[Senate Hearing 108-629]
[From the U.S. Government Publishing Office]
AGRICULTURE, RURAL DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR
FISCAL YEAR 2005
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THURSDAY, APRIL 1, 2004
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 1:08 p.m., in room SD-192, Dirksen
Senate Office Building, Hon. Robert F. Bennett (chairman)
presiding.
Present: Senators Bennett, Burns, and Kohl.
DEPARTMENT OF AGRICULTURE
STATEMENTS OF:
ERIC M. BOST, UNDER SECRETARY, FOR FOOD NUTRITION AND CONSUMER
SERVICES
WILLIAM T. HAWKS, UNDER SECRETARY FOR MARKETING AND REGULATORY
PROGRAMS
ELSA A. MURANO, UNDER SECRETARY FOR FOOD SAFETY
OPENING STATEMENT OF SENATOR ROBERT F. BENNETT
Senator Bennett. The subcommittee will come to order.
And may I begin by thanking everyone for your willingness
to rearrange your schedule and come at this slightly early hour
and apologize for being a little late. Senator Byrd cast his
17,000th vote today on the floor and we lingered to pay tribute
to him and give him our congratulations.
This is the second hearing to review the fiscal year 2005
budget request. We had Secretary Veneman here last week and we
appreciate how responsive she was on the various topics we
covered. This week we have several of the Under Secretaries at
USDA, as well as the Acting Commissioner of the Food and Drug
Administration.
So we look forward to hearing your testimonies. I am going
to try to keep this fairly quick because I do have an
unavoidable conflict at 2 o'clock and I would like to be
through before then if we can. If we cannot, we can go over
that time but I will be unable to participate in that.
So I have no other further opening statement, other than to
say welcome to all of you. Thank you for your service to the
United States of America, your willingness to interrupt other
careers to render public service.
This is the last time in this administration we will have
the opportunity to offer our thanks for what you do. And it
goes unappreciated and unnoticed too much. So I would like to
be sure on this occasion to do that.
Senator Kohl.
Senator Kohl. I thank you, Mr. Chairman, and we welcome Mr.
Bost, Dr. Murano, Mr. Hawks and Dr. Crawford.
For the sake of time, Mr. Chairman, I will forego my
opening statement but look forward to testimony and to ask
questions.
Thank you, Mr. Chairman.
PREPARED STATEMENT OF SENATOR DURBIN
Senator Bennett. The subcommittee has received a statement
from Senator Durbin which we will insert into the record.
[The statement follows:]
Prepared Statement of Senator Richard J. Durbin
Chairman Bennett, thank you for holding this important hearing
today. I look forward to working with you and my Subcommittee
colleagues on the fiscal year 2005 (fiscal year 2005) Agriculture
budget. Mr. Chairman, I would like to welcome our witnesses Eric Boast,
Under Secretary for Food, Nutrition, Consumer Services, Elsa Murano,
Under Secretary for Food Safety, William Hawks, Under Secretary for
Marketing and Regulatory Programs and Lester Crawford, Acting
Commissioner for Food and Drug Administration.
I'd like to take a few minutes this morning to talk about some very
important issues under USDA's jurisdiction.
An issue of great importance to me is dietary supplements.
Obviously, I was pleased about the ban on ephedra and Dr. McClellan's
commitment to look at citrus autantium, aristolochic acid and usnic
acid: all supplement ingredients I believe are dangerous. I was also
pleased to see FDA take action against anabolic steroids.
I want to see progress toward protecting the public from dangerous
supplements continue. However, I believe several critical changes need
to be made to the Dietary Supplement Safety and Education Act to make
your job easier. First, I believe we need to require that supplement
manufacturers report to the FDA when serious adverse events occur. I'm
not talking about someone getting a little dizzy from taking a
supplement. I'm talking about death, incapacity and hospitalization.
It is absolutely necessary that we know when a product is harming
people. The Office of the Inspector General at HHS estimates that the
FDA receives reports of less than 1 percent of all adverse event
associated with dietary supplements. How can the FDA effectively
protect the public if it doesn't know when a product is causing harm?
The Institute of Medicine's report that came out today supports a
mandatory system of adverse event reporting. It says, ``while
spontaneous adverse event reports have recognized limitations, they
have considerable strength as potential warning signals of problems
requiring attention, making monitoring by the FDA worthwhile''.
The second change I would like to see made to DSHEA is a
requirement to pre-market safety review of supplements containing
stimulants. I don't believe that every natural substance needs to be
subject to pre-market safety testing, but at the very least, DSHEA
should be changed so stimulants are tested before marketed. When a
supplement raises people's blood pressure, increases their metabolism
and constricts their blood vessels, it is only prudent that we test the
product before it is marketed.
Another issue of importance deals with childhood obesity. Under
Secretary Bost, I know that you've been working with my staff to
develop a school-based demonstration project in Illinois to help
students make better food choices while they are at school.
I've been in school cafeterias. I've watched students pass by the
fresh vegetables and go straight for the fries. I've also seen them put
fruit on the tray and then dump the tray after lunch, fruit untouched.
We have to do a better job of helping our young people understand
nutrition and why it matters.
I want to commend you and your staff for your efforts to work with
us to develop some innovative demonstration projects in Illinois
schools to help students make better food choices.
Chairman Bennett and Senator Kohl, thank you again for the
opportunity to talk about these issues and the fiscal year 2005 Budget.
Senator Bennett. Thank you very much. Let us go in the
following order: Mr. Bost, who is the Under Secretary for Food,
Nutrition, and Consumer Services of the USDA; William Hawks who
is the Under Secretary for Marketing and Regulatory Programs;
Elsa Murano, who is the Under Secretary for Food Safety. And
then, with the USDA having been heard from, we will turn to the
Acting Commissioner of the FDA, Dr. Lester Crawford.
Mr. Bost.
STATEMENT OF ERIC M. BOST
Mr. Bost. Good afternoon and thank you very much, Mr.
Chairman. Good afternoon, Senator Kohl.
Thank you for this opportunity to present the
Administration's budget request for fiscal year 2005 for the
Food, Nutrition, and Consumer Services.
You have my written testimony so I will try to be brief.
Since I have been Under Secretary, I have focused my
attention and energy on these priority challenges facing the
nutrition assistance programs: expanding access to programs so
that all eligible persons may participate; addressing the
epidemic of obesity that threatens the health of individual
Americans, our economy and health care system; and improving
the integrity with which our programs are administered at all
levels.
Let me just briefly review some of our accomplishments over
the course of the last 3 years. We have reached substantially
more participants in each of our major programs, 5.8 million
more people in Food Stamps; 1.6 million more children receiving
a free or reduced priced lunch; over 1.4 million more children
receiving a school breakfast; and over 400,000 more women,
infants and children participate in the WIC program each month
since January of 2001.
We have successfully implemented the provisions of the 2002
Farm Bill that met the Administration's goals, including the
important steps of restoring Food Stamp benefits to legal
immigrants and increasing flexibility for the States.
We have also expanded the Electronic Benefits Transfer,
EBT, to all 50 States, the District of Columbia, Puerto Rico
and the Virgin Islands. EBT now delivers over 95 percent of all
food stamp benefits. At some point in time we are going to have
to change the name because there will no longer be any food
stamps.
We reduced food stamp payment errors for the 4th year in a
row, the lowest that it has ever been in the history of the
Food Stamp Program, at 8.26. We also reduced food stamp
trafficking to less than 2.5 cents for each benefit dollar
issued, down by a third since 1996-1998.
We also promoted healthy lifestyles as a top priority
through the President's HealthierUS initiative, working with
public and private partners to promote healthy eating and
physical activity and to foster a healthy school nutrition
environment.
We promoted a healthy way for children and adults across
the program to increase emphasis on nutrition education. We are
currently working in concert with the Department of Health and
Human Services to update the Dietary Guidelines and a revision
of the Food Guide Pyramid.
We achieved a clean financial statement for FNS for the
fifth consecutive year in support of the President's initiative
to improve financial management across the Government.
I am very proud of these accomplishments, however much more
work remains to be done.
In terms of supporting the goals of the President's budget,
the President's budget for fiscal year 2005 requests $50.1
billion in new budget authority.
FOOD STAMP PROGRAM
Food Stamps, at $33.6 billion would serve an average of
24.9 million people each month. The Administration's budget
continues the $3 billion reserve appropriated in fiscal year
2004.
CHILD NUTRITION PROGRAM
In terms of the Child Nutrition Programs, the request of
$11.4 billion supports an increase in school lunch
participation from 28 million children to over 29 million
children. It also supports an increase in school breakfast
participation of over 1 million children from 8 million to 9
million children.
WIC PROGRAM
In our WIC Program, the President's budget proposes $4.8
billion for WIC Program to provide food nutrition, education
and a linkage to health care to a record level monthly average
of 7.86 million needy women and young children. I think this
speaks clearly to the President's commitment to this program.
Additionally, the $125 million contingency reserve fund is
available if there is a need for a increase if participation or
food cost exceeds our projection.
One of the things that I believe is very important that we
are spending a great deal of time on, not only in my area but
across the country, is addressing the overweight and obesity.
Poor dietary choices and sedentary lifestyles are having a
serious impact on the health and well being of this entire
country.
The most recent figures indicate that 62 percent of all
adults in this country are overweight. Estimated health care
costs at $123 billion, and also 400,000 deaths are directly
related to us being overweight.
Senator Bennett. Excuse me. Is that an annual cost of $123
billion?
Mr. Bost. $123 billion, that is correct.
Senator Bennett. Annually?
Mr. Bost. Annually.
Senator Bennett. That would pay for a lot of health care.
Mr. Bost. Yes, but we are eating ourselves to death.
$20 million for breast feeding peer counseling, $2.5
million to expand the successful Eat Smart Play Hard campaign
so we can integrate the nutrition assistance programs to
promote healthy eating and physical activity. $1.65 million is
requested to fund the updated 2005 Dietary Guidelines and the
Food Guide Pyramid. We believe this is very important, given
the fact that Americans are spending on average $33 billion a
year on weight loss products, books and et cetera, to help them
lose weight. We are spending that money even though we are
getting heavier.
NUTRITION PROGRAMS ADMINISTRATION
In addition, the President's request includes an increase
of $7 million in our administrative budget which will be
targeted at improving integrity in the Food Stamp Program,
improving the accuracy of certifications for free and reduced
price school meals and invigorating our oversight, training and
technical assistance activities with our State and local
partners.
As a part of our Nutrition Programs Administration, we are
requesting $152 million, an increase of $14.7 million.
Our total request for Federal administrative resources,
including those activities funded directly from the program
accounts, represents only 0.39 percent of the program resources
for which we are responsible.
PREPARED STATEMENTS
In conclusion, the President's direction has been very
clear. The Administration request sets priorities to ensure
access, maintain and improve integrity and supports our efforts
to address the public health threat of overweight and obesity
among all Americans in this country.
Thank you, Mr. Chairman.
[The statements follow:]
Prepared Statement of Eric M. Bost
Thank you Mr. Chairman and members of the subcommittee for this
opportunity to present the Administration's budget request for fiscal
year 2005 for the Food, Nutrition and Consumer Services (FNCS).
During the past 3 years as Under Secretary for the Food, Nutrition
and Consumer Services, I have focused my attention and my energy on
three central challenges facing the Federal nutrition assistance
programs: expanding access to the programs so that all eligible persons
can make informed decisions about whether to participate; addressing
the epidemic of obesity that threatens the health of individual
Americans, and our economy and health care system collectively; and
improving the integrity with which our programs are administered, at
all levels, so that we are the best possible stewards of the public
resources with which we are entrusted.
Let me first review briefly some key accomplishments achieved over
the last 3 years:
--We are reaching substantially more participants in each of our
major programs: 5.8 million more people in food stamps, 1.6
million more children receiving a free or reduced price school
lunch, over 1.4 million more in school breakfast, and over
400,000 more women, infants and children each month in WIC
since January 2001.
--We successfully implemented the provisions of the 2002 Farm Bill
that met the Administration's goals of simplifying policies,
improving access, and ensuring program integrity, including the
important steps of restoring benefits to legal immigrants and
increasing flexibility for the States.
--We expanded electronic benefits transfer (EBT) to all 50 States,
the District of Columbia, Puerto Rico, and the Virgin Islands;
EBT now delivers over 95 percent of all food stamp benefits.
--We have seen food stamp payment errors fall for the 4th year in a
row, reaching the lowest level ever--8.26 percent--in 2002.
--We have reduced food stamp trafficking to less than 2.5 cents of
each benefit dollar issued, down by one-third since 1996-1998.
--We have made healthy lifestyles a top priority through the
President's HealthierUS initiative. We are working with public
and private partners, such as the National 5 to 9 a Day
Partnership, to increase fruit and vegetable consumption and
have developed a soon to be released kit for schools entitled
``Fruits and Vegetables Galore: Helping Kids Eat More.'' We are
also expanding school-based efforts to promote healthy eating,
and to foster a healthy school nutrition environment through
technical assistance, training and nutrition education
materials that help schools assess and improve the school
nutrition environment, including improvements in school meals
and overall food policies.
--We have focused on promoting healthy weight for children and adults
across programs through the Eat Smart. Play Hard.TM
campaign, and within programs through Team Nutrition, the Fit
WIC obesity prevention projects, and efforts to improve Food
Stamp Program nutrition education.
--We are working in concert with the Department of Health and Human
Services to update the Dietary Guidelines for Americans, and we
are revising the Food Guide Pyramid to ensure that each
reflects the most comprehensive, up-to-date science available
in order to provide clear and useful nutrition information to
American consumers.
--We achieved a clean financial statement for FNS for the 5th
consecutive year, in support of the President's management
agenda initiative to improve financial management across
government.
I am proud of these accomplishments, and the hard work that they
represent from USDA staff, from the Congress, and from our State and
local program partners. But much important work remains to be done. I'd
like now to review the budget request and the improvements in
performance and results that it is designed to support.
The President's budget for fiscal year 2005 requests $50.1 billion
in budget authority to continue this critical work. This record request
reflects the Administration's long-standing commitment to protect our
children and low-income households from hunger and the health risks
associated with poor nutrition and physical inactivity through the
Nation's nutrition safety net. The purposes to which we will put this
substantial public commitment are clear: first, we seek to improve the
public's awareness of our programs and ease of access for all eligible
persons, and second, through both the Federal nutrition assistance
programs and the Center for Nutrition Policy and Promotion (CNPP), we
will continue to do our part to address the growing public health
threat that overweight and obesity poses to all Americans. Finally, we
will strive to enhance the efficiency and accuracy with which these
programs are delivered.
ENSURING PROGRAM ACCESS
This Administration has demonstrated a long-term commitment to the
Federal nutrition assistance programs and to the Americans whom they
assist. The most fundamental expression of this commitment is making
certain that sufficient resources are provided for these programs so
that all who are eligible and in need have ready access to these
critical benefits. We have delivered to you a budget that funds
anticipated levels of program participation, while acknowledging the
inherent difficulties in making such projections.
For the Food Stamp Program, the budget continues the $3 billion
contingency reserve appropriated in fiscal year 2004 but also offers,
as an alternative, a proposal for indefinite budget authority for
program benefits. This authority would be an efficient way to ensure
that benefits are funded even as economic circumstances change, a goal
we all share. In WIC, the $125 million contingency reserve appropriated
in fiscal year 2003 continues to be available to the program should
participation or food costs exceed the levels anticipated in the
budget. Should this not be sufficient, we are committed to working with
you to ensure that WIC is properly funded.
Adequate program funding, however, is not enough to ensure access
to program services for those who need them. Program structure and
delivery methods must be designed so as not to create the types of
barriers to program participation that can result in their
underutilization. As we move forward with the reauthorization of the
Child Nutrition and WIC Programs, improving program delivery and
ensuring the access of eligible people who wish to participate will
remain fundamental principles.
ADDRESSING OVERWEIGHT AND OBESITY
Poor dietary choices and sedentary lifestyles are having a serious
impact on the health and well being of all Americans. Obesity and
overweight are widely recognized as a public health crisis. The costs
of these conditions are enormous--reduced productivity and increased
health care costs estimated at over $123 billion, and, most sadly,
unnecessarily premature deaths for over 300,000 Americans annually. The
Federal nutrition assistance programs can play a critical role in
combating this epidemic by promoting better diets through nutrition
education and promotion. These program services, along with the work of
the Center for Nutrition Policy and Promotion, are an integral part of
the President's HealthierUS initiative, and the budget reflects our
continuing commitment to this effort. It includes $5 million for
ongoing demonstration projects to explore new ways for the WIC program
to reduce and prevent unhealthy weight among our children. We are also
seeking $2.5 million to expand our very successful Eat Smart. Play
Hard.TM campaign, and to develop an integrated, family-
oriented approach to nutrition education that cuts across all of the
Federal nutrition programs and complements efforts in schools and other
program settings to encourage healthy eating and physical activity.
Our request also supports FNCS' CNPP, which works with the
Department of Health and Human Services and other agencies to promote
good nutrition across all segments of the population. The budget
includes resources that are critical to the development and promotion
for the updated 2005 Dietary Guidelines for Americans and the
concurrently revised food guide system, providing essential tools to
communicate the Guidelines in ways that motivate Americans to improve
their eating and physical activity behaviors. The requested funding for
CNPP will enable us to capitalize on the investments we have already
made with a new opportunity to build upon public awareness of basic
nutrition messages with an enhanced food guide system that will target
individual needs.
ENHANCING PROGRAM INTEGRITY AND DELIVERY
With this budget request, we are asking the Nation to entrust us
with over $50 billion of public resources. We are keenly aware of the
immense responsibility this represents. To maintain the public trust,
we must demonstrate our ongoing commitment to be good stewards of the
resources we manage, as an essential part of our mission to help the
vulnerable people these programs are intended to serve.
This is not a new commitment. As I noted earlier, in fiscal year
2002, the most recent year for which data is available, the Food Stamp
Program achieved a record high payment accuracy rate of 91.74 percent.
We have also been working to develop strategies to improve the accuracy
of eligibility determinations in our school meals programs--an issue of
mutual concern to all those that care about these programs. The budget
features dollar and staff year resources which will allow us to
continue to work closely with our State and local partners on both of
these essential integrity initiatives--continuing both our successes in
the Food Stamp Program and our intensified efforts in school meals.
In the WIC program, we are requesting $20 million to continue our
initiative to assist States with the modernization of their information
technology infrastructure. These systems are essential underpinnings
for the improvements in program management, program integrity, and,
most importantly, program delivery that need to be achieved. The
Administration has worked closely with the Office of Management and
Budget (OMB) and the WIC community to fashion a procurement strategy
that will ultimately produce a series of core model WIC systems. States
updating their WIC systems will be able to select from among these
model core systems as starting points for their own implementation,
thus reducing their costs.
In the remainder of my remarks, I'd like to touch on several key
issues:
FOOD STAMP PROGRAM
The President's budget anticipates serving a monthly average of
24.9 million persons in fiscal year 2005, an increase of 1.2 million
over our projections of the current fiscal year. Our $33.6 billion
request supports this level of service. In addition, the budget
continues the $3 billion contingency reserve appropriated in fiscal
year 2004. While the President's budget anticipates continuing
improvement in the Nation's economy, Food Stamp Program participation
traditionally continues to rise for some time after the aggregate
employment begins to improve. Moreover, we have made a concerted effort
over the last 3 years to raise awareness of the benefits of program
participation and encourage those who are eligible, especially working
families, senior citizens, and legal immigrants, to apply. The rate of
participation among those eligible to participate increased 2 years in
a row, after 5 years of declines, reaching 62 percent in September
2001. However, many eligibles remain who could be participating but are
not. We have been aggressive in promoting the message that the Food
Stamp Program Makes America Stronger in the sense that the program puts
healthy food on the tables of low-income families and has a positive
impact on local economies. We have just recently embarked on a media
campaign to carry this message and to reach those who are eligible but
not participating. We have also paid particular attention to those
legal immigrants who have had their eligibility restored by the Farm
Bill by carrying messages on Hispanic radio stations across the
country.
These factors make this a particularly challenging period to
forecast program participation and costs. To ensure the adequacy of
resources available to the program, and as an alternative to the
traditional contingency reserve, we have proposed indefinite authority
for program benefits and payments to States and other non-Federal
entities.
CHILD NUTRITION PROGRAMS
The President's budget requests $11.4 billion to support the
service of appealing, nutritious meals to children in public and
private schools and child care facilities through the Child Nutrition
Programs in fiscal year 2005. In the National School Lunch Program, we
anticipate serving over 29 million children per day in fiscal year
2005. Similarly, the School Breakfast Program will serve approximately
9 million children each school day. The request for budget authority is
a slight decrease from levels appropriated in fiscal year 2004. This is
because the rate of program growth in fiscal year 2004, to date, has
been slightly less than anticipated. As a result, the anticipated
carry-over resources, in conjunction with the budget request, will
fully fund the projected level of program activity.
Several components of the Child Nutrition Programs expire at the
end of March. We urge the Congress to move quickly to extend these
provisions before they expire to ensure that all aspects of the Child
Nutrition Programs continue to operate without interruption. We also
want to work with the Congress to reauthorize and improve the entire
range of Child Nutrition Programs, consistent with the principles
outlined last year. These principles include ensuring that all eligible
children have access to program benefits as well as streamlining the
administration of programs to minimize burdens, supporting healthy
school environments and strengthening program integrity.
Reauthorization provides an opportunity to address our continuing
concern that the certifications of children to receive free and reduced
price meals are not performed as accurately as they reasonably could
be. Correct certifications are a priority to ensure that school meal
funds go to those most in need, and the many other Federal, State, and
local resources that use this same data are properly targeted as well.
In sum, we are committed to working with Congress to reauthorize
the Child Nutrition Programs and to reinvesting any savings achieved in
the process back into these important programs for program
improvements.
WIC
In fiscal year 2005, the President's budget request of $4.79
billion anticipates providing essential support to a monthly average of
7.86 million women, infants and children through the Special
Supplemental Nutrition Program for Women, Infants and Children (WIC).
This is an increase of 60,000 participants per month from anticipated
fiscal year 2004 participation levels. Additionally, the $125 million
contingency reserve, appropriated in fiscal year 2003, remains
available to the program should participation or food costs exceed our
projections. The Administration remains steadfast in its support of WIC
and is committed to working with Congress to ensure its proper funding.
Finally, the request includes $20 million to continue our peer
counseling initiative that is designed to enhance both rates of
initiation and duration of breastfeeding among WIC participants.
THE EMERGENCY FOOD ASSISTANCE PROGRAM (TEFAP)
Through TEFAP, USDA plays a critical supporting role for the
Nation's food banks. This support takes the form of both commodities
for distribution and administrative funding for States' commodity
storage and distribution costs. Much of this funding flows from the
States to the faith-based organizations that are a cornerstone of the
food bank community. The President's budget requests the fully
authorized level of $140 million to support the purchase of commodities
for TEFAP. Additional food resources become available through the
donation of surplus commodities from USDA's market support activities.
In recent years, these donations have increased the total Federal
commodity support provided to the Nation's food banks by almost 300
percent. State administrative costs, a critical form of support to the
food bank community, are funded at $50 million in the President's
request.
NUTRITION PROGRAMS ADMINISTRATION
We are requesting $152 million in our Nutrition Programs
Administration account, which reflects an increase of $14.7 million in
our administrative funding. This increase supports the Child Nutrition
and Food Stamp Programs integrity activities mentioned earlier, as well
as a number of nutrition guidance initiatives under the Center for
Nutrition Policy and Promotion. These resources are absolutely critical
to our ability to successfully execute the mission of the Food,
Nutrition and Consumers Services. Our total request for Federal
administrative resources, including those activities funded directly
from the program accounts, represents only about 0.39 percent of the
program resources for which we have stewardship. I believe that we need
this modest increase in funding in order to maintain accountability for
our $50 billion portfolio and to assist our State and local partners in
effectively managing the programs.
Mr. Chairman, I appreciate the opportunity to share my thoughts
with you, and would be happy to answer any questions you may have.
______
Prepared Statement of Roberto Salazar, Administrator, Food and
Nutrition Services
Thank you, Mr. Chairman, and members of the Subcommittee for
allowing me this opportunity to present testimony in support of the
fiscal year 2005 budget request for the Food and Nutrition Service.
The Food and Nutrition Service is the agency charged with managing
the Nation's nutrition safety net and providing Federal leadership in
America's ongoing struggle against hunger and poor nutrition. Our
stated mission is to increase food security and reduce hunger in
partnership with cooperating organizations by providing children and
low-income people access to nutritious food and nutrition education in
a manner that inspires public confidence and supports American
agriculture.
In fiscal year 2005, the President's budget requests a total of
$50.1 billion in new budget authority to fulfill this mission through
the Federal nutrition assistance programs. With this record request we
will touch the lives of more than 1 in 5 Americans over the course of a
year. This includes providing nutritious school lunches to an average
of 29 million children each school day (NSLP), assisting with the
nutrition and health care needs of 7.86 million at risk pregnant and
postpartum women (WIC) and children each month, and ensuring access to
a nutritious diet each month for 24.9 million people through the Food
Stamp Program (FSP). These are just 3 of our 15 Federal nutrition
assistance programs, which also include such important programs as the
School Breakfast Program (SBP), The Emergency Food Assistance Program
(TEFAP), the Summer Food Service Program (SFSP), the Child and Adult
Care Food Program (CACFP), the Food Distribution Program on Indian
Reservations (FDPIR), and the Commodity Supplemental Food Program
(CSFP). Through the range of design and delivery methods these programs
represent, FNS seeks to serve the children and low-income households of
this Nation and address the diverse ways and circumstances in which
hunger and nutrition-related problems present themselves.
The resources we are here to discuss must be viewed as an
investment--an investment in the health, self-sufficiency, and
productivity of Americans who, from time to time, find themselves at
the margins of our prosperous society. Under Secretary Bost, in his
testimony, has outlined the three critical challenges which the Food,
Nutrition and Consumer Services team has focused on under his
leadership: expanding access to the Federal nutrition assistance
programs, promoting healthy weight to address the problems of
overweight and obesity; and, improving the integrity with which our
programs are administered. In addition to these fundamental priorities
specific to our mission, President Bush has laid out an aggressive
agenda for management improvement across the Federal Government as a
whole--the President's Management Agenda. This agenda seeks to protect
the taxpayers' investment in all Federal activities by enhancing the
accuracy and efficiency of program delivery and reducing improper
payments, by improving decision-making through the integration of
performance information into the budget process, by building
partnerships with faith and community based organizations, and by
planning carefully and systematically for the human capital challenges
looming near for all of the Federal service.
THE CHALLENGE OF IMPROPER PAYMENTS
Benefits of the Federal nutrition assistance programs must be
carefully targeted and delivered to those who are eligible, in need,
and wish to participate. Benefit payments made in error increase the
cost of these programs to the taxpayers and can divert needed
assistance from eligible participants seeking services. Today I am
pleased to report to you, for the second year in a row, record high
payment accuracy rates for the Food Stamp Program. In fiscal year 2002,
the most recent year for which data is available, the Food Stamp
Program achieved an accuracy rate of 91.74 percent, 0.4 percent higher
than fiscal year 2001's record achievement. Despite this success, much
remains to be done to improve the accuracy and efficiency of benefit
delivery in all the Federal nutrition assistance programs, not just the
Food Stamp Program. The President's budget requests additional funding
to strengthen integrity and program management both at the Federal and
State levels. Our request includes an increase of $7 million in our
administrative budget which will be targeted at maintaining our
continuing success in the Food Stamp Program, improving the accuracy of
certifications for free and reduced price school meals, and improving
delivery of program benefits and reinvigorating our oversight, training
and technical assistance activities for our State and local partners.
BUDGET AND PERFORMANCE INTEGRATION
The President's Management Agenda recognizes that good decision-
making depends on both the availability of relevant, high quality data
and using that information in an analytical, business-like approach to
problem solving. The Food and Nutrition Service has long been a leader
in the Federal arena. Our entitlement programs are performance funded.
This requires us to balance, through analysis and insight, an uncertain
dynamic program demand with the constraints of a fixed appropriation.
In this year's budget explanatory notes, you will find expanded
performance information and analysis with clear connections linking
USDA's strategic plan, our budget request, and program performance.
Vital to the success of the President's vision of improved Federal
decision-making and seamless budget and performance integration is an
adequately funded, properly positioned agenda of performance
measurement and program assessment. Funding proposed in the request
would support a range of important program assessment activities:
focused studies of program operations, development of comprehensive
measures of program performance to inform and foster outcome-based
planning and management; and technical assistance to States and
communities for practical demonstrations of potential policy and
program improvements. These activities provide a crucial foundation for
strategic planning and program innovation. This request will allow the
programs to respond to emerging performance management issues
identified by the Performance Assessment Rating Tool of the National
School Lunch Program and Food Stamp Program as well as support
effective stewardship of the taxpayer investment in nutrition
assistance.
REACHING OUT TO THOSE IN NEED THROUGH FAITH-BASED AND OTHER COMMUNITY
ORGANIZATIONS
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 Federal
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 our outreach efforts in fiscal year
2005. The partnership of faith-based organizations and FNS programs,
including TEFAP, WIC, NSLP, and the CSFP, is long-established. Indeed,
the majority of organizations such as food pantries and soup kitchens
that actually deliver TEFAP benefits are faith-based. Across the
country, faith-based organizations have found over the years that they
can participate in these programs without compromising their mission or
values. They are valued partners in an effort to combat hunger in
America.
HUMAN CAPITAL MANAGEMENT
The General Accounting Office (GAO), have demonstrated that
recruiting, developing and retaining a highly-skilled workforce is
critical to sustaining our public service. This is especially true for
the Food and Nutrition Service. We currently estimate that up to 80
percent of our senior leaders are eligible to retire within five years,
as is nearly 30 percent of our total workforce. FNS must address this
serious challenge by improving the management of the agency's human
capital, strengthening services provided to employees, and implementing
programs designed to improve the efficiency, diversity, and competency
of the work force. With just nominal increases for basic program
administration in most years, the Food and Nutrition Service has
reduced its Federal staffing levels significantly over time. We have
compensated for these changes by working smarter--re-examining our
processes, building strong partnerships with the State and local
entities which administer our programs, and taking advantage of
technological innovations. We are extremely proud of what we have
accomplished, but seek additional funding in a few targeted areas to
address specific vulnerabilities. Full funding of the nutrition
programs administration requested in the President's budget,
approximately 0.39 percent of our program portfolio, is vital to our
continued success.
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
The President's budget requests $33.6 billion for the Food Stamp
account including the Food Stamp Program and its associated nutrition
assistance programs. These resources will serve an estimated 24.9
million people each month participating in the Food Stamp Program
alone. Included in this amount, we propose to continue the $3 billion
contingency reserve provided for the program in fiscal year 2004. The
importance of this reserve is especially critical in fiscal year 2005.
While we anticipate that the improvement we are now seeing in the
general economy will at some point begin to impact the program,
predicting the turning point of participation is challenging. Our
request also presents, as an alternative to the traditional contingency
reserve, a proposal of indefinite authority for program benefits and
payments to States and other non-Federal entities.
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 childcare settings every day. This level of funding will support an
increase in daily School Lunch Program participation from the current
28.7 million children to over 29.2 million children. This funding
request also supports an increase in daily School Breakfast Program
participation from the current 8.8 million to 9.0 million children.
Requested increases in these programs also reflect rising school
enrollment, increases in payment rates to cover inflation, and
proportionately higher levels of meal service among children in the
free and reduced price categories. We are proposing to extend
provisions that would expire on March 31, 2004.
WIC
The President's budget includes $4.8 billion for the Special
Supplemental Nutrition Program for Women, Infants and Children, the WIC
program. The request will allow local communities to provide food,
nutrition education, and a link to health care to a monthly average of
7.86 million needy women, infants and children during fiscal year 2005.
We also propose to continue our vital initiatives, begun in fiscal year
2004, to enhance breastfeeding initiation and duration, improve State
information technology infrastructure, and to maximize WIC's potential
to combat childhood obesity. The $125 million contingency fund provided
for in the fiscal year 2003 appropriation continues to be available to
the program. These resources are available if costs exceed current
estimates.
COMMODITY SUPPLEMENTAL FOOD PROGRAM (CSFP)
The Commodity Supplemental Food Program (CSFP) serves elderly
persons and at risk low-income pregnant and post-partum and
breastfeeding women, infants and children up to age six. The budget
requests $98.3 million for this program, the same level appropriated in
fiscal year 2004. This request may not support the same level of
program services as in fiscal year 2004 due to the availability of one-
time carry-over funds from 2003. However, we will take all available
administrative actions to minimize any program impact. We face a
difficult challenge with regard to discretionary budget resources. CSFP
operates in selected areas in 32 States, the District of Columbia, and
two Indian Tribal Organizations. The populations served by CSFP are
eligible to receive similar benefits through other Federal nutrition
assistance programs. We believe our limited resources are best focused
on those program available in all communities nationwide.
THE EMERGENCY FOOD ASSISTANCE PROGRAM (TEFAP)
As provided for in the Farm Bill, the budget requests $140 million
for commodities in this important program. Our request for States'
storage and distribution costs, critical support for the Nation's food
banks, is $50 million. The Food and Nutrition Service is committed to
ensuring the continuing flow of resources to the food bank community
including directly purchased commodities, administrative funding, and
surplus commodities from the USDA market support activities. Surplus
commodity 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 $152.2 million in this account, which includes an
increase of $7 million for the program integrity initiative described
earlier. Included are also a number of initiatives, under the Food and
Nutrition Service and 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 0.39 percent of the program resources for which
we have responsibility and sustains the program management and support
activities of our roughly 1,545 employees nationwide. I believe we need
these modest increases in funding in order to maintain accountability
for our $50 billion portfolio and to assist States to effectively
manage the programs and provide access to all eligible people.
Thank you for the opportunity to present this written testimony.
Senator Bennett. Thank you very much. Mr. Hawks.
STATEMENT OF WILLIAM T. HAWKS
Mr. Hawks. Thank you, Mr. Chairman, Senator Kohl.
It is indeed a pleasure to be with you today to discuss the
activities of the Marketing and Regulatory Programs.
Senator Bennett. Would you pull the microphone a little
closer to you?
Mr. Hawks. Turning it on will help, as well.
Senator Bennett. That also helps.
Mr. Hawks. As I said, it is certainly a pleasure to be with
you today to discuss the activities of the Marketing and
Regulatory Programs and the 2005 budget for those agencies
within Marketing and Regulatory Programs. Those are the Animal
and Plant Health Inspection Service, Agricultural Marketing
Service and the Grain Inspection, Packers and Stockyards
Administration.
My motto has been working together works. I am holding my
agencies accountable to make sure that they work.
I have five goals that I hold them accountable for. The
first one is to build broader bridges. The second one is to
move more product. The third goal is to invest in
infrastructure. The fourth goal is to grow our people. The
fifth goal is to sell agriculture as a profession.
The Marketing and Regulatory Program activities are funded
both by beneficiaries of the program services and by the
taxpayers. They carry out programs costing nearly $1.8 billion
with $418 million funded by fees paid by the beneficiaries of
the services and $449 million collected from Customs receipts.
On the appropriations side, the APHIS is requesting $893
million, GIPSA is requesting $44 million, and AMS is requesting
$87 million.
APHIS' primary mission is to safeguard animal and plant
health, address conflicts with wildlife, faciliate safe
Agricultural trade, promote environmental stewardship, and
improve animal well being. APHIS has been working to enhance an
already vigilant animal and plant health monitoring system.
APHIS trade issues resolution management efforts enabled us to
negotiate fair trade in the international market. APHIS also
regulates the movement and field release of biotechnology
derived plants. Recent developments in biotechnology hold great
promise as long as we are able to ensure the protection of the
environment and the safety of the foods.
GIPSA facilitates the marketing of livestock, meat,
poultry, cereals, oil seeds and related agricultural products
and promotes fair and competitive trade. GIPSA is requesting
increased funding for strengthening efforts to resolve
international grain trade issues and to provide improved
technology for the evaluating the value of livestock carcasses.
AMS activities assist U.S. agricultural industry in
marketing their products and in finding ways to improve their
profitability. AMS budget request seeks an increase of $10
million of appropriated funds to begin investing in a new
multi-agency web-based supply chain management system to manage
purchases of $2.5 billion of commodities used in all food
assistance programs every year. When fully implemented, this
system will decrease the time for purchases from 24 days down
to 5 days.
prepared statements
In light of time, this is going to conclude my statement.
You have my full written statement and I look forward to
responding to questions.
Senator Bennett. Thank you very much.
For the record, without objection, the written statement of
all of you will be included in the record. Dr. Murano.
[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 2005 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. Peter Fernandez, Associate 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 to increase marketing
opportunities and to protect American agriculture from damages caused
by pests and diseases.
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 which demonstrates that
working together works.
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, laboratory
capacity 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 caliber 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 the MRP agencies carry out programs costing $1.8 billion;
with $418 million funded by fees charged to the direct beneficiaries of
MRP services and $449 million from Customs receipts.
On the appropriation side, under current law, the Animal and Plant
Health Inspection Service is requesting $828 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 $44 million, and the Agricultural Marketing Service is
requesting $87 million.
The budget again proposes user fees that, if enacted, would recover
about $40 million. Legislation was submitted in 2003 which would
authorize new license fees to recover the cost of administering the
Packers and Stockyards (P&S) Act and authorize additional grain
inspection fees for developing grain standards. Legislation will be
submitted soon to enable additional license fees for facilities
regulated under the Animal Welfare Act. I will use the remainder of my
time to highlight the major activities and our 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. We believe that safeguarding the health of animals, plants,
and ecosystems makes possible safe agricultural trade and reduces
losses to agricultural and natural resources.
APHIS builds bridges by working in concert with its stakeholders--
States, Tribes, 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
moving more U.S. product.
I would like to highlight some key aspects of the APHIS programs:
Safeguarding the Agricultural Sector and Resource Base.--While
APHIS continues to work closely with the Department of Homeland
Security (DHS) to exclude agricultural health threats, it retains
responsibility for promulgating regulations related to entry of
passengers and commodities into the United States. APHIS' efforts have
helped keep agricultural health threats away from U.S. borders through
increased offshore threat-assessment and risk-reduction activities.
APHIS has also increased an already vigilant animal and plant health
monitoring and surveillance system to promptly detect outbreaks of
foreign and endemic plant and animal pests and diseases.
Management Programs.--Because efforts to exclude foreign pests and
diseases are not 100 percent successful, APHIS also assists
stakeholders in managing new and endemic agricultural health threats,
ranging from threats to aquaculture to cotton and other crops, tree
resources, livestock and poultry. In addition, APHIS assists
stakeholders on issues related to conflicts with wildlife and animal
welfare.
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 $2.5 billion in export markets in fiscal year 2003 by
helping resolve individual trade issues abroad.
Biotechnology.--Recent developments in biotechnology underscore the
need for effective regulation to ensure protection of the environment
and food supply, reduce market uncertainties, and encourage development
of a technology that holds great promise. APHIS' Biotechnology
Regulatory Services unit coordinates our services and activities in
this area and focuses on both plant-based biotechnology and transgenic
arthropods. We also are examining issues related to transgenic animals.
APHIS' 2005 BUDGET REQUEST
In a year of many pressing high-priority items for taxpayer
dollars, the budget request proposes about $828 million for salaries
and expenses. There are substantial increases to support the
Administration's Food and Agriculture Defense Initiative and to protect
the agriculture sector from bovine spongiform encephalopathy (BSE). A
brief description of key initiatives follows.
A total of about $173 million for Foreign Pest and Disease
Exclusion.--Efforts will be focused on enhancing our ability to exclude
Mediterranean fruit fly and foreign animal diseases. We also request
funds to regulate the possession and transfer of Select Agents, toxins
and pathogens necessary for research and other beneficial purposes
which could be deadly in the hands of terrorists.
A total of about $224 million for Plant and Animal Health
Monitoring.--APHIS plays a critical role in protecting the Nation from
deliberate or unintentional introduction of an agricultural health
threat, and the budget requests $94 million, a $49 million increase, as
part of the Food and Agriculture Defense Initiative. This includes
initiatives that enhance plant and animal health threat monitoring and
surveillance; bolster a National Animal Identification Program; ensure
greater cooperative surveillance efforts with States; improve
connectivity with the integration and analysis functions at DHS for
plant and animal health threats; and boost animal vaccine availability;
and other efforts. In addition, $50 million is requested for bovine
spongiform encephalopathy (BSE) activities to accelerate the
development of a National animal ID effort and to increase testing to
detect the presence of BSE in the U.S. livestock herd.
A total of $320 million for pest and disease management programs.--
Once pests and disease are detected, prompt eradication reduces
longterm 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 proposes $57 million of increased funding for efforts
against low-pathogenic avian influenza, emerging plant pests (such as
Citrus Canker and Emerald Ash Borer), tuberculosis, scrapie, and
chronic wasting disease.
Other programs offer offsets to those increases. Successes in boll
weevil eradication efforts allow a reduction in that program. Decreased
funding is requested for Asian Long-horned Beetle based on the ongoing
levels of State contributions. Funding is reduced for Johne's Disease
since it is rather endemic and funds need to be rationed for other
program needs. The budget also assumes that State cooperators will fund
a greater share of wildlife management programs.
A total of $17 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 2004, to collect $10.9
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. Since these facilities
are the direct beneficiaries of taxpayer assistance, it is appropriate
that a portion of the costs be funded by these beneficiaries.
A total of about $82 million for Scientific and Technical
Services.--Within USDA, APHIS has chief regulatory oversight of
genetically modified organisms. To help meet the needs of this rapidly
evolving sector, the budget includes a request to, in part, enhance the
regulatory oversight of field trials of crops derived with
biotechnology. Also, 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 being
marketed.
A total of $12 million for management initiatives.--This includes
building upon efforts started with Homeland Security Supplemental funds
for improving physical and operational security, It also includes
providing the State Department funds to help cover higher security
costs for APHIS personnel abroad. A portion of the increase would also
be used for enhanced computer security and eGov initiatives.
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 P&SP is to
promote a fair, open and competitive marketing environment for the
livestock, meat, and poultry industries. Currently, with 166 employees,
P&SP monitors the livestock, meatpacking, and poultry industries,
estimated by the Department of Commerce to have an annual wholesale
value of over $118 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 1,700 investigations in fiscal year 2003 to
enforce the Packers and Stockyards Act for livestock producers and
poultry growers, of which about 95 percent were closed in a year.
Financial recoveries were $27.2 million.
The Swine Contract Library began operation on December 3, 2003.
Producers can see contract terms, including, but not limited to, the
base price determination formula and the schedules of premiums or
discounts, and packers' expected annual contract purchases by region.
Since December 3, GIPSA has experienced approximately 27 ``hits'' each
day to view the Contract Summary reports and approximately 6 ``hits''
per day to view the Monthly reports.
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 and the Agricultural Marketing Act of 1946. 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 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. It also provides
technical assistance to exporters, importers and end users of U.S.
grains and oilseeds, as well as other USDA agencies, USDA Cooperator
organizations, and other governments. These efforts help facilitate the
sale of U.S. products in international markets.
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 average
$0.30 per metric ton, or approximately 0.23 percent of the $14 billion
value of U.S. grain exports. In fiscal year 2003 alone, more than 1.8
million inspections were performed on more than 222 million tons of
grains 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
2003, FGIS received only 13 quality complaints and no quantity
complaints from importers on grains inspected under the U.S. Grain
Standards Act. These involved 229,587 metric tons, or about 0.2 percent
by weight, of the total amount of grain exported during the year.
GIPSA'S 2005 BUDGET REQUEST
For 2005, the budget proposes a program level for salaries and
expenses of $44 million. Of this amount, $20 million is devoted to
grain inspection activities for standardization, compliance, and
methods development and $24 million is for Packers and Stockyards
Programs.
The 2005 budget includes the following program increases:
--$1 million for rapid response teams to closely examine livestock
marketing to ensure that producers are not unfairly
disadvantaged by the BSE situation. USDA will use the funds to
conduct market surveillance and ensure that marketing and
procurement contracts are honored in the aftermath of the BSE
finding.
--About $5 million to significantly upgrade the agency's IT
functions, including the ability to securely accept, analyze,
and disseminate information relevant to the livestock and grain
trades. About $4 million is a one-time increase for investment.
Currently, GIPSA receives more than 2.5 million submissions
from stakeholders, all of which are done on paper. The request
also includes $150,000 to maintain the Swine Contract Library.
--$1.2 million to monitor the various technologies that livestock and
meatpacking industries use to evaluate carcasses to ensure fair
and consistent use of those technologies. Producer compensation
is increasingly dependent not simply on the weight of the
animals they bring to slaughter, but the characteristics of the
carcasses as well (e.g., fat content).
--$0.5 million to enable GIPSA to better address and resolve
international grain trade issues, thus precluding disruption of
U.S. exports. GIPSA has experienced a growing demand for
cooperative participation with other agencies with
international trade responsibilities to help expand markets for
U.S. agricultural products and removing barriers to trade.
New User fees.--New user fees, similar to those proposed for fiscal
year 2004, 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 $6 million to cover these
costs. Also, the Packers and Stockyards program would be funded by new
license fees of about $23 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 the AMS is focused on facilitating the marketing of
agricultural products in the domestic and international marketplace,
ensuring fair trading practices, and promoting a competitive and
efficient marketplace to the benefit of producers, traders, and
consumers of U.S. food and fiber products. The Agency accomplishes this
mission through a wide variety of publicly and user funded activities
that help their customers improve the marketing of their food and fiber
products and ensure that food and fiber products remain available and
affordable to consumers. The following are just some of the ways that
AMS is doing its job better in serving its customers.
Customer Service and Technology.--AMS continues to improve its
service delivery by taking advantage of new technology to improve
public electronic access to information and services and to increase
operational efficiency. For example, the Livestock Mandatory price
reporting system processes huge amounts of raw data received from
slaughter facilities that report their transactions involving purchases
of livestock and sales of boxed beef and lamb, lamb carcasses, and
imported boxed lamb cuts. These data, including prices, contracts for
purchase, and other related information, are publicly disseminated in
over 100 daily, weekly, and monthly reports on fed cattle, swine, lamb,
beef and lamb meat. AMS continues to make enhancements to existing
reports and to introduce new reports in consultation with industry
stakeholders.
In 2003, AMS began offering automatic e-mail delivery of
comprehensive Market News information to subscribers. This free email
subscription service, provided in partnership with the Mann Library at
Cornell University, provides access to nearly 1,500 daily, weekly and
monthly market reports covering the six major AMS commodity groups. AMS
also is developing a Market News web portal that will allow users to
establish their own unique web pages through which they can immediately
access preferred market news reports, have the capability to build
specialized reports, and add customized features including nationwide
weather reports and metric data conversions. Users will be able to
access 5 years of data and download it in usable formats, including
charts, spreadsheets, and graphs. The portal will be available to
public users later this year for fruit and vegetable reports, and they
hope to expand it to market reports for other commodities soon
thereafter.
Partnerships.--AMS depends on strong partnerships with cooperating
State agencies and other Federal agencies to carry out many of our
programs. State agency partners collect data, provide inspection,
monitoring, and laboratory services for AMS, and otherwise maximize the
value of both State and Federal resources through sharing and
coordination. For instance, AMS' Market News program maintains
cooperative agreements with 40 States to coordinate local market
coverage with the regional and national coverage needed for AMS market
reporting. State employees who inspect shipments of seed within a State
provide information on potential violations in interstate shipments to
AMS' Federal Seed program. Thirty-three States and territories
participate with AMS in Pesticide Recordkeeping education and record
inspection activities and are reimbursed for their services.
Furthermore, the Pesticide Data program depends on its 10-12 State and
three Federal partners to collect and test the product samples on which
the program results are based. In fact, the Pesticide Data program
directs 80 percent of its funding to its State partners in
reimbursement for services provided. Another source of support for
State agriculture programs is AMS' Federal-State Marketing Improvement
Program (FSMIP), otherwise known as the Payments to States Program. In
2003, AMS allocated FSMIP grant funds to 20 States for 28 projects of
local and regional importance, such as marketing studies or developing
innovative approaches to the marketing of agricultural products.
Under the National Organic program, AMS program personnel accredit
State, private, and foreign certifying agents who certify that organic
production and handling operations are in compliance with the national
organic standards. As of February 2004, AMS received 137 applications
for accreditation. Of these, the program has thus far accredited a
total of 90 certifying agents, including 15 States, and 37 foreign
certifying agents. AMS also administers two cost share programs through
agreements with the States that help to offset certification costs for
organic producers. Additional resources provided in fiscal year 2004
will allow us to strengthen our support of the National Organic
Standards Board activities, including technical advisory panel
evaluations of materials and program evaluations--or peer reviews--and
to strengthen program enforcement.
Market Analysis.--In 2003, AMS supported wholesale or farmers
market facility projects in Mississippi, Georgia, Florida, Oregon,
Arizona, New York, Texas, American Samoa, Hawaii, and Kentucky. AMS
also supports marketing and market technology research projects which
were presented at numerous marketing conferences and workshops. AMS
supports farmers markets by conducting research on emerging trends in
market operations and practices and providing research reports,
reference material and fact sheets to farm vendors, farm market
managers, and the general public through the AMS website and a
telephone hotline.
AMS' Transportation Services Program works with Federal, State, and
local policy-makers to maintain an efficient national transportation
system that supports the needs of farmers, agricultural shippers, and
rural America. AMS conducts and sponsors economic studies of domestic
and international transportation issues and provides technical
assistance and information to producers, shippers, carriers, government
agencies, and universities. Program experts have generated studies and
reports on U.S. waterways, rail lines and rail car availability; rail
and shipping rate analyses; geographically disadvantaged farmers and
ranchers, and many others.
AMS transportation specialists are often called upon to provide
information and advice when agricultural transportation is disrupted.
After September 11, 2001, AMS has increasingly been asked to provide
more analyses on transportation security for agricultural products. In
2003, AMS developed a Transportation Security Briefing Book using the
information currently available. The book provides an overview of the
agricultural transportation system, existing safety measures, and
discusses the adverse effects of past disruptions in the system. While
this is a good start, we have found that much more study is needed in
this area for all modes of transport, but particularly for trucking,
which moves 90 percent of agricultural freight for at least one segment
of its transportation to destination.
Commodity Purchases.--AMS works in close cooperation with both the
Food and Nutrition Service (FNS) and the Farm Services Agency (FSA) to
administer USDA commodity purchases that stabilize markets and support
nutrition programs, such as the National School Lunch Program, the
Emergency Food Assistance Program, the Commodity Supplemental Food
Program, and the Food Distribution Program on Indian Reservations. To
maximize the efficiency of food purchase and distribution operations,
AMS, FNS, and FSA each provide a component of program administration
according to their organizational structure and expertise, but the
system is complex and requires close coordination. To better coordinate
the operations between the three agencies and control the vast array of
details inherent to the procurement process, the Processed Commodities
Inventory Management System (PCIMS) was developed more than 10 years
ago to track bids, orders, purchases, payments, inventories, and
deliveries of approximately $2.5 billion of commodities used in all
food assistance programs every year and another $1 billion in price
support commodity products maintained in inventory. PCIMS is still
being used by the three agencies with modifications having been made
over the years, when feasible, to add capabilities such as financial
tracking or to meet changes in program delivery.
AMS' 2005 BUDGET REQUEST
For AMS, the budget proposes a program level of $732 million, of
which over 88 percent will be funded by user fees and Section 32 funds.
The budget requests an appropriation of $87 million for Marketing
Services and Payments to States. The 2005 budget includes an increase
of $10 million in appropriated funds to improve the information
technology systems used to manage and control commodity orders,
purchases, and delivery. Under this proposal, PCIMS would be replaced
by the Web-based Supply Chain Management System (WBSCM). Implementation
of WBSCM will improve the efficiency of Federal procurement of
commodities by reducing ordering and delivery times from 24 days to 5
days. The 2005 budget also includes an increase of $0.3 million to
conduct studies aimed at improving the security of the U.S.
transportation system for agricultural commodities and supplies. The
budget includes a decrease of $2 million for FSMIP to reflect a
reduction for a one-time increase in 2004 for creation of specialty
markets in Wisconsin.
CONCLUSION
This concludes my statement. I am looking forward to working with
the Committee on the 2005 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, both unintentional and those caused by terrorist action, 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 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 in
presenting our fiscal year 2005 budget proposal. To provide some
context for our budget proposal, I would like to begin by reviewing our
agency's mission and describing some of the customer service
improvements we have made in delivery of our programs.
MISSION
The mission of the Agricultural Marketing Service--AMS--is focused
on marketing: 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 wide variety of publicly
funded activities that help our customers better market their food and
fiber products and ensure that food and fiber products remain available
and affordable to consumers. More specifically, AMS helps to make the
nation's agricultural markets work efficiently by providing wide and
equal access to market information for all producers and traders; by
developing agricultural product descriptions that provide a common
language for commercial trade; by providing data on pesticide residues
and microbiological pathogens that support science-based risk
assessment; by providing ``how to'' technical expertise to growers,
transporters, and others in the marketing chain; and by helping to
develop alternative or improved market outlets.
AMS also offers voluntary fee-based services such as product
quality grading, contract certification, export verification, and
quality control services such as plant inspections, equipment reviews,
and production quality or process control certification. Because these
voluntary services are available to verify the quality of agricultural
products and the efficacy of production processes, they support private
contractual arrangements and marketing claims that can improve
profitability for U.S. producers in both domestic and international
markets. In delivering these voluntary services, we remain vigilant
about their costs, while working in partnership with our customers to
ensure that marketplace needs are met.
CUSTOMER SERVICE AND TECHNOLOGY
We continue to improve our service delivery by taking advantage of
new technology--to improve public electronic access to information and
services and to increase our operational efficiency. For example, the
Livestock Mandatory price reporting system processes huge amounts of
raw data--some 2 to 3 million data items each week--received from 112
slaughter facilities, that report their transactions involving
purchases of livestock and sales of boxed beef and lamb, lamb
carcasses, and imported boxed lamb cuts. These data, including prices,
contracts for purchase, and other related information, are publicly
disseminated in over 100 daily, weekly, and monthly reports on fed
cattle, swine, lamb, beef and lamb meat. AMS continues to make
enhancements to existing reports and to introduce new reports in
consultation with industry stakeholders.
In 2003, AMS began offering automatic email delivery of
comprehensive Market News information to subscribers. Market News
reports cover prices, volume, quality, condition, and other market data
on farm products in production areas and at specific domestic and
international markets. This free email subscription service, provided
in partnership with the Mann Library at Cornell University, provides
access to nearly 1,500 daily, weekly and monthly market reports
covering the six major AMS commodity groups--cotton, dairy, fruit and
vegetable, livestock and seed, poultry, and tobacco. Users can search
by keyword or browse by commodity, then subscribe to and receive
selected reports via email whenever an update is published. This
initiative is part of the Federal e-government effort to streamline
government-to-citizen communications.
AMS also is developing a Market News web portal that will allow
users to establish their own unique web pages through which they can
immediately access preferred market news reports, have the capability
to build specialized reports, and add customized features including
nationwide weather reports and metric data conversions. Users will be
able to access 5 years of data and download it in usable formats,
including charts, spreadsheets, and graphs. The portal will be
available to public users later this year for fruit and vegetable
reports, and we hope to expand it to market reports for other
commodities soon thereafter.
PARTNERSHIPS
AMS depends on strong partnerships with cooperating State agencies
and other Federal agencies to carry out many of our programs. State
agency partners collect data, provide inspection, monitoring, and
laboratory services for AMS, and otherwise maximize the value of both
State and Federal resources through sharing and coordination. For
instance, AMS' Market News program maintains cooperative agreements
with 40 States to coordinate local market coverage with the regional
and national coverage needed for AMS market reporting. State employees
who inspect shipments of seed within a State provide information on
potential violations in interstate shipments to AMS' Federal Seed
program. Thirty-three States and territories participate with AMS in
Pesticide Recordkeeping education and record inspection activities and
are reimbursed for their services. Furthermore, our Pesticide Data
program depends on its State and Federal partners to collect and test
the product samples on which the program results are based. In fact in
fiscal year 2004, the Pesticide Data program will direct about 80
percent of its funding to its eleven State partners in reimbursement
for services provided. The resulting information generated by AMS can
be utilized by other Federal agencies such as EPA and FDA for policy
and regulatory actions, as well as other USDA agencies, academia,
agricultural industry, international organizations, and global traders.
We work with local and city agencies to improve wholesale, farmers,
and other direct marketing opportunities. In 2003, our Wholesale,
Farmers, and Alternative Markets program supported wholesale or farmers
market facility projects in Mississippi, Georgia, Florida, Oregon,
Arizona, New York, Texas, American Samoa, Hawaii, and Kentucky. The
program also supports marketing and market technology research projects
as well as numerous marketing conferences and workshops. In an effort
to help link farm direct sales with school nutrition programs, for
example, AMS organized a workshop focused on farm to school marketing
in fiscal year 2003 at the first national ``Farm to Cafeteria
Conference'' in Seattle, Washington.
Farmers markets directly benefit local producers and continue to be
an important farm product outlet for agricultural producers nationwide.
Farmers markets have risen in popularity due to growing consumer
interest in obtaining fresh products directly from the farm. The number
of farmers markets has grown by 79 percent between 1994 and 2002 to
more than 3,100 facilities nationwide. AMS supports farmers markets by
conducting research on emerging trends in market operations and
practices and providing research reports, reference material and fact
sheets to farm vendors, farm market managers, and the general public
through the AMS website and a telephone hotline. We also participate in
industry, producer, and academic conferences and training sessions
across the country.
Another source of support for local agriculture programs is AMS'
Federal-State Marketing Improvement Program, or FSMIP. These matching
grant funds, made available to State departments of agriculture and
other State agencies, fund 25 to 35 projects each year. In 2003, we
allocated FSMIP grant funds to 20 States for 28 projects of local and
regional importance, such as marketing studies or developing innovative
approaches to the marketing of agricultural products.
Our National Organic program, in partnership with its advisory
committee, provides nationwide standards and a certification system for
the U.S. organic food industry, which has over $8 billion in sales and
has seen annual growth in excess of 22 percent. Between 1995 and 2000,
the U.S. organic market expanded by 175 percent and is expected to more
than double its 2000 value of $7.8 billion to approximately $16 billion
by 2005. AMS works with the National Organic Standards Board to develop
standards for substances used in organic production, maintain a
National List of approved and prohibited substances for organic
production, and convene technical advisory panels to provide scientific
evaluation of materials considered for the National List. AMS program
personnel accredit State, private, and foreign certifying agents who
certify that organic production and handling operations are in
compliance with the national organic standards. As of February 2004,
AMS received 137 applications for accreditation. Of these, the program
has thus far accredited a total of 90 certifying agents--53 domestic
certifying agents, including 15 States, and 37 foreign certifying
agents. AMS also administers two cost share programs through agreements
with the States that help to offset certification costs for organic
producers. Additional resources provided in fiscal year 2004 will allow
us to strengthen our support of Board activities, including technical
advisory panel evaluations of materials and program evaluations--or
peer reviews--and to strengthen program enforcement.
Our Transportation Services Program works with Federal, State, and
local policy-makers to maintain an efficient national transportation
system that supports the needs of farmers, agricultural shippers, and
rural America. The program helps to support farm income, expand
exports, and maintain the flow of food to consumers. AMS conducts and
sponsors economic studies of domestic and international transportation
issues and provides technical assistance and information on
agricultural transportation, rural infrastructure and access, and food
distribution to producers, shippers, carriers, government agencies, and
universities. Program experts have generated studies and reports on
U.S. waterways, rail lines and rail car availability; rail and shipping
rate analyses; and geographically disadvantaged farmers and ranchers,
and many others. The program also produces periodic publications that
provide information for agricultural producers and shippers on various
modes of transportation, such as the weekly Grain Transportation
Report, the Refrigerated Transport Quarterly, quarterly issues of the
Ocean Rate Bulletin and Agricultural Container Indicators, and the
semiannual Agricultural Ocean Transportation Trends.
Our transportation specialists are called upon to provide
information and advice when agricultural transportation is disrupted,
such as late in 2002, when a labor stoppage closed the West Coast ports
and threatened millions of dollars of losses for agriculture from
commodities spoiled in transit. After 9/11, we are increasingly asked
to provide more analyses on transportation security for agricultural
products. In 2003, AMS developed a Transportation Security Briefing
Book using the information currently available. The book provides an
overview of the agricultural transportation system, existing safety
measures, and discusses the adverse effects of past disruptions in the
system. While this is a good start, we have found that much more study
is needed in this area for all modes of transport, but particularly for
trucking, which moves 90 percent of agricultural freight for at least
one segment of its transportation to destination.
Finally, AMS works in close cooperation with both the Food and
Nutrition Service (FNS) and the Farm Services Administration (FSA) to
administer USDA's nutrition assistance and surplus commodity programs.
AMS purchases agricultural commodities under authority of Section 32 of
the Act of August 24, 1935, which permanently authorized an
appropriation equal to 30 percent of customs receipts to encourage the
exportation and domestic consumption of agricultural commodities. These
funds, plus unused balances up to $500 million from the previous fiscal
year, may be authorized by the Secretary to support markets by
purchasing commodities in temporary surplus, for domestic nutrition
assistance programs, for diversion payments and direct payments to
producers, for export support, and disaster relief.
