thinking from inside and
around the agency we have undertaken a major strategic action planning
effort. Under the leadership of FDA's Executive Council we established
five broad strategic goals to frame the Agency's future. FDA's
leadership is now finalizing a strategic framework to identify
objectives and strategies within each of these goals. Cross-cutting
work groups, led by members of the senior management team, were
established for each goal area. Each group initiated its work based on
the Secretary's and my priorities, proposed initiatives, and a broad
range of objectives and strategies that are already underway or
proposed in recent planning initiatives. Our steps have included
leadership development of agency strategic objectives; development of
the long-range strategic plan based on the framework; and translation
of the strategic plan into a specific action plan for the remainder of
fiscal year 2003 and 2004. This effort encompasses the 5 critical
challenges and lays the foundation for our action plan. I look forward
to discussing this with you as this effort matures. Now lets review the
steps we are taking to address the challenges ahead.
Strong FDA
The critical challenge for a strong FDA remains. Essential to the
success of the agency is its professional workforce and their ability
to maintain a high level of public trust in FDA's activities. Two-
thirds of the money we're appropriated each year is spent on our
highly-skilled workforce to carry out FDA's complicated mission. Our
contributions are primarily a reflection of our professional services.
An organization that can keep up with the rapid changes in the
industries it regulates, and one capable of developing and implementing
effective and innovative public health measures, requires a very
special workforce. So our mission depends more than ever on a solid
cadre of experienced physicians, toxicologists, chemists,
statisticians, mathematicians and other highly qualified and dedicated
professionals. Their expertise is essential for making our regulatory
decisions balanced and fair, and for keeping us on the cutting edge of
the technology and sciences used by industry. A clear sense of mission
is not enough to attract and keep the best and brightest, highly
motivated employees who are essential to meeting the challenges that
the FDA faces in the 21st century. As FDA Commissioner, it is one of my
foremost goals to make sure that the FDA's working environment
encourages creativity, efficiency, and superior performance--an
environment which attracts and retains top-quality scientists, and
enables them to do top-quality work as part of an effective team.
To attract and keep high-caliber employees who are responsive to
the changing needs of the agency, we need to be responsive to their
diverse needs. FDA is already leading the way with many such workforce
initiatives already. Our employees can take advantage of flexible work
schedules, including an ``any-80'' program that can fit the difficult
schedules of two working parents, sick kids and sick parents, and other
outside commitments. About one-fifth of our employees take advantage of
our flexi-placing program, which permits telecommuting. And we support
employees with child care, elder care, and other distinctive needs.
In a recent survey conducted by OPM to gauge how Federal employees
feel about their jobs, FDA did very well compared to other government
agencies and the private sector, especially in how our employees feel
that their individual work here relates to Agency's core mission. About
73 percent said that they found FDA a friendly place to work, 82
percent said their supervisor supports their need to balance work and
family issues, and 65 percent said they would recommend the FDA as a
place to work. We're doing well. We want to do better.
We must reward employees who distinguish themselves and who remain
committed to our agency despite attractive outside job offers. On the
one hand, I'm glad that so many of our employees have other good
options. That tells me that we are attracting very talented people. On
the other hand, I don't want to lose them. We therefore offer a range
of programs to help recruit and retain talented staff, including
expansions of retention bonuses for employees in fields with a
particularly high turnover. In collaboration with the National Treasury
Employees Union, we are also working to provide additional financial
rewards for high performing workers
FDA must encourage fresh perspectives and plan for transitions as
well. For some of our workers, spending time here as well as in
academics or industry is the most rewarding career path, because it is
the best way to keep up with rapid scientific change. And more than 30
percent of our workforce will be eligible for retirement in less than 5
years. So we are working to develop succession plans and career
development plans. And we are expanding career options, such as new
fellowships and part-time appointments at our devices center, to
support combining work at FDA with work in an academic agency.
We will continue to find better ways to support our work
environment. The enormity of our task also compels us to seek new ways
to augment our available resources. One such opportunity is to use the
accumulated experience of FDA alumni. I'm very pleased that scores of
alumni from around the country have come together to establish the FDA
Alumni Association. The FDAAA can offer much to help us meet our
challenges.
Risk Management
Second, to strengthen our agency's ability to meet the challenges
of food and drug regulation in the 21st century, we must rely on the
best science available. Risk management is one of the many areas of
regulatory science FDA has long used in addressing risks to public
health and finding the best science for managing them. We must use
creative thinking and science-based risk management to increase public
health benefits while minimizing the public health risks. We must work
to ensure that our regulations and our decisions are firmly anchored in
the latest science; that they are fair; that they are dynamic; that
they are focused on public health risks; that they are cost-effective;
and above all, that they are responsive to the changing circumstances
we face.
We must do all we can to ease the regulatory burden. We need to
adjust our policies, methods and practices to the increasing volume,
variety and complexity of products under our purview, as well as to
increased threats--such as bioterrorism. We have to broaden the
application of the science of risk management through a committed,
constant and consistent effort to find ways to reduce health risks and
increase health benefits to the public as efficiently as possible.
Earlier this year as part of our response to this challenge--to
make sure we have regulatory processes that are as efficient and up-to-
date as possible--we announced a major new medical technology
development initiative with three main elements. The new initiative
includes a detailed plan for an overhaul of the practices on which the
FDA as well as manufacturers rely on to ensure that pharmaceutical
products are safe. The new initiative will encourage manufacturing
innovation while continuing to assure the highest drug quality.
First, we are conducting a ``root cause analysis'' of recent
``multiple cycle'' product approvals--products that required two or
more ``rounds'' of review before they could be approved. An extra round
means at least an extra 10 months or more, which can add many millions
to the cost of new products. It also delays availability to patients
who might benefit from the product. Second, we are developing ``quality
systems'' for our review procedures. The idea is to apply best
management practices internally to our review processes, such as using
peer review programs for reviewers to exchange ideas and use each
others' experience to learn about best practices. Third we will work to
publish new guidance documents. These new guidances will be in areas we
think the regulatory pathways could be improved or better defined. We
expect to learn something from outside experts in the open process of
developing guidances. The new guidances will include product guidances
for treating obesity, diabetes, and cancer. We think that new
regulatory standards can reduce the time and cost of product
development.
We are already advancing changes that will help us achieve these
three new goals. For example, we have developed a detailed plan for an
overhaul of the practices on which the FDA as well as manufacturers
rely on to ensure that pharmaceutical products are safe. GMP policies
haven't been updated in 25 years. Meanwhile, best practices in
manufacturing technologies and methods have undergone significant
progress over that time. We are developing new GMPs based on the latest
science of risk management and quality assurance. The new standards are
being designed to encourage innovation in manufacturing and technology;
coordinate submission review and inspection programs; and ensure their
consistent application by all three FDA centers that regulate
pharmaceutical products. This includes new guidance from CBER on the
manufacturing requirements for novel technologies such as cell
processing and gene therapy operations. The medical device user fee act
also significantly expands FDA's informal policy of allowing third
parties to conduct facility inspections under more closely supervised
conditions, to give some manufacturers the flexibility to have their
inspections carried out more quickly without sacrificing stringent
safety standards.
For food, there are several issues that are very much at the center
of our attention. One of them is ensuring the safety of genetically
modified feed and foods, and strengthening the public's confidence in
these new products. Genetically engineered crops are increasingly
common Field tests of new plants in the United States have increased
more than eight-fold in the last 8 years, and bioengineered crops are
now grown on 130 million acres world-wide. The public's concern about
these food products is also strong, as was recently illustrated by the
media coverage of the commingling of small amounts of bioengineered
corn with soybeans that had been intended for consumption.
In the last 10 years, the FDA has evaluated more than 50 new
varieties of bioengineered plants submitted to our agency. The basis of
this cooperation was an FDA policy, supported by the industry, of
voluntary consultation before the bio-rengineered products are
marketed. To help expand similar protections beyond the U.S. borders,
FDA's scientists have worked with the Codex Alimentarius Commission of
the World Health Organization/Food and Agriculture Organization, WHO/
FAO to draft guidelines for the assessment of safety of foods derived
from rDNA plants. And to get the best outside advice on food
biotechnology issues, the FDA has established a new Food Biotechnology
Subcommittee of its Food Advisory Committee.
Currently, as part of a project organized by the White House Office
of Science and Technology Policy, we are preparing draft guidance for
industry to provide early food safety evaluations for new proteins in
bioengineered crops for food or feed. If developers establish that
these new proteins are safe for consumption--meaning, that they do not
raise questions about their allergenicity and toxicity--then the foods
containing low levels of these innovative plants could be marketed
without comprehensive review. We will remain vigilant in addressing
concerns about genetically modified food and feed.
Next, I want to bring you up-to-date on the FDA's progress in
addressing an issue that has stirred great interest among food
scientists. I am referring to the studies released that show that
baked, fried or roasted foods rich in carbohydrates--including such
dietary staples as bread--contain acrylamide, which, at high doses, is
a known animal carcinogen. In soft bread, the reported levels of
acrylamide range from 30 micrograms to 162 micrograms per kilogram, and
in potato chips, to mention another example, the range is from 1.4
micrograms to 100 micrograms per ounce.
Acrylamide is well known to manufacturers who use it for water
treatment and production of dies and plastics, but it is largely a
terra incognita for food scientists. Given the key role of
carbohydrates in our diet, it's been incumbent on our scientific
community to subject acrylamide to a close scrutiny. Some of the
questions that need to be answered are, for example, is it genotoxic?
How is it formed? What is its level of exposure in the general
population? What is its bioavailability in food? And what are the
biomarkers of acrylamide exposure? And, what steps can be taken to
reduce the levels of acrylamide in food?
FDA is making a significant contribution to this research. Our
agency has developed a method for measuring levels of acrylamide in
foods, and used it so far on about 300 types of products, including
cereals, breads, and chips. We're developing an understanding how
acrylamide is formed, which is very important for finding ways how to
keep it out of food; and we are probing the chemical's toxicity.
Recently, we reported these and other findings to our Food Advisory
Committee.
With regard to chronic wasting disease, CWD, it has now been found
in farmed or wild deer and elk in 12 states and two provinces in
Canada. CWD belongs to a group of transmissible spongiform
encephalopathies, or prion diseases, which also includes BSE in cattle,
scrapie in sheep and goats, and classical and variant Creutzfeldt-Jacob
diseases in humans. There are currently no vaccines or treatments
available for these diseases which are invariably fatal. Compared to
other TSEs, CWD spreads readily between susceptible species. However,
because CWD's route of transmission is poorly understood, there is
considerable uncertainty whether CWD poses a threat to humans or
livestock is high, also not be used in animal feed.
In order to minimize any risk to public health, FDA publicly
announced last November that material from CWD-positive animals should
not be rendered for use in feed for any animal species. FDA further
recommended that animals from positive captive herds and animals from
high risk areas, such as those parts of Colorado, Wyoming and Wisconsin
where the prevalence of CW is high, also not be used in animal food.
FDA is also collaborating with other Federal agencies in studies of the
risk of CWD in the food supply, and the transmissibility of CWD to
humans.
These are but a few of the initiatives that are on our agenda, as
you will here there are several more projects such as, preparing good
manufacturing practices for dietary supplements; trying to improve the
food labeling with respect to allergens; doubling our food inspections
at the ports of entry; and we are stepping up our enforcement against
potentially harmful nutritional supplements. We even test typical home-
cooked meals for residues of pesticides and other contaminants.
Medical Errors/Patient Safety
A third critical step of our agency is to reduce adverse health
events involving the products we regulate. Health problems associated
with adverse events are far too common, carry a staggering economic tab
and a large number of them are preventable. The statistics on the
prevalence of avoidable health complications that often involve the use
of FDA-regulated products presents a huge challenge for our agency and
for all of us.
One type of an often preventable adverse events results from
foodborne disease. According to a 1999 survey by the Centers for
Disease Control and Prevention,CDC, foodborne diseases cause annually
76 million cases of illness, 325,000 hospitalizations, 5,000 deaths,
and an economic damage of up to $23 billion. In addition, inadvertently
consumed food allergens result in thousands of avoidable emergency room
visits.
Another often preventable adverse event is the misuse of
pharmaceuticals which is associated with thousands of deaths and about
3 million hospital admissions a year. It is estimated that our
pharmacists will fill 3.1 billion prescriptions by the end of this
year, 60 percent more than 10 years ago. Manufacturers worldwide are
increasingly presenting their new pharmaceuticals for FDA's review and
approval: 60 percent of the world's drugs are introduced first in the
United States. In 2000, the economic cost of drug-associated errors
alone was estimated to reach over $75 billion a year. Finding creative
ways to prevent even a fraction of the preventable medical errors, will
improve the lives of hundreds of thousands of Americans, and greatly
reduce the burden on our health care systems.
The FDA's MedWatch program is a system of voluntary reporting of
adverse events associated with the use of agency-approved products. The
agency's MedWatch program receives about 250,000 voluntary adverse
event and medical product problem reports each year, mostly from health
care professionals and consumers. Our Vaccine Adverse Event Reporting
System, VAERS is shared with CDC and includes participation by large
health plans. The Centers for Education and Research on Therapeutics,
CERTs, which was authorized by the FDA Modernization Act and is
administered through grants from AHRQ, is helping collect information
on safe and effective use of FDA-approved medications. And we see the
most promising emergence of increasingly sophisticated electronic
databases that make possible public-private collaboration in learning
more about the ways to improve the safety of medical treatments.
Another bright spot is MedSun, FDA's pilot program for devices that
requires rapid adverse event reporting on medical devices by a group of
hospitals and nursing homes. The system advances the public's health by
giving FDA quicker and more detailed information, without identifying
involved individuals, on potential problems with health care products
in actual medical practice. FDA's VAERS received more than 14,000
reports of adverse reactions in fiscal year 2002, most of which were
volunteered by health care providers, patients and their parents. I am
looking forward to the debut in June of the newest adverse event
reporting system in FDA, the Center for Food Safety and Applied
Nutrition Adverse Events Reporting System, CAERS will track voluntary
submitted food and cosmetic adverse reports and incorporates some of
the latest technology.
But that's not all FDA is doing. Recently, FDA made some additional
major patient safety announcements. These included a proposed rule to
require a universal barcoding system for prescription medications, to
support the development of better systems to support health
professionals. The proposed barcode rule would apply to all
prescription drug products, including biological products and vaccines,
except for physician samples, as well as over-the-counter drugs that
are commonly used in hospitals. The proposed rule, if finalized, could
reduce by half or more the large number of medication errors that occur
at the dispensing and administration stage, by helping to make sure
that the right patient gets the right drug at the right time.
A second proposed action the FDA recently announced--revamping of
our manufacturer reporting requirements for adverse events--aims to
enhance the agency's ability to effectively monitor and improve the
safe use of medications including drugs and biologics. Among other
things, the proposed rule would improve the quality and usefulness of
safety reports submitted to the agency, by giving us more detailed
information on serious actual and potential adverse events, especially
those involving new products where toxicities are not yet thoroughly
understood. It also uses standards that we have developed with
regulatory agencies around the world to develop, so that manufacturers
can submit one accurate and complete report to agencies rather than
many. The proposal will require the submission of all suspected serious
reactions for blood and blood products, not just deaths. These
provisions would provide FDA with more useful, timely, and extensive
information to support quicker, more effective actions by the agency to
prevent adverse events.
FDA is also working to reduce adverse events associated with
dietary supplements. With new evidence in the medical literature and in
adverse event reports there are reasons for the heightened concern that
dietary supplements containing ephedra, consequently FDA and HHS
announced a series of steps recently to protect Americans from the
potentially serious risks of these dietary supplements. The law
governing dietary supplement requires us to prove, scientifically and
legally, that a supplement presents an unreasonable risk in order for
us to take regulatory action. Thus, we are seeking rapid public comment
on the new evidence on health risks associated with ephedra to
establish an up-to-date record as quickly as possible, to support
restrictions on ephedra-containing products and the need for a strong
new warning label on any ephedra products that continue to be marketed.
We are also executing a series of actions against ephedra products
making unsubstantiated claims, for example about sports performance
enhancement, and against manufacturers that are marketing street drugs
not dietary supplements.
To help consumers continue to get unadulterated dietary
supplements, we also proposed a major new regulation to require good
manufacturing processes in their production, packing, and holding. The
proposed rule would, for the first time, establish standards to help
ensure that dietary supplements and dietary ingredients are produced
without contaminants or impurities.
I intend to expand the use of new information technology, IT, to
improve our understanding of what causes preventable adverse events. In
medical care, it is conceivable to develop of an electronic network
that would provide automatic updates on adverse events and the
circumstances that may have contributed to their occurrence. Such
information network could also enable the FDA to disseminate
automatically updated, relevant information on medical labels and
warnings, and thereby help prevent the adverse events from happening
again. Our agency is already conducting pilot IT programs in our
centers for medical devices, drugs, and biologics.
Potential health benefits can result from an effective use of
today's IT. For example, IT can help professionals monitor the
patient's progress and deliver a health care that ``gets it right.''
Many of the new, complex treatments have an inherently higher potential
for toxicity, and their use requires careful monitoring for liver,
kidney and other toxicities, as well as for interactions with the
patient's conditions and other medical treatments. The technology can
also aid in the sophisticated monitoring and support required by many
seriously ill patients who have undergone complex and sometimes
lifesaving surgical procedures. Used comprehensively IT would form the
backbone of a National Health Information Infrastructure, a system
capable of rapidly and securely transmitting significant health-related
data to institutions and public health professionals who need them to
ensure better care for patients. My vision is for the FDA to support
and use these new tools of health information technology and their
incorporation in this system, and pen new opportunities for advancing
our mission of promoting the public health. The Administration's
Consolidated Health Information E-Government initiative, to which FDA
is contributing, is working to establish broad health data information
standards that will apply to all agencies.
These and other advancements are part of a vision of what can be
accomplished if all of us in government, the health professions,
academia and industry continue to work toward better health information
systems--and more generally, toward a health care system that helps
patients and health professionals make better decisions supported by
safer and more effective medical treatments.
We have a major opportunity to help people improve their health by
providing them with the up-to-date information they need to choose a
healthy way to live. As the Secretary pointed out this is a human
tragedy and a shocking result of a failure to realize many of the
potential benefits of modern medical treatments. In my new post, I look
forward to supporting FDA's efforts to fulfill its important role in
this process, and to help secure the benefits of a robust 21st century
health care system.
Consumer Information
A fourth step to address FDA priorities is to help consumers get
reliable, accurate, and relevant information about the FDA-regulated
products. For all that the new medical technologies in the review
pipeline can accomplish, they cannot match the public health benefits
of sound lifestyle and dietary choices that individuals can make
themselves. It is also vitally important for consumers to have accurate
and truthful information about the risks and benefits of the medical
products they use. Americans increasingly want to learn more about what
they can do personally to maintain or improve their health. That's why
I am placing such a high priority on clearly communicating that
information--not only to consumers, but to health care providers and
others who can help ensure that consumers make important decisions
about their own health on the basis of reliable information.
To mention a couple of familiar examples, our agency is introducing
more and better information about the foods and dietary supplements to
help American consumers prevent diseases and improve their health by
making sound dietary decisions. One effort is nutrition labeling, which
encourages shoppers to select foods low in cholesterol and saturated
fats, and high in fiber. We will soon be adding a requirement to
include ``transfat'' on the nutrition label.
But consumers today expect us to do still more, and we must not
disappoint them. We must disseminate up-to-date and reliable scientific
information on the health effects of foods and nutritional supplements;
and we must make sure that the ads and claims for medical products,
foods, and dietary supplements are truthful and not misleading.
Moreover, we must make use of all means to get this information to
consumers in a way that would most benefit their health.
There is no example more persuasive of the need for innovative
approaches than the national epidemic of obesity. This is a very
serious, and growing, public health problem. According to a CDC survey,
in 1985 fewer than 14 percent of Americans were overweight.
Today, more than a third of our adult population is obese, 64
percent of U.S. adults are obese or overweight, and 15 percent of 12-19
year-olds are overweight. The health consequences include greater
incidence of diabetes, stroke, coronary artery disease, cardiovascular
disease, and high blood pressure--and that's not the complete list. The
economic costs of diseases linked with excess weight run into hundreds
of billions of dollars each year.
Although the FDA has approved drugs for curbing appetite and
breaking down dietary fat, their use usually does not result in a
weight loss greater than 10 percent. There is no better remedy for
excessive weight than healthy lifestyle choices--and to make these
choices, consumers need better information on how their diet affects
their health. Our agency has been helping to provide such information
through educational articles, guidelines and press releases.
But FDA cannot achieve the goal of a well-informed public through
labeling requirements and agency educational campaigns alone. We also
need to find better ways to encourage food producers to compete on the
basis of scientifically sound nutritional claims. As a recent study by
the Federal Trade Commission noted, ads with scientifically-based
health claims can have substantial positive effects on the choices of
consumers. Here is one area where we may be able to get more useful
nutritional information to consumers.
By putting credible, science-based information in the hands of
consumers, we hope to foster competition based on the real nutritional
value of foods rather than on portion size or spurious and unreliable
claims. Such labeling can help empower consumers to make smart, healthy
choices about the foods that they buy and consume.
Our consumer health information initiative includes three related
actions. First, we will issue guidance on qualified health claims for
conventional foods and dietary supplements. Any such claims must be
pre-approved by FDA and meet the ``weight of the scientific evidence''
standard, including support by a credible body of scientific evidence;
Second we will strengthen enforcement of dietary supplement rules.
Today, FDA is emphasizing its commitment to carrying out the intent of
Congress in the Dietary Supplement Health and Education Act of 1994 by
outlining its enforcement strategy against false or misleading claims
about dietary supplements. As an example of its commitment to strong
enforcement, FDA has seized dietary supplements making unapproved drug
claims. Third, we have established a Task Force on Consumer Health
Information for Better Nutrition. This task force will develop a
framework to help consumers obtain accurate, up-to-date, and science-
based information about conventional food and dietary supplements. This
includes the development of additional scientific guidance on how the
``weight of the evidence'' standard will be applied, as well as the
development of regulations. Our mission at FDA is to improve health
outcomes for the nation, and some of the best opportunities for
improving health involve informed choices by consumers. Through the
Better Health Better Information initiative, we are committed to
improving opportunities for consumers to get scientifically accurate
information about the health consequences of the foods they consume,
and to enhancing our enforcement efforts against those who would make
false or misleading claims for their products.
Counterterrorism
A fifth step in meeting our challenges is to address the critical
additional responsibilities--the nation's front lines against
terrorism. Helping protect our homeland is a privilege and our
paramount public health job, and we are doing all we can to deserve the
trust placed in our agency. Our product centers responsible for
pharmaceutical products are working to adapt their approval processes
to the unique challenges of developing safer and more effective
treatments for anthrax, smallpox, plague and other potential agents of
bioterrorism. Our center for medical devices is supporting the
development of methods for detecting biological agents with
bioterrorism potential, and for radiological decontamination. These new
tools are needed now, and we are doing our best to help bring them to
the nation's defense as quickly as possible.
A new initiative recently announced by the President Bush is
Project BioShield--a comprehensive effort to develop and make available
modern, effective countermeasures against biological and other
dangerous agents. This major cooperative effort will be a joint
activity of the new Department of Homeland Security and the Department
of Health and Human Services. The BioShield program which Congress is
currently considering will ensure resources to develop next-generation
countermeasures for smallpox, anthrax, and botulinum toxin; expand
research and development at NIH so that it in order to speed research
and development on medical countermeasures based on the most promising
recent scientific discoveries and make promising treatments available
quickly for emergencies. The BioShield program would provide FDA with
the ability to make new and promising treatments under development
available quickly in emergency situations--potentially saving many more
lives than treatments otherwise available today.
The President believes, by bringing researchers, medical experts,
and the biomedical industry together in a new and focused way, our
Nation can achieve the same kind of treatment breakthroughs for bio-
terrorism and other terrorism threats that have been achieved to the
threat of heart disease, cancer, and many other serious illnesses.
We have no responsibility more important and challenging than to
protect the safety and security of the United States food supply. This
is especially true as 80 percent of food products are within the FDA's
purview. We are also involved in ensuring the safety of many new types
of food. We all know the problem of food safety did not originate in
September of last year. During the last decade, rising incidence of
food contamination with Listeria, Salmonella and other pathogens--
combined with our more diverse and aging population, greater preference
for prepared foods, and rapidly growing food imports--have sharply
increased foodborne outbreaks that produced the CDC statistics I
mentioned.
This past year the CDC reported a 21-percent decline in illnesses
from four more common serious foodborne pathogens, and a food safety
survey conducted in 2001 reported substantial improvement in the way
our consumers handle food. But the terrorist attacks last year
highlighted new potential risks of deliberate food contamination. To
counter this unprecedented menace requires new thinking on how to
better safeguard our food.
Much work toward this goal has already been done. In the fall of
last year, for example, our agency initiated a scientific assessment of
the vulnerability of various categories of food to intentional
contamination. The appraisal utilized an analytical framework called
operational risk management that considers both the severity of the
public health and economic impact of a potential bioterrorist attack on
our food supply, and the likelihood of such an event taking place. The
FDA has developed two guidance documents--one each for domestic food
producers and for food importers--on how to protect their products
against intentional contamination. And, we are developing additional
guidance directed at the retail and cosmetic sectors.
One special emphasis is on the security of our food imports, the
volume of which is increasing by as much as 21 percent a year. In
particular, the FDA is taking part in two multi-agency efforts to give
our bioterrorism counter-measures greater scientific depth and
geographic distribution. Thanks to the leadership of the Undersecretary
of the Food Safety and Inspection Service, (FSIS), we have joined with
FSIS and several other Federal agencies in laying the groundwork for
PrepNet, a network focused on the prevention of--and response to--the
introduction of microbial, chemical, radiological or physical
contaminants into the food supply. And we are developing plans for
cooperative work with and expansion of CDC's cooperative Laboratory
Response Network that will upgrade our ability to quickly recognize and
identify a terrorist attack on food.