AMS retains only about 13 percent of the funds appropriated under
Section 32. In 2005, AMS expects to retain $800 million, half of
which--$400 million--will be spent on purchases for the Child Nutrition
Programs. Most of the rest is available to AMS' commodity purchases
program for emergency surplus removal. Eighty-six percent of the $6.2
billion total appropriation will be transferred to FNS to administer
the Child Nutrition Programs and 1 percent to the Department of
Commerce to develop fishery products.
The commodities purchased by AMS are donated to various nutrition
assistance programs such as the National School Lunch Program, the
Emergency Food Assistance Program, and the Food Distribution Program on
Indian Reservations, according to their needs and preferences. In
fiscal year 2003, AMS purchased 1.46 billion pounds of commodities that
were distributed by FNS through its nutrition assistance programs.
AMS purchases the non-price supported commodities--meat, fish,
poultry, egg, fruit and vegetable products--and FSA supplies the price-
supported commodities--flours, grains, peanut products, cheese and
other dairy products, oils and shortenings--that supply the National
School Lunch Program and other nutrition assistance programs
administered by FNS.
To maximize the efficiency of food purchase and distribution
operations, AMS, FNS, and FSA each provide a component of program
administration according to their organizational structure and
expertise, but the system is complex and requires close coordination.
AMS and FSA purchase for FNS the entitlement commodities provided to
schools. Schools and other nutrition assistance programs can also
receive bonus commodities that are purchased to support agricultural
markets through AMS' surplus commodity program. AMS and FSA are
responsible for issuing and accepting bids, and awarding and
administering contracts. FNS is responsible for taking commodity orders
from the States, monitoring purchases and entitlements throughout the
year, and the overall administration of the commodity nutrition
assistance programs. Before a purchase is announced, AMS and FSA
specialists work with potential vendors, FNS, and food safety officials
to develop a specification for each product purchased that details
product formulation, manufacturing, packaging, sampling, testing, and
quality assurance. After market conditions, availability, and
anticipated prices are assessed, and recipient preferences determined,
AMS and FSA invite bids for particular U.S. produced and domestic
origin food products under a formally advertised competitive bid
program. Bids received from responsible vendors are analyzed and
contracts are awarded by AMS and FSA. FSA administers the payments to
vendors, ensures the proper storage of commodities when needed, and
assists in their distribution.
To better coordinate the operations between the three agencies and
control the vast array of details inherent to the procurement process,
the Processed Commodities Inventory Management System, or PCIMS, was
developed more than 10 years ago to track bids, orders, purchases,
payments, inventories, and deliveries of approximately $2.5 billion of
commodities used in all domestic and foreign food assistance programs
every year and another $1 billion in price support commodity products
maintained in inventory. PCIMS is still being used by the three
agencies with modifications having been made over the years, when
feasible, to add capabilities such as financial tracking or to meet
changes in program delivery.
FISCAL YEAR 2005 BUDGET REQUEST
This leads us to the first of our two budget requests for fiscal
year 2005, which involves both a multi-agency partnership and an
electronic (e-) government initiative that will significantly improve
customer service.
WEB-BASED SUPPLY CHAIN MANAGEMENT SYSTEM
AMS, FNS and FSA are working together to replace PCIMS with a Web-
Based Supply Chain Management System, or WBSCM. For fiscal year 2005,
AMS is requesting funding of $10 million in our Marketing Services
appropriated account to begin developing the entire new system rather
than each of the three agencies separately requesting portions of the
funding needed.
WBSCM has undergone extensive reviews within USDA and was approved
as one of the Department's selected e-government ``smart choice''
initiatives. WBSCM is designed to greatly reduce the time required for
processing purchases; shorten delivery times; improve USDA's ability to
collaborate with other Departments; improve reporting capability;
reduce transportation, inventory, and warehousing costs; and enable
future system updates as needed. Furthermore, the system will create a
singe point of access for customers, allow us to share information more
quickly and conveniently, automate internal processes, and assist in
breaking down bureaucratic divisions. Eventually, WBSCM will be able to
support agencies that manage similar commodity distribution programs
for export. The Foreign Agricultural Service, the Agency for
International Development, and the Maritime Administration, have been
included in the development phases to ensure the new system can address
the needs of export programs.
Over the last few years AMS, FNS, and FSA have undertaken extensive
business practice reengineering efforts. Since PCIMS was developed and
``hard coded'' to automate the business practices of the time, it often
cannot be modified to accept significant changes in process without
undue costs. As a result, agency employees frequently have to develop
electronic entries external to PCIMS and then update the system with
the results. In contrast, WBSCM is designed to use commercial off the
shelf software which will speed up implementation, incorporate industry
and commercial best business practices, and give the agencies the
flexibility to reconfigure the system after implementation when
processes change. We expect that increased efficiency, better
coordination, and improved services will begin as soon as the basic
system is in place in mid-fiscal year 2007, when WBSCM will provide
those services being performed by PCIMS. Until then, we must continue
to maintain the PCIMS system.
AGRICULTURAL TRANSPORTATION SECURITY
Our second proposal this year is to strengthen our agricultural
transportation security expertise within the Transportation Services
program. We are requesting $300,000 to produce more in-depth analyses
of agricultural transportation security. Transportation is a critical
link in the food supply chain. Closer analysis of the sector will
provide the information needed for critical assessments of the
strengths and vulnerabilities of the various transportation modes used
to move farm inputs, food, and other agricultural products from farm to
market. These funds will strengthen USDA's Homeland Security efforts by
helping to safeguard the U.S. food supply and supporting the Department
of Homeland Security. We will be better able to provide the information
requested by policy officials in planning strategies to prevent
potential disruptions, and to provide comprehensive information more
quickly when any emergencies occur. Our current expertise and
established contacts with transportation providers give us a distinct
advantage in addressing agricultural transportation security issues.
The transportation industry also has a serious interest in protecting
shipments. For example, the Agricultural and Food Transporters
Conference (AFTC) recently requested help from AMS in developing
voluntary security guidelines. AMS is supporting a cooperative effort
between USDA and the AFTC to prepare a guidebook. With expanded
information and analysis, we will also be better able to advise
agricultural producers and shippers on improving their own security.
BUDGET REQUEST SUMMARY
Our total budget request includes $86 million for Marketing
Services, which includes an increase for pay costs partially offset by
a decrease for savings associated with information technology. We also
include a decrease of $2 million in Federal-State Marketing Improvement
Program grants funding under Payments to States and Possessions. These
funds were provided in fiscal year 2004 to support Wisconsin specialty
products. We request $11 million in Section 32 Administrative funds for
commodity purchasing and $16 million for Marketing Agreements and
Orders. These requests also include an increase for pay costs. Thank
you for this opportunity to present our budget proposal.
______
Prepared Statement of Dr. Peter Fernandez, Acting 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. APHIS is an action-oriented agency
that works with other Federal agencies, Congress, States, agricultural
interests, and the general public to carry out its mission to protect
the health and value of American agriculture and natural resources.
APHIS strives to assure its customers and stakeholders that it is on
guard against the introduction or reemergence of animal and plant pests
and diseases that could limit production and damage export markets. At
the same time, APHIS monitors for and responds to potential acts of
agricultural bioterrorism, invasive species, diseases of wildlife and
livestock, and conflicts between humans and wildlife. APHIS also
addresses sanitary and phytosanitary trade barriers and certain issues
relating to the humane treatment of animals. Finally, APHIS ensures
that biotechnology-derived agricultural products are safe for release
in the environment. We have developed a strategic plan to help us
accomplish these objectives, and I would like to report on our fiscal
year 2003 protection efforts and our fiscal year 2005 budget request in
that context.
APHIS' protection system is based on a strategic premise that
safeguarding the health of animals, plants, and ecosystems makes
possible safe agricultural trade and reduces losses to agricultural and
natural resources. All nine objectives in the protection system are key
components of this strategic premise. Failing to succeed in any one
objective will eventually lead to overall failure, and American farmers
will not reach their potential export markets. Additionally, the
protection system is a key component of USDA's Homeland Security role.
The United States has a vital stake in the health of American
agriculture, both economically and in terms of feeding our people and
many throughout the world. Terrorists could well recognize that vital
stake and seek to attack it.
Five Objectives for Safeguarding Health of Animals, Plants, and
Ecosystems
Objective 1.1--Conduct offshore threat assessment and risk
reduction activities.--In this era of increasing globalization and
advancing technologies, APHIS must constantly assess the exotic health
threats approaching our borders, and engage in offshore pest or disease
eradication activities when the threat is imminent and the potential
impact severe.
To prevent the introduction of costly foreign animal diseases into
the United States, our Foreign Animal Diseases (FAD) and Foot-and-Mouth
Disease (FMD) program works to detect and control outbreaks of animal
diseases in foreign countries far from our shores. This is our first
line of defense against foreign animal diseases and has become more
significant as international trade and travel have increased. APHIS
conducts operations overseas through bilateral agreements and works
with multilateral organizations, such as the World Organization for
Animal Health (OIE). Last year, for example, through an agreement with
Panama and Mexico, we collected 1,260 samples of suspected vesicular
disease throughout Central America from field investigations and tested
the samples in Panama. Fortunately, all tested negative for FMD, while
639 were diagnosed as vesicular stomatitis.
Through our Fruit Fly Exclusion and Detection program, we cooperate
with the Governments of Mexico, Guatemala, and Belize on the Moscamed
program to eradicate and control the Mediterranean Fruity Fly (Medfly),
which could cause $2 billion in losses if it became established in the
United States. Moscamed's current top priorities are to eradicate the
Medfly from Chiapas, Mexico, and move the barrier south into Guatemala
in an effort to achieve APHIS' and its cooperators' goal of eradicating
Medfly from Central America and thereby providing more secure
prevention against the threat Medfly poses to the United States. A
major component of the program is the production and release of sterile
flies to disrupt normal reproduction. In fiscal year 2003, the Central
America Medfly program produced 2.2 billion sterile fruit flies a week,
exceeding its goal of producing 2 billion per week. This production
increase allowed more flies to go to the preventive release program in
the United States.
Through our Tropical Bont Tick program, APHIS employees are
preventing the introduction of heartwater and other diseases
transmitted by tropical bont ticks into the livestock industry and
wildlife populations of the United States from affected Caribbean
islands. The cooperative program has eradicated ticks from six of the
nine islands involved so far, bringing us closer to our goal of
eradicating this pest from the Western Hemisphere.
Objective 1.2--Regulate and monitor to reduce the risk of
introduction of invasive species.--APHIS regulates the import of
agricultural products, including commercial shipments and items carried
into the United States by travelers, to prevent the entry of foreign
pests and diseases. We work closely with the Department of Homeland
Security (DHS) to monitor and intercept items that arrive at ports of
entry.
In fiscal year 2003, APHIS and DHS agricultural employees inspected
the baggage of nearly 74 million arriving passengers. Passenger baggage
is inspected manually, with x-ray technology, or through the use of
detector dogs. Agricultural inspectors also cleared 54,033 ships and
3,128,660 cargo shipments. In cooperation with DHS, we increased the
number of cargo inspections by 43 percent over fiscal year 2002 because
of the high entry risk of exotic wood boring and bark beetles, like
Asian long-horned beetle and emerald ash borer. In total, agricultural
inspectors intercepted 82,631 reportable pests at land borders,
maritime ports, airports, and post offices. At plant inspection
stations, our inspectors cleared 176,761 shipments containing over 1.2
billion plants units (cuttings, whole plants, or other propagative
materials) and intercepted 4,260 pests.
Part of APHIS' safeguarding strategy is to prevent the intentional
introduction of illegal products through market surveys,
investigations, and enforcement action. In fiscal year 2003, our
Safeguarding, Intervention, and Trade Compliance (SITC) staff and field
personnel seized 15,706 illegal plant products and 488 illegal meat,
poultry, and dairy products and found 112 reportable pests. When SITC
detects a prohibited item, we identify the item's origin and the
responsible shippers, importers, and broker. By maintaining the
relevant information in databases, the program can target specific
commodities and importers. This year, SITC investigations led to the
detection of 82 violations at markets and distributors' warehouses.
APHIS' Animal and Plant Health Regulatory Enforcement program
conducts regulatory enforcement activities to prevent the spread of
animal and plant pests and diseases in interstate trade. These
activities include inspection, surveillance, animal identification, and
prosecution. This year, APHIS continued the development of a multi-year
project to improve a headquarters-based, on-line computer system to
track investigations and automate the enforcement process. The database
will help our enforcement efforts by allowing APHIS programs and other
agencies such as the Departments of Homeland Security and Treasury to
share critical information and identify individuals, companies,
cargoes, carriers, or pathways posing risk.
In fiscal year 2003, APHIS conducted 1,782 investigations involving
plant quarantine violations resulting in 142 warnings, 682 civil
penalty stipulations, seven Administrative Law Judge decisions, and
approximately $1 million in fines. Regarding animal health programs, we
conducted 1,425 investigations, resulting in 210 warnings, 39 civil
penalty stipulations, five Administrative Law Judge decisions, and
approximately $44,900 in fines. Also during fiscal year 2003, the
program conducted 76 investigations of alleged Swine Health Protection
Act violations in Puerto Rico. This was slightly less than the target
of 80 investigations, mostly due to providing support for the exotic
Newcastle disease outbreak in California.
Objective 1.3--Ensure safe research, release, and movement of
agricultural biotechnology events, veterinary biologics, and other
organisms.--The growth of agricultural biotechnology hinges on the
public's acceptance of this technology as safe, and APHIS' regulatory
role is key to ensuring global acceptance. In addition to agricultural
biotechnology, the Agency monitors and regulates to ensure safe
agricultural research and commercialization activities involving the
movement of non-indigenous organisms and veterinary biologics.
APHIS' Biotechnology Regulatory Services (BRS) program, created in
August 2002, regulates the introduction (importation, interstate
movement, and field release) of genetically engineered organisms such
as plants, insects, microorganisms and any other organism that is known
to, or could be, a pest. APHIS also has determined that BRS may
potentially regulate animals, insects, and other disease agents
relevant to livestock health. Through a strong regulatory framework,
BRS determines the conditions under which genetically engineered
organisms can be introduced into the United States and allows for the
importation, interstate movement, and field release of these materials
only after rigorous conditions and safeguards are put into place. Under
the authority of the Plant Protection Act of 2000, APHIS can pursue
penalties for failure to adhere to our regulations, permit conditions,
and requirements.
With the creation of our new biotechnology compliance program, we
have chosen measures that will accurately and visibly reflect the
effectiveness of our inspection efforts for the testing of products
that carry a higher degree of perceived risk. We believe that increased
frequency of inspections--especially at high risk sites--coupled with
efforts to improve the quality of inspections through expanded
training, will translate into a high degree of stakeholder and public
confidence that these products will be safely confined and not
inadvertently enter the food supply. Our performance target for fiscal
year 2004 is to inspect 10 percent of low risk sites, 40 percent of
medium risk sites at least once during the growing season, and 100
percent of pharmaceutical and industrial sites a total of seven times--
five times during the growing season and two times afterwards.
Our Veterinary Biologics program continues to ensure that
veterinary biologics products are pure, safe, potent, and effective.
Our goal is to ensure the availability of quality veterinary biological
products for the diagnosis, prevention, and treatment of animal
diseases. The program will continue to respond to emerging diseases
with expedited reviews and inspections for new veterinary biologics,
and it will follow a risk-based approach to inspect and test other
products.
In fiscal year 2003, APHIS performed 78 regulatory actions
following routine inspections and 24 investigations of possible
regulation violations. APHIS' Center for Veterinary Biologics found the
marketing of unlicensed veterinary biologics and false or misleading
advertising of licensed veterinary biologics in over half of these
investigations. Through education, cooperation, and regulatory actions,
APHIS helped industry achieve increased compliance with the Virus-
Serum-Toxin Act.
Objective 1.4--Manage issues related to the health of U.S. animal
and plant resources and conflicts with wildlife. Agricultural
stakeholders also expect APHIS to help solve many types of health-
related production issues in the United States. For example, producers
need help in dealing with area-wide wildlife damage control problems.
Indigenous pest problems affecting multiple States, such as boll weevil
and grasshoppers, also require APHIS' attention. We are not alone in
these efforts and have good relationships are with our State and Tribal
partners in conducting these eradication and control programs. That
cooperation, in addition to support from academia and industry, is
essential for these types of programs to succeed.
We continue to make progress on a number of other animal health
programs as well. At the beginning of fiscal year 2003, there was one
pseudorabies-quarantined premise in the United States, compared to 12
at the beginning of fiscal year 2002. By the end of fiscal year 2003,
there were no swine commercial production premises under quarantine for
pseudorabies. As of September 30, 2003, there were 1,776 flocks
participating in the Scrapie Flock Certification Program of which 105
are certified, 1,663 are completely monitored, and 8 are selective
monitored flocks. This is in comparison to 1,539 flocks enrolled, 78
flocks certified, 1,452 flocks completely monitored, and 9 flocks
selectively monitored as of September 30, 2002. To continually improve
on the 46 States, Puerto Rico, and the Virgin Islands as accredited
Tuberculosis-free, the program depopulated three dairy herds in
California, four beef herds in Michigan, and one beef herd in Texas
during fiscal year 2003.
Among a number of protection efforts, APHIS' Wildlife Services (WS)
Operations program works to protect agricultural crops from wildlife
damage, to protect livestock from predation, and to protect human
safety by preventing wildlife collisions with aircraft. In fiscal year
2003, the Agency's beaver damage management activities in several
States averted $25 million in impending damage to forest and
agricultural resources, waterways and highway infrastructures. As wolf
populations continue to increase, so do requests for assistance with
wolf predation. As a result, APHIS responded to 179 requests for
assistance with wolf predation on livestock or domestic dogs during
fiscal year 2003 in Minnesota alone. In the west, APHIS responded to 41
requests for assistance with gray wolf predation in Idaho and 87
requests in Montana. Airports reported approximately 6,100 wildlife
strikes to civil aircraft in 2002, with the U.S. Air Force alone
reporting more than 3,800 strikes to military aircraft. Wildlife
strikes cost civil aviation in the United States over $480 million in
damages in 2002. The requests for APHIS assistance in managing wildlife
hazards at airports and military air bases continue to increase. In
fiscal year 2003, APHIS wildlife biologists provided wildlife hazard
management assistance to over 500 airports nationwide for the
protection of human safety and property, compared to only 42 airports
in fiscal year 1990 and 409 airports in fiscal year 2002. At JFK
International Airport, APHIS biologists have reduced gull strikes by
over 80 percent in 2000-2003 compared to strike levels in the early
1990s.
APHIS' Wildlife Services (WS) Methods Development program, through
the National Wildlife Research Center (NWRC), functions as the research
arm of APHIS' Wildlife Services program by providing 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. The program provides technical support for
the development of 5 drug/vaccine products through Investigational New
Animal Drug Authorizations under the Food and Drug Administration.
These materials are under development as wildlife immobilizing agents
and contraceptive products. APHIS continued to develop and evaluate
non-lethal methods for managing blackbird damage to sunflowers and rice
by conducting extensive laboratory testing of registered chemicals for
bird repellency characteristics. Scientists continued multi-year
research studies at various airports in the United States to reduce
wildlife strike hazards. These scientists researched turf management,
non-lethal repellents, and dispersal techniques to minimize strikes by
gulls, waterfowl, turkey vultures, hawks, and other species that
threaten aviation safety. In fiscal year 2003, we met our performance
target of testing and/or improving 18 wildlife damage management
methods and will maintain this target for fiscal year 2004.
APHIS' Animal Welfare program carries out activities designed to
ensure the humane care and handling of animals used in research,
exhibition, the wholesale pet trade, or transported in commerce. The
program places primary emphasis on voluntary compliance through
education with secondary emphasis on inspection of facilities, records,
investigation of complaints, reinspection of problem facilities, and
training of inspectors. However, when necessary, APHIS personnel
investigate alleged violations of Federal animal welfare and horse
protection laws and regulations and oversee and coordinate subsequent
prosecution of violators through appropriate civil or criminal
procedures. In fiscal year 2003, we conducted 365 animal welfare
investigations resulting in 172 formal cases submitted for civil
administrative action. We also issued 90 letters of warning and
resolved 44 cases with civil penalty stipulations resulting in $56,373
in fines. Administrative Law Judge Decisions resolved another 58 cases
resulting in $668,995 in fines.
Objective 1.5--Respond to emergencies--response planning,
surveillance, quick detection, containment, and eradication.--Even
though we devote many resources to pest and disease prevention and
regulatory compliance to safeguard agricultural health, it is
impossible to intercept every potential biological threat. APHIS must
have the capacity to quickly respond in order to limit the spread of
the outbreak and to eradicate it so that production losses are
minimized and exports of affected commodities do not suffer long-term
disruptions.
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. The EMS program
identifies national infrastructure needs for anticipating, preventing,
mitigating, responding to, and recovering from such emergencies. By
Presidential Homeland Security Directive, APHIS is restructuring its
emergency response systems according to the National Incident
Management System, or NIMS. APHIS implemented the incident command
structure in response to the exotic Newcastle disease (END) outbreak in
California, Arizona, Nevada, and Texas during fiscal year 2003. During
the END outbreak, APHIS followed the NIMS structure and established
five incident command posts in three States.
This same structure was put into place when, on December 23, 2003,
laboratory testing at the National Veterinary Services Laboratories
indicated that a single cow, slaughtered on December 9, 2003, in
Washington State, tested positive for BSE. The world reference
laboratory in the United Kingdom confirmed these presumptive positive
results on December 25 for BSE, and we immediately began a swift and
comprehensive investigation.
The epidemiological tracing and DNA evidence proved that the BSE
positive cow was born on a dairy farm in Alberta, Canada in 1997. She
was moved to the United States in September 2001 along with 80 other
cattle from that dairy. The epidemiological investigation to find
additional animals from the source herd led to a total of 189 trace-out
investigations. These investigations resulted in complete herd
inventories on 51 premises in three States: Washington, Oregon and
Idaho.
On February 9, 2004, APHIS announced that we had completed our
field investigation of the BSE case in Washington. During our
investigation, a total of 255 ``Animals of Interest''--animals that
were or could have been from the source herd--were identified on 10
premises in Washington, Oregon and Idaho. All 255 animals were
depopulated and sampled for BSE testing. Results were negative on all
samples. The carcasses from all of the euthanized animals were properly
disposed of in accordance with all Federal, State, and local
regulations. Consistent with international guidelines on BSE, we
focused on tracing the 25 animals born into the birth herd of the index
cow during a 2-year window around her birth. Based on normal culling
practices of local dairies, we estimated that we would be able to
locate approximately 11 of these animals. In fact, APHIS definitively
located 14 of these animals.
We are confident that the remaining animals represent very little
risk. Even in countries like the United Kingdom where the prevalence of
BSE has been very high, it has been very uncommon to find more than one
or maybe two positive animals within a herd.
Thus far in fiscal year 2004, USDA has transferred $80.4 million
from the Commodity Credit Corporation (CCC) to APHIS for BSE-related
activities. APHIS is using these funds to respond to the Washington
State incident and to enhance BSE surveillance around the country. This
CCC funding will supplement the funds already set aside for BSE
surveillance in APHIS' base appropriation. This enhanced surveillance
plan incorporates recommendations from the international scientific
review panel and the Harvard Center for Risk Analysis; both have
reviewed and supported the plan.
On December 30, 2003, Secretary Veneman announced that an
international panel of experts would be convened to review our BSE
investigative efforts and recommend enhancements to our BSE program.
The panel delivered their report on February 4, 2004, and commended
USDA for conducting such a comprehensive epidemiological investigation.
The panel also made recommendations for further enhancements to the BSE
program. The Secretary applied all of this information in considering
future actions with regard to BSE, and on March 15, she announced a
plan to enhance the BSE surveillance program. Previous targeted
surveillance efforts were designed to detect BSE in the adult cattle
population at the level of at least one infected animal per million
adult cattle with a 95 percent confidence level. The goal of the new
plan is to test as many cattle in the targeted high-risk population as
possible in 12 to 18 months, and then evaluate future actions based on
the results of this effort.
The plan also incorporates random sampling of apparently normal,
aged animals at slaughter. More than 86 percent of all adult cattle
processed annually are slaughtered in 40 plants; random sampling
efforts will be focused on these plants.
More intensive surveillance will allow us to refine our estimates
of the level of disease present in the U.S. cattle population and
provide consumers, trading partners, and industry better assurances
about our BSE status. Testing will be conducted at USDA's National
Veterinary Services Laboratories and at participating network contract
laboratories. As an example, if a total of at least 268,444 samples is
collected from the targeted population, we believe this level of
sampling would allow USDA to detect BSE at a rate of 1 positive in 10
million adult cattle (or 5 positives in the entire country with a 99
percent confidence level). We also plan on testing at least 20,000 BSE
slaughter samples from apparently healthy, aged bulls and cows. During
this effort, we will be utilizing approved rapid screening tests,
working with industry on disposal issues, and enhancing our BSE
education and outreach activities.
USDA remains confident in the safety of the U.S. beef supply. Out
of an abundance of caution, USDA recalled all meat products processed
in the affected slaughter plant the same day as the positive cow.
However, the meat presents an extremely low risk to consumers, because
all of the central nervous system related tissues--those most likely to
contain the BSE agent--were removed from the affected animal during
slaughter and did not enter the human food supply.
Even with the recent detection, the United States continues to have
a very low BSE risk. An independent assessment conducted by Harvard
University in 2001 and again in 2003 demonstrated that even with a
detection of BSE in this country, United States control efforts would
minimize any possible spread of the disease and ultimately eliminate it
from the U.S. cattle population. These controls include a long-standing
ban on imports of live cattle, other ruminants, and most ruminant
products from high risk countries; the Food and Drug Administration's
1997 prohibition on the use of most mammalian protein in cattle feed;
and an aggressive surveillance program that has been in place for more
than a decade. In each of the past 2 years, the United States tested
over 20,000 head of cattle for BSE, which is 47 times the recommended
international standard.
We opened the APHIS Emergency Operations Center (AEOC) in March
2003. The AEOC is a state-of-the-art facility that allows a national
management response team to communicate with field personnel and USDA
leadership during an outbreak situation. Communications capabilities
include video teleconferencing, advanced computer interfaces,
geographical information system mapping, and a strong multimedia
component.
Through the Pest Detection program, APHIS and its State cooperators
work to ensure the early detection of harmful or invasive plant pests
and weeds through the Cooperative Agricultural Pests Survey (CAPS)
program. The CAPS program provides the domestic infrastructure
necessary to conduct national surveys for plant pests and weeds and
document the results in a national database, the National Agricultural
Pest Information System (NAPIS). NAPIS provides a summary of pest
survey results and allows APHIS to track the spread of pests within the
United States, demonstrate their presence or absence, plan their
control, and support the export of agricultural commodities. APHIS is
currently engaged in a multi-year effort to enhance its early detection
program through an increased level of communication and cooperation
with its State partners, increased staffing levels, the use of new
technology, and a new focus on international pest risk analysis. These
efforts will help us meet our goal of detecting significant pest
introductions before a new pest can cause serious damage. Finding newly
arrived exotic pests before they spread will reduce the money spent on
costly eradication programs and prevent losses to farmers and our
natural ecosystems.
APHIS has completed pest risk assessments for ten of the 18 pests
on the national CAPS list for fiscal year 2003 and 2004 and is working
with State cooperators to develop State CAPS lists. We are also
instituting CAPS committees at the State, regional, and national levels
to ensure that stakeholders are involved in the process of targeting
pests for survey. In fiscal year 2003, APHIS and 21 States conducted
the Exotic Wood-Borer and Bark Beetle Survey, one of our new commodity-
or resource-based surveys. While the data is still not complete, this
year's survey turned up evidence of three new forest pests previously
not known to exist in the United States. We believe that these new
pests provide strong evidence of the need for the nationally directed
and risk-based detection program that we are currently implementing.
APHIS' Animal Health Monitoring and Surveillance program continues
to conduct activities such as: monitoring and surveillance of various
animal disease programs, foreign animal disease surveillance and
detection, emergency disease preparedness and response, animal health
monitoring, and epidemilologic support and delivery for both ongoing
disease programs and post-disease eradication programs. For example,
APHIS completed the Scrapie Ovine Slaughter Surveillance project sample
collection by gathering 12,508 samples from 22 slaughter plants and one
slaughter market. Losses from affected flocks cost producers
approximately $20 to $25 million annually.
APHIS has been challenged with numerous emergencies over the last
several years. However, we took quick and aggressive action to address
the following plant and animal situations: Asian Longhorned Beetle,
Chronic Wasting Disease, Citrus Canker, Emerald Ash Borer, Exotic
Newcastle Disease, Karnal Bunt, Mediterranean Fruit Fly, Mexican Fruit
Fly, Pierce's Disease/Glassy-winged Sharpshooter, Rabies, Spring
Viremia of Carp, and Tuberculosis. The Secretary used her authority to
transfer over $378 million to battle these pests and diseases. Without
the quick detection and early, rapid response, the cost to control
these outbreaks would have undoubtedly been higher.
Four Objectives for Facilitating Safe Agricultural Trade
APHIS' two goals of safeguarding U.S. agriculture and facilitating
international agricultural trade reinforce each other. By protecting
and documenting the health of our agricultural products, we can retain
existing markets and open new markets for our farmers. By facilitating
safe trade with other countries (including activities such as
monitoring world agricultural health and helping developing countries
build regulatory capacity), we help ensure that imported products will
not threaten our domestic production capability and health status.
Objective 2.1--Verify and document the pest and disease status of
U.S. agriculture and related ecosystems.--The World Trade
Organization's (WTO) Sanitary and Phytosanitary (SPS) Agreement 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 has resulted in APHIS' becoming increasingly involved
in demonstrating our pest and disease free status to allow agricultural
exports to trading partners.
APHIS' Pest Detection program conducted 150 surveys to document the
pest status of our plant resources and support U.S. producers' ability
to export their products. For example, by collecting extensive survey
data demonstrating the limited distribution of Karnal bunt in the
United States, APHIS provides assurance to our trading partners that
the disease is not present in major wheat-producing areas of the United
States, thereby ensuring annual agricultural exports of up to $5
billion and supplying the raw ingredients for domestic and foreign
customers of flour, pasta, and other wheat products. Plum pox is
another case in which the collection of national data has helped to
keep budwood markets open by demonstrating the absence of the pest from
various areas around the United States.
APHIS officials collaborate with State and other Federal agencies
to conduct animal health surveillance activities through the Animal
Health Monitoring and Surveillance (AHMS) program. These activities
include pre- and post-entry testing of imported animals, sample
collection at slaughter, and routine testing of animals for export and
interstate movement. APHIS also conducts surveillance for domestic
animal disease eradication programs, like brucellosis, tuberculosis,
chronic wasting disease, and others. This surveillance information
allows APHIS to make key regulatory decisions. In doing so, APHIS
strives to preserve U.S. exports markets, protect livestock or poultry
producers in disease-free areas, and provide the best options possible
for those producers who are affected by our regulatory decisions.
When foreign animal disease outbreaks occur in the United States,
our trading partners routinely ban U.S. animal and animal product
exports until APHIS has the opportunity to confirm the extent of the
disease's spread and demonstrate what regulatory actions are being
taken to contain it. Last year, the poultry breeding and hatchery
industry lost approximately $1 million per week due to bans by various
trading partners on U.S. poultry exports because of exotic Newcastle
disease. Our trading partners will lift such bans in unaffected and
unregulated areas only if we can convince them that measures are being
taken to mitigate the risk of the disease's spread via host commodity
exports. Providing our trading partners accurate and detailed
information about a foreign animal disease outbreak and the subsequent
Federal/State disease management response is critical. This information
gives our trading partners the assurances they need without exposing
them to undue risk. Such a regionalized approach helps minimize trade
disruption and negative market reactions.
Objective 2.2--Certify the health of animals and plants and related
products for export and interstate commerce.--In carrying out this
role, APHIS spends well over $100 million on disease diagnostics and
epidemiology and pest detection infrastructure. This infrastructure
makes our health certificates credible for trading partners, but it
also is instrumental for quickly detecting and limiting the spread of
outbreaks of new pests and diseases, part of our emergency response
strategy (Objective 1.5).
The Import/Export program promotes simple, science-based export
conditions and negotiates requirements based on technical-level
mitigation and guidelines established by OIE. The program is working
hard to strengthen its evaluation and risk assessment capabilities to
meet international and domestic responsibilities and respond to
international and domestic requests for regionalization in a timely
manner. For example, during fiscal year 2003 the Import/Export program
increased its capacity to conduct regionalization analyses for foreign
markets (import purposes) and domestic markets (export purposes).
During the early stages of the exotic Newcastle disease outbreak in
fiscal year 2003, many countries--including all members of the European
Union--suspended poultry imports from all regions of the United States.
APHIS, however, identified END-free regions of the country and helped
these regions regain market access. These actions helped protect the
entire U.S. poultry export industry, which has an estimated annual
worth of $2.5 billion.
APHIS' Agricultural Quarantine Inspection program facilitates the
export of agriculture shipments through EXCERT, an electronic database
containing plant health import requirements for over 200 countries.
APHIS export certifications ensure that U.S. products meet the
agricultural requirements of the country of destination. In fiscal year
2003, APHIS issued over 400,000 Federal plant health export
certificates for agriculture shipments, including the issuance of heat
treatment certificates for coniferous solid wood packing materials to
the People's Republic of China.
Objective 2.3--Resolve trade barrier issues related to animal and
plant health.--Because of APHIS' expertise in animal and plant health
issues and our regulatory role (Objective 1.2), the Agency serves as a
key resource for trade policy agencies, like the Foreign Agricultural
Service and the U.S. Trade Representative, in resolving sanitary and
phytosanitary issues that often become trade barriers (Objective 2.3).
The negotiations that occur to resolve these issues often result in
trading partners providing additional information about the pests or
diseases in question, and this information in turn leads to more
effective preventive regulatory strategies.
Officials with the Trade Issue Resolution and Management program
work to minimize trade disruptions caused by animal and plant health
issues. In fiscal year 2003, APHIS retained poultry markets in Japan,
Korea, and the Philippines worth over $169 million, expanded market
access for apples in Mexico worth $88 million, and opened new markets
for seed potatoes to Uruguay and apricots from the Pacific Northwest to
Mexico. Additionally, APHIS expanded market access for U.S. cherries,
canola seed, and potatoes in Mexico, and with the concerted efforts of
APHIS, Foreign Agricultural Service, and the Office of the United
States Trade Representative, we retained markets for wheat in Argentina
and Peru.
When individual agricultural shipments are held up at foreign
ports, APHIS attaches correct problems and negotiate with host
government officials to facilitate the shipment's acceptance. APHIS
obtained authorization for apples at four additional ports of entry in
Mexico resulting in the release of a $5 million apple shipment. In
addition, APHIS facilitated $1 million worth of U.S. cotton in Chile,
three rice shipments in Costa Rica and Guatemala, the release of $13
million in citrus shipments held by Japanese officials, and the waiving
of phytosanitary certification with Romanian officials for soy beans,
allowing a shipment of 14,000 tons of soybeans valued at over $3
million.
Objective 2.4--Provide expertise and training in animal and plant
health.--The WTO's SPS Agreement requires member countries to provide
technical assistance to developing countries to enable those countries
to participate more fully in the global trade arena. Using cooperative
agreements, preclearance trust fund agreements, and other international
arrangements, APHIS provides many countries with technical assistance
to strengthen their animal and plant health infrastructure, risk
assessment capacity, and food production capabilities (Objective 2.4).
By doing this, APHIS not only fulfills requirements for the SPS
Agreement but also improves offshore threat assessment and risk
reduction capabilities (Objective 1.1).
APHIS attaches continue to identify specific weaknesses in foreign
regulatory systems and provide technical assistance where appropriate.
Capacity building improves foreign countries' regulatory
infrastructure, U.S. relationships with key foreign officials, United
States regulatory concepts and approaches, and, ultimately, the
agricultural health status of the foreign country.
In fiscal year 2003, the Veterinary Biologics program continued
working with the Committee of the Americas for the Harmonization for
Registration and Control of Veterinary Medicines (CAMEVET). The
objectives of this committee include coordinating technical information
for the registration and control of veterinary medicines. The intention
of this program is to exchange information and harmonizes technical
procedures to improve the quality of veterinary medicines and the trade
of products among countries in the Americas.
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 2003, as an OIE
reference laboratory, APHIS' National Veterinary Services Laboratories
(NVSL) continued to use their diagnostic expertise to provide training,
consultation, and assistance to both domestic and international
laboratories. NVSL prioritized the evaluation/validation of new
technologies such as the exotic Newcastle disease and Avian Influenza
polymerase chain reaction and Chronic Wasting Disease kits to offer new
tools for control of certain key diseases. NVSL also shipped 117,095
vials of reagents to domestic and foreign customers to meet critical
testing needs. And, NVSL acquired a new chemistry analyzer for blood
screening purposes and doubled the number of fraudulent cases detected
over those detected in fiscal year 2002. The fraudulent blood testing
program at NSVL helps to assure confidence in the health of animals
exported from the United States to other countries.
NEW DIRECTION
After evaluating the current challenges and opportunities that
exist today, APHIS has developed a new strategic plan of action that
will set the Agency's course over the next 5 years. During this time,
APHIS is committed to focusing on the following overarching goals:
safeguarding the health of animals, plants, and ecosystems in the
United States; facilitating safe agricultural trade; and ensuring
effective and efficient management of programs to achieve its mission.
As part of its new strategic plan, APHIS intends to strengthen key
components of its protection system by focusing on the following
objectives:
--Ensuring the safe research, release, and movement of agricultural
biotechnology;
--Strengthening the Agency's emergency preparedness and response;
--Resolving trade barriers related to sanitary and phytosanitary
requirements;
--Reducing domestic threats through increased offshore threat-
assessment and risk-reduction activities;
--Reducing the risk of invasive species introductions by enhancing
risk-analysis capabilities; and,
--Managing issues related to the health of U.S. animal and plant
resources and conflicts with wildlife.
FISCAL YEAR 2005 BUDGET REQUEST
APHIS has developed its fiscal year 2005 Budget Request in the
context of the Strategic Plan, the overriding imperative of Homeland
Security, and the need to restrain Federal spending. The fiscal year
2005 Budget Request for Salaries and Expenses under current law totals
$828.4 million or $112 million more than the fiscal year 2004
Consolidated Appropriations Act. About $8.5 million is for the cost of
the pay raise.
The fiscal year 2005 increase, approximately 15.5 percent above the
fiscal year 2004 appropriation, is for initiatives designed to address
the increasing threats to the health of American agriculture and
Homeland Security and to support the President's Food and Agriculture
Defense Initiative. About 40 percent of the increase, approximately
$45.4 million, is an investment to substantially reduce the over $378
million fiscal year 2003 emergency transfers and to protect and expand
the $53 billion annual agricultural export market by fully funding
Federal costs up front in the budget. Other notable increases stem from
the highest priority components of APHIS' Strategic Plan and the Food
and Agriculture Defense Initiative. APHIS' request for fiscal year 2005
contains $94.36 million for programs that support the Food and
Agriculture Defense Initiative, an increase of nearly $50 million over
fiscal year 2004.
highest priority components of the strategic plan and homeland security
APHIS proposes to increase funding for the Biotechnology Regulatory
Services program by $6.544 million. This will enable us to inspect all
high risk fields five times during the growing season and two times in
the subsequent season to provide the maximum confidence level that
pharmaceutical and industrial developments are managed safely. Such a
confidence level is necessary to convince skeptics and trading partners
that these, and other biotechnologically derived products, are safe.
That confidence is vital to the growth of the industry and American
agriculture.
We propose to increase the Import-Export program by $3 million and
the Pest Detection program by $1.5 million to fulfill APHIS'
responsibilities under the Bioterrorism Preparedness and Response Act
of 2002. APHIS must regulate possessors and users of ``select agents,''
toxins and pathogens necessary for research and other beneficial
purposes which could be deadly in the hands of terrorists.
In light of the first BSE case in the United States, we propose
increasing the Animal Health Monitoring and Surveillance program by an
additional $8.641 million to support enhanced BSE surveillance to
maintain the confidence of the American people in the safety of the
beef supply and allow us to continue our efforts to prevent the
introduction and spread of BSE in the U.S. cattle population. In this
program, we also request $33.197 million to accelerate implementation
of a National Animal Identification program. Timely tracebacks of
animals are integral to a rapid response and recovery to incursions of
animal illness and foreign animal disease.
Early detection of new animal and plant pest or disease
introductions has the potential to significantly reduce eradication
costs and producer losses and, accordingly, is a high priority for
APHIS. We propose to increase the funding available to our State
cooperators through cooperative agreements for plant pest surveys and
animal health monitoring efforts by $15.2 million (including $9.1
million for the Pest Detection program and $6.1 million for the Animal
Health Monitoring and Surveillance program). In addition to requesting
increased funding to provide to our cooperators, we are proposing a
$6.202 million increase for the Pest Detection program to enhance our
pest detection infrastructure and national coordination efforts. By
establishing basic capacity in all 50 States now, we will enhance our
ability to find and contain pests and diseases like citrus canker,
Asian longhorned beetle, emerald ash borer, Karnal bunt, exotic
Newcastle disease, and avian influenza before they become widespread
and require expensive emergency eradication programs. Similarly, we
request an increase in the Wildlife Services Operations program by $5
million to expand infrastructure to monitor and gather data on the
disease status of free-ranging animals and integrate this data with
existing agricultural animal health monitoring systems. APHIS will use
this information to detect and respond to disease outbreaks in wildlife
populations and mitigate the risk of wildlife diseases transmission to
farmed livestock.
The budget requests a $5 million increase for the Biosurveillance
program to enhance several data collection systems already in use,
allowing us to improve our surveillance capabilities and establish
connectivity with the integration and analysis function at DHS.
The increase of $3.149 million in the Trade Issue Resolution and
Management program will allow APHIS to place more officials overseas to
facilitate the entry of U.S. agricultural products and to help
establish international standards based on sound science. Having APHIS
attaches on site in foreign countries pays dividends weekly. They can
intervene when foreign officials raise false barriers to the entry of
individual American export shipments. In 2002, APHIS attaches
successfully intervened to clear shipments worth $53 million in such
cases.
We propose to increases the Low Pathogenic Avian Influenza (LPAI)
program by $11.783 million to conduct a vigorous surveillance and
control program in the live bird markets in the Northeast--the most
threatening continuing reservoir of LPAI in the United States.
Eliminating LPAI in these markets would help prevent costly eradication
programs like the one we conducted in Virginia in 2002. It also would
remove a barrier to poultry exports--a $2.2 billion market--that many
countries have or are threatening to invoke. OIE is likely to upgrade
LPAI status to ``List A,'' which could result in more restrictions on
our exports if we do not move to eradicate LPAI in the United States.
We also propose to increase the Foot and Mouth Disease/Foreign
Animal Disease program by $4.229 million to further our goal of
reducing domestic threats through increased offshore threat assessment
and risk-reduction activities by placing more officers overseas to
monitor animal disease incidence and assist foreign countries in
controlling outbreaks. We propose to increase the Pest Detection
program by $3.875 million to do the same for plant pests and diseases.
We request an increase in the Tropical Bont Tick (TBT) program by
$2.495 million to eradicate TBT from Antigua completely and quickly
prevent threats to other islands already free, to control and eradicate
TBT from St. Croix, and establish surveillance on other U.S. islands
and mainland to determine if TBT has spread.
We propose to increase the Emergency Management Systems program by
$10.625 million to enhance animal health emergency preparedness
throughout the United States and to establish a vaccine bank to
complement the North American Foot and Mouth Disease Vaccine Bank. This
additional resource would include vaccines or preventives for other
foreign animal disease of significance. These efforts will help protect
our Nation's meat, poultry, and livestock exports, which are valued at
$7.7 billion annually, and the livestock and poultry industries
overall, which are valued at $87 billion.
The budget proposes an increase in the Veterinary Biologics program
by $1.861 million to increase inspections, licensing, and testing of
biotechnology-derived veterinary biologics and to enhance tools
available to the national animal health laboratory network that would
fulfill international standardization requirements. United States sales
of agricultural biotechnology products (transgenic seeds [excluding
rice and wheat], animal growth hormones, biopesticides, and other
products) are projected to increase from $2.4 billion in 2003 to $2.8
billion by 2006, an increase of $144 million annually.
The budget proposes an increase in the Veterinary Diagnostics
program by $4.347 million to enhance the national animal health
laboratory network and continue its diagnostic work at the Foreign
Animal Diseases Diagnostic Laboratory on Plum Island to provide
critical services to the animal industry and help protect the United
States herd against potential acts of bioterrorism.
The request increases the Agricultural Quarantine Inspection
program by $3 million to enhance operations at the National Germplasm
and Biotechnology Laboratory to develop technology to detect and
identify high-risk plant pathogens as well as protocols for quarantine
testing. These efforts support APHIS' emergency response capabilities,
eradication programs, pest exclusion activities, biotechnology
permitting programs, and the newly mandated Select Agents program. This
increase is offset by a decrease of $2.771 million associated with
inter-line inspections in Hawaii and a decrease of $1.246 million for
fiscal year 2004 equipment investments.
The budget increases the Import/Export program by $1.355 million to
fully develop and begin implementing an automated system to track
animal and animal product movements. We are developing this tool in
response to increasing global trade and travel and demands for
increased efficiency in tracking animals and animal products entering
and leaving the country.
FUNDING TO CONTINUE EMERGENCY PROGRAMS
APHIS has been battling several pests and diseases that have
entered or unexpectedly spread to new areas of the United States over
the past few years. Finishing the job is important if we are to achieve
the goals we established when these programs began. Chief among these
goals is maintaining export markets. Only by aggressively attacking
pest and disease introductions can we assure trading partners that the
problems are not endemic to the United States and thus not a reason to
ban our products from their markets. The budget requests, and the value
of the industries and markets at stake, follow.
--Emerald ash borer, $12.5 million, an increase of $11.009 million.
This pest has emerged as a serious pest in the Northern Midwest
States and threatens the ash saw timber industry, with a value
of $25 billion. Much like the Asian Longhorned Beetle, this
pest probably arrived via non-agricultural imports and reflects
a new threat; not only do the contents of a container pose a
risk, so does the container itself. The budget request would
provide for Federal cost-sharing of 75 percent for this
program.
--Glassy-winged sharpshooter (vector of Pierce's Disease), $24
million, an increase of $1.881 million. Without a program to
control Pierce's Disease, the U.S. wine industry could face
losses of $33 billion. The budget request would provide for
Federal cost-sharing of 57 percent for this program.
--Citrus Longhorned Beetle (CLHB), $325,000. The CLHB attacks over 40
varieties of hardwood and fruit trees and has no natural
enemies. The CLHB could cause $41 billion in losses to forest
resources nationwide. The budget request would provide for
Federal cost-sharing of 100 percent for this program.
--Citrus Canker, $52.5 million, an increase of $19.071 million. This
program protects the Florida citrus industry worth over $9
billion. The budget request would provide for Federal cost-
sharing of 57 percent for this program.
--Infectious Salmon Anemia, $235,000. This program protects a part of
the burgeoning aquaculture industry--salmon exports of over
$100 million annually. The budget request would provide for
Federal cost-sharing of 47 percent for this program.
--Spring Viremia of Carp, $285,000. This program protects the common
and silver carp industries, with a value of $2.8 billion. The
budget request would provide for Federal cost-sharing of 77
percent for this program.
--Chronic Wasting Disease, $20.1 million, an increase of $1.478
million. In addition to the potential spread to other species,
this program directly protects the elk farming and antler
industry (with annual gross receipts of $150 million) and
white-tailed deer farms (with capital investments estimated at
$2.5 billion). The budget request would provide for Federal
cost-sharing of 77 percent for this program.
--Bovine Tuberculosis, $20.9 million, an increase of $5.998 million.
This program protects the entire livestock industry, which has
annual earnings from exports of $5.4 billion. The budget
request would provide for Federal cost-sharing of 57 percent
for this program.
--Scrapie, $20.9 million, an increase of $5.106 million. This program
minimizes losses to sheep and goat producers, who currently
incur annual losses of $20-25 million because of scrapie. The
budget request would provide for Federal cost-sharing of 67
percent for this program.
OTHER INCREASES
We recognize the need for fiscal restraint, but believe that the
following additional investments are important if we are to meet the
challenges facing us.
--To support the Biotechnology priority, we request an increase of
$441,000 for the Animal and Plant Health Regulatory Enforcement
program to help ensure compliance by investigating alleged
violations of permit restrictions regarding pharmaceutical and
industrial plants.
--To further improve our pest and disease surveillance and detection
capability--both to protect and gain export markets and to
prevent recurring, costly emergency programs--we request $6.171
million for the Fruit Fly Eradication and Detection Program to
increase detection trapping in Florida and California.
--To provide the funding requested by the State Department in
providing adequate security for APHIS personnel overseas and to
continue security and mission critical facilities, we request
$7.133 million in our Physical/Operational Security program.
--To establish and maintain liaison positions at key government
agencies and to investigate and evaluate disposal techniques
for contaminated biological materials, e.g., animal carcasses,
we request $932,000 for our Biosecurity program.
--To continue to modernize our information technology infrastructure
to include network capacity planning and management,
implementation of eGov initiatives, and cyber security
compliance and management, we request $891,000 in our APHIS
Information Technology Infrastructure program.
--To increase nematode resistant potato varieties and regulatory
treatments, we request $184,000 for the Golden Nematode program
and to maintain current efficiencies, we request $451,000 in
the Screwworm program.
DECREASES
To allow us to fund these high priority programs, we offer key
offsets:
With $15.585 million in reduced funding for the Johne's program,
APHIS would rely more on the collaborative working relationship between
Federal and State animal health workers. For the Boll Weevil program,
we are proposing that the Federal Government assume 15 percent of
program costs, which in conjunction with the projections of lower
nationwide needs, will result in a request of $17 million, a reduction
of $33.4 million. To offset the $5 million increase for the wildlife
surveillance system, we assume a $5.556 million increase for State
cooperators to fund a larger share of the cost of other wildlife
management programs such as predator, bird, and invasive species
damage. Funding for the Asian longhorned beetle program is requested to
be $9.3 million, or a reduction of $20.670 million. The fiscal year
2005 request is based on an overall program level consistent with the
$4 million traditionally provided by cooperating (non-Federal)
agencies. This would change the program from an eradication program to
a control program. The aim is still to protect $41 billion of U.S.
forest resources while facilitating the $122 billion trade market with
China, the source of the pest.
We also propose a reduction of $10.857 million associated with
animal welfare user fees. This will allow the industry to cover an
estimated 66 percent of the cost of enforcing the animal welfare
regulations.
CONCLUSION
APHIS' mission of safeguarding U.S. agriculture is becoming ever
more critical. Although the processes by which we protect America's
healthy and diverse food supply are being increasingly challenged,
APHIS is committed to taking the lead in building and maintaining a
world-class system of pest exclusion, surveillance, detection,
diagnosis, and response. Like the APHIS Strategic Plan, the APHIS
Budget consists of interdependent components that only when taken
together can truly protect the health and value of American agriculture
and natural resources.
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 Donna Reifschneider, Administrator, Grain
Inspection, Packers and Stockyards Administration
INTRODUCTION
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 2005
budget proposal.
GIPSA is part of USDA's Marketing and Regulatory Programs, which
works to support a 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 both service and regulatory capacities. 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 comprises 737 employees. Grain inspection services are
delivered by the national inspection system, a network of Federal,
State, and private inspection personnel that is overseen by GIPSA. The
system includes 12 GIPSA field offices, 2 Federal/State offices, and 8
State and 58 private agencies that are authorized by GIPSA to provide
official services. This network insures the availability of official
inspection and weighing services anywhere in the United States. GIPSA
also maintains 3 Packers and Stockyards Programs regional offices that
specialize in poultry, hogs, and cattle/lamb.
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 166 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 2003, 5,287 market agencies and
dealers, and 2,067 packer buyers were registered with GIPSA. In
addition, there were 1,429 facilities that provided stockyard services,
with an estimated 6,000 slaughtering and processing packers, meat
distributors, brokers and dealers, and 128 poultry firms running 202
poultry complexes 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 1,700 investigations. As a
result of these investigations, the Packers and Stockyards Programs
helped restore over $27 million to the livestock, meatpacking, and
poultry industries. While this is not the largest amount GIPSA has ever
reported to Congress, it constitutes more than 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 $3.2 million
being restored to custodial accounts that are established and
maintained for the benefit of livestock sellers. Livestock sellers
recovered over $1.5 million under the P&S Act's packer trust
provisions. During fiscal year 2003, 55 insolvent dealers, market
agencies and packers corrected or reduced their insolvencies by $6.6
million. In addition, GIPSA's financial investigators analyzed more
than 400 bond claims exceeding $7 million. However, GIPSA 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. 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 testing of every scale
used to weigh livestock or live poultry twice a year. In addition,
GIPSA initiated or completed 41 investigations of weight and price
manipulation of livestock. Some of these investigations are on-going.
GIPSA also investigated the operations of 143 live poultry dealers;
most of these investigations examined whether live poultry dealers were
in compliance with contracts entered into with poultry growers. With
members of the regulated industries, we developed industry standards on
new technologies that are entering the marketplace to evaluate and
price livestock purchased on a carcass merit basis. We anticipate
implementing two more voluntary standards in the next 6 months.
GIPSA continues to develop its Competition Program. During fiscal
year 2003, the Competition Branch began or continues evaluations of 31
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, one firm was brought into compliance, and a second
firm went out of business. Six of the investigations revealed that the
concerns raised were not supported by evidence. 23 complaints were
still pending at the end of the fiscal year. GIPSA continues to work
closely with the CFTC, attending CFTC Commissioner briefings on the
cattle, hog, and meat markets.
GIPSA's Rapid Response Teams remain a powerful tool to address
urgent industry issues that place the industries in imminent financial
harm. Last year, GIPSA rapid response teams investigated 59 situations
across the Nation. During fiscal year 2003, these rapid response
investigations contributed to returning $5.9 million to livestock
producers and poultry growers at a cost of $413,010 in salary and
travel expenses.
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 2003, GIPSA, with assistance from the
Office of the General Counsel, filed 22 administrative or justice
complaints alleging violations of the P&S Act. This number, similar to
last year, represents more than a 50 percent increase over the number
of complaints filed in fiscal year 2001.
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 88
callers. These calls were in addition to calls received in our regional
offices. GIPSA also increased its outreach activities. GIPSA conducted
28 orientation sessions for new auction market owners and managers and
4 feed mill orientations to educate them about their fiduciary and
other responsibilities under the P&S Act.
It is important to note some of the activities that GIPSA has been
engaged with in recent months. Following the discovery of the bovine
spongiform encephalopathy (BSE) positive cow in December, 2003, GIPSA
created Financial Protection, Trade Practices and Competition Task
Forces to provide protection to livestock producers and members of the
cattle industry commensurate with its authority under the Packers and
Stockyards Act. These task forces are based in Denver, Colorado,
GIPSA's cattle office, and include technical experts from each of
GIPSA's regional offices and headquarters. The task forces have
developed strategies to identify and respond to potentially unlawful
practices unique to current market conditions. Daily Agency-wide
meetings are being held to inform and share all BSE related information
so that employees, task forces, and headquarters are all current on the
latest issues.
GIPSA's Financial Protection Task Force is monitoring livestock
markets for financial failures. The Task Force has identified scheduled
sales at auction markets that were cancelled in the days and weeks
following the BSE announcement. It's monitoring firms likely to be more
vulnerable to impacts of the BSE incident, identifying industry changes
in payment practices, and standing ready to deploy rapid response teams
to investigate financial concerns in the industry. GIPSA is currently
conducting several investigations of particularly financially
vulnerable firms.
GIPSA's Trade Practices Task Force is reviewing changes in
marketing and procurement practices implemented by packers in response
to the BSE incident. GIPSA has been in contact with major packers and
industry groups to stay current on packer responses. GIPSA is reviewing
notices sent by packers to livestock producers informing producers of
purchasing and pricing changes implemented as a result of BSE. GIPSA
has received complaints from producers who claim that packers have
changed the payment terms of their contracts and has deployed rapid
response teams to investigate these complaints. GIPSA's Competition
Task Force is analyzing, and when warranted, investigating cattle
markets when anti-competitive practices may be occurring. Several
investigations have been initiated. The Competition Task Force analyzes
reported fed-cattle prices in various geographic markets to identify
abnormal patterns that may indicate violations of the P&S Act. The task
force assesses whether price differences are the result of normal
market forces, or packer behavior that may violate Section 202 of the
P&S Act. When normal market forces fail to explain abnormal prices, the
Competition Task Force conducts a rapid response investigation to
determine whether the P&S Act has been violated.
GIPSA has also communicated with the Commodity Futures Trading
Commission (CFTC), the Agricultural Marketing Service, Food Safety and
Inspection Service, the Animal and Plant Health Inspection Service, and
local and State governmental organizations to discuss issues and
coordinate plans. GIPSA attends CFTC's surveillance meetings and is
prepared to work with CFTC on any investigation that may involve a
potential violation of the P&S Act. GIPSA is actively responding to the
BSE incident and is prepared to continue enforcement of the Packers and
Stockyards Act and regulations in light of this situation.
In addition, this year GIPSA made significant progress on the
Livestock and Meat Marketing Study for which Congress appropriated $4.5
million in fiscal year 2003. The study will look at issues surrounding
a ban on packer ownership. GIPSA, through APHIS, is in the process of
contracting out the study. Since packers' use of non-spot arrangements
is intertwined with other advance marketing arrangements throughout the
supply chain, the study has a broad focus.
The issues addressed by the study are complex. The research is
expected to involve several academic disciplines, varied research
methods, and large amounts of data that are not already available.
Business schools, economics departments, and agricultural economics
departments at universities have indicated an interest in bidding, as
have consulting firms. GIPSA expects to see collaborations of
disciplines in the bids.
Contractors are expected to complete the study in phases over 2
years, with the first reports due 1 year after contract award. Some
descriptive findings will be released prior to completion of the
analytical parts of the study. Information about the study, including
the Federal Register notice, the public comments, and RFP notices, is
available on GIPSA's website at: www.usda.gov/gipsa, by following the
``marketing study'' icon.
Also in fiscal year 2003, GIPSA completed development of the Swine
Contract Library as an internet application that meets the requirements
of the Livestock Mandatory Reporting Act of 1999's amendments to the
Packers and Stockyards Act. Packers are required to file swine purchase
contracts with GIPSA, and monthly reports about the number of swine
expected to be delivered, under contract, to packers.
The Swine Contract Library includes information from swine packing
plants with a slaughter capacity of 100,000 swine or more per year. 31
firms operating 51 plants accounting for approximately 96 percent of
industry slaughter are subject to the SCL. GIPSA has received over 530
contracts to date. In the first 2 months of operation, the SCL recorded
more than 1,400 hits. Through the SCL, producers have the ability to
see contract terms, including, but not limited to, base price
determination formula and the schedules of premiums or discounts, and
packers' expected annual contract purchases by region.
The Swine Contract Library went live with information on contract
provisions available to the public in early fiscal year 2004, and is
available on the GIPSA web site at http://www.usda.gov/gipsa/.
FEDERAL GRAIN INSPECTION SERVICE
GIPSA's Federal Grain Inspection Service (FGIS) facilitates the
marketing of U.S. grain in domestic and international markets by
providing the market with services and information that effectively and
accurately communicate the quality and quantity of grain being traded.
GIPSA administers its inspection and weighing programs under the
authority of the U.S. Grain Standards Act, as amended, and the
Agricultural Marketing Act of 1946 (AMA) as it relates to the
inspection of rice, pulses, lentils, and processed grain products.
Providing reliable, high quality inspection and weighing services
at a reasonable price remains a key commitment of GIPSA and the State
and private officials comprising the official inspection system.
Federal export inspection services average $0.30 per metric ton, or
approximately 0.23 percent of the $14 billion value of U.S. grain
exports. In fiscal year 2003, more than 1.8 million inspections were
performed on more than 222 million metric tons of grains and oilseeds.
Over 84,000 weighing certificates were issued on 91.5 million metric
tons of grain.
There have been many changes in official inspection services over
the past several years to respond to changing market demands. GIPSA has
programs and services in place to facilitate the loading of shuttle
trains; to address greater product differentiation; and to provide
customers with inspection results electronically. These all represent
steps in the right direction, but we recognize that the market is
changing daily and we must change with it to remain relevant.
GIPSA is focusing on a number of key areas to better facilitate the
marketing of U.S. grain. We are enhancing our international outreach
capabilities to remove obstacles to U.S. grain reaching world markets.
We are bringing standardization to domestic and international markets.
We are focusing on providing the market with the information it needs
on the end-use functional quality attributes of grain that determine
its true value in an increasingly quality-specific market. We are
improving service delivery, and the efficiency and cost-effectiveness
of the official system.
International outreach is one component of our efforts to
facilitate the marketing of U.S. grain. We will continue to expand our
outreach efforts to support market development around the world. Our
international customers are making great use of the wide array of
recently produced multimedia educational materials.
In recent years, we have significantly expanded our outreach
efforts to ensure open markets for U.S. grain in Asia and Mexico. Last
year, GIPSA initiated two 3-month regional assignments, one in Asia and
one in Mexico, to address immediate and long-term grain marketing
issues in each region. In Mexico, GIPSA has worked extensively with
APPAMEX (an organization of Mexican grain importers), the USDA/Foreign
Agricultural Service (FAS), and USDA cooperator organizations to
address Mexico's concerns about U.S. grain quality. We have conducted
in-depth grain grading seminars to educate Mexican buyers, traders, and
end users on the U.S. grain marketing system, GIPSA's impartial grain
quality assessment, and U.S. grain standards, sampling procedures, and
inspection methods. In fiscal year 2003, GIPSA also helped several of
Mexico's private sector grain elevators and processing facilities set
up grain inspection laboratories mirrored after GIPSA's. Last fiscal
year, we also worked with Mexican and Canadian officials to secure a
trilateral agreement on implementation of the Biosafety Protocol.
Our international outreach program also includes technical
consultative services for international customers. In fiscal year 2003,
GIPSA responded to 17 requests for technical assistance from exporters,
importers, and end users of U.S. grains and oilseeds, as well as other
USDA agencies, USDA Cooperator organizations, and other governments.
Our international outreach are not the only initiatives we have
underway to improve the standardization of, and in turn, facilitate
marketing in, domestic and international markets. In the biotech arena,
GIPSA is helping bring standardization, consistency, reliability, and
accuracy to the biotech testing entities and tools used by the market.
GIPSA's test kit evaluation program validates the performance of rapid
tests for biotechnology-derived grains and oilseeds. Our Proficiency
Program improves the performance and reliability of government and
private laboratories in the United States and worldwide that test for
biotechnology-derived grains. Under this voluntary program,
participants are evaluated based on results of their quantitative and/
or qualitative testing of samples of all commercially available corn
and soybean biotechnology events. More than 88 organizations
participated in the program in fiscal year 2003, a threefold increase
from 22 organizations in February 2002.
In fiscal year 2002, GIPSA established formal research
collaboration with the National Institute of Science and Technology
(NIST) to investigate DNA-based testing for biotechnology-derived
grains and oilseeds, and to investigate the development of reference
materials and methods for DNA-based testing. Using information obtained
through confidentiality agreements with life science organizations,
GIPSA and NIST produced event-specific plasmids for evaluation as
reference materials and potentially to be in the development of
reference methods. In fiscal year 2003, GIPSA and NIST hosted a
workshop entitled AStandard Reference Materials for Biotechnology
Crops.'' Thirty-six representatives from the life science
organizations, testing laboratories, test kit manufacturers, food
processors, Canada, European Union, and Japan attended.
In fiscal year 2004, GIPSA will continue to collaborate with NIST
to investigate challenges associated with Polyermase Chain Reaction
(PCR) technology and develop reference materials to improve the
reliability and accuracy of DNA-based testing and to harmonize testing
on a global basis, and will continue to work with NIST to establish
global agreement on the development of reference materials for
biotechnology-derived grains and oilseeds.
Our market facilitation efforts also include bringing standardized
information to markets. In 1999, wheat importers and exporters asked
GIPSA to declare that the United States does not produce transgenic
wheat. In September 1999, GIPSA began, in accordance with the authority
provided under the U.S. Grain Standards Act (7 U.S.C. 79), issuing the
following letterhead statement upon an applicant's request: ``There are
no transgenic wheat varieties for sale or in commercial production in
the United States.'' The potential deregulation of Round-Up Ready wheat
added potential uncertainty to world markets. Wheat industry
representatives anticipate that continued issuance of the current
statement will be essential to ensure the continued marketing of U.S.
wheat. To facilitate the marketing of U.S. wheat if deregulation
occurs, GIPSA has agreed to continue issuing the non-transgenic wheat
statement, upon request, provided that Monsanto meets several
requirements verifying that seed has not been sold for commercial
production.
GIPSA also continues to ensure that the official United States
standards are responsive to the needs of the domestic marketplace.
Developments in plant breeding, the use of new marketing strategies
such as identity preservation, increasingly complex processing, food
manufacturing, and feed formulation, and other factors will
continuously challenge GIPSA to promote current, market-relevant grades
and standards that reflect required quality characteristics for
specific end uses. In fiscal year 2003, GIPSA proposed creating two
subclasses in the class Hard White wheat, which would differ based on
seed coat color. Seed coat color can be an important quality factor
depending on the target flour product and the miller's flour extraction
goal. Also underway are reviews of the soybean standards with a focus
on test weight, and the sorghum standards to clarify the various class
definitions and to revise the definition of non-grain sorghum.
Working closely with barley producers and the barley malting
industry, GIPSA began developing new official criteria called
``Injured-by-Sprout'' in malting barley. Sprouting occurred in barley
in the U.S. Northern Plains region during 2002, which prevented malting
barley production contracts from being honored. Barley producers'
insurance claims also were denied because official procedures to assess
barley sprout damage differ from those used by the malting industry.
GIPSA's response is facilitating the marketing of malting barley by
enabling USDA's Risk Management Agency to implement the new procedure
for the 2004 barley crop year.
Other standards enhancements undertaken to facilitate marketing in
fiscal year 2003 include amendments to the U.S. Standards for Rice to
establish and add Ahard milled ``rice as a new milling degree level and
to eliminate the reference Alightly milled.'' These changes better
align the GIPSA standard with current industry processing and marketing
standards.
GIPSA knows that customers also need more information about the
specific end-use qualities of the products they are purchasing. We are
focusing on providing rapid testing of end-use functionality factors to
differentiate the functional qualities that meet specific end-use
needs.
GIPSA continues cooperative efforts with groups from Canada,
Australia, and several European countries to develop and evaluate
global artificial neural network (ANN) near-infrared transmittance
(NIRT) calibrations for wheat and barley protein. GIPSA conducted a
field study on current partial least squares (PLS) wheat protein
calibrations and the global ANN calibration. GIPSA also evaluated the
field performance of the ANN barley protein calibration. In fiscal year
2004, GIPSA will finalize individual instrument standardization
procedures to support implementation of an ANN calibration for wheat
and barley protein.
In April 2003, GIPSA convened a meeting of leading North American
wheat researchers to generate new avenues of research that would lead
to rapid tests for wheat end-use functional characteristics, applicable
at the time of inspection and at other points in the value chain.
Participants developed a list of quality factors and possible technical
approaches for measuring them, with the overarching goal of having a
market applicable test ready for use by May 2006. To help keep
researchers focused on the task, GIPSA will establish a virtual
discussion room for researchers to further collaboration on and support
for this effort, and to help researchers find extramural grant sources.
GIPSA is working with the United Soybean Board on their ``Better
Bean Initiative,'' a program directed at improving the nutritional
composition of U.S. soybean meal and oil. USDA/ARS currently is
receiving funding to develop measurement technology for meal and oil.
GIPSA is taking part in the Soybean Quality Trait initiative that is
seeking to standardize soybean protein, oil, moisture, and fatty acid
measurements. GIPSA is part of an inter-laboratory collaborative study
to evaluate the consistency of soybean protein, oil, and moisture
reference methods. GIPSA is also helping to assemble a soybean sample
library suitable for use in developing and evaluating near-infrared
(NIR) calibrations.
GIPSA is also exploring new approaches to compliment and supplement
our traditional array of services. In fiscal year 2003, GIPSA continued
developing a process verification service for grains in response to
market demand.
Our efforts to develop new programs did not preclude us from making
significant improvements to existing ones. During fiscal year 2003,
GIPSA revised the regulations on reinspections and appeal inspections
under the U.S. Grain Standards Act to better reflect market needs and
to remove an inefficient, costly, and unnecessary regulatory
requirement. Previously, reinspections and appeal inspections for grade
included a review of all official factors that may determine the grade,
are reported on the original certificate, or are required to be shown.
The revised regulations allow interested parties to specify which
official factor(s) should be redetermined during the reinspection or
appeal inspection service. To safeguard against inadvertent misgrading,
official personnel may determine other factors, when deemed necessary.
In fiscal year 2004, GIPSA plans to propose a similar action for rice
and pulses and other commodities that are inspected for quality factors
under the authority of the Agricultural Marketing Act of 1946.
Improving service delivery is essential, as is improving the
efficiency and cost-effectiveness of the official system. This will
include many initiatives, ranging from harnessing technology to improve
operational efficiency and service delivery to making needed program
policy changes.
In addition, GIPSA has dedicated resources to homeland security
efforts. GIPSA continues to work closely with the USDA Office of Crisis
Planning and Management (OCPM) to refine the Department's and the
Agency's Continuity of Operations Plan (COOP) and to support and staff
the Department's Crisis Action Team (CAT). In fiscal year 2003, GIPSA's
COOP and CAT representatives participated in numerous USDA and
Marketing and Regulatory Program-sponsored disaster-related exercises
and training sessions. They also completed the GIPSA Supplement to the
USDA Headquarters COOP Plan, which provides guidance for the
continuation/reestablishment of GIPSA's COOP essential functions,
including identifying GIPSA's emergency relocation facilities where
these functions will be performed and GIPSA personnel who will be
required to perform them. The provisions of the GIPSA Supplement, which
mirrors the USDA Headquarters COOP Plan, applies only to GIPSA
headquarters offices in Washington, D.C.
GIPSA provided technical assistance related to homeland security
issues to a number of industry and governmental groups, including the
National Grain and Feed Association Safety Committee, the Security
Analysis System for U.S. Agriculture (SAS-USA) Technical Advisory
Committee, the Interagency Food Working Group, and the USDA Homeland
Security Working Group. The Agency is currently working with the
National Food Laboratory Steering Committee to coordinate and integrate
resources to support the key components of the Food Emergency Response
Network (FERN).
GIPSA also continued to face challenges in maintaining an
appropriate operating cushion in its user fee account. During fiscal
year 2003, GIPSA transferred $2 million from our appropriated account
to preclude fiscal over-obligation in violation of the Anti-Deficiency
Act. As of May 31, 2003, the cash balance of GIPSA's user fee account
had fallen to $2.9 million, a dangerously low amount considering
GIPSA's monthly obligations of about $3.0 million.
Due to flat or decreasing exports, and marketing trends that are
reducing revenue generated by our current fee structure, there has been
a persistent gap between costs and revenue. GIPSA has absorbed losses
in its reserve user fee funds. GIPSA has executed many cost-cutting
measures to reduce obligations. The Agency has cut employment levels,
closed field and sub-offices, streamlined support staffs, and
introduced new technology to improve program efficiency.
In the longer term, GIPSA is pursuing several options to preclude
future funding difficulties, including implementing a new fee schedule.
Program efficiencies, such as streamlining the official inspection
processes using a web-based technology and re-engineering program
delivery, and opening discussions with stakeholders on how and by whom
official inspection services should be delivered to American
agriculture were undertaken. 2005 Budget Request
To fund important initiatives and address the Agency's
responsibilities, GIPSA's budget request for fiscal year 2005 is $44.1
million under current law for salaries and expenses and $42.5 million
for our Inspection and Weighing Services. There is an increase of
$662,000 for employee compensation. GIPSA already submitted legislation
last fall which would collect $29.0 million in new user fees in fiscal
year 2005, $5.8 million for the grain standardization activities and
$23.2 million for the Packers and Stockyards Programs. A substantial
portion of the IT increases will be one-time only requests.
For grain inspection, the President's fiscal year 2005 budget
proposes a current law request of $20.0 million; a total increase of
$1.8 million.
An increase of $1,300,000 would allow GIPSA to merge data from
several Agency computer information systems for efficient oversight and
management of the official grain inspection system and to provide on-
demand, Web based access to this data by our partners, customers, and
GIPSA personnel. Management needs a single source to capture
information about each inspection provided to track work
accomplishment, technical analysis, and compliance verification. With
the information reported, GIPSA will be able to automate the generation
of billings records that will be used by the NFC FFIS to generate the
invoice for each customer. GIPSA will also use the data system to
automatically document and generate a statement of fees owed by each
customer on a monthly basis.
By implementing this application, GIPSA will be able to retire two
Unix applications and the computer equipment that it runs on. Retiring
these Unix applications will allow GIPSA to move towards achieving its
goal of a common computing environment within and between FGIS and
P&SP, free up one half of a staff year required today for support, and
eliminate dependency for support of this application to a single
developer.
Also requested is $500,000 to expand GIPSA's technical outreach in
key international markets, which is required because GIPSA has
experienced a growing demand for cooperative participation with other
agencies with international trade responsibilities--for example, State
Department, U.S. Trade Representative (USTR), Foreign Agricultural
Service (FAS), and the Animal and Plant Health Inspection Service
(APHIS)--toward achieving our overall mutual objective of expanding
markets for agricultural products and removing barriers to trade.
Modern biotechnology has presented new challenges to U.S. grain
markets as many countries develop domestic regulations regarding
biotech grains. GIPSA has served the international grain trade
community by developing programs to address these emerging needs, and
working with related agencies--State, USTR, FAS, and APHIS, among
others--to share information regarding these programs and contribute
our expertise. For example, China announced broad biosafety regulations
2 years ago that continue to threaten U.S. soybean exports. Partner
agencies have sought GIPSA's active participation in negotiations
challenging this technical barrier to trade. Such issues are likely to
increase in number and frequency in the future.
As another example, a new international environmental treaty, the
Biosafety Protocol, which entered into force in September 2003,
requires new documentation on biotech grain shipments, and many
countries already are developing regulations that are unnecessarily
trade-disruptive. During the years ahead, it will be essential for
GIPSA to continue in what has been its integral role in an interagency
process for implementation of the Protocol by contributing expertise in
grain handling, transportation, and marketing, to prevent unnecessary
trade disruption.
The funding increase will enable GIPSA to provide personnel on
overseas temporary duty to better address and resolve grain trade
issues, precluding market disruption due to technical differences in
analytical methods and standards; expand U.S. market share due to
increased customer satisfaction; and continue to provide critically
important technical support as the U.S. government seeks to ensure
practical implementation of new regulatory requirements being developed
by a growing number of trading partners.
For the Packers and Stockyards Programs, the President's fiscal
year 2005 budget proposes a current law request of $24.2 million; a
total increase of $3.81 million.
An increase of $1,460,000 for the development of web applications
which is required because the current database and application
architecture will not support the volume, security, or recovery
requirements of GIPSA and USDA as GIPSA moves to support GPEA and OMB
and USDA eGov initiatives. Further, the Enterprise Architecture project
completed in 2003 identified fifteen (15) business functions that are
not supported by any applications within the Packers & Stockyards
Programs area, seven of those being key business functions. In
addition, the current applications lack integration on the information
that is common between the applications, hence requiring duplication
(albeit minimal) information entry by program users.
To enable the timely implementation of customer-centric
applications within the Packers and Stockyards Program, additional
Information Technology developmental resources are required. Currently
the Packers and Stockyards Program does not have the web designers or
programmers that would allow it to rapidly and accurately deploy Web-
based applications. To supplement the current information technology
staff and to bring new technology into the program area, GIPSA is
requesting contracting funds.
These funds would be used to contract-out the design, development,
implementation, and maintenance of important Web initiatives as
identified as part of GIPSA's overall Enterprise Architecture and
approved by USDA's OCIO. For example, with the requested funding,
entities regulated under the Packers and Stockyards Act would be able
to register with GIPSA via the internet, electronically file annual
reports, and submit bond claims and complaints via the internet. GIPSA
would be able to increase its efficiency by electronically verifying
bond and trust accounts with banks, the integration of three stove
piped applications, and the real-time tracking of the status and cost
of an investigation. (The submission of annual reports alone would save
GIPSA over 1,500 hours annually by personnel that are GS14s and 15s.)
This would allow the Resident Agents to complete an additional 200
investigations in the future.
An increase of $150,000 is required to operate and maintain the
Swine Contract Library (SCL), which is one of GIPSA's Packers and
Stockyards Programs' (P&SP) first e-government initiatives. As such,
GIPSA has developed an Internet web site that offers packers the
opportunity to submit their contracts and anticipated number of hogs
procured under contract to GIPSA via a secured connection and producers
the opportunity to view contract information via the Internet.
The funding increase will be used to operate and maintain the SCL
system. This position will monitor, review, and analyze the contract
information and monthly reports submitted by packers, ensure that
packers are in compliance by examining submissions for completeness,
consistency, and accuracy, conduct confidentiality analysis on
information before release, and make the information available at the
P&SP regional office and on the GIPSA web site. The increase will also
fund Information Technology services and the annual renewal cost for
computer software licenses. This IT position will provide software,
hardware, and web site maintenance for the SCL program.
An increase of $1,200,000 to support fair and transparent product
differentiation and valuation which is required because packers
significantly reduced the numbers of livestock purchased based on live
weight in recent years. In a stated effort to better meet consumer
demand and provide greater ``value,'' packers and producers began
trading livestock through contract and marketing agreement or formula-
priced transactions. In conjunction with this change in marketing
methods, packers explored and began using new means of automating the
evaluation of live cattle and hogs, and carcasses based on new
technologies, including among other methods, ultrasound and
photographic imaging.
Technologies and their applications for evaluating the quality of
both live animals and carcasses are changing at an accelerating pace.
Previously, carcass merit purchases were generally based on a carcass
weight and often one or two grades assigned by USDA graders. Today,
packers increasingly rely on internally assigned measures of carcass
quality using modern and complex technologies.
Live poultry dealers, as well, are exploring new technologies to
assist in evaluating the quality of birds obtained from poultry
growers. Implementation of new technologies in the poultry industry may
supplement or replace the current methods used by live poultry dealers
to determine bird quality and payment to growers, including contract
growers.
The technologies now being implemented by packers have a direct
effect in determining the prices paid to producers for livestock.
Technologies being developed by live poultry dealers will likely affect
prices paid to poultry growers. These changes introduce new risks for
producers and growers, because these new technologies are not
standardized and their accuracy is inconsistent.
This lack of standardization and inconsistent accuracy makes it
difficult for producers and growers to detect errors and deliberate
changes in the way the technology is used, leaving producers and
growers vulnerable to unfair and unjustly discriminatory practices by
members of the meat packing and poultry industries. A change that
affects as little as one half of 1 percent of the value of livestock in
a multi-billion dollar industry can have a huge impact on producers and
growers over time. Therefore, P&SP needs to dramatically increase its
monitoring and regulatory presence.
This increase in funding will provide P&SP ongoing funding to
obtain industrial engineering expertise in the operation of these new
electronic evaluation technologies and the methods in which packers and
live poultry dealers use them; to develop enforcement tools,
investigation techniques and regulatory policies necessary to continue
to effectively regulate the meat packing and poultry industries, and
when appropriate, initiate enforcement action; to educate and inform
the meat packing and poultry industries about responsibilities under
the P&S Act with regard to these new technologies; and to educate and
inform livestock producers and poultry growers about how the electronic
evaluation technologies are used in the meat packing and poultry
industries, and how the technologies are regulated by P&SP.
An increase of $1,000,000 is required because immediately following
the announcement that a U.S. cow tested positive for BSE, P&SP created
task forces to provide protection to livestock producers and members of
the cattle industry. These task forces are developing strategies to
identify and respond to anti-competitive practices unique to current
market conditions; monitor markets for financial failures and
investigate any livestock sale barn or slaughtering facility that
closes to ensure that any unpaid cattle sellers are identified and
appropriately compensated and investigate complaints related to
livestock marketing and procurement contracts.
P&SP regulates 1,429 posted stockyards, 5,287 market agencies and
dealers, 2,067 packer-buyers, and 340 bonded packers (those purchasing
over $500,000 worth of livestock per year). An additional group of
packers that purchase less than $500,000 are also subject to P&SP
jurisdiction. A large number of these entities may be adversely
impacted as the BSE situation develops, creating circumstances that
require immediate P&SP action.
P&SP is developing strategies to identify anti-competitive
practices that could occur as a result of current market conditions.
These strategies will be implemented and appropriate responses will be
initiated where anti-competitive conduct is suspected.
P&SP is looking closely at suspect livestock transactions to ensure
that market participants are not taking advantage of the unique market
conditions created by the BSE situation. P&SP will deploy rapid
response teams to investigate BSE-related complaints. Costs for rapid
response investigations related to BSE could easily exceed amounts
typically expended on all other rapid response investigations. In the
past three fiscal years, P&SP spent $1,372,210 conducting 150 rapid
response investigations, or an average of 50 investigations per year at
a cost of $457,403.
An increase of $1,200,000 will allow the Agency to establish
computer industry standard hardware, software, and facilities to
implement the development of customer oriented electronic interfaces to
the Federal Grain Inspection Program and the Packers and Stockyards
Program. This will allow for a common Information Technology
environment for the receipt and delivery of electronic data necessary
to efficiently conduct the Agency's programs.
These capabilities will by necessity need to be closely integrated
with the existing Information Technology Architecture in GIPSA and
conform to the USDA Enterprise Architecture. The computer equipment
will be composed of multiple, high performance servers which must
accommodate the transfer of very large amounts of data securely and
transparently between themselves and the existing Agency information
systems. These computer servers must be developed to have the
capability to implement a wide range of Web based interactive
applications.
Finally, an increase of $1,000,000 is needed because in order to
bring the Information Technology Systems security up to an acceptable
level within GIPSA, the Agency's network infrastructure must be brought
up to the standards as depicted in the USDA Enterprise Architecture.
The Agency will need to add network switches, routers and firewalls to
bring the network infrastructure up to an acceptable security standard.
To insure thorough security planning, the Agency will need funding for
additional contractor support in the development of disaster recovery
plans, continuity of operations plans, risk analysis, and the
certification and accreditation of existing information systems.
CONCLUSION
Mr. Chairman, Members of the Committee, I would like to conclude my
testimony on the fiscal year 2005 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.
Thank you.
STATEMENT OF ELSA A. MURANO
Dr. Murano. Thank you, Mr. Chairman, Senator Kohl.
I am glad to have the opportunity to speak to you this
afternoon regarding the status of the Food Safety and
Inspection Service programs and on our fiscal year 2005 budget
request for food safety within the U.S. Department of
Agriculture.
As we begin the new year at USDA, I am proud to highlight
several areas in which we have used science to improve public
health during the past year.
BSE
First, though, I want to briefly touch on the Bovine
Spongiform Encephalopathy or BSE issue. Since December 23rd of
last year, BSE has been front and center with us, as it has
with everyone who has concerns about public health and food
safety. Upon learning of the BSE find, we immediately took
action to protect the public's health. New regulations were
published on January 12th, a mere 2 weeks after the BSE case
was announced, truly a remarkable example of how quickly the
Bush Administration responded to this threat.
The removal of specified risk material from the food
supply, which was the hallmark of these new regulations, was
indeed the single most significant step we could have taken to
protect the public's health.
SIGNIFICANT FOOD SAFETY ADVANCEMENT OF 2003
The American public remains confident in the safety of the
U.S. meat supply, and with good reason. The confidence is due
in part to the significant advancements that we have made
during 2003. For example, we have seen a dramatic decline in
pathogen levels and regulatory samples for Listeria
monocytogenes, E. coli O157:H7, and Salmonella. In addition, we
had a striking decline in the number of meat and poultry
product recalls last year. In fact, the number of class one
recalls has nearly been cut in half from the total during 2002.
These are dramatic indicators that our scientifically-based
policies and programs are working to ensure that the American
public receives the safest food possible.
CHALLENGES FOR 2004
Despite these advancements, there is always room for
improvement and FSIS has identified challenges for 2004.
Through reflection and refinement we have outlined specific
initiatives to ensure that we continue to improve health
outcomes for American families. These include improving
training through the Food Safety Regulatory Essentials program,
using the recently established New Technologies Office to
promote and accelerate the use of innovative food safety
technologies, improving risk assessment coordination to ensure
the best available information and science is used in policy
development, continuing to conduct baseline studies to
determine the nationwide prevalence and levels of various
pathogenic organisms in raw meat and poultry, and coordinating
with other Federal agencies to strengthen existing efforts to
prevent, detect and respond to food related emergencies
resulting from acts of terrorism.
FISCAL YEAR 2005 BUDGET REQUEST
I will now turn to the fiscal year 2005 budget request for
FSIS. FSIS is requesting a program level of $951.9 million, a
net increase of about $61 million from the levels for fiscal
year 2004. Under current law, we are requesting an
appropriation of $838.7 million with an additional $113 million
in existing user fees.
The budget request will fund increased BSE surveillance
programs as well as additional training for inspection
personnel and numerous programs that will continue to keep us
among the leading public health agencies in the world.
The budget request includes a $15.5 million increase for
pay raises in Federal and State programs. The budget request
includes a $17.3 million increase for humane slaughter
enforcement and the full cost of in-plant inspection. Included
in this request is $5 million to continue the humane slaughter
enforcement work funded in fiscal year 2003.
The remaining $12.3 million of the $17.3 million is for
staff support costs that are critically important to
maintaining front-line inspection.
The fiscal year 2005 request includes a $33.6 million
increase for new initiatives that support our goals at FSIS.
First, we include an increase of $3 million for BSE
surveillance. The BSE inspection program will add permanent BSE
control measures in 2005.
Second, our budget requests $23.5 million to increase
support for our Food and Agriculture Defense Initiative. Food
contamination and animal and plant diseases and infestations
can have catastrophic effects on human health and the economy.
So, our portion of the Food and Agriculture Defense Initiative
has five components: the Food Emergency Response Network or
FERN; data systems to support the Food Emergency Response
Network; enhancing FSIS laboratory capabilities;
biosurveillance; and follow-up biosecurity training.
To improve the infrastructure under FERN, the budget
request calls for a $10 million expansion. Of that funding,
$6.1 million would be spent on contracts with state and local
laboratories and $2.6 million would be used to establish five
regional hubs and a national operating center to coordinate
FERN's efforts and conduct training.
The budget request also includes initiatives to support
FERN. The Electronic Laboratory Exchange Network, eLEXNET, is a
national web-based system that allows laboratories to rapidly
report and exchange standardized data. So the budget request of
$4 million will be used to make eLEXNET available to additional
FERN and other food testing laboratories nationwide.
The budget request includes $2.5 million to enhance our
laboratory capabilities for detecting new bioterror-associated
agents and to ensure that our capability and capacity to
perform toxin and chemical testing is maintained.
The final new initiative is training, which is a very
important issue for us. FSIS has been criticized in the past
for having insufficiently trained field employees. So, we are
working very, very hard to address these concerns and need
additional resources in order to significantly improve our
training. We are requesting $7.1 million, over a 50 percent
increase in the FSIS training budget for fiscal year 2005.
Included in the requested training budget is $3.1 million for
our Food Safety Regulatory Essentials training to supplement
training for current on and off-line field employees to improve
enforcement of HACCP and food safety sampling.
PREPARED STATEMENTS
Thank you again, Mr. Chairman and Senator Kohl, for your
attention. And we certainly look forward to responding to your
questions.
[The statements follow:]
Prepared Statement of Dr. Elsa A. Murano
Mr. Chairman and Members of the Subcommittee, I am glad to have the
opportunity to speak with you regarding the status of the Food Safety
and Inspection Service (FSIS) programs and on the fiscal year 2005
budget request for food safety within the U.S. Department of
Agriculture (USDA).
In Washington, people talk about their inspiring view of the
Capitol or the monuments, and the sights that inspire them to work
harder and better. The view in my office is quite awesome--at once
humbling and challenging. I am referring to a famous portrait on my
wall of Louis Pasteur, examining a spinal cord sample. Pasteur
disagreed with the popular attitude of the day, ``science for science's
sake;'' he felt that science as a purely academic exercise did not
properly serve the people of the 19th century. Instead, he believed
that science should have practical applications that could be used to
improve the lives of others. As we begin the new year at USDA, I am
proud to highlight several areas in which we have used science to
improve public health during the past year. I also will share with you
our goals for this year, and will conclude with a discussion of the
fiscal year 2005 budget request.
First though, I want to briefly touch on the Bovine Spongiform
Encephalopathy (BSE) issue. Since December 23, 2003, BSE has been
``front and center'' with us, as it has with everyone who has concerns
about public health and food safety. Upon learning of the BSE find, we
immediately took action to protect the public's health. New regulations
were published on January 12th, a mere 2 weeks after the BSE case was
announced--truly a remarkable example of how quickly the Bush
Administration responded to this threat. The removal of specified risk
material (SRM) (brain, spinal cord, etc.) from the food supply, which
was the hallmark of these new regulations, was indeed the single most
significant step we could have taken to protect the public's health. To
ensure that these measures are implemented effectively, part of the
fiscal year 2005 budget request that I will discuss later consists of
$3 million for the agency to conduct surveillance of SRM and advanced
meat recovery (AMR). We are confident that the aggressive BSE measures
we have developed will continue to protect the U.S. food supply.
SIGNIFICANT FOOD SAFETY ADVANCEMENTS OF 2003
The American public remains confident in the safety of the U.S.
meat supply--and with good reason. The confidence is due, in part, to
the significant advancements that we made during 2003. One such
advancement has been the dramatic decline in pathogen levels in
regulatory samples. Late last year, we released data that showed a 25
percent drop in the percentage of positive Listeria monocytogenes
samples from the previous year, and a 70 percent decline compared with
years prior to the implementation of the Hazard Analysis and Critical
Control Point (HACCP) program. In June 2003, to further reduce the
incidence of Listeria monocytogenes, we issued regulations for
establishments producing ready-to-eat products.
Our measures to prevent E. coli O157:H7 contamination of ground
beef have yielded similar results. In September 2002, based on evidence
that E. coli O157:H7 is a hazard reasonably likely to occur at all
stages of handling raw beef products, FSIS issued a directive requiring
all establishments that produce raw beef products to reassess their
HACCP plans. Last year, FSIS' scientifically trained personnel
conducted the first-ever comprehensive audits of more than 1,000 beef
establishments' HACCP plans. A majority of those plants made major
improvements based on their reassessments, and, as a result, we are
seeing a substantial drop in the percentage of ground beef samples that
are positive for E. coli O157:H7. In 2003, of the ground beef samples
collected and analyzed for E. coli O157:H7, only 0.30 percent tested
positive, compared to 0.78 percent in 2002--a 62 percent reduction.
This is a definite improvement, and the strongest signal that science
can drive down the threat from pathogens.
In 2002, we issued new enforcement procedures for the Salmonella
performance standard that are paying off. Instead of waiting for three
cycles of tests for Salmonella, the failure of the first set now
triggers an FSIS review of an establishment's HAACP plan. Due to this
process and other science-based initiatives, the percentage of ``A''
samples (a sample from a randomly scheduled initial set) positive for
Salmonella in raw meat and poultry has dropped by 65 percent over the
past 6 years. Out of the number of random ``A'' samples collected and
analyzed by FSIS during 2003, only 3.8 percent of the samples were
positive for Salmonella, as compared with 10.6 percent in 1998. Again,
this is very good news. The data for these three pathogens validate our
scientific approach to improving public health through safer food.
We also had a striking decline in the number of meat and poultry
product recalls last year. In fact, the number of Class I recalls has
nearly been cut in half from the total during 2002. This is a dramatic
indicator that our scientifically-based policies and programs are
working to ensure that the American public receives the safest food
possible.
FSIS has also had great success with its food safety education
programs. Through new and innovative methods, FSIS is sharing its food
safety message with the general public, including culturally diverse
and underserved populations and those at highest risk for foodborne
illnesses. From March to November 2003, the USDA Food Safety Mobile
traveled over 24,000 miles and participated in 87 events in 64 cities
across the country, providing information and publications on food
safety to approximately 179,000 people face-to-face and making an
estimated 64.4 million media impressions. Another success story is a
public service announcement (PSA) featuring former Miss America Heather
Whitestone McCallum, which has aired 14,448 times since September 2003.
This PSA ranked in the top 3 percent of all PSA's shown during the
month of January 2004 along with PSA's by the American Red Cross, the
Federal Emergency Management Agency (FEMA), and the Department of
Homeland Security (DHS). We are very proud of these far-reaching FSIS
food safety education campaigns.
CHALLENGES FOR 2004
Despite the advancements we made last year, there is always room
for improvement, and FSIS has identified challenges for 2004. Louis
Pasteur said, ``In the realm of science, luck is only granted to those
who are prepared.'' Food safety is too important to be left to guess
work or luck; we must be prepared to identify and meet challenges head-
on.
When I joined USDA over 2 years ago, I established five goals--a
roadmap of improvements for our food safety mission:
--To improve the management and effectiveness of our regulatory
programs;
--To ensure that policy decisions are based on science;
--To improve coordination of food safety activities with other public
health agencies;
--To enhance public education; and
--To protect FSIS regulated products from intentional contamination.
Through reflection and refinement, we have outlined specific
initiatives to make sure we fulfill those goals, thereby improving
health outcomes for American families. These initiatives were outlined
in our food safety vision document, Enhancing Public Health: Strategies
for the Future. This detailed plan will continue to drive our policies
and actions during this calendar year.
Initiative One: Training
In April 2003, FSIS inaugurated new Food Safety Regulatory
Essentials (FSRE) training, which is designed to better equip
inspection personnel in verifying an establishment's HACCP food safety
system. All trainees received training in the fundamentals of
inspection, covering the Rules of Practice, Sanitation Performance
Standards, and Sanitation Standard Operating Procedures. FSIS also
provides food safety training based on the types of products being
produced at the establishments where inspectors are assigned. As of the
end of last year, more than 1,000 individuals had completed this
training regime.
During 2004, FSIS will continue to train all new entry level
slaughter establishment inspectors and veterinary medical officers in
technical, regulatory and public health methods. We are also looking at
expanding the types of training in the future to meet evolving agency
needs and challenges.
Initiative Two: Furthering the Use of Innovative Food Safety
Technologies
I believe that we must encourage the use of safe and effective
interventions. One way we can encourage such intervention is by hosting
public meetings. In January, in Omaha, Nebraska, FSIS held a public
meeting to discuss the development and use of new food safety
technologies to enhance public health. The meeting generated useful
ideas regarding how plants can best utilize new technologies in their
operations.
FSIS established a New Technology Office in August 2003. This group
is tasked with reviewing new technologies and, where appropriate,
expediting the use of new technologies at meat and poultry official
establishments and egg products plants. Our New Technology staff is an
experienced team of 9 veteran FSIS employees who serve as the single
portal for all new technology submissions. We designed this group to
better manage the new technology process and allow for implementation
as quickly as possible. They also ensure that FSIS personnel are aware
of new technologies and where they are being used.
To increase the pool of new technology submissions to the agency,
we have established an e-mail address, [email protected],
through which parties may submit their information. I am happy to
report that we have received over 30 Notifications and Protocols for
new food safety technologies since we have streamlined the submission
process. Of the 27 Notifications received, 19 have been issued letters
indicating that FSIS has no objections, and 4 are still pending. Once
the agency issues a no objection letter, the firm that submitted the
proposal may use the new technology.
Initiative Three: Risk Assessment Coordination
In order to better focus its resources on food safety risk
assessment activities, FSIS established a risk assessment coordination
team with USDA-wide membership. As risk assessment becomes increasingly
important as a means of providing the science behind policy decisions,
the need for such a group within USDA is clear. This group will promote
scientifically sound risk assessments and foster research to support
risk assessments.
Microbial risk assessment is still in its infancy compared to
chemical risk assessments, so the need to share ideas and resources is
critical. In November 2003, we started this interactive process by
holding a public meeting to discuss how the government uses the three
components of the risk analysis framework--risk assessment, risk
management, and risk communication--to inform and implement risk
management decisions. In particular, we examined several crucial
elements for FSIS to consider in its risk assessments, including how:
--FSIS can improve the transparency of the risk analysis process;
--FSIS can balance the need for transparency, stakeholder involvement
and peer review with the need for timely scientific guidance;
and
--Risk assessments can better inform policy development and decision-
making.
Initiative Four: Developing a Research Agenda
In November 2003, FSIS and the Research, Education and Economics
mission area, announced a unified research agenda to coordinate USDA
food safety research priorities and needs. For FSIS, research is
critical to achieving its public health vision. Although FSIS does not
conduct research itself, the agency must identify its research needs
based on its public health goals so that the research community can
meet them. The unified agenda includes research to:
--Investigate the ecology, epidemiology, virulence and genetic
characteristics related to pathogenicity for E. coli O157:H7,
Salmonella, Listeria monocytogenes, and other foodborne
pathogens to identify targeted control measures;
--Develop effective on-farm, feedlot, transportation, handling, and
other pre-processing intervention strategies for reducing the
incidence and levels of antibiotic resistant microorganisms and
key foodborne pathogens in meat, poultry, eggs and fresh
produce;
--Develop, validate, and transfer technology of new and improved
processing methods to reduce or eliminate key foodborne
pathogens in meat, poultry, fresh produce, seafood, and ready-
to-eat foods; and
--Develop rapid and sensitive detection methods for abnormal prions
to prevent the possible spread of transmissible spongiform
encephalopathies.
Initiative Five: To Develop Best Practices for Animal Production
In consultation with producers, researchers, and other
stakeholders, FSIS is developing a list of best management practices
for animal production in order to provide guidance for reducing
pathogen loads before slaughter.
Last September, FSIS arranged a symposium with USDA partners to
discuss ways to significantly reduce the levels of E. coli O157:H7 in
live animals before slaughter. We understand that preventing the spread
of E. coli and other pathogens on the farm is vital to increasing food
safety and protecting public health. The dialogue generated at the
meeting helped us develop guidelines outlining the best management
practices at the pre-harvest stage, which we expect to publish this
year. Once these guidelines are published, FSIS will initiate an
aggressive outreach effort to distribute them to producers.
Initiative Six: Baseline Studies
It is imperative that FSIS develops baseline studies. FSIS is
developing protocols to conduct continuous baseline studies to
determine the nationwide prevalence and levels of various pathogenic
microorganisms in raw meat and poultry. The studies will help the
agency and the industry to better understand what interventions are
working or how they could be improved. To achieve the agency's goal of
applying science to all policy decisions, the fiscal year 2004 budget
included a new $1.7 million initiative to establish a continuous
baseline program for risk assessments and performance measurement.
In the past, baseline studies have been used to establish pathogen
reduction performance standards, which are an important part of
verifying the sanitary operation of meat and poultry establishments.
The new baseline studies will take into account regional variation,
seasonality and other critical factors.
The continuing nature of the baseline studies will provide
information on national trends and a tool to assess performance of
initiatives designed to reduce the prevalence of pathogens in meat and
poultry products. These baseline studies will also yield important
information for conducting risk assessments that can outline steps we
can take to reduce foodborne illness.
These surveys will also be important in establishing the link
between foodborne disease and ecological niches, as well as levels and
incidence of pathogens in meat and poultry. The net result will be more
targeted interventions and the effective elimination of sources of
foodborne microorganisms.
Initiative Seven: Food Biosecurity
While the events of September 11, 2001, brought the issue of the
vulnerability of our food supply to the forefront, FSIS' food
biosecurity efforts did not start on September 12, 2001. FSIS' 100 plus
years worth of experience in dealing with food emergencies have allowed
the agency to develop the expertise to protect the U.S. meat, poultry,
and egg products supply wherever and whenever emergencies or new
threats arise.
It is imperative that FSIS coordinates with other public health
agencies to protect the food supply against intentional harm. The
agency has improved such coordination, as well as strengthened existing
efforts to prevent, detect, and respond to food-related emergencies
resulting from acts of terrorism. 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. Later, when I discuss the fiscal year
2005 budget request, I will describe the components of our food and
agriculture defense initiative.
ACHIEVING THE NEXT LEVEL OF FOOD SAFETY
The emergence of previously unrecognized pathogens, as well as new
trends in food distribution and consumption, highlights our need for
new strategies to reduce the health risks associated with pathogenic
microorganisms in meat, poultry and egg products. Through analysis and
discussions with stakeholders, we have identified three issues that
need to be addressed to attain the next level of public health
protection.
Issue One: To anticipate/predict risk through enhanced data integration
To better anticipate risks involving meat and poultry products, we
must have the best available data to clearly identify the extent and
nature of these risks, so that we may determine an effective response.
These data consist of regulatory samples, as well as samples collected
by food processing establishments. Thus, we must improve data analysis
while encouraging data sharing from all reliable sources.
With regard to food biosecurity, FSIS works closely with the White
House Homeland Security Council, DHS, the Food and Drug Administration
(FDA) and the USDA Homeland Security Staff to develop strategies to
protect the food supply from an intentional attack. For example, FSIS,
along with FDA and industry partners, is working with DHS to establish
new food information sharing and analysis activity for the food sector.
This public/private partnership will aid in the protection of the
critical food infrastructure by centralizing the information about
threats, incidents, and vulnerabilities.
Issue Two: To improve the application of risk analysis to regulatory
and enforcement activities
Food safety problems need to be documented as they occur, so that
conditions may be analyzed and, if need be, corrected. A better
understanding of the prevalence and causes of food safety failures
could allow better assessment of how to best address them. Data
regarding the causes of food safety violations, either within a
specific establishment, or within a class of establishments, can be
utilized in order to better focus prevention and regulatory enforcement
strategies.
FSIS is exploring the development of a real-time measure of how
well an establishment controls the biological, chemical, and physical
hazards inherent in its operations. Such a predictive model would help
the agency make resource allocation decisions across the country's more
than 6,000 meat and poultry establishments to maximize food safety and
public health protection.
Issue Three: To better associate program outcomes with public health
surveillance data
We have seen notable advances in preventing foodborne illness,
which the Centers for Disease Control and Prevention (CDC) have
attributed, in part, to the implementation of HACCP. However, there
still is a need to determine how specific policies affect public
health. In order to accomplish this, we need to obtain and document
data that links foodborne illness outbreaks with specific foods. It may
then be linked with prevalence data of specific pathogens in specific
foods. However, to complete the linkage with public health outcomes, we
need accurate and timely human health surveillance data.
We have already taken steps to secure such surveillance data, and
we continue to update our systems. In 1995, FSIS worked with CDC, FDA,
and public health laboratories in several States to establish FoodNet,
the Foodborne Diseases Active Surveillance Network, as part of CDC's
Emerging Infections Program.
FoodNet includes active surveillance of foodborne diseases, case-
control studies to identify risk factors for acquiring foodborne
illness, and surveys to assess medical and laboratory practices related
to foodborne illness diagnosis. FoodNet provides estimates of foodborne
illness and sources of specific diseases that are usually found in the
United States, and interprets these trends over time. Data are used to
help analyze the effectiveness of the Pathogen Reduction/Hazard
Analysis and Critical Control Point rule and other regulatory actions,
as well as public education aimed at decreasing foodborne disease in
the United States. We are also considering establishing a joint task
force with CDC to determine ways to improve FoodNet.
In addition to data collected through FoodNet, FSIS is a partner
with CDC and State agencies in PulseNet, a national computer network of
public health laboratories that helps to rapidly identify outbreaks of
foodborne illness. Laboratories perform DNA ``fingerprinting'' on
bacteria that may be foodborne, then the network permits rapid
comparison of the ``fingerprint'' patterns through a CDC database.
PulseNet is an early warning system that links seemingly sporadic
illnesses, and enables public health officials to more quickly identify
and react to the emergence of multi-State illness outbreaks.
FSIS is also working with CDC's National Center for Infectious
Diseases to design and support studies that enable definite connections
to be made between occurrence of specific pathogens in specific foods
and the occurrence of human foodborne illness.
FoodNet, PulseNet and other similar programs are excellent examples
of Federal and State agencies working together to accomplish public
health goals. These programs will help FSIS and other regulatory
agencies to focus inspection and enforcement on those practices where
risk is deemed to be highest, resulting in a more efficient use of
government resources.
FISCAL YEAR 2005 BUDGET REQUEST
I will now turn to the fiscal year 2005 budget request for FSIS. In
fiscal year 2005, FSIS is requesting a program level of $951.7 million,
a net increase of about $61 million from the enacted level for fiscal
year 2004. Under current law, we are requesting an appropriation of
$838.7 million, with an additional $113 million in existing user fees.
The budget request will fund the increased BSE surveillance programs I
mentioned earlier, as well as additional training for inspection
personnel and numerous programs that will continue to keep FSIS among
the leading public health agencies in the world. By continuing the
principle of making policy based on sound science, we will modernize
our inspection system to handle the challenges of food safety in this
century. Implementation of these budget initiatives is imperative to
help us attain the public health vision we have set for FSIS.
Supporting FSIS' Basic Mission
The FSIS budget request for fiscal year 2005 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
budget request includes a $15.5 million increase for pay raises in
Federal and State programs. In addition, the budget supports an agency-
wide staff-year ceiling of 9,641, an 84 staff year increase from the
2004 appropriation level. The budget reflects the proposed calendar
year 2005 pay raise of 1.5 percent for Federal and State personnel, a
0.2 percent increase for employee rewards, and the annualized cost of
the 4.1 percent pay increase for calendar year 2004. The costs also
include a total net increase of approximately $721,000 for state food
safety and inspection.
Two critical elements of FSIS' mission are to continue the
enforcement of humane slaughter regulations and to provide for the full
cost of front-line inspection. FSIS will continue strict enforcement of
its regulations for the humane handling and slaughter of livestock. In
fiscal year 2003, over 7,600 inspection personnel stationed in over
6,000 federally inspected meat, poultry, and egg products plants
verified that the processing of 43.6 billion pounds of red meat, 49.2
billion pounds of poultry, and 3.7 billion pounds of liquid egg
products complied with statutory requirements. The fiscal year 2005
budget request includes a $17.3 million increase for humane slaughter
enforcement and the full cost of in-plant inspection. Included in the
request is $5.0 million to continue the work funded in fiscal year 2003
for fiscal year 2003 through fiscal year 2004.
The remaining $12.3 million of the $17.3 million is for staff
support costs that are critically important to maintaining front line
inspection. Over 80 percent of FSIS costs are for salaries, benefits,
and travel costs for inspectors to travel between plants. Increases in
benefit and travel costs cannot be deferred to another year. The
agency's share of employee benefits costs has been rising in recent
years by over $4 million annually. The agency has also experienced
large increases in retirement costs, hiring incentives, and employee
allowances for the purchase of safety equipment and related items. The
increase is needed to avoid employment restrictions in the inspection
program, which would result if unavoidable cost increases are not fully
funded and must be absorbed.
New Initiatives
The fiscal year 2005 request includes a $33.6 million increase for
new initiatives that support the Department's goals for FSIS.
First, as I discussed in my opening, the fiscal year 2005 budget
request includes an increase of $3 million for BSE surveillance. FSIS'
BSE inspection program will add permanent BSE control measures in
fiscal year 2005. These control measures will include increased in-
plant verification of slaughter plant designs for controlling SRMs,
overtime inspection, and travel for Veterinary Medical Officers to test
non-ambulatory disabled livestock when they arrive at small slaughter
plants that do not have a resident veterinarian. In fiscal year 2005,
FSIS will also perform about 60,000 screening tests at processing
plants that use AMR equipment, to ensure that SRMs do not enter the
food supply.
The fiscal year 2005 budget also requests a $23.5 million increase
to support our food and agriculture defense initiative. Food
contamination and animal and plant diseases and infestations can have
catastrophic effects on human health and the economy. USDA, the
Department of Health and Human Services and DHS are working together to
create a comprehensive food and agriculture policy that will improve
the government's ability to respond to the dangers of disease, pests
and poisons, whether natural or intentionally introduced. FSIS' portion
of the food and agriculture defense initiative has five components:
--Biosurveillance;
--The Food Emergency Response Network;
--Data systems to support the Food Emergency Response Network;
--Enhancing FSIS laboratory capabilities; and
--Follow-up biosecurity training.
To finance the biosurveillance component of the food and
agriculture defense initiative, the fiscal year 2005 budget requests $5
million. The Homeland Security Council (HSC) Biodefense End-to-End
Assessment, in cooperation with all relevant U.S. Government agencies,
identified early attack warning and surveillance as a top priority to
prepare against a potential bioterrorist attack. The HSC supports an
interagency biosurveillance initiative to improve the Federal
Government's ability to rapidly identify and characterize such an
attack. This initiative will improve Federal surveillance capabilities
in human health, food, agriculture, and environmental monitoring. It
will also allow Federal agencies to establish integration capability at
DHS so that DHS may rapidly compile these streams of data and integrate
them with threat information.
FSIS has conducted its own vulnerability assessments of regulated
domestic and imported products. The assessments identify potentially
vulnerable products and processes, likely threat agents, and points
along the production/consumption continuum where attack is most likely
to occur. The agency will focus its resources on the points of greatest
vulnerability.
The second component of the food and agriculture defense initiative
is the Food Emergency Response Network (FERN). A nationwide laboratory
system with sufficient capacity to meet the needs of anticipated
emergences is integral to any bioterror surveillance and monitoring
system. FERN consists of Federal and State governmental laboratories
which are responsible for protecting citizens and the food supply from
intentional acts of biological, chemical, and radiological terrorism.
Currently, over 60 laboratories, including public health and veterinary
diagnostic laboratories, representing 27 States and five Federal
agencies, have agreed to participate in FERN. The goal is to establish
100 FERN laboratories, creating a network of Federal, State and local
laboratories that FSIS could call upon to handle the numerous samples
that would be required to be tested in the event of a terrorist attack
on the meat, poultry or egg supply.
To improve the infrastructure under FERN, the budget request calls
for a $10 million expansion. Of that funding, $6.1 million would be
spent on contracts with State and local laboratories, and $2.6 million
would be used to establish five Regional Hubs and a National Operating
Center to coordinate FERN's efforts and conduct training. In addition,
during fiscal year 2005, FSIS would also use $1.3 million to establish
five to seven State laboratories for screening of microbiological
agents, with more laboratories in the future, based on the availability
of funds. The staff of these laboratories will receive training,
perform methods validation, and analyze surveillance and check samples.
The third and fourth components of the food and agriculture defense
initiative support FERN. The electronic laboratory exchange network
(eLEXNET) is a national, web-based system that allows laboratories to
rapidly report and exchange standardized data. The fiscal year 2005
budget request of $4 million will be used to make eLEXNET available to
additional FERN and other food-testing laboratories nationwide. Access
to properly validated methods used for screening, confirmation, and
forensic analysis is critical to all laboratories, and laboratories
need rapid access to new or improved methods that use emerging
technologies, have greater sensitivity, or are more efficient. FSIS is
working with FDA to develop a web-based repository of analytical
methods that is compatible with eLEXNET. The budget request also
includes $2.5 million to enhance FSIS' laboratory capabilities for
detecting new bioterror-associated agents, and to ensure FSIS'
capability and capacity to perform the toxin and chemical testing that
will be standardized across all FERN laboratories.
The final component of the food and agriculture defense initiative
is follow-up biosecurity training for the workforce. Follow-up training
is essential as part of the ongoing effort to protect the public by
educating the workforce regarding the latest threat agents and
countermeasures to those agents. The budget request includes $2 million
for follow-up training for fiscal year 2005.
The final new initiative I will discuss is training. FSIS has been
criticized over the years by the General Accounting Office and the
Office of the Inspector General for having poorly trained field
employees. We have been addressing these concerns over the last year,
but need additional resources in order to significantly improve our
training. We are requesting $7.1 million--over a 50 percent increase--
in the FSIS training budget for fiscal year 2005. Of the requested
training budget, $4.0 million would be used to increase the number of
entry level inspectors receiving formal classroom training from 20
percent to 100 percent. Under this proposal, all new inspectors will
receive formal training on how to identify and respond to food safety
problems. New employees will be required to demonstrate mastery of
training in order to be certified to assume inspection duties.
The requested training budget also includes $3.1 million for Food
Safety Regulatory Essentials training, to supplement training for
current on- and off-line field employees to improve enforcement of
Pathogen Reduction/Hazard Analysis and Critical Control Point
regulations and food safety sampling. These frontline employees are
responsible for making the critical decisions to ensure that products
are safe to eat, so it is essential to have a scientifically and
technically trained workforce.
User Fee Proposal
FSIS' fiscal year 2005 budget also includes a legislative proposal
to recover the costs of providing inspection services beyond an
approved 8-hour primary shift. The proposal was submitted to Congress
last August. If the proposal is enacted, the level of appropriated
funds needed would be reduced by an estimated $124 million, making the
FSIS budget request $714.7 million. Under current law in 2005, FSIS
estimates it will collect $113 million in annual user fees to recover
the costs of overtime, holiday, and voluntary inspection.
CLOSING
We intend to continue to engage the scientific community, public
health experts and all interested parties in an effort to identify
science-based solutions to public health issues to ensure positive
public health outcomes. It is our intention to pursue such a course of
action this year in as transparent and inclusive a manner as is
possible. The strategies I discussed today will help FSIS continue to
pursue its goals and achieve its mission of reducing foodborne illness.
Mr. Chairman, thank you again for providing me with the opportunity
to speak with the Subcommittee and submit testimony regarding the steps
that FSIS is taking to remain the world leader in public health. I look
forward to working with you to improve our food safety system, ensuring
that we continue to have the safest food supply in the world.
______
Prepared Statement of Dr. Barbara J. Masters, Acting Administrator,
Food Safety and Inspection Service
Mr. Chairman and distinguished members of the Subcommittee, I am
pleased to be here today as we discuss public health and the U.S.
Department of Agriculture's (USDA) fiscal year 2005 budget request for
the Food Safety and Inspection Service (FSIS).
Infrastructure
FSIS has a long, proud history of protecting public health.
Although the Agency under its current name was established by the
Secretary of Agriculture on June 17, 1981, its history dates back to
1906. FSIS' mission is to ensure that meat, poultry, and egg products
prepared for use as human food are safe, secure, wholesome, and
accurately labeled. FSIS is charged with administering and enforcing
the Federal Meat Inspection Act (FMIA), the Poultry Products Inspection
Act (PPIA), the Egg Products Inspection Act (EPIA), and the regulations
that implement these laws.
Ensuring the safety of meat, poultry, and egg products requires a
strong infrastructure. To accomplish this task, FSIS has a large
workforce of approximately 10,000 employees, most of who are stationed
in the field, dedicated to inspection. In fiscal year 2003, over 7,600
inspection personnel stationed in over 6,000 federally inspected meat,
poultry, and egg products plants verified that the processing of 43.6
billion pounds of red meat, 49.2 billion pounds of poultry, and 3.7
billion pounds of liquid egg products complied with statutory
requirements. In addition, we re-inspected 3.8 billion pounds of
imported meat, poultry and processed egg products from 28 of 33
countries that we determined have inspection systems equivalent to our
own. Assuring that these products are safe and wholesome is a serious
responsibility.
As you are well aware, these are compelling times in food safety,
and it is because of your support that we are making real progress in
improving the safety of the U.S. food supply. I would like to thank you
for the past support you have given us in our budget requests. Now, I
would like to tell you how we are fulfilling our responsibilities
through FSIS' food safety vision and about our initiatives for better
ensuring the safety of meat, poultry, and egg products.
Fulfilling the Vision
The continued mission of FSIS is to ensure that consumers have the
safest possible food supply. To fulfill this vision, we have set out to
continuously modernize FSIS' ability to improve the safety of meat,
poultry, and egg products. Our efforts are paying off, as seen by the
16 percent decline in foodborne illness over the last 6 years. The
Centers for Disease Control and Prevention (CDC) attributes these
results in part to the implementation of the Hazard Analysis Critical
Control Point (HACCP) system in all meat and poultry plants in the
United States. However, in spite of these positive trends towards a
safer food supply, FSIS recognizes that intensified efforts are needed
to reach the next level of food safety. That is why the agency has
diligently worked to carry out Dr. Murano's five core goals:
--To improve the management and effectiveness of our regulatory
programs;
--To ensure that policy decisions are based on science;
--To improve coordination of food safety activities with other public
health agencies;
--To enhance public education; and
--To protect FSIS regulated products from intentional contamination.
Improving the Management and Effectiveness of Regulatory Programs
In order for policies and programs to be successful, they must be
uniformly and correctly applied. Thus, proper training of the workforce
is essential. In addition, communication to field personnel needs to be
timely and accurate, with proper supervision from the district and from
headquarters in order to foster accountability in the system.
Training and Education
The key to improving the management and effectiveness of FSIS'
considerable infrastructure is to ensure that the agency is well
prepared with the tools necessary to protect the food supply. Training
is a top priority of the agency. FSIS can only achieve its public
health, food safety, and food security mission with adequate
preparation of its workforce through scientific and technical training.
In April 2003, FSIS began the Food Safety Regulatory Essentials
(FSRE). The goal of the training is to teach inspection personnel how
to do their jobs properly, and emphasizes the regulatory decision-
making thought process both through lecture and workshop examples. In
fiscal year 2003, FSIS exceeded its goal to train 800 inspectors under
FSRE. A comparison between pre-test and post-test scores has shown that
the knowledge improvement of our inspectors has increased by an average
of 20 percent. Feedback from our inspectors has been extremely
positive, and industry representatives have noted the positive
difference that these courses are having on how inspection procedures
are performed.
FSIS has also initiated a comprehensive 2-year training and
education effort designed to ensure that every FSIS employee fully
understands their role in preventing or responding to an attack on the
food supply. Last year, over 1,600 employees received food security
training. By the end of fiscal year 2004, over half of our workforce
will have received this training. The Law Enforcement Academic Research
Network (LEARN), which is carrying out the training, has stated that
this training effort is unparalleled in the Federal sector since it is
being provided to such a broad base of our employees.
Another initiative the agency has undertaken to enhance FSIS'
training effort is taking training opportunities closer to our
employees. In August 2003, the agency announced new regional training
centers designed to bring comprehensive workforce training programs to
FSIS field employees throughout the country. FSIS has established the
regional training centers in five field locations: Atlanta, GA; Dallas,
TX; Philadelphia, PA; Des Moines, IA; and Boulder, CO. FSIS has hired
three of the regional trainers to head the new centers, and expects to
hire the remaining two trainers by April. In addition, FSIS will be
providing distance learning that will be easily accessible to our field
employees. These approaches will allow FSIS to train more inspectors
each year in various skills to enhance their technical and regulatory
abilities.
Another step we've taken is to increase our cadre of scientifically
trained personnel, known as Consumer Safety Officers (CSOs). CSOs have
a scientific and technical background and receive additional FSIS
training that enables them to use a disciplined methodology to assess
and verify the design of food safety systems. FSIS has trained every
entering CSO--150 of them--in a cooperative agreement through the Texas
Agricultural Experiment Station. In fiscal year 2004, the agency plans
to train 200 additional employees in this program, including employees
who have been promoted to CSOs, Veterinary Medical Officers, Program
Investigators, and others.
Accountability
FSIS inspection personnel are held accountable for ensuring that
public health is protected. To emphasize the importance of
accountability, FSIS created the Office of Program Evaluation,
Enforcement and Review (PEER) during the agency's recent
reorganization. PEER serves as a quality control team by ensuring 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. PEER retains the role of ensuring prompt
and appropriate enforcement of the inspection laws. The work of the
field Program Investigators in PEER places them on a daily basis in
close proximity to performance and compliance problems and concerns at
the in-plant level, which affords the agency the ability to deal with
necessary adjustments and problems in a much more immediate and direct
fashion than in the past. PEER was formed because a strong quality
assurance program that uses reviews, evaluations, and audits as its
tools can have a significant impact on management effectiveness,
efficiency and policy development.
Because accountability is crucial in delivering programs in a
consistent and effective manner, FSIS implemented the Humane Activities
Tracking (HAT) program in February 2004. This new electronic tracking
system will document inspection activities to ensure that livestock are
humanely handled and slaughtered in federally inspected facilities. The
HAT program will provide FSIS with more accurate and complete data on
the time spent by FSIS personnel performing nine specific humane
handling related tasks to ensure humane handling and slaughter
requirements are met.
In addition, in November of 2003, FSIS issued an updated directive
to all inspection personnel and district offices providing specific,
detailed information about requirements of the Humane Methods of
Slaughter Act to ensure that verification and enforcement requirements
are clearly and uniformly understood. In May of 2003, FSIS also issued
a directive to provide guidance and direction to inspection personnel
to ensure consistent use of enforcement actions.
ENSURE THAT POLICY DECISIONS ARE BASED ON SCIENCE
FSIS continuously reviews its existing authorities and regulations
to ensure that emerging food safety challenges are adequately
addressed. In addition, FSIS is committed to continuing its emphasis on
the use of science, research, and technology in the development of
improved food safety policies, focused on prevention whenever possible.
Risk Assessment
Risk assessment is one tool that can provide FSIS with the solid
scientific foundation on which to base regulatory and policy decisions.
In fact, the Agency has used risk assessment to estimate the likelihood
of exposure to various hazards, and to estimate the resulting public
health impact. For example, in February 2003, FSIS released a draft of
a quantitative risk assessment conducted on Listeria in ready-to-eat
(RTE) meat and poultry products. On February 26, 2003, FSIS held a
public meeting to discuss the design of the risk assessment, the
results, and conclusions that could be drawn from it regarding the risk
of contamination of RTE products with this pathogen during processing.
The Listeria risk assessment, in conjunction with a previously
released Food and Drug Administration (FDA)/FSIS risk ranking, peer
review, and public comment, provided important data enabling FSIS on
June 6 to publish a final Listeria rule originally proposed in early
2001. This risk-based regulation will serve as the cornerstone of the
FSIS efforts to prevent listeriosis from RTE meat and poultry products.