Our efforts to improve food security have received strong support
from the President, the Secretary of Health and Human Services, and
you--the Congress. Thanks to a supplemental appropriation of $151
million received in fiscal year 2002, we have been able to hire several
hundred new employees whose job will be to keep watch on imports and
whatever other avenues our enemies might try to use to contaminate our
food or tamper with other regulated products. But it is important to
keep in mind that reducing risks to food security requires more than
hiring inspectors. Even with the great expansion of FDA's presence in
the nation's ports of entry, we will be able to inspect only a fraction
of the 5.6 million food shipments that will be imported this year.
We need to find innovative ways to make our foods more secure
without adding unnecessary costs. Thus additional efforts are in the
works. One is the implementation of the Public Health Security and
Bioterrorism Preparedness and Response Act of 2002, which gives the FDA
greater control over food in general, and imported food in particular.
Secondly, several weeks ago we announced a set of new food security
measures as part of Operation Liberty Shield. Operation Liberty Shield
is a comprehensive, multi-agency national plan designed to increase
protections for America's citizens and infrastructure while maintaining
the free flow of goods and people across our border with minimal
disruption to our economy and way of life.
The Bioterrorism Act contains a number of food provisions which
require new regulations. We have now published four proposed
regulations, three of which are mandated to be in effect by December
12, 2003. This project is on the fast track, and I am committed to
issuing the final rules by their statutory deadline. The registration
of will require all facilities that manufacture, process, pack or hold
food for consumption in the United States to register with the FDA by
mid-December, 2003. A second regulation will require importers to
provide the FDA with a prior notice of food shipments that includes
information about the shipment's contents and origin, as well as the
anticipated port of entry. A third regulation will obligate food
businesses to maintain records to enable us to determine where the food
came from and who was its subsequent recipient, so that we can quickly
trace any food contamination back to the source. The fourth regulation
authorizes the FDA to order the detention of food on the basis of
credible evidence or information that it poses a serious health threat
to humans or animals.
Liberty Shield, our newest undertaking, focuses on published
common-sense food guidance documents on food security relevant to just
about all firms involved in food production, ranging from the smallest
mom-and-pop operations and county fairs to the largest food producers.
The guidances cover all major sectors of food production, distribution,
and use.
Another focus of Operation Liberty Shield, is increased food
inspections and sampling for important agents of terrorism. We have
recently invested over $1 million in emergency funds to purchase test
kits that enable us to sample for these agents, and we are starting to
use these kits more widely in our inspections and testing of both
domestically produced and imported foods.
We'll be undertaking further efforts to work with the food industry
as we carry out investigations and import audits, and as we implement
new procedures, to make sure the measures lead to the greatest benefits
for food security without imposing unnecessary costs or regulatory
burdens on food production, processing, and distribution. And we want
to make sure firms remain aware of potential terrorist activities,
especially as they relate to raw material shipments, inventory
quarantine procedures, sourcing of foreign products or ingredients, and
vulnerable operations
Over the coming years, I believe the best solution will be the
adoption of a risk-based import surveillance system to replace our
current import program, which is fully linked with U.S. Customs entry
processes--processes that have historically been designed to address
revenue and trade issues, not public health issues. We're moving in the
direction of a modern, risk-based system for food imports already. This
includes shifting toward a ``life cycle'' approach. I am confident of
our agency's ability to rise to the many new challenges we face and I
look forward to working with you. Now for the budget request
Fiscal Year 2004 Budget Request
As I have mentioned, pivotal to the continued success of the FDA
and the success of the President's efforts to promote health care
quality is the FDA budget Our fiscal year 2004 President's budget
request totals $1.7 billion, including $1.4 billion in budget authority
and $307 million in user fees. Budget authority increases above the
fiscal year 2003 Appropriation total $82.6 million and savings related
to the President's initiatives total $58.2 million. The agency's
reductions include transferring funding to the new Department of
Homeland Security, management savings due to de-layering, and
information technology consolidations. The user fee increases total $37
million. The full time employee total equals 10,753, which includes the
adjustment for management savings.
We believe our budget request will allow FDA to fund ongoing
operations at the current level and also support more than 1,000
recently hired investigators and analytical staff to fight
counterrorism. In the near future, FDA will be challenged to resolve
complex issues connected with emerging technological and demographic
developments that include the human genome project, breakthrough device
technology, and biotechnology medicines and development. Our specific
budget initiatives as compared with our fiscal year 2003 President's
request parallels our top priorities.
The President's 2004 Budget was developed within a framework that
set a proposed total for discretionary spending in 2004, and each
agency and program request reflects the Administration's relative
priority for that operation, activity or Program. Thus, the fiscal year
2004 budget has not changed based on the program or agency levels
included in the 2003 Omnibus bill the Congress approved in mid-
February. We recognize that you may believe there is a need to reorder
and adjust some of these priorities and the Administration intends to
work with you to remain within the 2004 top line amount.
Cost of Living $31.4 million
Essential to FDA's success is its dedicated professional staff. FDA
is a people-intensive Agency where payroll accounts for over 60 percent
of the budget. Forty-five percent of that workforce is dedicated to
``front line'' efforts such as foreign and domestic inspections and
coordination with States and cooperative education programs. The budget
request includes $23.283 million in inflationary cost-of-living
adjustments which will be used to support the level of existing
programs and also provide a minimum level of support to the hundreds of
investigators and analytical staff hired in fiscal year 2002 for
Counterterrorism activities. And, the request includes an additional
$8.108 million that will be used, in part, to defray other pay costs,
making up the difference between a 3.1 percent versus a 4.1 percent pay
increase.
As I have said, the importance and complexity of the FDA's work
will only increase in the years to come. Thus the continued success of
our mission depends on the experienced and highly dedicated
professionals who can make our regulatory decisions balanced and fair
keeping us on the cutting edge of the technology and sciences used by
industry. Making sure FDA's working environment encourages creativity,
efficiency and performance is one of my goals.
Secretarial Initiative: Protecting Our Homeland: Food Safety--
Counterterrorism $20.5 million
FDA has limited capacity to monitor or control the flow of imported
foods, inspect domestic manufacturers, and detect foodborne pathogens
before they cause human illness. When these limitations are combined
with the possibility of deliberate attempts to contaminate the food
supply at any point along the food production, processing and
distribution chain, the risks are greatly increased. We believe that a
coordinated approach with state, Federal and local partners, offers a
better means of identifying and containing outbreaks associated with
deliberate attempts to contaminate the food supply.
One key food provision of the Bioterrorism Act is the requirement
for registration of domestic and foreign food facilities that
manufacture, process, pack, or hold food for human or animal
consumption in the United States to register with the agency by
December 12, 2003. FDA also plans to have its registration system
operational by October 12, 2003, to accept early registrations.
Improving the FDA's food safety inspection, detection and
monitoring capabilities is and has been a top priority of the
Department and the agency before the events of September 11. This FDA
effort is the latest in a series of measures to build stronger
safeguards for the American people.
We believe these measures will bolster our ability to regulate
effectively the more than 400,000 domestic and foreign facilities that
deal with food within our country. Our ability to efficiently and
effectively help protect the nation's food supply is a critical part in
our agency's counterterrorism mission. Thanks to the leadership of
Senators Gregg and Kennedy, and Representatives Tauzin and Dingell, the
Bioterrorism Act gives FDA this important new authority.
FDA will also provide grants to states for inspections under
section 311 of the Bioterrorism Act, conduct direct Federal food
inspections, and improve Center and Field laboratory preparedness. By
increasing the number of state contracts, grants and partnerships, we
believe it will ensure application of appropriate preventative controls
to ensure a safe, wholesome, and nutritious food supply. We expect the
initial grants to be used by the states to build their infrastructure
so that they may become part of the Laboratory Response Network. With
better assessment capabilities of the risks to FDA regulated products
we will focus efforts by directing the grants toward risk based
inspectional activities or additional laboratory capability.
The infrastructure needed to support the Laboratory Response
Network, LRN for counterterrorism coordinated by the CDC, provide
integrated laboratory solutions and disseminated testing capacity to
support public health preparedness and response to an act of
counterrorism involving the food supply, FDA will develop scientific
practices, expand Federal, State and local involvement in our eLEXNET
system by having 79 laboratories around the country participate in a
common shared microbial agent electronic data system, while assuring
coordination with other members of the Public health Information
Network. The total effect is the creation of a safety net that
significantly reduces the probability that terrorists will ever achieve
their aims, and minimizes the impact of these threats if they do occur.
Secretarial Initiative: Realizing the Possibilities of 21st Century
Health Care: Patient Safety $4 million
FDA's public health and safety role requires a rigorous and
effective postmarket surveillance activity. When FDA approves drugs and
other medical products such as devices, it has completed a thorough
review to determine that these products are safe when they are
marketed. That is not always the end of the story. New safety findings
may emerge after approval, when a wider patient population uses
products. In some cases, products may not be used safely to prevent
harm. It is important for FDA to continually monitor these products and
track trends associated with them. A critical task of the agency is to
reduce adverse health events, a large number of which are preventable.
Medical errors are estimated to account for 40,000 to 100,000 deaths
per year in hospitals alone.
The requested increase of $4 million, coupled with the $3 million
from our Generics Drug request will allow FDA to expand the use of new
information technology to improve our understanding of what causes
preventable adverse events. FDA will continue to conduct pilot IT
programs for medical devices, drugs, generic drugs and biologics as
well as continue the implementation of Phase III to include drug
products into the Medical Device Surveillance Network, MedSun. FDA's
new safety initiative, using modern health information systems, will
provide faster and more complete information on safety problems
associated with drugs and devices so adverse events involving these
products can be avoided. Additionally, FDA will place greater emphasis
on preventing adverse events involving generic drugs.
Generic Drugs Program $13 million
According to the Congressional Budget Office, generic drugs save
consumers an estimated $8 to $10 billion a year at retail pharmacies.
Billions more are saved when hospitals use generic drugs. A generic
drug is identical, or bioequivalent to a brand name drug in dosage
form, safety, strength, route of administration, quality, performance
characteristics and intended use. Although generic drugs are
therapeutically identical to their branded counterparts, they are
typically sold at substantial discounts from the branded price.
Brand-name drug innovation requires great investment of scientific
effort and other resources, with an uncertain return. We all therefore
recognize that innovators must be able to receive adequate compensation
through our patent system. Otherwise, pharmaceutical research and the
development of better medical treatments could come to a halt.
But it is also clear that the high prices of many innovative drugs
in the United States, where they are not restricted by government
controls, are sustaining pharmaceutical research and development
worldwide. This is good for pharmaceutical innovation, but it also
creates a serious challenge for many of our patients, who are having
difficulty paying the high and rising costs of up-to-date drug
treatment.
This is where the generic drug industry plays an essential role in
promoting the health of Americans. Generic drug manufacturers produce
medications that are just as safe and effective as their brand
counterparts, and part of the FDA's mission is to make sure that's the
case. Yet the prices of generics are much lower: a generic version of a
$72 average brand-name prescription costs about $17. And thanks to more
brand-name medications coming off patent--over 200 of them in the next
few years--as well as to the ever-improving scientific knowledge and
public awareness about the benefits of generic drugs, the health and
economic benefits of using generic drugs are constantly growing.
Encouraging rapid and fair access to generic medications after the
expiration of appropriate patent protection is, therefore, one of my
major priorities as FDA Commissioner. Americans need more generic drugs
more than ever, and the FDA has to do its part to make these products
available. There are many steps involved in achieving this goal, and I
want to walk through some of them
One part of achieving this goal--reducing the net review time--is
largely under the control of the FDA. It's a function of the efficiency
of our review process and our available resources. Our Office of
Generic Drugs (OGD), has been making progress in this area. Despite the
growth in the submissions of original abbreviated new drug applications
(ANDAs) from 309 in 1999 to 361 in 2002, our generics program during
the same time increased the proportion of applications reviewed within
180 days from about 28 percent to 80 percent. The average time required
for a first review of an ANDA is down to 100 days, from 135-140 days in
the late 1990s.
These substantial improvements were made possible by rising
efficiency in the generics office, as well as by increased resources.
The appropriations for this office increased by $1.4 million in 2001,
by $2.5 million in 2002, and another $5.3 million in 2003. I thank you
for your continued support of this vital program. We can and will do
more to improve the efficiency of our reviews, and acting quickly on
generic drug applications is well worth even greater FDA resources.
Moreover, we hope and expect that the number of generic applications
will continue to grow above this year's record level of almost 400
ANDAs. We will use the $13 million requested in 2004 to improve our
reviews and to handle the growing workload. It will increase the size
of the generics programs by about 30 percent.
With this funding request, we will be able to hire about 40
additional staff in generic drugs, and add to OGD an additional
division for the review of chemistry. This expansion should help reduce
the average review time by at least 2 months, move up the proportion of
180-day reviews still closer to the 100 percent goal, and further
reduce the waiting time in the ANDA queue. What we need is actual
improvement in generic drug availability. And to get more generics in
the pharmacies and to our patients' bedsides, we have to meet two
additional requirements.
First, the products we review must be safe and effective--meaning,
they must demonstrate therapeutic equivalence to the brand drug, and
they must be appropriately labeled and safely manufactured. And second,
there must be the minimum of legal challenges to the marketing of
generic drugs. And in considering both of these very important factors,
we see some positive developments--as well as some concerns.
On the positive side, the number of full and tentative generic
applications approved has gone up significantly, from 242 in 1999 to
384 last year--an all-time record. On the other hand, median time to
the issuance of an approval or ``tentative approval'' letter--which
used to be longer than 2 years--is yet to drop below 18 months. That
means, even as we are making large strides in reducing our review time,
there is still substantial room for improvement in total time to
approval. And although many generic applications have been approved
within 1 year, this timeframe is still the exception rather than the
rule. Moreover, even after the FDA issued a tentative approval, some
potentially important generic drugs have remained unavailable because
of legal challenges.
The reason that total time to approval or tentative approval is not
declining as much as we might hope is that, very often, multiple review
cycles are required. Unfortunately, a large share of the initial
generic applications are not up to the FDA's requirements. And this
critical obstacle to increasing generic drug availability cannot be
removed by the FDA alone
The second main obstacle to effective communications has been FDA's
internal policies that discouraged early consultations between OGD
reviewers and sponsors of ANDAs. In part, these policies were necessary
because the generic drugs staff has been--and is--overwhelmed with
review work, and could not take on additional tasks.
We are considering modifications to our policies on communications
involving generic applications during the review process. I have
therefore asked the Director of our Center for Drug Evaluation and
Research (CDER), and the Director of the Office of Generic Drugs to
lead an effort to identify steps, such as improving the clarity,
consistency, and timeliness of our guidance and communications for
generic drug applicants, to help improve the level of understanding and
quality of applications by generic manufacturers.
A third key factor affecting the availability of safe and effective
generic drugs is manufacturing processes. To ensure safety and prevent
adulteration, generic manufacturers must comply with Good Manufacturing
Practices. Pharmaceutical GMPs, and the system that enforces them,
still get the job done. But they have not been updated in many years,
and it's time for reform to make sure that we have a GMP system that
achieves its critical goals as efficiently as possible.
I will now turn to another critical factor affecting generic drug
availability: uncertainties in the legal landscape that generic
manufacturers face. Recently, as you well know, there has been
tremendous interest in whether reforms are needed in FDA's regulations
to implement the Hatch-Waxman law that governs generic drug
competition, or whether there need to be reforms in the law itself.
While hundreds of generic drugs enter the market each year without
substantial legal obstacles, some aspects of FDA's current
interpretation of the law have been associated with disruptions,
delays, uncertainty, and added costs for some generic manufacturers who
are trying to compete fairly against some of the most important brand-
name drugs in the country. On occasion, generic manufacturers who have
geared up to compete following the expiration of what they thought were
the relevant brand-name patents, only to learn that they had new
patents to contend with. This practice lead to the repeated use of the
so-called ``30-month stays'' of full approval of ANDAs and 505(b)(2)
applications.
To address this problem, the FDA proposed a new regulation last
fall. The proposed rule would allow only a single 30-month stay per
generic drug application. The proposed rule would clarify that certain
types of patents are not allowed to be submitted for listing in the
Orange Book, while others for method of use, formulation process,
product by process, and different forms of the pending or approved drug
substance must be submitted for listing. Further, the proposal would
substantially strengthen the signed declaration accompanying the patent
submission. These measures should reduce the submission of patents for
Orange Book listing that do not represent true innovation.
Secretarial Initiative: Accelerating the Availability of Lower Cost
Drugs--Improving Health Sciences: Over-the-Counter Drugs (OTC)
$1 million
OTC drugs play an increasingly vital role in America's health care
system, and provide an effective means to significantly reduce consumer
prescription costs for specified ailments. The trend to self-medication
has increased significantly in recent years as health care costs have
risen and consumers want to be empowered to treat minor ailments with
safe and effective OTC drug products.
The increase will support the hiring and training of seven FTE to
improve the OTC drug review process so that FDA is better equipped to
provide the consumer faster access to OTC drug products without
compromising safety issues; expedite the review of Rx-to-OTC switches;
and, develop and work toward finalizing standards--monographs--for
analgesic, antiseptic, laxative, and sunscreen drug products for OTC
use. All of these efforts help produce significant consumer benefits
such as significantly reducing and/or eliminating all unsafe and
ineffective products from the OTC market; providing greater and broader
access to OTC drug products; reducing some health care costs; and
increasing competition.
Best Pharmaceuticals for Children Act $5 million
Pediatric provisions included in the FDA Modernization Act of 1997
have had a profound impact on the study of drugs used for children. On
January 4, 2002, Congress enacted the Best Pharmaceuticals for Children
Act (BPCA), to continue providing incentives for the effective
development and dissemination of information on how to properly use
therapies in children.
Currently there is still not enough information regarding the
pediatric use of about 75 percent of prescription medicines. Prior to
implementation of the pediatric provision, 80 percent of medications
had not been tested on children, forcing pediatricians to guess at
dosage for children, subjecting our children to dangerous health risk
in terms of under dosing or over dosing. This is a particularly serious
and dangerous situation for the newborn and those infants born
prematurely. We know the bodily functions of infants are different than
adults and in particular their response to various therapies. We
believe this provision will continue to result in pediatric patients
being given medicines that have been properly evaluated for their use
in the intended populations.
With the increase, FDA seeks to expand availability of drugs for
children. We will strengthen our coordination with NIH on ensuring the
safety and efficiency of pediatric drugs. FDA and the NIH will develop,
prioritize, and publish an annual list of approved drugs for which
there is a referral, an approved or pending new drug application, or no
patent or market exclusivity protection and for when additional
pediatric safety and effectiveness studies are needed, establish a
research fund for the study of drugs that no longer have exclusivity or
patent protection and specifies the process for obtaining contracts;
provide a public summary of all studies. In fiscal year 2003 NIH
received $25 million to expand the availability of drugs for children,
in fiscal year 2004 NIH is requesting an additional $25 million for a
total of $50 million was to support this effort.
FDA will hire new staff for our Center for Drug Evaluation and
Research, CDER to continue to define, develop, issue, and track written
requests for pediatric studies; publish the final study reports on the
docket; review submitted results from these pediatric studies within 6
months; oversee ethical issues related to studies; and disseminate
appropriate information to the public. The increase will also support
the hiring of 4 FTE in the Office of Pediatric Therapeutics, under the
heading of Other Activities, to address all activities related to the
increasing number of new pediatric studies submitted by the
pharmaceutical sponsors.
Secretarial Initiative: Improving Departmental Management
FDA is also supporting various administration and department
initiatives associated with the President's Management Agenda by
consolidating human and IT resources to achieve greater efficiencies
and economies of scale; consolidating the biologic therapeutic review
function into the similar drug review function to achieve greater
consistency and less duplication of effort, conducting outsourcing
studies and improving management to achieve cost savings and maximum
efficiencies; organizational de-layering for faster decision-making and
better communications; and, implementing a new financial management
system to provide agency managers with timely and consistent financial
information.
FDA plans a major consolidation of its Headquarters Offices in the
Washington D.C. metro area going from 16 locations to two--White Oak
and College Park, Maryland. These locations were selected to create
greater economies of scale and scope with the co-locating,
standardizing and modernizing document handling; sharing facilities
such as libraries and conference areas; reducing redundancies in a wide
range of administrative management tasks; allowing the conversion to a
single computer network; and significantly reducing management layers.
College Park has been completed.
Center for Drug Evalutation and Research Move $6 million
FDA headquarters currently occupies approximately 40 buildings in
16 locations. A long term goal has been for these facilities to be
consolidated into two locations which will result in considerable
annual operating savings. Receipt of the request will complete the
second phase of the CDER relocation. This portion of the second phase
will consolidate the offices and laboratories of CDER into one office
and laboratory complex, enhancing communication, primarily by
supporting cabling and relocation services.
Arkansas Regional Lab $3.5 million
FDA is also strengthening its analytical capabilities in the field
by completing Phase III of the Arkansas Regional Laboratory multi-
purpose facility to support the increased need for domestic and import
inspections efforts.
FDA's field laboratories provide critical laboratory and analytical
support to domestic and import inspection efforts and are a key element
to the FDA science base. These laboratories provide a cost-effective
critical mass of scientific expertise in the fields of chemistry,
microbiology, pesticide chemistry, animal drug research, and total diet
research. ARL, located in the middle of the United States, will provide
critical laboratory analysis for FDA-regulated products in a seventeen-
state radius.
Completion of Phase III of the ARL will enable FDA to fully utilize
Building 50 and effectively collaborate with the National Center for
Toxicological Research on scientific issues critical to the Agency and
the American public. One of the issues addresses FDA's preparedness for
counterterrorism events. The Jefferson Laboratories are developing DNA-
based or mass spectrometry based technologies to permit the analyses of
products for chemical and microbiological hazards. These methods will
assist public health officials in identifying the type of hazard and
its appropriate counter-measure.
Without these funds, Phase III will not be completed in a timely
manner and that delay may adversely impact FDA efforts to finalize
development of methods, which could be used for chemical and
microbiological hazards.
Unified Financial Management System $2.3 million
FDA's management needs timely, reliable, and current information.
The DHHS Unified Financial Management System, UFMS, is designed to
provide financial information in a manner that will enable FDA to
maintain its clean audit opinion and meet all other financial
information management requirements.
FDA is performing various preparatory activities such as
consolidating fifteen agency location codes to one; standardizing
computer financial systems by implementing web-based versions; and,
preparing its financial community for changes. Additional funding in
fiscal year 2004 will enable the FDA to implement its portion of UFMS
titled, Financial Enterprise Solution by beginning to design and test
the General Ledger with payroll interface, which will account for over
60 percent of FDA's transactions; and purchase software licenses,
hardware, training and program support and meet increased contractor
costs for site implementation.
Rent Redistribution $10 million
FDA is working with GSA to obtain space around the country to
accommodate the more than 800 counterterrorism personnel hired with
fiscal year 2002 Emergency Supplemental Appropriation. FDA anticipates
redistributing some funds in fiscal year 2003 for GSA rent costs, and
we are working to determine the exact amount of this redistribution.
FDA expects its GSA rent costs to increase by at least $10 million in
fiscal year 2004. In an effort to achieve additional management
efficiencies, FDA intends to redirect funds from the programs,
including field activities, to cover cost increases. Similar
redistribution of increased GSA rent costs may all take place in fiscal
year 2003.
Reorganizations and Improving Management
To meet my priorities of a strong and effective organization, risk
reduction, counterterrorism and food security, and reducing medical
errors and consumer communications, FDA has reorganized and several
functions within the Office of the Commissioner. These include the
Office of the Senior Associate Commissioner, the Office of Crisis
Management, the Office of Legislation and the Office of Combination
Products. In addition, the therapeutic biologics review function is
being transferred from CBER to CDER to consolidate the similar drug
review functions. Organizational de-layering to achieve a flat,
streamlined Agency where decision-making and better communications
exists is being aggressively pursued. FDA is also consolidating its
administrative functions into a Shared Services Organization, SSO. The
SSO concept will allow FDA to provide administrative support functions
to Agency components to meet critical mission needs in the most
efficient and effective manner possible. Similarly, FDA actively
participated in leadership with the Department in the 40 to 4 Human
Resource, (HR) consolidation effort. FDA's HR Director chaired the
Department's workgroup of Operating Division representatives to design
the new 40 to 4 HR consolidation initiative. FDA also conducted the
pilot of a web-based application process called ``quickhire'' which is
the system to be used supporting operations at the four HR centers. In
preparation for the 40 to 4 consolidation, FDA consolidated its six
personnel offices into one in 2002.
As we prepare to transition FDA's HR staff to the Department's
Rockville Service Center, scheduled to begin operation on October, 1,
2003, I will continue to support the Department's consolidation
initiative. These efforts will place the Agency in a position to more
effectively and efficiently meet the challenges of providing better
protection to consumers and promoting better health.
Management Savings $25.7 million
Management savings in fiscal year 2004 will contribute to an
environment in which the FDA functions effectively as a single agency
that consistently supports top-quality work by all of its employees.
The challenges facing FDA cannot be confronted adequately without
adequate resources in the right places. By rightsizing the Agency is
thinking critically and carefully about how it uses its resources to
improve the public health. Innovation and change is the norm in the
American health care system, and programs must be designed with the
future in mind.
To accomplish this, FDA is conducting sourcing studies and
improving management to achieve cost savings and maximum efficiencies
for a fiscal year 2004 savings of $25.698 million and 199 FTE.
IT Consolidation $29.6 million
Information technology infrastructure functions are also being
consolidated. This consolidation effort will reduce IT infrastructure
and development expenditures in fiscal year 2004 by $29.587 million.
Similar systems will be combined, IT processes reviewed and there will
be reduced efforts on lower priority projects. Standardization of
management processes will be fostered to increase the effectiveness of
IT even as overall costs are reduced.
User Fees--Current Law User Fees $31.7 million
The budget request includes $249.825 million in PDUFA III user fees
for the drug and biological product review process, an increase of
$26.925 million over fiscal year 2003. This consists of pay and
inflationary increases and new initiatives included in the PDUFA III
legislation.