The rule requires all establishments that produce RTE products that are
exposed to the environment after cooking to develop written programs to
control Listeria monocytogenes and to verify the effectiveness of those
programs through testing. Establishments must share testing data and
plant-generated information relevant to their controls with FSIS. The
rule also encourages all establishments to employ additional and more
effective Listeria monocytogenes control measures.
Innovative Testing Methods
In October 2003, FSIS announced the adoption of the BAX system to
screen for Salmonella in raw meat and poultry products. The Microbial
Outbreak and Special Projects Laboratory, in collaboration with three
FSIS field service laboratories, evaluated the BAX system to determine
whether it would be beneficial to the agency and to determine its
validity and reliability. FSIS determined that the BAX system was as
sensitive as the existing method of detecting Salmonella in raw meat
and poultry products, but also reduced the reporting time for negative
samples by one to 2 days. FSIS has been using the BAX screening system
for Salmonella in ready-to-eat meat, poultry and pasteurized egg
products since February 2003, and for Listeria monocytogenes since
April 2002. This new measure increases efficiency in detecting
pathogens and saves valuable agency time and resources.
Reducing E. coli O157:H7
FSIS has instituted major changes in its E. coli O157:H7 policy to
further ensure that beef plants address and reduce the presence of E.
coli O157:H7. In October 2002, the agency took strong steps to address
E. coli O157:H7 contamination based on USDA's Agricultural Research
Service's data and FSIS' draft risk assessment. Those measures are
starting to pay dividends to the American consumer. Our scientifically
trained personnel have examined prevention mechanisms at more than
1,000 beef establishments and a majority of those plants have made
major improvements based on reassessments of their HACCP plans. As a
result, we are seeing a drop in the number of E. coli O157:H7 positive
samples in ground beef. For instance, in E. coli O157:H7 samples
collected and analyzed during 2003, 0.30 percent tested positive,
compared to 0.78 in 2002--or a 62 percent reduction.
IMPROVE COORDINATION OF FOOD SAFETY ACTIVITIES WITH OTHER PUBLIC HEALTH
AGENCIES
With primary authority over meat, poultry, and egg products, FSIS
plays an integral role in ensuring the safety of America's food supply.
As one partner in the U.S. food safety effort, FSIS strives to maintain
a strong working relationship with its sister public health agencies.
Cooperation, communication, and coordination are absolutely essential
if we are to be effective in addressing public health issues.
BSE Coordination
The December 2003 discovery of a single case of Bovine Spongiform
Encephalopathy (BSE) in Washington State provides an excellent example
of the strong communication ties and the cooperation between USDA and
its Federal and State food safety partners. The Federal Government's
swift and substantial reaction to the BSE diagnosis played a vital role
in maintaining high consumer confidence. FSIS and its sister agencies
moved effectively and forcefully upon the discovery of a BSE case in
this country, further strengthening already formidable BSE preventive
measures. Being a part of the continuous briefings, planning meetings,
international trade discussions, and all the other events surrounding
this situation has been both challenging and rewarding. FSIS has worked
closely with USDA's Animal and Plant Health Inspection Service (APHIS)
and other mission areas in USDA, FDA, state governments, industry and
consumers to ensure our BSE prevention and response measures are fully
effective in the United States.
MOU with FDA
Since 1999, FSIS and the Food and Drug Administration (FDA) have
had a Memorandum of Understanding (MOU) to exchange information on an
on-going basis about establishments that fall under both jurisdictions.
FSIS will continue engaging in substantive discussions with FDA and
other agencies who share public health and food safety
responsibilities. The Bioterrorism Act of 2001 (Public Law 107-188)
further enhanced this cooperation by authorizing FDA to commission FSIS
employees to conduct inspection at dual jurisdiction facilities.
Public Health Service Commissioned Corps Officers
In addition to its partnerships with the White House and Federal
agencies, FSIS has entered into a working relationship with the U.S.
Public Health Service (PHS) and the Office of the Surgeon General. In
April 2003, FSIS signed a Memorandum of Agreement with the Surgeon
General and the PHS that allows expanded numbers of PHS Commissioned
Corps Officers to be detailed to the agency. FSIS currently has 19 PHS
Commissioned Corps Officers detailed to the agency and will incorporate
additional PHS Officers nationwide across all program areas under the
agreement. Not only will these officers help FSIS respond to foodborne
disease outbreaks and assist in preventing foodborne illness, but they
will assist in the agency's homeland security efforts as well. Since
the Commissioned Corps Officers are available 24 hours a day, 7 days a
week, this affords a greater flexibility to respond immediately during
heightened security alerts or an actual threat to the food supply.
USDA's Unified Food Safety Research Agenda
Another example of FSIS' commitment to communication, cooperation,
and coordination was the November 2003 announcement of a unified food
safety research agenda to improve the efficiency and effectiveness of
food safety programs. USDA also released a list of additional research
needs specific to meat, poultry and egg products that FSIS will
encourage non-governmental entities to address. The government research
agenda will complement these efforts by industry and academia. USDA's
Research, Education, and Economics (REE) mission area worked with
USDA's Office of Food Safety, other government food safety agencies,
and stakeholders to develop the unified research agenda. The unified
agenda prioritizes research needs and maximizes use of available
resources.
ENHANCE PUBLIC EDUCATION EFFORTS
Because everyone has a responsibility for food safety, educating
the public about this responsibility is a crucial element in FSIS' food
safety mission. All food preparers, from consumers to food service
employees, must know and understand basic safe food-handling practices.
These efforts must be broad enough to ensure that no segment of the
public is uninformed about safe food handling practices, yet at the
same time, target various segments of the population to positively
influence those behaviors that pose the greatest potential risk.
Communicating with the public about food safety must be accomplished in
a manner that is easily understandable so that it is useful to every
segment of the population. Thus, FSIS has considered innovative and
collaborative methods for delivering the food safety message.
The Food Safety Mobile
One such innovative way of spreading the food safety message is
USDA's Food Safety Mobile, which was introduced in March 2003. This
eye-catching ``food safety educator-on-wheels'' brings food safety
information to consumers and builds on our partnerships in communities
across the country. Through the Food Safety Mobile, FSIS is sharing its
food safety message with the general public as well as culturally
diverse and underserved populations and those with the highest risk
from foodborne illnesses. From March to November 2003, the Mobile
traveled over 24,000 miles and participated in 87 events in 64 cities
across the country. These events ranged from county fairs and grocery
store demonstrations, to the Taste of Minnesota and the Philadelphia
Thanksgiving Day Parade. FSIS used these opportunities to provide
information and publications on food safety to approximately 179,000
people face-to-face at Mobile events. FSIS estimates 64.4 million media
impressions from the Mobile, and that does not include internet
exposure.
Educational Campaign
FSIS has also been conducting an educational campaign through
public events and media interviews with national and regional media
organizations in order to reach more of the population with important
public health messages. Recent events were held in Houston,
Philadelphia, Portland, San Francisco, Miami, and the Flathead
Reservation in Montana. National television interviews have been
conducted with major television networks, including Fox News, Telemundo
and Univision. National celebrities, such as former Miss America
Heather Whitestone McCallum, pop music legend Olivia Newton-John, and
country singer Wynonna Judd, have also been recruited to help FSIS
reach even larger audiences with food safety messages through special
events and the filming of Public Service Announcements (PSA). The
results have been impressive. The Heather Whitestone McCallum PSA has
aired 14,448 times since September 2003. This PSA ranked in the top 3
percent of all PSA's shown during the month of January 2004 along with
PSA's by the American Red Cross, the Federal Emergency Management
Agency (FEMA), and the Department of Homeland Security (DHS).
USDA's Meat and Poultry Hotline
USDA's Meat and Poultry Hotline is an additional tool that FSIS
uses to share its food safety message. The Hotline handled over 98,000
calls and 80 media and information multiplier calls during fiscal year
2003. Calls included requests from newspapers, magazines, radio,
television, and book authors, and included live interviews with radio
and television stations. The Hotline also provides recorded information
and live assistance for our Spanish-speaking callers. Additionally, the
Hotline was a key resource for keeping the public informed about the
BSE situation in Washington and has handled approximately 4,000 calls
and 1,000 emails concerning BSE since December 23, 2003.
PROTECT MEAT, POULTRY, AND EGG PRODUCTS AGAINST INTENTIONAL
CONTAMINATION
In the aftermath of September 11, 2001, there is recognition that
threats to the well being of the Nation's citizens can come in the form
of terrorist attacks, including the intentional contamination of food.
With a strong food safety infrastructure already in place, FSIS has
been focusing on fortifying existing programs and improving internal
and external lines of communication. By partnering with other agencies,
including CDC, FDA, USDA's Agricultural Research Service (ARS), DHS,
APHIS, the Environmental Protection Agency (EPA), as well as
international partners such as the Canadian and Mexican governments'
food inspection agencies, and State and local health agencies, FSIS is
in a pivotal position to share information and to strengthen critical
infrastructure protection activities concerning food from farm to
table.
FSIS Office of Food Security and Emergency Preparedness
To date, FSIS has undertaken a number of initiatives to protect
meat, poultry, and egg products from the potential of a terrorist
attack. Immediately following September 11, 2001, FSIS established the
Food Biosecurity Action Team (F-BAT). The charge of F-BAT was to
coordinate all activities related to biosecurity, counter-terrorism,
and emergency preparedness within FSIS. These activities are
coordinated with USDA's Homeland Security Council, other government
agencies, and industry. Currently, FSIS' newly created Office of Food
Security and Emergency Preparedness (OFSEP) has assumed the
responsibilities of F-BAT and serves as the centralized office within
FSIS for food security issues.
OFSEP interacts closely with USDA's Homeland Security Council and
represents the agency on all food security matters throughout the
Federal Government, as well as in State and local activities. The
Office's mission is to lead in the development of the agency's
infrastructure and capacity to prepare for, prevent, and respond to,
deliberate attacks or other threats to the U.S. food supply. As the
lead coordinator and primary point of contact on all food security and
emergency preparedness activities within FSIS, OFSEP focuses primarily
on:
--Emergency preparedness and response;
--Federal/State/Industry Relations;
--Continuity of operations (COOP);
--Scientific expertise in chemical, biological, and radiological
terrorism; and,
--Security clearance and safeguarding classified information.
To ensure coordination of these activities involves all program
areas of the agency, OFSEP established a new standing advisory group,
the Food Security Advisory Team (FSAT), comprised of representatives of
the major program areas within FSIS, to provide program-specific
technical support.
Expanding Coordination with Federal, State, and Local Agencies
FSIS collaborates and coordinates closely with its State partners
to ensure an effective prevention and response program. Some of the
many state organizations FSIS works with include the Association of
Food and Drug Officials (AFDO); the Association of State and
Territorial Health Officials (ASTHO); and the National Association of
State Departments of Agriculture (NASDA). Most recently, FSIS teamed
with FDA in cosponsoring a joint meeting between ASTHO and NASDA,
entitled ``Homeland Security: Protecting Agriculture, the Food Supply,
and Public Health--The Role of the States.'' The purpose of this
meeting was to enhance collaboration between State public health and
agriculture agencies and the Federal Government. Both the Secretary of
Agriculture and the Secretary of Health and Human Services (HHS) were
on hand for this joint meeting.
FSIS also works closely with the White House Homeland Security
Council, DHS, FDA, and the USDA Homeland Security Staff to develop
strategies to protect the food supply from an intentional attack. For
example, FSIS, along with FDA and industry partners, is working with
DHS to establish a new food information sharing and analysis activity
for the food sector. This public/private partnership will aid in the
protection of the critical food infrastructure by centralizing the
information about threats, incidents, and vulnerabilities.
Consumer Homeland Security Education
Because everyone has a stake in a safe and secure food supply, FSIS
published Food Safety and Food Security: What Consumers Need to Know in
November 2003, as part of the agency's continuing effort to protect
public health by preventing and responding to contamination of the food
supply throughout the farm-to-table continuum. The brochure, developed
by FSIS, is available in both English and Spanish. In a concise and
easy-to-follow format, Food Safety and Food Security: What Consumers
Need to Know, lays out comprehensive and practical information about
safe food handling practices, foodborne illness, product recalls,
keeping foods safe during an emergency and reporting suspected
instances of food tampering. This publication is the latest in a series
of food security guidelines issued by FSIS that includes FSIS Security
Guidelines for Food Processors and FSIS Safety and Security Guidelines
for the Transportation and Distribution of Meat, Poultry and Egg
Products.
Ensuring the Safety of Imports
To further strengthen our import inspection program, we established
a new position called the import surveillance liaison inspector, using
funds provided in the fiscal year 2001 Homeland Security Supplemental
Appropriations Act. These inspectors augment the current activities of
traditional import inspectors at locations across the country. The
import surveillance liaison inspectors conduct a broader range of
surveillance activities, and they coordinate with other agencies, such
as the APHIS, FDA, and the U.S. Customs and Border Protection within
the DHS. Currently, 20 of these new inspectors are on board, and we
anticipate more will be added.
Laboratories
Laboratories play a key role in our ability to quickly detect
contamination of the food supply. FSIS has four ISO accredited
laboratories--three regulatory laboratories that conduct testing on
samples of meat, poultry and egg products, and a fourth laboratory that
focuses on microbial outbreaks. FSIS has increased security at all of
our laboratories. This includes instituting procedures to ensure proper
chain of custody and other controls on all samples and materials
received by the labs. The labs participate in the Electronic Laboratory
Exchange Network (eLEXNET), which is a system designed to provide a
secure network in which food safety labs at various levels of
government can share test data on food samples.
Furthermore, FSIS laboratories have enhanced analytical capability
for compounds of concern and developed surge capacity. Our four labs
have expanded capability to test for non-traditional microbial,
chemical and radiological threat agents. In addition, the Agency has
also begun construction of a Bio Security Level 3 facility that will be
able to conduct analyses on a larger range of potential bioterrorism
agents.
FSIS is also represented on the interagency Laboratory Response
Network and has worked to develop the Food Emergency Response Network
(FERN) for potential foodborne contamination incidents. FERN was formed
in 2002 and currently has about 61 members, including FSIS, FDA, and
state labs. Participation is open to Federal, State, and local
government labs that are capable of conducting food testing and
forensic analysis for a wide variety of chemical, biological and
radiological agents. FERN can help respond to national emergencies,
including terrorist threats that might affect the food supply. In
fiscal year 2005, FSIS plans to significantly expand its participation
in FERN.
FISCAL YEAR 2005 BUDGET REQUEST
I appreciate having the opportunity to discuss a number of FSIS'
accomplishments with you. Now I would like to present an overview of
the fiscal year 2005 budget request for FSIS. Implementation of these
budget initiatives is imperative to helping us attain FSIS' public
health mission. In fiscal year 2005, FSIS is requesting a program level
of $951.7 million, a net increase of about $61 million from the enacted
level for fiscal year 2004. Under current law, we are requesting an
appropriation of $838.7 million, with an additional $113 million in
existing user fees.
Supporting FSIS' Basic Mission
The FSIS budget request for fiscal year 2005 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 2005 budget includes $15.5 million in increases for
mandatory pay raises in Federal and State programs. This includes
annualization of the calendar year 2004 pay raise, as well as the
anticipated calendar year 2005 pay raise.
The fiscal year 2005 budget request includes a $17.3 million
increase for the full cost of in-plant inspection and enforcement of
humane handling and slaughter. FSIS employee salary, benefits, and
inspector travel between plants make up a large portion of the FSIS
budget and have a serious affect on our ability to staff plants if not
fully funded. Thus, FSIS requires a $12.3 million increase to avoid
detrimental employment restrictions within the agency, which would
result if unavoidable cost increases are not fully funded and must be
absorbed. An additional $5 million is requested so that FSIS'
inspection workforce can continue its strict enforcement of regulations
for humane slaughter and handling of livestock, a top priority at FSIS.
New Initiatives
The fiscal year 2005 request includes a $33.6 million increase for
new initiatives that support the Department's goals for FSIS.
BSE Surveillance
First, the fiscal year 2005 budget request includes an increase of
$3 million for BSE surveillance. FSIS' BSE inspection program will add
permanent BSE control measures in fiscal year 2005, which include:
increased in-plant verification of slaughter plant designs for
controlling specified risk materials (SRMs), overtime inspection, and
travel for Veterinary Medical Officers to test non-ambulatory disabled
livestock when they arrive at small slaughter plants that do not have a
resident veterinarian. FSIS will also perform about 60,000 screening
tests in fiscal year 2005 at processing plants that use advanced meat
recovery (AMR) equipment, to ensure that SRMs do not enter the food
supply.
Food and Agriculture Defense Initiative
The fiscal year 2005 budget also requests a $23.5 million increase
to support a food and agriculture defense initiative in partnership
with USDA, HHS, and DHS. Food contamination and animal and plant
diseases and infestations can have catastrophic effects on human health
and the economy. The three Federal Departments involved are working
together to create a comprehensive food and agriculture policy that
will improve the government's ability to respond to the dangers of
disease, pests and poisons, whether natural or intentionally
introduced. Our food and agriculture defense initiative has five
components:
--Biosurveillance;
--The Food Emergency Response Network;
--Data systems to support the Food Emergency Response Network;
--Enhancing FSIS laboratory capabilities; and
--Follow-up bio-security training.
First, the food and agriculture defense initiative will allow FSIS
to participate in an interagency biosurveillance initiative that would
improve the Federal Government's ability to rapidly identify and
characterize a potential bioterrorist attack. Funding this initiative
will improve Federal surveillance capabilities and enable FSIS to
integrate with DHS to compile FSIS surveillance information rapidly
with threat information. This funding would also allow FSIS to focus
its resources on the vulnerable products and processes identified
during the agency's vulnerability assessments of imported and domestic
products; increase regulatory sampling for three additional threat
agents; add five Import Surveillance Liaison Inspectors, 30 program
investigators for transportation, distribution, and retail
surveillance, and two Public Health and Epidemiology Liaison Officers
to our workforce; and establish a Foodborne Disease Surveillance
Communication system to coordinate with DHS systems.
The second component of the food and agriculture defense initiative
is the Food Emergency Response Network (FERN), which I discussed
earlier. A nationwide laboratory system with sufficient capacity to
meet the needs of anticipated emergences is integral to any
bioterrorism surveillance and monitoring system. The goal is to
establish 100 FERN laboratories, creating a network of Federal, State
and local laboratories that FSIS could call upon to handle the numerous
samples that would be required to be tested in the event of a terrorist
attack on the meat, poultry or egg products supply. The fiscal year
2005 budget request would expand FERN to contract with State and local
laboratories, and to establish five regional hubs and a National
Operating Center to coordinate FERN's efforts and conduct training. In
addition, FSIS would also fund the establishment of five to seven State
laboratories for screening of microbiological agents, with more
laboratories in the future, based on the availability of funds.
The third and fourth components of the food and agriculture defense
initiative provide further support to FERN. The electronic laboratory
exchange network (eLEXNET), which I mentioned previously, is a
national, web-based, electronic data reporting system that allows
analytical laboratories to rapidly report and exchange standardized
data. The fiscal year 2005 budget request would provide funding needed
to make eLEXNET available to additional FERN and other food-testing
laboratories nationwide. In turn, the budget request would enhance
FSIS' laboratory capabilities in order to detect new bioterror-
associated agents, and to ensure FSIS' capability and capacity to
perform the toxin and chemical testing that will be standardized across
all FERN laboratories.
Because the realm of biosecurity is ever changing, FSIS must
provide its workforce with the most up-to-date information necessary to
ensure that meat, poultry, and egg products are protected from
intentional contamination. Therefore, the final component of the food
and agriculture defense initiative is follow-up biosecurity training of
the workforce. This additional training is essential as part of the
ongoing effort to protect the public by educating the workforce
regarding the latest threat agents and countermeasures to those agents.
Training and Education
Training is a top priority at FSIS. Our inspection workforce is our
greatest asset, and this is why FSIS is dedicated to establishing and
maintaining a comprehensive and fully integrated training program. The
agency is continuing its extensive training effort by requesting
approximately $7.1 million, or an increase of 50 percent over fiscal
year 2004, to train all new inspection personnel and to expand existing
training programs in fiscal year 2005.
To ensure that newly hired inspection personnel receive the proper
orientation and training to perform their jobs when they report to
duty, FSIS is requesting approximately $4 million in fiscal year 2005.
The agency has been criticized in the past for not immediately training
all new employees. This initiative will provide the formal training
needed to ensure that inspection procedures are performed consistently
and appropriately under agency policies. This initiative will also
enable FSIS to place 10 district trainers, in addition to five already
funded in the agency's baseline, throughout the Nation, to orient and
train FSIS employees.
Last year, FSIS began retooling and expanding its existing training
programs by incorporating a public health focus and integrating
scientific and technical principles with training on technical and
regulatory approaches to inspection. Through the $3.1 million requested
by FSIS in fiscal year 2005, the agency would continue to provide Food
Safety Regulatory Essentials (FSRE) training to field employees,
including food inspectors, CSOs, Inspectors-in-Charge, and Compliance
Officers. The agency will offer the training regionally to accommodate
inspection staff. Additional computer-based-training will be provided
to implement the training, and will be catered to the inspection
personnel's specific food safety responsibilities.
User Fee Proposal
Under current law, in 2005 FSIS estimates it will collect $113
million in annual user fees to recover the costs of overtime, holiday,
and voluntary inspection. FSIS' fiscal year 2005 budget includes a
legislative proposal to recover the costs of providing inspection
services beyond an approved 8-hour primary shift. The proposal was
submitted to Congress last August. If enacted, the level of
appropriated funds needed would be reduced by an estimated $124
million, making the FSIS budget request $714.7 million. This will
result in significant savings for the American taxpayer.
CLOSING
The goals and initiatives that FSIS has laid out as its vision
represent a monumental task. But let me assure you; this is a task that
we are ready and willing to take on. I believe that with the
appropriate support, FSIS will be able to achieve its public health
vision and strengthen the safety of meat, poultry, and egg products.
Mr. Chairman, this concludes my prepared statement. Thank you for
your continued support. Thank you also for the opportunity to submit
testimony to the Subcommittee on how FSIS is working with Congress and
other partners to achieve its public health vision.
ADDITIONAL COMMITTEE QUESTIONS
Senator Bennett. Thank you very much for your testimony.
[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
BSE
Question. On March 15, 2004, the Department of Agriculture
announced details for an expanded surveillance effort for BSE. The
release also stated that $70 million is being transferred from the
Commodity Credit Corporation (CCC) to test cattle in the high risk
population. According to the announcement, the $70 million will allow
testing of 268,000 animals. Using the Department estimate, testing all
animals destined for export could cost at or near $1 billion.
In your opinion, do you believe testing 100 percent of the export
market is possible? Also, any additional comments or updates in regard
to the cost of animal testing would be appreciated.
Answer. Although it is logistically possible to test 100 percent of
the cattle slaughtered in the United States every year, USDA does not
recommend following this course of action. Testing predominantly young,
healthy animals beyond the bounds of a scientific surveillance plan
would create a false sense of security for consumers and could lead to
either a tiered system (testing for exports but not for domestic
consumption) or, more probably, testing all cattle slaughtered.
USDA's targeted surveillance program is designed to identify the
presence of BSE in the U.S. cattle population if it exists. We
understand that some in industry have suggested blanket-testing all
animals presented at slaughter as a means of providing ``BSE-screened
products'' and easing trade barriers. However, it is our contention
that current barriers against U.S. beef are scientifically unwarranted,
and we continue working at the highest levels to reopen foreign markets
for U.S. producers.
We must clarify that surveillance testing for BSE--especially if it
is performed on clinically normal animals at slaughter--is not an
efficient risk mitigation measure for protecting public health. USDA is
confident that the removal of specified risk materials, along with
other measures such as feed practices regulated by the Food and Drug
Administration address the potential health risk of BSE.
USDA's BSE surveillance program has always focused testing efforts
on those animals that fall into the highest-risk category for the
disease. These include cattle exhibiting signs of neurologic disease;
condemned at slaughter for neurologic reasons; testing negative for
rabies and submitted to public health laboratories and teaching
hospitals; and appearing non-ambulatory (including those exhibiting
general weakness severe enough to make it difficult but not impossible
to stand), also known as ``downer cattle.'' We also sample adult cattle
that have died for unexplained reasons.
We estimate that approximately 35 million cattle are slaughtered in
the United States annually. If each one of these animals were to be
tested, and we included the cost of the test kit, sample collection,
shipping and handling, laboratory processing and support, training,
equipment, and other associated fees, USDA estimates that the total
cost would be between $175 and $200 per animal. Thus, the total cost
for testing every animal slaughtered could reach as high as $6 to $7
billion per year.
Question. The livestock industry and Department of Agriculture are
working toward reopening export markets in Japan, Mexico, and other
exporting countries. The controversy arises over testing each animal
and whether or not animals under the age of 30 months should be tested.
Do you believe each animal, including those under 30 months of age,
should be tested prior to export?
Answer. USDA's targeted surveillance program is designed to
identify the presence of BSE in the U.S. cattle population if it
exists. We do not agree that blanket-testing all animals prior to
export, including those under 30 months of age, is a scientifically
sound approach to disease surveillance.
USDA's BSE surveillance program has always focused testing efforts
on those animals that fall into the highest-risk category for the
disease. These include cattle exhibiting signs of neurologic disease;
condemned at slaughter for neurologic reasons; testing negative for
rabies and submitted to public health laboratories and teaching
hospitals; and appearing non-ambulatory (including those exhibiting
general weakness severe enough to make it difficult but not impossible
to stand), also known as ``downer cattle.'' We also sample adult cattle
that have died for unexplained reasons.
AVIAN INFLUENZA
Question. The Administration's fiscal year 2005 Budget request
includes an increase in funding of $11.783 million to address Low
Pathogenic Avian Influenza (LPAI) in live bird markets.
Can you update the Committee in regard to ongoing action related to
avian influenza and explain how the Department would utilize the
additional funding?
Answer. APHIS has been working to establish a national LPAI program
and incorporate it into the National Poultry Improvement Plan (NPIP).
The national LPAI program will be discussed and hopefully adopted at
the NPIP meeting in July 2004. The program has drafted a Uniform
Methods and Rules (UM&R) for the live bird marketing portion of the
program and the subcommittee of the U.S. Animal Health Association is
currently reviewing the draft to obtain their recommendations for
program improvement.
APHIS would utilize the additional funding for cooperative
agreements with states that will support the LPAI prevention and
control program; for indemnities; for additional field personnel,
equipment, and other resources necessary to assist states with long-
term prevention and control; for educational materials and training for
recognition of avian influenza and for biosecurity practices to protect
against the disease; for development and administration of vaccine to
support industry when infected with LPAI; and for reagents and other
laboratory support to incorporate the commercial program through the
National Poultry Improvement Program (NPIP). This program is currently
testing poultry breeder flocks and will continue to expand its
activities until all segments of the commercial industry are monitored
and certified as avian influenza clean.
Question. With the discovery of avian influenza, a number of
countries have banned poultry imports from the United States.
Can you provide the Committee with an update on poultry export
markets and exactly what actions USDA is taking to reopen these
markets?
Answer. The USDA is currently working with countries that have
imposed bans on taking the necessary actions to remove the bans on
exports and reopen all poultry markets. Our actions include:
depopulating positive testing flocks, cleaning and disinfecting those
flocks, providing additional surveillance activities to ensure that all
positive have been removed, and responding to inquiries and
questionnaires to prove that areas are free of avian influenza and
trade bans can be removed.
On April 6, the Canadian Food Inspection Agency (CFIA) recognized
the United States as free of highly pathogenic avian influenza (HPAI)
and lifted all HPAI-related importation bans on U.S.-origin birds,
poultry, and poultry products. Other countries including Armenia,
Macedonia, and Serbia have removed their bans and have allowed exports
to enter their country. Several other countries including: Chile, Czech
Republic, Hungary, Israel, Poland, and Taiwan have reduced their
restrictions to allow poultry exports from all states except for Texas.
CHILDHOOD OBESITY
Question. Childhood obesity is a growing health concern for many
Americans. The Department of Agriculture has and continues to conduct
research to further understand the factors that contribute to obesity.
Can you update the Committee in regard to actions that the
Department is taking to inform consumers and to combat obesity?
Answer. The Department is making a substantial commitment to
promoting healthy weight through nutrition education and promotion. In
the Food, Nutrition, and Consumer Services (FNCS) mission area, the
Food and Nutrition Service (FNS) nutrition education efforts are
targeted primarily to participants or potential participants in the
nutrition assistance programs it administers, while the Center for
Nutrition Policy and Promotion (CNPP) provides nutrition education and
information for the general public. In addition, the Cooperative State
Research, Education and Extension Service (CSREES) has a significant
commitment to nutrition education, as well as the Agricultural Research
Service and the Economic Research Service, who perform basic and
applied research supporting this effort.
FNCS undertakes a range of ongoing activities each year to deliver
nutrition education and promotion to program recipients; all of these
include maintenance of proper weight as one component of a healthy
lifestyle, including:
--Integrating nutrition and physical activity promotion within and
across the programs.--The Eat Smart. Play Hard.TM
campaign for children and their caregivers stresses the need to
balance what you eat with how active you are, and Team
Nutrition provides nutrition education for the Nation's
schoolchildren. Materials such as brochures, activity sheets
and posters, coordinated with nutrition curricula, are used to
help children, their parents, and caregivers learn healthy
eating and active living behaviors.
--Reshaping nutrition education in the Food Stamp Program.--To target
activities that promote healthy weight. For example, we are
developing new nutrition education materials that program staff
can use to motivate low-income elderly people and women with
children to improve their eating behaviors.
--Developing new ways to support healthy weight through the WIC
program.--The Fit WIC project developed five intervention
programs that WIC and other community agencies can implement to
prevent overweight in young children. Educational packages such
as Fathers Supporting Breastfeeding are used in WIC clinics to
support breastfeeding. Breastfed babies are less likely to
become overweight as they grow, and mothers who breastfeed may
return to pre-pregnancy weight more easily.
--Promoting healthy school nutrition environments.--Unhealthful
beverage and food choices at school can undermine children's
ability to learn and practice healthy eating. We developed and
are distributing the Changing the Scene action kit to help
local schools and communities to support healthier eating and
active living behaviors.
--Promoting increased fruit and vegetable intake.--Through
partnerships with other Federal Agencies and the National 5-A-
Day Program. For example, we worked together to develop the
Fruits and Vegetables Galore-Helping Kids Eat More tool kit,
which helps foodservice professionals with planning,
preparation, and promotion strategies to encourage the children
they serve to consume more fruit and vegetables. For fiscal
year 2005, the President's Budget proposes several initiatives
to enhance these efforts to better address obesity and promote
healthy weight. These include:
--The budget requests $20 million, a $5 million increase, to enhance
WIC breastfeeding promotion efforts through peer counseling.
The use of breastfeeding peer counselors has proven to be an
effective method of increasing initiation and duration of
breastfeeding, and breastfed babies are more likely to maintain
a healthy weight as they grow.
--The budget requests $5 million to initiate a new series of WIC
Childhood Obesity Prevention Projects, which build on the
success of the Fit WIC projects to work in partnership with
States on innovative strategies to use WIC to prevent and
reduce childhood obesity through enhanced nutrition and
education, physical activity promotion, and environmental
efforts. Ongoing funding for such projects is critical to
ensuring continuous improvement in this area.
--It requests $2.5 million to expand the Eat Smart. Play
Hard.TM Campaign and establish a cross-program
nutrition framework to help ensure a comprehensive, integrated
approach to nutrition education in all FNS nutrition assistance
programs.
--The budget includes $1 million for the Center for Nutrition Policy
and Promotion (CNPP) plans to build on previous work to
implement the consumer messages developed and pilot tested with
20- to 40- year-old women, especially low-income women, to help
consumers aim for a healthy weight.
--The budget requests as additional $655,000 to complete the
development of the 6th edition of the Dietary Guidelines for
Americans, as well as an additional $1 million to update and
promote the new food guidance system which will update the Food
Guide Pyramid. CNPP also plans to develop obesity prevention
materials based on the Dietary Guidelines and the new food
guidance system, as well as promote the consumption of fresh
fruit and vegetables. Plans include the development of print
materials and interactive tools, such as the Interactive
Healthy Eating Index, that direct dietary guidance to the
individual to facilitate healthful behavior change.
INDEFINITE FUNDING IN THE FOOD STAMP ACT
Question. The Administration's fiscal year 2005 Budget includes a
request for new legislative language to allow for indefinite funding
authority for the Food Stamp Act.
Can you provide the Committee with an explanation of why this
legislative language has been requested?
Answer. The indefinite authority proposal in this year's Food Stamp
Program budget would provide such sums as necessary to fund program
benefits and payments to States, in the last 4 months of the fiscal
year if program needs exceed the anticipated level. It would ensure
that sufficient resources will always be available to provide access to
the program for all eligible persons who wish to participate. It can be
difficult to estimate program needs or the size of an adequate
contingency reserve, particularly when there are changes in the
economy. With indefinite authority, if program costs should
significantly exceed budget estimates, it would never be necessary to
seek a supplementary appropriation or implement a benefit reduction.
This proposal would bring the structure of this critical program in
line with other major social welfare programs that already have
indefinite authority.
______
Questions Submitted by Senator Christopher S. Bond
GUIDELINES ON FAT CONSUMPTION
Question. There is a linear relationship between high transfatty
acid and high saturated fat intake and chronic disease. We also know
that the consumption of foods high in these two elements likely
contribute to the statistics on obesity.
Does USDA intend to draft guidelines or standards for the
consumption of these fats?
Answer. The 2005 Dietary Guidelines Advisory Committee (DGAC) is in
the process of evaluating the most recent scientific evidence on fatty
acids and health and is preparing to make science-based recommendations
specifically for saturated and trans fatty acids consumption. At its
most recent public meeting held on March 30 and 31, 2004, members of
the Committee discussed the possibility of setting intake goals for
both types of these fatty acids--saturated and trans--and also
discussed the implications these proposed recommendations would have
for the general public. It is expected that the dietary fat
recommendations will emphasize the reduction of current intake for
saturated and trans fatty acids. The Committee is also expected to
address the need for encouraging product reformulations by food
manufacturers to reduce unhealthy fats in food products. It should be
noted that on July 11, 2003, the Food and Drug Administration published
a final rule requiring food manufacturers to list the amount of trans
fatty acids on product nutrition labels by January 1, 2006. Some
manufacturers have already responded to the rule by implementing the
labeling requirement or by eliminating trans fatty acids from their
products.
The Committee is continuing its deliberations on specific fatty
acid recommendations. However, the final advisory report is expected to
be submitted to USDA and HHS by June 30, 2004. The final science-based
recommendations on saturated and trans fatty acids will be incorporated
in the agency's education and communication efforts after completion of
the DGAC report.
In an effort to help Americans reduce their risk of cardiovascular
disease and improve their health, USDA's proposed new Food Guidance
System, to be released in 2005, emphasizes consumption of oils instead
of solid fats in the diet and differentiates between saturated and
unsaturated fats. The guidance recommends that Americans choose fats
mostly from foods higher in polyunsaturated or monounsaturated fat, and
particularly Omega-3 fats such as those found in fish.
Question. Since not all oils are equally healthy, will USDA provide
guidelines and or regulations to restaurants and other food
manufacturers and--more importantly--provide them a roadmap to
increasing the nutritional content and decrease trans and saturated fat
levels of their products?
Answer. The 2005 Dietary Guidelines Advisory Committee (DGAC) is in
the process of evaluating the most recent scientific evidence on fatty
acids and health and is preparing to make science-based recommendations
specifically for saturated and trans fatty acids consumption. The
Committee is also expected to address the need for encouraging product
reformulations by food manufacturers to reduce unhealthy fats in food
products.
Additionally, researchers from the Agricultural Research Service
are working with agricultural producers and the fats and oils industry
to find alternative ingredients and develop oils such as canola and
sunflower oils with higher levels of the fatty acids that may help
reduce levels of low-density lipoproteins--or bad cholesterol--without
reducing the high-density lipoproteins--or good cholesterol. Through
Federal research and education efforts, these ``heart-friendlier'' oil
products are expected to be utilized by the food industry, offering
trans fatty acid-free products in the marketplace.
Question. Does USDA intend to provide specific guidelines and or
regulations on the characteristics of healthy oils highlighting those
oils that have low saturated fat and transfat profiles that can be used
in most food manufacturing to improve overall health and nutrition of
those foods?
Answer. The 2005 Dietary Guidelines Advisory Committee (DGAC) is in
the process of evaluating the most recent scientific evidence on fatty
acids and health and is preparing to make science-based recommendations
specifically for saturated and trans fatty acids consumption. At its
most recent public meeting held on March 30 and 31, 2004, members of
the Committee discussed the possibility of setting intake goals for
both types of these fatty acids and also discussed the implications
these proposed recommendations would have for the general public. It is
expected that the dietary fat recommendations will emphasize reduction
in saturated fatty acids and trans fatty acids. The Committee is also
expected to address healthy fats and provide intake recommendations on
how consumers can incorporate ``healthy'' oils in their diets. The USDA
will incorporate the recommendations from the DGAC into its education
and communication efforts after completion of the DGAC report. The USDA
will provide consumers with information on the most common sources for
``healthy'' oils to offer them healthy choices in selecting a balanced
diet.
Question. Does USDA have this authority?
Answer. USDA has authority to provide consumers with information on
the nutritional content of foods, including oils and common sources for
``healthy'' oils. USDA attempts to help consumers, producers and
industry by offering information regarding healthy choices when
selecting a balanced diet.
Question. How does USDA intend to incorporate the information it
hopes to disseminate through the campaigns mentioned in Mr. Bost's
testimony into USDA run food programs?
Answer. Nutrition promotion efforts such as the Eat Smart.Play
Hard.TM campaign and Team Nutrition are designed
specifically to be delivered through the Federal nutrition assistance
programs. Materials are developed by the Food and Nutrition Service
(FNS) and disseminated to State and local program partners through the
web and direct delivery. Program cooperators also order campaign
materials through the Department of Commerce's National Technical
Information Service (NTIS).
Most of the materials developed to date are designed for use in
specific programs. Part of the requested $2.5 million increase for
cross-program nutrition activities will support development of
nutrition promotion materials that can be integrated into more than one
program, maximizing the impact of limited nutrition education funding.
FNS and the Center on Nutrition Policy and Promotion (CNPP) also
work closely together to ensure that program-based nutrition education
activities are fully consistent with the Dietary Guidelines for
Americans and the food guidance system intended to deliver the
Guidelines to the general population. These agencies confer directly,
and participate together in the Dietary Guidance Working Group, which
reviews nutrition education materials to ensure their consistency with
Federal nutrition policy and guidance. When the new Guidelines and food
guidance system are finalized, FNS will review all of its nutrition
education interventions to ensure that they are consistent with the
updated guidance, and make any needed changes.
SOYBEAN RUST
Question. In part due to a short U.S. soybean crop in 2003, the
U.S. livestock industry is expected to import a larger amount of
soybean meal this year than in the recent past. The usual source for
U.S. soymeal imports is Brazil, which experienced the arrival of Asian
soybean rust a few years ago. Since Asian soybean rust has not yet
arrived in the United States, it is important that we do everything we
can to delay that arrival as long as possible.
When will APHIS make a decision about any additional quarantine
steps for imported soybeans or soybean meal that it will impose, and
will APHIS consult with the relevant stakeholder groups, such as the
American Soybean Association and livestock groups, before making a
final decision?
Answer. APHIS officials are looking closely at our country's
importation of soybean seed, meal, and grain. Our analysis to date has
shown that clean soybean seed and soybean meal--which is a heat-
treated, processed product--is unlikely to pose any risk of introducing
this disease. Historically, there has never been a documented instance
of soybean rust spread through trade. Rather, it is spread naturally
through airborne spore dispersal. We are currently conducting a risk
assessment to study the viability of the pathogen. The preliminary
results of the assessment indicate a very low risk, if any, of
introducing this disease through imports. We posted our initial risk
document on the APHIS' Web site and requested public comments. The
comment period closed April 12, 2004.
We have been working very closely with the American Soybean
Association and other stakeholders throughout our efforts to prevent
and prepare for the introduction of soybean rust. Most recently, USDA
officials participated in a soybean rust conference that was
cooperatively organized by USDA, five pesticide companies, and the
American Soybean Association. The primary goal of the conference was to
disseminate to soybean farmers the knowledge, information, and
techniques they will need to manage this pathogen when it reaches the
continental United States. We are committed to continuing and expanding
this outreach, including working with the livestock industry, in our
efforts develop policies for preventing the human-assisted entry of the
disease. We will ensure that any new regulations regarding soybean
imports are based on the best available scientific information.
______
Questions Submitted by Senator Herb Kohl
COMBATING CHILDHOOD OBESITY
Question. Mr. Bost, both USDA and FDA have recently announced new
efforts to combat the increasing problem of obesity. FDA announced the
``Calories Count'' program, and USDA has money in several programs,
including WIC, to help battle this problem. However, for all of the
government's efforts, all of the money being put into this effort pales
in comparison to the food industry's billions of dollars worth of
advertising.
How can the government successfully get its message out when, at
first glance, its efforts appear to be dwarfed by the food industry?
How do your agencies compete with that?
Answer. USDA has a strong partnership with the Department of Health
and Human Services, including CDC and FDA, which helps ensure that the
Federal investment to combat obesity is a collaborative effort with
consistent messages to the public. USDA plans to capitalize on the
Federal infrastructure working with the vast network of State, county,
and other local government agencies and groups to extend the reach of
their messages and materials. USDA is participating in the creation of
a new Food Guidance System which would be the cornerstone of other
Federal nutrition assistance programs. USDA is also actively exploring
options for partnerships and seeking opportunities to collaborate with
other health organizations, advocacy and industry groups to help carry
the Federal Government messages.
Question. Mr. Bost, the Senate report of the fiscal year 2004
Agriculture Appropriations bill encouraged the USDA to work with Share
Our Strength and its Operation Frontline (as well as other innovative
organizations) to improve eating habits and food budgeting skills of
program participants. In view of growing concern about obesity and
health, those objectives seem as valid as ever.
What progress can the Department report in response to this
encouragement?
Answer. Share Our Strength SOS provided my office with a proposal
for Operation Frontline to provide nutrition education to nutrition
assistance program participants. I also met with Bill Shore, the
Executive Director of SOS, to discuss it with him personally before it
was sent to the Food and Nutrition Service for a more thorough review.
In our discussion, I learned that the project shares many of the same
goals as USDA's nutrition education efforts, and uses a model similar
to that used by State agencies in providing nutrition education and
promotion to Food Stamp recipients.
As you know, nearly all of the nutrition education funding provided
to FNS must be used for grants to State agencies that operate the
programs, often for specifically earmarked purposes. The Department's
ability to provide direct funding for organizations such as SOS is thus
highly constrained, and we were unable to offer a grant to support
Operation Frontline in response to their proposal. However, I was
pleased to learn more about their efforts, and value SOS as a non-
profit sector partner in our shared effort to promote healthy eating
and wise use of food resources among low-income people.
COMMODITY SUPPLEMENTAL FOOD PROGRAM FISCAL YEAR 2004 FUNDING
Question. The Commodity Supplemental Food Program was forced to cut
nearly 30,000 participants in fiscal year 2004. The current budget flat
lines program funding, but the carryover funding from the previous
years is no longer available. It has been estimated that this will
cause another 30,000 people taken off the roles--all senior citizens.
How do you propose people at the state level, who actually carry
out these programs, deal with a cut this deep?
Answer. About 29,500 fewer caseload slots were assigned in 2004
than in 2003. However, the caseload of 536,196 allocated in 2004
exceeds actual participation in any month to date, including the peak
participation of 526,955 achieved in September 2003. Thus, the caseload
available in 2004 covered actual nationwide program participation.
In reference to the President's fiscal year 2005 budget request,
the $98.335 million requested for the Commodity Supplemental Food
Program (CSFP) equals Congress' fiscal year 2004 program appropriation,
and is higher than the $94.991 million requested in the budgets for
fiscal years 2002 through 2004. However, variables beyond the
Administration's control have yielded significantly fluctuating levels
of total program resources over the same period. These variables are
the amounts that Congress appropriates and cash carryover from the
previous year, which is determined primarily by the extent to which
States utilize their assigned caseloads. Even though the fiscal year
2005 budget request includes an increase over the prior year's request,
the anticipated lack of cash carryover would result in a projected
participation decrease of 60,700 nationally.
The Department will pursue all means to minimize the impact of
straight-line funding for the program. We also wish to point out that
we are implementing major initiatives, including more extensive and
varied Food Stamp Program outreach efforts, which address the
nutritional needs of the population served by the CSFP. People eligible
for the program should also be eligible to receive benefits under the
Emergency Food Assistance Program and the Nutrition Services Incentive
Program now administered by the Department of Health and Human
Services. The Food and Nutrition Service will work closely with State
agencies to help affected individuals meet their nutritional needs
through these other Federal nutrition assistance programs.
FOOD GUIDE PYRAMID
Question. Mr. Bost, you mentioned in your statement that the FNS is
currently working on updating the food guide pyramid. I understand that
you have received a significant number of comments so far on your
efforts.
How many comments has FNS received on the proposed food guide
pyramid?
Answer. Last September, a Notice was published in the Federal
Register requesting comments from all stakeholders on the proposed
technical revisions to the current Food Guide Pyramid. USDA is using an
open and transparent process to revise the science base and
communications elements for the current Food Guidance System, the Food
Guide Pyramid. This process resulted in 255 response letters with 1,101
separate comments from a broad array of nutrition professionals, health
organizations, academic faculty, food industry organizations and the
general public. To continue this transparent process, we have made
these comments available for anyone to view on our website at http://
www.usda.gov/cnpp/pyramid-update/index.html.
Question. Do you believe you will be able to make the June deadline
for publication?
Answer. The report to the Secretaries of Agriculture and Health and
Human Services from the Dietary Guidelines Advisory Committee is
expected to be finalized by June 30, 2004. The scientific advisory
report will be published in electronic format on the USDA and HHS
websites. The two Departments will then jointly review and publish the
revised Dietary Guidelines, which is anticipated to be released in
January 2005. The revised Food Guidance System is scheduled to be
released approximately a month later, in February 2005.
LOW-CARBOHYDRATE DIETS
Question. How is USDA working to take into consideration the
various low-carbohydrate diets that have become so popular in this
country?
Answer. USDA continues to rely on consensus science from
authoritative bodies and reports such as the report from the Dietary
Guidelines Advisory Committee, the National Academy of Sciences, and
USDA's food consumption surveys. USDA's Agricultural Research Service
has six nutrition research centers that continually explore timely
nutrition issues. As new weight-loss diet trends emerge, USDA works in
collaboration with HHS as well as reputable organizations such as the
American Dietetic Association and the Society for Nutrition Education,
to plan communications strategies to help guide the American public to
make healthy food choices.
Question. Is USDA, NIH or CDC doing any research on the safety and
validity of these diets?
Answer. USDA's research is focused on energy balance and nutrient
adequacy to effect long-term health. For optimal nutrient adequacy, the
research continues to look at the nutrition requirements that ensure a
healthy life, maximum vigor and well being and reduced risk of chronic
disease, not to study the comparative effects of weight-loss diets.
Where many new diet programs capture the interest of the public and
come and go, nutritional requirements remain constant regardless of any
particular diet. Much of our Federal research includes the role of
carbohydrates, proteins, and fats and other nutrients play in a healthy
diet.
NATIONAL ORGANIC STANDARDS BOARD
Question. Mr. Hawks, the Organic Foods Production Act is very clear
that the NOSB should be able to hire their own Executive Director, and
that that person should report to the NOSB directly. Is the job
announcement published by USDA intended to meet the requirements of the
statute in this regard?
Answer. AMS intends to meet the requirements of the Organic Foods
Production Act (OFPA) which provides that the Board shall have a staff
director.
The General Provisions of the Consolidated Appropriations Act,
2004, (Title VII) limit the Department's spending authority to ``not
more than $1.8 million for all advisory committees within USDA. Of this
total, AMS has been allotted $90,000 for the National Organic Standards
Board. This means that AMS can spend up to $90,000 of the funds
appropriated for Organic Standards on the expenses of the NOSB. The
Organic Foods Production Act requires that Board members be reimbursed
for their travel expenses, including per diem. AMS cannot transfer
appropriated funds to the Board to hire its own staff, nor do we have
the authority to hire or contract for an employee who is not
responsible to AMS.
Consequently, AMS recently filled an Advisory Board Specialist
position. All of the specialist's time is dedicated to NOSB support
under the direction of the National Organic Program (NOP) Manager. A
complete description of the Advisory Board Specialist's duties will be
provided for the record.
The increased funding provided by Congress in fiscal year 2004 will
enable the Department to hire additional staff which will further
increase the program's quantity and timeliness of service.
[The information follows:]
Advisory Board Specialist Responsibilities:
--Bi-annual re-establishment of the NOSB Charter
--Development and publication of news releases and Federal Register
notices seeking nominees for NOSB membership
--Preparation of nominations packages and supporting documents for
NOSB appointments
--Development and publication of news releases and Federal Register
notices alerting the public to NOSB meetings
--Arranging public meetings; travel, hotel and meeting
accommodations, and contracting for Court Reporters and Audio
Visual Equipment
--Arranging guest speakers at NOSB meetings
--Reimbursing NOSB members for travel expenses in accordance with
Federal travel regulations
--Development, maintenance, and administration of an NOSB website
--Reporting on Board activities
--Arranging and participating in NOSB committee conference call
meetings
--Developing and publishing rulemaking actions to implement NOSB
recommendations
--Contracting with vendors for Technical Advisory Panel (TAP) review
of petitioned materials
--Reviewing petitions for compliance with OFPA, its implementing
regulations, and the petition procedures
--Communicating with petitioners and the TAP vendors
--Identifying program needs for which the NOSB can provide advice
--Reviewing the work of the NOSB for completeness, accuracy, and
compliance with OFPA, its implementing regulations, and the
requirements of other Federal entities
--Performing all activities required for compliance with FACA
--Representing USDA at all meetings of the NOSB and its committees
Question. I understand that AMS has contracted with the American
National Standards Institute to review the National Organic Program.
Will the ANSI effort be a one-time audit or ongoing oversight panel,
which is what was envisioned by the statute and the organic community.
If the ANSI effort is a one-time review, what steps, if any, are being
taken to create an ongoing Peer Review Panel, to oversee the
accreditation activities of the National Organic Program?
Answer. We are in the process of completing an initial peer review
of the NOP and hope to complete that review later this fiscal year.
After this review is completed, we will make the results public and
invite members of industry and the Board to work with us to develop a
process for ongoing Peer Reviews of the NOP.
Question. Could you please provide the Committee with a list of the
policy recommendations made by the NOSB since passage of the final
organic rule, and what action has been taken by the Department in
response to those recommendations?
Answer. The information is submitted for the record.
NOSB NON-MATERIALS RECOMMENDATIONS SINCE MARCH 2000
------------------------------------------------------------------------
NOSB Recommendations AMS Response
------------------------------------------------------------------------
June 2001:
Recommended regulations pertaining to The recommendation is
labels with principal display panel, covered by existing
ingredient deck and information panel standards. Should AMS
all on a single labeling panel. determine that there are
problems with application
of the standards; AMS will
engage in rulemaking to
clarify the requirements.
June 2001:
Recommended Peer Review Panel Review of AMS' accreditation
procedures for review of program could not begin
accreditation program. until after certifying
agents were accredited. AMS
has contracted with the
American National Standards
Institute for review of
AMS' accreditation program.
The review is underway.
June 2001:
Recommended technical corrections to AMS has acted on several of
the final rule. the recommended corrections
and AMS is still working
with the NOSB on others AMS
will soon take action on
the remainder.
September 2001:
Recommended Apiculture Standards...... The recommendation is
covered by existing
standards. Should AMS
determine that there are
problems with application
of the standards; AMS will
engage in rulemaking to
clarify the requirements.
September 2001:
Recommended guidance for preservatives The recommendation did not
used in vaccines. need AMS action beyond
acceptance and posting on
the Web. The recommendation
is posted on the Web.\1\
October 2001:
Recommendations on Aquatic Animals.... AMS accepted the
recommendations. The
recommendations are posted
on the Web.\1\
October 2001:
Recommendations on Pasture............ The recommendation is
covered by existing
standards. Should AMS
determine that there are
problems with application
of the standards; AMS will
engage in rulemaking to
clarify the requirements.
October 2001:
Recommendation, Principles of Organic The recommendation did not
Production and Handling. need AMS action beyond
acceptance posting on the
Web. The recommendation is
posted on the Web.\1\
October 2001:
Recommended procedures for amending AMS follows the Federal
the National List. Rulemaking procedures for
amending regulations.
October 2001:
Recommended Greenhouse Standards...... The recommendation is
covered by existing
standards. Should AMS
determine that there are
problems with application
of the standards; AMS will
engage in rulemaking to
clarify the requirements.
October 2001:
Recommended Mushroom Standards........ The recommendation is
covered by existing
standards. Should AMS
determine that there are
problems with application
of the standards; AMS will
engage in rulemaking to
clarify the requirements.
October 2001:
Recommended removing handlers from the AMS has not accepted the
$5,000 exemption. recommendation because it
would violate the Organic
Foods Production Act.
October 2001:
Recommended adding ``certified'' in AMS has not accepted the
front of ``distributor'' in 3 places. recommendation because
distributors are not
required to be certified.
May 2002:
Recommended guidelines for determining The recommendation is posted
whether a processing technology shall on the Web.\1\ When AMS
be reviewed by the NOSB. further defines what
materials are subject to
NOSB review, it may take
further action on the
technology recommendation.
May 2002:
Recommended guidelines for US/EU AMS has considered all
equivalency. points within this
recommendation. USDA and
USTR are in equivalency
negotiations with the EU.
May 2002:
Recommended that certifying agents use AMS fully supports the
the Organic Farm Plan documents recommendation. The
developed under an AMS cooperative recommendation did not need
agreement. AMS action beyond
acceptance and posting on
the Web. The recommendation
is posted on the Web.\1\
May 2002:
Recommended that certifying agents use AMS fully supports the
the Organic Handling Plan documents recommendation. The
developed under an AMS cooperative recommendation did not need
agreement. AMS action beyond
acceptance and posting on
the Web. The recommendation
is posted on the Web.\1\
May 2002:
Recommended clarification on ``access AMS accepted the
to the outdoors'' for poultry. recommendation and used it
to develop an ``access to
the outdoors'' policy
statement for livestock
which is posted on the
Web.\1\
May 2002:
Recommended a handling operation The recommendation did not
ingredient affidavit as guidance to need AMS action beyond
handlers and certifying agents. acceptance and posting on
the Web. The recommendation
is posted on the Web.\1\
May 2002:
Recommended clarification for section AMS is working with the NOSB
205.606 relative to commercially on this issue. The NOSB is
available. scheduled to provide a new
recommendation on section
205.606 at its April 2004
meeting.
May 2002:
Recommended clarification regarding The recommendation did not
planting stock for perennial crops need AMS action beyond
grown as annual crops. acceptance and posting on
the Web. The recommendation
is posted on the Web.\1\
May 2002:
Recommended guidance on transitional The recommendation is
products. outside the National
Organic Standards. AMS will
take no action beyond
posting the recommendation
on the Web.\1\
May 2002:
Recommended compost production methods AMS is working with the
beyond those specifically addressed chair of the NOSB Compost
in the NOP. The recommendation is Task Force on this issue.
intended as guidance. Specifically, AMS has
requested scientific
justification for the
recommendations. AMS is
concerned about the
potential for human
pathogens in the compost.
October 2002:
Recommended regulation changes for The Organic Trade
origin of livestock; dairy animals. Association (OTA) filed its
own recommendations
relative to dairy animal
replacement at the October
2002 NOSB meeting. The OTA
and NOSB recommendations
differ substantially. AMS
is reviewing this issue.
May 2003:
Approved a new recommendation on The Organic Trade
origin of dairy animals. Association (OTA) filed its
own recommendations
relative to dairy animal
replacement at the October
2002 NOSB meeting. The OTA
and NOSB recommendations
differ substantially. AMS
is reviewing this issue.
October 2002:
Recommended criteria for certification AMS is reviewing this issue.
of grower groups.
May 2003:
Recommended publication of AMS is reviewing this issue.
clarification management of breeder
stock.
May 2003:
Recommended regulation change on AMS is working on a
chlorine contacting organic food. rulemaking docket that will
address this
recommendation.
------------------------------------------------------------------------
\1\ Website: http://www.ams.usda.gov/nop/indexIE.htm.
BEAVER CONTROL
Question. How does APHIS/Wildlife Services plan to uphold their
cooperative responsibility with the Wisconsin Department of Natural
Resources to provide beaver damage management activities that are being
requested of them to restore trout streams that have been damaged by
beavers?
Answer. APHIS/Wildlife Services (WS) cooperates with the Wisconsin
Department of Natural Resources (WDNR) to conduct beaver damage
management on high quality trout streams in Wisconsin. Beaver dam
building activities can greatly alter the natural flow of a trout
stream, destroying its ability to support trout. Beaver dams and the
impoundments they create cause decreased water flow, water warming, and
increased siltation. They also pose a barrier to trout, interfering
with spawning. One component of the WS trout habitat protection program
is to maintain select trout streams in free flowing, natural condition
in order to improve or restore trout habitat and protect habitat
improvement structures. The fiscal year 2005 budget will continue to
fund these programs at current levels.
Question. Beaver damage to roads, bridges, crops, forests and
property are also increasing in Wisconsin resulting in an increasing
number of requests to Wildlife Services for assistance. The State of
Wisconsin, some counties and some townships provide cooperative funding
to Wildlife Services for their assistance with beaver damage problems.
How does Wildlife Services plan to fulfill their cooperative
responsibilities in responding to Wisconsin citizens' requests for
beaver damage assistance?
Answer. APHIS/Wildlife Services (WS) cooperates with a number of
northern Wisconsin county highway and forestry departments, and
numerous local township road departments, to provide beaver damage
management services for the protection of roads and road structures,
and forestry resources. The fiscal year 2005 budget will continue to
fund these programs at current levels.
BOVINE SPONGIFORM ENCEPHALOPATHY RECALL
Question. Dr. Murano, during the BSE scare, USDA announced that
approximately 38,000 pounds of beef were recalled, after originally
stating that the recall was only 10,400 pounds. Over the course of the
following few weeks, we read stories about consumers who feared that
they ate the contaminated meat because they were never informed that
they purchased a part of the recalled amount, because proprietary
information, including sales and distribution records, is kept secret
during a voluntary recall. Further, there was a 3 week delay between
the time the recall was announced and the time retailers found out
about it.
How much of the recalled beef was actually found?
Answer. FSIS field personnel worked cooperatively with other
Federal and State partners to conduct recall effectiveness checks on
100 percent of the establishments that sold or distributed the product
associated with the recall. FSIS is confident that the product was
quickly removed from the marketplace. FSIS determined that the
recalling firm and its customers made extensive efforts to retrieve and
dispose of the recalled product.
FSIS announced the recall at 1:00 a.m. on December 24, 2003. Less
than 18 hours later, over 325 locations--primarily grocery stores--had
received notifications from their suppliers.
On February 9, 2004, FSIS issued an update to the recall stating
that approximately 21,000 pounds of product had been returned. This
estimate was developed in late January 2004 using information from the
FSIS investigation, including recall effectiveness checks.
Question. How long did it take between the time USDA announced the
recall and the time individual grocery stores found out they had part
of the contaminated beef? Was the responsibility on the grocers to find
out for themselves, or were they all informed by either their state
governments or USDA?
Answer. FSIS announced the recall at 1:00 a.m. on December 24,
2003. FSIS issued a press release that was distributed nationally.
Simultaneously, its recall management division began collecting
distribution information from the establishments that slaughtered and
processed meat from the affected animal. Less than 18 hours later, over
325 locations--primarily grocery stores--had received notifications
from their suppliers. It is the responsibility of the recalling company
to notify its customers, including grocers, that they had received
recalled product. FSIS then conducted effectiveness checks on the
recall to confirm that the responsibilities of the recalling firm were
met.
Question. If USDA had the authority to initiate mandatory recalls,
do you think consumers would have found out more quickly? Why or why
not?
Answer. No establishment has refused to comply with a recall
requested by FSIS. Should they refuse, then FSIS has the legal
authority to detain and/or seize meat, poultry and egg products in
commerce. The current recall process is the quickest way to determine
where the affected product has been distributed because companies are
familiar with who their customers are and can notify them much more
quickly than the Federal Government could. Public health would not
likely be enhanced by the addition of mandatory recall authority
because the Agency already has the means to remove product quickly from
commerce.
Question. After all of the dust has settled, is USDA looking again
at its policy of not wanting the authority for mandatory recalls?
Answer. Through effectiveness checks, public meetings and other
means, FSIS is constantly reviewing and looking for ways to improve the
recall process. In December 2002, FSIS held a public meeting to discuss
improving the process for recalls of meat, poultry and egg products and
to gather useful input on related topics. FSIS expects to issue a
revised recall directive in fiscal year 2004 taking into account the
comments it received at the public meeting. The directive will discuss
how public notification of recalls is to take place and will provide
information on the new risk-based system the agency will use for
determining the scope of effectiveness checks.
SOUND SCIENCE
Question. Dr. Murano, in your testimony you stated that there was a
significant drop in E.coli 157:H7 between 2002 and 2003, and credited
this drop to reassessment of plants' HACCP plans and increased audits.
Were the same plants that were sampled in 2002 sampled in 2003? If
not, how can you make a comparison between the two years? Unless the
exact same plants were sampled, how can you be statistically certain
that the plants sampled in 2002, but not sampled in 2003 have shown any
improvement?
Answer. There are valid methods for analyzing a time series of data
even though, as in this dataset, there are changes in the
establishments being sampled from year to year. The analysis conducted
by FSIS compares over 6,000 scheduled samples of ground beef production
from fiscal year 2002 with over 6,000 samples of ground beef production
from fiscal year 2003 and tests whether the populations are the same
from year to year with respect to the presence of E. coli O157:H7.
Statistical analysis was done using the Chi-square test to show the
association between positive E. coli O157:H7 samples and laboratory
method, season and year. A Poisson regression model was used to
demonstrate the significant decline in percent positive samples from
2002 to 2003, after controlling for season and laboratory method. The
conclusion is that the reduction in E. coli O157:H7 in raw ground beef
from fiscal year 2002 to fiscal year 2003 was statistically
significant.
On April 29, 2004, the Centers for Disease Control and Prevention,
in its annual report on the incidence of infections from foodborne
pathogens, noted a decline of 42 percent of illness caused by E.coli
O157:H7 from 1996 to 2003. Most significantly, between 2002 and 2003,
illnesses caused by E.coli O157:H7, typically associated with ground
beef, dropped by 36 percent.
Question. Further, I have been informed that of the 58,000 samples
collected for Salmonella in 2002, nearly 40,000 were collected from
beef products, which have a lower rate of Salmonella than poultry
products. It would appear that due to the high percentage of beef
products sampled relative to other products, FSIS would be more likely
to find a lower rate of positive Salmonella samples than if the
percentages were weighted for equal comparison. Can you comment on
this?
Answer. The agency has seven Salmonella performance standards for
classes of raw product, and the highest number of samples is for raw
ground beef because more establishments are subject to this standard
than other standards.
On April 29, 2004, the Centers for Disease Control and Prevention,
in its annual report on the incidence of infections from foodborne
pathogens, noted that from 1996 to 2003, illnesses caused by Salmonella
decreased 17 percent and Salmonella Typhimurium (typically associated
with meat and poultry) decreased 38 percent.
Question. You mention the new need for new baseline studies in your
statement. In fiscal year 2004 FSIS received funding for these
activities.
What will you do, or are you currently doing, to ensure that these
studies do not have some of the same problems as the previous studies,
as outlined by the National Academy of Science? Will FSIS be using any
of its fiscal year 2005 funding to continue conducting new baseline
studies?
Answer. For the current baseline project, using the funds provided
for fiscal year 2004, the agency developed a study protocol that was
reviewed by the National Advisory Committee on Microbiological Criteria
for Foods (NACMCF). FSIS modified the current plans based on NACMCF
recommendations and will continue to seek comments from the National
Advisory Committee on Microbiological Criteria for Foods on future
baseline projects.
FSIS considers the fiscal year 2004 $1.65 million baseline
initiative to be an addition to its base program and will continue to
review funding needs for fiscal year 2005.
INSPECTOR TRAVEL
Question. Dr. Murano, it has been suggested that FSIS inspection
personnel would benefit greatly from exposure and visits to slaughter
facilities in different parts of the country, in order to compare
differing methods of animal handling and slaughter practices to help
them better enforce HMSA.
Would you consider making changes to your travel policy to provide
an employee per diem for time spent visiting slaughter facilities, if
done as part of an unrelated personal or business trip?
Answer. USDA is committed to strong enforcement of the HMSA. FSIS
continually assesses its HMSA oversight and enforcement, primarily
through the activities of the District Veterinary Medical Specialists
(DVMSs). As methods are available to improve our HMSA efforts, the
DVMSs develop strategies for incorporating them into the overall roles
and responsibilities of the agency. Currently, DVMSs have authority and
opportunity to travel across district boundaries for humane activities
when necessary.
SAUSAGE CASINGS
Question. Dr. Murano, this question involves a very specific issue
related to food safety and sausage production in this time of concern
about BSE. FSIS interim final regulations issued January 12 identify
the distal ileum section of beef cattle small intestine as Specified
Risk Material (SRM) in U.S. animals. In practice FSIS requires that the
entire small intestine be removed and disposed of as inedible--
presumably to ensure that the distal ileum is removed--even though I am
told that the distal ileum can be definitively identified and removed
without destroying the entire small intestine. This situation has the
potential to cause harm to that segment of the sausage industry that
relies on beef rounds as casing for their products.
Is there a way to ensure that the distal ileum SRM is completely
removed, while still ensuring the safety and availability of beef
rounds used as sausage casings?
Answer. FSIS is aware of the various methods for ensuring that the
distal ileum is properly removed. FSIS specifically asked for comment
in a Federal Register notice (January 12, 2004, Docket #03-025IF) on
this issue and will be analyzing the comments. Meanwhile, FSIS also is
aware that more than the distal ileum of the small intestine may
demonstrate infectivity based on preliminary studies from the United
Kingdom. FSIS is interested in gaining more information about this new
development as FSIS analyzes the comments.
Question. I am told that current inventories for sausage casings
could be exhausted within 2 months. Is it possible to provide further
regulatory refinements to address this issue within that time frame?
Answer. Casings made from the small intestine of cattle slaughtered
after January 12, 2004, are not currently allowed for human
consumption. FSIS is aware of the demand for sausage casings made from
the small intestine of cattle. However, in the interest of public
health, FSIS will be analyzing the comments received on the interim
final rule published on January 12, 2004, and further considering the
potential ramifications of new findings that additional sections of the
small intestine may demonstrate infectivity. FSIS will not change the
restriction on the use of the small intestine in human food until after
review of comments received.
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
STATEMENT OF LESTER M. CRAWFORD, D.V.M., Ph.D.
Senator Bennett. Dr. Crawford, we welcome you. I think this
is your first time in this particular assignment and we look
forward to hearing from you.
Mr. Crawford. Thank you, Mr. Chairman and Senator Kohl. It
is a pleasure for me to be here with my colleagues from USDA.
I want to thank you for the opportunity to discuss the
Administration's fiscal year 2005 budget for the Food and Drug
Administration.
As we approach our 100th birthday in 2006, our mission of
promoting and protecting the public health has never been more
vital. Likewise, the challenges and opportunities we face have
never been greater.
This committee's generous support of FDA's mission over the
past few years testifies to your recognition of the essential
role our agency plays in the well being of all Americans.
The President's budget for proposal for fiscal year 2005
asks you to continue that support. It seeks $1.85 billion, $1.5
billion in budget authority and $350 million in user fees.
The budget authority increases total $138.9 and savings
from administrative efficiencies and deferred facilities
repairs and improvements of $30.1 million for a net increase of
$108.8 million.
The President's budget request also asks you to build on
your past support by increasing FDA funding in several priority
areas. For Food Defense and Counterterrorism, we are seeking an
increase of $65 million. Working with the White House Homeland
Security Council, FDA and USDA have created a Joint Food
Defense Budget that will strengthen our ability to protect the
Nation's food and agriculture supply from threats whether
deliberate or accidental.
$35 million is requested to establish a national laboratory
network to test food samples. $15 million is requested for
research to protect the food supply by such measures as better
and faster tests to detect toxic agents in food. $7 million to
increase FDA's food import examinations to nearly 100,000, six
times the number we did in 2001. $3 million to increase our
crisis management capabilities and $5 million to support the
Administration's biosurveillance initiative.
For BSE, or mad cow disease, we are requesting an increase
of $8.3 million.
Mr. Chairman, FDA is proud, and I think justifiably so,
that we were able to trace and control all of the meat and bone
meal associated with the BSE-infected cow discovered late last
year in the Pacific Northwest. All of the rendering facilities
we inspected as part of this one BSE case were in full
compliance with our rules designed to create firewalls against
BSE in this country. Nevertheless, we can and should do more.
We have already announced several measures to make those
firewalls even stronger. With this increased funding, which if
you approve it would bring our total BSE resources to $30
million, we will do three things. We will increase our State-
funded BSE inspections by 2,500, we will add more than 900
risk-based BSE inspections and 600 targeted animal feed
inspections, and we will conduct a total of 10,000 BSE
inspections, 52 percent more than planned for the current year.
For our Medical Device Program, we are asking for an
increase of $25 million. We are committed to ensuring that the
Medical Device User Fee and Modernization Act is implemented in
a manner that meets its performance goals and that ensure the
strongest and most effective medical device review program
possible under the law with available resources. We need this
increase to meet the appropriations triggers required for the
Agency to collect medical device user fees. With these
resources, FDA will meet all of the performance goals by fiscal
year 2008.
For the Center for Drug Evaluation and Research move to
White Oak in Maryland, we are requesting an increase of $20.6
million in new budgetary authority and $10 million in user
fees. We will use these resources to relocate the 1,700 review
staff in the Center for Drug Evaluation and Research to the
White Oak Campus.
For medical countermeasures, we seek an increase of $5
million. We are seeking this amount to bolster FDA's ability to
help companies develop new medical countermeasures against
terrorist attacks and to review those products quickly. FDA
will use this increase to expedite the review of new drug
applications, biologics license applications, generic drugs and
over-the-counter medical product countermeasures.
For the pay increase we request an increase of $14.4
million. Fully 60 percent of our budget pays the salaries of
FDA's dedicated expert employees. I need not emphasize here how
important this money is for our ability to carry out our public
health mission.
For administrative efficiencies, this budget request
includes a reduction of $30 million. These funds will be used
to partially fund the high priority initiatives I just
mentioned as well as to support the goals of the President's
Management Agenda.
Mr. Chairman, by focusing on the President's highest
priorities for FDA, in some respects I have only scratched the
surface of all that we do every day to protect the health of
Americans.
An additional agency priority of particular interest to the
Subcommittee, is lowering the rate of obesity, one of the most
serious public health issues facing America today. We have just
finished an FDA obesity working group which prescribes a number
of recommendations and public input to reforming the food label
to make it more amenable to the control of obesity, and also
for demystifying some of the myths that now occur with respect
to our food supply, not the least of which is confusion about
carbohydrates and various classifications of carbohydrates.
PREPARED STATEMENT
I can list other additional program priorities, but in the
interest of time I will submit my statement for the record and
I appreciate very much the time accorded me.
Thank you.
[The statement follows:]
Prepared Statement of Lester M. Crawford
Introduction
Good morning. Mr. Chairman and distinguished members of the
Subcommittee, I'm pleased to have the opportunity to speak with you
today and present to you the Food and Drug Administration's fiscal year
2005 budget request. I am Dr. Lester M. Crawford, DVM, Ph.D. Acting
Commissioner, Food and Drug Administration.
The FDA is responsible for protecting the public health by assuring
the safety, efficacy, and security of human and veterinary drugs,
biological products, medical devices, our Nation's food supply,
cosmetics, and products that emit radiation. The FDA is also
responsible for advancing the public health by helping to speed
innovations that make medicines and foods more effective, safer, and
more affordable; and helping the public get the accurate, science-based
information they need to use medicines and foods to improve their
health.
I'd like to begin by conveying my appreciation to the Subcommittee
members and their staffs for providing FDA with several key increases
in the fiscal year 2004 appropriation such as those funds for generic
drugs, food defense, and medical device review. In a moment, I will
elaborate on how we have spent or plan to spend those funds in the
current year. I can assure you that funds appropriated in the current
year and additional increases appropriated in fiscal year 2005 will
continue to be spent wisely. The American people would be impressed if
they really knew how much bang for their buck they get out of FDA.
I am fully aware of the difficult funding decisions all of you must
face in the current session, but I want to remind you that marginal
investments in FDA's programs can have such a positive ripple effect
across all of your constituencies--from the consumer to the farmer to
the manufacturer and beyond. FDA is working diligently to reduce
administrative and IT costs in fiscal year 2004 and 2005. In fiscal
year 2004, we offered $57 million in IT and administrative savings and
we have again proposed another $23 million in administrative savings in
fiscal year 2005, which we are realizing through efficient
administrative resource management. We will continue to seek
administrative resource savings in order to support our critical
mission requirements.
Executive Summary
FDA makes substantial and meaningful differences in the lives of
over 290 million Americans. I am extremely thankful for the
professional dedication, creativity, and expertise of our staff.
Through a combination of dedicated and skilled staff, new authorities
of recently passed legislation, and the resources this Subcommittee
provides us to carry out our mission, we will be in a better position
to meet our challenges than ever before.
The Administration and Congress have an obligation to the American
public to ensure that adequate and properly targeted resources are
available for the continued success of the Agency and the success of
the Federal Government's efforts to promote quality health care. The
importance and complexity of FDA's work will only increase in the years
to come as FDA continues to carry out its primary mission of protecting
and promoting the public health. This means that while more medical
products and therapies will be available to save and improve lives, FDA
also must think critically and carefully about how it uses its
resources to improve the public wellbeing. In guiding us through our
new Strategic Action Plan that attempts to balance demands with limited
resources, we will constantly follow the practice of ``efficient risk
management.''
FDA's Strategic Plan
On August 20, 2003, FDA released a 5-Part Strategic Action Plan
entitled ``Protecting and Advancing America's Health: A Strategic
Action Plan for the 21st Century.'' This is a dynamic and evolving
document that outlines how the Agency is taking new steps to protect
and advance America's public health. In response to various public
health threats, the Agency developed a core set of consumer-focused
goals that includes the following: helping consumers get truthful and
non-misleading information about FDA regulated products; promoting
quick access to new medical technologies that are safe and effective;
improving patient and consumer safety; responding to the new challenges
of bioterrorism and food defense, and building a stronger, science-
based FDA. These goals were developed and refined in conjunction with a
number of key healthcare stakeholders, and were based on important
feedback from the consumer and patient communities. These are among the
many critical challenges the Agency faces as it moves forward into the
21st century. I will first discuss these challenges and progress within
our strategic planning effort, and then will discuss the specifics of
FDA's 2005 budget request.
Efficient, Science-Based Risk Management
In fiscal year 2005, FDA will be charged with regulating over
150,000 drugs and devices, overseeing the development of almost 3,000
investigational new drugs, monitoring 125,000 domestic product
establishments including over 10,000 firms involved in the animal drugs
and feed process, reviewing and acting upon an estimated 13 million
import line entries, and the list goes on and on. On top of this
workload, we cover the full life cycle of nearly all food and medical
products, and also interact on a daily basis with all facets of Federal
and State governments, consumers, public and private institutions, and
foreign entities. Our proposed budget includes the equivalent of 10,844
full-time employees, including reimbursables. The numbers speak for
themselves and they explain why we must practice efficient, science
based risk management in fulfilling our increasingly complex mission.
FDA's approach entails the use of the best scientific data, the
development of quality standards, and the use of efficient systems and
practices that provide clear and consistent decisions and
communications to the American public and the regulated industries.
This is achieved by employing principles and technologies that can
reduce avoidable delays and cost in product approvals, overhauling and
updating the way medical products are manufactured, implementing more
effective strategies for food imports and food safety, and by
implementing an enforcement strategy that combines clear communications
to industry backed up by effective civil and criminal enforcement, FDA
will achieve quicker access to safe and effective new products, and
reduce public health risks without unnecessary costs. Over the past
year, our work resulted in a wealth of success stories related to
enforcement, new medical product development, imports and the safety of
our food supply.
Our science based enforcement strategy is one based on clarity,
science, leveraging resources with our enforcement partners in Justice,
Homeland Security, and the states, and most importantly, deterrence. In
fiscal year 2003, our efforts led to 341 arrests, 199 convictions,
fines and restitutions of more than $800 million submitted to the U.S.
Treasury (including a multimillion dollar settlement for health care
fraud), 17 injunctions of firms/individuals, nearly 400 criminal cases
opened, 25 seizures of violative products, and more than 500 Warning
Letters. Additionally, we took action against drug counterfeiters,
unscrupulous parties in the dietary supplement industry, and those who
spread misinformation or commit fraud via false labeling and
advertising. We remain vigilant when necessary but hold the belief that
our regulations and the enforcement of the regulations should be no
more burdensome than necessary. In addition, FDA remains concerned
about the public health implications of unapproved prescription drugs
from entities seeking to profit by getting around U.S. legal standards
for drug safety and effectiveness. Many drugs obtained from foreign
sources that either purport to be or appear to be the same as U.S.-
approved prescription drugs are, in fact, of unknown quality. Consumers
are exposed to a number of potential risks when they purchase drugs
from foreign sources or from sources that are not operated by
pharmacies properly licensed under state pharmacy laws. Although some
purchasers of drugs from foreign sources may receive genuine product,
others may unknowingly buy counterfeit copies that contain only inert
ingredients, legitimate drugs that are outdated and have been diverted
to unscrupulous resellers, or dangerous sub-potent or super-potent
products that were improperly manufactured. The Agency has responded to
the challenge of importation by employing a risk-based enforcement
strategy to target our existing enforcement resources effectively in
the face of multiple priorities, including homeland security, food
safety and counterfeit drugs. However, the number of incoming packages,
as it works today, already overwhelms the system, and this presents a
significant ongoing challenge for the Agency. The Agency understands
Congress' desire to address importation of drugs and appreciates their
understanding of FDA's responsibility to uphold he current law.
New drug development is an extremely costly process. Today, we see
cases where the cost of developing a novel drug may reach $800 million
and take a decade to get from discovery to the marketplace. According
to a Tufts University study, only 21.5 percent of new drugs
successfully pass through the clinical phase and gain FDA approval. FDA
must foster and encourage new product development by ensuring that its
review and approval processes are efficient, transparent, consistent,
and predictable. We need to ensure that biomedical innovation leads to
the quick development of safe and effective medical products. As
recently discussed in our report entitled ``Innovation or Stagnation?--
Challenge and Opportunity on the Critical Path to New Medical
Products,'' FDA, together with academia, patient groups, industry, and
other government agencies, must embark on an aggressive, collaborative
research effort to create a new generation of performance standards and
predictive tools that will provide better answers about the safety and
effectiveness of investigational products, faster and with more
certainty. This action promises not only to bring medical breakthroughs
to patients more quickly, but to do so in ways that ensure greater
understanding about how to maximize patient benefits and minimize their
risks. This can be accomplished by developing quality systems for the
Agency's review procedures, developing guidances in new areas of
technology development, and continuing encouragement of quality
improvement in the manufacturing sector.
We want to build on the past success of industry-supported programs
such as the drug review process, which is funded by a combination of
appropriated dollars and user fees defined by the Prescription Drug
User Fee Act that will allow FDA to collect up to $284 million in
fiscal year 2005. This program's support helped bring median approval
times for standard new drug applications from 26.9 months in 1993 to
15.4 months in 2003. Increased funding for the past several years in
the generic drugs program has allowed median approval times to drop
from 39.7 months in 1993 to 17.3 in 2003, and an estimated time under
17 months with the fiscal year 2004 appropriation. We plan on this kind
of support translating into similar success for the medical device
review program with the help of budget authority and user fee dollars
in fiscal year 2004 and beyond. Increased funding in fiscal year 2005
will allow the Agency to expedite the speed and quality of the medical
device review process.
In the past year, highlights of our medical product review process
include:
--in total, approved 483 new and generic drugs and biological
products, including 21 New Molecular Entities with active
ingredients never before marketed in the United States;
--approved 85 new drug applications;
--approved 373 generic drug applications;
--approved 25 biologic license applications;
--generic approvals included drugs for the treatment of hypertension
and heart failure, the treatment and prevention of
Cytomegalovirus Retinitis in AIDS and transplant patients; a
treatment for major depressive disorder; and another for
impetigo, an infection of the skin;
--accelerated approvals of a drug used for the treatment of pediatric
patients with a type of myeloid leukemia--a rare, life-
threatening form of cancer that accounts for approximately 2
percent of all leukemias in children, and another for use in
combination therapy for chronic Hepatitis C;
--over-the-counter drug approvals including Claritin for allergies
and Prilosec for frequent heartburn;
--device approvals included the first drug-eluting stent for
angioplasty procedures to open clogged coronary arteries,
clearance of the first device for diabetics which integrates a
glucose meter and an insulin pump with a dose calculator into
one device, and an innovative rapid HIV diagnostic test kit
that provides results with 99.6 percent accuracy in as little
as 20 minutes.
Lastly, FDA continues to pursue the most cost effective allocation
of resources to identify food safety hazards and reduce injury and
illness associated with food products. In 2003, building on an HHS
strategic goal, FDA implemented new food security regulations that
amount to the most substantial expansion of FDA's food safety
activities in three decades. The Agency also instituted various new
risk communications to improve upon more routine food safety for
consumers. Additionally, the Agency continues to practice a cost
effective allocation of resources through the targeting of field
resources to imports that present the most significant risk. With no
sign of import entries decreasing, FDA will intensify these efforts by
implementing preventative food safety measures through collaborative
arrangements with domestic and foreign governmental bodies.
Patient and Consumer Safety
As beneficiaries of the world's premiere heath care system,
Americans should not have to endure preventable medical errors and
adverse events related to medical products, dietary supplements, and
foods that are responsible for thousands of deaths, millions of
hospitalizations, and tens of billions in added health care costs.
Americans deserve better than settling for serious health consequences
that can't be spotted until many years after a product has been on the
market. And Americans and their physicians deserve better than having
to rely on limited and often outdated information about risks,
benefits, and costs of medical treatments when they are making medical
decisions--which, these days, are among the costliest and most
important decisions in their lives. So we are taking new steps to make
our systems and processes for assuring the safety of food and medical
products work better than ever, and to build new ways to assure better
patient safety by taking advantage of modern information technology
tools. We are thankful for the appropriated increases for patient,
medical product safety and our various adverse event systems in the
food and medical product centers that we have received in past years.
Preventing medical errors is a top priority at the Department of
Health and Human Services and at FDA, and over the past year, FDA has
introduced a number of solutions that are enabling a more sophisticated
and effective 21st century patient safety system, thus helping lower
healthcare costs and ensure longer, healthier lives for Americans. As a
result of these new strategic initiatives, more programs are now in
place to improve consumer safety than at any time in the Agency's
history. In fiscal year 2003, FDA issued a new proposed requirement for
bar codes on nearly all prescription drugs and some over-the-counter
drugs, as well as machine-readable information on blood and blood
components intended for transfusion, that will result in an estimated
413,000 fewer adverse events over the next 20 years. FDA has initiated
partnerships that will allow use of external medical databases to
investigate specific product safety issues. We continue to encourage
the development of ``active'' reporting systems that use fast, easy
web-based reports and systems to get more extensive and timely
information on new drugs, important complications, and adverse events
that are not well understood. In fiscal year 2003, we also proposed new
safety standards to further reduce the incidence of adverse events,
such as proposed amendments to radiation-safety standards for
diagnostic x-ray equipment and new antibiotic labeling to prevent drug-
resistant bacterial strains.
Through enhanced testing and other improvements in blood safety,
the risk of transmission of viruses such as HIV, hepatitis B and C has
been dramatically reduced. While a blood supply with zero risk of
transmitting infectious disease may not be possible, the blood supply
is safer than it has ever been. The agency's Center for Biologics
Evaluation and Research, worked closely with other FDA Centers, the
Center for Disease Control and Prevention, the National Institutes of
Health, academic scientists, and the blood and diagnostic industries,
in an unprecedented team effort that resulted in the development and
implementation of investigational blood donor screening for West Nile
Virus within 8 months of when the threat was first recognized. As a
result, over 1,000 units of potentially WNV infected blood were
identified and removed this past year before they could be transfused.
Lastly, the Agency's Center for Food Safety and Applied Nutrition
launched the CFSAN Adverse Event Reporting System covering all food,
dietary supplement, and cosmetic products. Consumers submitted and FDA
reviewed more than 6,000 adverse events and consumer complaints in an
attempt to ensure consumers are alerted quickly to any potential new
dangers. Recently, the CFSAN Adverse Event Reporting System provided
information on the dangers of ephedra, which has been banned by FDA.
Better Informed Consumers So many of our stakeholders focus their
attention on our mission to protect public health, and ensure the
safety of the food supply and the safety and effectiveness of medical
products or therapies. However, at the beginning of my testimony I
restated FDA's mission which includes mention of our duty to promote
public health and ``[help] the public get the accurate, science-based
information they need to use medicines and foods to improve their
health.'' The public entrusts our subject matter experts and public
affairs specialists in Congressional districts across the country at
the state and local level to provide consumers with the tools they need
to make better-informed choices. These choices range from diet to
medical practice recommendations to disease management on the part of
the individual. Our role as an educator or informer of the public will
become evermore important as patients make more independent decisions
about their health and medical care. We must continue to assist the
public in how to use their health care dollars as we have done with our
generic drug campaigns, and at times protect them from misleading
information that could endanger the public's health.
Providing information on diabetes care and prevention is a top
priority of FDA and the Administration. In recent years, diabetes rates
among people ages 30 to 39 rose by 70 percent. Research shows that good
nutrition lowers people's risk for many chronic diseases, including
obesity, heart disease, stroke, some types of cancer, diabetes, and
osteoporosis. For at least 10 million Americans at risk for type 2
diabetes, proper nutrition along with physical activity can sharply
lower their chances of getting the disease.
FDA is also attempting to enhance the consumer understanding of the
relationship between diet/obesity and chronic disease. A recently
released report by FDA's Obesity Working Group includes recommendations
to strengthen food labeling, to educate consumers about maintaining a
healthy diet and weight and to encourage restaurants to provide calorie
and nutrition information. It also recommends increasing enforcement to
ensure food labels accurately portray serving size, revising and
reissuing guidance on developing obesity drugs and strengthening
coordinated scientific research to reduce obesity and to develop foods
that are healthier and low in calories. This effort is important, as a
new study from Centers for Disease Control and Prevention (CDC) shows
poor diet and inactivity are poised to become the leading preventable
cause of death among Americans--causing an estimated 400,000 deaths in
2000. CDC estimates that 64 percent of all Americans are overweight,
including more than 30 percent who are considered obese. In addition,
about 15 percent of children and adolescents, aged 6 to 19, are
overweight--almost double the rate of two decades ago. FDA must promote
good nutrition by allowing consumers access to credible, science-based
information, and fostering competition based on the real nutritional
value of foods rather than on portion size or spurious and unreliable
claims. Such labeling can promote better public health by empowering
consumers to make smart, healthy choices about the foods that they buy
and consume. This is a high priority for the Administration to ensure
that health claims are supported by scientific information. President
Bush continues to emphasize the improvement of health through better
diets and lifestyles.
FDA is undertaking major new efforts to ensure consumers have the
most up-to-date, truthful information on the benefits and risks of FDA
regulated products. In this arena, FDA fulfills two complementary
roles: ensuring that the information sponsors provide about products is
accurate and allows for their safe use; and, communicating directly
with the public concerning benefits and risks of products FDA
regulates.
FDA's strategic plan calls for the Agency to learn how to more
effectively communicate the risks and benefits of FDA regulated
products to consumers, as well as those in the health and medical
professions. The goal is a well-informed public, empowered to make
better choices to improve their health. Just this past year, FDA has
been involved in a number of consumer education campaigns related to
the prudent use of antibiotics, the misuse of pain relievers, the
parity between generic and name brand drugs, buying medicines and
medical products online, and several other campaigns aimed at
addressing a number of areas where the consumer needs to minimize the
risks and maximize the benefits of medicine use. FDA also teamed up
with women's health organizations to raise awareness about hormone
replacement therapy (HRT). The previous year, we conducted a similar
campaign to raise awareness about diabetes. We spread the word widely
about these efforts and we almost always try to provide these messages
in Spanish to reach as much of the public as possible.
Counterterrorism
FDA is improving its capability to assess and respond effectively
to its mission of protecting the security of the Nation's food supply,
and ensuring the safety and effectiveness of medical products used to
prepare and respond to biological, chemical, or radiological attacks.
As Secretary Thompson reported in the July 2003 report entitled,
``Ensuring the Safety and Security of the Nation's Food Supply,'' the
Agency is working with other government agencies and the private sector
to develop and implement a comprehensive strategy to protect the food
supply from attack. These include additional staff for food safety
field activities, greater import presence at our Nation's borders,
threat assessments, and additional money for food security research.
FDA's medical product centers are also working harder and more
creatively than ever to speed the availability of the next generation
of safer, more effective countermeasures to protect Americans against
biological, chemical, nuclear, and radiological agents of terrorism.
In fiscal year 2003, FDA implemented a number of fundamental
enhancements on both the food defense and medical countermeasures
fronts, in meeting the objectives of this strategic goal. In direct
response to this heightened threat, and in conjunction with the
Department of Health and Human Service's larger counterterrorism
initiatives, FDA has implemented new steps in food defense that
represent the most fundamental enhancements in the Agency's food safety
activities in many years. FDA's implementation of four new food
security regulations prompted by the Public Health Security and
Bioterrorism Preparedness and Response Act of 2002 (Bioterrorism Act),
will be fundamental and long lasting. Two additional regulations are
expected to be finalized in the near future. The Bioterrorism Act gave
the Agency some potentially effective tools in identifying, preparing
for or responding to terrorist attacks on the food supply. The design
and implementation of these four regulations has also spawned a closer
working relationship with the U.S. Customs and Border Protection Agency
(CBP). Our close relationship led to a recent Memorandum of
Understanding (MOU) between FDA and CBP in December 2003 that allows
FDA to commission thousands of CBP officers to conduct, on FDA's
behalf, investigations and examinations of imported foods in accordance
with the prior notice requirements. This cooperative arrangement with
FDA's sister enforcement agency was in addition to a more than six-fold
increase in the number of field examinations of imported foods from
fiscal year 2001 to fiscal year 2003 (78,000) conducted by FDA
inspectors and our state partners. Much more needs to be done in this
area as we note in our Congressional budget request for an increase of
$65 million.
Protecting consumers against terrorism also requires that Americans
have access to safe and effective medical countermeasures. This year,
FDA has worked closely with scientists and product developers and has
taken new steps to speed the development of these safe, effective
treatments and preventive vaccines. FDA works closely with NIH, CDC,
DHHS, DOD and industry to develop new and improved treatments and
vaccines to counter smallpox, anthrax, and other potential emerging
biowarfare and public health threats.
FDA has had to become more proactive in identifying possible
products for approval for medical countermeasures due to the fact that
no known group of patients are currently affected by many of the
conditions linked to biological, chemical, or radiological agents. So,
in fiscal year 2003, the Agency issued new guidance on the development
of Radiogardase (``Prussian Blue'') for treatment of internal
contamination with thallium or radioactive cesium. Several months
later, a firm submitted an application and FDA approved Radiogardase to
treat people exposed to radiation contamination from harmful levels of
cesium-137 or thallium after identifying existing safety and efficacy
data. FDA has worked with other government agencies to facilitate the
development of counter-terrorism products, such as vaccines and immune
globulins against anthrax, smallpox, and botulism, by resolving
regulatory issues and developing assays for potency testing. FDA also
took various steps to make sure that manufacturers of medical
countermeasures are following Current Good Manufacturing Practices
(CGMPs). In 2003, FDA determined that CGMP inspections were lacking for
27 manufacturers of identified medical countermeasures, and the Agency
took action to address this. Even without the legislation creating
Project BioShield, an act designed in part to provide incentives for
developing safer, more effective countermeasures, FDA will remain the
only governmental Agency involved with the approval of products
necessary to prevent or treat human exposure to these terrorist agents.
We hope this Subcommittee supports our $5 million request in fiscal
year 2005.
A Strong FDA
The final goal of our Strategic Plan revolves around our world-
class, professional workforce that is highly dedicated and committed to
making a difference. FDA is aware of the need to maintain the highest
level of public trust in its activities. I believe this component of
our plan is the bedrock and the most critical component for the success
of the Agency. For that reason, the Agency must adequately develop and
support its cadre of experienced physicians, toxicologists, chemists,
biologists, statisticians, mathematicians, and other highly qualified
professions. Since 2001 and into the foreseeable future, we have
continually sought new opportunities to improve our management, and
efficiencies in our organization, infrastructure and information
technology. The practice of efficient risk management certainly applies
here as we must strive to adopt management practices that make the
Agency's core programs most efficient. The fiscal year 2005 request
fully funds the $33.1 million ($20.6 million of which is budget
authority) to complete a part of the work force consolidation at White
Oak, Maryland.
FDA's adherences to the strategies and goals of the President's
Management Agenda have brought about real and positive change toward
improving the management of the Agency. These five goals are Strategic
Management of Human Capital, Competitive Sourcing, Improved Financial
Performance, Expanded E-government, and Budget and Performance
Integration. Over the past year, FDA management achieved a number of
milestones in the area of ``Strategic Management of Human Capital,''
including the development and phased stand-up implementation of the new
shared service organization (SSO). Consolidation into the SSO, combined
with improved business processes, will allow FDA to maintain
administrative service levels with substantially fewer staff. Another
area of continued progress is towards the goal of ``improved financial
performance.'' Due to this Subcommittee's continued support, the Agency
is making progress towards the eventual replacement of its obsolete
legacy accounting systems. The Department-wide Unified Financial
Management System will integrate financial management to provide more
timely and consistent information, and promote the consolidation of
accounting operations that will substantially reduce the cost of
accounting services. In addition, FDA has continued its progress
towards the consolidation of its IT infrastructure by collaborating
with HHS toward achieving its ``One HHS'' goals and objectives. FDA
also competed six agency support functions in fiscal year 2003 to
determine the most efficient organization for running and managing each
function. The agency determined that the in-house operations for all
six functions were the most efficient organizations for providing their
respective services. We estimate savings of $16.3 million over a 5 year
performance period from just these six organizations. These are just a
few examples of FDA's outstanding progress in making efficient use out
of limited resources, and practicing efficient risk management.
Fiscal year 2005 Budget Request
As I noted earlier, adequate funding of the Agency's highest
priorities is vital to our success. Our fiscal year 2005 President's
budget request totals $1.845 billion, including $1.495 billion in
budget authority and $350 million in user fees. The Administration
proposes both increases and savings related to the President's
initiatives for a net budget authority increase of $108.8 million above
the fiscal year 2004 Appropriation. Requested increases cover: Cost of
Living, Food Defense, Medical Device Review, Medical Countermeasures,
Bovine Spongiform Encephalopathy prevention, and the Agency's
relocation of the Center for Drugs to the consolidated campus.
Additionally, the budget includes management savings achieved through
administrative efficiencies and savings achieved by using carryover
funds from our Buildings and Facilities account. The user fee increases
total more than $40 million. This proposed budget will support a total
of nearly 10,800 full time employees.
Cost of Living
Adequate annual pay increases are essential to allow FDA to fully
utilize programmatic increases. More than 60 percent of FDA's budget
goes toward paying our highly skilled scientific workforce, far more
than some Agencies. FDA's labor percentage is higher due to a number of
reasons, but most importantly because the Agency's diverse workload
requires numerous interdependent specialists in each of the Agency's
product areas, the inspectional responsibilities require great
geographic diversity to perform duties across the country and around
the world, and the number of personnel necessary to monitor the entire
life-cycle of all products under the Agency's purview (e.g., clinical
drug trials to drug application review to advertising of approved
product to actual effect of drug on patient's health). The lack of cost
of living increases has the potential to limit or nullify other
targeted increases towards high priority Administration, Congressional
and/or mission critical initiatives.
FDA is thankful for this Subcommittee's involvement in providing
the Agency with additional funding to cover the cost of inflationary
pay increases between fiscal year 2002 and fiscal year 2004. We
approach you once again and request that you provide a $14.4 million
increase representing a congressionally approved 4.1 percent cost of
living increase for calendar year 2004 as well as a 1.5 percent
increase for calendar year 2005 as proposed by the President.
Food Defense
As I noted earlier, Food Defense is a major component of FDA's
strategic goal to protect America from terrorism as it relates to foods
and medical products under our purview. I am also pleased to report
that this Subcommittee's support in the hiring of 655 new field staff
through the fiscal year 2002 supplemental appropriation as well as the
increases provided in fiscal year 2003 is beginning to produce positive
results.
Despite some significant progress over the past year with the rapid
implementation of the food registration and prior notice regulations
and systems, increased training and outreach, record amounts of import
examinations, expanded research programs, daily intelligence briefings
of FDA officials, etc., additional steps need to be taken to fully
prepare our Nation to handle various types of intentional attacks on
the food supply.
FDA has spent an extensive amount of time over the past year
coordinating this multifaceted plan with the White House Homeland
Security Council, the Department of Homeland Security, and the USDA.
The result is a joint budget developed with USDA and DHS for food
defense to protect the agriculture and food sectors. Based upon the
Administration's current knowledge, ability to respond, and capacity to
handle an actual attack, FDA requests $65 million in increased funding
to shore up five key areas--$35 million for the Food Emergency Response
Network [FERN], $15 million for research, $7 million for inspections,
$3 million for incident management, and $5 million for biosurveillance.
The investments in these particular areas will help develop awareness
amongst the various components of the food sector, build upon existing
surveillance tools, institute prevention techniques to shield against
an attack, prepare for an attack, and provide the capacity to respond
if such an event should occur.
It is also vital that the Agency has the capability to coordinate
and handle a food defense response with state and local governments and
other Federal agencies. We are seeking to build a food defense
laboratory network among states, part of a system called FERN. FERN is
comprised of labs specializing in food testing for biological, chemical
and radiological threat agents and these laboratories will have the
capacity to rapidly test a large number of food products. We need to
make a distinction here between a corresponding network of labs handled
by the Centers for Disease Control and Prevention. CDC is in charge of
the Laboratory Response Network that primarily handles clinical testing
of human specimens such as blood or urine.
Another system we will build upon with our fiscal year 2005 request
is the Electronic Laboratory Exchange Network or eLEXNET. This network
is the Nation's first seamless, integrated, secure, web-based data
exchange system for food testing information. eLEXNET allows health
officials at multiple government agencies engaged in food safety
activities to compare, share, and coordinate laboratory analysis
findings on food products. Whereas FERN laboratories are involved in
the actual analysis of food samples, eLEXNET provides a forum for the
exchange of laboratory data. FDA is continuing efforts to expand
eLEXNET to provide better nationwide data on food product analyses by
regulatory agencies.
Between fiscal year 2001-2005, FDA will increase the number of
import food inspections from approximately 12,000 to 97,000. Along with
increased inspectional needs, FDA must take the lead in conducting or
overseeing research projects that help us understand the effects of
contaminated food supplies on people. There are some hostile agents
capable of entering our food supply that we don't know how they will
react in humans. This is a complex challenge and we must conduct
calculated risk assessments and then use limited resources to study
human food consumption contaminated with these agents. Our food defense
task is challenging and we will make a concerted effort to gain a
greater understanding of these threats to the food supply. We currently
have over 90 research projects devoted to identifying food adulteration
and we hope to improve testing and identification with these projects.
Bovine Spongiform Encephalopathy (BSE)
Although 150 deaths in Europe from variant Creutzfeldt-Jakob
disease (vCJD) are linked to consumption of beef from cows with BSE,
the economic impact to the farming communities was also devastating.
The European Union estimated the cost of BSE contamination in affected
countries to reach $107 billion and Canada's recent discovery was
costing an average of $11 million a day in lost exports. The
Administration is acting vigorously to limit the distribution or spread
of any products suspected of carrying BSE following the December 23,
2003 discovery of a Holstein cow with BSE in the state of Washington.
On January 26 of this year, FDA announced several new public health
measures to strengthen the five existing firewalls that protect
Americans from exposure to the agent thought to cause BSE. FDA intends
to ban from human food, dietary supplements, and cosmetics a wide range
of bovine-derived material so that the same safeguards that USDA
implemented for meat products, also apply to food products that FDA
regulates. FDA will also prohibit certain feeding and manufacturing
practices involving feed for cattle and other ruminant animals. The
Agency will strengthen its current controls and implement these new
protections by publishing two interim final rules.
In fiscal year 2004, the base budget is $21.5 million for BSE
activities across all FDA programs. In fiscal year 2005, we request
$8.3 million for a total of $29.8 million in total funding for this
initiative. With the increased funding, we will undertake a trilateral
approach of increased inspections, enforcement activities, and
education. The requested resources will enable the Agency to increase
field BSE inspections, sample collections and analyses; increase
targeted sample collections and analyses of both domestic and imported
animal feed or feed components; fund 2,500 more state inspections of
animal feed firms; conduct industry outreach to better inform industry
of responsibilities and opportunities to prevent BSE from contaminating
animal feed; and strengthen the states' infrastructures to monitor, and
respond to, potential feed contamination with prohibited materials. The
Administration believes that an $8.3 million request is a relatively
modest increase in light of the potential health benefits and cost
savings that can be achieved with these resources.
Medical Device
Review FDA is committed to ensuring that the Medical Device User
Fee and Modernization Act (MDUFMA) performance goals are met and that
the strongest and most effective medical device review program possible
is available. The Administration requests a budget authority increase
of $25.5 million for a total of $217 million, the amount needed to
match the original levels specified by law for fiscal year 2005. On
October 29, 2003, OMB Director Josh Bolten wrote to Congress describing
the Administration's commitment to support this program at the level
intended by MDUFMA in fiscal year 2005 and beyond. Within the approach
outlined by Mr. Bolten, the Agency is committed to meeting the original
MDUFMA performance goals.
As you know, MDUFMA requires that $205.7 million be appropriated in
budget authority each year for FDA's Center for Devices and
Radiological Health and related field activities, adjusted for
inflation (CPI). The President's fiscal year 2005 budget meets the
MDUFMA threshold for fiscal year 2005 appropriations requirements. We
look forward to working with Congress to modify MDUFMA to preclude the
requirement to appropriate the entire ``shortfall'' from fiscal year
2003 and fiscal year 2004, in order to continue the user fee program
beyond fiscal year 2005. FDA is committed to achieving the performance
goals of MDUFMA.
In fiscal year 2005, FDA will utilize the appropriated increases to
build upon the success in fiscal year 2003 and fiscal year 2004. In
fiscal year 2003, FDA invested user fee and appropriated dollars in a
number of ways that will contribute to the ultimate improvement in the
review process in later years, including the hiring of more than 50 new
scientific, medical, engineering, and other review staff and the
development of process improvements to speed review from beginning to
end.
Medical Countermeasures
Counterterrorism is a major priority for the FDA and the Department
of Health and Human Services. Speeding the development of safe medical
countermeasures to improve protection against terrorism and emerging
diseases requires that Americans have access to safe and effective
medical treatments. Prior to September 11th, FDA had been engaged in
coordinated efforts with other Departments to develop and make
available better countermeasures for biological, chemical and
radiological attacks. The urgency is far greater now and so in fiscal
year 2005, FDA will continue to work closely with scientists and
product developers and take new steps to speed the development of these
safe, effective treatments. FDA requests $5 million to expedite the
review of new drug applications, biologics license applications,
generic drugs and over-the-counter medical product countermeasures. The
Agency must get involved in each facet of the process from animal
studies to dosing requirements to the development of postmarket systems
that will be in place to ensure rapid reaction to adverse events. These
initiatives are all necessary to ensure that adequate treatments are
available for a wide assortment of threats. One of these initiatives is
Project BioShield, a program designed to help ensure that medical
products are reviewed and approved for safety and effectiveness in the
event of war or catastrophic events. The first request for proposals
for procurement of a new generation anthrax vaccine through Project
BioShield will be initiated shortly.
Center for Drugs Relocation
I can only imagine that it is difficult for members of this
Subcommittee to write home about the funding you helped secure for
FDA's consolidation of its Washington, D.C. metro area Headquarters
Offices from 16 locations to three. However, I think they would be
happy to hear that the eventual settling into the three new sites in
White Oak, Laurel, and College Park, MD, create greater economies of
scale and operational efficiencies. The bottom line is that you will
save the American taxpayers money when this project is complete.
Although substantial facility needs at White Oak are mostly addressed
through the GSA appropriation, FDA must continue to seek your support
for relocation costs. In accordance with the President's Management
Agenda, the FDA plans to modernize document handling, use shared
library and conference facilities, reduce redundancies in a wide range
of administrative management tasks, convert to a single computer
network, and reduce management layers. Without the requested funds,
these management improvements and efficiency gains would be
jeopardized.
This current plan calls for the relocation of 1,700 drug review
personnel in April of 2005. The budget funds the total need for this
move, $33.1 million, and the request includes an increase of $20.6
million in new budget authority. The remainder would come from $2.4
million in the base budget, and $10 million in PDUFA user fees. The
General Services Administration has requested $89 million in their
fiscal year 2005 budget request to continue construction on the campus.
If GSA's subcommittee approves the full request, the building
construction would proceed as schedule. However, if GSA does not
receive its full request for White Oak, it would have severe financial
consequences for FDA. In a 2003 GAO report entitled ``Federal Real
Property: Executive and Legislative Actions Needed to Address Long-
Standing and Complex Problems,'' the report spells out the Federal
Government's problems in managing property, including the inefficient
use of space. FDA would be faced with paying unnecessary rental
payments for multiple properties unless the funding of construction and
relocation costs are synchronized as is currently the plan.
User Fees
In fiscal year 2005, the Agency expects to collect $350 million in
user fees, primarily from PDUFA, MDUFMA, and ADUFA fee programs. These
user fee programs provide substantial funding that compliment budget
authority resources and allow FDA to meet agreed upon performance
measures that allow for more rapid reviews of human drugs, medical
devices and animal drugs. Additionally, the Agency collects modest fee
amounts for the Mammography Quality Standards Act program as well as
export certification and color certification programs.
President's Management Agenda & Administrative Consolidation
FDA has been very proactive in streamlining its operations and
reducing its administrative expenses. Since November 2001, the Agency
has worked with the Department of Health and Human Services to do its
part to comply with the President's goal to improve the Strategic
Management of Human Capital across the Federal Government. We have
demonstrated tremendous success in efforts to delayer our
organizational structure, consolidate FDA's decentralized Human
Resources (HR) services to a single FDA HR office which has
consolidated into the HHS Rockville HR Center; implement a shared
services organization that makes best use of administrative resources;
plan for consolidated facilities at White Oak Maryland, consolidation
of IT activities, and, find efficiencies via competitive sourcing or A-
76 studies. Thanks to your support, we also continue to improve
financial management at FDA through the planned implementation of a new
financial system. In fiscal year 2005, FDA proposes its second straight
year of reductions by way of $23.1 million in savings achieved through
a seven and a half percent reduction in administrative staff, or a
combined reduction of 15 percent between fiscal year 2004 and fiscal
year 2005. In addition, no request is being made this year in the
Buildings and Facilities appropriation. This represents a savings of $7
million that was devoted to higher priority programs. Approximately
$4.6 million in carryover funds will sustain the program through fiscal
year 2005.
Conclusion
I thank you for your commitment and continued support of FDA. I am
confident that the information I provide to you today, and any
additional information provided to the Subcommittee following this
hearing, will give you further evidence of the Agency's needs in fiscal
year 2005, and justify the requested increases these priorities. Thank
you for the opportunity to testify today. I look forward to working
with all of you and your staffs in the months ahead.
Senator Bennett. Thank you, sir.
We appreciate all of you.
PROPOSED LEGISLATION
Mr. Bost, there are several requests in the budget for
legislative language. One, you have requested a legislative
proposal to exclude special pay for military personnel deployed
in a designated combat zone if that pay was not received
immediately prior to deployment. And second, a request for new
legislative language to allow for indefinite funding authority
for the Food Stamp Act.
Could you furnish the committee with a written explanation
in both of these cases? Senator Kohl and I have determined that
we are not going to legislate on an Appropriations Bill without
the complete cooperation of the members of the authorizing
committee. You have asked us to do this when it is within the
purview of the authorizing committee. So I think a clear
written statement on those two things would be helpful to us as
we make our decision as to whether or not we are going to
proceed on that.
Mr. Bost. Certainly Mr. Chairman. I would be more than
happy to do so.
[The information follows:]
The President's fiscal year 2005 budget includes a provision to
exclude ``special'' military pay when determining food stamp benefits
for deployed members of the armed services. Current rules count all
military pay received by the household as earned income in determining
household eligibility and benefits. Military personnel receive
supplements, such as combat or hazardous duty pay, to their basic pay
when they serve in combat, which could reduce a family's benefits or
make them ineligible.
The proposal excludes this income as long as it was not received
immediately prior to deployment. It supports the families of servicemen
and servicewomen fighting overseas by ensuring that they do not lose
food stamps as a result of the additional income resulting from their
deployment.
This change is being sought in appropriations language for fiscal
year 2005 when it is most needed. The cost in fiscal year 2005 is $3
million. Total cost for fiscal year 2005 to 2009 is $12 million if it
is needed and enacted in all those years. In fiscal year 2005, we
expect to help 2,900 military families.
The indefinite authority proposal in the fiscal year 2005 budget
request for the Food Stamp Program would provide such sums as necessary
to fund program benefits and payments to States. It would ensure that
sufficient resources were always available to provide access to the
program for all eligible persons who wish to participate. Unlike the
contingency reserve funds, if program costs should significantly exceed
budget estimates, it would never be necessary to seek a supplementary
appropriation or implement a benefit reduction. This proposal would
bring the structure of this critical program in line with other major
entitlement programs that already have indefinite authority.
Senator Bennett. Thank you.
FOOD GUIDE PYRAMID
We have talked to you about the pyramid. I seemed to get a
lot of publicity the last time I did that. You say it is
currently undertaking a reassessment. Should we just leave it
at that and say that it is still being reassessed or do you
have any progress reports you want to share with us?
Mr. Bost. We do not really have any progress to report at
this point but I think it is real important to know that the
first aspect of that is a review of the Dietary Guidelines.
Secretary Veneman and Secretary Thompson appointed a group of
leading scientists and they are in the midst--I think they have
had two meetings and one is upcoming to review the Dietary
Guidelines. A review of the Dietary Guidelines will fold into a
review of the Pyramid itself.
It is going to come as a result of the challenges we are
facing concerning obesity and it continues to come under a
great deal of scrutiny.
I think the challenge is trying to be everything to
everyone and that is the biggest challenge. Essentially, we eat
too much and exercise too little. We are trying to move
everybody in this country toward a healthy lifestyle.
Senator Bennett. Thank you.
LIVE BIRD MARKETS AND AVIAN INFLUENZA
Mr. Hawks, the Washington Post has run some stories on live
bird markets and the fact that these markets may be a breeding
ground for bird flu or avian influenza. Do you have any
information you could provide to us here about that issue?
Should we expect the Department to be taking any action with
respect to the live bird markets?
Mr. Hawks. Yes, sir, you sure should. As a matter of fact,
there is almost $13 million in our 2005 budget request to
address avian influenza. That encompasses the live bird
markets.
We are actually, as we speak, moving forward with plans to
do more surveillance in those live bird markets, and to do more
surveillance in general with respect to low path avian
influenza. We are engaged with the States involved and
certainly recognize the significance of the live bird markets
and the need to address them.
We have already, in the past, actually closed those live
bird markets. We have what we call a holiday in those bird
markets. We close them for 3 days. We clean, disinfect and
depopulate those birds that are there.
It certainly is an area that is of concern to us.
Senator Bennett. What about those countries that have
banned poultry exports from the United States because the bird
flu? Are we doing anything to try to get those markets
reopened?
Mr. Hawks. Yes sir, we sure are. We are very much engaged
in that.
We have submitted a significant amount of information to
our trading partners about what we are doing about the
epidemiological investigations that are ongoing.
The one that is the most significant is the high path avian
influenza in Gonzalez, Texas. We have completed our
surveillance programs there and have found no additional avian
influenza.
I will personally be in Mexico City on April 13th, the week
after next, to engage in continued discussions with my Mexican
counterparts to try to reinforce our desire for them to open
the market and follow the appropriate path.
BOVINE SPONGIFORM ENCEPHALOPATHY
Senator Bennett. While we are on the subject of markets,
that brings us now to BSE, and the request on the part of some
countries that there be a 100-percent testing of the export
market. I understand you are working, as you say, with Mexico,
also Japan. Is 100-percent testing of the export market
physically possible? Is that a feasible thing?
Mr. Hawks. Mr. Chairman, we do not think that is the
prudent thing to do, to test 100 percent for BSE. As a matter
of fact, Mexico has opened parts of its market to us. We
continue to move there. But the Japanese market is the one that
seems to be the most insistent on an increased level of
testing. We have communicated earlier this week with the
Japanese our desire to go to the OIE, the Office of
International Epizootics, with a panel there to look at our
proposals and their proposals to make sure that we are taking
the appropriate scientific measures. But we do not believe that
100-percent testing is the appropriate path.
Senator Bennett. Thank you.
RECALL REPORT BY OFFICE OF INSPECTOR GENERAL
Dr. Murano, I was pleased to hear you talk about the
dramatic decline in recall, but the Office of Inspector General
has recently released a report--not that recently, but
September of 2003--a report critical of several aspects of a
specific recall in Colorado. Is that a one-of-a-kind situation
that has been dealt with, or do you feel that the OIG has
raised some issues that should be examined Department-wide?
Dr. Murano. Thank you, Mr. Chairman. As you know, that
particular recall took place in the summer of 2002, and as that
recall was taking place, we identified right away things that
we needed to correct to improve our effectiveness at overseeing
how recalls are conducted by companies.
We identified a lot of the things that ended up in the OIG
report, many months later. We certainly did not wait for the
OIG report to start doing something about it, and I think that
is what has made a big difference in the results that we see
now.
Of course, the OIG takes quite a while to put out their
reports. I think the report came out, as you said, last fall.
We obviously had been working very, very diligently to address
a lot of the issues. We have revised a lot of our directives.
We have put in place new policies, and instituted new training
modules for our inspectors. I think the proof of it is the
recent BSE-related recall that we oversaw, because I think in
that particular case, we were able to conduct effectiveness
checks in a way that was certainly an improvement over what was
done back in 2002.
MEDICAL DEVICE USER FEE AND MODERNIZATION ACT
Senator Bennett. Thank you.
Dr. Crawford, you and I have visited about MDUFMA--I am
learning the acronyms and how to pronounce them--and as you
know, I was very supportive of that program, got a commitment
from OMB. I am pleased to note--and you mention it in your
testimony--how that is being followed through on.
There is speculation that we here on Capitol Hill may have
to go to a year-long continuing resolution if we cannot get the
appropriations bill through. If they left it to Senator Kohl
and me, we would get them all through. But people above our pay
grade seem to have some problem.
If there is a year-long continuing resolution, what would
be the impact on MDUFMA?
Dr. Crawford. Well, Mr. Chairman, we believe that under the
law we would be required and obligated to continue with the
user fee program. The problem would be--within the scope of my
testimony, I mentioned that we will increase the funding for
the medical device program. The President has asked for the
increase of funding to $25 million to fully fund this
particular program.
Also, within the context of the Administration's budget
request, we would seek relief from the shortfalls in fiscal
year 2003 and fiscal year 2004. That probably would not be met
under a continuing resolution, and so we would have to have
another plan in place. If the continuing resolution did not
last too long, I think it would be all right in correcting
that.
However, we would be working with OMB to try to get an
exception under the continuing resolution for this. And I can
commit to doing that. Working with them is something we always
do, but we would be particularly interested in getting this
accomplished.
I was Acting Commissioner before when we got MDUFMA passed,
and even though I was here then, I never did learn about the
acronym. And I appreciate being educated on it.
I have a real commitment to making this thing work before
this administration year is up, and I would feel pretty good
about that.
GENERIC BIOLOGICS
Senator Bennett. A final question. Let's talk about both
generic versions of biotech drugs and counterfeit drugs. The
Wall Street Journal ran an article a month or so ago: ``FDA
Takes Step Towards Allowing Generic Versions of Biotech
Drugs.'' Are you familiar with that?
Dr. Crawford. Yes, I am.
Senator Bennett. Okay. Well, it is clear from reading the
article that there is much to be learned, and it seems unusual
to me that FDA is developing scientific guidance on how to do
something when there is no legal structure by which to do it.
There are some serious intellectual property and patient safety
questions.
First, wouldn't everybody be better off if there was an
open, transparent, and science-driven process before the FDA
announces its conclusions?
Dr. Crawford. Yes, I agree. And I also agree that we will
need to pay special attention to the regulatory and legal
framework that will enable this or not enable it to take place.
When I first testified on this subject some time ago, FDA
had been in the mode of saying that generic biologics were not
possible for a number of reasons. Some of them were
pharmacological, that is, characterizing what is actually in
the biologic so that it can be transferred from one
manufacturer to another one, that is, from the pioneer to the
generic manufacturer. And the second thing was the very legal
and regulatory constraints that you mentioned.
But as the science improves, we have no recourse, Mr.
Chairman, but to be open-minded about it and to receive input
from the public and from experts in the field, as well as the
manufacturers. And although we do not know what the path is at
this point to achieve that or even if it is achievable, we are
open to suggestions.
We announced just last week a new initiative at FDA called
the Critical Path Initiative, in which we are trying to take
basic research developments and get them from the laboratory to
the bedside quicker. So we intend a large investment, as much
as we can afford, in trying to get that kind of thing done. It
used to be called technology transfer. It is now much more
complex than that and the tools are better.
I do not know what the outcome will be. All I can say to
you is that we are open to suggestions from this committee, of
course, but from all others.
COUNTERFEIT DRUGS
Senator Bennett. Thank you. And, very quickly, the FDA
earlier this year issued a report on the issue of counterfeit
drugs, the efforts of a counterfeit task force. Is that task
force report now available?
Dr. Crawford. Yes, it is, and we can make one available to
the committee. And if we haven't already done that, I
apologize, Mr. Chairman. But it will be done before very much
more time passes by, I assure you.
Senator Bennett. All right. I was going to ask you to list
the recommendations and so on, but that can be done with the
submission.
Dr. Crawford. We will submit that for the record,
separately if we may.
[The information follows:]
Combating Counterfeit Drugs: A Report of the Food and Drug
Administration
EXECUTIVE SUMMARY
The counterfeiting of currency and consumer products are common
problems that plague governments and manufacturers around the world,
but the counterfeiting of medications is a particularly insidious
practice. Drug counterfeiters not only defraud consumers, they also
deny ill patients the therapies that can alleviate suffering and save
lives. In some countries the counterfeiting of drugs is endemic--with
some patients having a better chance of getting a fake medicine than a
real one. In many more countries, counterfeit drugs are common. In the
United States, a relatively comprehensive system of laws, regulations,
and enforcement by Federal and State authorities has kept drug
counterfeiting rare, so that Americans can have a high degree of
confidence in the drugs they obtain through legal channels. In recent
years, however, the FDA has seen growing evidence of efforts by
increasingly well-organized counterfeiters backed by increasingly
sophisticated technologies and criminal operations to profit from drug
counterfeiting at the expense of American patients.
To respond to this emerging threat, Commissioner of Food and Drugs
Mark McClellan formed a Counterfeit Drug Task Force in July 2003. That
group received extensive comment from security experts, Federal and
State law enforcement officials, technology developers, manufacturers,
wholesalers, retailers, consumer groups, and the general public on a
very broad range of ideas for deterring counterfeiters. Those comments
reinforced the need for FDA and others to take action in multiple areas
to create a comprehensive system of modern protections against
counterfeit drugs. FDA discussed those ideas, and considered
alternatives and criticisms at its public meetings, to develop a
comprehensive framework for a pharmaceutical supply chain that will be
secure against modern counterfeit threats. The specific approach to
assuring that Americans are protected from counterfeit drugs includes
the following critical elements:
1. Implementation of new technologies to better protect our drug supply
Because the capabilities of counterfeiters continue to evolve
rapidly, there is no single ``magic bullet'' technology that provides
any long-term assurance of drug security. However, a combination of
rapidly improving ``track and trace'' technologies and product
authentication technologies should provide a much greater level of
security for drug products in the years ahead. Similar anti-
counterfeiting technologies are being used in other industries, and FDA
intends to facilitate their rapid development and use to keep drugs
secure against counterfeits.
a. The adoption and common use of reliable track and trace
technology is feasible by 2007, and would help secure the integrity of
the drug supply chain by providing an accurate drug ``pedigree,'' which
is a secure record documenting the drug was manufactured and
distributed under safe and secure conditions.
Modern electronic technology is rapidly approaching the State at
which it can reliably and affordably provide much greater assurances
that a drug product was manufactured safely and distributed under
conditions that did not compromise its potency. FDA has concluded that
this approach is a much more reliable direction for assuring the
legitimacy of a drug than paper recordkeeping requirements, which are
more likely to be incomplete or falsified, and that it is feasible for
use by 2007. Radiofrequency Identification (RFID) tagging of products
by manufacturers, wholesalers, and retailers appears to be the most
promising approach to reliable product tracking and tracing.
Significant feasibility studies and technology improvements are
underway to confirm that RFID will provide cost-reducing benefits in
areas such as inventory control, while also providing the ability to
track and trace the movement of every package of drugs from production
to dispensing. Most importantly, reliable RFID technology will make the
copying of medications either extremely difficult or unprofitable. FDA
is working with RFID product developers, sponsors, and participants of
RFID feasibility studies to ensure that FDA's regulations facilitate
the development and safe and secure use of this technology. FDA is also
working with other governmental agencies to coordinate activities in
this area.
b. Authentication technologies for pharmaceuticals have been
sufficiently perfected that they can now serve as a critical component
of any strategy to protect products against counterfeiting.