In addition, the request includes $29.190 million for MDUFMA to
significantly improve the medical device review process. This is a
$4.065 million increase over fiscal year 2003. Our Medical Device and
Radiological Health program has re-engineered itself over the last
decade to accomplish more and has changed its strategic direction by
consciously shifting its focus to high-risk, high-impact products to
optimize the effect on public health. Other innovations brought by the
FDA Modernization Act have streamlined the processing of premarket
notifications (510(k)s) by using accredited third parties. The results
were improvements in the review times and review processes. MDUFMA
builds on these successes by providing medical device user fees
beginning with fiscal year 2003 submissions, authorizing the use of
accredited third parties to conduct quality systems/GMP inspections
under very rigorous conditions, providing for effective FDA oversight
of reprocessed single-use devices, improving the focus on devices
intended for pediatric populations, improving the coordination of
reviews that involve combination products, and more.
MDUFMA commits FDA to a comprehensive set of challenging
performance goals that will lead to substantial improvements in the
timeliness of device reviews. MDUFMA user fees, and the additional
appropriations you provide for this important program, will ensure
FDA's ability to bring new medical technologies to health care
professionals and patients more ability to bring new medical
technologies to health care professionals and patients more rapidly,
through a strengthened program that can meet the public's expectation
that the medical devices they use are safe and effective. These
resources will also help us meet the challenges now facing us from the
medical device industry that include increasingly cutting edge and
complex technologies that are being applied to current medical device
products being developed and a shortage of the right scientific
expertise needed to review these products. We must ensure that our
science base is up to date, that our reviewers receive appropriate
training, improve our outreach to industry and other stakeholders, and
improve our review information system. We believe the increase will
work to enhance our infrastructure, respond to the expected growth in
the number of PMA applications the Agency receives, and improve our
performance.
The request also includes $23.225 million in other user fees for
mammography inspections, export certifications and color
certifications, an increase of $.735 million over fiscal year 2003.
Proposed User Fees--Animal Drug Review User Fees $5 million
A new user fee is proposed for the review of animal drug products.
This proposal is patterned after the successful Prescription Drug User
Fee Act, PDUFA that has enabled FDA to add over 1,000 employees to the
drug review process over the last 10 years. With this $5 million
request, FDA would improve and expedite the review of animal drug
preapprovals.
Closing
I thank you for your commitment and continued support of FDA. We
all have a shared responsibility of bringing to American homes safe,
varied and plentiful food, and products devoted to providing the public
with a healthy lifestye and healthy choices. I look forward to a long
and harmonious working relationship with you, the Congress and other
interested parties as we collaborate to promote and protect the health
of our people.
MEDICAL DEVICE USER FEES
Senator Bennett. I am sure it will come as no surprise to
you that since assuming this position, I have heard from a lot
of folks about MDUFMA, the Medical Device User Fee. I have
tried to understand this. Let me see if I have got it right.
The medical device people agreed some time ago that they
would start to pay a user fee if in response they would get
faster turnaround times, the argument being, well, we just
don't have the resources within FDA to give you the turnaround
times on approvals that you say you need and they say it is so
important. Their reaction was, it is so important to us to get
rapid turnaround times for our applications that we will pay
for it.
And so a deal was struck whereby they would pay, and let me
see if I have the numbers right, $150 million in user fees over
the next 5 years and the government would match these funds
with a $15 million increase for the Center for Devices and
Radiological Health in each of the fiscal years 2003, 2004, and
2005. In other words, the user fees, if I can add it correctly,
add up to $150 million and the Feds say, we will put in another
$45 million, so we approach an additional $200 million to try
to get faster service out of the government.
This was enacted into law in October of 2002, after the
2003 budget request was received. Now, my predecessor as
chairman of the subcommittee, Senator Cochran, was unable to
get more than $4 million in 2003 as a start on this, but that
was a good start and a significant downpayment of the $15
million that was envisioned.
So now we get your budget and you are increasing it by $1
million and we are going the other direction. I understand,
having been in the executive branch, the kinds of pressures
that you are under from OMB and the kinds of things that
happen, and I am not going to ask you, did you recommend that
we were going to the $15 million and then did the people at OMB
cut you back. That is the kind of internal negotiations that go
on and I am not going to go there.
But one of the things I learned as a businessman is that a
deal is a deal, and we are in a situation where the industry is
coming up with an additional $150 million in user fees and
someone in the budgetary process is saying, that is wonderful.
Let us take that $150 million and spend it someplace else. In
other words, money is fungible and if we have got an extra $150
million coming in from another source, we will use that to
offset money that we would otherwise have spent to try to get
this up here. As you can understand, these folks feel somewhat
badly used.
So my question to you is what your suggestions are as to
how we get out of this and if this subcommittee were to earmark
some additional money to get close to the $15 million that was
agreed to, can you help us find the offsets as to where it
might come from?
Dr. McClellan. Mr. Chairman, MDUFMA is one of those terms
that, probably like you, I hadn't heard much before coming into
government work and starting to work on important issues
related to the development and use of new medical technologies.
But I think your understanding of the program is extremely good
and I think your awareness and attention to this issue is
extremely important.
There are many breakthroughs occurring in medical devices
today. We recently approved a new drug-eluding stint that will
significantly reduce the rate of complications after many heart
procedures for the millions of Americans suffering from heart
disease. We need to make those newer, safer, more effective
treatments available to the public as quickly as possible.
The FDA has long supported user fee programs like MDUFMA in
other areas of medical technology. We have got a prescription
drug user fee program that works for drugs and biologics
extremely well in helping us reduce approval times and getting
safe and effective products out there to the public more
quickly, and we support it and we still support an effective
medical device program. We are trying to get the Senate to act
very soon on an animal drug user fee program, as well.
This is an issue where from--I know you are experienced in
the executive branch and in the Senate--you are right, a deal
is a deal, but sometimes new programs take a little bit of
extra effort to get off the ground effectively, and I want to
tell you right now that I at FDA, Secretary Thompson at the
Department, and everyone in this administration who cares about
this issue is fully committed to the goals of the Medical
Device User Fee Program.
At FDA, what we have done is we have already started to
hire some of the new people under the user fees that the
companies are paying now. We are doing this with the full
expectation that this is going to be a long-term program, that
it is going to lead to some significant improvements in our
approval times, which are too long today for priority medical
devices. So we have got about 40 hires that we are in the
process of making now for medical reviewers and other experts
to help us improve the job that we are doing on medical devices
and we are making some longer-term plans to help make sure that
this program works.
This is a matter that, as you know, has been under
considerable discussion recently with the industry, with many
people in the administration and many members on the Hill, and
I want to thank you and I want to thank Senator Cochran for
their efforts in helping to get this program off the ground.
I appreciate your telling me you don't have to hear from me
about discussions internally with OMB, but I think I can tell
you that I have had a lot of discussions with senior officials
in OMB and I think I can tell you that the entire
administration is committed to making sure this program works,
that it is made permanent, that we do get the significant kinds
of improvements in device review performance that the program
envisions, and we have got a little bit more work to do to get
there.
So we intend, OMB intends, the entire administration
intends to work closely with this committee and with other key
appropriations and authorizing committees in Congress to make
this program work.
With respect to earmarks, that is obviously something that
is going to continue to come up in these appropriations
discussions and I know and trust that we are going to have
ample opportunity to talk with you about ways to make this
program happen without getting in the way of other key
priorities for the FDA. As you well know, we have got a
tremendous amount of responsibilities at the agency. We have
got a budget that we are trying to do the most with in order to
meet those responsibilities and so we need to be very careful
about any kind of earmarks that would take funds away from
other key priorities.
So I can't tell you right now that we are going to have
that $15 million right now in the budget for this year. I can
tell you that we, that OMB, that everyone in the administration
is committed to finding a way to make this program work, to
make it sustainable, make it permanent, make it have triggers
that won't need to kick in because we are meeting our
performance goals, and it is going to take a little bit of work
in the weeks and months ahead to do that, but we are going to
do that.
Senator Bennett. Well, thank you. Talk about imposing new
user fees in new areas will impact how well those user fees are
responded to, because if, indeed, you have the reputation of
inducing, if you will, people to agree to a user fee by saying,
and we will raise ours on this side if you raise yours on
yours, and then when that user fee turns into really nothing
more than a tax that goes into the general fund and gets used
fungibly for something else, it is going to be very difficult--
--
Dr. McClellan. The companies that are paying the user fees
have an expectation that they are going to get significant
performance improvements in response to that and we have got to
fulfill those expectations.
Senator Bennett. You have got to fulfill that, and I will
do what I can to try to help----
Dr. McClellan. I appreciate that, and I will look forward
to working with you on this in the weeks ahead.
DRUG REIMPORTATION
Senator Bennett. My time is going down, but very quickly,
this isn't ``beat up on Canada'' day, but could you talk about
the reimportation of drugs and the safety of drugs, that people
go to Canada to buy drugs and then bring them back into the
United States.
Dr. McClellan. We are working hard on that issue, as well.
As you probably know from our--as I am sure you know from our
previous discussions, one of my top priorities at the agency is
to do all we can to do our job more efficiently, because in
many ways, in reducing the costs of the drug development
process, making generic drugs more quickly available, helping
to prevent medical errors, getting consumers better information
about how to use pharmaceuticals, are many things that FDA can
do to help drive down the costs that people are paying. The
problems with affordability of medical care today are very much
in front on my mind and the mind of millions of Americans, so
many things that we are doing to help people reduce costs of
drugs while still making sure they have safe and effective
drugs.
Where I have concerns is when people have to cut corners,
when, because of affordability concerns, they take risks that
involve the use of products that may not be as safe or as
effective. And the problem with reimported drugs that come into
this country outside our regulatory system is that we can't
provide assurances about the safety or effectiveness of those
drugs. Because I care a lot about this, we have had a lot of
discussions with the Canadian authorities in recent months
about steps that might be possible to take to provide more of
those kinds of assurances.
Canada recently issued a guidance about the safety and
effectiveness of drugs that come through Canada. But in putting
that out, they also clarified in a letter to the Washington
Post just yesterday that they can't assure the safety of
imported drugs coming illegally into the United States, that
is, coming in outside of our regulatory system. We can't,
either, because they are outside of our regulatory scheme.
And so there is a real concern there. We have got to find
better ways to make affordable treatments available.
Reimportation of illegal drugs, or importation of illegal
drugs, since you often can't tell the difference, is not a safe
and effective solution.
Senator Bennett. Thank you. Senator Kohl.
CHRONIC WASTING DISEASE
Senator Kohl. Thank you, Mr. Chairman.
Dr. McClellan, yesterday in the Washington Post, it was
reported that in Canada, there was a large elk herd living near
the area where the infected cow was found and that chronic
wasting disease was common among that elk herd. When asked
whether or not chronic wasting disease could have jumped from
the elk to this particular cow and turned into mad cow disease,
Dr. Lester Crawford, your Deputy Commissioner, stated that
there are no known cases of this happening, but, and I quote
him, ``you really can't entirely predict what a prion-related
disease will do.''
Obviously, this statement is alarming because in States
like Wisconsin, where CWD has been found, we also have a large
cattle/cow presence. So do you have some clarification or some
words of comfort that you can offer in addition or in
correction, to some extent, to what was said by your Deputy
Commissioner yesterday?
Dr. McClellan. Senator, it is a good question, and let me
just be very clear that what I can say is based on the best and
latest available science, and what the science tells us is
there is no evidence that chronic wasting disease, which is
another prion disease, has any association with BSE, has jumped
species or in any way could cause BSE in ruminant animals.
As you know, the elk and game animals in which CWD is
present are different from the ruminant animals that are
carriers and that are subject to BSE. They are different
illnesses and there is no evidence of transfer between species.
Moreover, as I understand the facts, that elk herd that you
mentioned in Alberta was something like 100 miles away from
where the affected cow was, so no opportunity there physically
for any kind of transmission to occur even if there was some
evidence that transmission could occur, and as I said, there is
no scientific evidence that it does occur. So at this point, I
don't see any evidence that CWD has any association or
connection to this BSE case.
Just an added word about my Deputy Commissioner. He is one
of the foremost experts on animal health in public policy today
and I think the country can be very confident that FDA is
taking effective action on these important issues related to
BSE and CWD in Wisconsin as a result of his contributions and
hard work at the agency, and his views on this issue are
exactly the same as mine.
Senator Kohl. I do appreciate that and the clarification is
very helpful. Thank you very much, Mr. Chairman.
Senator Bennett. Thank you. Senator Cochran.
Senator Cochran. Mr. Chairman, thank you very much for the
good job you are doing, Mr. McClellan.
Dr. McClellan. Thank you, Senator.
RELATIONSHIP WITH THE DEPARTMENT OF HOMELAND SECURITY
Senator Cochran. You are off to a good start and we
appreciate that good effort.
The Department of Homeland Security has been created and
with it has come some new responsibilities. One example is
transfer of some authority from the Animal and Plant Health and
Inspection Service to Homeland Security and Plum Island, the
facilities there.
The question is, though, since FDA, your agency, and the
Department of Agriculture continue to be responsible for food
safety, however, to what extent are you working with the
Department of Homeland Security to ensure that you have
whatever information you need that they may be able to share
with you so that your agency and the Department of Agriculture
can continue to carry out your responsibilities to quickly
identify and respond to outbreaks of foodborne diseases?
Dr. McClellan. Senator, we are working extensively now with
the new Department of Homeland Security. This is actually a big
boom for food security efforts in this country. The Department
has a strong commitment and some important expertise. One of
their under secretaries comes from doing security work for a
major soft drink company, for example, so they have got some
important expertise to contribute in food and drink security,
as well, in this country.
I want to thank you for your efforts now on homeland
security. We certainly miss you here. No disrespect to the new
chairman, but it is very useful from my standpoint to have
somebody in your position who understands the complexity of
food security issues and all of the resources that we have
available and where we need to improve them to keep the
country's food supply secure.
So far, I think we are off to a good start. The Department
of Homeland Security is staffing up now. We have regular
interagency meetings with them on food security issues and also
agriculture security issues that involve USDA, as well. We are
also supported in this effort by the White House's Homeland
Security Council, which has a number of specific directorates
that work on issues like developing countermeasures and
protecting the infrastructure that bear, as well as public
health, that bear on supporting our activities.
Some of the specific issues that you mentioned, such as
making sure that intelligence information is shared
effectively, making sure that the USDA and FDA are using the
same kinds of simulation models and expert input in developing
our strategies for our respective roles in protecting and
securing the food supply, in these and many other areas, the
Department is very helpful and I will look forward to continue
working with you to make sure that whole process of
coordination and support works well.
Senator Cochran. In this budget that is before us for
review, is there funding requested to support these
interactions?
Dr. McClellan. There is substantial new funding requested
in this budget for our food security efforts, over $20 million
in new funding in the 2004 budget. That includes funding that
is going to go to States to help them improve their inspections
related to food security issues, help improve our nationwide
food laboratory network. We have recently announced some other
programs with CDC and the like to do that, as well. We are
implementing new information systems. We are taking a lot of
steps.
In all of these areas, homeland security coordination is
built in. Our methods of implementing all these steps involves
some important input from Homeland Security. So, for example,
in the work that we are doing with the States, the overall
guidance for that work comes out of interagency working groups
that the Department of Homeland Security participates in and
the White House Homeland Security Council chairs in many cases.
DRUG COUNTERFEITING
Senator Cochran. The chairman asked you about the
reimportation of drugs from Canada and what your views were
about that. We also had brought to our attention last year,
your predecessor came to a meeting with Senator Kohl and me
about the dangers associated with counterfeiting of drugs and
the dangers in policing that, that over-the-counter drugs in
many instances had been counterfeited in countries outside the
United States and that customers were now buying drugs off the
Internet from overseas sources.
What are the dangers associated with that and do you have
in your budget any funding requests that would help you get the
word out or publicize the danger so that consumers would be
aware of the dangers in connection with these practices?
Dr. McClellan. The dangers are serious, and I just want to
give you a ``for example.'' Yesterday, we were involved in a
criminal investigation and operation in the State of Florida
that took action against some individuals who are involved in
manufacturing a counterfeit drug and trying to sell a
counterfeit version of a drug called Procrit. It is one that is
potentially life-saving for people who have low blood counts
and this counterfeit version was not an effective drug. It was
actually non-sterile water which could have caused infections
as well as not providing the intended treatment.
I am worried about this. We are seeing more of it as the
technologies available to people who don't have the best
interests of the American public at heart get better and get
used more widely, and as people worry more about the costs of
prescription drugs, we are seeing more efforts to introduce
counterfeit drugs into the system as well as more efforts by
illicit Internet groups. For example, we announced an action
recently involving a company in Belize that was offering
products over the Internet. They didn't obviously identify on
their site that they are in Belize. We had to trace back the
site's address and so forth. Obviously, we can't provide any
assurances about the safety or effectiveness of these products.
We are devoting some additional time and effort and
attention inside the agency to find better ways, working with
everyone involved in the drug distribution system, to protect
Americans from these growing threats, and I think we are going
to be able to do that in the months ahead.
But part of the effort here is also publicizing
information. We put out a number of brochures and educational
materials that can provide guidance to people about how they
can buy drugs safely over the Internet. There are some
perfectly legitimate providers there and they can provide
access to treatments that may be hard for people to get if they
live in rural areas and the like. But they need to follow the
advice that we give to avoid some of these kinds of illicit
drugs that come outside of the system of drug regulation that
the FDA provides, and outside that system that we are very
determined to protect the integrity of, outside that system, we
can't assure safety and effectiveness.
We are working with pharmacies. We are working with various
public health organizations to try to get this message out, and
I think we need to do more of it. It is a growing concern at
the agency.
Senator Cochran. Thank you. Mr. Chairman, my time has
expired. I do want to submit a few questions for the record,
particularly one related to the Center for Food Safety and
Applied Nutrition at FDA and its collaboration with the
National Center for Natural Products Research at the University
of Mississippi.
Dr. McClellan. That has been a very effective collaboration
for us, learning more about dietary supplements, which is a big
concern of mine. Thank you.
Senator Bennett. The questions will be included in the
record.
ANIMAL FEED RULE COMPLIANCE
Senator Johnson. Thank you, Mr. McClellan, for joining us
this morning. The references to reports as of March 23 relative
to 14 percent of rendering facilities handling material,
prohibited ruminant feed, not having a system to prevent
commingling, and 33 percent of non-FDA-licensed feed mills
having not labeled their products came from a letter from a
group of consumer organizations sent to USDA Secretary Veneman
and HHS Secretary Thompson just yesterday. It is my
understanding that your assertion is that their numbers are
simply incorrect.
Dr. McClellan. Well, they are outdated. My understanding is
that their statements were based on a GAO report from 2002,
which, in turn, was based on data and information collected in
2000. I think the GAO report highlighted the need for us to be
particularly vigilant in this area because the food ban is
absolutely one of the critical firewalls of protecting
Americans and protecting our cattle if there were ever a case
of BSE discovered in this country. Remember, because of the
way, as you well know, because of the way that BSE is
transmitted, it has to go through the food supply, through the
feed that cows eat. And so you have to have an infected cow
being rendered into animal feed for this ban to have a
protective effect.
Right now, we don't have any infected cows in the United
States, despite an awful lot of testing by USDA of at-risk
animals, and so this ban is an additional firewall of
protection for the country and we need to make sure that it
works. And that is why, over the past year since that GAO
report, we have really stepped up our efforts and we would be
happy to provide your staff with the full set of information,
the latest numbers. But we are at over 99 percent substantial
compliance with the feed ban and we are aiming for total
compliance and we are going to do everything we can to get
there.
ANIMAL FEED INSPECTIONS
Senator Johnson. It is my understanding that 80 percent of
the feed mill inspections are handled at the State level and
you only really have about ten personnel involved. Are you
comfortable with that----
Dr. McClellan. Well, we have more than----
Senator Johnson [continuing]. The State-FDA partnership?
Dr. McClellan. We have more than ten personnel involved in
this inspection activity. As I mentioned earlier, we spend over
$22 million of our budget on these BSE-related activities and
close to $11 million of that is for field inspection activities
by our personnel.
We do rely a lot on our State partners in this effort and
that is why we put a lot of work into training and monitoring
programs to make sure they are doing the job. We have conducted
a massive training program to ensure that State inspectors are
every bit as informed as our FDA inspectors and we also have
held training programs at several locations throughout the
United States to give them an opportunity to participate
actively in these education activities.
In addition, we have standardized and computerized the
inspection forms to minimize inconsistencies and minimize human
errors and we have implemented computerized checks in case we
see something that shouldn't be there. We have improved our
whole computer information support system for this very
important activity.
All of these activities were implemented in response to the
kinds of concerns that you raised. I want to thank you for
that, and that were raised by the GAO report, and I want to
continue to work closely with you and your staff to make sure
we are taking all necessary steps to make sure that this feed
ban works effectively.
Our staffing levels are at a much higher level than ten for
this effort. For example, in the 2002 budget where we started
establishing this $22 million line item, I think we had close
to 200 staff in activities related to this BSE program. But
like I said, we will be happy to follow up with you and your
staff to make sure we are doing everything appropriate on this
very important issue.
Senator Johnson. Very good. Senator Dorgan is here, and he
may have some questions about the Canadian reimportation of
prescription drugs issues, but I do want to just very quickly
allude to the fact that I have a great number of my
constituents who rely on a regular basis on purchasing
prescription drugs from Canada and they are FDA-approved,
branded, and very effective drugs.
It seems to me that it should not be rocket science to
figure out a monitoring system. Granted, this is a very
roundabout way of dealing with America's prescription drug
pricing issues, but it seems to me that in the meantime, the
alternative, although you talk about risk of drugs from Canada,
the alternative is an even larger risk that people simply are
not going to take prescription drugs because they can't afford
them. My constituents literally are choosing between groceries
and staying on their prescriptions. This is not only a crisis,
it is an urgent crisis.
In a more perfect world, we would do a number of things
legislatively to address the problem. America remains the only
major industrialized society in the world that does not
negotiate on behalf of its citizens a better price. And so my
constituents are buying these drugs at less than half the
price. Not only that, they are going to Mexico, which I would
caution my citizens about. But I have my constituents telling
me that they snowbird to Texas to pay for their entire stay on
the prescriptions they buy in Mexico. It has become, as you
know, a bit of an industry in both those countries.
I have had people tell me that at one time it used to be
the border towns were various kinds of tourist attractions, now
it is pharmacia, pharmacia, pharmacia as they go across the
border. And even in Mexico, although I would urge caution
there, a lot of people are staying alive literally because they
are buying their drugs in Canada and Mexico and not paying the
prices that they have to pay in the United States.
I just simply want to tell you what you already know, but
also urge you to work with us constructively to devise a system
whereby we can provide whatever additional assurances,
particularly relative to Canada, that reimportation would allow
us to do. It is a band-aid in a way because we need to address
this in the context of Medicare and other kinds of things, but
we will need the FDA's cooperation for that legislation which I
am convinced will pass once again to make that work.
Let me just ask you very quickly, because my time is
expiring, make sure that I understand on the user fees for
medical devices. You are using 100 percent of the user fees
towards the purpose of expediting that program? You are not
pocketing the money and using it, as Senator Bennett caused me
some concern, talking about the money being fungible and
heavens knows what the money is being used for, as simply
another tax. While we are not fully matching it, you are at
least using this new revenue flow, revenue stream, for the
purpose it was designed, do I understand you correctly on that?
MEDICAL DEVICE USER FEES
Dr. McClellan. You understand us correctly. The budget was
passed late this year for 2003. As soon as it was approved back
in February, we started the process of hiring the new reviewers
and other medical experts who will make this program work
better. We have got a process ongoing now. It is going to get
40 more expert staff into the program as soon as possible to
improve the way that we are handling device reviews.
Like I said before, we are going to build on that effort.
We want to make this program permanent and successful.
Senator Johnson. My time is expired. I do have a couple
other questions that, with Mr. McClellan's agreement, I would
like to submit to the FDA.
Senator Bennett. They will be submitted. We will have a
second round, if you desire.
Senator Johnson. I am going to have to excuse myself,
unfortunately, fairly soon here for, as usual, other
conflicting, overlapping investigations, but thank you, Mr.
Chairman.
Senator Bennett. Senator Dorgan.
DRUG REIMPORTATION
Senator Dorgan. Mr. Chairman, thank you. Let me follow up
on the questions that my colleague has asked with respect to
reimportation.
I want to talk to you about a February 12 letter from the
FDA. First, let me tell you about a woman named Sylvia Miller
who I accompanied, along with other senior citizens, to a one-
room drug store in Emerson, Canada, five miles north of the
North Dakota-Canadian border. This drug store in Emerson,
Canada, was visited by a group of senior citizens accompanied
by myself. Sylvia Miller was among them. She purchased
Coumadin, Zestril, Glucophage, and Serevent, among other
things, and saved about $150 by buying her medications in a
small one-room pharmacy.
I didn't think and don't think, and she didn't think, and I
expect you don't think there was any concern about tainted
medicine or counterfeit medicine. This is a chain of supply
that is almost identical to ours and she was purchasing at a
licensed pharmacist in Emerson, Canada.
February 12, your agency sent out a letter that was signed
by----
Dr. McClellan. Mr. Bill Hubbard, probably.
Senator Dorgan [continuing]. By Dr. Bill Hubbard, and let
me just read what it says. It talks about reimportation. It
says, those who can be found civilly and criminally liable
include all those who cause a prohibited act, those who aid and
abet a criminal violation of the act or conspire to violate the
act can be found criminally liable.
The result of this letter is that Blue Cross-Blue Shield of
North Dakota then put out a missive in North Dakota saying, we
can no longer cover with our insurance policies the purchase of
prescription drugs in Canada by citizens who have our policies.
So North Dakotans are now told because of your February 12
letter that prescription drugs purchased in Canada will not be
covered by Blue Cross-Blue Shield.
Was that the intent of this letter? Would you really have
intended, for example, to tell a Sylvia Miller, if she had Blue
Cross-Blue Shield, if you drive to Emerson, Canada, and buy a
prescription drug from a licensed pharmacist, it is FDA's
judgment that an insurance company could be held criminally
liable for aiding and abetting that and, therefore, they should
cut off insurance coverage for those prescription drugs?