Authentication technologies include measures such as color shifting
inks, holograms, fingerprints, taggants, or chemical markers embedded
in a drug or its label. The use of one or more of these measures on
drugs, starting with those considered most likely to be counterfeited,
is an important part of an effective anti-counterfeiting strategy.
Because counterfeiters will adapt rapidly to any particular measure and
because the most effective measures differ by product, the most
effective use of authentication technology will vary by drug product
over time. FDA intends to clarify its policies and procedures to help
manufacturers employ and update these technologies safely and
effectively. In particular, FDA plans to publish a draft guidance on
notification procedures for making changes to products (e.g., addition
of taggants), their packaging, or their labeling, for the purpose of
encouraging timely adoption and adaptation of effective technologies
for detecting counterfeit drugs. FDA also intends to continue to
evaluate and provide information to stakeholders on forensic
technologies (e.g., use of product fingerprinting, addition of markers)
and other analytical methods that allow for rapid authentication of
drug products. FDA also plans to support the development of criteria
that contribute to counterfeiting risk, and/or the development of a
national list of drugs most likely to be counterfeited based on these
criteria, to assist stakeholders in focusing their use of anti-
counterfeiting technologies as effectively as possible.
2. Adoption of electronic track and trace technology to accomplish and
surpass the goals of the Prescription Drug Marketing Act
At the time PDMA was enacted the only way to pass on a pedigree for
drugs was to use paper, which has posed practical and administrative
challenges. RFID technology, which would provide a de facto electronic
pedigree, could surpass the intent of PDMA and do so at a lower cost.
In light of the rapid progress toward much more effective electronic
pedigrees that can be implemented within several years, FDA intends to
continue to stay its regulations regarding certain existing pedigree
requirements to allow suppliers to focus on implementing modern
effective pedigrees as quickly as possible.
3. Adoption and enforcement of strong, proven anti-counterfeiting laws
and regulations by the States
Because States license and regulate wholesale drug distributors
they have an important role in regulating the drug distribution supply
chain. The FDA is working with the National Association of Boards of
Pharmacy on its effort to develop and implement revised state model
rules for licensure of wholesale drug distributors. Such rules will
make it difficult for illegitimate wholesalers to become licensed and
transact business, thus making it easier to deter and detect channels
for counterfeit drugs. Some states have already reduced counterfeit
threats by adopting such measures. FDA will continue working with NABP
and states to facilitate adoption of the Model Rules.
4. Increased criminal penalties to deter counterfeiting and more
adequately punish those convicted
Although increased criminal penalties would not affect FDA's
regulatory framework for overseeing the U.S. drug supply, they would
provide an added deterrent to criminals who work to counterfeit our
citizens' medications. FDA has requested that the United States
Sentencing Commission amend the sentencing guidelines to increase
substantially the criminal penalties for manufacturing and distributing
counterfeit drugs and to provide for enhanced penalties based on the
level of risk to the public health involved in the offense.
5. Adoption of secure business practices by all participants in the
drug supply chain
Effective protection against counterfeit drugs includes actions by
drug producers, distributors, and dispensers to secure their business
practices such as ensuring the legitimacy of business partners and
refusing to do business with persons of unknown or dubious background,
taking steps to ensure physical security, and identifying an individual
or team in the organization with primary responsibility for ensuring
that effective security practices are implemented. The wholesalers have
already drafted a set of secure business practices and FDA will
continue to work with other major participants of the drug supply chain
to develop, implement, and disseminate such business practices, through
such steps as issuing guidance and supporting the development of
industry best practices. To help ensure secure business practices, FDA
intends to increase its inspection efforts of re-packagers whose
operating procedures place them at increased risk for the introduction
of counterfeit drugs.
6. Development of a system that helps ensure effective reporting of
counterfeit drugs to the agency and that strengthens FDA's
rapid response to such reports
If counterfeit drugs do enter the American marketplace, procedures
should be in place to recognize the hazard and alert the public quickly
and effectively. FDA plans to take new steps to encourage health
professionals to report suspected counterfeit drugs to FDA's MedWatch
system. FDA also intends to create a Counterfeit Alert Network to
provide timely and effective notification to affected health
professionals and the public whenever a counterfeit drug is identified.
7. Education of consumers and health professionals about the risks of
counterfeit drugs and how to protect against these risks
FDA will develop educational materials, including new tools on the
FDA website at www.fda.gov, new public service announcements, and new
educational partnerships with consumer and health professional
organizations, to help consumers avoid counterfeits. FDA will enhance
its educational programs for pharmacists and other health professionals
about their role in minimizing exposure to, identifying, and reporting
counterfeits.
8. Collaboration with foreign stakeholders to develop strategies to
deter and detect counterfeit drugs globally
Counterfeit drugs are a global challenge to all nations, and
criminal counterfeiting operations are increasingly operating across
national borders. FDA intends to work with the World Health
Organization, Interpol, and other international public health and law
enforcement organizations to develop and implement worldwide strategies
to combat counterfeit drugs.
The steps described in this report are intended to secure the
safety and of the U.S. drug supply, which the FDA regulates. The FDA
does not have the legal authority or resources to assure the safety and
efficacy of drugs purchased from other countries outside our domestic
drug distribution system, or from unregulated Internet sites that are
not run by pharmacies licensed and regulated by U.S. States.
A. Purpose of the Anti-Counterfeiting Initiative
The actions described in this report are based on the work of an
internal FDA Counterfeit Drug Task Force \1\, which was formed in July
2003 by Commissioner of Food and Drugs Mark McClellan, M.D., Ph.D.,
with the goals of:
---------------------------------------------------------------------------
\1\ The Task Force consists of senior agency staff from the Office
of the Commissioner (Office of Policy and Planning, Office of External
Affairs, and Office of the Chief Counsel), Office of Regulatory
Affairs, the Center for Drug Evaluation and Research, and the Center
for Biologics Evaluation and Research.
---------------------------------------------------------------------------
--Preventing the introduction of counterfeit drugs and biologics into
the U.S. drug distribution chain;
--Facilitating the identification of counterfeit drugs and biologics;
--Minimizing the risk and exposure of consumers to counterfeit drugs
and biologics; and
--Avoiding the addition of unnecessary costs to the prescription drug
distribution system, or unnecessary restrictions on lower-cost
sources of drugs.
B. Scope of the Problem
FDA believes that counterfeiting is not widespread within the
system of manufacturing and distributing pharmaceuticals legally in the
United States, as a result of an extensive system of Federal and State
regulatory oversight and steps to prevent counterfeiting undertaken by
drug manufacturers, distributors, and pharmacies. However, the agency
has recently seen an increase in counterfeiting activities as well as
increased sophistication in the methods used to introduce finished
dosage form counterfeits into the otherwise legitimate U.S. drug
distribution system. FDA counterfeit drug investigations have increased
to over 20 per year since 2000, after averaging only 5 per year through
the late 1990's. (See Figure 1--Chart of FDA investigations)
Increasingly, these investigations have involved well-organized
criminal operations that seek to introduce finished drug products that
may closely resemble legitimate drugs yet may contain only inactive
ingredients, incorrect ingredients, improper dosages, sub-potent or
super-potent ingredients, or be contaminated. Thus, drug counterfeiting
poses real public health and safety concerns today, and may pose an
even greater threat in the future if we fail to take preventative
measures now. As counterfeiters continue to seek out new technologies
to make deceptive products and introduce them into legitimate commerce,
our systems for protecting patients must respond effectively.
Although exact prevalence rates in the United States are not known,
outside the U.S. drug counterfeiting is known to be widespread and
affect both developing and developed countries. In some countries more
than half of the drug supply may consist of counterfeit drugs. For
example, recent reports have detailed that more than 50 percent of
anti-malarials in Africa are believed to be counterfeit. In virtually
all countries, counterfeit drug operations have been uncovered in
recent years.
C. What is in this Report
The body of this report contains a range of findings that have
broad support from industry stakeholders and the public to identify and
address the vulnerabilities in the U.S. drug distribution system to
counterfeit drugs.
This report is based on the potential options discussed in the Task
Force's Interim Report, the comments FDA received in response to that
report, our internal discussions, and on information gathered and
reviewed by the Task Force including:
--Meetings with government agencies, manufacturers, wholesalers,
retailers, professional and trade associations, standard-
setting organizations, consumer groups, and manufacturers of
anti-counterfeiting measures;
--Reviewing reports prepared by, or on behalf of, Federal and State
governments;
--Sponsoring a public meeting where 72 presentations were made
--Sponsoring a technology forum which included 54 exhibits
--Reviewing public comments to the anti-counterfeiting initiative
docket
--Site visits to manufacturing facilities, wholesale distribution
centers, retailers, radio-frequency identification (RFID)
laboratories and pilot facilities;
--Attendance at stakeholder task force meetings and industry RFID
feasibility study meetings
--Meetings with academic and industry experts
Appendix A contains the Counterfeit Alert Network Co-sponsorship
agreement. See www.fda.gov/oc/initiatives/counterfeit/ for background
information that was included in the Task Force's Interim Report
(released on October 2, 2003) as well as a detailed discussion of the
comments FDA received. Appendix B contains a more detailed discussion
of the comments FDA received and considered in developing the final
report.
The FDA is grateful for the input and universal support, not only
with regard to the creation of the task force, but also with regard to
the need for securing the Nation's drug supply.
D. Securing our Nation's Drug Supply
To secure the U.S. drug supply chain, there are several areas that
deserve attention, including the areas of technology, business
practices, legislation, regulation, public awareness and education,
creation of an alert network, and international cooperation.
1. TECHNOLOGY
a. Unit of Use Packaging
(1) What FDA sought comment on:
Whether to package all finished dosage form drugs in unit of use
packaging as appropriate for the particular product (e.g., tablet,
multi-dose vial) at the point of manufacture?
(2) What the comments said:
Comments cited a large number of benefits, including eliminating
the need for re-packaging and improved patient compliance, as well as a
large number of costs, including those associated with shifting
production from bulk packaging. The cost hurdle to counterfeiters,
created by unit of use packaging, was said not to be high enough for it
to be effective as a stand-alone anti-counterfeiting measure. A
detailed discussion of the comments is in Appendix B.
(3) Discussion:
Although single unit containers (e.g., blister packs) usually come
to mind, unit of use packaging is any container closure system designed
to hold a specific quantity of drug product for a specific use and
dispensed to a patient without any modification except for the addition
of appropriate labeling.
Unit of use packaging does not create a sufficiently high level of
security to justify its use as a stand-alone anti-counterfeiting
measure. However, because of its many other benefits, which may vary on
a product specific basis (e.g., tablets, liquid forms), manufacturer
initiated cost-benefit analyses of particular products, starting with
newly approved products and products that are likely to be
counterfeited, are likely to show that unit of use packaging could be
effective as one layer in a multi-layered anti-counterfeiting strategy.
(4) FDA Conclusions:
Unit of use packaging can be beneficial in fighting counterfeit
drugs.
--It would be beneficial for all manufacturers and re-packagers to
analyze the costs and benefits of using unit of use packaging
for each product, starting with newly approved products and
products that are likely to be counterfeited, and to consider
implementing unit of use packaging for products where the
benefits are equal to or outweigh the costs;
--Unit of use packaging can be helpful, but only as one layer in a
multi-layered anti-counterfeiting strategy;
--FDA intends to encourage adoption of unit of use packaging by:
inviting stakeholders and other interested individuals and
organizations to submit research on the relative costs and
benefits of unit of use packaging to assist FDA in developing
future policy; and encouraging standard setting bodies to
develop standards for unit of use packaging with the goal of
reducing its costs (e.g., in areas such as size, shape, and
pill organization).
b. Tamper Evident Packaging
(1) What FDA sought comment on:
Whether to use tamper evident packaging from the point of
manufacture, for all dosage forms, active pharmaceutical ingredients
(APIs), and bulk chemicals?
(2) What the comments said:
The comments on tamper evident packaging mirrored the comments on
unit of use packaging.
(3) Discussion:
Decisions to employ tamper evident packaging on prescription drug
containers as an anti-counterfeiting measure require a product specific
cost-benefit analysis. As with unit of use packaging, FDA does not
believe that tamper evident packaging presents a high enough hurdle for
counterfeiters to make it effective as a stand-alone anti-
counterfeiting measure.
(4) FDA Conclusions:
Tamper evident packaging may be beneficial in fighting
counterfeiting of prescription drugs.
--It would be beneficial for manufacturers and re-packagers to
consider using tamper evident packaging for prescription
product containers, starting with products likely to be
counterfeited or newly approved products, where the benefits
are equal to or outweigh the costs;
--Tamper evident packing can be helpful, but only as one layer in a
multi-layered anti-counterfeiting strategy.
c. Authentication Technology
(1) What FDA sought comment on:
Whether to incorporate at least two types of anti-counterfeiting
technologies into the packaging and labeling of all drugs, at the point
of manufacture, with at least one of those technologies being covert
(i.e., not made public, and requiring special equipment or knowledge
for detection) starting with those products at high risk of being
counterfeited and where the introduction of counterfeit product poses a
serious health risk;
Whether to incorporate a taggant, chemical marker, or other unique
characteristics into the manufacturing process of all drugs that is
only identifiable with the use of sophisticated analytic techniques
starting with those products at high risk of being counterfeited and
where the introduction of counterfeit product poses a serious health
risk; and
Whether to issue FDA guidances concerning the appropriate use of
anti-counterfeiting technologies and the application and review process
for labeling and packaging changes or product changes such as
incorporation of taggants, chemical markers, or other unique
characteristics into the product for the purpose of product
authentication.
(2) What the comments said:
The comments stressed that there was no ``silver bullet'' anti-
counterfeiting technology because sophisticated, well-financed
counterfeiters can defeat any anti-counterfeiting measure. Therefore,
the best strategy is to use multiple, periodically changing,
authentication measures on a product specific basis after doing a risk
analysis that takes into account the risk that the product will be
counterfeited and the public health risk if the product is
counterfeited.
Given the rapid developments in anti-counterfeiting technology and
the dangers of aiding counterfeiters by locking in or requiring certain
technologies, most comments stressed that the FDA should not mandate
the use of specific anti-counterfeiting technologies.
FDA issuance of guidance concerning the agency's application and
notification policies and procedures related to incorporating anti-
counterfeiting measures into products (e.g., taggants), or labeling and
packaging (e.g., inks, holograms) was universally supported.
A detailed discussion of the comments is in Appendix B.
(3) Discussion:
FDA agrees that the danger of unwittingly assisting counterfeiters
and stifling technologic development outweigh the benefits that would
accrue if it were to mandate the use of a specific authentication
technology at this time. Furthermore, the decision to deploy
authentication technologies is best made by the manufacturer, based on
a product specific risk-benefit analysis that, in the future, should
take into account whether mass serialization and radio-frequency
identification technology (see below) is being used for tracking and
tracing the drug.
However, due to the high costs and technical barriers that
authentication technologies create for counterfeiters, their use is a
critical component of any effective multi-layered anti-counterfeiting
strategy, especially for products that are likely to be counterfeited.
Therefore, FDA believes that an appropriate role for it is to
facilitate the use of authentication technologies by reducing any
regulatory hurdles that may exist relating to their use.
(4) FDA Conclusions:
Existing authentication technologies have been sufficiently
perfected they can now serve as a critical component of any strategy to
protect products against counterfeiting.
--The use by manufacturers and re-packagers of one or more
authentication technologies on their products, particularly
those likely to be counterfeited, would protect the public
health and diminish counterfeiting;
--To facilitate the use of authentication technologies on existing
products, FDA plans to publish a draft guidance on notification
procedures for making changes to products (e.g., addition of
taggants) their packaging, or their labeling for the purpose of
deterring and detecting counterfeit drugs;
--FDA plans to continue to evaluate and disseminate information to
stakeholders on developing forensic technologies (e.g., use of
product fingerprinting, addition of markers) and other
analytical methods that allow for rapid authentication of drug
products.
d. Identification of Products likely to be counterfeited
(1) What FDA sought comment on:
Are all products at high risk for being counterfeited?
How can products at high risk for being counterfeited be
identified?
What criteria should be used to determine if a product is at high
risk for being counterfeited?
(2) What the comments said:
Although a few comments suggested that all products were at high
risk for being counterfeited, most of the comments FDA received
supported the idea of developing criteria by which stakeholders could
determine which products are likely to be counterfeited and/or
developing a national list of products likely to be counterfeited based
on these criteria. There was general agreement that the existence of
state specific lists, each with its own regulatory requirements, could
inhibit commerce and adversely affect the availability of drugs. FDA
notes that the State of Florida has already published a list of
``specified products'' (i.e., a list of drugs most likely to be
counterfeited) that is being used to implement state pedigree
requirements. A detailed discussion of the comments is in Appendix B.
(3) Discussion:
Due to the large number of drugs with the potential to be
counterfeited, FDA does not believe it is possible to create a
comprehensive list of all such drugs. However, FDA does believe that a
national list of those drugs most likely to be counterfeited and/or a
set of criteria to use for determining those drugs would be useful for
stakeholders to use at their discretion. Uses could include:
--Assisting manufacturers and re-packagers in making decisions
whether to use authentication technologies and unit of use
packaging;
--Assisting wholesalers in developing purchasing policies and
allocating resources for detecting counterfeits;
--Assisting retailers in targeting certain drugs for authentication
and patient education prior to dispensing;
--Assisting states in implementing regulatory requirements;
--Assisting stakeholders in developing migratory paths to adoption of
mass serialization and electronic track and trace technology.
FDA strongly supports the development of such a set of criteria, or
a list based on these criteria, that has the support and participation
of all stakeholders. Regular input from interested parties as well as
the ability to add or delete drugs from the list on short notice are
important parts of the process.
FDA believes that members of regulated industry are better
positioned at this time than FDA to develop a process for creating,
maintaining, and updating such a list (and/or set of criteria).
(4) FDA Conclusions:
FDA has concluded that there would be great value in the creation
of a national list of drugs most likely to be counterfeited based on
factors that are likely to contribute to counterfeiting risk.
--FDA intends to encourage stakeholders and standards setting
organizations to work together to create a national list of
drugs most likely to be counterfeited, based on an assessment
of criteria for determining counterfeit risk;
--The best result would be achieved if all stakeholders, including
FDA, and other interested parties participate in developing a
list, or criteria for determining, drugs most likely to be
counterfeited;
--Any such list, and/or criteria, would be most effective if made
publicly available to all stakeholders.
FDA is aware of only one national list of drugs most likely to be
counterfeited. The list was developed by the National Association of
Boards of Pharmacy and is available at www.nabp.org.
e. Radio-frequency Identification (RFID) Technology
(1) What FDA sought comment on:
Whether a pedigree for all drug products can be achieved by phasing
in track and trace technology (i.e., electronic pedigree) starting at a
case and pallet level for products likely to be counterfeited and
progressively including all products at the case, pallet, and package
level; and
Whether, as an interim measure, prior to widespread adoption of
track and trace technology all drugs and biologics likely to be
counterfeited should be tracked and traced either by limiting the
number of transactions of the product or by using available track and
trace technology, identifying the drug at the case and pallet level,
and preferably at the product level, throughout the distribution
system.
(2) What the comments said:
There was universal support for the adoption of electronic track
and trace technology. RFID was cited as being the technology with the
strongest potential for securing the supply chain but that it was not
ready for widespread commercial use with pharmaceutical products. Many
costs, potential benefits, and unresolved issues related to RFID were
cited. The potential benefits included the ability to control inventory
and conduct rapid, efficient recalls, while costs that could hinder the
adoption of RFID included purchase of tags and other hardware,
integration into existing information systems, and compliance with
regulatory requirements (e.g., labeling, electronic records). Important
unresolved issues included the need to develop standards and business
rules for RFID, the need to address database management issues, and the
need to determine the effect of RFID on product quality.
FDA was also informed that some companies are planning feasibility
studies concerning business uses of RFID for early this year and that
other activities related to creating standards, business rules, and
migratory pathways for RFID are also ongoing. A detailed discussion of
these activities and other comments concerning RFID is in Appendix B.
(3) Discussion
Use of mass serialization to uniquely identify all drug products
intended for use in the United States is the single most powerful tool
available to secure the U.S. drug supply. Mass serialization involves
assigning a unique number (the electronic product code or EPC) to each
pallet, case, and package of drugs and then using that number to record
information about all transactions involving the product, thus
providing an electronic pedigree from the point of manufacture to the
point of dispensing. This unique number would allow each drug purchaser
to immediately determine a drug's authenticity, where it was intended
for sale, and whether it was previously dispensed.
Although there is general agreement that widespread use of mass
serialization is inevitable, several important issues remain
unresolved, including the migratory paths that participants in the drug
distribution system will follow as they begin to serialize their
products, and the most likely timeline for widespread commercial use.
It currently appears that the technology most likely to bring mass
serialization into widespread commercial use by the pharmaceutical
industry is RFID, although two-dimensional bar codes may be used for
some products. RFID technology includes not only the silicon tags
containing the EPC, but also antennas, tag readers, and information
systems that allow all users to identify each package of drugs and its
associated data. This data can be used not only to authenticate drugs
but also to manage inventory, conduct rapid, targeted recalls, prevent
diversion, and ensure correct dispensing of prescriptions.
Acquiring and integrating RFID technology into current
manufacturing, distribution, and retailing processes will require
considerable planning, experience, and investment of resources.
Currently, some manufacturers, wholesalers, and retailers are
developing business plans and testing mass serialization using RFID
while others are taking a wait and see approach. Due to rapid
technologic advancements, the lack of significant market place
experience with it in the pharmaceutical supply chain, each participant
is best situated to determine his optimal paths to adopting it.
Therefore, FDA has identified near term actions, described below,
for it to take in order to facilitate the performance of mass
serialization feasibility studies using RFID, and to assist
stakeholders as they migrate towards the use of RFID technology.
In the long term, after there is significant market place
experience with RFID, FDA plans to propose or clarify, as necessary and
appropriate, policies and regulatory requirements relating to the use
of RFID. Labeling, electronic records, product quality, and Current
Good Manufacturing Practices (cGMP) requirements are issues that have
arisen in connection with RFID. However, regulatory or policy
determinations regarding these, or other, issues should not be made
until they can be informed by sufficient data and significant
marketplace experience with RFID. FDA has also identified a series of
actions, discussed below, that would help industry stakeholders and
standard-setting organizations achieve this goal.
Lastly, stakeholders will need to ensure that they comply with the
patient privacy protections provided by the Health Insurance
Portability and Accountability Act as they implement use of RFID
technology.
(4) FDA Conclusions:
The adoption and common use of RFID as the standard track and trace
technology, which is feasible in 2007, would provide better protection.
--Due to industry's current initiatives, mass serialization and RFID
technology is likely to be adopted according to the following
timeline:
January--December 2004
--Performance of mass serialization feasibility studies using RFID on
pallets, cases, and packages of pharmaceuticals;
January--December 2005
--Mass serialization of some pallets and cases of pharmaceuticals
likely to be counterfeited;
--Mass serialization of some packages of pharmaceuticals likely to be
counterfeited; and
--Acquisition and use of RFID technology (i.e., ability to read and
use the information contained in RFID tags and the associated
database) by some manufacturers, large wholesalers, some large
chain drug stores, and some hospitals.
January--December 2006
--Mass serialization of most pallets and cases of pharmaceuticals
likely to be counterfeited and some pallets and cases of other
pharmaceuticals;
--Mass serialization of most packages of pharmaceuticals likely to be
counterfeited; and
--Acquisition and use of RFID technology (i.e., ability to read and
use the information contained in RFID tags and the associated
database) by most manufacturers, most wholesalers, most chain
drug stores, most hospitals, and some small retailers.
January--December 2007
--Mass serialization of all pallets and cases of pharmaceuticals;
--Mass serialization of most packages of pharmaceuticals; and
--Acquisition and use of RFID technology (i.e., ability to read and
use the information contained in RFID tags and the associated
database) by all manufacturers, all wholesalers, all chain drug
stores, all hospitals, and most small retailers.
--FDA plans to assist, to the extent necessary and appropriate, in
facilitating the rapid, widespread adoption of RFID in the drug
distribution system by working with stakeholders in the
following areas:
--Addressing any regulatory and policy issues related to the
performance of feasibility studies;
--Addressing any regulatory and policy issues relating to the
notification requirements associated with implementation of
RFID;
--Addressing any product quality concerns and data issues related
to the performance of feasibility studies;
--Reviewing protocols for feasibility studies;
--Working with other governmental agencies to coordinate
activities;
--Encouraging stakeholders to convene meetings of supply chain
participants to identify, discuss, and propose solutions to
technical, business, and policy issues related to the use
of RFID technology in the pharmaceutical distribution
system; and
--Exploring the need for any other processes and venues that might
be needed to assist stakeholders as they migrate towards
the use of RFID technology.
--FDA intends to regularly review the pace at which RFID is being
adopted in the U.S. drug distribution system;
--FDA plans to publish or clarify, as appropriate, regulatory
requirements, policy guidance, and product quality testing
requirements related to the use of RFID after sufficient data
and marketplace experience with RFID are available to
adequately inform our decision-making; and
--FDA intends to consider taking further steps to facilitate the
adoption of mass serialization.
1. Business steps for industry
Each industry stakeholder interested in implementing RFID would
benefit from the following steps:
--Create an internal team focused on the adoption of mass
serialization and use of RFID technology;
--Perform internal feasibility studies to gain experience with mass
serialization and RFID technology and to identify internal
business issues requiring resolution;
--Perform external pilot studies with stakeholders across the supply
chain to gain experience using mass serialization and RFID and
to identify opportunities, barriers and external business
issues associated with them;
--Develop policy and a business case for the use of mass
serialization and RFID;
--Cooperate and work with other stakeholders and government agencies
to develop infrastructure and information systems to use with
mass serialization of pallets, cases, and packages of drugs;
--Participate on standard setting groups developing technical
standards and business rules for use of mass serialization and
RFID;
--Work with government agencies and other members of the supply chain
to identify and address regulatory and economic issues that
could delay the adoption of mass serialization and RFID; and
--Educate other members of the supply chain and government agencies
about mass serialization and RFID.
To the extent possible, it would be most useful for interested
firms to perform these actions concurrently. For example, standards
development requires knowledge gained from feasibility studies in order
to move forward, and vice versa.
2. Standards Setting Issues
Any effort to develop standards for mass serialization of pallets,
cases, and packages would be most effective if it addressed the
following issues:
--Minimum Information Requirements for the serial number--in the case
of RFID tags this means containing a mass serialization code
that uniquely identifies the object to which it is attached
(e.g., minimum of 96 bits of information);
--Communication protocol standards--in the case of RFID this means
standard protocols for interrogating and reading tags;
--Reader Requirements--Readers of mass serialization codes should be
interoperable (e.g., readers must use protocols that allow them
to read multiple classes of tags or bar codes, as applicable)
and should be able to automatically upgrade software over an
information network;
--Pedigree requirements--this means that databases containing
transaction information should be compatible (e.g., format,
mark-up language);
--Information Network Requirements
--1. Database Structure (e.g., centralized vs. distributive)
--2. Data ownership
--3. Data access (to meet business, track and trace, and recall
needs)
--4. Data Access controls to assure information security;
--Software Requirements--all applications should be compatible and
compliant to assure global interoperability; and
--Best use of Frequencies--(e.g., 13.56 megahertz on packages and 915
megahertz on cases and pallets due to interference and read
range issues).
2. REGULATORY INITIATIVES AND STATE MODEL RULES
All levels of government, in addition to the private sector, should
take responsibility for ensuring the safety and security of the U.S.
drug distribution system. Each level has a role in deterring and
preventing the introduction of counterfeit drugs into the Nation's drug
supply chain. To complement and build on the technology measures
described above, regulatory and legislative steps at all levels of
government may be necessary. At the Federal level, FDA is taking steps
to meet the objectives of the Prescription Drug Marketing Act (PDMA),
which is intended to address vulnerabilities in the U.S. drug
distribution system. At the State level, it would be beneficial for
states to strengthen their provisions governing wholesale distribution,
as described below in the revised Model Rules for Licensure of
Wholesale Distributors. And, FDA plans to pursue increased criminal
penalties for counterfeiting in the United States Sentencing
Commission's sentencing guidelines.
A. Prescription Drug Marketing Act (PDMA)
(1) What FDA sought comment on:
What are the most effective ways to achieve the goals of PDMA and,
given recent or impending advances in technology discuss the
feasibility of using an electronic pedigree in lieu of a paper
pedigree?
(2) What the Comments Said:
Many of the comments that discussed PDMA acknowledged the
limitations and concerns of full implementation of PDMA. However, many
comments also supported the use of paper pedigrees for their deterrent
value and as a means to verify prior sales through due diligence. A
risk-based approach to implementing PDMA, which focuses on those drugs
that are at high risk of being counterfeited, was suggested, as well as
maintaining a full pedigree that documents all sales and transactions
back to the manufacturer for drugs and high risk. One comment suggested
an interim solution of ``one forward, one back'' pedigree for high-risk
drugs. However, a number of the comments noted the high cost and
incomplete protection provided by such paper requirements, especially
as a general interim measure; by the time these costly requirements
were phased in, they could be replaced by a more modern system. A
majority of the comments supported the eventual use of an electronic
pedigree for all drug products in the supply chain and indicated that
an electronic pedigree should be considered as a modern solution to
fulfilling and exceeding the PDMA goals, and urged FDA to take steps to
help achieve a reliable pedigree solution as quickly as possible. As
noted above, FDA believes that substantial progress toward a more cost-
effective solution than incomplete and costly paper pedigrees is
possible within the next several years. A detailed discussion of the
comments is in Appendix B.
(3) Discussion:
FDA has worked closely with affected parties to identify and
resolve concerns related to the implementation of the pedigree
requirements of the PDMA. Through the various public comment
opportunities over the years, the agency has heard mixed reviews about
the value, utility, and difficulty of implementing a paper pedigree
that identifies each prior sale, purchase, or trade of such drug. The
comments received in response to questions raised in the Interim Report
confirm that these concerns continue.
FDA is encouraged by the enthusiasm and interest that stakeholders
in the U.S. drug supply chain have expressed toward the adoption of
sophisticated track and trace technologies that are more reliable than
paper pedigrees. As discussed above, there appears to be movement by
industry toward implementation of electronic track and trace capability
in 2007. When this is in place, RFID should be able to function as a de
facto electronic pedigree that follows the product from the place of
manufacturer through the U.S. drug supply chain to the final dispenser.
If developed properly, this electronic pedigree could be used to meet
the statutory requirement in 21 U.S.C. 353(e)(1)(A) to provide a
pedigree under certain circumstances.
In the interim, until the electronic pedigree is in widespread use,
voluntary adoption of multi-layer strategies and measures discussed in
this report would reduce the likelihood that counterfeit drugs will be
introduced into the U.S. drug distribution system. These measures,
combined with RFID technology, can help provide effective long-term
protections that will minimize the number of counterfeit drug products
in the United States distribution system.
As discussed in a notice published in the Federal Register in
conjunction with the publication of this report, FDA plans to continue
to stay the implementation of 21 CFR 203.3(u) and 203.50. However,
the agency intends to continue to reassess the stay of implementation
on an annual basis. The agency will monitor closely whether progress
toward the implementation of electronic pedigrees continues at the
rapid pace evident in this task force analysis. Our plan to reassess
the stay annually is part of the agency's strong commitment to see that
effective product tracing is implemented as quickly as possible. The
agency also encourages wholesalers to provide pedigree information that
documents the prior history of a drug product, particularly for drugs
most likely to be counterfeited, even when the passing of such a
pedigree is not required by the Act. The suggestion from the comments
that there be a one-forward, one-back pedigree for high-risk drugs in
the interim, until an electronic pedigree is uniformly adopted, may
have merit. However, FDA believes that Congress would have to amend
section 503(e) of the Act if such a system is to become a requirement.
(4) FDA Conclusion:
Adoption of electronic track and trace technology would help
stakeholders meet and surpass the goals of PDMA. Therefore, FDA intends
to focus its efforts on facilitating industry adoption of this
technology within the next few years.
--To allow stakeholders to continue to move toward the goal of an
electronic pedigree, FDA intends to delay the effective date of
21 CFR 203.3(u) (definition of ADR criterion) and 203.50
(specific requirements regarding pedigree) until December 2006;
--By December 2006, FDA intends to determine whether to further stay
the regulations or take other appropriate regulatory action.
B. Model Rules for Wholesale Distributor Licensing Strengthened
(1) What FDA sought comment on:
How should the NABP Model Rules for Licensure of Wholesale
Distributors (Model Rules) be updated?
Whether FDA regulations at 21 CFR Part 205, should be updated, as
appropriate, to make it consistent with updates to the NABP Model
Rules?
(2) What the Comments Said:
The comments overwhelmingly supported strengthening state
requirements governing the licensure and oversight of wholesale
distributors. Many comments cited the systemic weaknesses in the
oversight of the wholesale drug industry and that existing inspection
and due diligence processes are often insufficient to detect criminal
activity. Some comments noted the positive steps already taken by some
states, such as Florida, toward more effective regulation of wholesale
distributors. For example, Florida has implemented more stringent
requirements for licensure, stronger penalties, and due diligence
requirements. Most comments stated that the full adoption of revised
NABP model rules would improve security nationwide, and that stricter
uniform standards were desirable across all 50 states so as not to
create 50 different sets of criteria and rules for licensing. FDA was
encouraged to revisit the current minimum standards requirements
described in 21 CFR Part 205 to assess whether a ``Federal floor'' for
states would enhance or diminish state efforts to meet the NABP
recommendations. A detailed discussion of the comments is in Appendix
B.
(3) Discussion
FDA is pleased to recognize the recent efforts by NABP in revising
the Model Rules. The revised Model Rules significantly strengthen the
requirements for licensure, as well as put in place or fortify
requirements that will ensure and protect the integrity of drug
products as they travel through the U.S. drug supply chain from the
manufacturer to the consumer.
NABP sought comment from FDA, as well as interested stakeholders,
in developing the revised Model Rules. The comments that FDA received
as part of the anti-counterfeiting initiative have been discussed with
NABP.
The revision of the Model Rules sought to enhance the protections
included in the original version of the Model Rules and close existing
gaps. The table below contains highlights of the revised Model Rules:
NABP is taking steps to facilitate implementation of the revised
Model Rules, including: (1) publishing a list of susceptible products
and calling for a coalition of national organizations to develop a
process to maintain and update the list; (2) serving as bondholder for
wholesalers in order to consolidate the need to hold a bond in all
states where a wholesaler may do business; and (3) establishing a
clearinghouse that will list wholesalers who receive accreditation by
NABP and who have passed an inspection by their newly created
inspection service, which NABP will conduct in partnership with the
states. FDA supports NABP's efforts to facilitate adoption and
implementation of the enhanced Model Rules.
Counterfeiting is a problem that is not isolated to one state. If a
state strengthens its licensing requirements while a bordering state
does not, the counterfeiters and illegitimate wholesalers will likely
move into the bordering state. Widespread state adoption,
implementation, and enforcement of the Model Rules would help combat
counterfeiting.
(4) FDA Conclusion:
Because States have an important role in regulating drug
distributors, adopting and enforcing stronger state anti-counterfeiting
requirements would help in our collective effort to detect and deter
counterfeiting.
--FDA strongly supports the efforts taken by NABP to enhance the
Model Rules and other actions taken to facilitate
implementation;
--FDA supports all efforts by the States to adopt these Model Rules.
Adoption of the model rules by all States would have a
significant impact on protecting the Nation's drug supply by
ensuring that all persons and entities involved in wholesale
distribution of drug products meet stringent licensing criteria
and maintained high ethical and business standards;
--FDA encourages these state actions and the agency intends to
explore whether and to what extent to revise the current
minimum standards for state licensing of wholesale prescription
drug distributors in 21 CFR Part 205.
C. Higher Penalties for Drug Counterfeiting
(1) What FDA sought comment on:
Discuss the advantages and disadvantages of increased penalties for
counterfeiting drugs
(2) What the Comments Said:
There was overwhelming support and unanimous agreement that higher
penalties for counterfeiting are needed.
(3) Discussion:
FDA agrees with comments suggesting that higher penalties deter
drug counterfeiters.
Current sentencing guidelines for counterfeit drug distribution are
not commensurate with the public health threat posed by this criminal
activity and strengthening the guidelines should help deter such
conduct in the first instance. Despite the significant threat to public
health posed by counterfeit drug products, current law provides
penalties far below the level of some purely economic crimes. For
example, counterfeiting a prescription drug label (bearing a registered
trademark) is punishable by up to 10 years in prison, while
counterfeiting the drug itself is punishable by a maximum of only 3
years in prison. Therefore, FDA plans to continue to pursue its request
that the United States Sentencing Commission consider amending the
sentencing guidelines to substantially increase criminal penalties for
manufacturing and distributing counterfeit drug products and to
specifically provide for enhanced penalties based on the level of risk
to the public health involved in the offense.
(4) FDA Conclusion
FDA intends to pursue its request that the United States Sentencing
Commission consider amending the sentencing guidelines to increase
substantially criminal penalties for manufacturing and distributing
counterfeit drugs and to provide specifically for enhanced penalties
based on the level of risk to the public health involved in the
offense.
3. Creation of a Counterfeit Alert Network for Information
Dissemination and Education
(1) What FDA sought comment on:
Whether a counterfeit alert network should be created through use
of existing, or newly developed, communication tools, that allow
reception, dissemination, and sharing of information about counterfeit
drugs in a timely manner;
What are the capabilities of current communication network, what a
communication network should have in order to part of a counterfeit
alert network, and costs associated with developing or adapting current
systems.
(2) What the Comments Said:
The agency received many comments supporting the creation of a
counterfeit alert network. Most of the comments suggested that the
agency take steps to build on existing networks and several comments
offered their organizations' distribution lists or network as a conduit
for the counterfeit alert network. The agency was advised that the
counterfeit alert network should not be overused in order to avoid
alert ``fatigue,'' which could create indifference or doubt regarding
the importance of the messages. The agency was encouraged to consider
cost-effective public/private partnerships to design communication
strategies and facilitate efforts to standardize anti-counterfeit
communications and to augment and coordinate communication systems. A
detailed discussion of the comments is in Appendix B.
(3) Discussion:
The FDA is committed to informing the public, particularly
consumers, pharmacists, other health professionals, wholesalers, and
others involved in the U.S. drug distribution system, about counterfeit
drug incidents in a timely manner. FDA is also committed to educating
them about ways to identify and prevent counterfeits from entering into
this system. To increase awareness of counterfeit drugs and safeguard
the Nations drug supply, FDA is creating a network of national
organizations, consumer groups, and industry representatives to deliver
time-sensitive messages and information about specific counterfeit
incidents and educational messages about counterfeits in general. The
network is called the ``Counterfeit Alert Network.''
Partners in the Counterfeit Alert Network will be required to enter
into a co-sponsorship agreement with FDA that lays out roles and
responsibilities. Partners agree to disseminate the FDA time-sensitive
messages to their members/subscribers/readers in the manner outlined in
the co-sponsorship agreement, to partner in delivering educational
messages, and in the case of health professionals, provide a link to
the MedWatch website to report suspect counterfeits. A copy of the co-
sponsorship agreement can be found in Appendix C.
The agency plans to maintain a list (as it does now) of additional
health professional, consumer, and industry organizations, and media
outlets to notify when an actual counterfeit incident is confirmed and
what steps to take to minimize risks and remove the product from the
U.S. distribution system. This will help ensure the widest possible
distribution to the appropriate audience's.
FDA met with consumer groups, pharmacy groups, and physician groups
to determine the type of information that would be most useful to
receive from FDA in the event of a counterfeiting incident. FDA intends
to create templates for standardizing the format and content of health
professional and consumer information in the event of a counterfeit
incident that can guide outreach efforts in an efficient manner, while
assuring the flexibility FDA needs to formulate the messages.
(4) FDA Conclusions:
FDA will create a Counterfeit Alert Network that links together and
enhances existing counterfeit notification systems, to provide for
timely and effective notification to health professionals and consumers
of a counterfeit event.
--FDA is creating a counterfeit alert network to partner with
national healthcare organizations, consumer groups, and
industry representatives to deliver time-sensitive messages
about specific counterfeit incidents and educational messages
about counterfeits in general, and information about how and
when to report suspect counterfeit drug products;
--FDA plans to develop and execute multi-media informational
strategies for specific audiences to ensure that the messages
reach the largest number of interested people possible through
the network;
--FDA plans to develop internal guidelines for the informational
contents of outgoing FDA messages that will bemost useful to
communicate a counterfeiting incident to individual stakeholder
groups.
4. Health Professional Reporting Encouraged via MedWatch
(1) What FDA sought comment on:
Whether FDA's MedWatch system should be used as a tool to receive
and disseminate timely information about counterfeit drug products,
especially identification of suspect drug product?
(2) What the Comments Said:
Most of the comments supported the use of MedWatch for reporting
suspect counterfeit drugs. These comments stated that health
professionals are familiar with MedWatch and it would be too cumbersome
and expensive to develop a new system, which people would have to be
educated to use. One comment believed that reports of possible
counterfeiting should be separate from MedWatch because it is not
designed for criminal activity reporting and oversight. Another comment
stated that because MedWatch is a voluntary reporting system, there
could be significant under-reporting.
(3) Discussion:
For nearly 10 years, MedWatch has been FDA's reporting portal for
adverse drug reactions and ``product problems.'' These include problems
with product quality that may occur during manufacturing, shipping, or
storage, such as product contamination, defective components, poor
packaging or product mix-up, questionable stability, and labeling
concerns. If a pharmacist or consumer notices an unexplained change in
size, shape, color, or taste of their dosage form, or notices that the
coating is chipped or tablets are cracked, or that the drug is not
working like it usually does, they may consider that to be a problem
with their product. These are also characteristics that could occur if
the product was a counterfeit drug. In fact, in the past, FDA has
received some reports of suspect counterfeit drugs through MedWatch.
If a consumer suspects that his or her medicine is counterfeit,
they are encouraged to contact the pharmacist who dispensed the drug,
rather than report directly to MedWatch. The pharmacist may have
information from the manufacturer that the shape, color, or taste of
the product may have changed, or other information that may be helpful
in determining if the product may be counterfeit or if the suspicious
characteristic of the product or its packaging is expected.
The use of MedWatch is for health professional reporting. This
would not affect the agreement with the Pharmaceutical Research and
Manufacturers of America (PhRMA), whereby manufacturers have agreed to
report counterfeits of their products to FDA's Office of Criminal
Investigations, within 5 days of becoming aware of the counterfeit.
FDA has streamlined procedures for processing reports of suspect
counterfeit drugs. The MedWatch Central Triage Unit (CTU) standard
operating procedures (SOPs) have been amended to include ``suspect
counterfeit product'' as a category of reports, so the CTU will know
where to send the report for expedited processing.
It is easy and convenient to file a report with MedWatch. All
reports are confidential and the identity of the reporter is not
disclosed. FDA encourages reporting using the online reporting form
that can be found at www.fda.gov/medwatch.
(4) FDA Conclusion:
FDA plans to encourage and educate health professionals to report
suspect counterfeit drugs to MedWatch.
--FDA plans to encourage and educate health professionals to report
suspect counterfeit drugs to MedWatch as an overarching
mechanism to report such information;
--FDA plans to change the instructions for the MedWatch reporting
form, both paper and online versions, so reporters will know
how and when to report suspect counterfeits. Additionally, FDA
plans to amend the MedWatch website description of product
problems to include suspect counterfeits.
5. Secure Business Practices
(1) What FDA sought comment on:
Whether to develop sets of ``secure business practices'' which
would be voluntarily adopted by manufacturers, wholesalers, re-
packagers, and pharmacies?
Whether stakeholders should designate an individual or team to
coordinate security and anti-counterfeiting activities?
Issuance of an FDA guidance document concerning physical site
security and supply chain integrity?
There was no proposal specific to re-packagers. However, FDA
identified independent re-packaging operations, through several ongoing
investigations, as a point of entry for counterfeit drugs into the
distribution system, and some of the proposed options would have had
the effect of limiting those re-packaging operations.
(2) What the comments said:
The comments supported the need for development of secure business
practices by all stakeholders in the drug distribution chain because
each stakeholder has a responsibility to ensure that pharmaceutical
products are authentic. The comments suggested that such practices
include ensuring the legitimacy of business partners and refusing to do
business with persons of unknown or dubious background, taking steps to
ensure physical security, and identifying an individual or team in the
organization with primary responsibility for ensuring that effective
security practices are implemented.
It is critically important that the physical facilities involved in
the production, distribution, or dispensing of pharmaceuticals are
secure against counterfeit drugs. In the area of food safety, our
Center for Food Safety and Nutrition (CFSAN) has issued guidance for
the food industry on preventive measures that establishments may take
to minimize the risk that products under their control will be subject
to tampering or other malicious, criminal, or terrorist actions.
Although it was acknowledged that re-packagers were required to
comply with Current Good Manufacturing Practices as set forth in 21 CFR
210 and 21 CFR 211, due to the involvement of re-packaging operations
in some recent counterfeiting schemes, FDA was asked to provide more
oversight and to conduct more frequent inspections of re-packagers.
See Appendix B for a detailed discussion of actions taken by
manufacturers, wholesalers, and pharmacists to develop secure business
practices.
(3) Discussion:
Recent counterfeiting cases demonstrate that the current business
practices of participants in the U.S. drug distribution system are in
some cases inadequate to prevent the introduction of counterfeit drugs.
Implementation of secure business practices by participants in the U.S.
drug supply chain is critical for deterring and detecting counterfeit
drugs. Therefore, FDA commends and strongly supports efforts to develop
and implement secure business practices for these participants. FDA
plans to facilitate and encourage the development of innovative
approaches to securing business transactions in the drug supply chain.
The number of stakeholders who have told FDA they are already
implementing the business practices discussed above is very
encouraging. In addition to identifying effective security measures,
the designation of an individual or team to have primary responsibility
for coordinating security activities helps ensure effective
implementation.
FDA agrees that re-packaging operations can be a significant
vulnerability in the drug supply chain. Although current statutory and
regulatory requirements allow for appropriate oversight of re-
packagers, FDA agrees that enforcement of those requirements could be
strengthened.
(4) FDA Conclusions:
For government efforts against counterfeit drugs to be successful,
drug producers, distributors, and dispensers will have to take
effective actions to secure their business practices.
--Efforts by stakeholders to develop the secure business practices
listed above would help protect the public health and diminish
counterfeiting;
--FDA plans to work with individual stakeholders and groups
representing stakeholders, as necessary and appropriate, to
continue to develop, make publicly available, and widely
disseminate secure business practices;
--Good security practices include designation of an individual or
team, reporting directly to the organization's senior
management, to coordinate the security and anti-counterfeiting
activities for the organization;
--FDA supports efforts by pharmaceutical manufacturers, wholesalers,
and retailers to secure their physical facilities against
counterfeit drugs. FDA plans to issue guidance on physical site
security that applies to participants in the U.S. drug
distribution system.
--FDA plans to make its oversight over re-packagers of drugs a higher
priority. FDA expects to increase the frequency with which it
inspects re-packagers whose operations are found to be at
increased risk for the introduction of counterfeit drugs. The
increase in frequency will be based on the degree of risk, as
determined by applying to re-packaging operations the risk
based model FDA is developing for prioritizing inspections of
drug manufacturing sites.
6. FDA'S Rapid Response to Reports of Suspect Counterfeit Drugs
Streamlined
(1) What FDA sought comment on:
Enhancing FDA's internal processes for responding to and
investigating reports of suspected counterfeit products
(2) What the Comments Said:
The comments unanimously supported any efforts by the agency to
rapidly respond to reports of suspect counterfeit drugs.
(3) Discussion:
FDA takes reports of suspect counterfeit products very seriously.
The agency is proud of its investigative tools and talents and its
quick response to the public health needs when a counterfeit has been
reported and has been confirmed. To improve this process, the agency
evaluated its policies and procedures for responding to reports of
counterfeit drugs to determine if FDA's response could be more
efficient. Although FDA has had many positive experiences in responding
and working with manufacturers and the public, FDA identified several
ways to further enhance coordination and communication among all
initial responders within the agency.
Because different parts of the agency throughout the country may
receive the potential counterfeiting report, in some instances, it may
take time for the information to flow to the appropriate people who
need it to respond efficiently. Therefore, FDA has established an FDA-
wide rapid response protocol for suspect counterfeit drugs that will
ensure that specified persons/offices/divisions within the agency are
notified and engaged as soon as possible after the report is made to
the agency. Policies and procedures have been or will be amended to
reflect this streamlined information flow and coordination of agency
response. Increased coordination and communication will help FDA to
initiate rapidly any criminal or civil investigation, as well as to
assess the health hazard of the counterfeit situation so the public
health response can be launched.
(4) FDA Conclusion:
To respond rapidly to a report of a suspect counterfeit, FDA is
further streamlining its internal processes to respond quickly to
reports of suspect counterfeit drugs by improving coordination and
communication among all initial responders in the agency.
--FDA intends to amend its internal SOPs, where appropriate, to
provide for more rapid response when a suspect counterfeit is
reported;
--FDA intends to build on lessons learned from working with
manufacturers in past counterfeiting experiences to determine
how industry/agency collaboration can and should be
strengthened.
7. Educating the Public and Health Professionals
a. Consumers
(1) What FDA sought comment on:
As the sophistication of the ``final product'' drug counterfeiting
operations has increased, the public needs to be more aware of ways to
identify the risk of counterfeit drugs, receive instructions on ways to
minimize the chance of receiving fake products and to identify
potential counterfeits.
(2) What comments said:
The comments stated that it is imperative that consumers be
encouraged to be more proactive in managing their health and be given
useful tools to be vigilant to help avoid potential counterfeit drugs.
Consumers should be educated to be aware of noticeable differences in
their medication, the packaging, or any adverse events. In addition,
consumers should understand the important role that their pharmacist
and healthcare providers can play in identifying, reporting, and
responding to counterfeit drug events. However, the comments warned
that care should be taken in any education campaign to not
unnecessarily alarm the public.
(3) Discussion:
Despite the growing sophistication of counterfeit drug threats,
many consumers are not fully aware of these risks. The Agency, in
conjunction with consumer and patient advocates, as well as industry
representatives is eager to find additional creative ways to educate
the public of the potential threat of counterfeit drugs. The messages
should alert consumers to the risk, offer ways consumers can recognize
the signs of a potentially counterfeit product, teach them how to
reduce the risk of exposure and tell them what to do if they suspect
they have encountered one. Of course, FDA wants to strike an
appropriate balance in the need to proactively educate consumers
without causing unnecessary alarm that could interfere with their use
of prescribed drug regimes. Most important, it is critical to focus
awareness, and education programs should focus on issues that consumers
can control.
FDA has an ongoing educational campaign that is intended to educate
consumers about the risks of buying medicines online. FDA intends to
reaffirm this message and focus the educational campaign on teaching
safe purchasing methods. Particular focus will be placed on encouraging
the public to seek out the Verified Internet Pharmacy Practice Site
(VIPPS) seal when purchasing from an online pharmacy.
In addition, stakeholders indicated that there is a need for
better, timelier, accurate information about specific counterfeit
situations. FDA plans to create a counterfeit drug resource page on our
website. The objective of this webpage is to concentrate customized
education tools into a resource library that can empower individual
stakeholder groups.
(4) FDA Conclusions:
Educating the consumers about the risks of counterfeits is a
critical piece in the effort to stop counterfeits from entering the
stream of commerce.
--FDA plans to develop additional, multi-layer, consumer-oriented
educational materials that will help them learn about
counterfeits, what to watch for, and where to turn for useful
information if they think they have encountered a suspected
counterfeit;
--FDA plans to re-launch the FDA public service announcement (PSA)
campaign for best online buying practices to educate consumers
about how to buy drugs online safely, and risks to avoid in
online purchasing;
--FDA plans to house on its www.fda.gov website a comprehensive,
consumer-friendly online library that will contain both general
and specific counterfeit drug information. It will also contain
targeted educational materials for various interest groups that
discuss counterfeit issues generally. In addition, the agency
intends to develop a new FDA anti-counterfeiting resources icon
to increase familiarity with the issue.
b. Pharmacists and Other Health Care Professionals
(1) What FDA sought comment on:
Pharmacists need improved tools to receive information and to
educate themselves about how to handle these situations and to keep
abreast of current counterfeit events. They need to know how to
identify and counsel consumers who might have received counterfeit
products.
Physicians, nurses and other health professionals also have contact
with consumers taking pharmaceuticals and can help identify and counsel
patients that could have accessed a counterfeit. This will require
these groups keep up to date on current counterfeit events and know
steps to take to report situations if a counterfeit is suspected.
(2) What the comments said:
Groups representing pharmacists and pharmacies recognize the need
for pharmacists to take a leadership role in the identification of
counterfeits, prevention of their introduction into the distribution
chain, and education of consumers about counterfeits.
The healthcare community indicated that awareness and education
campaigns are important if its health professionals are to be active
participants in the fight against counterfeit drugs.
(3) Discussion:
Pharmacists and health professionals can play a major role in
helping identify counterfeits and preventing their introduction into
the distribution chain. FDA has been working with pharmacy and medical
professional groups to develop educational materials for pharmacists
and other healthcare professionals, including doctors, nurses, and
physician assistants.
(4) FDA Conclusion:
FDA plans to enhance its educational programs for pharmacists and
other health professionals about their role in minimizing exposure to,
identifying, and reporting counterfeits.
--FDA intends to work with pharmacy and health care professional
groups to develop materials to help educate their profession on
the risk of counterfeits, what to do in case a counterfeit is
suspected and ways to aid in educating consumers. This will
include development of clear, concise messages and protocols,
as well as the establishment of a delivery mechanisms that will
help them learn about the threat of counterfeits, what to watch
for, and where to turn for useful information in the case of a
suspected counterfeit;
--FDA intends to encourage pharmacy and health care professionals to
become partners in the agency's newly established Counterfeit
Alert Network;
--FDA intends to expand its outreach efforts by presenting at or
participating in conferences and by publishing articles in
professional journals and periodicals that target audiences of
doctors, nurses, pharmacist and hospital administrators to
educate them about counterfeits and raise awareness of the
risks;
--FDA intends to work with health professional trade groups to
identify or improve data collection/reporting systems that
could help identify counterfeits as they enter the stream of
commerce (i.e, include appropriate questions on the ER patient
admission questionnaire that might help diagnose usage of a
counterfeit drug.)
8. International Approach
(1) What FDA sought comment on:
Strengthening international cooperation in law enforcement efforts,
identifying counterfeit products, using anti-counterfeiting
technologies, and educating stakeholders and consumers
Whether there should be global standards for packaging of
pharmaceuticals and the use of anti-counterfeiting technologies
(2) What the comments said:
The comments supported FDA involvement in global efforts to deter
and detect counterfeit drugs.
(3) Discussion:
The growing global prevalence of counterfeit drugs must be
curtailed. The steps described in this report are intended to secure
the U.S. domestic drug supply. However, as long as counterfeit drugs
exist worldwide, opportunities could arise for counterfeit drugs to
find their way into the United States. Many countries have taken steps
to secure their Nation's drugs supply, while others struggle because of
limited resources, inadequate regulatory infrastructure, or competing
national health priorities. The World Health Organization (WHO) has
taken the lead to increase worldwide collaboration and to develop
strategies to deter and detect counterfeit drugs. There are several
international criminal enforcement collaborations, such as the
Permanent Forum on International Pharmaceutical Crime and the Interpol
Intellectual Property Crimes Action Group. FDA intends to work with WHO
and other international organizations to develop and implement
worldwide strategies to combat counterfeit drugs.
(4) FDA Conclusions:
FDA will collaborate with foreign stakeholders to develop
strategies to deter and detect counterfeit drugs globally.
Below is a table showing when certain anti-counterfeiting measures
will be available:
APPENDICES
Appendix A: Counterfeit Alert Network Co-sponsorship Agreement
Appendix B: More detailed description of the comments received for
certain issues (where the comments were diverse or lengthy)
APPENDIX A
COUNTERFEIT ALERT NETWORK CO-SPONSORSHIP AGREEMENT
Background
The U.S. Food and Drug Administration (FDA) is committed to
informing the public, particularly consumers, pharmacists, other health
care professionals, wholesalers, and others involved in the U.S. drug
distribution system, about counterfeit drug incidents in a timely
manner and educating these parties on ways to identify and prevent
counterfeits from entering into this system. To increase awareness of
counterfeit drugs and safeguard the Nations drug supply, FDA will
create a network of national organizations, consumer groups, and
industry representatives to deliver time-sensitive messages and
information about specific counterfeit incidents and educational
messages about counterfeits in general. FDA also will develop and
execute informational strategies for specific audiences to ensure that
the messages reach the largest number of interested people possible
through the network. The network will be called the ``Counterfeit Alert
Network.''
The goals of the Counterfeit Alert Network include, but are not
limited to:
--disseminating alert messages to a wide audience about specific
counterfeit drug incidents in the United States and measures to
take to minimize exposure (e.g., recall information);
--outlining the roles and responsibilities of consumers, pharmacists,
other health professionals, and wholesalers must play to
identify counterfeit drugs, report suspect counterfeit drugs,
and prevent them from entering the U.S. distribution system;
and
--developing a network of national organizations, consumer groups,
and industry representatives to help disseminate the
information.
[INSERT CO-SPONSIOR ORGANIZATION INFORMATION]
Importance of the Partnership to FDA and [Organization]
This partnership will increase the potential audience of FDA's
important notifications about specific counterfeit drug incidents and
messages about how and when to report suspect counterfeit drugs. By
distributing FDA developed messages through the [ORGANIZATION]
information system, these messages can reach more than [#] people.
Responsibilities of FDA and [Organization]
FDA will develop targeted messages, with a particular focus on
consumers, pharmacists, and other health care professionals when a
counterfeit drug is found in the U.S. distribution system. FDA will
also develop educational and informational materials about how to
detect a counterfeit drug, what to do if a drug is believed to be
counterfeit, how to report the suspect counterfeit to the FDA, and ways
to minimize the risk of receiving a counterfeit drug. These materials
may include: web-based documents, print ads, posters, prepared
newspaper articles, fact sheets, consumer brochures/pamphlets, and
informational packets. FDA will provide any logistical and technical
support, such as writing, layout, designing, and preparing
illustrations for the products.
FDA will ensure that all materials are cleared through the Agency
and the U.S. Department of Health and Human Services before releasing
material to the [ORGANIZATION] for public distribution FDA will provide
these materials in a format (hard copy, digital, or electronic) that
[ORGANIZATION] can use, as appropriate, to create, manufacture, and/or
have printed in enough quantities to distribute to various audiences.
FDA will not be responsible for any costs outside of the materials
already produced by FDA.
[ORGANIZATION] will distribute in a timely manner FDA's
notifications about specific counterfeit incidents as an alert through
an active messaging system (separate email or fax alert
correspondence). [ORGANIZATION] will facilitate the ability of their
members/subscribers/website visitors to report suspect counterfeit drug
products to FDA, e.g., via a link to the FDA Counterfeit Drugs webpage
or FDA's MedWatch webpage. [ORGANIZATION] will distribute relevant FDA-
educational messages about counterfeits, covering such issues as
awareness, recognition, prevention, tracking, and authentication of
drug products.
The [ORGANIZATION] will pay for the cost, if any, of printing
materials, posting materials on its website, email distribution,
renting ad space, and securing print placement in magazines and
newspapers, as appropriate. [ORGANIZATION] will make clear, in any
solicitation for funds to cover its share of the distribution costs
that it, not FDA, is asking for the funds. [ORGANIZATION] will not
imply that FDA endorses any fundraising activities in connection with
the event. [ORGANIZATION] will make clear to donors that any gift will
go solely toward defraying the expenses of [ORGANIZATION], not FDA.
FDA and the [ORGANIZATION] I will develop a dissemination plan that
outlines where and how the educational materials and alert messages
about specific counterfeit incidents will be distributed to various
audiences.
FDA and the [ORGANIZATION] will review this agreement in 2 years
from the original date of this agreement, but either party to this
agreement can terminate its participation at any time by notifying the
other party of its intent to do so in writing.
Charges
The [ORGANIZATION] will not sell any educational materials related
to this joint effort. [ORGANIZATION] will not impose an enrollment or
registration fee for subscribers to receive this information.
Independently Sponsored Portions and Endorsements
All materials and efforts related to the Counterfeit Alert Network
will be jointly sponsored. FDA staff will not be used to develop,
promote, or otherwise support any event that is independently sponsored
by the co-sponsor, although official announcements and brochures may
contain factual references to the available materials and Counterfeit
Alert Network messages.
The [ORGANIZATION] will not use the name or logo of FDA except in
factual publicity. Factual publicity includes materials provided to
[ORGANIZATION] on FDA's program and Counterfeit Alert Network
materials. Such factual publicity shall not imply that the involvement
of FDA serves as an endorsement of the general policies, activities, or
products of the [ORGANIZATION]. Where confusion could result, a
disclaimer should accompany publicity to the effect that no endorsement
is intended. The [ORGANIZATION] will clear all publicity materials with
FDA to ensure compliance.