Dr. McClellan. That is a question that several insurance
companies have asked following the letter. My understanding
from our discussions with a number of insurance companies, the
American Association of Health Plans, and others is that there
are no companies out there actively encouraging people to go to
Canada to buy drugs.
Senator Dorgan. That is not the question. You are not
answering the question I have asked.
Dr. McClellan. Well, you know, what we did there was
restate what has long been FDA policy, and the FDA policy is,
as you know, Senator, that personal importation of drugs is
allowed. We have got a lot of good medical treatments out there
and they are not affordable because Medicare does not have
decent prescription drug coverage and it needs it now, so I
have got a lot of sympathy for your constituent. But FDA has a
policy on personal importation. If people go across the border
and bring back a personal supply, even though that is
technically illegal, we are not enforcing the law against those
individual persons.
So when they go over and they go to a Canadian pharmacy
that provides drugs to Canadians, and they are not FDA-approved
but they are approved by the Canadian agency, I can understand
how she would, in the circumstances she is in, because Medicare
doesn't cover drugs, would feel like that is what she has to
do.
That is very different than an insurance company going out
and actively encouraging people to buy drugs illegally over the
Internet.
Senator Dorgan. Mr. McClellan, I am sorry. I have limited
time. You are answering a question I haven't asked you. There
is no evidence that any insurance company in the history of
America has encouraged people to go across some country's
border to buy prescription drugs. I have never even heard of
that. I am asking you----
Dr. McClellan. That is what I am saying. That is the
relevant issue.
Senator Dorgan. So what is the deal? Why are you talking
about that? I am asking you a very specific question. I would
like an answer, if you could.
Dr. McClellan. Because what the companies wanted to know
from us, and what we clarified since that letter, is we are not
actively encouraging any Americans to go anywhere to buy
prescription drugs illegally outside the system. We are taking
all reasonable steps to make sure that people are getting legal
treatments, FDA approved, safe and effective treatments. Do we
need to do anything else? And the answer is no. They should
just continue following the policies that they have been
following.
Senator Dorgan. Let me re-ask the question, then.
Dr. McClellan. And I will re-answer the question.
Senator Dorgan. You have not answered it. You have not
answered it, with all due respect. The question is this. If
Sylvia Miller is able to go to Canada and bring a personal
supply of drugs back, a 30-day supply of drugs, for example, or
a 90-day supply of drugs, whatever that might be, is it your
intention to threaten insurance companies who might cover that
because they have a policy that covers prescription drugs for
that particular policy holder? Is it your intention to say to
insurance companies with the February 12 letter, don't you dare
reimburse your members, because if so, you may be abetting this
and you may be liable for criminal prosecution? Is that really
your intent?
Dr. McClellan. Our intent, and our discussions with the
industry, and our understanding of the way that the industry
has responded to this----
Senator Dorgan. Let us talk about your discussions with the
industry, then, because----
Dr. McClellan [continuing]. Is that no companies are
changing their policies--no companies have had to change their
policies about coverage because none of them are actively
encouraging people to go get prescriptions. Is it possible that
under a policy someone goes across the border and gets a
prescription and gets it covered? Certainly, it is possible,
but that is different from a company actively encouraging
people to use potentially unsafe drugs.
Senator Dorgan. Do you believe an insurance company should
prohibit coverage when an American senior citizen, for example,
goes over and brings a prescription drug back and is allowed to
bring it back by your own testimony? Do you believe the
insurance company should prohibit payment for that, because
that is what is happening. Blue Cross and Blue Shield of North
Dakota has put out an announcement, ``We will now no longer
cover these.''
The fact is, we are not talking about a lot of money. We
are not talking about a lot of consumers. But the fact is, they
have cut this off because of your letter and I am asking
whether the FDA letter intends that to be the case.
Dr. McClellan. I am happy to talk with any company in this
country to clarify what FDA's policies are and are not. This is
not something that is aimed at your constituent going across
the border to go to a reputable Canadian drug store and
personally buy prescriptions that she thinks are safe.
There are some real concerns, and I am sure you wouldn't
want insurance companies or anyone else to encourage Americans
to buy drugs over the Internet where the drugs may not be safe
or they are not approved by us or the Canadians have explicitly
said they can't assure the safety and where the consumer may
not even know where the drug is coming from. I am sure that is
not what you would want us to encourage.
Senator Dorgan. Different subject, but thanks for raising
it. My question remains, do you want the FDA to be on record,
which it is, telling an insurance company that they may be
criminally liable, so be sure and tell your policy holders they
will not cover prescription drugs that they now purchase in a
trip to Canada, because that is where we are and I am asking
whether that is what your intent is and you have not yet
answered what----
Dr. McClellan. I will tell you what my intent is. What I
hope people are telling their policy holders is the same thing
that we are telling the public, which is that drugs that are
not approved by the FDA, that are not legally obtainable in the
United States cannot have safety assurances that we would vouch
for. We cannot assure that they are safe and effective.
We have had a lot of discussions with the Canadian
government about this, Senator, in recent months because I am
very concerned about the safety of drugs that all Americans are
doing, and the upshot of those discussions is reflected in what
the Canadian government said yesterday in the Washington Post,
is that they can't assure the safety of drugs coming to
Americans from outside the United States. We obviously can't
assure it because it is outside of our regulatory sphere. So
this is a real area of concern.
I think what this also highlights for your constituent is
that it would be very important for the Senate to act as
quickly as possible to pass a real Medicare prescription drug
benefit so that she can get affordable medications. There are
too many Americans like her who are facing a choice between
buying drugs that they can afford and buying drugs that they
can be sure are safe and effective and do what the drugs need
to do. That is not a good position for health policy to be in
and I am sure we share the goal of getting this addressed as
soon as possible.
Reimportation of illegal drugs is not a cornerstone for a
safe and effective public health policy in this country. It
shouldn't be. We can do better and we should do better.
Senator Dorgan. Well, the great part about this country is
you and I have the right to disagree about that. I profoundly
disagree about what you have just said. When Sylvia Miller goes
to a pharmacy in Emerson, Canada, if you know anything about
the chain of supply in Canada, and you do, you understand that
the purchase of Coumadin in that drug store is as safe as
purchasing Coumadin at a drug store in downtown Washington,
D.C. You know that and there isn't any way you would try to
refute that. But that is not what I am asking about----
Dr. McClellan. And I am not----
Senator Dorgan. I am asking a very simple question of you.
Is it----
Dr. McClellan. And just to be clear, I am not refuting that
a drug that Sylvia Miller goes and buys in a Canadian pharmacy
is very likely to be safe and that the Canadian government does
a very good job of assuring the safety and effectiveness of
medications for their own citizens purchased in their own
pharmacies.
The problem today is that the vast majority of Americans
who are buying drugs from outside our regulatory system are not
doing what Sylvia Miller does. They are buying over the
Internet from sites that may be in Canada, that may not. We
have seen a lot of the products coming into the country. In
many cases, they are not labeled properly. They are the wrong
amounts. They don't come with the risk management and warning
information that a doctor and pharmacist in this country would
provide. This is not a safe and effective medical system for
providing prescription drugs and we need to do better.
Senator Dorgan. Well, the pharmaceutical industry spends a
great amount of money advertising your position, but frankly, I
am talking to you about a narrower issue here this morning and
I have not yet received an answer.
Dr. McClellan. Maybe the best thing.
Senator Dorgan. Wait a minute. Let me finish the question.
Do you believe that Blue Cross and Blue Shield of North Dakota
should cover a prescription drug that is an FDA-approved drug
purchased at a drug store in Emerson, Canada, brought back for
personal use by a senior citizen in North Dakota? Should Blue
Cross and Blue Shield cover that if that person has a policy
that provides prescription drug coverage, or should Blue Cross-
Blue Shield be potentially liable for criminal sanctions,
according to your letter? Which do you believe?
Dr. McClellan. I don't think that there is anything in our
letter that expressly and in general prohibits Blue Cross-Blue
Shield of North Dakota from covering a prescription that one of
their members may have purchased in Canada on a personal use
basis. That is consistent with our policy of personal
importation.
That is very different from Blue Cross-Blue Shield of
anywhere encouraging or advocating or taking steps to promote
the use of illegal pharmaceuticals in this country, and I would
be happy, again, just to make sure--I am sorry we are not quite
connecting on this because it is an important public health
issue--I would be happy to talk with representatives from this
company and get them in touch with our staff to clarify exactly
what the letter means.
We have had these discussions with insurance companies and
I am very confident that most insurance companies in this
country are interested in paying for drugs that are safe and
effective and that promote the public health as a result. And
so I don't think there is any conflict between their policies
and what our letter says and I am happy to get our staff to
verify that Blue Cross of your State is not an exception to
that rule.
Senator Dorgan. Mr. Chairman, thanks for your patience. If
you are saying that there is nothing that prohibits this
insurance company from covering a prescription drug purchased
from a pharmacy in Canada, then we need to resolve it with this
insurance company. We have got some folks out there who would
expect to have their prescription drugs covered and they are
now not covered because of your February 12 letter and because
of its interpretation. I just read part of it. If I were the
insurance company, I would interpret it the same way.
But if you say that is not what you intend, you don't
intend to prohibit this company from covering that circumstance
I described, if that is the case, then let us do a U-turn on
this letter, or at least redescribe what you intend in the
letter so that Blue Cross-Blue Shield of my State knows that.
Look, I don't know you from a cord of wood. I mean, we
don't exchange Christmas cards and you are probably
extraordinarily competent. In fact, a colleague of mine was
just telling me that they have very high regard for you. What
angers me is that people who can't afford to get knocked around
in this system all the time, just all the time. The woman I
discussed here is just one, but she is trying to live on a very
small amount of money, trying to buy prescription drugs. She
has to take ten of them. And so in this circumstance, she was
trying to access a less expensive prescription drug that she
knows and I know is safe because the chain of custody in Canada
is identical to ours.
Frankly, I just get angry when I see this letter, which is
parroting the pharmaceutical industry's advertisements about
why we shouldn't have the ability to go to Canada. Why
shouldn't there be free trade in prescription drugs, as long as
we can guarantee safety? I don't think there is any question
that we can.
Do you know that almost every day, a semi-truckload will
come to the U.S. border with Canadian meat. Do you know what
they do? They say, well, if it was inspected in the Canadian
plant, it is good enough for us. They run it right through the
border. But we can't do that with prescription drugs that go
from a manufacturer that is inspected by the FDA, a drug that
is approved by the FDA, goes into a chain of custody from the
manufacturer to a wholesaler to the drug store that is
licensed. We can't do that? Of course, we can. You know that.
Look, I think I have made my point. I think you have told
me some new information here finally. I don't intend to be
rude, Dr. McClellan. I want you to do your job and do it well.
I want the FDA to be on the side of consumers, and Mr.
Chairman, thank you for giving me the opportunity.
Dr. McClellan. Mr. Chairman, if I could have just a
minute----
Senator Bennett. Surely. There is no one waiting for a
third round.
Dr. McClellan [continuing]. And I do want to thank you,
Senator. I mean, look, we are both frustrated about this issue.
Drugs should be more affordable in this country. I am trying to
do everything I can at FDA for our part of getting the costs of
drugs and other medical treatments down.
But as FDA Commissioner, I have to pay a lot of attention,
for the reasons that you just mentioned, to making sure that
the treatments are safe and effective and to protect the
integrity of the assurances that we give to the public about
the safety and effectiveness of drugs.
I am not a cord of wood. I am a doctor and I am a health
policy person, but I am not a lawyer. So we probably need to
get our lawyers to talk to the company lawyers and just make
sure we get the clarification here. I think everybody has got
the same goal of getting safe and effective treatments to
people at the lowest possible cost, and I will get you on our
Christmas card list.
Senator Dorgan. Well, Commissioner, I am not a lawyer,
either, so we have something in common. Let me make sure you
are on my list, as well, and we will exchange this coming year
and begin to visit. Thank you for answering the question.
Senator Bennett. I am not a lawyer, either, so that brings
us all around.
Thank you very much for your testimony this morning. One or
two quick things in conclusion.
I think one of the values of this hearing is that we have
seen a greater degree of coordination about BSE statements
coming out of the government than has been the case in the
past, and I would hope you and the folks at USDA and anyone
else who is involved could talk to each other as well as talk
to the press with the responses that are being demanded because
it is very helpful to get the total picture.
The additional information you have given about what
happens to a slaughtered animal whose carcass is then rendered
and that is avoided getting it into feed that would go to a
ruminant animal is something that was not in the USDA
statement, not that they avoided it, but it was simply they
dealt with their side of it, you dealt with your side of it,
and putting the two together should have a much greater calming
effect than taking either one by itself.
So I would hope, to the degree you can, there could be some
coordination there in the public statements on this.
Dr. McClellan. Absolutely.
NUTRITION
Senator Bennett. And finally, you heard my conversation
with Under Secretary Bost, which, as I say, I touched one of
his hot buttons. You have a role in the question of nutrition
and, of course, as we get into the whole issue of obesity, we
get into the area of drugs because a lot of people are treated
with drugs, either in an attempt to deal with conditions that
trigger overeating--insulin is a very, very major player in the
whole question of weight management.
Indeed, that is the thing that was driving this book. The
woman was an endocrinologist who was dealing with diabetics and
with insulin. That led her into her conclusion that too high an
intake of carbohydrates was part of the problem and her
subsequent examination of the pyramid, and the same thing is
true with Dr. Sears and the writing that he has done in his
book ``The Zone'' and the people who are following that diet.
Can there be some greater coordination, a greater breakdown
of silos, if you will, between FDA and USDA on some of these
nutrition issues so that we can come to the Federal Government
as the final arbiter that says, this is the way Americans
should eat. These are the manifestations. USDA, as they
construct the pyramid, at least from my perception, probably is
a little isolated from the endocrinologists, the study of
insulin, the study of impact on blood sugars and drugs that are
created to deal with that, and a little cross-fertilization in
this area could be very helpful.
Also, do USDA scientists--you say you are a doctor. There
is a whole series of studies that are done in NIH that could
impact our whole approach to nutrition. One of the things that
is frustrating to me as I come into government is the discovery
that we do live in a world of silos and stovepipes and
particularly in the budgetary process. We appropriate money for
this and they are studying something. Then we appropriate money
for this and they may be studying the same thing from a
slightly different point of view. Then we appropriate money for
this and they are studying the same thing from a slightly
different point of view.
We could not only save some money, but more importantly, we
could get much better results if the stovepipes kind of
disappeared and people began to coordinate and cooperate and
just talk to each other across agency lines.
So I would leave you with that admonition at the close of
the hearing here. Any response? No response is necessary, but
if you have any, of course, I would be happy to receive it.
Dr. McClellan. I would be glad to, at the risk of taking up
a couple more minutes of your time. This issue of coordination
and the importance of good diets and promoting the public
health is a top priority of Secretary Thompson's. He has made
many of the same points that you have.
Public health is a very complex topic, public health and
diet, and there are some good reasons to have some specialized
expertise focus in different places. But I particularly
appreciate your emphasis on making sure that each of these
silos of expertise is working together effectively towards the
overall public health goals that we need to support, and I
agree with you, as well, that there are few more urgent than
trying to do more to help people find safe and effective ways
of watching their diet in a way that reduces obesity.
Right now, we are clearly doing badly. We have already gone
over the statistics. Under Secretary Bost cited some of them.
We need better treatments. Many people today are turning to
smoking cigarettes or using unproven dietary supplements in an
effort to lose weight and that is just not a safe way to go
about this.
The main public health message that we have learned from
the various types of research is pretty simple at a basic
level, which, as Under Secretary Bost said, it is what you take
in and what goes out--in terms of calories and what goes out in
terms of energy expenditures that contribute to whether you are
gaining or losing weight or not, and while we at FDA don't
regulate those kinds of books that you put up there, that is
not a medical product, I would also add the admonishment that
if it sounds too good to be true, it probably is.
For some of these diets, even though they have been shown
to have some short-term effects on weight, what you really need
is a sustained long-term weight loss program and a sustained
long-term balanced diet, with calories in equaling calories
out, and most of those diets don't do so well from a long-term
standpoint, which is what you really need to improve health.
And to do that, we need to find some better approaches. We
are working on new medications at FDA. One of our priority
areas for new guidance to industry is in obesity, is in better
obesity treatments, and that is an effort that NIH is working
closely with us in. We are trying to encourage industry to do
more to compete about the health consequences of their foods
and the health consequences of eating those foods as part of a
good diet so that we don't see competition just around taste
and product price and whether it is super-sized or not and
whether it springs ready-to-eat out of a box, but also around
what it does for your health.
FDA hasn't done as much in the past, I think, as it should
to encourage that kind of competition, and we are working with
experts from many government agencies on the right way to go
about that. We have got a task force right now that includes
NIH, the Federal Trade Commission, and we have been in
consultation with the USDA experts, as well.
So I think with your leadership on encouraging more of this
kind of interaction and more focused effort against these
important and urgent public health problems related to obesity
and good nutrition, we can make more progress, and I look
forward to working with you on that and all the many other
issues that no doubt we will have interactions about going
forward.
Senator Bennett. Thank you very much. Again, completely
anecdotal, but I am aware of a woman who had very serious
obesity problems and she dieted very strictly and she was on
the treadmill every day and she continued to gain weight. It
was very frustrating to her and she had a number of other
problems.
She finally went to a doctor who said, you have got an
endocrine imbalance here, prescribed some prescription drugs,
and she could eat more than she had been eating before, trying
just to cut down on everything and exercise and all the rest of
it. She could satisfy her cravings for more nourishment and, in
fact, lose weight in the process because there were changes in
her metabolism that were stimulated by the prescription drugs
that she took. Her husband commented to me, ``I am glad to have
her back. This is the woman that I married,'' whereas
psychologically and emotionally, the woman he had married had
disappeared in the process.
So there is, in addition to all of the things that Under
Secretary Bost appropriately said about quit being a couch
potato and quit sitting in front of the computer, walk to
school instead of ride the bus and so on, there is clear
evidence that many of the things you deal with and the things
that USDA deals with are interrelated in these complicated
mechanisms we call our bodies.
ADDITIONAL COMMITTEE QUESTIONS
The more we can get the Federal Government to spend its
research dollars intelligently on this and then communicate
intelligently so that ordinary people can say, well, this is
the final word, rather than I have to go to the bookstore and
rifle through 50 books and hope I find the one book that
applies to me, is what I am hoping for eventually.
[The following questions were not asked at the hearing, but
were submitted to the Department for response subsequent to the
hearing:]
Questions Submitted by Senator Robert F. Bennett
ANIMAL DRUG USER FEES
Question. Dr. McClellan, I noted that your budget request assumes
the enactment of a new animal drug user fee to expedite the review of
applications for animal drugs. As you know, this falls under the
jurisdiction of the House and Senate authorizing committees. What is
the status of approval of this new user fee?
Answer. You are correct; the first step in making this important
FDA program enhancement a reality in fiscal year 2004 is obtaining
authorization. The bill, S. 313, ``The Animal Drug User Fee Act of
2003'' passed by unanimous consent in the Senate on June 3, 2003. A
companion bill, H.R. 1260, was introduced with bipartisan support in
the House. The measure, as passed by the Senate, requires an
appropriations action before FDA has the full legislative authority it
needs to collect and spend these fees.
Question. What would be the impact on the center for veterinary
medicine if this fee proposal is not enacted?
Answer. Congressional authorization of this user fee proposal to
support significant improvements in CVM's new animal drug evaluation
process is critical to achieving the Center's initiatives for a
sustainable and predictable animal drug review process.
Without the additional resources the user fees are designed to
provide, review performance will not improve. Existing delays in review
times are already close to exceeding the timeframe within which a new
animal drug sponsor can recoup its investment in drug development for
most animal drugs. Failure to promote safe and effective new animal
drug development may also result in increasing compliance problems
associated with illegal drug use, illegal compounding of unapproved
animal drugs, use of unapproved chemicals and drugs in food-producing
animals, and a resulting increase in tissue residue violations both
detected and undetected.
Alternatively, if ADUFA is enacted, the general public as well as
industry will benefit from faster animal drug approvals. This will
provide greater public health protection by helping ensure that animal
drug products that are shown to be safe and effective are readily
available; speed public access to new and more cost efficient animal
drug products; promote animal health by increasing the availability and
diversity of safe and effective drug products that relieve animal pain
and suffering without compromising public health; provide the animal
health industry significant benefits from earlier marketing of products
and more predictable review processes; and, decrease incentives for
marketing unapproved animal drug products that have not been shown to
be safe and effective through the animal drug approval process.
GENERIC DRUGS
Question. I noted in your budget justification the emphasis you
have placed on approving new generic drug applications--$13 million and
40 new staff have been requested for fiscal year 2004. How long does it
currently take the FDA to complete the review of a generic drug
application?
Answer. During fiscal year 2002, the Office of Generic Drugs
approved 295 applications with a median approval time of 18.3 months
and an average approval time of 21.4 months. Currently the Agency is
reviewing the vast majority, over 80 percent, of applications within
180 days.
Question. Why does it take so long?
Answer. Studies of the FDA processes for new drugs have shown that
early communications and guidance can improve drug applications and
allow deficiencies to be corrected during the initial review, rather
than having to wait for additional review cycles to fix problems. In
addition, generic manufacturers have expressed interest in finding ways
to improve the quality of their applications, so that more applications
can be approved on the first round of review. Therefore, FDA is
implementing a new system of early communications with generic drug
manufacturers who submit applications. FDA also will provide additional
guidance for generic manufacturers preparing and submitting quality,
complete applications.
Various interested parties also raise numerous scientific issues
when generic products are anticipated. The discussion of these issues
is critical as it ensures full consideration of all possible scientific
aspects of the product. However, the full examination of these
questions can delay the action on generic drug applications. In
addition, with the advancement of science, new and more challenging
issues are being raised. There are products for which efficient,
reliable methods for the demonstration of bioequivalence have not been
successfully developed.
Question. What do you plan to do with this funding and staff to
shorten that length of time?
Answer. FDA generally can approve generic drugs for the marketplace
as soon as the patent protection on brand-name drugs expires or when a
court determines that the generic product will not infringe on the
innovator's patent or that the patent is invalid. The generics'
manufacturers must demonstrate to the FDA that their products are
therapeutically equivalent to an approved brand-name drug in terms of
safety, strength, quality, purity, performance, intended use and other
characteristics.
The proposed increase in the FDA's generics budget will allow FDA
to hire 40 experts in its generic drugs program to review generic drug
applications more quickly and initiate targeted research to expand the
range of generic drugs available to consumers. FDA also has begun
internal reforms to improve the efficiency of its review process for
generic drugs. In particular, FDA is implementing a new system of early
communications with generic drug manufacturers who submit applications.
FDA also will provide additional guidance for generic manufacturers
preparing and submitting quality, complete applications.
Studies of the FDA processes for new drugs indicate that such
communications and guidance can improve drug applications and allow
deficiencies to be corrected during the initial review, rather than
having to wait for additional review cycles to fix problems. In
addition, generic manufacturers have expressed interest in finding ways
to improve the quality of their applications, so that more applications
can be approved on the first round of review.
The new resources and other reforms are expected to reduce the
total time to approval for most new generic drugs by 3 months or more
over the next 3 to 5 years. Because these changes will generally
accelerate the approval for all generic drugs, most Americans who take
generic drugs will benefit.
The FDA also will expand its educational programs and partnerships
involving generic drugs, to help consumers get accurate information
about the availability of generic drugs for their health needs and to
help ensure that consumers are aware that FDA-approved generic drugs
are as safe and effective as their brand-name counterparts. FDA will
also undertake more scientific studies of generic drug
``bioequivalence'' to expedite the determination of whether the generic
copy of a drug works in the same way as the original product, and will
enhance monitoring of the safety of generic drugs on the market.
RX TO OVER-THE-COUNTER SWITCHES
Question. During our recent conversation, Dr. McClellan, you
mentioned to me your efforts to move more and more medications from
requiring a prescription to being available over the counter. One of
your reasons, as I recall, was to reduce out-of-pocket costs to
consumers by not requiring them to pay for a doctor visit as well as a
prescription. This would be especially beneficial to those who do not
have health insurance.
There is another side to that coin--the very real danger of self-
medicating. There are some products that should not be used in
conjunction with others. While these dangers might be listed on the
package, many times the print is very small. How do you decide which
drugs no longer require a prescription?
Answer. Two of the options available to FDA to switch a drug
subject to an approved new drug application from prescription, Rx, to
over-the-counter status are voluntary submission and rulemaking.
The simplest, voluntary submission, is when a sponsor voluntarily
submits a supplemental NDA to make the switch. The second option,
rulemaking, is permitted under section 503(b)(3) of the Federal Food,
Drug, and Cosmetic Act. That provision allows the Agency to remove the
Rx restriction from a drug such restriction is not necessary for the
protection of the public health. In both instances, FDA must determine
that the legal and safety standards for OTC marketing are satisfied
prior to allowing the switch. Some factor the Agency considers when
determining Rx-to-OTC switch candidates are: an acceptable margin of
safety based on prior prescription marketing experience; low misuse and
abuse potential; a reasonable therapeutic index of safety; and, self
treatment and self monitoring with minimal physician intervention.
Question. Does the manufacturer request this switch?
Answer. Historically, the majority of drugs that have been switched
from prescription only to over-the-counter, OTC, status have been at
the initiation of the sponsor. However, FDA's regulations allow for any
interested party to petition the agency to request to switch a product
from prescription to OTC status.
Question. What steps do you take to make sure that these drugs are
being used appropriately once they are so widely available?
Answer. Sponsors of approved NDAs are required to file periodic
safety reports and these are monitored for adverse events. The Agency
also maintains a voluntary reporting system, Medwatch, that is
available to all consumers and health care professionals to report
adverse events for both prescription and over-the-counter products. In
some cases, use studies are conducted prior to switching a drug from
prescription to OTC as one way to help ensure that the consumer can
appropriately use a product in an OTC setting.
Also, a regulation that will be fully implemented by May 2005
standardizes the labeling format that will improve the labeling on
drugs Americans use most, OTC drugs. By clearly showing a drug's
ingredients, dose and warnings, the new labeling will make it easier
for consumers to understand information about a drug's benefits and
risks as well as its proper use.
MEDICAL DEVICE USER FEES
Question. Dr. McClellan, the FDA budget assumes that at least
$29,190,000 will become available from the medical device user fees
authorized under current law. These funds are to be used to decrease
the time necessary for medical device reviews conducted by the Center
for Devices and Radiological Health (CDRH). Prior to the enactment of
the medical device user fee and modernization act of 2002, how much
money was spent for this review responsibility?
Answer. We are currently developing the base line data on how much
we spent on the process for the review of medical devices, as recently
defined in the Medical Device User Fee and Modernization Act, MDUFMA,
in fiscal year 2002--the year before MDUFMA was enacted. We do not have
these data yet in large part because the new statutory definition cuts
across our traditional accounting categories. The results, when we have
them, will be published in the MDUFMA Financial Report that is due to
Congress at the end of January 2004.
Question. Of the amounts specifically appropriated to the FDA, not
including MDUFMA funds, how much is expected to be spent for this
activity in fiscal year 2004?
Answer. Because the new statutory definition cuts across our
traditional accounting categories, we do not currently have an accurate
estimate on fiscal year 2004 funding. We estimate that it will be at
least what was spent on the process in fiscal year 2002, but will have
more accurate data when we complete data gathering for the MDUFMA
Financial Report.
Question. How many full-time employees were assigned to these
reviews prior to the enactment of MDUFMA?
Answer. Approximately 730 FTEs were spent on the process in fiscal
year 2002. However, we will have more accurate information when we
complete some data gathering that is currently underway. We expect this
information to be published in the MDUFMA Financial Report that is due
to Congress at the end of January 2004.
Question. Not including MDUFMA funds, how many full-time employees
will be assigned to these reviews in fiscal year 2004?
Answer. We anticipate that the agency will assign at least the same
amount of FTE on the process in fiscal year 2004 as in fiscal year
2002. However, we will be able to provide better data once we have
completed data gathering for the MDUFMA Financial Report.
Question. I noted that of the amount available from MDUFMA,
$15,808,000 will be provided to CDRH. Of the remainder, $7,026,000
would be transferred to the Center for Biologics Evaluation and
Research, $642,000 would be transferred to the Office of the
Commissioner, $2,501,000 would be utilized by the Office of Management
and Systems, $350,000 would go to the Office of Planning, Policy and
Legislation, and a total of $2,863,000 would be applied to rent-related
costs.
What contributions are made to the review of medical device
applications by each of the entities listed above?
Answer. Device application review is done both in the Center for
Devices and Radiological Health, CDRH, and in the Center for Biologics
Evaluation and Research, CBER. Most of the review work is done in CDRH,
but a significant amount is done in CBER--especially review of
diagnostic devices and test kits that incorporate biologics or are used
in blood testing work. Resources are allocated between those components
in proportion to the amount of device review work that is done by each
center, and keeping in mind that all of the appropriated increases, in
the devices and radiological health line of the appropriation, are
provided to CDRH and the field.
Increases are included in the rent line because additional space
will have to be acquired to house the additional staff the agency
expects to hire over each year--from an additional 120 FTE in fiscal
year 2004 to 265 additional FTE dedicated to this process by 2007.
Increases are also included in funds for the Office of Management
and Systems, which collects and manages the fee revenue, hires
additional staff, coordinates the acquisition and management of the
additional space, provides IT support, and reports to Congress on the
financial aspects of the program each year.
The Office of Policy and Planning is responsible for the annual
MDUFMA performance report to Congress and for assisting with other
management responsibilities for the program, such as the annual
stakeholders meetings.
FDA has also allocated funds to the Office of Combination Products,
which was mandated by the Medical Device User Fee Act to streamline the
processing of complex drug-device, drug-biologic, and device-biologic
combination products that play an increasingly significant role in
health care.
Question. Before enactment of the medical device user fee
authority, how were these responsibilities funded and in what amounts?
Answer. All of the items previously mentioned are related to the
implementation of MDUFMA. These activities are over and above any
previous resources available to the agency. As a result of MDUFMA, FDA
has expanded work related to the review of medical devices by the
Center for Devices and Radiological Health as well as the Center for
Biologics Evaluation and Research. The additional responsibilities that
are being funded by MDUFMA in the Other Activities line of the budget
by the Office of Management and Systems, the Office of Policy and
Planning, and the Office of Combination Products were not necessary
prior to the enactment of MDUFMA. Under MDUFMA, FDA must collect and
manage the fee revenue, hire additional staff, coordinate the
acquisition and management of the additional space for staff, provide
IT support, report to Congress on the financial and performance aspects
of the program each year, assist with management responsibilities for
the program such as the annual stakeholders meetings, and assist in the
streamlining of the processing of complex combination products.
Question. Has there been any reduction in these amounts since the
enactment of MDUFMA?
Answer. We will have more accurate information when we complete
some data gathering that is currently underway. However, the reductions
related to the Devices and Radiological Health program in the fiscal
year 2004 request reflect management savings and IT consolidation and
should not impact the resources directly devoted to the review process.
User fee collections under MDUFMA are not considered an offset for this
program. They are used exclusively for the review of new devices and
related costs. FDA supports the goals of MDUFMA, and is committed to
making the medical device user fee program a success.
DRUG EFFICACY STUDY IMPLEMENTATION MONOGRAPHS
Question. Dr. McClellan, FDA's recent enforcement activity with
regard to single entity extended release guaifenesin has focused
attention on many prescription products that have apparently been
marketed for decades without significant safety or effectiveness
concerns, but at the same time are outside of the current FDA drug
approval process. I understand that the FDA has given careful
consideration to many competing concerns, including upholding the
integrity of the new drug approval process, ensuring the availability
of affordable medicines, and not unnecessarily disrupting patients and
physicians, as well and manufacturers and distributors and the people
they employ. Would the FDA consider establishing a monograph system
similar to the over-the-counter (OTC) monograph system to deal with
these older products?
Answer. FDA believes it would not be feasible to establish a
monograph system for certain older prescription drug products. Such a
system would have to be developed through notice and comment
rulemaking, based on publicly available data, and would be limited to
products that have been marketed to a material extent and for a
material time and that can be established as generally recognized as
safe and effective. It would take many years to develop and implement
such a system and would require substantial additional resources.
Because of its complexity, we anticipate that developing a monograph
system and individual monographs for prescription drugs would be
extremely resource intensive and time-consuming.
Furthermore, many prescription drugs are associated with serious
toxicity or potential harmful effects and are often for serious
indications. Therefore, the types of prescription drugs that would be
appropriate for consideration as generally recognized as safe and
effective under a monograph system could be very limited. In addition,
some categories of drugs would not be appropriate for monographs in any
case because they have unique performance characteristics that require
review under an application instead of under the general criteria found
in monographs. For example, the safety and effectiveness of controlled
release dosage forms are highly dependent on the specific formulation,
and it would be difficult to ensure the safety and effectiveness of
these drugs using a categorical approach such as a monograph system.
Question. Does the FDA have the authority under existing law to
establish a monograph system for older prescription products?
Answer. FDA believes that it would be theoretically possible, but
infeasible, to establish a monograph system for certain older
prescription drug products. Such a system would have to be developed
through notice and comment rulemaking, based on publicly available
data, and would be limited to products that have been marketed to a
material extent and for a material time and that can be established as
generally recognized as safe and effective. It would take many years to
develop and implement such a system and would require substantial
additional resources. Because of its complexity, we anticipate that
developing a monograph system and individual monographs for
prescription drugs would be extremely resource intensive and time-
consuming.
Furthermore, many prescription drugs are associated with serious
toxicity or potential for harmful effects and are often for serious
indications. Therefore, the types of prescription drugs that would be
appropriate for consideration as generally recognized as safe and
effective under a monograph system could be very limited. In addition,
some categories of drugs would not be appropriate for monographs in any
case because they have unique performance characteristics that require
review under an application instead of under the general criteria found
in monographs. For example, the safety and effectiveness of controlled
release dosage forms are highly dependent on the specific formulation,
and it would be difficult to ensure the safety and effectiveness of
these drugs using a categorical approach such as a monograph system.
Question. Under the monograph system for OTC drugs, does the FDA
have the authority to take action against products when there are
substantial questions regarding safety and efficacy even if the
monograph has not been finalized?
Answer. FDA has the authority to take action against an OTC drug
subject to a pending monograph when substantial questions regarding
safety and efficacy are evidenced. If the drug contains an ingredient
that is explicitly prohibited by regulation, 21 CFR 310.545, has label
deficiencies that constitute a potential hazard to health, or is
adulterated, FDA Compliance Policy Guide 450.200.
GUAIFENESIN
Question. With regard to single entity extended release
guaifenesin, I understand that in February of this year, manufacturers
and distributors were granted a grace period until November 2003 to
obtain new drug approvals for their products. Affected companies
obviously would need time to develop the information necessary for a
new drug application (NDA) submission.
In light of the fact that FDA's own figures indicate that the
median time to approval for standard NDAs has steadied at 12 to 14
months, was that a realistic grace period?
Answer. FDA exercised its enforcement discretion and granted a
grace period to prevent undue hardship to the consuming public and the
industry that could result from an abrupt cessation of such products'
supply. Among other things, this grace period had to be limited in
order to preserve the incentives for companies to develop and submit
new drug applications, as required by law. The new drug approval
process plays an essential role in assuring that all drugs are both
safe and effective. In addition, because FDA had determined that the
single-ingredient, extended release guaifenesin drug products were on
the market illegally, a decision to leave them on the market
indefinitely could have run afoul of the Court's ruling in Hoffmann-
LaRoche v. Weinberger, 425 F.Supp. 890 (D.D.C. 1975).
Finally, single-ingredient, extended release guaifenesin
manufacturers actually had much more than the 2 years notice provided
to manufacturers of products subject to the cough/cold monograph. The
Agency, by regulation, has identified certain drugs as requiring new
drug applications for marketing, including all extended release dosage
form drug products [21 CFR 310.502(a)(14)]. The Agency's interpretation
of that regulation has not changed since it was publicly announced in
1959. It appears that the Warning Letter recipients all began
manufacturing their products after that public announcement. When
guaifenesin was considered for OTC marketing by the Agency in
rulemaking proceedings, the Agency repeatedly reaffirmed, in the
Federal Register, the existence of the longstanding Agency policy
requiring new drug application approval prior to marketing extended
release drug products. FDA Compliance Policy Guide section 440.100 (CPG
7132c.02) has also clearly stated for many years that any drug on the
market without FDA approval is subject to regulatory action ``if it is
identical or related to a post-1962 NDA approved for safety and
effectiveness.'' Thus, the manufacturers of single ingredient extended
release guaifenesin products had ample notice that they faced immediate
removal from the market.
Question. I note that on December 23 of last year, the FDA
finalized the OTC monograph for cough and cold products with more than
one active ingredient, so-called ``combination cough/cold products.''
Manufacturers and distributors are not required to come into full
compliance with the monograph until December 2004. Why were these OTC
products given 2 years to conform to the monograph or come off the
market when single entry extended release guaifenesin prescribed by
physicians has to come off the market at the end of a 9-month grace
period?
Answer. The final monograph for cough/cold combination drug
products that issued in December 2002, was developed under the OTC Drug
Review process. The monograph set forth the criteria for such drugs to
be generally recognized as safe and effective, i.e. not unapproved new
drugs. The rulemaking process, established in 1972, provided that OTC
drug products would not be deemed to be unapproved new drugs until
after the effective date of the final monograph. In other words, the
OTC Review process itself provided for a period of time during which a
firm could bring its product into compliance with a final monograph and
permitted continued marketing during such time period. In the case of
the cough/cold drug products, the 2-year time period was determined to
be reasonable and necessary to enable affected drug manufacturers to
reformulate and print new labels to comply with the final rule.
The recent action taken by FDA with regard to single-ingredient,
extended release guaifenesin drug products involved the issuance of
Warning Letters in October 2002 to manufacturers and distributors of
such drug products, advising those firms that their drugs were
unapproved new drugs. In that case, FDA exercised its enforcement
discretion and granted a grace period to prevent undue hardship to the
consuming public and the industry that could result from an abrupt
cessation of such products' supply. Among other things, this grace
period had to be limited in order to preserve the incentives for
companies to develop and submit new drug applications, as required by
law. The new drug approval process plays an essential role in assuring
that all drugs are both safe and effective. In addition, because FDA
had determined that the single-ingredient, extended release guaifenesin
drug products were on the market illegally, a decision to leave them on
the market indefinitely could have run afoul of the Court's ruling in
Hoffmann-LaRoche v. Weinberger, 425 F.Supp. 890 (D.D.C. 1975).
Finally, single-ingredient, extended release guaifenesin
manufacturers actually had much more than the 2 years notice provided
to manufacturers of products subject to the cough/cold monograph. The
Agency, by regulation, has identified certain drugs as requiring new
drug applications for marketing, including all extended release dosage
form drug products [21 CFR 310.502(a)(14)]. The Agency's interpretation
of that regulation has not changed since it was publicly announced in
1959. It appears that the Warning Letter recipients all began
manufacturing their products after that public announcement. When
guaifenesin was considered for OTC marketing by the Agency in
rulemaking proceedings, the Agency repeatedly reaffirmed, in the
Federal Register, the existence of the longstanding Agency policy
requiring new drug application approval prior to marketing extended
release drug products. FDA Compliance Policy Guide section 440.100 (CPG
7132c.02) has also clearly stated for many years that any drug on the
market without FDA approval is subject to regulatory action ``if it is
identical or related to a post-1962 NDA approved for safety and
effectiveness.'' Thus, the manufacturers of single ingredient extended
release guaifenesin products had ample notice that they faced immediate
removal from the market.
DIETARY SUPPLEMENTS
Question. Dietary supplements are products that are regulated as a
food product. These are products made from herbs or certain ingredients
and these products are not permitted to make claims that they ``cure
diseases.'' Rather, they are permitted to make ``structure and
function'' claims, as long as there is scientific information
supporting these claims.
The law is clear. If there is a safety concern about a product and
the product causes a substantial risk of harm, then FDA may withdraw
the product from the marketplace. However, if the scientific evidence
is not clear, the Dietary Supplement law permits the agency to take
other actions.
The FDA is the administrative body that we have authorized to make
sound scientific judgments within, let me repeat, within the parameters
of the law.
Let's talk about what has occurred to date. Dr. McClellan I
understand that you have taken very swift action on the issue of
ephedra and have proposed rules to require very strong warning labels
on dietary supplement products that contain ephedra. In addition, I
understand you propose that these products not be used by children or
by athletes as an athletic performance enhancer.
Dr. McClellan, I also understand that you have reviewed various
scientific studies, including one commissioned by the FDA that looked
at the adverse event reports. It is my understanding that the Rand
Institute, an independent think tank, conducted a study and reviewed
these reports on ephedra leading up to this regulatory process. They
stopped short of saying that ephedra caused the adverse events.
Do you intend to finalize these rules in the near future? Will you
commission additional studies on this matter or do you feel you are
getting additional information through rulemaking?
I believe that the Agency is taking the correct approach: they are
evaluating the law; they are looking at the scientific evidence; they
are taking strong administrative action; and I believe that it is
consistent with their mission in overseeing products under their
authority.
Answer. The agency remains very much concerned about the safety of
dietary supplements containing ephedrine alkaloids. The agency is
currently examining all comments to its March Federal Register notice.
Upon consideration of all the comments, the agency will take the most
appropriate action consistent with the law to best protect public
health. The actions may or may not necessitate rulemaking. If the
agency issues a rule, it may include labeling, as well as marketing
restrictions. We do not anticipate commissioning any further studies at
this time.
______
Questions Submitted by Senator Thad Cochran
DIETARY SUPPLEMENTS
Question. The FDA has the primary role in regulating as well as
assuring the safety of dietary supplements, like Ephedra. Scientific
data are critical for developing policies regarding dietary supplements
and for demonstrating safety. I understand that a number of scientific
studies have yielded questionable results due to a lack of quality of
the supplements being tested. Would a source of standardized products
improve the scientific testing of these products as well as the safety
of these products for consumers?
Answer. Scientific data establishing the botanical and chemical
profiles of authenticated botanical ingredients, such as ephedra,
provide the essential basis for developing standards that can be used
in a variety of ways to enhance scientific research and regulatory
decisions. Such standards can provide a basis for evaluating Good
Manufacturing Practices, GMP, in order to confirm that the ingredient
used in a product is the ingredient intended for use. Adulterations or
mis-identifications can more easily become apparent. This use has value
for FDA in enforcement actions, for industry in establishing and
monitoring GMP provisions, and for researchers in characterizing the
test substance used in their own studies and for comparing results
across studies performed by different laboratories.
Validated analytical methods for detecting contaminants in
botanical and other dietary supplement ingredients are valuable to
regulators, researchers, and manufacturers. If such methods were widely
available, they would help ensure that supplement ingredients do not
contain unsafe levels of contaminants such as heavy metals, pesticides,
and drugs.
Sound scientific information on the botanical and chemical profiles
of authenticated botanical ingredients and validated analytical methods
for contaminants and adulterants would help assure the standardization
of test products for research and the purity of marketed products.
NATIONAL CENTER FOR NATURAL PRODUCTS RESEARCH
Question. I have followed with interest the collaboration between
the FDA's Center for Food Safety and Applied Nutrition, and the
National Center for Natural Products Research at the University of
Mississippi. The FDA has indicated it has plans to expand this
relationship. Can you comment on the value of this collaboration? Does
the Center for Drug Evaluation and Research also plan to undertake
similar collaborations in order to deal with dietary supplements that
may be submitted for approval as drug products?
Answer. Under the Dietary Supplement Health and Education Act of
1994, DSHEA, FDA has primary responsibility for ensuring that
appropriate regulatory actions are taken against marketed dietary
supplement products that present significant health risks or bear false
or misleading label claims. Policy decisions that require the
evaluation of risks and claims need to have a sound scientific base.
For botanical dietary supplements, development of such a science base
is especially problematic because of several unique features, including
the complexity of the constituents, variability of sourcing, lack of
availability of reference materials, lack of manufacturing controls,
and new and rapidly expanding uses in the marketplace. The existing
cooperative agreement between the University of Mississippi, National
Center for Natural Products Research, NCNPR, and FDA was established to
address these critical research issues.
In September 2001, FDA implemented a cooperative agreement with the
National Center for Natural Products Research, NCNPR. This agreement
was amended in September 2002, to increase overall funding of the
project. The agreement between FDA and NCNPR creates a partnership that
allows for more efficient use of resources to identify and analyze
specific components in botanical dietary ingredients, thereby enhancing
overall public health by ensuring that dietary supplements are safe and
their labeling is not misleading.
Accomplishments to date have included collection and chemical
profiling of a number of botanicals, e.g., a variety of ephedra
species, aristolochia and asarum species. Scientific workshops have
either been held such as the ``Authentication of Botanicals'' in August
2002, or are planned--such as ``Use of Hepatoxicity Methods to Evaluate
Safety of Botanicals'' in September 2003. In addition, collaborations
have occurred between NCNPR staff and FDA's National Center for
Toxicological Research, with the methods validation project co-funded
by FDA and NIH with the Association of Official Analytical Chemists,
AOAC, with NIH's Office of Dietary Supplements, NIH/ODS and their
Clinical Research Program for Dietary Supplements, and with the
National Toxicology Program NIEHS/NIH-sponsored research in botanical
safety.
Future plans include the continuation of the basic efforts on
collection and chemical profiling of authenticated botanical materials
noted above with the inclusion of additional botanicals as current
efforts are completed, holding additional scientific conferences and
workshops, and continuation of collaborations between individual
scientists at FDA's Center for Food Safety and Applied Nutrition,
CFSAN, and NCNPR including the sharing of samples and research data.
This expansion will greatly enhance the already useful chemical
profiling information that FDA is receiving from the NCNPR/University
of Mississippi collaborative agreement in that it will provide a more
complete body of evidence on which to evaluate safety. Activities
carried out under the Cooperative Agreement contribute significantly to
the Center's dietary supplement program and expand the capabilities of
researchers at both Centers.
A dietary supplement submitted for approval as a drug product and
intended for use in the diagnosis, cure, mitigation, treatment, or
prevention of disease would undergo our new drug application, NDA,
review process. We would seek expert advice through Advisory Committees
when necessary.
CITIZENS' PETITION--CFC GAS AND ASTHMA PRODUCTS
Question. Please provide us the status, within the FDA, of the
citizens' petition that calls for the removal of certain asthma
products, called metered-dose inhalers, from the list of essential uses
for CFC gas.
Answer. The American Lung Association's, ALA, citizen petition
requesting the elimination of the essential use designation for
albuterol presents serious and complex policy issues.
Section 2.125(f) specifies the 4 criteria for determining that a
use of an ozone-depleting substance is no longer essential. A citizen
petition must present ``compelling evidence'' that all criteria are
met. The second criterion is that ``supplies and production capacity
for the non-ODS product's exist or will exist at levels sufficient to
meet patient need.'' ALA states that information that will support
their desired finding on this criterion is proprietary, but it can be
developed in the course of rulemaking. We have not received any
comments providing information on supplies and production capacity of
alternatives.
RX TO OVER-THE-COUNTER SWITCHES
Question. As you point out in your statement, nonprescription drugs
are becoming more important in our health care system as more products
switch from prescription to over-the-counter status. The Administration
has requested an additional $1 million to ``improve the OTC drug review
process'' through hiring and training personnel. In your opinion, what
impact do these products have on the health of Americans? Will the
additional funds be used to complete the switch applications that are
currently pending or initiate new switches?
Answer. Over-the-counter, OTC, drugs play an increasingly vital
role in America's health care system. With reports of rapidly
increasing spending on prescription drugs, interest in finding ways to
curb those costs is also intensifying. The trend to patient directed-
medication has increased greatly in recent years as health care costs
have risen and consumers want to be empowered to treat minor ailments
with safe and effective OTC drug products. The mission of OTC drug
review at FDA is to protect and promote the health of Americans by
providing access to important safe and effective OTC drug products.
The requested increase in funding will be used to hire and train
seven additional FTEs to improve the OTC drug review process, develop
and work toward finalizing OTC drug monographs, and conduct consumer
behavior research that would be used to identify and manage potential
risks of OTC drugs. Additional staff will assist in expediting all
processes within the review division, making available OTC products in
a timely manner.
______
Questions Submitted by Senator Christopher S. Bond
MEDICAL DEVICE USER FEES
Question. Dr. McClellan, you're to be congratulated for your role
in reaching a deal with the medical device industry that requires them
to pay $150 million in user fees over the next 5 years. This deal also
requires the government to match industry funds with a relatively
modest $45 million increase to be attained over the years 2003-05. I'm
disappointed that the Administration's budget for fiscal year 2004
fails to provide the funds required under this agreement in fiscal year
2004. Yet, you've proposed new increases in other areas of FDA
activity. Can you assure me that, notwithstanding your proposed new
initiatives in non-device areas, you will meet your obligations under
the device user fee agreement?
Answer. FDA assures you that it looks forward to working with
Congress and industry to ensure the device user fee program is
successful. FDA is committed to meeting the performance goals, as
stated in the goals letter. We have already begun discussions within
the Administration to find ways to fund this program appropriately in
fiscal year 2005 and beyond to ensure that this important program does
not sunset.
Question. The user fee agreement only requires you to meet current
performance for the first 3 years of the program, even as you collect
fees from industry. Yet I understand the agency's position is that you
can't meet these modest goals without the additional funds that are to
come from appropriations.
With the $15 million increase we appropriated to CDRH for fiscal
year 2003 plus the $27 million in user fees industry will pay, the CDRH
budget is substantially larger in fiscal year 2003 than it was in the
previous fiscal year. I've noticed that you propose a number of
management efficiencies at the agency. In addition, you announced new
initiatives to help speed multi-cycle reviews of promising new medical
technologies through FDA. Why can't you meet the modest performance
goals required by the device user fee agreement using these
efficiencies combined with the increased funds that Congress and the
device industry are already giving you?
Answer. The appropriations for devices and radiological health in
fiscal year 2003 provided an increase of $12.5 million over the fiscal
year 2002 appropriation. Of this amount, $5.2 million was to fund the
costs of the Federal pay increase for existing employees, $3.4 million
was to enhance the counterterrorism capabilities of FDA's field
operations. The increase of $1.5 million and 1 FTE for patient safety/
medical errors and the additional $4.0 million added by Congress gave
us some additional device review capabilities--as will the management
efficiencies that we expect to achieve in fiscal year 2004. These
amounts were offset by the $1.7 million rescission of 0.65 percent.
We fully expect to meet the only performance goal that applies for
fiscal year 2003 and fiscal year 2004--complete action on 90 percent of
the amendments containing complete responses to an ``approvable''
within 30 days. The more challenging MDUFMA goals take effect in fiscal
year 2005, and become increasingly more challenging each subsequent
year through fiscal year 2007. We allowed more time before these goals
take effect because we will have to hire and train additional staff to
be able to meet these goals.
Question. Passage of the device user fee agreement was the
culmination of a 10-year effort to win over the strong resistance to
user fees of many in the device sector and in Congress. I understand
that if FDA does not receive a $45 million increase for the device
program by fiscal year 2005, the user fee agreement terminates and the
agency loses the ability to collect fees from industry in the remaining
2 years of the program. Given the history of the user fee issue in the
device sector, I suspect you'll lose this program and any chance of
collecting fees from the industry again if you don't find a way to meet
the performance goals. What is your plan to avoid losing this program
and this funding source that I suspect you need and want?
Answer. The agency looks forward to working with Congress and
industry to ensure the device user fee program is successful. FDA is
committed to meeting the performance goals, as stated in the goals
letter. We have already begun discussions within the Administration to
find ways to fund this program appropriately in fiscal year 2005 and
beyond to ensure that this important program does not sunset.