Records
Records concerning this partnership shall account fully and
accurately for any financial commitments and expenditures of FDA and
[ORGANIZATION]. Such records shall reflect, at a minimum, the amounts,
sources, and uses of all funds.
Public Availability
This co-sponsorship agreement, as well as any financial records for
this partnership, shall be publicly available.
Co-Sponsorship Guidance
FDA and the [ORGANIZATION] will abide by the memorandum of August
8, 2002, ``Co-sponsorship Guidance,'' issued by the Associate General
Counsel for Ethics. DATE FDA Signee DATE NIZAI Director,
Ethics and Integrity Staff Office of Management and Programs Office of
Management Food and Drug Administration DATE deg.
APPENDIX B
EXPANDED DESCRIPTION OF COMMENTS RECEIVED
Technology
Unit of Use Packaging
Comments supporting widespread utilization of unit of use
technology cited:
--The decreased need for repackaging which is a point of entry for
counterfeit drugs;
--Authentication technologies applied by the manufacturer would reach
the dispensing pharmacy and the patient;
--The lower cost for utilizing unit of use packaging on newly
approved drugs;
--The deterrent value to counterfeiters of the higher costs of
duplicating unit of use packages;
--Improvement in patient safety due to reduction in dispensing errors
and better patient compliance; and
--Increased pharmacist availability for patient counseling (due to
reduction in time needed to fill prescriptions).
Some comments cautioned the FDA against mandating unit of use
packaging for all drugs citing:
--The high cost, and length of time, it would take to change
production lines from bulk to unit of use packaging;
--The investment made by many pharmacies in re-packaging and pill
counting equipment;
--The difficulty of packaging certain products (e. g. vaccines,
multi-dose liquid formulations) in unit of use form;
--The need to differentiate repackaging performed under contract to a
manufacturer or by a pharmacy (which may achieve market
efficiencies) from repackaging by other entities;
--The need to perform a careful product-by-product cost-benefit
analysis on unit of use packaging before creating any
requirements;
--The minimal hurdle that unit of use packaging creates for
sophisticated drug counterfeiters;
--The need to comply with the Consumer Product Safety Commission
(CPSC) regulatory requirements for child resistant unit of use
packaging;
--The difficulty some consumers (e.g., arthritic patients) may have
in opening unit of use packaging such as some blister packs;
--The need for pharmacists to modify prescribed quantities to
correspond with available unit of use packages which could
require changes in state law; and
--The need to establish standards for such things as size and shape
of unit of use packaging in order to minimize patient confusion
and address shelf space issues.
Authentication Technologies
They supported use of authentication technologies as part of an
overall anti-counterfeiting strategy and stated that authentication
technologies serve two purposes:
They make it more difficult and expensive to produce a copy of the
drug or its packaging and labeling, and
They provide a means for determining if a specific drug, package,
or label is authentic.
Manufacturers of specific anti-counterfeiting technologies provided
us with descriptions of their products that were extremely valuable in
helping us understand how they work, their cost, and how they might be
incorporated into pharmaceutical products, packaging, and labeling or
used to detect counterfeit products through forensic and other
analytical methods, including rapid methods.
Many comments supported the issuance of an FDA guidance document on
the use of authentication technologies. They stated that there was no
clear FDA policy specifically targeted to this important subject. They
suggested that current FDA policies and practices for New Drug
Applications (NDAs), Abbreviated New Drug Applications (ANDAs), and
Biologics License Applications (BLAs), supplements, and other
notification procedures should be clarified so the policies and
procedures applicable to use of anti-counterfeiting technologies are
clearly articulated and available in a single document.
The following points were made regarding the use of authentication
technologies on drug products, their packaging and labeling:
--There is no ``silver bullet'' solution--all anti-counterfeiting
technologies can be defeated;
--Because all anti-counterfeiting technologies can be defeated, a
more extensive approach utilizing layered overt and covert
technologies that are changed on a regular basis is frequently
required;
--Authentication technologies are expensive;
--Manufacturers should determine which authentication technologies to
use, on a product specific basis. The FDA should not require
the use of any specific anti-counterfeiting technology. For
example: the number and type (e.g., overt, covert) of
technologies utilized for a given product need to take into
account the type of product (e.g., solid, liquid), use, cost,
history of counterfeiting etc.;
--Repackaging destroys anti-counterfeiting technologies employed by
the manufacturer;
--Incorporation of anti-counterfeiting measures into the product,
packaging, and labeling may be subject to application and
notification requirements which means that initiating or
changing such technology could require a significant time and
expense;
--Although all products are at risk for being counterfeited there is
a need to develop criteria or a classification system to help
identify those products at highest risk for being counterfeited
and thereby assist stakeholders in identifying products that
might derive a greater benefit from the incorporation of
authentication technologies;
--The large number of available technologies coupled with the number
of different products stocked in pharmacies and the need to
change anti-counterfeiting measures make it difficult for
pharmacists to be knowledgeable about the technologies used for
a product at any given time;
--Technologies that do not allow for ``real time'' or consumer
authentication (e.g., covert technologies known only to the
manufacturer and/or the FDA) may have an uncertain benefit in
rapid identification of counterfeit drugs.
List of Drugs Likely to be Counterfeited
Many comments stated that it was important for stakeholders to
allocate financial resources to protect those products that are most
likely to be counterfeited. There was agreement that the criteria we
suggested to identify drugs that were likely to be counterfeited were
correct. These included:
--Impact on public health if the drug were counterfeited;
--Drugs history of counterfeiting;
--Drugs price;
--Drugs volume;
--Drugs dosage form;
--Drugs clinical uses; and
--Whether similar products had a history of being counterfeited.
However, there was no consensus on how to apply these, or other,
criteria in creating a list of such products.
As stated above, some comments suggested that instead of developing
a list of drugs likely to be counterfeited, a set of criteria for
determining whether a drug was at likely to be counterfeited should be
created. One proposal for such criteria was:
A drug has been subjected to a seizure or stop sale notice because
of counterfeiting, or
There is documentation that a drug was counterfeited and is the
subject of an investigation by Federal or State authorities AND
The product is high cost (e.g., over $200 per dose) or high volume
(e.g., top fifty drugs), or
The product is used extensively for treatment of HIV/AIDS or
cancer, or
The product is injectable, or
The product distributed in a special or limited way, or
There are multiple documented instances of pedigrees not being
passed with the product
Radiofrequency Identification Technology
We received a large amount of information on the benefits, costs,
and unresolved issues relating to RFID. These include:
Benefits
--Ability to deter and detect counterfeit drugs;
--Ability to conduct efficient targeted recalls;
--Ability to manage inventory;
--Ability to identify theft;
--Ability to identify diverted drugs; and
--Improvement in patient safety by assuring correct dispensing of
drugs.
Costs
--Purchasing hardware (e.g., tags, readers) and software;
--Integration into legacy information systems;
--Database creation, security, and maintenance;
--Integration of RFID technology into existing manufacturing
processes, distribution procedures;
--Compliance with regulatory requirements (e.g., cGMP, notification,
product integrity); and
--Feasibility studies.
Unresolved Issues
--Need for all stakeholders to embrace the technology in similar
timeframes in order to realize the full potential of RFID
technology including provision of a universal electronic
pedigree;
--Need to develop standards and business rules;
--Need to address database issues such as structure (e.g., central
vs. distributive), ownership, access, and security;
--Clarification of regulatory requirements pertaining to use of RFID
(e.g., cGMP, electronic records, notification); and
--Need for a flexible migration path to the use of RFID in order to
meet the needs of different stakeholders.
Stakeholder Activities
We have been informed of several feasibility studies, starting in
early 2004, that should give members of the supply chain experience
using RFID as well as provide them with an opportunity to test its
business uses and identify potential barriers to its acceptance. These
studies include:
--Wal-Mart.--Drug manufacturers and wholesalers will attach RFID tags
to all bottles of controlled substances;
--Accenture.--Coordinating a study of RFID involving manufacturers,
wholesalers, and retailers that will explore the use of RFID
for tracking, tracing, recalls and theft of selected
pharmaceuticals;
--CVS.--Is studying the potential benefits that tagging and tracing
pharmaceuticals and prescriptions in a retail pharmacy would
have on operating efficiency, quality of patient care, and
customer service; and
--Other feasibility studies using RFID are being planned in Europe to
study the use of serialization for authentication at the point
of dispensing.
In addition to feasibility studies, we understand that several
groups representing many supply chain participants have been meeting to
discuss ways to facilitate the adoption of RFID. For example the
Product Safety Task Force (PSTF) convened under the auspices of the
Healthcare Distribution Management Association (HDMA) is developing
business requirements and identifying business issues relating to RFID
technology.
The PSTF and other stakeholders have informed us that the migratory
path (or phase in) to widespread use of RFID at a package level could
vary by stakeholder based on the place of that stakeholder in the
supply chain (e.g., manufacturer vs. retailer) and on specific costs
and benefits accruing to that stakeholder (e.g., types of products
manufactured, number of distribution centers, technology cost per
product).
Several migratory paths were mentioned, including:
--Phasing in use of RFID technology with use at the case and pallet
preceding use at the package level;
--Phasing in use of RFID technology starting with use on pallets,
cases, and packages of ``high risk'' products with gradual
inclusion of other products at all levels; and
--Use of RFID technology at the pallet and case level coupled with
use of 2-D Bar Codes at the package level with gradual phase in
of RFID technology at the package level.
According to stakeholders, these paths are not mutually exclusive
and it is likely all of these, and other, paths will be utilized as
RFID technology becomes more widely adopted.
Secure Business Practices
Below are some of the secure business practices that have been
developed by participants in the U.S. drug distribution system.
Manufacturers
Several manufacturers have announced policies intended to secure
the supply chain. These policies include:
--Limiting sales to authorized wholesalers. Authorized wholesalers
are defined either as wholesalers who purchase a manufacturers
products exclusively from that manufacturer or as wholesalers
who purchase a manufacturers product directly from the
manufacturer or from other authorized wholesalers;
--Making the list of authorized distributors publicly available;
--Ability to audit the sales records of wholesale distributors;
--Working with dispensing pharmacies to ensure they are aware of the
identities of authorized distributors; and
--Designation of an individual or team to coordinate security and
anti-counterfeiting activities.
Wholesalers
The Healthcare Distribution Management Association (HDMA) released
a document entitled ``Recommended Guidelines for Pharmaceutical
Distribution System Integrity'' which set forth a series of recommended
actions for wholesalers to take prior to and while conducting business
transactions with other wholesalers. In essence they comprise a ``due
diligence'' checklist which includes items such as:
--Obtaining detailed information about the wholesalers licensure,
inspection results, history of disciplinary actions, corporate
officers, owners, and management personnel;
--Performing a criminal background check on the wholesaler, its
officers, owners, and other key personnel;
--Obtaining a credit history and information about its business
activities, financial status, and liability insurance;
--Performing a detailed physical site inspection; and
--Ensure that the wholesaler is in compliance with Federal and State
requirements, verifies that the wholesaler is an authorized
distributor for the products being transferred or has a process
in place for verifying pedigrees.
Individual wholesalers supported the HDMA guidelines and provided
FDA with ideas for additional secure business practices including:
--Not selling pharmaceuticals to other wholesalers at all; and
--Completely separating the functions of quality assurance and
compliance from sales and marketing and requiring quality
assurance and compliance staff to perform due diligence on
potential business partners.
Pharmacies and Pharmacists
We have been informed that several organizations representing
pharmacies and pharmacists are developing secure business practices as
a guide for pharmacies and pharmacists. One pharmacy group notified us
that they have already published a list of strategies to use for
assuring the integrity of pharmaceuticals. This list includes:
--Staying informed about reports of counterfeit drugs;
--Contacting wholesalers to get information about the status of their
licensure, whether they are authorized distributors, and where
they source their drugs;
--Evaluate pharmacy security;
--Educate hospital staff;
--Follow up on patient complaints; and
--Report suspect products.
Prescription Drug Marketing Act (PDMA)
A majority of the comments that discussed PDMA noted the
limitations and concerns of full implementation of PDMA. Such
limitations include:
--Paper pedigrees can be forged and counterfeited;
--Paper pedigrees are logistically difficult to accommodate in the
drug distribution system;
--ADRs are not required to pass pedigree information on to the next
purchaser, so subsequent wholesalers are unable to obtain the
pedigrees needed to sell their products;
--The pedigree for a product that circulates several times through
the supply chain loses all prior sales history if the drug
product is sold to an ADR;
--The net effect is that secondary wholesalers who cannot obtain
pedigrees necessary to legally market drugs could be driven out
of business; reducing the number of legitimate distributors in
the system, decreasing competition and increasing prices;
--Manufacturers do not update their lists of ADRs so it is difficult
for a wholesaler to obtain ADR status; and
--Costs of paper pedigrees outweigh the benefits.
A number of other comments, however, supported the use of paper
pedigrees for their deterrent value and as a means to verify prior
sales through due diligence. Comments noted that even forged pedigree
papers provide an additional opportunity to identify counterfeiters and
block introduction of counterfeit drugs into the drug supply if
wholesalers exercise due diligence by tracing the sales through the
pedigree and identifying the place where the forgery occurred. A few
comments suggested that FDA should exercise enforcement discretion and
not take enforcement action against a wholesaler who fails to provide
pedigree information back to the manufacturer as long as the wholesaler
provides pedigree information back to the first ADR who received the
drug from the manufacturer.
Several comments suggested a risk-based approach to implementation
of the PDMA, which focuses on those drugs that are at high-risk of
being counterfeited. Many of these comments suggested that high-risk
drugs maintain a full pedigree that documents all sales and
transactions back to the manufacturer. One comment suggested an interim
solution of ``one forward, one back'' pedigree for high risk drugs.
This system would be analogous to recent bioterrorism legislation for
food distributors, whereby participants in the food distribution system
maintain only those records necessary to identify immediate previous
sources and immediate subsequent recipients of food. However, comments
on FDA's food regulations have suggested it will take at least several
years to phase in the paper recordkeeping requirements. Moreover, in
contrast to drugs, there are no major steps in development now to
provide widespread electronic pedigrees for drug products. Finally, as
noted throughout the riskiest drug products are the ones for which
modern anti-counterfeiting and track-and-trace methods should be
implemented soonest.
Most comments supported the development of an electronic pedigree
for all drug products in the supply chain and that an electronic
pedigree should be considered as a long-term solution to fulfilling the
PDMA requirements codified at 21 CFR 203.50. Given the costs of
implementing the partial anti-counterfeiting measures included in the
PDMA, and the expectation of continued significant progress toward
implementation of modern pedigree systems for drugs, more effective
modern pedigree systems are likely to be available before it would be
possible to phase in and achieve compliance with paper pedigree
requirements.
Model Rules for Wholesale Distributor Licensing
The comments overwhelmingly supported strengthening requirements
governing the licensure and oversight of wholesale distributors. Many
comments cited the systemic weaknesses in the oversight of the
wholesale drug industry, prior to Florida's implementation of licensing
reform, that were described in the Florida Grand Jury Report, such as
issuing licenses without proper background checks and granting licenses
despite one or more felony convictions. The comments also stated that
existing inspection and due diligence processes are often insufficient
to detect criminal activity. As mentioned above, there was uniform
agreement that the penalties for counterfeiting drugs are insufficient
to serve as an adequate deterrent.
Many comments supported the concept of tighter requirements
generally, while others gave specific suggestions for improvement. Some
of the specific suggestions included:
--Detailed and robust applications that provide greater disclosure of
information about the applicant and their prior history;
--Criminal background checks for applicant and company principals;
--List of prescription drug-related or fraud-related activities that
are ``not in the public interest'' such that states should deny
licenses to persons with criminal records for these activities;
--Pre-license inspection of wholesale distribution facilities;
--Periodic and unannounced inspections;
--National clearinghouse for information on wholesale licensure
status, debarments, exclusions, and/or results of criminal
background checks;
--Bonds of up to $100,000;
--Requiring all wholesalers to transmit pedigree tracing transactions
back to the manufacturer for susceptible products;
--Non-ADRs must pass pedigree with all drugs with transaction
information back to an authorized distributor;
--Amending the definition of ADR to include those on the
manufacturers list, have a written agreement currently in
effect with the manufacturer, or has a verifiable account with
the manufacturer and minimal transactional or volume
requirement thresholds from the manufacturer of 5,000 sales
units within 12 months or 12 purchases (invoices) within 12
months;
--Requiring authentication of pedigree if there is reason to suspect
that the product may be counterfeit, as well as on a random
basis;
--Migrating to electronic pedigree;
--More aggressive penalties and enforcement on state and national
level;
--Quickly suspending and/or revoking licenses of violators; and
--Including due diligence requirements for wholesalers to conduct on
its suppliers.
Most comments stated that the stricter standards should be uniform
across all 50 states so as not to create 50 different sets of criteria
and rules for licensing.
Concerns about several provisions in the new Florida and Nevada
laws regarding licensing of wholesale distributors were expressed. Some
of the comments described implementation and logistical problems that
wholesalers have experienced in these states as a result of the new
law.
Some comments encouraged FDA to revsit the minimum standards
requirements described in 21 CFR Part 205 to create a ``Federal floor''
for States to meet. The comments were not uniform, however, on whether
such a Federal floor might enhance or deter state efforts to implement
the complete set of NABP recommendations.
Counterfeit Alert Network for Information Dissemination and Education
The agency received many supportive comments about the counterfeit
alert network concept. Most of the comments suggested that the agency
use existing networks and several comments offered their organizations
distribution list or network as a conduit for the counterfeit alert
network.
Some comments offered strategic approaches for the development of
such a network, including suggested concepts for message delivery.
Suggestions include using active notification via ``push'' e-mail
technology, validated and secure systems, easily understood language
with clear and unambiguous messages, multiple notification systems,
accessible to all stakeholders, no cost for users, timely, visual alert
to flag importance, redundant delivery vehicles such as email, fax,
direct mail, and phone, and have an embedded link to take user back to
FDA or MedWatch website. The comments also suggested that consistency
is an important element so there is familiarity in times of emergency
situations. The agency was warned not to overuse the counterfeit alert
network in order to avoid alert ``fatigue,'' which could create
indifference or doubt regarding the importance of the messages.
The agency was encouraged to consider public/private partnerships
to design communication strategies and facilitate efforts to
standardize anti-counterfeit communications and to augment and
coordinate communication systems. The comments also said that costs to
FDA and private partners should be kept to a minimum.
Senator Bennett. Thank you. I appreciate the opportunity to
ask questions of all four of you, and, again, thank you for
your service.
Senator Kohl.
WIC CONTINGENCY FUND
Senator Kohl. Thank you, Mr. Chairman.
Mr. Bost, last week, when Secretary Veneman was here, I
noted that States are already starting to take action to
conserve WIC dollars because they are afraid they do not have
enough money to finish out this year. I said we have a
contingency fund to prevent things like this from happening and
States need to be given as much advance notice as possible if
contingency fund money will be made available.
At that time the Secretary said that USDA was aware of the
problem and was looking into it. It has been a week now and we
have not heard anything, so I would like to ask you the
question that we asked her: Do you anticipate using any of the
contingency fund this year? And when will an announcement be
made with respect to this issue?
Mr. Bost. Well, Senator Kohl, it is interesting that you
ask the question because the money was released to several
States last night.
Senator Kohl. Last night.
Mr. Bost. Last night.
Senator Kohl. That is great. You know, I cannot imagine----
Senator Bennett. He knew you were going to ask the
question.
Senator Kohl. You cannot respond any more quickly than
that.
Mr. Bost. Beg your pardon?
Senator Kohl. That is terrific.
Mr. Bost. Well, I think to be perfectly----
Senator Kohl. So the contingency funding is being made
available.
Mr. Bost. Well, actually the States should have it in their
letter of credit as we speak. They probably received it at
midnight last night.
Senator Kohl, I think it is really important to note, too,
that the issue of tracking that information from the States in
terms of looking at participation and looking at the food cost
is it is not an exact science. And we have been following it
for some time. And we were trying to look at being as judicious
as we possibly could with those contingency funds, but we did
release them last night to those States that were in need, and
they will not have to stop serving any clients that are
eligible.
WIC FOOD COSTS
Senator Kohl. A follow-up on that. Can you confirm that WIC
food costs have been higher than anticipated and that the food
cost assumptions upon which the fiscal year 2005 funding
request was based are now outdated?
Mr. Bost. Well, I don't know if I would say that they were
outdated, but I think the preliminary information that we
currently have available to us and that we have been reviewing
would lead us to believe that the overall food costs are a
little bit higher than estimated.
The other point I would like to make is that it is not only
an issue of food cost, but it is also participation rates. In
some States, the food costs are a little bit higher; in some
States, it is not. We are watching and tracking it very, very
closely. It is something that we are very concerned about.
Senator Kohl. And do you anticipate that this updated data
and increased participation rate will make it likely that we
will have to provide some additional resources in fiscal year
2005 for WIC?
Mr. Bost. I don't think I have drawn those conclusions at
this point. It is something we are watching very closely. If we
see that is indeed the case, we will come and work with you and
Congress to ensure that the needs of these persons are met.
Senator Kohl. Good.
NATIONAL ORGANIC PROGRAM
Mr. Hawks, in fiscal year 2004, we provided a significant
increase in funding to the National Organic Program and
required that part of the funding be used to meet several
statutory requirements of the Organic Foods Production Act of
1990 that have not yet been met. These include directives to
hire an executive director for the National Organic Standards
Board, to create an ongoing peer review panel, and to improve
scientific technical support for the Organic National Standards
Board.
Could you comment on the progress of the agency with
respect to each of these three funding directives?
Mr. Hawks. Yes, sir. We are making extremely good progress
toward hiring. I think the executive director is very close to
being hired. My staff tells me that we are moving judiciously
in all of these areas with regard to organic.
Senator Kohl. The peer review panel, do you know if that is
ongoing or are you moving in that direction? Have you created
an ongoing peer review panel?
Mr. Hawks. We are in the process of completing initial peer
review as we speak.
Senator Kohl. And, finally, to improve scientific technical
support for the National Organic Standards Board, any comment?
Mr. Hawks. Yes, sir. We are doing that. The funds that were
provided in our 2004 budget are helping us on the technical
scientific review as well.
Senator Kohl. That is great.
Mr. Hawks. We appreciate those funds.
ANIMAL FEED INSPECTIONS
Senator Kohl. Yes, thank you.
Dr. Crawford, FDA recently announced that they would be
implementing new rules regarding animal feed as a result of
BSE, including increasing inspections of rendering plants and
feed mills. An increase of over $8 million is provided in the
budget for this purpose. How many rendering plants and feed
mills are in the United States? Of those, how many handle
ruminant material prohibited from being used in animal feed?
And will these inspections, specifically of plants that handle
ruminant material be physical inspections or paper audits? And
what about plants that do not handle ruminant material?
Dr. Crawford. With respect to the number of plants and what
they handle, if it is agreeable, I would like to submit that
for the record.
The second thing is the inspections will be doubled next
year. We are asking for that in this budget. The kinds of
inspections will be both physical and also audit types. We
expect for the plants to know where the material came from and
where it is going, and we have records access for that. And we
will be evaluating that.
The other thing is that we want to know what kinds of
materials went in there and what the feed was used for and
whether or not we can trace that in order to be sure that it
isn't going to the wrong species.
So it is a fairly complex inspection process that is
reflected in that $8.3 million more that we want for BSE. One
of the major things we are trying to do is to control BSE
because the most likely source of infection is animal feed, as
you know.
[The information follows:]
Animal Feed
As of February 6, 2004, there are 235 rendering plants, 1,085 FDA
licensed feed mills, and 5,071 non-FDA licensed feed mills in the
United States. Of these, 157 rendering plants, 310 FDA licensed feed
mills, and 759 non-FDA licenses feed mills handle materials prohibited
from being used in animal feed.
Senator Kohl. All right. Dr. Murano, your budget requests
an additional $23,500,000 for the Food and Agriculture Defense
Initiative. Funding is also requested in FDA and other agencies
for this. It sounds like the increases are going for computer
system upgrades, increased surveillance, bio-surveillance and
training.
For those of us who are not steeped in the language of
homeland security, can you explain in laymen's terms what this
money will be used for?
Dr. Murano. Certainly. As you said very well, this is a
coordinated effort between ourselves and FDA and other agencies
as well, because we understand that we must do several things
to maintain the safety of our food supply from intentional
attack. One is surveillance, so both we and FDA need funds to
survey the food supply for specific agents that we do not
normally test for, for what we deem to be normal contamination
of food. These are threat agents for which both of these
agencies have conducted vulnerability assessments to see where
we are the most vulnerable. We have determined where we are the
most vulnerable, and are trying to close those gaps and then
test for the threat agents that we believe are most likely to
be used.
Secondly, the Food Emergency Response Network that I
described very briefly in my opening remarks, is also a joint
effort with FDA. It is a network of laboratories throughout the
entire country that have to work together and be well
coordinated to respond to an event. More importantly, it must
do the important surveillance work that needs to be done even
before an event takes place. All of these labs have to be
coordinated in terms of using the same methods and the
information has to be shared among all the laboratories. That
is why part of the funds are being asked for eLEXNET, which is
a web-based information sharing platform.
For all of these reasons, we have our budget request and
FDA has their budget request, but funds are to be used jointly
to establish a very robust network of 100 labs in this coming
year.
WIC-ONLY STORES
Senator Kohl. All right. Mr. Bost, I have recently been
informed about a growing problem that is costing the WIC
program several million dollars a year. The WIC-only stores
that, as you know, serve only WIC clients and accept only WIC
certificates, are increasing in numbers very rapidly. In
California alone, there were 82 WIC-only stores in 1996, and
now there are more than 600 across that State.
The problem with these stores is that they do not have to
compete in the normal market, and so they are able to charge
extremely high prices for their products. In California, the
estimates are that the WIC-only stores charge 15 percent or
more in addition to normal price for WIC food packages than
other stores. This is a growing problem, and the WIC program
obviously is suffering additional, unnecessary, and
unprogrammed costs because of it.
With money so tight, obviously, Mr. Bost, we need to do as
much as we can to control this problem. Can you comment on the
problem? And to what extent are you aware and consider it
serious and what you may be doing about it?
Mr. Bost. Well, interestingly enough, Senator Kohl, I think
it is important to note that only 2 percent of all the
authorized WIC vendors are essentially WIC-only. Right now we
have the WIC-only stores only in California and in the
Commonwealth of Puerto Rico. So, one, it is not widespread.
The second point is the fact that we have heard anecdotally
that the cost to the Federal Government is more. However, the
service is better than our clients are receiving other places.
So we are in the process of reviewing that data to make a
determination, if it is accurate information, generally
speaking, is the cost more. So we have just started that
review. I think we actually have two of my senior staff that
are going to go into some of the stores in California over the
course of the next couple of months and ascertain exactly what
the situation is. We are concerned given the fact that we are
seeing an increase in our overall WIC costs.
CRITICAL PATH INITIATIVE
Senator Kohl. Yes.
Dr. Crawford, FDA recently announced that they are going to
use new technologies to help reduce the cost of developing new
drugs. While the goal of this announcement is definitely
worthy, announcements such as these raise a question of how
closely the FDA should be working with the industry that it
regulates.
What considerations are being taken before FDA makes a
decision on something that will cause them to work in close
collaboration with the industry that you are regulating?
Dr. Crawford. Thank you, Senator Kohl. As you know, we are
bound by very strict ethical guidelines to keep us from acting
and colluding with the industry that we regulate. We have to be
very careful about that.
Our record has been good over the years, but we want to
keep it good and even better. So we are separated from working
directly with the industry, either in a consulting capacity or
in any other kind of capacity to improve their bottom line,
their profitability, and even the approval of these drugs.
The genesis of this program, which we are very pleased
with, is some years ago, as you know, there was a move to
double the National Institutes of Health budget. And so that
budget went from between $13 and $14 billion, to $27 billion.
This is expected with some concomitant increases in industrial
research and development to produce a large number of new
technologies and scientific developments that could and I
believe will lead to the capability of this country and its
pharmaceutical industry producing more useful products, not
just in the human drug category but probably in other
categories.
The bottleneck for these breakthroughs periodically in
terms of getting the technology from the laboratory to the
patient and, therefore, saving lives and improving the well-
being of people in this country and in other countries has
sometimes been the Food and Drug Administration. Obviously, if
a large number of new products are developed as a result of the
NIH research and the research that is taking place in the
pharmaceutical world, we have to be ready for them. We have to
know what kinds of categories of products are coming. We have
to have the personnel that can rapidly, accurately review these
products so that we are sure they are safe and effective, but
also to get them to the market as quickly as we possibly can,
consistent with their safety and efficacy. That needs a new
mind-set, a new model at FDA, and we call it the Critical Path
from the laboratory to the patient. It is a modest program to
begin with, but it does require us to rethink how we do this.
Now, in saying that, although we will not be divorced from
cooperating with NIH, we will be distanced from the
pharmaceutical industry that we regulate as we try to get
together a new system. So thank you for the question, and I
assure you we will be separated to the maximum ethical extent.
BIOTERRORISM REGULATIONS
Senator Kohl. Thank you.
Dr. Crawford, it was recently announced that FDA would
delay publishing a final rule on contaminated food tracking by
2 months. The purpose of this rule, as you know, is to help FDA
track down contaminated food and food ingredients as quickly as
possible, and it has been lauded by consumer groups.
Why did the FDA postpone publishing the rule? Can you give
us a date certain by which the rule will be published?
Dr. Crawford. Thank you for the question. When the
Bioterrorism Act was passed in June of 2002, we did get the
authority to do this kind of thing, the recordkeeping authority
that you are talking about, as well as three other new
authorities which enable us to police the food supply better
than ever before, thanks to the wisdom of the Congress. This is
something that had been developing for a long time, but the
advent of the terrorist threats that we are all aware of moved
the Congress and also moved the agency to work together to try
to get this passed.
We are delayed a bit from what we projected in December
with publishing this final regulation. Exactly when it will
come out we are not sure at this point. It shouldn't be very
much longer. We are putting the finishing touches on it, and we
are working with the administration to get it forward.
But I wanted you to know and I wanted to say for the record
that the authority to take these kinds of action exists. We
just have not implemented the regulations which set out how we
will do it. But we are acting already and we are protecting the
food supply through the authorities that were vested in us by
the Bioterrorism Act.
BSE
Senator Kohl. Finally, Mr. Hawks, the Secretary announced
on March 15th that USDA would greatly enhance BSE testing over
a year to a year and a half period, 12 to 18 months. Do we
understand that this enhanced testing is scheduled only for
this limited length of time? And if test results show any
additional BSE-positive cases in the United States, will USDA
further enhance testing and continue it for an indefinite
amount of time? And if so, will CCC funds be used for that
purpose, or how will these costs be covered?
Mr. Hawks. Thank you, Senator Kohl. You are exactly right,
we did announce on March the 15th our enhanced surveillance
package. We also announced that $70 million would be
transferred from CCC to implement this enhanced surveillance
plan. This is in keeping with the international review team
report, which recommended that we conduct very intensive
surveillance of the targeted population for a period of 1 year.
So that is what we have to do. Determinations will be made
about where we move from here when we see what we find with
this surveillance plan.
Our objective is to try to get as many of these samples as
we possibly can. If we collect approximately 268,000, we
believe this sampling will show one BSE positive animal in 10
million adult cattle a 99-percent confidence level. We are very
committed to this. We are also testing a random sampling of
normal animals in this process. We are working with the
industry to make sure that we are able to get these samples as
well.
So I think the answer is we will have to see where we are,
see what the surveillance turns up, and then it would be
appropriate to make determinations about how to proceed after
that.
Senator Kohl. What happens in the public eye, Mr. Hawks? We
tested one animal for BSE, and there was a panic across our
country. Suppose you find one other animal or two other animals
out of--how many do you intend to test?
Mr. Hawks. We are going to test as many of the target
population as we possibly can. We have been testing roughly
20,000 per year for the last 2 years. This year, we had
intended to test 40,000. Now our goal is to test as many as we
possibly can for the next 12 to 18 months.
Senator Kohl. Well, suppose you test 5 million and you find
five and you announce that. I suppose you would announce that,
right?
Mr. Hawks. Well, I think statistically speaking, if we test
268,000 from the target population, it is almost as good as
testing----
Senator Kohl. All right. Suppose you do and you find three
more or four more.
Mr. Hawks. The measures that we have already taken to
protect food safety, including the removal of specified risk
materials, those measures have been taken to ensure that the
food supply is safe. And I think whether we find one more, or
whether we find three more, or if we don't find any more, the
measures that are in place are there to adequately protect our
public.
The U.S. case is totally unlike what happened in Asia. In
Japan, there was a total loss of consumer confidence. As we
have seen in this country and in Canada as well, our consumers
believe that we are doing a good job in protecting food safety.
I will eat beef quite often. So I think it is very important to
understand that I have total confidence, Dr. Murano has total
confidence, because that is her responsibility as well. We
share those responsibilities.
Senator Kohl. I thank you so much, Mr. Hawks.
Senator Burns.
Senator Burns [presiding]. Senator Kohl, how are you this
afternoon? I noticed that the chairman here asked me to come
down here and to really mess up this whole hearing. He sent the
right guy. And he has already covered a lot of these things:
obesity, as if he had a problem.
Senator Burns. And I am glad he took care of that before I
got here. So let's go down the line.
By the way, first of all, since I have got you here, Mr.
Hawks, and most of you, we all know that we probably dodged a
humongous bullet last December the 23rd and again May the 4th
up in Canada. We didn't have to go through the situation the
Canadians went through up there.
I appreciate your actions, and I know it was the cow that
stole Christmas, but, nonetheless, it was one of those things.
And I don't know what my telephone log looks like, but it was
pretty full.
I talked to the Secretary yesterday, and I expressed my
gratitude, and I think it was done as well as it could be done
for a bureaucracy. So I am happy about that. However, we still
come under some criticism, but, nonetheless, it is usually
criticism that probably does not quite understand how the
system works and what we did.
If we tested 100 percent--I don't know. You might have
already been asked this question, and I apologize if you have
been. If we started testing tomorrow 100 percent of our
production in the beef market right now, do you think that
export market would just snap back overnight?
Mr. Hawks. No, sir, I do not. We did discuss this earlier.
I think 100 percent testing has absolutely no scientific
justification. I believe that the path that we are on with the
aggressive surveillance, with the measures that we have taken
to remove SRMs and the measures that FDA is announcing to put
additional firewalls in place are more than adequate to prevent
the spread of BSE if it is here and also to protect food
safety.
NATIONAL ANIMAL IDENTIFICATION
Senator Burns. Let me ask you another question. How are you
moving on the national ID system?
Mr. Hawks. We are moving very well. As you know, we have
been developing a plan over a period of years. USAIP has been
working for over 2 years. They have done a tremendous amount of
work. The Secretary asked our Chief Informational Officer,
Scott Charbo, as well as Nancy Bryson, and our Chief Economist,
Keith Collins to look at this, with each one of them looking
from their respective viewpoints, the legal, the technological
and the economic.
We have put together a plan drawing heavily upon what USAIP
is doing. It is certainly our intent later this year to be able
to issue premises identifications, and early next year to do
individual identifications. We have a few principles that we
are working on, such as being technology neutral. We want to
make sure that any system that we put in place does not add
burden to our producers, as you and I both know and appreciate
those concerns. We protect confidentiality of information. So
those are some of the things we are addressing.
Senator Burns. When can we expect to see that plan?
Mr. Hawks. You should be able to see that plan real soon.
It is going through final review at the Department now, and so
we hope to have that plan to you in the very near future.
BSE TESTING
Senator Burns. Give me an idea of those packing facilities
that want 100 percent test in order to maybe get into the
international market or see what they could do. We have seen a
reluctance from the USDA for that. Can you give me an update on
that situation and the position that you have taken?
Mr. Hawks. Yes, sir. Certainly that is continually under
review. We do not believe there is, as I have said, a
scientific justification for doing 100 percent testing. We have
recently approved some rapid-test test kits for use in our
surveillance plan. We will continue to review those requests
that are before us now in the Department of Agriculture, but we
certainly do not believe there is scientific justification for
doing 100 percent testing.
Senator Burns. Tell me, on the test itself, have you
settled on a particular test?
Mr. Hawks. No, sir. We have recently approved two rapid
tests for the surveillance plan. We are continuing to review
other tests as we speak and hope to have, in the very near
future, additional test kits approved for use.
Senator Burns. When will we see those?
Mr. Hawks. I would hope to see those, as I said, in the
very near future. I am like you, coming into Government out of
the private sector. It is very difficult to nail down those
exact dates as we could when you and I are out there on the
farm.
DENTICIAN
Senator Burns. We look at those things. I am not an expert
on that and I would have none, but I can tell you that I know
some people that do know the difference. I think false
positives are always out there, those kinds of situations in
that respect. Now, age. You have first come out with a system
to mouth the cattle. That has not been the most accurate
procedure sometimes. In other words, it all depends on a little
bit of heredity and genetic makeup of the animal. Also, whether
it calved and where they are raised. And so, Dr. Murano, you
want to----
Mr. Hawks. She is our dentician expert.
Senator Burns. Are you pretty good on horses?
Dr. Murano. Sir, I will tell you that we have had to come
up with a system that would help us determine the age of these
cattle, and you are correct in that the dentician method is not
perfect. We all know that. We have instructed our inspectors
that what they do first and foremost is look, at the records
that come with the animals, and use that as their main gauge of
the age of the animal. If those records are complete, that is
what we go by because that is the most accurate. When those
records are not accurate or not available--and I presume that
will be corrected once this animal ID system is all in place--
the only other method that we have available to us that we know
is the dentician.
However, having said that, the regulations that we
published January 12th are still under an open comment period,
and we have actively sought the input of the industry, any
stakeholders, and anyone who may have information and evidence
on what might be a better method than dentician. We are surely
open to whatever other suggestions the experts in the field
have for us, and we will move to do the best job we can and be
as accurate as possible.
NATIONAL ANIMAL IDENTIFICATION
Senator Burns. With a national ID system and a producer
that keeps records--and most do now and especially in
performance herds; we are doing it more with range cattle more
every day to identify those animals who excel in their
production and this type thing, I would say--and if we go to
some sort of a digital ear tag, that at least the week the
animal was born, it would also be part of that record on that
ear tag. That is the only thing that I think the ear tag has an
advantage over a hot iron brand, but that is a westerner
talking and not the general run of the cattle business.
So I think we have to approach that because I will tell
you, being in that business, I sat up there the other day, and
just to see if I had any talent left at the auction when they
were selling cattle the other day at the auction. I sat up
there and I still got the touch, I want you to know, right now.
Mr. Hawks. Are you looking for a job, Senator?
Senator Burns. No.
I tell you how it can go. A farmer came in and set down
beside me, and there was a little package of calves come in,
and they probably weigh, I do not know, pretty close to 6 and
pretty green. And he just leaned over and he said, ``Conrad,
what do you think those things will weigh?'' And I said, ``Do
not ask me. I missed the weight of a chicken by 7 pounds one
time.''
But I really believe that the national ID system, I think
you have a working group out there right now that is headed by
Gary Wilson out of Ohio, and I have talked with him--he was in
town about a week, week and a half ago--on the national ID
system, and also on the age, because I will tell you, that age
is critical. It is critical because we know of people that some
feed calves, some feed yearlings, and then there is a little
thing called a heiferette, and we know about those kind of
stock, but it is critical as far as the return to the producer,
and also critical to the man who sends them to market for
slaughter, and how they are graded and this type of thing.
Right now it is a pretty rapid market out there right now,
especially on that class of cattle and livestock.
We would like to see what you have proposed. We would like
to work with you on that, especially that working group on
national ID and on age. I also talked to some people that want
to do some work as far as verification of the animal from birth
to the grocery store, tests along the way. Because there are
some plans and programs in the private sector that are being
developed, but they will depend on--they want to work with the
Department of Agriculture, because we know when we go into the
export market, it is the Department of Agriculture who really
carries the message into the international market. So we want
to do that if we possibly can.
ADDITIONAL COMMITTEE QUESTIONS
As far as the chickens, I know there are probably some
people in this room that think chickens is awfully important. I
am not one of them.
Only on Sunday every now and again. But I am really
concerned about the cattle business.
I do not have any more questions. Senator, are you all
done?
Senator Kohl. Yes.
Senator Burns. I would just be like any other chairman. The
record will be kept open for a couple of weeks. We may have
some questions from other committee members that will be
directed your way. We would appreciate if you would respond to
those questions both to the committee and to the individual
member of the committee. We appreciate that very much.
[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
DRUG INFORMATION WEB SITE
Question. I noted that the FDA recently launched a web site to
allow both consumers and the medical community to find comprehensive
information about FDA-approved drugs quickly and easily. Since the web
site was launched on March 3, how many ``visitors'' has it had?
Answer. Drugs@FDA has had 154,065 visitors for the period March 3
through April 12, 2004.
Question. Has the FDA received any feed-back from consumers and
health care professionals about the ease of access, and whether the
information is comprehensive and useful?
Answer. Since March 1, 2004 we have received 70 comments on
Drugs@FDA, version 1. It's important to note that there were two
previous beta versions of Drugs@FDA on the Internet: beta 1 in June
2003, and beta 2 from September 2003-March 2004. We received a
significant volume of very helpful feedback which was incorporated into
Drugs@FDA, version 1.
The nature of the comments Drugs@FDA, version 1, ranged from the
general (5) we liked it or didn't like it to questions about specific
drug products (25) that were referred to CDER's Division of Drug
Information for response. Most comments pertinent to Drugs@FDA (40)
fall in the category of requesting new features. For example, users
requested the ability to search by indication or drug class, wanted
more labels added, to obtain NDC numbers and imprint information, to
have more regulatory terms added to the glossary, links to the Orange
Book, and even the ability to download the database for analysis.
MEDICAL DEVICE REVIEW
Question. According to the 2003 Annual Report of the Office of
Device Evaluation, the Center for Devices and Radiological Health was
meeting or exceeding most of its MDUFMA-prescribed performance goals in
2002. As previously noted, the fiscal year 2005 budget request includes
$25.555 million for this user fee program. What will the FDA actually
do with this increased funding?
Answer. The FDA commitment letter defines the performance
objectives FDA is pursuing under MDUFMA. It requires FDA to meet
challenging objectives for both cycle and decision goals and to pursue
a variety of other goals that do not involve quantifiable measures of
progress, such as maintaining current performance in areas where
specific performance goals are not identified, working with its
stakeholders to develop appropriate performance goals for modular
review of PMAs, and working to improve the scheduling and timeliness of
pre-approval inspections.
The appropriation requested by the President's fiscal year 2005
Budget will provide FDA the resources needed to move forward to
effectively implement MDUFMA. Substantial improvement will be required
to meet both the fiscal year 2005 performance goals and to lay the
foundation for the increasingly challenging performance goals of fiscal
year 2006 through fiscal year 2007.
The additional funding will be used to:
--Cover the cost of living increases so that FDA can maintain
staffing levels and scientific capabilities to meet the demands
of an increasing workload and new challenges;
--Enhance the IT systems that support the current review process and
develop system capabilities to facilitate the submission and
acceptance of electronic premarket applications;
--Enhance reviewer training and skill maintenance so that FDA
reviewers are able to keep pace with rapidly developing and
increasingly complex device technologies;
--Employ research and science based activities that provide support
critical to the device product approval process;
--Invest in office and laboratory infrastructure to keep pace with
rapid technological and scientific change in diverse fields of
expertise;
--Work with outside experts to develop guidance and standards to help
industry understand and meet FDA requirements, and to help
support FDA's role in international harmonization on emerging
technologies.
--Expand FDA's small business assistance program as required by the
FD&C Act. Approximately 35 percent of the PMAs approved last
year were from first time submitters who needed FDA's
assistance;
--Conduct pre-approval inspections of device manufacturers;
--Enhance policy guidance document development, emergency response,
review management and risk communication for products developed
and used to respond to terrorist threats and national security
crisis; and
--Contract with professional societies and agencies to address the
agency's needs, including the need for adequate laboratory
facilities, to plan bio-effects research, and to develop
requirements for the safe use of devices.
Question. Since the agency has already reached most of its MDUFMA
performance goals, should the FDA be working toward more aggressive
goals?
Answer. Although FDA is making satisfactory progress towards
achieving the ambitious performance goals established under MDUFMA, the
fiscal year 2003 Office of Device Evaluation/Office of In Vitro
Diagnostic Device Evaluation and Safety (ODE/OIVD) Annual Report does
not claim or imply that we ``have already reached most'' of MDUFMA's
performance goals. MDUFMA's goals are based on receipt cohorts; for
example, the fiscal year 2003 receipt cohort includes applications
received from October 1, 2002 through September 30, 2003. For PMAs and
PMA supplements, the receipt cohort performance data shown for fiscal
year 2003 in the ODE/OIVD Annual Report represents only receipts
through March 31, 2003 (6 months of data); for 510(k)s, the receipt
cohort performance data shown for fiscal year 2003 represents only
receipts through June 30, 2003 (9 months of data). See the footnotes on
pages 48, 53, 56, and 68 of the fiscal year 2003 report. Furthermore,
the results applicable to our MDUFMA performance goals will change over
time as FDA completes work on pending applications. As of March 31,
2004, the following fiscal year 2003 applications were still pending
(the numbers were substantially higher when the fiscal year 2003 report
was prepared):
--PMAs--21
--Expedited PMAs--1
--180-day PMA Supplements--2
--510(k)s--316
Also, the goals become more stringent beginning in fiscal year
2005.
The ODE/OIVD Annual Report shows promising progress towards
achieving MDUFMA's objectives, but those results represent only
preliminary indicators of performance. FDA will provide quarterly
reports updating our progress towards achieving MDUFMA's performance
goals on our MDUFMA web site (www.fda.gov/cdrh/mdufma).
MEDICAL DEVICE/DRUG MARKETING
Question. We have all heard that a particular DC laser surgeon
fixed Tiger Woods' eyesight, and that former Senator Bob Dole has
benefited from a particular prescription drug. Now we learn that golfer
Jack Nicklaus has a new hip made by a particular company. The
implications here are if it is good enough for Tiger/Bob/Jack, its good
enough for me. What role does the FDA play in monitoring these types of
advertisements?
Answer. FDA regulates drugs and medical devices in the United
States under the authority of the Federal Food, Drug, and Cosmetic Act
(FDCA). This authority extends to promotional labeling for all drugs
and devices and advertising for prescription drugs and so-called
``restricted'' devices. (21 U.S.C. 342(a); 352(a), (n), (q), (r);
362(a).) The Federal Trade Commission (FTC) also has legal authority to
regulate advertising (15 U.S.C. 52), and takes the lead in regulating
the advertising of OTC drugs and non-restricted devices. FDA takes the
lead in regulating the labeling of over-the-counter (OTC) and
prescription drugs and non-restricted and restricted devices, and the
advertising of prescription drugs and restricted devices.
Advertisements for prescription drugs must include, among other
things, ``information in brief summary relating to side effects,
contraindications, and effectiveness,'' as specified in FDA
regulations. (21 U.S.C. 352(n); see also 21 CFR 202.1.) Advertisements
for restricted devices must include ``a brief statement of the intended
uses of the device and relevant warnings, precautions, side effects,
and contraindications. . . .'' (21 U.S.C. 352(r).) Both prescription
drug and restricted device advertisements also must not be false or
misleading, meaning they must disclose material risk information. (21
U.S.C. 352(q)(1) & 321(n); 21 CFR 202.1(e)(5).) FDA's rules for
prescription drug and restricted device advertising are the same,
whether the advertising is aimed at a consumer audience or at health
care professionals.
The FDCA contains no special rules for celebrity endorsements in
advertising. In general, an endorsement could be subject to the general
rules for advertising set forth above. Thus, if a celebrity
spokesperson were to make a statement in an advertisement for a
prescription drug or restricted device that is false or misleading, or
if an advertisement contained a celebrity testimonial but lacked the
risk information required under the above provisions, FDA likely would
have authority to initiate enforcement action under the FDCA.
Statements by independent individuals not speaking on behalf of a drug
firm are not subject to FDA's advertising jurisdiction. Oral
representations by paid representatives of drug firms concerning the
safety or effectiveness of a product might also within FDA's regulatory
authority if they create a new intended use for a product, for which
adequate directions would be required in labeling and for which
premarket approval might be required. (See 21 U.S.C. 352(f)(1), 355.)
FDA believes consumer-directed advertisements play an important
role in advancing the public health by encouraging consumers to seek
treatment. Since 1997, consumer-directed advertisements have been aired
(on television or radio) for about 98 prescription drugs. Of those, 14
are intended for under-treated conditions, such as high cholesterol,
heart disease, and mental health problems like depression. Others are
for serious conditions such as asthma, Alzheimer's disease, arthritis,
chronic obstructive pulmonary disease, diabetes, insomnia, migraine,
obesity, osteoporosis, overactive bladder, serious heartburn, smoking
cessation, and sexually transmitted diseases.
FDA held a public meeting to discuss the results of FDA surveys and
other research on consumer-directed advertising on September 22-23,
2003. Based in part on discussion at that meeting, FDA has developed
guidance to encourage advertising that provides risk and benefit
information appropriate to support conversations between consumers and
their health care providers. On February 4, 2004, the agency issued
three draft guidance documents, addressing (1) options for presenting
risk information in consumer-directed print advertisements for
prescription drugs, to encourage use of consumer-friendly language and
formats (2) criteria FDA uses to distinguish between disease awareness
communications and promotional materials, to encourage manufacturers to
disseminate disease educational messages to the public, and (3) a
manner in which restricted device firms can comply with the rules for
disclosure of risk information in consumer-directed broadcast
advertising for their products, to help encourage compliance in this
emerging area of medical product promotion.
FDA has adopted a comprehensive, multi-faceted, and risk-based
strategy for regulating consumer-directed advertising of medical
products. This strategy includes legally sustainable letters, guidance
development, frequent informal communications with industry and
advertisers, and research on the public health effects of consumer-
directed promotional materials. We continue to monitor the impact of
consumer-directed promotion on the public health.
METHYLMERCURY ADVISORY FOR SEAFOOD
Question. As you will recall, Dr. Crawford, in the Statement of the
Managers to accompany the fiscal year 2004 Omnibus Appropriations bill,
the conferees encouraged coordination between the FDA and the EPA on
what is considered a safe level of methylmercury exposure. I was
pleased to note that an updated consumer advisory regarding fish
consumption and methylmercury was released in mid-March. How does this
new advisory differ from that which was released by the FDA in July of
2002?
Answer. The FDA issued an advisory for mercury in fish in March of
2001; this advisory was then reviewed by the FDA's Food Advisory
Committee (FAC) in July 2002. There was no new advisory issued in July
2002. The FAC made six recommendations at their meeting in July 2002 as
follows:
--Better define what is meant by ``eat a variety of fish'' so that
consumers can follow this recommendation effectively;
--Work with other Federal and State agencies to bring commercial and
recreational fish under the same umbrella;
--Publish a quantitative exposure assessment used to develop the
advisory recommendations;
--Develop specific recommendations for canned tuna, based on a
detailed analysis of what contribution canned tuna makes to
overall methylmercury levels in women;
--Address children more comprehensively in the advisory to relate
dietary recommendations in the advisory to the age/size of the
child; and,
--Increase monitoring of methylmercury to include levels in fish and
the use of human biomarkers.
Based on these recommendations, meetings with stakeholders, focus
group testing as well as further input from the FACs in December 2003,
the FDA issued a revised advisory on March 19th 2004. The revised
advisory differed from the 2001 advisory in a number of ways as
follows:
--The 2004 Advisory is a joint advisory by FDA and EPA that addresses
both commercial caught and locally caught fish and shellfish;
--The 2004 Advisory more strongly emphasizes the positive benefits of
eating fish;
--The 2004 Advisory provides examples of commonly eaten fish that are
low in mercury;
--The 2004 Advisory and the Question and Answers section specifically
addresses canned light tuna and canned albacore (``white'')
tuna, as well as tuna steaks;
--The 2004 Advisory recommends not eating any other fish in the same
week as locally caught fish are consumed (the Advice on the
amount of locally caught fish to eat is the same as in the 2001
EPA advisory); and,
--The 2004 Advisory contains a section that addresses the frequently
asked questions about mercury in fish.
The 2004 advisory was revised to provide useful information for
keeping fish as part of a healthy diet and at the same time reduce the
exposure to mercury. The 2004 Revised Advisory more accurately reflects
the purpose of the information.
NEW DRUG APPROVAL PROCESS
Question. The FDA recently issued a report which described the
decrease in the number of new innovative drug application, and
recommends reform to the existing regulatory process. I would
appreciate it if you could explain just exactly what the FDA plans to
do in this regard.
Answer. The ``critical path'' is best described as the crucial
steps that determine whether and how quickly a medical discovery
becomes a reliable medical treatment for patients. There are certain
points on this path where difficulties are occurring. FDA believes that
a major problem in today's drug development process is that the new
science and scientific tools being used in the discovery process are
not being harnessed to guide the development process that brings
products to market. FDA has called for a new focus on modernizing the
tools that applied biomedical researchers and product developers use to
assess the safety and effectiveness of potential new products, and the
manufacturing tools necessary for high-quality mass production of
cutting-edge therapies. FDA is in a unique position to identify
scientific challenges that cause delays and failures in product testing
and manufacturing because of its experience overseeing medical product
development, assessment, and manufacturing/marketing; its vast clinical
and animal databases; and its close interactions with all the major
players in the critical path process.
FDA, through collaboration with academia, patient groups, industry,
and other government agencies, will play a major role in identifying
systemic medical product development problems via development of a
Critical Path Opportunities List, and in conducting or collaborating on
research to create a new generation of performance standards and
predictive tools that will provide better answers about the safety and
effectiveness of investigational products, faster, with more certainty,
and at lower costs. Specific examples of critical path efforts include:
developing guidances and scientific workshops on ``best practices'',
developing new animal or computer-based predictive models, developing
new biochemical and genomic assays as biomarkers for safety and
effectiveness, collaboration on the design of new clinical evaluation
techniques, and facilitating multi-company studies of technologies
which no one company could mount. FDA will identify and prioritize the
most pressing product development problems and the areas that provide
the greatest opportunities for rapid improvement and public health
benefits across the three dimensions of the ``critical path''--safety
assessment, evaluation of medical utility, and product
industrialization and will facilitate collaborative research in these
areas.
Question. A consumer group has expressed the opinion that the FDA
should approve only drugs which show concrete advantages to drugs
currently on the market. What is your response to that suggestion?
Answer. Our present and future mission remains constant: to ensure
that drug products available to the public are safe and effective. If
the drug is effective and we are convinced its health benefits outweigh
its risks, we approve it for sale. Statutory requirements dictate that
we review products submitted to us requesting approval. From a medical
perspective, it is desirable for physicians and consumers to have a
variety of drug treatment choices. Not all people can tolerate a
specific drug. Not all drugs have the intended affect in every person.
From an economic perspective, it is also useful to have a market
featuring a variety of products so that prices are competitive.
SEAFOOD INSPECTION/GAO REPORT
Question. The General Accounting Office recently issued a report on
the FDA's imported seafood safety program. Basically, GAO found that
although the FDA has made some progress in the number of foreign firms
being inspected and the number of seafood products being tested at U.S.
ports of entry, there is more work to be done. Among other things, GAO
recommends that the FDA work with NOAA to have NOAA employees provide
various services under their Seafood Inspection Program. Have you
reviewed this GAO report? Do you agree with their observations? What
steps has the FDA taken to work with NOAA in this regard?
Answer. FDA reviewed the GAO report and provided a lengthy comment
to the GAO on this particular recommendation. The comment was published
in the Appendices to the report. In summary, FDA noted that it has a
long and collegial working relationship with the seafood inspection
program within the National Marine Fisheries Service (NMFS) and that
the two agencies will be working together to find better ways of
integrating their programs. Potential areas of integration were
described, including the use of NOAA laboratory capacity to carry out
analyses of seafood samples that FDA takes during the normal course of
work; the commissioning of NMFS inspectors; the use of NMFS inspectors
who might already be on site in distant locations; and the issuance by
NMFS of European Health Certificates for a fee to U.S. industry that
ships fish and fishery products to Europe. The latter would free up FDA
resources that are now devoted to that activity.
We have recently worked with NOAA Fisheries' National Seafood
Inspection Laboratory (NSIL) located in Pascagoula, MS and the NOAA
Fisheries' Northwest Fisheries Science Center in Seattle, WA to assess
the use of NOAA laboratory capacity to carry out analyses of seafood
samples that FDA takes during the normal course of our work, or during
``crisis'' situations. Specifically for chloramphenicol analysis, our
discussions have resulted in FDA's provisional approval (pending on
site review) of these laboratory's methods for sample submission,
custody, routing, and accounting and documentation procedures necessary
to maintain the regulatory chain of custody and tracking required for
import collections. While FDA is not able to fund this initiative this
fiscal year, we hope that we will be able to implement this proposal in
the future.
AGRICULTURAL PRODUCTS
Question. The White House Office of Science and Technology Policy,
(OSTP) had recommended approximately 2 years ago (August 2, 2002) that
various agencies--including the FDA--complete guidelines regarding the
early safety assessment of agricultural products developed through
biotechnology for food and feed use. To date, there is no evidence that
the FDA has acknowledged this mandate nor made any progress towards
finalizing a policy. The U.S. regulatory system currently imposes a
zero tolerance on the presence of unapproved biotech-enhanced events in
food and feed, regardless of the risk level. It does not recognize the
realities of a biological system. This zero-tolerance' policy exposes
grain handlers, food processors and feed manufacturers to the risk that
any trace amounts of biotech-enhanced events in general commodity crops
that have not been approved for food and feed under the U.S. regulatory
process could render such crops adulterated and subject to seizure
under Federal law. Such a policy is inconsistent with other food purity
standards which have established thresholds for trace amounts of
unexpected materials. Without having a policy in place, the United
States risks significant disruptions in global agricultural trade. What
is the FDA doing to meet their obligations and will they be able to
complete their work by year's end?
Answer. On August 2, 2002, OSTP announced proposed Federal actions
to update field tests requirements for biotechnology derived plants and
to establish early food safety assessments for new proteins produced by
such plants. As part of this proposal, FDA announced that it would
publish for comment draft guidance to address the possible
intermittent, low level presence in food and feed of new non-pesticidal
proteins from biotechnology-derived crops under development for food or
feed use, but that have not gone through FDA's pre-market consultation
process. FDA is preparing draft guidance and expects to publish the
draft guidance for comment this year.
TRANSGENIC ANIMALS IN CVM
Question. The FDA has resources in place for regulation of
transgenic animals in CVM. However, the agency has to date not provided
any guidance to industry for the regulation of transgenic animals. What
is the FDA doing to refine and clarify the regulatory process for
transgenic animals, and when can we expect to see specific regulatory
guidance published?
Answer. It is true that CVM has not issued any general guidance to
industry for the regulation of transgenic animals. Instead, CVM has
worked with investigators one-on-one to ensure safe and efficient
development of animal biotechnology products while an interagency group
led by the White House Office of Science and Technology Policy (OSTP)
develops a coordinated framework that is appropriate to animal
biotechnology.
In 1984, the Federal Government embarked on project to develop a
Coordinated Framework for regulation of biotechnology products. The
early efforts focused on plant biotechnology for agricultural purposes.
The effort has resumed at various times as new categories of products
became feasible. For example, in May 2000, the White House directed its
Council on Environmental Quality, ``CEQ'', and Office of Science and
Technology Policy to conduct an interagency assessment of Federal
environmental regulations pertaining to agricultural which includes
both plants and animals, biotechnology and, if appropriate, make
recommendations to improve them. Information is available on the
internet at http://www.ostp.gov/html/ceq_ostp_study1.pdf.
The White House-directed interagency process continues with respect
to animal biotechnology products. The OSTP has convened over the last
year an interagency group--which was similar to the group convened in
May 2000--with FDA, APHIS, EPA, and OMB, represented. The group is
focusing on the application of the Coordinated Framework to the wide
range of animal biotechnology products that have been developed since
the framework was created in the 1980's. There were very few examples
of animal biotechnology products available to consider in the 1980's
and only a limited number in 2000. The discussions are continuing,
using various product examples, and including listening sessions with
various stakeholders. Ultimately, a seamless Federal oversight system
for animal biotechnology products is expected.
Both as part of this interagency process and separately, FDA has
examined--and continues actively to consider--the many complex legal,
scientific, and policy issues related to animal biotechnology. FDA has
a variety of authorities potentially applicable to transgenic animals,
including FDCA authorities over foods, food additives, and new animal
drugs. In 2000, FDA commissioned the National Academy of Sciences/
National Research Council Committee on Agricultural Biotechnology,
Health, and Environment, (NAS) to identify and rank, where possible,
potential risks associated with the introduction of animal
biotechnology into commerce. FDA is using the resulting report
recommendations, issued in the fall of 2002, as guidance in developing
an action plan for the future. FDA is also preparing a risk assessment
on animal clones and considering risk management measures that might be
appropriate as a condition for marketing animal clones for use in the
human food chain.
FDA is also involved in considering issues relating to particular
applications of animal biotechnology. In March 2003, FDA began
investigating and contacting universities engaged in genetic
engineering research to ensure that genetically engineered animals do
not enter the food or animal feed--as rendered animals--supply. In May,
FDA issued a letter to the Presidents of the Land Grant Universities
and posted the letter for more general access on its website.