______
Questions Submitted by Senator Herb Kohl
BOVINE SPONGIFORM ENCEPHALOPATHY
Question. Dr. McClellan, as you know, in the 1990s, during the BSE
crisis in Britain, millions of cattle were slaughtered and burned, and
significant amounts of feed were removed from the market. In 1997, FDA
banned the use of certain contents in animal feed in order to try and
stop the spread of BSE. What has FDA done to make sure that none of the
feed removed from the market in Europe, or any of the remains of the
destroyed cattle, have entered the United States on the black market in
our animal feed?
Answer. FDA has prioritized the review of our import entries to
make sure that all of the possible commodities that might be or contain
the mammalian proteins prohibited from use in ruminant feed are
reviewed before entry into the United States. In addition, we have an
Import Alert in place which instructs the FDA import personnel to
detain without physical examination any product that is or contains any
animal protein product from the countries identified by USDA/APHIS as
``restricted'' either because they have identified a case of BSE in
that country or they are at risk for BSE because they have open
commerce with those countries. That includes all of the European
countries, Japan, and Israel, as well as Canada.
We also have an ongoing assignment to collect samples and analyze
animal feed products using feed microscopy from the BSE positive or
suspect countries in which the documents indicate no processed animal
protein is present to be assured that products are not being entered
through intentional or inadvertent mislabeling. To date none of these
samples have found the presence of processed animal protein.
On an ongoing basis, FDA meets with USDA and Customs to coordinate
the U.S. review and response to products offered for entry into the
United States.
Question. How is the FDA involved in the investigation of the
Canadian case, especially in regard to tracing the feed that this herd
consumed?
Answer. FDA is working cooperatively with Canada in the
investigation of this incident. Technical counterparts are
communicating on a regular basis as the investigation unfolds. A
representative from FDA's Center for Veterinary Medicine spent a week
in Canada working with CFIA officials. FDA was notified by CFIA about
pet foods that were potentially contaminated with rendered material
from the BSE positive cow in Canada and shipped to the United States.
The firm has asked for return of all suspect products and FDA has
issued notices to alert consumers about this information. FDA is
currently part of a daily interagency conference call that shares
information on the investigation of this incident. The call includes
representatives from USDA/FSIS and APHIS, as well as CDC. Each of those
agencies is working with their respective Canadian counterparts.
REGULATION OF ANIMAL FEED
Question. Please explain specifically how FDA regulates animal
feed. Specifically, are there inspectors in all plants? Is there
testing at the borders? How does FDA actually enforce its feeding ban?
Answer. FDA regulates animal feed through the administration of the
Federal Food, Drug, and Cosmetic Act, the Act. Animal feed is food
under the Act. In general, food must be truthfully labeled and may not
be adulterated. The Act, among other things, prohibits the interstate
shipment of adulterated or misbranded food, and the adulteration or
misbranding of food after receipt in interstate commerce. What
constitutes adulteration or misbranding is defined in the Act. Food
additives must be shown to be safe prior to their use in food. In
addition, drugs are often administered to animals through feed and
therefore, many animal feeds contain drug products and are called
medicated feeds. The drugs go through a pre-approval process, and the
medicated feeds must be manufactured in conformance with Current Good
Manufacturing Practices regulations to assure appropriate controls are
in place for the manufacture, processing, and distribution of the
medicated feeds. Generally, feed mills that use potent drugs that
require pre-slaughter withdrawal must be licensed by FDA to receive and
manufacture feed containing those drugs.
The regulation of animal feed, as with most FDA regulated
commodities, begins with inspection of the manufacturing and
distributing operations for feed and feed ingredients. The inspections
are physical and include discussion with management and employees;
plant walk through and observation of the processing; examination of
equipment, plant premises, and grounds; and, review of records.
Inspections are generally conducted biennially if certain potent drugs
are used, and on an as needed basis for other firms. FDA is not in the
plant at all times. However, we may conduct inspections multiple times
during the year if there is a need; for example, to follow-up on an
inspection that found violations of the law, to confirm that
commitments to compliance were implemented, or when new information
arises that indicates a possible violation of the law. We also work
cooperatively with our state counterparts who may also be conducting
inspections of a plant at various times throughout the year. We may
also collect samples for analysis during the inspection or at sales or
use locations.
FDA is notified of shipments of imported products. We may review
the incoming documents for the shipment, physically examine the
shipment, and collect samples for analysis. Products that are not
acceptable for distribution in the United States are refused entry. In
some circumstances, the owner may be able to recondition the product so
that it would be acceptable such as by making labeling changes where
the basis for refusal is improper labeling. FDA would monitor the
reconditioning and examine the shipment before permitting entry.
Under the BSE feed ban, certain mammalian proteins are deemed food
additives when used in ruminant feed; these are referred to as
prohibited material. They have not been shown safe for use in those
feeds and are therefore not permitted. Any ruminant feed containing
these proteins would be adulterated. For non-ruminant feeds that do
contain these proteins, the feed ban requires measures to prevent
commingling and cross contamination, record keeping, and caution
statement labeling.
FDA has taken a multipronged approach to enforcement of the feed
ban. FDA, in conjunction with the states and trade associations, has
done extensive education of the regulated industries. We also conduct
100 percent inspections of all renderers, protein blenders, and feed
mills, as well as a percentage of other firms such as distributors and
ruminant feeders. We have pursued enforcement action for firms that
have failed to bring their operation into compliance. As of May 2,
2003, 59 Warning Letters have been issued, and 42 firms have recalled
over 241 products. The Act provides additional enforcement tools
including seizure of violative product, injunction, and prosecution.
Currently, we are conducting inspections of all firms that handle
prohibited material annually. We also give priority for inspection to
any firm that was found out of compliance on the previous inspection
and any firm that we have information indicating possible violations
are occurring.
Additional enforcement activities include the development of a new
BSE Compliance Program with input from a wide range of FDA and state
officials, and two national meetings to introduce the Program. The
purpose of the Program is to provide complete instructions to FDA and
State investigators in conducting domestic BSE inspections and
evaluating imported animal feed products from BSE-at-risk countries.
FDA has also worked with a contractor to incorporate the BSE feed ban
inspection information into the FDA FACTS System providing increased
data integrity, increased ability to obtain information on the
inspection obligations and their status, and enhanced ability to
monitor compliance activities. Part of this database enhancement
included a new BSE inspection checklist to improve data reporting for
inspection. We have also trained field employees in the use of this new
checklist and on the present BSE regulatory strategy. FDA also
initiated training and installation of the Harvard BSE Risk Assessment
simulation to enable FDA to test proposed risk management strategies in
terms of the effects on the spread and the rate of disappearance of BSE
should BSE be accidentally introduced into the country. In addition,
FDA conducted a series of interagency tests of the FDA BSE Response
Plan, and a satellite-training course on the BSE Contingency Plan. FDA
revised the BSE Response Plan and published it on FDA's web site. FDA
presented a national satellite broadcast, entitled ``BSE Import Safety
Net'', to FDA, U.S. Customs Service and USDA inspection and compliance
personnel. FDA is still physically collecting and analyzing import
samples from known BSE countries identified as at-risk for BSE, for the
presence of mammalian protein; no processed protein should be coming in
from at-risk countries. This assignment to date has not found any
violations.
ADMINISTRATIVE SAVINGS
Question. FDA's fiscal year 2004 budget request is approximately
$24.5 million above the fiscal year 2003 appropriated level, not
including user fees. When looking at the budget, I was pleased to see
that the request includes increases for food safety, patient safety,
over-the-counter and generic drugs, and other increases totaling
approximately $79.5 million. However, in order to pay for these
increases, the budget proposes cuts of approximately $58 million. The
explanations for these cuts in the budget is very brief, and I would
like more information on them. The budget includes a cut of $28 million
for ``management savings'', and states that it will be accomplished by,
and I quote, ``reallocating resources, realigning and reorganizing
functions.'' What specifically does this mean, and how was this savings
amount formulated? What effect will this have on FDA employees?
Answer. FDA is supporting various administration and department
initiatives associated with the President's Management Agenda by
consolidating human and IT resources to achieve greater efficiencies
and economies of scale; consolidating the biologic therapeutic review
function into the similar drug review function to achieve greater
consistency and less duplication of effort, conducting outsourcing
studies and rightsizing to achieve cost savings and maximum
efficiencies; organizational de-layering for faster decision-making and
better communications; and, implementing a new financial management
system to provide agency managers with timely and consistent financial
information.
Organizational de-layering to achieve a flat, streamlined Agency
where decision-making and better communications exists is being
aggressively pursued. FDA is also consolidating its administrative
functions into a Shared Services Organization, SSO. The SSO concept
will allow FDA to provide administrative support functions to Agency
components to meet critical mission needs in the most efficient and
effective manner possible. These efforts will place the Agency in a
position to more effectively and efficiently meet the challenges of
providing better protection to consumers and promoting better health.
As a result of the planned efficiencies expected from the migrating
to shared services and results of our competitive sourcing initiatives,
we expect to realize the savings as depicted in the budget.
Question. The budget also states that IT infrastructure functions
are being consolidated, and the budget supports DHHS efforts to
``improve the HHS Information Technology Enterprise Structure.'' These
activities are resulting in a $29.5 million cut in FDA's budget. How
was this savings amount formulated, and how much of it is actually
showing up in the Department's fiscal year 2004 budget? Specifically,
what is not being done or funded in order to come up with this money?
Will we be seeing further ``IT savings'' in order to improve the DHHS
IT system?
Answer. IT consolidations will result in improved processes that
will ensure that the Agency commits to the right projects for the right
cost. FDA's budget request includes savings of $29.6 million in the IT
budget from both ongoing infrastructure consolidation efforts as well
as reduced expenditures through the consolidation, streamlining,
postponement or elimination of specific lower priority projects.
The Agency will fully implement its IT infrastructure consolidation
by October 2003, thereby reducing infrastructure expenditures in fiscal
year 2004 by $15.0 million. These reductions will be achieved, in part,
by the ability of the Agency's Chief Information Officer, CIO, to
exercise better control over IT decision making, including the
identification of inefficiencies as targets for reduction. The CIO will
also look for opportunities that, based on a sound business approach
using a rigorous cost-benefit analysis, would benefit from the
integration of new technology. As a further by-product of
consolidation, the Agency will also foster standardization of
management processes, thereby increasing the effectiveness of IT even
as FDA reduces overall costs. These improved processes will ensure that
the Agency commits to the right projects for the right cost.
Additionally, FDA will reduce spending on development of specific
IT systems across the entire Agency by $14.6 million. Managers of
information technology organizations allocated reductions to the
development of IT systems based upon one of three rationales for
increased efficiencies. First, consolidation of similar systems either
within FDA or the Department will provide savings in the cost of
contracts and government personnel while reducing unnecessary
duplication. Second, streamlining work processes and underlying IT
processes will provide additional savings. Some of the improvements to
IT processes will include better project management, more reliable
tools to estimate costs and schedules for use in improved contract
performance management, and consistent development practices. Third,
lower priority projects will be scaled back or eliminated where
reasonable to do so. The impact of reducing efforts on lower priority
projects will be mitigated by improvement in work processes achieved
through consolidation and streamlining efforts.
MEDICAL DEVICE USER FEES
Question. Dr. McClellan, as you're aware, last year the Congress
passed the Medical Device User Fee and Modernization Act, which
requires the medical device industry to pay a portion of the cost for
FDA to approve their products. Although I am not on the authorizing
committee that put this bill together, I understand that there are
requirements for certain levels of appropriated funding, and if this
funding isn't provided, the program sunsets after 5 years. I also
understand that FDA was consulted regularly when this bill was being
developed--and was supportive of it. However, I don't see any increase
in FDA's budget to help meet these appropriations targets. Further, I
have been told that FDA now needs an increase of $22 million in
appropriated funds this year, strictly for medical device review
activities, in order to meet its targets set by law. Why did FDA agree
to these appropriations targets if it had no intention of requesting
funding to meet them?
Answer. The Administration has to balance the many competing
demands of each component within the Federal government with the total
resources available. As a result, the fiscal year 2004 President's
budget request for the Food and Drug Administration fell below the
levels specified in MDUFMA. We support the goals of MDUFMA, and are
committed to making the medical device user fee program a success.
Question. If Congress provides FDA with the President's budget
request this year, please explain what effect that will have on the
implementation of MDUFMA--will FDA still be able to meet its
performance goals for this year?
Answer. The agency is committed to meeting the MDUFMA goals to the
maximum extent possible with the resources that are available. We want
the program to be as successful as the prescription drug user fee
program. We fully expect to meet the performance goals that apply for
fiscal year 2003 and fiscal year 2004--complete action on 90 percent of
the amendments containing complete responses to an ``approvable''
within 30 days. The more challenging MDUFMA goals do not take effect
until fiscal year 2005, and become increasingly more challenging each
subsequent year through fiscal year 2007. We have allowed more time
before these goals take effect because we will have to hire and train
additional staff to be able to meet these goals.
Question. Does FDA plan to request the necessary funding in the
future to meet the MDUFMA appropriations requirements in order to both
help FDA meet its performance goals, and to prevent the program from
expiring?
Answer. The agency looks forward to working with Congress and
industry to ensure the device user fee program is successful. FDA is
committed to meeting the performance goals, as stated in the goals
letter. Agency leadership has already begun discussions within the
Administration to find ways to fund this program to ensure its success.
Question. The President's fiscal year 2004 CDRH appropriations
request is $185 million, is a decrease of $9 million from the fiscal
year 2003 appropriated level of $193 million. At the same time, CDRH is
proposing to collect $16 million in collecting user fees in fiscal year
2004. One could assume from these facts alone that these user fees,
which were meant to be additive in nature, and not to replace
appropriated funds, are doing just that. Please explain.
Answer. One of the provisions of MDUFMA requires that the funds
from fees must be in addition to an appropriation amount that is as
great as the amount FDA spent on the device review process from
appropriations in fiscal year 2002--the year before MDUFMA went into
effect--adjusted for inflation. This provision is meant to assure that
appropriated resources available for device review are increased for
inflation each year, and that the funding from fees is over and above a
set level of appropriations, after adjustment for inflation. We are
committed to working with Congress and the Administration to ensure
that this intent of MDUFMA is realized. The reductions for the Device
and Radiological Health program reflect management savings and IT
consolidation, as discussed previously, and should not impact the
resources directly devoted to the review process.
SEVERE ACUTE RESPIRATORY SYNDROME
Question. We have all been reading the news stories and following
the development of SARS. So far, we in this country have been very
lucky, but just this week Secretary Thompson said that he believes we
will see SARS deaths here. Hopefully, though, the efforts of the FDA,
CDC, and other governmental and private entities will make us as
prepared as we can be in the event of an outbreak in the United States.
I read the statement that Dr. Lumpkin, the FDA Principal Associate
Commissioner, gave to a House Committee a few weeks ago, outlining
several steps FDA is taking in regard to SARS. This included working to
identify the virus, working on drugs to treat and vaccines to prevent
the virus, ensuring there are enough medical products available to deal
with SARS, and protecting our blood supply. Often, when emergencies
such as this arise, there is a need for supplemental funding beyond
what is in the budget. Please briefly describe for us the activities
FDA is undertaking in regard to SARS. Is there, or do you anticipate a
need for additional funding to help fully fund all of FDA's SARS-
related activities?
Answer. FDA is carefully tracking the scientific progress in
defining, treating and, ultimately, defeating SARS to ensure that all
FDA resources are aggressively and effectively deployed in the battle
against this new virus.
FDA's Center for Biologics Evaluation and Research--CBER--is
working with other government agencies and the private sector to
address many of the most difficult early issues in vaccine development.
As this program is in its infancy, much painstaking work must be
accomplished to assure that the development and manufacturing processes
meet the standards required to produce safe and effective vaccines
On April 17, 2003, FDA issued guidance to the Nation's blood
establishments on measures for further safeguarding the blood supply
against SARS including recommendations for deferral of certain donors.
FDA took this interim measure to assure the safety of the blood supply
while more is learned about the disease. At this time, it is unknown
whether SARS can be transmitted through blood. If tests are developed
that can detect SARS in blood, adaptation of those tests to screen
blood donations is likely and would be helpful. FDA will work with
manufacturers to facilitate the development of those tests. In
addition, manufacturers of products made from blood, for example
plasma-derived therapeutics, may need to evaluate their need for viral
inactivation methods to be sure that their processes are capable of
removing the virus. FDA will work with these manufactures to validate
and implement any new necessary processes as rapidly as possible.
FDA will continue to monitor this evolving situation and intends to
make any revisions or additions as needed to preserve the safety and
availability of the blood supply, based on the best available
information. For example, FDA's guidance may be modified based on
further scientific research on whether the causal agent of SARS may be
present in the blood of persons subject to this interim deferral. As in
any deferral decision, the need to evaluate the effect on supply also
must be considered.
FDA's Center for Devices and Radiological Health--CDRH--is working
with CDC, who along with others in the SARS Laboratory Network
organized by World Health Organization--WHO--is helping further the
scientific understanding of the virus. A diagnostic test for SARS,
based on the detection of RNA sequences in the novel coronavirus, is
currently under development along with an enzyme-linked immunosorbent
assay--ELISA--test for antibodies to the SARS-related virus. The first
of these tests, using polymerase chain reaction--PCR--technology, will
help with acute diagnoses of patients, while the ELISA test will be
used to confirm a case during or after convalescence. CDC developed
these prototype experimental reagents over the past 2 months in an
effort to address this unmet public health need. FDA rapidly reviewed
information for the investigational use of this test, and is working
closely with CDC to develop appropriate information for patients and
health professionals, and an approach for further evaluation of this
new test. This test methodology will be distributed to approximately
100 specialized laboratories around the country. Under the terms of
this test's wider distribution, patients and practitioners will receive
clear information about the test when it is used to assist in
diagnosing SARS. Hopefully, this information will facilitate the
development and evaluation of an approved diagnostic test as quickly as
possible.
CDRH is reaching out to industry to ensure that any development
plans for new tests are well designed and that premarketing
applications submitted to the Agency are of such quality that a
priority review can swiftly proceed. In addition, FDA has already
cleared or approved dozens of tests for use in differential diagnosis
of acute respiratory syndromes and has put in place a postmarket
surveillance program to measure how well these tests are working. These
tests do not diagnose SARS; rather they help to diagnose other
conditions that may have symptoms similar to SARS. In this way SARS can
be ruled out as the diagnosis in these patients. CDRH is also
monitoring the Internet to see if products are being sold with false
claims of detecting the SARS virus. If such products are found FDA will
take action to protect consumers from being harmed by them.
FDA's Center for Drug Evaluation and Research--CDER--is currently
working with the private sector and other governmental agencies to
identify drugs that may have utility in the treatment of SARS. CDER has
contacted pharmaceutical companies in order to help identify candidate
drugs with potential utility for the treatment of SARS. CDER has also
helped to facilitate communications between companies and other
governmental agencies--NIH and the U.S. Army Medical Research Institute
for Infectious Diseases, USAMARID--involved with the preliminary
evaluation of these drugs in screening tests. Sixteen drugs from nine
companies were identified as candidate drugs for preliminary testing to
evaluate whether the compounds have activity in vitro against the SARS
coronavirus.
CDER has worked closely with CDC on the development of an
investigational protocol for the treatment of patients with SARS. This
protocol provides a mechanism for patients with suspected SARS that
meet certain medical criteria to be treated with intravenous
ribavarin--an investigational antiviral drug not otherwise available.
The study provides a means for patients to receive intravenous
ribavarin, an agent that may have therapeutic utility for SARS.
CDER is working with NIH and CDC regarding the possible development
of a controlled clinical trial to critically evaluate the utility of
therapeutic agents for the treatment of SARS. Similar to CDER's
interactions to interactions with the CDC on CDC's protocol, CDER has
been in contact with members of the Collaborative Antiviral Study Group
and NIH in order to facilitate and expedite the review of any protocol
under development for the treatment of SARS.
CDER is involved in ongoing monitoring of the supplies of the drug
ribavarin, which is available in several formulations. This work allows
CDER to keep abreast of the current levels of ribavarin supplies in
order to be able to forecast how much drug may be available to meet
potential future clinical needs.
SARS was first detected after the budget was submitted to Congress,
and as a result, was not addressed in the request.
Question. Has funding been diverted from other activities because
of the SARS effort? If so, which activities?
Answer. In fiscal year 2003, the Center for Biologics Evaluation
and Research, CBER, is redirecting an estimated $1.3 million of its
resources to SARS-related activities. Many of the CBER staff who
currently perform regulatory policy, review and research are the same
staff who also focus on other areas such as West Nile virus, and
counterterrorism.
In fiscal year 2003, the Center for Devices and Radiological
Health, CDRH, is redirecting an estimated $200,000 of their resources
to SARS-related activities. CDRH redirected some of their efforts away
from routine premarket application review to address SARS-related
concerns and applications.
The Center for Drug Evaluation and Research, CDER, has not diverted
any funds from other activities for SARS efforts since this is part of
the CDER's Emergency Preparedness readiness efforts. The Center will
continue to promote and protect public health by assuring that safe and
effective drugs, including all SARS-related drug products, are
available.
BIOTERRORISM PREPAREDNESS AND RESPONSE ACT OF 2002
Question. The Bioterrorism Preparedness and Response Act of 2002,
the Bioterrorism Act, required FDA to implement several changes to
strengthen its' food safety regulations, including the development of a
system to register products manufactured abroad, by December 12 of this
year. Four major proposed rules have been published since January, and
I understand that approximately $12 million from fiscal year 2002
supplemental funding has already been spent on the registration system.
Further, the budget requests an increase of $20.5 million for food
safety, in part to fund the implementation of the new food safety
requirements and registration system. Specifically, what has the $12
million in funding been spent for, and what remains to be done on the
registration system?
Answer. FDA has allocated approximately $12.3 million from base
resources for the registration and prior notice systems in fiscal year
2003. Approximately $4.3 million of this funding is from the fiscal
year 2002 counterterrorism supplemental. Funds for the registration
system include hardware, software, and contractor services for the
design, development, testing, and implementation of the web-based
electronic registration system. The registration system funding also
includes funding for office space, hardware, software, and contractor
services for the design, development, and initial staffing for the
paper registration process, as well as the Help Desk for electronic and
paper registration. The Help Desk will also handle calls about use of
the prior notice electronic system also required by the Bioterrorism
Act.
The electronic registration system is currently being developed and
tested. A prototype has been successfully demonstrated to food industry
and foreign embassy representatives at four public meetings. The
project is on time, and the goal is to have the electronic registration
system operational by October 12, 2003 allowing 2 months for facilities
to register before the December 12, 2003 deadline. The paper
registration process has been designed. The design of the Help Desk and
the implementation of the paper process are in the final stages of
contract award. The Help Desk implementation will be awarded once the
design is completed.
The prior notice system has been allocated funds for infrastructure
design, procurement, setup, operations and maintenance of computer
system hardware, system/database software and licensing, and contractor
services for the design, development, testing, and implementation of
the web-based electronic prior notice system. Funding will also be
utilized for extensive enhancements required to the Operational and
Administrative System for Import Support, OASIS, system to support
prior notice.
The Bureau of Customs and Border Protection, CBP, is cooperating
with FDA to permit current filers to use the existing Automated
Commercial System, ACS, software to submit prior notice. FDA will
develop and maintain two separate interfaces. The first expands the
current Automated Commercial System--OASIS interface to incorporate the
requirements for prior notice. The second is the web interface to
capture prior notice for types of entries that have traditionally been
exempt from Customs entry--i.e. mail, low dollar value entries, etc.
FDA is integrating the prior notice requirements into the OASIS
import entry processing system and making modifications to FDA's OASIS
and Automated Commercial System interface. Additional modifications to
the data warehouse decision support system will support the matching,
standardization and validation of registration and prior notice
information, ensuring high quality, consistent data. Enhancements to
the automated import screening process to validate registration and
prior notice will support inputs from both the web-based system and
ACS. The existing entry review process in OASIS will be modified to
support manual review of food articles that do not pass the automated
screening processes. Prior Notice requirements will be met through
enhancements to the import reporting database.
The web-based electronic prior notice system prototype is on
schedule for completion the last week in July. The goal is to have the
web-based electronic Prior Notice system and the new ACS-OASIS
interfaces operational by the December 12, 2003 deadline.
In fiscal year 2004, FDA has requested $10.5 million of the $20.5
million for operations and maintenance costs of the registration and
prior notice systems, for hardware and software maintenance,
telecommunications, facility lease, and contract labor. The request
also includes funding for operations and maintenance of the labor-
intensive paper registration system and combined Help Desk.
Question. How has FDA been working with industry and consumer
groups to make sure that these rules are as stringent as necessary
while not excessively burdensome?
Answer. President Bush signed the Public Health Security and
Bioterrorism Preparedness and Response Act of 2002--the Bioterrorism
Act--Public Law 107-188, into law on June 12, 2002. The Bioterrorism
Act requires the Secretary of Health and Human Services, acting through
the Food and Drug Administration FDA, to develop regulations by
December 12, 2003, to implement Section 305--Registration of Food and
Animal Feed Facilities--and Section 307--Prior Notice of Imported Food
Shipments. If FDA fails to issue final regulations by December 12,
2003, the Bioterrorism Act still requires domestic and foreign
facilities to register with FDA by this date, and requires FDA to
receive prior notice of imported food shipments of not less than 8
hours or more than 5 days beginning December 12, 2003. The Bioterrorism
Act further specifies that imported food from unregistered facilities,
or food offered for import without adequate prior notice, must be held
at the U.S. port of entry until the facility is registered and/or FDA
has received adequate prior notice. The Bioterrorism Act requires FDA
to develop and issue final regulations by December 12, 2003, to
implement section 306--Establishment and Maintenance of Records. FDA is
developing a regulation to implement the expedited enforcement
procedures for perishable foods required by Section 303--Administrative
Detention. Both HHS and FDA are committed to meeting the statutory
deadlines in the Bioterrorism Act, and FDA has been devoting extensive
resources to this effort.
By typical rulemaking standards, the statutory timeframes for
having final rules in effect within 18 months of enactment is an
expedited one. To ensure the registration and prior notice rules can
take effect by December 12, 2003, FDA is required to propose rules,
take comment, and publish final rules within 16 months of enactment.
Notwithstanding this ambitious time frame, FDA recognized the
significant impact these regulations could have on its stakeholders,
both domestic and foreign. Accordingly, FDA began its outreach
activities for developing these regulations by issuing a ``Dear
Colleague'' letter to stakeholders, including states, foreign
embassies, trade associations, industry, sister agencies, and consumer
groups. The letter explained the new regulatory requirements in the Act
and FDA's timeline for implementing them. The letter also invited
stakeholders to submit comments to FDA by August 30, 2002, that FDA
committed to considering as we developed the proposed rules. We
requested comments on stakeholders' areas of concern and suggestions
for addressing them while meeting the statutory requirements.
In July and August, FDA also held six constituent briefings with
stakeholders that approximately 88 organizations, 36 embassies, 52
organizations attended. During these public meetings, FDA explained the
provisions in the Bioterrorism Act, and again solicited comments by
August 30, 2002. In addition, FDA opened a public docket for each
regulation to receive these comments. FDA received over 150 comments
during this early comment period that we considered as we developed the
proposed regulations. Comments were submitted by 24 trade associations,
8 foreign embassies, 7 foreign countries, 17 individual companies, 8
consumers and consumer groups, and 2 other agencies or state
associations. FDA also met with officials at HHS and the Office of
Management and Budget, OMB.
Beginning in September 2002, FDA senior staff with responsibility
for developing the regulations began weekly meetings with their
counterparts within the Department of Treasury, U.S. Customs Service,
to discuss implementation of the Bioterrorism Act's provisions,
particularly with respect to the registration and prior notice
rulemakings. The input we received from Customs is reflected in the
proposals that FDA developed.
In September and October 2002, FDA briefed HHS and OMB officials,
respectively, on FDA's concepts for the proposed regulations and
obtained early feedback before we began drafting the proposed rules. In
mid-November 2002, FDA then briefed the other Federal agencies who had
stakeholders potentially affected by the proposed rules and/or who had
an interest in the safety and security of the U.S. food supply to
explain the proposed rules, prior to sending the draft proposed rules
to DHHS and OMB. As part of its review under Executive Order 12866, OMB
sent both draft rules to other Federal agencies for review and comment,
and forwarded all the comments it received from those agencies, as well
as its own comments, to FDA for consideration. FDA made changes to the
draft proposed rules to address the comments we received.
FDA sent the proposed registration and prior notice rules to the
Office of Federal Register on January 29, 2002, where they were placed
on immediate display. We also posted the proposed rules on our website
on this date. The rules were officially published jointly by FDA and
the Department of Treasury on February 3, 2003, 68 FR 5378 and 68 FR
5428, respectively with a 60-day comment period. The comment period
closed on April 4, 2003. FDA currently is reviewing the comments and
determining what changes should be made to the rules before finalizing
them. HHS' and FDA's goal is to publish the final rules by October 10,
2003, which will allow them to take effect under the Congressional
Review Act by the statutory deadline of December 12, 2003. FDA can
begin accepting registrations from facilities upon OMB approval and the
publication of the final regulation so that if FDA publishes the rule
as planned, facilities will have 2 months to register before the
statutory deadline.
FDA also published notices of proposed rulemaking in the Federal
Register to implement sections 303 and 306 on May 9, 2003, see 68 FR
25241 and 68 FR 25187, respectively. The deadline for comment on these
proposed rules is July 8, 2003. During the public comment period,
members of the public--both domestic and foreign--can submit comments
and supporting data for the Agency to consider as we develop the final
rules. FDA is committed to working with our stakeholders as we develop
all four of these regulations, and we will comply fully with our
international trade obligations, including the applicable World Trade
Organization agreements and the North America Free Trade Agreement.
FDA has taken extraordinary steps to reach out to both our domestic
stakeholders and our international partners to advise everyone about
the proposed rules. To date, FDA senior officials and staff have
participated in over 80 meetings, both domestic and abroad. In
addition, the Foreign Agricultural Service at the United States
Department of Agriculture has held multiple meetings in the countries
in which they are located to explain the new requirements. Other
international organizations, such as the Inter-American Institute for
Cooperation on Agriculture in Costa Rica, also have held meetings using
FDA's documents and other outreach materials. We have received numerous
compliments from all affected parties on our efforts to reach out to
affected stakeholders, explain the new requirements in the Bioterrorism
Act and FDA's proposed rules implementing them, and to solicit their
comments.
FDA began by holding a public meeting, via satellite downlink, to
discuss the registration and prior notice proposed regulations on
January 29, 2003, 1:00-3:00 p.m. EST. Nearly 1,000 participants in
North and South America, and the Caribbean viewed the live broadcast.
The meeting was later re-broadcast to Europe to Asia, Africa, and the
Pacific. FDA held a similar public meeting, via satellite downlink, to
discuss the recordkeeping and administrative detention proposed
regulations on May 7, 2003, 1:00-3:00 p.m. eastern standard time.
Participants in North and South America, and the Caribbean viewed the
broadcast live. The meeting was re-broadcast to Europe to Asia, Africa,
and the Pacific. Transcripts of both broadcasts, as well as copies of
the videotape itself, are available on FDA's website in English,
French, and Spanish.
FDA has developed fact sheets, talking points, and a Powerpoint
presentation presenting an overview of the proposed rules in English,
French, and Spanish that others may use to help communicate the
requirements of the proposed rules. These materials also are posted on
FDA's website. In addition, as stakeholders translate these materials
into additional languages, FDA posts the additional translations on our
website. Currently, there are approximately ten different language
versions available for some of these materials, including Ukrainian,
Slovene, Serbian, Russian, Romanian, Polish, Hungarian, Czech,
Croatian, and Bulgarian.
FDA also has been working with several sister agencies to ensure a
broad dissemination of information and outreach materials, specifically
those addressing international outreach. These agencies include the
United States Trade Representative, USTR, the United States Department
of Agriculture, Foreign Agricultural Service, FAS, the Animal, Plant
Health Inspection Service APHIS, and the Grain Inspection, Packers and
Stockyards Administration, GIPSA, the Department of State, the
Department of Commerce, and the Bureau of Alcohol, Tobacco, and
Firearms, within the Department of Treasury. This collaboration led to
the development of the fact sheets on the legislation and a flyer on
registration that were circulated to FAS officers abroad, an
informational email and cable to the posts, fact sheets on the two new
proposed rules, press releases, transcripts, and a computer disk that
FDA will include in packets sent to FAS officers. These materials will
be used by embassy staff to actively and aggressively disseminate
information on the legislation and the proposed rules at trade shows,
industry meetings, and as a regular part of their interaction with our
trading partners.
In addition to the above outreach activities, FDA has attended
numerous meetings both domestically and abroad during the public
comment periods on the rules to ensure both that affected parties are
aware of the proposed requirements and can provide meaningful comments
to FDA for the agency to consider as we develop the final rules. These
interactions have been invaluable for both stakeholders and for the
agency to hear firsthand the suggestions from affected parties.
FDA is taking steps to implement the statute with provisions that
are as stringent as necessary while not excessively burdensome. During
our development efforts at both the proposed and final rule stages, we
estimate the costs and benefits for several regulatory options of
varying degrees of stringency. These options vary both the number of
regulatory requirements and the coverage of the regulation, and provide
varying benefits. We published our cost-benefit analyses for many of
these options in the proposed rule and solicited comment on them. In
response to comments we received during the public comment period that
ended on April 4, 2003, we are revising the cost-benefit analysis of
some of the options we presented in the proposal and adding some new
options. This presentation of options allows FDA and HHS to see the
trade-offs between costs and benefits of various regulatory options,
which in turn allows them to choose the regulatory option that most
completely supports the statutory requirements with provisions that are
as stringent as necessary while not excessively burdensome. We also
fully consider our obligations under international treaties and
agreements to ensure that we implement the statute in a way that is not
more burdensome than necessary.
Also, since the beginning of our regulatory development efforts,
FDA has collaborated with U.S. Customs on the implementation of this
rule. Both the registration and prior notice proposed rules were co-
signed by the Department of Treasury and the Department of Health and
Human Services. During our discussions preceding issuance of the
proposed rule and as stated therein, Customs had informed FDA that it
could not modify its existing Automated Commercial System, ACS, by the
statutory deadline to receive the mandatory prior notifications. As a
result, FDA began development of a stand-alone system that would
receive the prior notices. The two agencies have continued our
collaboration, and recently issued a joint press release in which we
announced that importers, in most circumstances, will be able to
provide the required information to FDA using ACS, making it easier for
them to comply with the new law. As we continue our work to finalize
the rule, we continue to meet weekly with Customs to streamline the
requirements and implementation to the fullest extent feasible in a
continued effort to make the rule no more burdensome than necessary.
Question. Are further increases anticipated in future years as
these rules go into effect?
Answer. Out-year budget plans have not been developed, and we will
continue to balance competing priorities when requesting funding.
During fiscal year 2005, FDA will be implementing its Import
Strategic Plan which will mesh with the Prior Notice and Registration
Systems. As the Agency gains experience with the Import Strategic Plan,
the experience will inform our budget recommendation.
GENERIC DRUGS
Question. Dr. McClellan, last year, the Senate included a $750,000
increase above the President's request in order to decrease the FDA
review time for generic drugs, and requested a report on what types of
information should and should not be in the FDA ``Orange Book.'' This
year, the FDA budget request includes an increase of $13 million to
hire additional employees to reduce review times and support the
implementation of improved regulations governing generic drug
competition. What is the status of the ``orange book'' report?
Answer. The ``orange book'' report to Congress is currently in the
clearance process. However, on October 24, 2002, the Agency published
its proposed rule, ``Applications for FDA Approval to Market a New
Drug: Patent Listing Requirements and Application of 30-Month Stays on
Approval of Abbreviated New Drug Applications Certifying That a Patent
Claiming a Drug is Invalid or Will Not be Infringed.'' The comment
period has closed and the final rule is expected to publish soon.
In this proposed rule, the Agency proposed to amend its patent
submission and listing requirements for NDAs. The proposed rule
clarified the types of patents that must and must not be submitted for
listing and revised the declaration that NDA applicants must provide
when submitting their patents for listing to help ensure that NDA
applicants only submit appropriate patents and therefore make the
patent listing process more efficient.
The proposal also would revise the regulations regarding the
effective date of approval for ANDAs and certain applications submitted
under section 505(b)(2) of the Federal Food, Drug and Cosmetic Act. If
the ANDA or 505(b)(2) application contains a certification that a
listed patent is invalid or will not be infringed and the patent owner
or NDA holder brings a suit for patent infringement, the approval of
that application is delayed up to 30 months while the litigation is on
going. Currently there is the opportunity for multiple 30-month stays
of approval. The proposal would permit only one opportunity for a 30-
month stay per application that will streamline the ANDA and 505(b)(2)
application approval process.
Question. What are the specific goals for review times, if this
increased funding is provided?
Answer. The proposed increase in the FDA's generics budget will
allow FDA to hire 40 experts in its generic drugs program to review
generic drug applications more quickly and initiate targeted research
to expand the range of generic drugs available to consumers. It is our
goal to complete review and action upon original generic drug
applications, accepted for filing, within 6 months after the submission
date 85 percent of the time for fiscal year 2004.
FDA also has begun internal reforms to improve the efficiency of
its review process for generic drugs. In particular, FDA is
implementing a new system of early communications with generic drug
manufacturers who submit applications. FDA also will provide additional
guidance for generic manufacturers preparing and submitting quality,
complete applications.
Studies of the FDA processes for new drugs indicate that such
communications and guidance can improve drug applications and allow
deficiencies to be corrected during the initial review, rather than
having to wait for additional review cycles to fix problems. In
addition, generic manufacturers have expressed interest in finding ways
to improve the quality of their applications, so that more applications
can be approved on the first round of review. The new resources and
other reforms are expected to reduce the total time to approval for
most new generic drugs by 3 months or more over the next 3 to 5 years.
Because these changes will generally accelerate the approval for all
generic drugs, most Americans who take generic drugs will benefit.
The FDA also will expand its educational programs and partnerships
involving generic drugs, to help consumers get accurate information
about the availability of generic drugs for their health needs and to
help ensure that consumers are aware that FDA-approved generic drugs
are as safe and effective as their brand-name counterparts. FDA will
also undertake more scientific studies of generic drug
``bioequivalence'' to expedite the determination of whether the generic
copy of a drug works in the same way as the original product, and will
enhance monitoring of the safety of generic drugs on the market.
DRUG PRICES
Question. Dr. McClellan, you mentioned several times during your
exchange with Senator Dorgan the need for this country to find a way to
provide safe, effective, FDA-approved drugs to the American people at a
low cost, both through the Medicaid and Medicare programs. Recently,
the Supreme Court ruled that the state of Maine could use their power
as a bulk purchaser of drugs for Medicaid patients to bargain with drug
companies to make cheaper drugs available to the state's non-Medicaid
population. Currently, there is some controversy around this decision,
and Secretary Thompson has apparently not yet decided what course of
action to take. It seems that Maine has perhaps found a way to do just
what you suggested in your testimony--providing safe, effective, FDA-
approved drugs at a lower cost to its' population. If the Secretary
asked for your opinion on whether or not he should allow Maine to do
what they have proposed, how would you respond?
Answer. If Secretary Thompson were to ask my opinion on this issue,
I would tell him that if he concludes that the Maine proposal is
appropriate and legal under the Medicaid and Medicare programs, there
is nothing to suggest that the safety and effectiveness of the FDA-
approved drugs purchased under the program would be compromised.
PRODUCT RECALLS
Question. Recently, several lots of the popular drug Lipitor were
recalled. I have been contacted by constituents, who, upon hearing of
the recall, called their pharmacists to determine whether or not their
product was included in it, and whose pharmacists were not aware that
any product had been recalled. When a product is recalled, what
responsibility is held by the FDA, the drug manufacturer, the
pharmacists, and others who may be involved in the production or
delivery of the drug, in order to make sure that the message gets to
consumers quickly?
Answer. FDA assesses each recall situation on an individual basis
to determine what type of public notification is necessary, taking into
account factors such as the degree of health hazard, the type and scope
of distribution, and the likelihood that product remains on the market.
At a minimum, FDA publishes a Weekly Enforcement Report that includes a
listing of each new recall after it has been classified, which can take
some time. This weekly report is made available to the media and is
posted on FDA's public web site, www.fda.gov, under the heading
``Safety Alerts and Recalls.''
When FDA determines that a product being recalled presents a
serious hazard to health that requires a public warning, FDA ordinarily
gives the recalling firm an opportunity to issue such a public notice,
requesting that FDA be given the opportunity prior to its issuance to
review and comment on its adequacy. If the recalling firm cannot or
does not issue a public warning when deemed necessary by FDA, then FDA
issues such a public notice itself. The Federal Food, Drug, and
Cosmetic Act does not give FDA the authority to order a drug firm to
recall a product or to issue a public warning, so such actions are
voluntary on the part of the firm. The nature of the public notice will
vary depending on the circumstances. For example, it might be a general
public warning through the general news media, either national or local
as appropriate, or it might be through specialized news media such as
professional or trade press, or to specific segments of the
distribution chain such as pharmacists, doctors, or hospitals. For
Class I recalls, which represent the most serious degree of health
hazard and usually involve a public warning, the warning notices are
also promptly posted on FDA's web site under ``Safety Alerts and
Recalls.''
Recalling firms are usually the company responsible for the
distribution of the violative product in interstate commerce. In most
cases the recalling firm is also the manufacturer, but it may be a
distributor, especially if the product has been imported or distributed
by someone other than the manufacturer. The recalling firm has the
primary responsibility to issue any necessary public warning as well as
issuing the recall notification to their direct accounts, to whom it
shipped the product. Direct accounts, generally wholesale distributors,
are usually requested to notify their customers--e.g., chain stores--
down to the retail level--e.g., pharmacies. Recalls of products that
have the potential to present a serious health risk, such as
counterfeit drug products, are normally extended to the user or
consumer level. In such a case, because recalling firms do not have
information on the identity of the consumer, the recalling firm is
usually expected to issue an appropriate press release, as described
above, to alert the public so that it is aware of the hazard and can
take the necessary steps to remedy the situation.
FDA works closely with the recalling firm to ensure that it
conducts an effective recall. To this end, FDA may issue a statement on
the recall, especially on a prescription counterfeit drug, to warn
physicians, pharmacists, nurses, and all other health care
professionals, trade groups, and consumers that a counterfeit drug may
be on the market. In this situation with counterfeit Lipitor, the
distributor Albers Medical Distributors, Inc. issued a recall notice on
May 22, 2003, and FDA issued two talk papers on May 23, 2003, and June
3, 2003, to alert the public. In addition, Pfizer, Inc. issued a news
release on June 3, 2003, to further notify U.S. pharmacists of the
counterfeit Lipitor.
Question. Are there different procedures in place for different
types of recalls (i.e. different types of products or the danger posed
by the recalled product)?
Answer. Although the basic recall procedures are the same, the
specific details on how a recall is handled vary with the
circumstances. For each recall, a specific recall strategy is developed
by FDA, or by the recalling firm with FDA's review of the adequacy of
the strategy. The strategy takes into account factors such as FDA's
evaluation of the health hazard, the type of the product and how it is
used, the distribution pattern, the degree to which product is expected
to remain on the market, the degree to which the product and the
deficiency is easily identifiable, and the possible need for continued
availability of essential products. For each recall, the strategy
addresses the depth of the recall--e.g., wholesale, retail, or consumer
level-the possible need for a public warning and what form it needs to
take, what method and level of effectiveness checks the recalling firm
will conduct at consignees, what audit checks FDA will conduct, and any
other recall implementation factors.
The specific strategy and the urgency of a specific recall vary
considerably depending on FDA's assessment of the health hazard
involved. FDA assigns a numerical recall classification--i.e., I, II,
or III-to each particular product recall to indicate the relative
degree of health hazard presented by the product being recalled. Class
I is a situation in which there is a reasonable probability that the
use of, or exposure to, a violative product will cause serious adverse
health consequences or death. Class II is a situation in which use of,
or exposure to, a violative product may cause temporary or medically
reversible adverse health consequences or where the probability of
serious adverse health consequences is remote. Class III is a situation
in which use of, or exposure to, a violative product is not likely to
cause adverse health consequences.
Although the recall health hazard classification heavily influences
the recall strategy, the recall classification does not automatically
trigger a public warning or a particular depth of recall. For example,
although in practice most Class I recalls are determined to warrant a
public warning, such a warning may not be appropriate or necessary if
the distribution of the article was quite limited, easily identified,
and all units can be quickly and effectively retrieved. Some Class II
recalls may be found to require a public warning, whereas others may
not. FDA would not usually expect Class III recalls to require public
warnings, but it is possible a recalling firm might voluntarily issue
such a notice on its own volition. Each recall has to be evaluated on a
case-by-case basis and decisions on the recall strategy must be
appropriate to the particular situation.
MEDICAL GASSES
Question. Dr. McClellan, as I understand it, FDA has now issued one
draft guidance that addresses the general good manufacturing practices
(GMPs) that apply to the medical gas industry, and is still working on
another draft guidance that will be specific to the validation of air
separation units (ASUs). Can you tell me the status of your efforts?
Answer. The Agency has issued the medical gas cGMP guidance
document and is currently in the process of developing draft guidance
on the validation of ASU requirements. The guidance development process
will be consistent with the Agency's good guidance practices and will
allow for extensive industry input and interaction. In fact, the Agency
has already met with the Compressed Gas Association, CGA, on March 7;
April 18; June 18; July 11; August 29; November 6, 2002, and on
February 12, 2003, to discuss technical ASU validation issues including
risk-models. We will continue to meet and solicit the industry's input
on technical issues as we develop the ASU guidance document. Once draft
guidance is issued, there will be a comment period, and the Agency will
review and seriously consider all comments received during the comment
period before finalizing the guidance.
Question. Is the FDA utilizing a risk-based approach with respect
to both guidances?
Answer. These guidances are based on extensive input and comments
received from industry over several years, and includes risk-based
thinking on these issues. There will be ample opportunity for comment
and meetings with stakeholders before final guidances are developed to
ensure that the available scientific evidence is fully considered in
our efforts to develop a risk-based approach on this topic.
Question. It is also my understanding that the medical gas industry
has developed a consensus risk-based model for ASU validation that will
be the basis for a new industry standard. Can you tell me whether FDA
plans to use the industry model or perform an independent risk
assessment as the basis for the ASU guidance recommendations?
Answer. The Agency has met extensively with the Compressed Gas
Association, CGA, and discussed the industry's proposed risk-based
model for ASU validation. The agency found those meetings to be very
valuable and productive, and a shared understanding was achieved on
many issues that will be reflected in the draft guidance that the
Agency intends to develop on the subject. The draft guidance will
reflect a risk-based approach, including important aspects of the model
that was discussed. There will be further opportunities to discuss this
matter to ensure that any unresolved issues can be fully considered
before the conclusion of the guidance development process.
COLOR CERTIFICATION
Question. I understand that, under the FFDCA, the FDA certified
color regulatory program is paid for by an industry user fee. I have
been contacted by a company located in Wisconsin that participates in
this user fee program. They state that the FDA has moved this program
into significantly larger and more expensive space, even though there
has been no increase in programmatic responsibilities or staff.
Specifically, they claim that while the color certification program
used to run out of 10,000 square feet of space at a cost of $20 per
square foot, they have moved to a new, 35,000 square foot space at a
cost of $52 per square foot. Also, security costs have increased from
$10,000 in previous years to over $300,000 this year. Further, it is my
understanding that in previous years these companies have received a
rebate from the FDA for unused funds, and that these rebates, which
some companies had come to depend on, will no longer be given.
What is the justification for moving to this larger, significantly
more expensive, space? What is the justification for the increase in
the security costs?
Answer. The General Services Administration, GSA, required FDA to
vacate Federal Building 8 by December 31, 2002, and to prepare that
building for other uses. FDA was forced to set up a temporary location
for the color certification function while new space is being made
available in College Park, Maryland. GSA had only one facility
available for FDA for this purpose in Chantilly, Virginia. The color
certification staff moved from Federal Building 8 to the interim space
in Chantilly, Virginia in October 2002. While the Federal Building 8
space housed a majority of CFSAN staff including color certification,
the Chantilly space is solely for work done by the color certification
staff. The interim space provided by GSA is larger than FDA requested;
unfortunately, there is not an easy way to divide the space so that FDA
could use less. FDA's Associate Commissioner for Management and Systems
visited the space to review the situation. In fiscal year 2003, FDA
will have to use funding in the color certification account to pay for
approximately $1.8 million in rent and related costs for the Chantilly
location and about $1.5 million for buildout for College Park. The
first phase of the move of the color certification operation from
Federal Building 8 to interim space in Chantilly, Virginia took place
November 2002 and the second and final phase was completed in December
2002. FDA senior management has met with industry staff more than once
to review these costs.
When the color certification program was housed at Federal Building
8, a proportionate share of security services at Federal Building 8 was
applied to the color certification program. In contrast, the interim
office in Chantilly is used only for the color certification program.
In fiscal year 2003, after the events of September 11, all Federal
facilities have new security requirements. For both of these reasons
the security costs applicable to the certification function have risen
significantly.
The fees for certification of colors have not been raised since
1993. Consequently, FDA's fee income for this function has been
relatively steady. Naturally, as the employees receive pay raises, and
as general inflation affects other costs, FDA's costs tend to rise
gradually over time. During fiscal year 2002, FDA made a refund to the
industry of $1 million in fees that had been collected over a period of
years but were not needed by the agency at that time. This was in part
due to the fact that FDA's rent costs related to this function were
reduced in fiscal year 2001 due to GSA reducing the overall rent cost
for Federal Building 8; the costs to this fund were reduced further in
fiscal year 2002 because GSA did not charge FDA rent for the building,
but only utilities costs and other costs of operating the building.
Combined, this Fund saved about $800,000 in space costs during fiscal
years 2001 and 2002 due to these cost reductions.
In fiscal year 2003, however, FDA has had to incur significantly
higher rent costs for a temporary laboratory for this function in
Chantilly, VA, and has also had to provide funding to GSA for the
buildout costs of a building in College Park, Maryland, near the
present Harvey Wiley building occupied by FDA. This additional building
is being prepared to house the color certification function on a
permanent basis.
While FDA currently expects to have sufficient funds in this
account to be able to absorb these costs during fiscal year 2003, the
agency will not have any funds with which to make any refund to the
industry. It should also be noted that refunds of fees are not a
regular event--before the refund made during fiscal year 2002, the last
prior refund was in 1990.
Question. What effect is this going to have on the amount of the
user fees that the color certification industry is required to pay?
Answer. For fiscal year 2002, the fee income in this fund was about
$5 million, and expenses were only about $4 million because the fund
had very low costs for space since the agency was not being charged
rent for Federal Building 8. However, in fiscal year 2003, we expect
total expenses to be about $7.5 million, while income remains around $5
million. Therefore, most of the surplus money in this fund will be
depleted. For fiscal year 2004, projected expenses for this activity
are estimated at about $6 million. The agency expects to need to raise
the fees for color certification, because the current level of income
is not enough to meet the costs of the function on a continuing basis.
Question. As the sole provider of funding for this new space, was
the industry consulted prior to the move?
Answer. Yes. FDA senior management has met with industry staff more
than once to review these costs. In fact, when FDA staff met with
industry representatives prior to the refund that was made to industry
during fiscal year 2002, we explained that there would be some
substantial costs due to this necessary relocation of the program. At
the meeting industry representatives were notified that we would be
moving to interim space and funds to cover buildout costs for the
permanent facility would also be required.
Question. Do you believe the sole responsibility for paying for
what, at first glance, appears to be unnecessary increases in space and
security costs, should lie with the color certification industry?
Answer. The law requires that the fees support all costs of the
color certification function, and the agency is using fees that have
been built up in this account to meet the increased facilities costs
being incurred in fiscal year 2003. The agency did make a refund to the
industry of $1 million during fiscal year 2002, but it is not possible
to make another refund now during fiscal year 2003 without jeopardizing
FDA's ability to keep a reasonable amount of funds in this account to
assure continued service to the color industry. The agency expects to
have a balance in this account on September 30, 2003, of only about $1
million in total.
Question. How has the FDA responded to the concerns of the color
certification industry?
Answer. FDA senior management has met with industry staff more than
once to review these costs. In fact, when FDA staff met with industry
representatives prior to the refund that was made to industry during
fiscal year 2002, we explained that there would be some substantial
costs due to this necessary relocation of the program. Also, it is
likely that the fees will need to be raised at some point during fiscal
year 2004, and the agency has informed the industry's representatives
of that likelihood. During a meeting with industry representatives in
December 2002, all costs for the program were explained.
Question. What is the FDA's plans regarding a rebate for this
industry, and if one is not going to be provided, why?
Answer. During fiscal year 2002, FDA made a refund to the industry
of $1 million in fees that had been collected over a period of years
but were not needed by agency at that time. This was in part due to the
fact that FDA's rent costs related to this function were reduced in
fiscal year 2001 due to GSA reducing the overall rent cost for Federal
Building 8; the costs to this fund were reduced further in fiscal year
2002 because GSA did not charge FDA rent for the building, but only
utilities costs and other costs of operating the building. Combined,
this Fund saved about $800,000 in space costs during fiscal years 2001
and 2002 due to these cost reductions.
In fiscal year 2003, however, FDA has incurred significantly higher
rent costs for a temporary laboratory for this function in Chantilly,
VA, the only facility GSA had available for this purpose. FDA has also
had to provide funding to GSA for the buildout costs of a building in
College Park, Maryland, near the present Harvey Wiley building occupied
by FDA. This additional building is being prepared to house the color
certification function on a permanent basis.
While FDA currently expects to have sufficient funds in this
account to be able to absorb these costs during fiscal year 2003, the
agency will not have any funds with which to make any refund to the
industry. It should also be noted that refunds of fees are not a
regular event--before the refund made during fiscal year 2002, the last
prior refund was in 1990. Also, it is likely that the fees will need to
be raised at some point during fiscal year 2004, and the agency has
informed the industry's representatives of that likelihood.
BLOOD SAFETY
Question. Dr. McClellan, according to a December 2002 Associated
Press report, FDA found more than 200 safety violations by the blood-
collecting unit of the Red Cross, and has asked a court to hold the Red
Cross in contempt for several years of safety violations. It is my
understanding that FDA and the Red Cross are now working to improve the
safety standards of the Red Cross. Can you please provide me with
information on how FDA is working with the Red Cross to improve their
safety standards?
Answer. Since May of 1993, the American Red Cross-ARC-has been
under a Consent Decree of Permanent Injunction that required ARC to
establish clear lines of managerial control over a newly established
comprehensive quality assurance system in all regions; to enhance
training programs; and to improve computer systems, records management,
and policies for investigating and reporting problems, including
adverse reactions. In August 2000, concerns arising from an inspection
of ARC's national headquarters for blood services revealing that ARC
had not adequately corrected serious violations of blood supply rules
recurring over the past 17 years prompted FDA to begin negotiations
with ARC to revise the 1993 Decree.
After extensive discussions and mediation efforts, ARC agreed to
sign an Amended Consent Decree of Permanent Injunction, containing
substantial revisions to the original Consent Decree designed to
improve safety standards at ARC. The Amended Consent Decree, which the
United States District Judge signed on April 15, 2003, is the
culmination of these negotiations.
The Amended Consent Decree includes the important substantive
provisions from the original Decree, and updates them to provide a
series of clear deadlines for completing specific requirements of the
Decree. Importantly, the provisions were also revised to address
additional types of violations observed since the original Decree was
signed in 1993. The Amended Decree also includes a comprehensive
financial penalty scheme that requires ARC to pay substantial financial
penalties if, in the future, ARC fails to comply with FDA laws and
regulations aimed at ensuring the safety of the Nation's blood supply.
FDA expects that ARC will concentrate fully on responding to the
Agency's concerns about blood safety, and to its responsibilities as a
major supplier of the Nation's blood, by implementing the systems
required by the Amended Consent Decree. By doing so, ARC will avoid the
need for FDA to use financial penalties to force ARC to improve its
operations, to promptly correct problems when they are discovered, and
to take action proactively to prevent further violations from
occurring.
HOMELAND SECURITY
Question. How many FTEs are currently on detail to the Department
of Homeland Security?
Answer. No FDA staff are on detail to the Department of Homeland
Security. However, FDA is working extensively with the Department of
Homeland Security. We participate in regular interagency meetings with
DHS on food security issues and also agriculture security issues that
involve the Department of Agriculture.
Question. How long is the average detail to DHS?
Answer. Currently, FDA does not have any employees detailed to the
Department of Homeland Security.
Question. What effect, if any, is this having on the workload of
employees at FDA? Are there effects on performance?
Answer. The workload of FDA employees and Agency performance levels
will not be affected by work being conducted in collaboration with the
Department of Homeland Security.
______
Questions Submitted by Senator Tom Harkin
SHELLFISH
Question. Two years ago the GAO reported to Senator Lugar and me
about the failure of FDA and the Interstate Shellfish Sanitation
Conference to adequately protect consumers from unsafe shellfish. The
FDA continues to fund campaigns to educate vulnerable consumers about
avoiding raw Gulf Coast shellfish that may be contaminated by deadly
Vibrio vulnificus bacteria. Those efforts have failed, in part because
they failed to inform consumers which shellfish were safer to eat, such
as those harvested from colder waters or even Gulf Coast shellfish that
were processed to eliminate deadly bacteria. Will you work with the
ISSC to ensure that future campaigns will inform all consumers that raw
shellfish harvested from cold waters and processed Gulf Coast shellfish
are safer than raw, unprocessed Gulf shellfish harvested during warmer
months?
Answer. We continue to believe that immuno-compromised individuals
should avoid raw animal protein generally, including raw molluscan
shellfish. Immuno-compromised persons should only eat molluscan
shellfish that are fully cooked because there can be viruses or other
pathogens in raw seafood that are potential risks to immuno-compromised
persons in addition to Vibrio vulnificus. Consequently, FDA education
efforts and the current Interstate Shellfish Sanitation Conference,
ISSC, education efforts advise immuno-compromised individuals to avoid
raw molluscan shellfish.
Moreover, the issue of differentiating some oysters from others is
complicated. For example, we have been working with ISSC to increase
the number of oysters that have been processed to kill Vibrio
vulnificus. However, we have been advised by the ISSC that doctors in
Texas declined to dispense ISSC education materials that suggested that
their immuno-compromised patients could safely eat oysters that had
been processed to kill Vibrio vulnificus. These doctors insisted that
their patients completely avoid raw shellfish. We continue to consider
the question of how to be supportive of new technologies, such as post
harvest treatments, that kill Vibrio vulnificus while at the same time
fully protecting immuno-compromised individuals.
METHYLMERCURY
Question. Eight percent of U.S. women of childbearing age have
mercury levels in their blood that are high enough to raise concerns.
Although the FDA is responsible for ensuring the safety of commercial
seafood, it currently conducts little monitoring of mercury levels in
seafood and does not focus on the species, like tuna (canned and
fresh), that are most popular with consumers. When will FDA establish a
comprehensive plan to monitor mercury levels in a wide variety of fish,
especially popular species? Does the agency have the resources to test
mercury levels in a statistically significant number of tuna and other
popular species?
Answer. FDA is conducting a study to measure mercury levels in a
variety of 12 different domestic and imported commercial fish. This
study is designed to augment the current data set FDA has on mercury
levels in fish. Most of FDA's monitoring of methylmercury in commercial
seafood has been undertaken as part of the Total Diet Study. The Total
Diet Study, sometimes called the Market Basket Study, is an on-going
FDA program that determines levels of various pesticide residues,
contaminants, including methylmercury, and nutrients in foods. The
purpose of the study is to estimate the intake of these substances in
representative diets of specific age-sex groups in the United States to
determine potentially unsafe dietary conditions. To accomplish this
goal, FDA purchases foods from supermarkets or grocery stores four
times per year, one from each of four geographic regions of the
country. The most frequently consumed foods are collected based on food
consumption data. Therefore, those fish most frequently consumed are
those that are tested.
LISTERIA MONOCYTOGENES
Question. Listeria monocytogenes causes 2,500 illnesses and 500
deaths each year, according to the Centers for Disease Control and
Prevention. More than 3 years ago, FDA committed to amend its
regulations to better protect consumers from Listeria in smoked
seafood, fresh cheeses, and other FDA-regulated ready-to-eat foods.
When will you issue a proposed rule to require Listeria testing in
facilities that produce ready-to-eat foods? Do you have the resources
to expedite this rulemaking?
Answer. Listeria monocytogenes, LM, a harmful bacterium that can be
found in a variety of foods, causes an estimated 2,500 illnesses and
500 deaths in the United States each year. In pregnant women, LM-caused
illness can result in miscarriage, fetal death, or severe illness in or
death of a newborn infant.
The Department of Health and Human Services and the U.S. Department
of Agriculture have reviewed ongoing LM prevention and control
activities and developed a joint action plan in 2001, which includes
immediate, short-term, and long-term activities targeted at the serious
problem of LM-caused illness. The Plan can be found at the following
internet address, http://www.foodsafety.gov/dms/lmriplan.html.
The action plan is a multi-pronged collaborative effort to decrease
the number of cases of human listeriosis. The plan takes into
consideration the results of the DHHS and USDA draft risk assessment of
foodborne LM in ready-to-eat foods, which was published in January 2001
along with the draft LM action plan.
FDA plans to issue the final risk assessment and model during the
summer of 2003, and the draft LM action plan will be updated
accordingly based on this new information. Some of the on-going items
include expanding PulseNet to enhance consumer and health care provider
information and enhance disease surveillance and outbreak response.
Some of the items being considered for the future include continuing
education efforts, issuing draft FDA guidance for food processors,
redirecting regulatory strategies, working with other Federal agencies
on safety-based date labeling and coordinating research activities on
the development of better methods of detection and quantification of
LM.
Following the publication of the final LM Risk Assessment, we will
determine where we need to focus our efforts to protect the public
health.
______
Questions Submitted by Senator Tim Johnson
TISSUE REGULATIONS
Question. I understand that FDA has delayed regulation of the human
tissue transplant market for more than 6 years, even though the agency
acknowledges that the use of infected tissues poses a serious threat to
public health. During a recent Governmental Affairs hearing, the FDA
Director of the Center for Biologics Evaluation and Research said that
FDA will adopt new rules for tissue banks, but did not indicate when.
While the implementation of such regulations continues to be delayed,
people are dying as a result of receiving contaminated tissues
Commissioner. What I would like to know is, what exactly is your time
line for rolling out regulations for the tissue transplant industry?
Answer. FDA has had regulations in place for some human tissues
since 1993. These regulations require tissue establishments to test
human tissue donors for HIV-1, HIV-2, hepatitis B, and hepatitis C;
prepare and follow written procedures for disease testing, assessing
relevant medical records, and identifying quarantined tissue; prepare,
validate and follow written procedures for prevention of infectious
disease contamination or cross-contamination by tissue during
processing; and, maintain records. The regulations also authorize FDA
to inspect tissue establishments, to quarantine imported human tissue,
and to require retention, recall, and/or destruction of violative
tissue. FDA considers these rules to be an interim measure, until FDA
finalizes the more comprehensive regulatory scheme developed in FDA's
tissue action plan.
Implementation of the tissue action plan is a top priority for the
Agency at this time. We are in the process of finalizing a proposal for
review and clearance by the Administration. Though we do not have a
precise target date for publication of the final rules, you can be sure
that it is a top priority for Dr. McClellan and Dr. Goodman.
MEDICAL DEVICE USER FEES
Question. The MDUFMA user fee agreement was designed to create a
stable and sufficient funding base for the rapidly expanding portfolio
of increasingly complex devices that CDRH must regulate and approve. As
Chairman Bennett pointed out at the hearing, substituting user fee
money for budget money essentially amounts to a tax increase on
innovation. If you combine $15,150,000 in user fees to a $6,000,000
drop in the fiscal year 2004 base funding for CDRH proposed by the
Administration, doesn't the overall CDRH budget increase by a total of
only $9,150,000 in the Administration's proposed fiscal year 2004
budget? Isn't this the type of budget gimmick that the user fee trigger
was designed to avoid? Why does your budget request prioritize millions
of dollars of discretionary spending over the requirements of the
MDUFMA law?
Answer. One of the provisions of MDUFMA requires that the funds
from fees must be in addition to an appropriation amount that is as
great as the amount FDA spent on the device review process from
appropriations in fiscal year 2002--the year before MDUFMA went into
effect--adjusted for inflation. This provision is meant to ensure that
appropriated resources available for device review are increased for
inflation each year, and that the funding from fees is over and above a
set level of appropriations, after adjustment for inflation. We are
committed to working within the Administration and with Congress to
ensure that the intent of MDUFMA is realized. The reductions for the
Device and Radiological Health program reflect management savings and
IT consolidation and should not impact the resources directly devoted
to the review process. User fee collections under MDUFMA are not
considered an offset for this program. They are used exclusively for
the review of new devices and related costs. FDA supports the goals of
MDUFMA, and is committed to making the medical device user fee program
a success.
Question. If Congress does not appropriate the remainder of the $45
million MDUFMA target for CDRH budget, the user fee program will end
and FDA will face the loss of up to $35 million per year in user fee
money. This would create a dramatic revenue loss for CDRH and FDA, and
cause patients to wait longer for the approval of new devices. What
mechanisms does FDA have in place to assure that this will not happen?
Answer. The agency looks forward to working with Congress and
industry to ensure the device user fee program is successful. FDA is
committed to meeting the performance goals, as stated in the goals
letter. We have already begun discussions within the Administration to
find ways to fund this program appropriately in fiscal year 2005 and
beyond to ensure that this important program does not sunset. FDA is
committed to the goals of the Medical Device User Fee program and we
are committed to finding a way to make the MDUFMA program work, to make
it sustainable, make it permanent, and avoid having the trigger kick in
because we are meeting our performance goals.
GENERIC DRUGS EDUCATION
Question. In fiscal year 2002, this committee appropriated $250,000
for the Office of Generic Drugs to do outreach and education on the
safety and efficacy of generic drugs. What is the status of these
activities at this point and where do you hope to go in the future in
this regard?
Answer. FDA has embarked on a multimedia educational program to
build consumer and health-care professionals' confidence in the safety
and effectiveness of generic drugs. The primary audience for the
educational program has been consumers. The messages being conveyed are
that generic drugs are reviewed and approved by the FDA, and that they
are safe, effective and manufactured under FDA's quality standards. FDA
has developed and distributed three print public service announcements,
brochures, newspaper articles, and an FDA Consumer Magazine article.
Congress recommended an additional $150,000 for this program in the
fiscal year 2003 appropriation and FDA expects to spend this amount by
the end of the fiscal year. With these funds FDA has also pursued the
possibility of expanding the audience for this campaign by conducting
focus groups for pharmacists and physicians.
In fiscal year 2004, $400,000 has been proposed to support the
generic drug education program for its third year. The work for fiscal
year 2004 is building upon plans previously established to further
communicate a standard message for the public. These funds will be used
to continue support for FDA's multimedia educational program to build
consumer and health-care professionals' confidence in the safety and
effectiveness of generic drugs. FDA will continue to convey the message
that generic drugs are reviewed and approved by the Agency, and they
are safe, effective and manufactured under the Agency's quality
standards. The campaigns will continue to include the distribution of
print public service announcements, brochures, newspaper articles, and
FDA Consumer Magazine articles. In addition, funds will be used to take
information from focus groups for pharmacists and physicians to develop
educational programs for those professionals.
DRUG COUNTERFEITING
Question. I know that you are concerned about the quality and
safety of prescription drugs re-imported from Canada, yet as you know,
we are learning more and more about the problem of drug counterfeiting
inside U.S. borders. Pharmacists are worried because some of the fakes
are so good it is hard to tell what is counterfeit and what is real.
Part of the problem appears to stem from the quick expansion of the
secondary wholesaler industry. I was shocked to hear in a recent
article on this issue that a drug might be bought and sold up to 6 or
more times before reaching the consumer. Most wholesalers are doing a
good job, but counterfeiting by a few bad eggs is becoming an
increasing problem, which really concerns me. What is FDA doing to
better monitor drug counterfeiting and diversion within the United
States? What specific plans does FDA have to increase regulation of the
secondary drug wholesaler market?
Answer. The overall quality of drug products that consumers
purchase from U.S. pharmacies remains high. The American public can be
confident that these medications are safe and effective. FDA cannot,
however, offer the same assurance to the public about the safety and
quality of drugs purchased by consumers from foreign sources.
FDA takes very seriously any allegations or information regarding
the counterfeiting or adulteration of drug products. As the drug
manufacturing and distribution system has become more global in nature,
the challenge of protecting against counterfeit, adulterated or
substandard drugs has become more difficult. The Agency is concerned
about a spate of drug counterfeiting and tampering cases that have
occurred in recent months, and is aggressively pursuing these types of
enforcement cases.
FDA is working on a number of fronts to address the influx of
unapproved and counterfeit prescription drugs coming into the United
States from foreign sources. These efforts include: educating the
public to the significant potential safety issues presented by the
purchase of drugs from foreign countries; working with professional
groups to disseminate FDA's message on the potential dangers of
Internet drug sales; partnering with state governments and other
Federal agencies to develop more effective enforcement strategies; and,
undertaking monitoring of and enforcement against Internet pharmacy
outlets that present the most significant concerns. Recent high-profile
regulatory actions send a strong message that FDA is actively working
to take strong steps to protect the public from conduct that threatens
the U.S. drug supply.
The Agency has responded to the challenge of counterfeit drugs and
diversion in the secondary market by employing a risk-based enforcement
strategy to deploy our existing enforcement resources in the face of
multiple priorities, including homeland security, food safety and
counterfeit drugs. As an example, the Agency utilizes Import Alerts to
identify particular shipments that may pose significant potential risk
to public health. In the case of the increased volume of unapproved
sildenafil, also known as generic Viagra, arriving at the Miami
facility, the Agency has issued an Import Alert to instruct field
personnel to work with the BCBP to detain all such shipments from
specific manufacturers, distributors and countries of origin.
FDA is also developing an new initiative on counterfeit drugs which
includes creating an internal task force to explore the use of modern
technologies and other measures such as partnering with State and
Federal law enforcement agencies for stronger enforcement that will
make it more difficult for counterfeit drugs to get distributed with--
or deliberately substituted for--safe and effective drugs.
FDA's Office of Criminal Investigations, or OCI, works with state
and other Federal investigative agencies and prosecutors to uncover
violations of the FD&C Act and other laws with respect to unapproved,
misbranded, illegally imported, or otherwise unsafe or substandard drug
products.
OCI has opened 73 counterfeit drug cases since October 1996.
Investigations have so far netted 44 arrests and 27 convictions. Fines
and/or restitution have been imposed in excess of $250,000. FDA has
seen a gradual, but troubling, increase in the incidence of finished
dosage form counterfeit activity. Much of this activity has targeted
high volume, high cost drugs where counterfeiters attempt to obtain the
highest return possible in a short time period. Many of these drugs are
used for treating cancer and AIDS patients. The public perception of a
more dramatic increase in counterfeit drug activity stems from the fact
that the latest several counterfeits have appeared in the wholesale
market and received wider distribution than has been the case
historically.
On April 22, 2003, the Pharmaceutical Research and Manufacturers of
America, or PhRMA, which represents the country's major research-based
pharmaceutical and biotechnology companies, announced the adoption of a
voluntary program to report suspected instances of drug counterfeiting
to FDA. The information provided by PhRMA members under this program
will be helpful to the Agency because it will assist FDA in carrying
out its responsibilities to protect the safety and integrity of the
Nation's drug supply by enhancing the Agency's ability to detect
quickly and remove counterfeit drugs from the marketplace.
Under this program, PhRMA member companies have agreed to notify
FDA's OCI within 5 working days of determining that there is a
reasonable basis to believe that a product has been counterfeited. The
program also applies to counterfeits discovered in foreign countries if
there is clear evidence that the counterfeits are intended for
distribution in the U.S. Drug manufacturers already conduct their own
investigations of suspected distribution of counterfeit drugs. This
formal collaborative agreement will strengthen FDA's ability to assure
the safety and effectiveness of drugs used by U.S. Consumers. The
reporting program went into effect on May 1, 2003.
ADDITIONAL SUBMITTED STATEMENT
Clerk's Note.--The Subcommittee has received a statement
from the Medical Device Manufacturers Association which will be
inserted in the record at this point.]
Prepared Statement of the Medical Device Manufacturers Association
We would like to thank the Subcommittee for the opportunity to
submit comments on the subject of medical device user fees. The Medical
Device Manufacturers Association (MDMA) is a national trade association
based in Washington, D.C. that represents and serves the innovators and
entrepreneurs in the medical device industry. The thousands of
innovative companies that MDMA represents, including over 160 dues
paying members, consist of manufacturers of medical devices, diagnostic
products, and health care information systems. MDMA seeks to improve
the quality of patient care by encouraging the development of new
medical technology and fostering the availability of innovative
products in the marketplace.
The device user fee program has been an area deep concern for our
members since the Medical Device User Fee and Modernization Act
(MDUFMA, Public Law 107-250) was signed into law in October 2002. As
you know, we are philosophically opposed to the idea of device user
fees; however, we intend to meet our obligations under the agreement
negotiated in MDUFMA.
MDUFMA was designed to provide an enhanced and expeditious review
process for medical devices by imposing fees on premarket approval
applications, supplements, and 510(k) submissions reviewed by the
Center for Devices and Radiological Health (CDRH) at the Food and Drug
Administration (FDA). The law provides for shared responsibility
between manufacturers and the government to fund the program. Over 5
years, the manufacturers' fees and Congressional appropriations would
provide CDRH with $225 million in additional resources in exchange for
strong new review performance goals for the agency. The performance
goals set out in the letter accompanying the bill are conditioned on
FDA receiving money from both industry and Congress. Thus, without
adequate Congressional support, manufacturers will not see the benefits
from their user fee payments.
While MDUFMA ensures industry funding of $81 million over 3 years,
with additional industry funds in later years if the program continues,
the performance goals agreed to in MDUFMA are conditioned on FDA
receiving an additional $45 million in federal appropriations during
the first 3 years of the program (fiscal years 2003-2005). If Congress
fails to appropriate these funds, the program will sunset in fiscal
year 2006, without industry receiving the improved review times agreed
to in MDUFMA. Without the additional Congressional appropriations,
device manufacturers fear that their user fee contributions over the
next 3 years will not have the desired effect of more expeditious
reviews.
To fully fund the FDA and allow them to meet the performance goals
included in MDUFMA, Congress would need to appropriate $205,720,000 for
CDRH for each of fiscal years 2003-2005, with inflationary adjustments.
So far, Congress has not provided the needed support. In fiscal year
2003, the appropriation for CDRH was $194,720,000, which represents
only a $4 million increase from the fiscal year 2002 figure--not even
enough to cover salary increases--and leaves CDRH $11 million short of
the fiscal year 2003 target of $205,720,000. This shortfall needs to be
made up in the next 2 years to avoid the program's sunset. If Congress
maintains the fiscal year 2003 level in fiscal year 2004, the funding
level will be $22 million in deficit.
Potentially making matters even worse, the President's fiscal year
2004 budget request for CDRH is $184,543,000, more than a $10 million
cut from the actual fiscal year 2003 appropriation. Cutting the budget
by this much would result in a $32 million shortfall leading up to
fiscal year 2005, not including inflationary adjustments. Potentially
there would be a need for a $50 million plus appropriation in fiscal
year 2005 in order to maintain the user fee program.
Recent statistics show that the FDA device reviews are still taking
far too long. The average approval time for premarket applications is
364 days--more than twice the statutory target of 180 days. In
addition, approval times for 510(k)s are on the rise, up to a 96-day
average. MDUFMA performance goals would require FDA to approve 90
percent of PMAs within 320 days by 2007. This will not be attainable
unless FDA receives the additional Congressional appropriations
authorized in MDUFMA. Furthermore, a massive third year appropriation
would not be a reasonable solution. FDA needs this money this year so
that it will have the ability to hire the staff needed to meet the
performance goals.
We recognize that Congress must make difficult decisions among many
competing spending priorities. However, we encourage Members to
consider the importance of supporting faster FDA reviews of innovative
devices. Many of these devices present significant scientific
advancements that need to be brought to the health care market as
quickly as possible. Diagnostic products and other innovative
technologies for use by public health workers are especially timely,
though these technological breakthroughs are of little use if the FDA
cannot review them in a timely fashion. Bottling up new devices in the
FDA review pipeline only serves to harm patients who could benefit from
access to the latest treatments and devices.
Congress should be committed to appropriating adequate resources to
ensure that new products can get to the market as quickly as possible.
MDMA is working to ensure that Congress appropriates the money now so
that patients will have access to innovative products faster through
improved review times. We strongly encourage the Subcommittee to
appropriate the funding amounts established in MDUFMA so that the FDA
will be able to achieve the performance targets that device
manufacturers are currently paying for.
Without adequate Congressional support, the intent of MDUFMA will
fail completely. Now that industry is ``paying in'' in the form of a
user fee, manufacturers should receive something in return. The
industry's $81 million contribution in fees over the next 3 years
should result in receiving the benefit of improved performance goals.
However, if Congress does not meet its obligations as agreed to in
MDUFMA, MDMA will not support future user fee proposals.
MDMA thanks the Subcommittee for the opportunity to present our
views on this matter, and we look forward to working with you in the
future to continue to improve the FDA to ensure that patients have
access to the latest in medical technology.
CONCLUSION OF HEARINGS
Dr. McClellan. I agree with that.
Senator Bennett. Thank you very much.
Dr. McClellan. Thank you, Mr. Chairman.
Senator Bennett. The subcommittee is recessed.
[Whereupon, at 12:13 p.m., Thursday, May 22, the hearings
were concluded, and the subcommittee was recessed, to reconvene
subject to the call of the Chair.]