Information on the ``Letter from FDA to Land Grant University'', from
May 13, 2003, may be found on the internet at http://www.fda.gov/cvm/
biotechnology/LandGrantLtr.htm. Roughly 2 dozen organizations have
responded to FDA's outreach and identified multiple projects with
transgenic animals. FDA is monitoring these and other projects as
appropriate.
FOOD SAFETY
Question. The Chicago Tribune recently published an article
regarding the rising threat to the U.S. food supply. Many of the quoted
experts used the word ``scary'' in describing our vulnerability. What
strategy, if any, has the FDA adopted to counter intentional tampering
with the U.S. food supply. An additional $65 million was requested in
the fiscal year 2005 budget request for food defense. What exactly does
the FDA plan to do with these funds? What outputs will these funds
provide?
Answer. FDA employs five food defense strategies:
--Development of increased food security awareness among Federal,
State, local, and tribal governments and the private sector by
collecting, analyzing, and disseminating information and
knowledge (awareness);
--Development of capacity for identification of a specific threat or
attack on the food supply (prevention);
--Developing effective protection strategies to ``shield'' the food
supply from terrorist threats (preparedness);
--Developing a rapid, coordinated response capability to a terrorist
attack (response); and,
--Development of capacity for a rapid, coordinated recovery from a
terrorist attack (recovery).
FDA's plan to protect the food supply will be executed on both the
import and domestic fronts.
The fiscal year 2005 requested increase of $65,000,000 for
Counterterrorism food defense includes $35,000,000 (including eLEXNET)
to establish the Food Emergency Response Network (FERN) for increasing
lab testing capacity in the event of a threat to the food supply.
Roughly $23,000,000 of FERN funds will be available to States for
establishing food lab emergency response capabilities and $5,500,000
for infrastructure costs. The request also includes $15,000,000 to
address a significant research need for ensuring that we have the
capability of detecting or inactivating a broad range of agents that
could pose serious threats to the food supply; $7,000,000 to increase
import and domestic inspections activities; $5,000,000 to coordinate
with and establish connectivity of our existing food surveillance
efforts to the Department of Homeland Security as part of the
Administration's bio-surveillance initiative; and $3,000,000 for the
Emergency Operations Network project to upgrade our crisis/incident
management capabilities in the event of a potential threat to the food
supply.
Funds requested for FERN would establish 15 State food emergency
response labs, and will also provide an additional 25 labs connected to
the eLEXNET, plus necessary infrastructure such as a national
operations center to support participating labs. Research funds would
ensure that we have the capability of detecting or inactivating a broad
range of agents that could pose serious threats to the food supply. The
funds for inspections would result in an additional 37,000 import field
exams over the projected 60,000 projected level in fiscal year 2004 for
a total of 97,000 import field exams. It would also allow for increased
surveillance of our food supply by funding an additional 750 domestic
establishment inspections. Funds would also upgrade our Emergency
Operations Center by investing in the Emergency Operations Network, and
would increase coordination of our food surveillance efforts with the
Department of Homeland Security.
Question. Last year, the FDA joined with the U.S. Bureau of Customs
and Border Protection to develop a program to protect the American
public from food bioterrorist attacks. There were high hopes that as
many as 420,000 manufacturing, processing, packing, and holding
facilities, both in the United States and abroad, would quickly
register under this program and provide advance notice of imports in
order to expedite the entry process. According to press reports, only
about half of those facilities have registered, and food shipments are
still arriving without prior notice. Why haven't all covered facilities
complied with these requirements? What efforts have the FDA and the
Customs Bureau undertaken to make sure that covered facilities
register? It is estimated that 25,000 shipments of imported food arrive
at U.S. ports of entry every day. Does the FDA have sufficient
resources to adequately inspect these shipments?
Answer. In the Registration Interim Final Rule (IFR), FDA estimated
that about 420,000 facilities would be covered by the requirements of
the rule. In the Prior Notice IFR, FDA estimated that it would handle
25,000 prior notice submissions per day. To clarify the above question,
FDA has not estimated that the approximately 420,000 facilities
estimated in the Registration IFR would necessarily provide prior
notice to FDA.
FDA is unsure why it has only received approximately 200,000 of the
expected registrations to date. Because registration is a completely
new requirement and covers so many food facilities, FDA believes many
small facilities may still be unaware of the registration requirement.
FDA continues to place a high emphasis on notifying as many affected
entities as possible of the registration requirements through outreach.
On April 1, 2004, FDA completed nine city domestic outreach meetings
for small businesses and other stakeholders on the registration and
prior notice IFRs. FDA's international component of Phase II outreach
has been conducted through the collaboration and cooperation of the
Department of State through a foreign press conference, Voice of
America video teleconference, and USDA's Foreign Agricultural Service.
Worldwide attaches disseminated the Registration and Prior Notice
interim final rules, compliance policy guidance, and Questions and
Answers. FDA, with Customs and Border Protection participation, is also
conducting a series of four outreach meetings in Asia from April 21-29,
2004. FDA will continue to conduct outreach in order to notify affected
entities of the registration requirement.
In response to the question regarding whether FDA has sufficient
resources to adequately inspect the estimated 25,000 daily shipments of
imported food arriving at U.S. ports, FDA would like to clarify that
the goal is not to physically inspect each shipment associated with a
prior notice submission. However, it is important to note that these
shipments are reviewed electronically to determine if the shipment
meets identified criteria for physical examination or sampling and
analysis or warrants other reviews by FDA personnel. This electronic
screening allows FDA to concentrate its limited inspection resources on
high-risk shipments while allowing low-risk shipments to proceed into
commerce.
Prior to receiving our prior notice authority, FDA already was
receiving much of the entry information contained in the prior notice
submission. However, FDA was not receiving the entry information in
advance of the shipment arriving in the United States. With the new
prior notice authority, FDA is receiving the entry information in
advance of the shipment arriving in the United States (timeframe
depends on mode of transportation), and thus, the Agency is better able
to focus inspection resources on those shipments for which there is
reason to believe they may pose a danger to the food supply.
MONOGRAPH DRUG APPROVAL SYSTEM
Question. The Senate Committee Report to accompany the fiscal year
2004 Agriculture appropriations bill discussed the interest in the
establishment of a monograph system for prescription drug products. The
FDA was asked to provide a report regarding the feasibility and cost of
such a new monograph system for prescription drug products. What is the
status of the FDA review of this proposal? If a monograph system is not
the appropriate way to go, what efforts has the FDA undertaken to find
a way to preserve health and safety while at the same time encourage
competition, keep prescription drug prices low, and keep small
businesses open?
Answer. In 2003, the Senate Committee on Appropriations asked FDA
to prepare a report regarding the feasibility and cost of a new
monograph system for prescription drugs that have been marketed to a
material extent or for a material time without pre-market approval. The
agency is currently preparing that report. The report will analyze
critical issues that would need to be addressed if FDA were to develop
monographs for the approval of marketed prescription drugs. The report
will evaluate the cost and feasibility of developing such a system.
Question. The FDA just extended the comment period for
consideration of a guidance document regarding enforcement priorities
for older prescription drugs marketed outside of the current new drug
approval system. In examining comments, will the FDA examine
alternative approaches to the enforcement policy, such as a
prescription drug monograph for these older prescription drugs?
Answer. In October 2003, the Agency issued a draft Compliance
Policy Guide (CPG) outlining FDA policies to encourage companies to
sponsor unapproved drugs through the agency's drug approval process.
The draft CPG requests public comment and sets forth the agency's
enforcement approach, explaining that FDA will continue to give
priority to enforcement actions involving three categories of
unapproved drugs: Those that pose safety risks; those that lack
evidence of effectiveness; and those that constitute health fraud. It
also explains how the agency intends to address those situations in
which a firm obtains FDA approval to sell a drug that other firms have
long been selling without FDA approval.
FDA received requests to reopen the comment period and has reopened
the comment period until April 27, 2004. The Agency will carefully
examine all comments, including comments relating to alternative
approaches that are submitted on the matter.
PRESCRIPTION DRUG ABUSE
Question. Mr. Crawford, last month the FDA joined with the Office
of National Drug Control Policy, the DEA, and the Surgeon General in
releasing the President's National Drug Control Strategy. As noted in
the ONDCP press release, this marks the first time that any
Administration has included the issue of prescription drug abuse in
this Strategy. What, exactly, is the FDA's role in this effort? Will
the FDA be able to fulfill this mission with existing funds and
authorities? If not, were additional resources requested in the fiscal
year 2005 budget? Does the FDA need additional statutory authorities?
Answer. The strategy for reducing prescription drug abuse focuses
on three core tactics:
First, Business Outreach and Consumer Protection: FDA will work to
ensure product labeling that clearly articulates conditions for safe
and effective use of controlled substances so that commercial
advertising fully discloses safety issues associated with the drug's
use. A specific example of this is labeling that properly identifies
patients for whom these products are appropriate and that recommend a
``stepped care'' approach to the treatment of chronic pain, in
accordance with treatment guidelines.
FDA will consider Risk Management Programs (RMPs). The Agency will
evaluate the need for a RMP during the approval process for Schedule II
opiate drug products. RMPs help ensure the safe prescribing and use of
these drugs through identification of appropriate patients and
monitoring for adverse outcomes.
FDA in conjunction with the DEA and the White House Office of
National Drug Control Policy (ONDCP) will work with physician
organizations to encourage comprehensive patient assessment prior to
prescription of opiate therapy.
FDA and other Federal agencies are enlisting the support of
responsible businesses affiliated with online commercial transactions.
These legitimate businesses will be asked to alert law enforcement
officials to suspicious or inappropriate activities related to these
products.
Second, Investigation and Enforcement: The Internet is one of the
most popular sources of diverted prescription drugs. An increasing
number of rogue pharmacies offer controlled substances and other
prescriptions direct to consumers online.
FDA's Office of Criminal Investigation (OCI) and DEA work together
on criminal investigations involving the illegal sale, use, and
diversion of controlled substances, including illegal sales over the
Internet. Both FDA and DEA have utilized the full range of regulatory,
administrative, and criminal investigative tools available, as well as
engaged in extensive cooperative efforts with local law enforcement
groups, to pursue cases involving controlled substances.
FDA and U.S. Customs and Border Protection (CBP), with assistance
from DEA, continue to conduct spot examinations of mail and courier
shipments for foreign drugs to U.S. consumers to help FDA and CBP
target, identify, and stop illegal and potentially unsafe drug from
entering the United States from foreign countries via mail and common
carriers.
Finally, Protecting Safe and Effective Use of Medications: FDA will
support DEA's efforts with medical associations to identify existing
best practices in physician training in the field of pain management.
DEA and FDA plan to develop a mechanism to support the wider
dissemination and completion of approved Continuing Medical Education
(CME) courses for use of opioids that include information on the risk
of abuse and addiction.
FDA in conjunction with ONDCP and DEA will develop public service
announcements that appear automatically during Internet drug searching
to alert consumers to the potential danger and illegality of making
direct purchases of controlled substances online. Currently, FDA, along
with its sister agency, the Substance Abuse and Mental Health Services
(SAMHSA), have jointly developed a public service announcement campaign
to better educate consumers on the abuse of prescription pain killers.
FDA did not request additional resources in the fiscal year 2005
budget in order to participate in the activities stated above. This
initiative does not require additional regulatory authority.
OBESITY
Question. In your prepared remarks you discuss the FDA Obesity
Working Group whose recommendations were recently released as part of
HHS Secretary Thompson's overarching new national education campaign
for combating obesity. What is the FDA role in these anti-obesity
efforts? Which of your Centers is responsible for these efforts? What,
specifically, is the FDA doing to make sure labels on food is correct,
and that claims made about food are factual and science-based? What, if
any, additional plans will be implemented in fiscal year 2005?
Answer. In support of the President's Healthier U.S. initiative,
the DHHS established a complementary initiative, Steps to a Healthier
United States, which emphasizes personal responsibility for the choices
Americans make for healthy behaviors. One aspect of this initiative
focuses on reducing the major health burden created by obesity and
other chronic diseases. Following DHHS' July 2003 Roundtable on Obesity
and Nutrition, on August 11, 2003, FDA established an Obesity Working
Group, or OWG, to prepare a report that outlines an action plan to
cover critical dimensions of the obesity problem from FDA's perspective
and authorities. This report was released on March 12, 2004.
There is no simple answer to the problem of obesity. Achieving
success in reducing and avoiding obesity will occur only as a result of
efforts over time by individuals as well as various sectors of our
society. It should be noted, however, that most associations, agencies,
and organizations believe that diet and physical activity should be
addressed together in the fight against overweight and obesity.
The OWG report provides a range of short and long-term
recommendations to address the obesity epidemic with a focus on a
``calories count'' emphasis for FDA actions. These recommendations are
based on sound science and address multiple facets of the obesity
problem under FDA's purview, including developing appropriate and
effective consumer messages to aid consumers in making wiser dietary
choices; establishing educational strategies and partnerships to
support appropriate messages and teach people, particularly children,
how to lead healthier lives through better nutrition; developing
initiatives to improve the labeling of packaged foods with respect to
caloric and other nutrition information; encouraging and enlisting
restaurants in efforts to combat obesity and provide nutrition
information to consumers, including information on calories, at the
point-of-sale; developing new therapeutics for the treatment of
obesity; designing and conducting effective research in the fight
against obesity; and continuing to involve stakeholders in the process.
Regarding food labeling, the OWG report contains several
recommendations based on sound science. I will provide these
recommendations for the record.
[The information follows:]
Publish an advance notice of proposed rulemaking, or ANPRM, to seek
comment on the following:
--How to give more prominence to calories on the food label, for
example, increasing the font size for calories, including a
column in the Nutrition Facts panel of food labels for percent
Daily Value for total calories, and eliminating the listing for
calories from fat;
--Whether to authorize health claims on certain foods that meet FDA's
definition of ``reduced'' or ``low'' calorie. An example of a
health claim for a ``reduced'' or ``low'' calorie food might
be: ``Diets low in calories may reduce the risk of obesity,
which is associated with type 2 diabetes, heart disease, and
certain cancers.''
--Whether to require additional columns on the Nutrition Facts panel
to list quantitative amounts and percent Daily Value of an
entire package on those products and package sizes that can
reasonably be consumed at one eating occasion--or declare
quantitative amounts and percent Daily Value of the whole
package as a single serving if it can reasonably be consumed at
a single eating occasion; and,
--Which, if any, reference amounts customarily consumed of food
categories appear to have changed the most over the past decade
and hence require updating.
File and respond in a timely way to petitions the agency has
received that ask FDA to define terms such as ``low,'' ``reduced,'' and
``free'' carbohydrate; and provide guidance for the use of the term
``net'' in relation to carbohydrate content of food--these petitions
were filed on March 11, 2004. Encourage manufacturers to use dietary
guidance statements, an example of which would be, ``To manage your
weight, balance the calories you eat with your physical activity.''
Encourage manufacturers to take advantage of the flexibility in
current regulations on serving sizes to label as a single-serving those
food packages where the entire contents of the package can reasonably
be consumed at a single eating occasion. Encourage manufacturers to use
appropriate comparative labeling statements that make it easier for
consumers to make healthy substitutions.
We believe that if the report's recommendations are implemented
they will make a worthy contribution to confronting our Nation's
obesity epidemic and helping consumers' lead healthier lives through
better nutrition.
We also believe that the regulatory scheme for claims in food
labeling, whether health claims, nutrient content claims, or other
types of claims, are science based, and we continue to consider
modifications to our regulations to keep up with recent scientific
developments. Some of the modifications FDA is currently considering
are described above in the list of topics to be covered by the ANPRM
the agency intends to issue.
ALBUTEROL METERED-DOSE INHALERS
Question. As noted in the Senate Report last year, there are a
number of organizations which support the removal of ozone-destroying
CFC albuterol metered-dose inhalers from the market. The FDA has
indicated in its regulatory plan that it intends to issue a rule on
this matter. Proponents of this rule had expected a proposed rule by
now. When can this Committee expect the FDA to issue a proposed rule to
remove albuterol metered-dose inhalers from the U.S. market? Can you
tell us at this time what you expect the effective date would be for
that rule? When do you expect the FDA will issue a final rule?
Answer. FDA is currently working on the CFC albuterol proposed rule
and expects it to publish shortly. The rulemaking process prohibits FDA
from describing the contents of the proposed rule, so the Agency cannot
state the effective date of the rule at this time. FDA expects the
final rule to publish in March 2005.
BIOTECH-ENHANCED EVENTS IN FOOD AND FEED
Question. The U.S. regulatory system currently imposes a zero
tolerance on the presence of unapproved biotech-enhanced events in food
and feed, regardless of the risk level. It does not recognize the
realities of a biological system. This zero-tolerance' policy exposes
grain handlers, food processors and feed manufacturers to the risk that
any trace amounts of biotech-enhanced events in general commodity crops
that have not been approved for food and feed under the U.S. regulatory
process could render such crops adulterated and subject to seizure
under Federal law. Such a policy is inconsistent with other food purity
standards which have established thresholds for trace amounts of
unexpected materials. Without having a policy in place, the United
States risks significant disruptions in global agricultural trade. What
is the FDA doing to meet their obligations and will they be able to
complete their work by year's end?
Answer. On August 2, 2002, OSTP announced proposed Federal actions
to update field tests requirements for biotechnology derived plants and
to establish early food safety assessments for new proteins produced by
such plants. As part of this proposal, FDA announced that it would
publish for comment draft guidance to address the possible
intermittent, low level presence in food and feed of new non-pesticidal
proteins from biotechnology-derived crops under development for food or
feed use, but that have not gone through FDA's pre-market consultation
process. FDA is preparing draft guidance and expects to publish the
draft guidance for comment this calendar year.
GENERIC BIOLOGICALS
Question. In your testimony you stressed the importance of being
``open-minded'' about the science ``as the science improves.'' Can you
assure the Subcommittee that the Agency will not adopt an approach that
resurrects old science, and that the Agency intends to remain open
minded as it evaluates application of the vast innovation in analytical
tools to the development and evaluation of follow-on biologicals?
Answer. We can assure the subcommittee that the Agency will not
adopt an approach that resurrects or relies on outdated scientific
techniques in the development and evaluation of follow-on biologics.
Indeed, the Agency has been very proactive in striving to understand
and embrace the latest technology used in the characterization of
biotechnological products. For example, the Agency supports active
research programs that utilize current technologies in addressing
mission related research and in developing technologies that help
address regulatory and scientific issues. These efforts are important
to ensure that FDA scientists remain current with the latest advances
in analytical techniques. Scientific staff also participates in
scientific symposia and extensively interact with colleagues. Indeed,
many of our scientific staff involved in the regulation of biotech
products, are located on the NIH campus, which provides an enriched
research environment utilizing advanced technology that is second to
none.
In June 2003, the Agency cosponsored, along with the International
Association of Biologicals and the National Institute for Biological
Standards and Control, a conference on the ``State of the Art
Analytical Methods for the Characterization of Biological Products and
Assessment of Comparability''. This meeting focused on what current
analytical technologies can and cannot tell us about the
physicochemical structure and function of biological therapeutics;
The Agency's scientists participate yearly in the annual Symposium
on ``Well Characterized Biotechnological Products'' cosponsored by FDA
and the California Separation Sciences Society. This symposium includes
highly technical seminars, workshops, and poster sessions that
introduce the latest analytical technologies for the evaluation of
biotechnological products. These technologies are presented by the
leading academic, Industrial (pharmaceutical and equipment vendors),
and government scientists;
The Agency's scientists actively participate in many International
conferences sponsored by biotech and pharmaceutical organizations (Bio,
Pharma, and DIA) and other organizations that provide scientific,
technological and regulatory information to the pharmaceutical
industry. These conferences frequently present the application of the
latest analytical methods for the characterization of protein and
glycoproten therapeutics;
The Agency also invites innovative scientists from academia and
industry to present and discuss with FDA scientists the latest advances
in analytical technology and the development of animal models that
address some of the current limitations of physicochemical
characterization of protein products.
Regarding immune responses to biological therapeutics
(immunogenicity), which can cause serious adverse events and limit
product effectiveness, the agency co-sponsored a meeting entitled
``Immunogenicity of Therapeutic Biological Products'' in October 2001,
and has participated in numerous symposia on this topic in national
meetings. Agency research scientists work with industry and academia in
bringing to bear, on biological product development, informative animal
models (transgenic, knockout, and knock-in) to more accurately predict
the human immune response to various biotech products.
Question. In your testimony you highlighted the extraordinary
strides made over the past few years in developing instrumentation and
other analytical tools that have vastly improved the ability to
evaluate follow-on biologicals. Please identify for the Subcommittee
the type of new analytical tools now available to industry and the
Agency to conduct rigorous evaluations of follow-on biologics.
Answer. Over the last several years there have been many advances
in analytical tools that have improved the ability to evaluate follow-
on Biologicals.
Electrospray, matrix assisted laser desorption (ES-MS), and fast
atom bombardment mass spectrometry (MALDI-TOF) have been use in
conjunction with advances in separation technologies (Reverse Phase-
High Performance Liquid Chromatography (RP-HPLC), Ion Exchange
Chromatography, Hydrophobic Interaction Chromatography, Affinity
Chromatography, and Size Exclusion Chromatography) to identify protein
and carbohydrate heterogeneities and are very powerful tools for
characterizing variations in a protein that are typically present in a
single product.
Recent advances in mass spectrometry (time of flight, fourier
transform) have greatly improved the resolving powers of the technology
and now provide the capability to resolve to within a 1 Da mass
accuracy, the mass of a protein. In conjunction with powerful
deconvulution software, this technology allows for very accurate mass
data and a more comprehensive assessment of the carbohydrate profiles.
This technology has resulted in a new approach called ``top down'' that
allows for the analysis of intact proteins. In contrast, the
traditional approach analyzes protein fragments generated by digestion
with proteases, making it difficult to provide assurance that minor
modifications to the protein have been identified.
Protein aggregates can compromise the quality of a product as it
relates to its safety and efficacy and are thought to be the most
important product characteristic in generating immune responses. Such
aggregates have typically been analyzed by size exclusion
chromatography (SEC), an analytical method with limitations that result
in the detection of only a very narrow spectrum of aggregates that can
form in a protein product. Technological advances in a number of other
analytical methods such as sedimentation velocity obtained by
analytical ultracentrifugation and field flow fractionation can detect
a much wider spectrum of aggregates, many of which are not detected by
SEC.
Advances in gel electrophoresis primarily various forms of
capillary electrophoresis, now provide excellent resolution between
protein species which differ slightly in net charge and can be coupled
to various detention methods (UV, fluorescence, MS) for enhanced
product characterization.
Surface plasmon resonance technology monitors molecular interaction
in real time and allows for the accurate detection and quantification
of the on and off rates (kinetic rate constants) of protein-to-protein
interactions. This technology has been applied to the design of
immunoassays used for the detection of host antibodies formed against
biotechnology products and to the characterization of mAB product
interactions with their therapeutic target.
Advances in the understanding of signal transduction mechanisms for
many protein products have provided for the development of more precise
in vitro bioassays that monitor an early event in the biological
function of a protein rather then a cellular response, such as cell
growth, that is subject to greater variability in outcomes.
Protein products are not rigid structures and frequently the
ability to flex and change conformations is critical to a protein's
function. This property is difficult to detect by convention
physicochemical techniques. However, advances in scanning probe
microscopy particularly Atomic Force Microscopy (AFM), facilitate the
mapping of biological samples to three-dimensional images and are
capable of detecting multiple conformations. AFM-generated surface
topology maps can portray in explicit detail the surface features of
proteins and DNA. The application of this technology is broad and
includes the study of protein and DNA structure, protein folding/
unfolding, protein-to-protein interactions, protein-to-DNA
interactions, enzyme catalysis and protein crystal growth.
Dynamic light scattering and multi-angle light scattering (LS) are
beginning to be used in conjunction with advances in separation systems
such as field flow fractionation and size exclusion chromatography. LS
can provide absolute molecular weight, root-mean square radius and
hydrodynamic radius of individual species of product.
Microcalorimetry allows one to assess the thermodynamic profile of
a protein, which provides a measurement of the structural stability of
the protein product or interactions with other proteins. The method can
determine affinity constants, enthalpy, entropy, heat capacity, Gibbes
free energy and the number of binding sites, parameters that help
characterize proteins but have not been routinely employed in the
biotech industry.
Fluorescence spectroscopy has been useful in monitoring flexibility
of proteins and conformational stability.
Nuclear Magnetic Resonance Spectroscopy (NMR) has traditionally
been used to identify small molecules and their structures are now
being applied to solving the structure of much larger and more complex
biological macromolecules.
Question. Please outline for the Subcommittee the history of FDA's
regulation of biologicals, the range and volume of biological approvals
issued by the Agency over the course of that history, and any other
factors you consider relevant to FDA's vast scientific expertise that
is being applied to development of the draft Guidance and that
ultimately would be brought to bear in evaluating follow-on
biologicals.
Answer. The regulation of biologics began in the United States in
1902, when Congress passed the Virus, Serum and Antitoxin Act (also
known as the Biologics Control Act of 1902 and as the Virus Toxin Law).
This law was enacted following the deaths of ten children who had
received injections of diphtheria antitoxin contaminated with tetanus.
In 1901, there was a serious epidemic of diphtheria resulting in a
great demand for the diphtheria antitoxin. At the time, there was no
requirement for safety testing and none was performed, and the
manufacturing process was not controlled properly. The tetanus
contamination was traced to an infected horse whose serum was used in
producing the antitoxin.
The 1902 Act required biologics to be manufactured in a manner that
assured safety, purity, and potency. Provisions of the Act included:
--Establishment license requirements;
--Product license requirements;
--Labeling requirements;
--Inspection requirements;
--Suspension/revocation of licenses; and,
--Penalties for violations.
The responsibility for implementing this new law was given to the
Hygienic Laboratory of the Public Heath Service (PHS). In 1903, PHS
issued regulations that included requirements that inspections would be
unannounced and licenses were to be issued and re-issued on the basis
of an annual inspection. The 1902 Act was amended in 1944. One change
included a requirement that a biological license could be issued only
upon demonstration that the product and the establishment met standards
to ensure the continued safety, purity and potency of such products.
This evaluation was to be made during pre-licensure inspections. These
provisions are codified in section 351 of the PHS Act (42 U.S.C. 262).
Another change that occurred at this time was the focal point for
administering the Act. This responsibility was given to the National
Institute of Health's National Microbiological Institute. Changes in
responsibility for regulating biological products under the PHS Act
occurred in the mid-1950 with the advent of polio vaccines. From 1955
to 1972, biologics were regulated within the National Institutes of
Health (NIH), in the Division of Biologics Standards (DBS). In 1972,
biologic regulation was transferred to the FDA's Bureau of Biologics.
After this transfer to the FDA began a merger of the regulatory
requirements of the PHS Act and the Federal Food, Drug and Cosmetic
(FD&C) Act (21 U.S.C.). Biologics were viewed as biological products
under the PHS Act, and as drugs under the FD&C Act, subject to
inspection under the Good Manufacturing Practices (GMP) regulations for
drugs. The reagent manufacturers were also inspected under drug GMPs
because there were no device regulations until 1976. Among the several
changes that occurred, blood banks were required to register with the
FDA and GMPs for blood and blood products were promulgated. Today one
of the major responsibilities of FDA is to ensure the safety of the
Nation's blood supply.
In 1982, the FDA merged the Bureau of Biologics and the Bureau of
Drugs into the Center for Drugs and Biologics. After a subsequent
reorganization the responsibility for biologics regulation was placed
under the Center for Biologics Evaluation and Research (CBER). The
responsibilities for regulating biological products has grown and
become more complex from its beginning in 1902, when technologies for
producing biological products were in their infancy and the primary
role was vaccine regulation. Today the regulation of a wide variety of
novel biological products and their use as therapeutics requires
knowledge of new scientific developments and concepts of research in
the relevant biological disciplines. The therapeutic biological
products that the FDA regulates are on the leading edge of technology.
Rapid scientific advances in biochemistry, molecular biology, cell
biology, immunology, genetics, and information technology are
transforming drug discovery and development, paving the way for
unprecedented progress in developing new medicines to conquer disease.
As a representative sample of the range and volume of biological
products approved, we offer below the fiscal year 2003 approvals.
CBER's fiscal year 2003 major approvals include all approvals for
original new BLAs (except those for blood banking), and other approvals
for original biologic, drug, or device applications or supplements
(e.g., for new/expanded indications, new routes of administration, new/
improved tests, new dosage formulations and regimens). Although most of
the Office of Therapeutics Research and Review's applications were
transferred to the Center for Drug Evaluation and Research on June 30,
2003, all major BLA approvals are included in this list for both
centers.
[The information follows:]
BIOLOGICS LICENSE APPLICATIONS
------------------------------------------------------------------------
Tradename/Proper Name Indication for Use Manufacturer
------------------------------------------------------------------------
Pegasys
Peginterferon alfa-2a....... Treatment of Hoffmann-La Roche
adults with Inc. Nutley, NJ
chronic hepatitis
C who have
compensated liver
disease and who
have not been
previously
treated with
interferon alfa.
COBAS Ampliscreen HCV
Hepatitis C Virus (Hepatitis For the detection Roche Molecular
C Virus/Polymerase Chain of HCV RNA, in Systems, Inc.
Reaction/Blood Cell human plasma. Pleasanton, CA
Derived).
Pediarix
DTaP & Hepatitis B Combination GlaxoSmithKline
(Recombinant) & Inactivated vaccine for Biologicals
Polio Virus Vaccine. childhood Rixensart,
immunization. Belgium
COBAS Ampliscreen HIV-1
Human Immunodeficiency Virus For detection of Roche Molecular
Type 1 (HIV-1/Polymerase Human Systems, Inc.
Chain Reaction). Immunodeficiency Pleasanton, CA
Virus (HIV-1) in
human plasma
using Polymerase
Chain Reaction.
Aralast
Alpha-Proteinase Inhibitor Chronic Alpha Therapeutic
(Human). replacement Corporation Los
therapy Angeles, CA
(augmentation) in
patients having
congenital
deficiency of
Alpha-1-
Proteinase
Inhibitors with
clinically
evident emphysema.
HUMIRA
Adalimumab.................. Reducing signs and Abbott
symptoms and Laboratories
inhibiting the Abbott Park, IL
progression of
structural damage
in adult patients
with moderately
to severely
active rheumatoid
arthritis who
have had an
inadequate
response to one
or more disease
modifying
antirheumatic
drugs (DMARDs).
Amevive
Alefacept................... Treatment of adult Biogen, Inc.
patients with Cambridge, MA
moderate to
severe chronic
plaque psoriasis
who are
candidates for
systemic therapy
or phototherapy.
Crosseal
Fibrin Sealant (Human)...... Adjunct to OMRIX
hemostasis during Biopharmaceutical
liver surgery. s, Ltd. Fairfax,
VA
Peroxidase Conjugate ORTHO
Antibody to HBsAG ELISA Test
System 3
Antibody to Hepatitis B Detection of Ortho-Clinical
Surface Antigen (Mouse hepatitis B Diagnostics, Inc.
Monoclonal) Enzyme-Linked surface antigen Raritan, NJ
Immunosorbent Assay (ELISA) in human serum or
(Antibody to HBsAg/Enzyme plasma as a
Immuno Assay (EIA), Version screening test
3.0/Monoclonal). and an aid in the
diagnosis of
potential
hepatitis B
infection.
Fabrazyme
agalsidase beta............. For use in Genzyme
patients with Corporation
Fabry disease to Cambridge, MA
reduce
globotriasylceram
ide (GL-3)
deposition in
capillary
endothelium of
the kidney and
certain other
cell types.
Aldurazyme
Laronidase.................. For treatment of Biomarin
patients with Pharmaceutical,
Hurler and Hurler- Inc. Novato, CA
Scheie forms of
Mucopolysaccharid
osis I (MPS I)
and for patients
with the Scheie
form who have
moderate to
severe symptoms.
FluMist
Influenza Virus Vaccine For active MedImmune
Live, Intranasal. immunization for Vaccines, Inc.
the prevention of Mountain View, CA
disease caused by
influenza A and B
viruses in
healthy children
and adolescents,
5-17 years of
age, and healthy
adults, 18-49
years of age.
XOLAIR
Omalizumab.................. For adults and Genentech, Inc.
adolescents (12 South San
years of age and Francisco, CA
above) with
moderate to
severe persistent
asthma who have a
positive skin
test or in vitro
reactivity to a
perennial
aeroallergen and
whose symptoms
are inadequately
controlled with
inhaled
corticosteroids.
BEXXAR
Tositumomab and Iodine I 131 Treatment of Corixa Corporation
Tositumomab. patients with Seattle, WA
CD20 positive,
follicular, non-
Hodgkin's
lymphoma, with
and without
transformation,
whose disease is
refractory to
Rituximab and has
relapsed
following
chemotherapy.
Zemaira
Alpha-1-Proteinase Inhibitor To use as chronic Aventis Behring
(Human). augmentation and L.L.C. King of
maintenance Prussia, PA
therapy in
individuals with
Alpha-1-
Antitrypsin
Deficiency and
evidence of
emphysema.
Advate
Antihemophilic Factor Indicated in Baxter Healthcare
(Recombinant), Plasma/ hemophilia A Corporation
Albumin Free Method. (classical Westlake Village,
hemophilia) for CA
the prevention
and control of
bleeding
episodes, and in
the perioperative
management of
patients with
hemophilia A.
Genetic Systems HIV-1/HIV-2 Plus
O EIA
Human Immunodeficiency Virus For detection of Bio-Rad
Types 1 and 2 (HIV-1 and antibodies to Laboratories,
HIV-2/Enzyme Immunoassay human Inc. Hercules, CA
(EIA)/Recombinant and immunodeficiency
Synthetic). types 1 and 2.
GAMUNEX
Immune Globulin Intravenous Indicated in Bayer Corporation
(Human), 10 percent by primary humoral Berkeley, CA
Chromatography Process. immunodeficiency
and idiopathic
thrombocytopenic
purpura.
------------------------------------------------------------------------
BIOLOGICS LICENSE SUPPLEMENTS (FOR NEW INDICATIONS, NEW ROUTES OF
ADMINISTRATION, NEW DOSAGE FORMS, IMPROVED SAFETY)
------------------------------------------------------------------------
Tradename/Proper Name Indication for Use Manufacturer
------------------------------------------------------------------------
Prevnar
Pneumococcal 7-valent New indication for Lederle
Conjugate Vaccine the prevention of Laboratories
(Diphtheria CRM197 Protein). otitis media. Division Pearl
River, NY
Avonex
Interferon beta-1a.......... Package insert Biogen, Inc.
revised to Cambridge, MA
include updated
information
regarding serum
neutralizing
antibodies.
Pegasus
Peginterferon alfa-2a....... Combination Hoffmann-La Roche
therapy with Inc. Nutley, NJ
Ribavirin, USP
(COPEGUS), for
the treatment of
chronic Hepatitis
C Virus infection
in adults.
Aranesp
Darbepoetin alfa............ Darbepoetin alfa Amgen, Inc.
Albumin (human) Thousand Oaks, CA
formulation in
single dose
prefilled
syringes for six
dosage strengths
(60, 100, 150,
200, 300 and 500
micrograms).
Simulect
Basiliximab................. Addition of new Novartis
single dose 10 mg Pharmaceuticals
strength of drug Corporation East
product. Hanover, NJ
Avonex
Interferon beta-1a.......... Package insert Biogen, Inc.
revised to Cambridge, MA
include safety
and efficacy data
from a study of
patients who
experienced a
single clinical
exacerbation of
multiple
sclerosis and to
provide a
Medication Guide.
Betaseron
Interferon beta-1b.......... To revise the Chiron Corporation
Clinical Studies Emeryville, CA
section to
include data from
two studies
conducted in
patients with
secondary
progressive
multiple
sclerosis (MS),
also to update
the Adverse
Reactions and
Warnings sections
to include new
safety
information, and
to provide a
Medication Guide.
Remicade
Infliximab.................. For reducing the Centocor, Inc.
number of Malvern, PA
draining
enterocutaneous
and rectovaginal
fistulas and
maintaining
fistula closure
in patients with
fistulizing
Crohn's disease.
Rebif
Interferon beta-1a.......... Final pivotal Serono, Inc.
study report that Rockland, MA
confirms the
results of 48
week data.
Avonex
Interferon beta-1a.......... HAS-free liquid Biogen, Inc.
formulation in a Cambridge, MA
prefilled syringe
as an alternate
dosage form and
to provide for a
Medication Guide.
Dryvax
Smallpox Vaccine, Dried, Active Wyeth
Calf Lymph Type. immunization Laboratories,
against smallpox Inc. Marietta, PA
disease.
Dryvax
Smallpox Vaccine, Dried, Include new safety Wyeth
Calf Lymph Type. information for Laboratories,
the recent Inc. Marietta, PA
reports of
cardiac events
and updated
storage period
for the vaccine
after
reconstitution
from 15 days to
90 days.
Infanrix
Diphtheria & Tetanus Toxoids To include in the GlaxoSmithKline
& Acellular Pertussis indication a Biologicals
Vaccine Adsorbed. fifth dose at 4-6 Rixensart,
years of age Belgium
after 4 prior
doses of Infanrix.
Enbrel \1\
Etanercept.................. To expand the Immunex
rheumatoid Corporation
arthritis Seattle, WA
indication to
include improving
physical function.
Enbrel \1\
Etanercept.................. For reducing signs Immunex
and symptoms in Corporation
patients with Seattle, WA
active ankylosing
spondylitis.
Enbrel \1\
Etanercept.................. To expand the Immunex
indication to Corporation
include Seattle, WA
inhibiting the
progression of
structural damage
of active
arthritis in
patients with
psoriatic
arthritis.
Kineret \1\
Anakinra.................... To expand the Amgen, Inc.
indication to Thousand Oaks, CA
include slowing
the progression
of structural
damage in
moderately to
severely active
rheumatoid
arthritis, in
patients 18 years
of age or older
who have failed
one or more
DMARDs.
Synagis \1\
Palivizumab................. To expand the MedImmune,Inc
indication to Gaithersburg, MD
include children
with
hemodynamically
significant
congenital heart
disease.
------------------------------------------------------------------------
\1\ OTRR product applications transferred to CDER on 6-30-03.
NEW DRUG APPLICATIONS
------------------------------------------------------------------------
Tradename/Proper Name Indication for Use Applicant
------------------------------------------------------------------------
TriCitrasol Anticoagulant Sodium
Citrate Conc. 46.7 percent
Trisodium Citrate, 30 mL
Anticoagulant Sodium Citrate triCitrasol, after Cytosol
Solution. dilution of a Laboratories,
rouleaux agent, Inc. Braintree,
is an MA
anticoagulant
used in
granulocytapheres
is procedures.
Anticoagulant Citrate Dextrose
Solution, Solution A, U.S.P.,
(ACD-A). 50 mL, PN 6053
Anticoagulant Citrate To provide for the Cytosol
Dextrose Solution (ACD). use of Laboratories,
Anticoagulant Inc. Braintree,
Citrate Dextrose MA
Solution,
Solution A,
U.S.P., (ACD-A)
50 mL for the
extracorporeal
processing of
blood with
Autologous PRP
systems in
production of
platelet rich
plasma (PRP) for
in vitro use.
------------------------------------------------------------------------
SUPPLEMENTAL NEW DRUG APPLICATIONS
------------------------------------------------------------------------
Tradename/Proper Name Indication for Use Applicant
------------------------------------------------------------------------
Abbokinase
Urokinase................... Improvements in Abbott
the manufacture Laboratories
and testing of Abbott Park, IL
the bulk drug
substance and
drug product, and
withdrawal of the
indication for
coronary artery
thrombosis
indication (CAT)
and the Open-Cath
dosage strengths.
------------------------------------------------------------------------
DEVICE APPLICATIONS
------------------------------------------------------------------------
Description and
Tradename Indication for Applicant
Device
------------------------------------------------------------------------
OraSure OraQuick Rapid HIV-1 For the detection OraSure
Antibody Test of antibodies to Technologies
HIV-1 in human Bethlehem, PA
finger-stick
whole blood
specimens.
MedMira Rapid HIV Test For detection of MedMira labs
HIV-1 and HIV-2 Bayers Lake
Antibodies. Halifax, Canada
Ortho ProVue, Software Version: Modular, Micro Typing
2.10 Microprocessor- Systems Inc.
controlled Pompano Beach, FL
instrument
designed to
automate in vitro
immunohematologic
al testing to
human blood
utilizing the ID
MTS/Gel
Technology.
Vironostika HIV-1 Plus O For the BioMerieux, Inc.
Microelisa System qualitative Durham, NC
detection of
antibodies to
Human
Immunodeficiency
Virus Type 1 (HIV-
1), including
Group O, in human
specimens
collected as
serum, plasma, or
dried blood spots.
------------------------------------------------------------------------
DEVICE SUPPLEMENTS (FOR NEW INDICATIONS, IMPROVED SAFETY)
------------------------------------------------------------------------
Description and
Tradename Indication for Applicant
Device
------------------------------------------------------------------------
Calypte HIV-1 Urine EIA HIV-1 Urine EIA to Calypte Biomedical
include changes Corporation
to the black box Alameda, CA
warning statement.
------------------------------------------------------------------------
______
Questions Submitted by Senator Christopher S. Bond
nutritional guidelines
Question. There is a linear relationship between high transfatty
acid and high saturated fat intake and chronic disease. We also know
that the consumption of foods high in these two elements likely
contribute to the statistics on obesity. Does FDA intend to draft
guidelines or standards for the consumption of these fats?
Answer. FDA issued on July 11, 2003 final rules to require that
trans fatty acids be listed in mandatory nutrition labeling.
Manufacturers must have this information in Nutrition Facts panels on
all food packages entering interstate commence by January 1, 2006. On
July 11, 2003, FDA also published an advance notice of proposed
rulemaking (ANPRM) to solicit data and information that could be used
to establish new nutrient content claims about trans fatty acids; to
establish qualifying criteria for trans fat in current nutrient content
and health claims; and to consider statements about trans fat, either
alone or in combination with saturated fat and cholesterol to enhance
consumers' understanding about such cholesterol-raising lipids and how
to use the information to make healthy food choices. The agency has
reopened the comment period to this ANPRM to receive comment on the
Institute of Medicine's (IOM) December 2003 report on Dietary Reference
Intakes in which the IOM included a suggested approach for establishing
a daily value for trans fat. In addition, FDA has scheduled a Food
Advisory Committee Nutrition Subcommittee meeting at the end of April
2004 to consider scientific questions related to saturated fat and
trans fat that may help determine the agency's course for food labeling
of these fats.
Question. Will FDA provide guidelines and or regulations to
restaurants and other food manufacturers and--more importantly--provide
them a roadmap to increasing the nutritional content and decrease
saturated fat levels of their products?
Answer. An important goal of the Nutrition Labeling and Education
Act of 1990 was to provide incentives to manufacturers to improve the
nutritional composition of food products. Studies have shown that the
implementing regulations, which required nutrition labeling on most
packaged foods, resulted in a significant increase in the number of
low- and reduced-fat products in the marketplace. We anticipate that
the new labeling regulations requiring that trans fat be listed will
have a similar effect, reducing total intake of trans fat. In fact,
since publication of the final rule requiring the listing of trans fat,
several food manufacturers and at least one major fast food restaurant
chain have announced that they are changing the type of fats used in
order to reduce levels of trans fats.
Question. Does FDA intend to provide guidelines and or regulations
on the characteristics of healthy oils' that can be used in most food
manufacturing to improve overall health and nutrition of those foods?
Answer. By requiring the saturated and trans fat content to be
declared in Nutrition Facts panels on most packaged foods, FDA is
providing an incentive for manufacturers to reduce the levels of those
fats whose consumption is associated with increased levels of LDL-
cholesterol.
Question. Does FDA have this authority?
Answer. Manufacturers may choose between different food ingredients
to use in their food products, provided that such ingredients are safe
for such use under the Federal Food, Drug, and Cosmetic Act (the Act).
FDA has authority, under section 403(q) of the Act, to require
nutrition labeling on packaged food products. Restaurant foods are
exempt unless they make a nutrition claim.
Question. How will FDA ensure that as they move forward with trans-
fat labeling that saturated fats will not come back into the diet?
Answer. Nutrition labeling will indicate the levels of both
saturated fat and trans fat in most packaged foods. Consumer education
programs will encourage consumers to look at both types of fats and to
consider the combined total amount in making purchasing decisions.
______
Questions Submitted by Senator Herb Kohl
OBESITY
Question. Dr. Crawford, both USDA and FDA have recently announced
new efforts to combat the increasing problem of obesity. FDA announced
the ``Calories Count'' program, and USDA has money in several programs,
including WIC, to help battle this problem. However, for all of the
government's efforts, all of the money being put into this effort pales
in comparison to the food industry's billions of dollars worth of
advertising. How can the government successfully get its message out
when, at first glance, its efforts appear to be dwarfed by the food
industry? How do your agencies compete with that?
Answer. In support of the President's Healthier U.S. initiative,
the DHHS established a complementary initiative, Steps to a Healthier
U.S., which emphasizes personal responsibility for the choices
Americans make for healthy behaviors. One aspect of this initiative
focuses on reducing the major health burden created by obesity and
other chronic diseases. Following DHHS' July 2003 Roundtable on Obesity
and Nutrition, on August 11, 2003, FDA established an Obesity Working
Group, or OWG, to prepare a report that outlines an action plan to
cover critical dimensions of the obesity problem from FDA's perspective
and authorities. This report was released on March 12, 2004.
There is no simple answer to the problem of obesity. Achieving
success in reducing and avoiding obesity will occur only as a result of
efforts over time by individuals as well as various sectors of our
society. It should be noted, however, that most associations, agencies,
and organizations believe that diet and physical activity should be
addressed together in the fight against overweight and obesity.
The OWG report provides a range of short and long-term
recommendations to address the obesity epidemic with a focus on a
``calories count'' emphasis for FDA actions. These recommendations are
based on sound science and address multiple facets of the obesity
problem under FDA's purview, including developing appropriate and
effective consumer messages to aid consumers in making wiser dietary
choices; establishing educational strategies and partnerships to
support appropriate messages and teach people, particularly children,
how to lead healthier lives through better nutrition; developing
initiatives to improve the labeling of packaged foods with respect to
caloric and other nutrition information; encouraging and enlisting
restaurants in efforts to combat obesity and provide nutrition
information to consumers, including information on calories, at the
point-of-sale; developing new therapeutics for the treatment of
obesity; designing and conducting effective research in the fight
against obesity; and continuing to involve stakeholders in the process.
Regarding food labeling, the OWG report contains several
recommendations based on sound science. I will provide these
recommendations for the record.
[The information follows:]
Publish an advance notice of proposed rulemaking, or ANPRM, to seek
comment on the following:
--How to give more prominence to calories on the food label, for
example, increasing the font size for calories, including a
column in the Nutrition Facts panel of food labels for percent
Daily Value for total calories, and eliminating the listing for
calories from fat;
--Whether to authorize health claims on certain foods that meet FDA's
definition of ``reduced'' or ``low'' calorie. An example of a
health claim for a ``reduced'' or ``low'' calorie food might
be: ``Diets low in calories may reduce the risk of obesity,
which is associated with type 2 diabetes, heart disease, and
certain cancers.''
--Whether to require additional columns on the Nutrition Facts panel
to list quantitative amounts and percent Daily Value of an
entire package on those products and package sizes that can
reasonably be consumed at one eating occasion--or declare
quantitative amounts and percent Daily Value of the whole
package as a single serving if it can reasonably be consumed at
a single eating occasion; and,
--Which, if any, reference amounts customarily consumed of food
categories appear to have changed the most over the past decade
and hence require updating.
In addition, FDA will file and respond in a timely way to petitions
the agency has received that ask FDA to define terms such as ``low,''
``reduced,'' and ``free'' carbohydrate; and provide guidance for the
use of the term ``net'' in relation to carbohydrate content of food--
these petitions were filed on March 11, 2004.
FDA will also encourage manufacturers to use dietary guidance
statements, an example of which would be, ``To manage your weight,
balance the calories you eat with your physical activity.'' In
addition, the Agency will encourage manufacturers to take advantage of
the flexibility in current regulations on serving sizes to label as a
single-serving those food packages where the entire contents of the
package can reasonably be consumed at a single eating occasion and
encourage manufacturers to use appropriate comparative labeling
statements that make it easier for consumers to make healthy
substitutions.
FDA believes that if the report's recommendations are implemented
they will make a worthy contribution to confronting the Nation's
obesity epidemic and helping consumers' lead healthier lives through
better nutrition.
FDA also believes that the regulatory scheme for claims in food
labeling, whether health claims, nutrient content claims, or other
types of claims, are science based, and we continue to consider
modifications to our regulations to keep up with recent scientific
developments. A benefit of standardized, science-based terminology, as
with other terms that FDA has defined that consumers may use to make
health-based dietary choices--e.g., terminology concerning fat content-
, is that it allows consumers to compare across products and it
encourages manufacturers to compete based on the nutritional value of
the food. However, FDA does not regulate television and other media
marketing of food products. Some of the modifications FDA is currently
considering are described above in the list of topics to be covered by
the ANPRM the agency intends to issue.
With respect to conveying the report's messages to the public, FDA
believes that all parties, including the packaged food industry,
restaurants, academia, and other private and public sector
organizations in addition to government agencies at all levels, have an
essential role to play. On April 22, 2004, FDA's Science Board focused
on specific recommendations from the OWG report. These recommendations
call on FDA to work through a third-party facilitator to engage all
involved stakeholders in a dialogue on how best to construct and convey
obesity messages in the restaurant setting and in the area of pediatric
obesity education.
This approach is one example of how the Agency intends, by means of
public and private partnerships, to leverage its ability to convey
appropriate messages on obesity to the public with the goal of changing
behavior and ultimately reversing obesity trends in the United States.
IMPORT INSPECTIONS
Question. Dr. Crawford, the FDA budget this year includes a $7
million increase to fund 97,000 food import examinations. This is a big
increase in inspections over any previous year--still, however, less
than one percent of all of the food imported into this country will be
inspected. How would you respond to charges that you still aren't
inspecting nearly enough imported food, especially in light of events
during the past year where bad food has gotten in and people have died?
How do we ensure consumers that their food is indeed safe?
Answer. FDA is appreciative of the additional funding we have
received for the inspection of domestic firms and for inspections of
imported foods. FDA believes it is more effective to focus our
resources in a risk-based manner than to focus simply on increasing the
percentage of imported food shipments that are physically inspected. It
is important to note that every shipment of FDA-regulated food which is
entered through Customs and Border Protection as a consumption entry is
electronically reviewed by FDA's Operational and Administrative System
for Import Support to determine if it meets identified criteria for
further evaluation by FDA reviewers and physical examination and/or
sampling and analysis or refusal. This electronic screening allows FDA
to concentrate its limited inspection resources on high-risk shipments
while allowing low-risk shipments to proceed into commerce.
Due to constantly changing environments of operation, e.g.,
counterterrorism and BSE, our domestic inspection and import strategy
cannot be defined in terms of a percentage of coverage through
inspections, physical examinations and sample analyses. It needs to be
a flexible blend of the use of people, technology, information and
partnerships to help protect Americans from unsafe imported products.
Accordingly, the Agency is developing and using strategies for
mitigating risks prior to importation through partnerships and
initiatives based on best practices and other science based factors
relevant to the import life cycle, i.e., from foreign manufacturer to
the U.S. consumer. Recently this principle has been applied in the
``Canadian Facility Voluntary Best Management Practices for Expediting
Shipments of Canadian Grains, Oilseeds and Products to the United
States'' implemented February 24, 2004, and designed to mitigate the
potential of mammalian protein prohibited from being fed to cattle or
other ruminants under BSE-prevention regulations promulgated by CFIA
and FDA.
Another piece of the long term solution to a higher level of
confidence in the security and safety of food products lies in
information technology that will merge information on products and
producers with intelligence on anticipated risks to target products for
physical and laboratory examination or refusal. This strategy would
rely on data integrity activities that reduce the opportunity for
products to be incorrectly identified at ports. It would also rely on
cooperation from producers so that FDA can identify sources that are
unlikely to need physical testing. However, even with such targeting,
improvements are limited by the available methodologies for assessing
threat agents and our ability to predict which tests ought to be used.
We are ramping up our food inspections, but we recognize that we
also need to inspect smarter, not just inspect more. That is why FDA is
making significant investments in technology and information resources
such as the development of the Mission Accomplishment and Regulatory
Compliance Services System, MARCS. MARCS is a comprehensive redesign
and reengineering of two core mission critical systems at FDA: FACTS
and the Operational and Administrative System for Import Support,
OASIS. OASIS supports the review and decision making process of
products for which entry is sought into the United States. We are using
funds to work to further improve targeting and using force multipliers
such as IT.
FDA also has a proof of concept project, called ``Predict,'' with
New Mexico State University under a Department of Defense contract
which is being designed to enhance agency capability to rapidly assess
and identify import entries based on risk using relevant information
from various sources including regulated industry, trade, other
Federal, State, and local entities, and foreign industry and
governments. This project, if successful, will greatly enhance FDA's
capability to be smarter in directing field activities on products of
greater risk to public health and safety. The proof of concept project
is projected to be completed in the Fall of 2004. The relentless growth
in the volume of domestic as well as imported food products, which are
increasingly in ``ready for consumer sale packaging.'' Food imports are
now growing at 19 percent per year. FDA needs to use all the potential
tools available to improve its efficiency in food security and safety
coverage.
In addition, FDA has several strategic initiatives to enhance
safety. One of these is ``Agency Initiatives to Improve Coverage,''
which includes the creation of the Southwest Import District to better
coordinate import activities on the southern border. Another is
reciprocal FDA and U.S. Customs and Border Protection training to
improve product integrity of goods offered for import and increase
enforcement actions by Customs to deter willful violations of U.S. laws
and regulations. While foreign inspections and border operations
provide some assurance that imported foods are safe, the agency
continues to work to foster international agreements and harmonize
regulatory systems. For instance, we actively participate in the
Canada/U.S./Mexico Compliance Information Group, which shares
information on regulatory systems and the regulatory compliance status
of international firms to protect and promote human health.
It is very important that American consumers trust the safety of
the food supply. FDA has made fundamental changes in how we implement
our mission of protecting the food supply, so that all Americans can
have confidence that their food has been handled under secure
conditions that provide assurance of its safety.
FDA FOIA POLICIES
Question. Dr. Crawford, my office has been working with a non-
profit patient advocacy group, the TMJ Association, in their efforts to
have two FOIA requests that are well over a year old responded to.
Their original FOIA request was made on November 1, 2002 (request
number 02017071), more than 17 months ago, and the subsequent request
was made on March 25, 2003 (request number 03004361). They have not yet
received the information requested, and have been unable to get a date
commitment by FDA as to when the information will be provided. It is my
understanding that they have been informed that FOIA requests are
severely backlogged, and the FDA has no idea when they will be able to
process their request. What is the current backlog for FOIA requests?
Answer. As of April 28, 2004, FDA has 19,369 pending FOIA
requests--17,555 have been pending more than 20 days and 1,814 have
been pending 20 days or less. The Denver District Office is responsible
for responding to the two requests from the TMJ Association. As of
April 28, 2004, Denver District Office has 369 pending FOIA requests--
357 requests have been pending more than 20 days, and 12 requests have
been pending 20 days or less.
Question. How many FDA staff are responsible for handling these
requests? Is this their sole responsibility, or do they have other
responsibilities as well?
Answer. For fiscal year 2003 the total number of personnel
responsible for processing FOIA requests was 91 FTE, 75 full time
employees, and 16 FTE work years representing personnel with part-time
FOIA duties in addition to other responsibilities.
Question. Does FDA need additional staff or resources in order to
process these requests on a timely basis?
Answer. In some agency components FOIA is a collateral duty. For
example, in most FDA field offices, Compliance Officers whose primary
responsibilities are related to the Agency's regulatory enforcement
activities also perform FOIA duties as permitted by time and regulatory
workload. Additional staff devoted to FOIA could shorten the amount of
time for processing requests.
Question. What do you believe is a reasonable length of time for a
group to wait for an information request to be processed and responded
to?
Answer. Requests are processed by the agency component that
maintains the requested records. There are a number of factors that
must be considered in order to predict a reasonable amount of time for
a request to be processed. Those factors include the volume of requests
received by the component, the complexity of requests received, the
amount of time required to search for records, the amount of time
require to review the records to determine whether information is
releasable under FOIA, and the resources available to process requests.
Question. What is the average length of time it takes to process a
FOIA request? Can you please explain the severe delay in processing
this specific one, which has taken over 2 years and apparently has no
end in sight? Can you please provide me a timeframe within which the
FDA will respond to these two particular FOIA requests?
Answer. Under the Electronic Freedom of Act Amendments of 1996,
agencies are permitted to establish multiple tracks for processing FOIA
requests based on the complexity of the requests and the amount of work
and time required to process requests. Some FDA components have
established multiple processing tracks. Requests are processed on a
first in, first out basis within each track. The median number of days
to process requests in the simple processing track is 19 days. The
median number of days to process requests in the complex processing
track, for more complicated requests, is 363 days. For requests that
are not processed in multiple processing tracks, the median number of
days to process is 44 days.
Due to a heavy load of regulatory cases in the Denver District
Office that must be handled by the Compliance Officers in addition to
staff shortages, FOIA work in the Denver District is being performed by
one individual on a part-time basis. This has resulted in a significant
backlog of FOIA requests. The Denver District Office expects to fill
request 02-17071 from the TMJ Association in six months, and request
03-4361 in one month.
Question. What additional efforts can this group undertake in order
to speed up their request?
Answer. The Denver District Office expects to fill request 02-17071
from the TMJ Association in 6 months, and request 03-4361 in one month.
In addition, the Denver District is reviewing and evaluating its
FOIA workload and will develop a strategy aimed at reducing the backlog
of FOIA requests.
Question. What is the FDA's policy on charging for FOIA requests
made by non-profit patient advocacy groups?
Answer. The FOIA sets forth criteria that agencies must follow with
respect to charging for processing FOIA requests. Non-profit
organizations are considered Category III requesters. Such requesters
receive 100 pages of duplication and 2 hours of search at no charge. If
the number of pages exceed 100 and/or if the amount of search time
exceeds 2 hours, Category III requesters are charged based on the FOIA
fee schedule of the Department of Health and Human Services. The fee
for duplication is $.10 per page, and the fee for search is based on
the grade level of the individual who processes the request. I will be
happy to provide the current grade rates for the record.
[The information follows:]
Current Grade Rates
GS-1 through 8--$18.00 per hour
GS-9 through 14--$36.00 per hour
GS-15 and above--$64.00 per hour
In addition, requesters may make a request for waiver or reduction
of fees if their request meets the following criteria: disclosure of
the information is in the public interest because it is likely to
contribute significantly to public understanding of the operations or
activities of the Government; and, disclosure is not primarily in the
commercial interest of the requester.
IMPLICIT PRE-EMPTION
Question. Adverse reactions to prescription drugs and other
medicines take the lives of more than 100,000 Americans each year, and
millions more are seriously injured. For many years, state tort laws
have enabled some victims to receive compensation for their injuries.
It has been brought to my attention that the Food and Drug
Administration (FDA) has stepped in to protect drug companies from
liability in some of these lawsuits, potentially robbing individuals of
their only means of compensation. FDA's actions are even more troubling
when you consider that these lawsuits have other important purposes,
such as deterring future bad behavior and providing the American public
with access to important health and safety information. How many times
has the FDA interfered in lawsuits, arguing that implicit pre-emption
prohibits a plaintiff from receiving compensation for their injuries?
In how many of these cases has a court held that the plaintiff's tort
claim was implicitly pre-empted by Federal law?
Answer. In the past several years, the Department of Justice (DOJ)
has represented the United States in four cases involving state-law
challenges to the adequacy of FDA-approved risk information
disseminated for FDA-approved new drugs.\1\ In each case, DOJ contended
that the state-law claim was preempted by Federal law. In addition, in
some cases, DOJ argued that the state-law claim was not properly before
the court by operation of the doctrine of primary jurisdiction.\2\
---------------------------------------------------------------------------
\1\ FDA also periodically becomes involved, through the Department
of Justice, in cases involving preemption of state-law requirements
under the medical device provisions of the FDCA, which include an
express preemption provision, 21 U.S.C. 360k(a).
\2\ Primary jurisdiction allows a court to refer a matter to an
administrative agency for an initial determination where the matter
involves technical questions of fact and policy within the agency's
jurisdiction. See, e.g., Israel v. Baxter Labs., Inc., 466 F.2d 272,
283 (D.C. Cir. 1972); see also 21 CFR 10.60.
---------------------------------------------------------------------------
The legal basis for preemption in these cases is FDA's careful
control over drug safety, effectiveness, and labeling according to the
agency's comprehensive authority under the FDCA and FDA implementing
regulations. If state authorities, including judges and juries applying
state law, were permitted to reach conclusions about the safety and
effectiveness information disseminated with respect to drugs for which
FDA has already made a series of regulatory determinations based on its
considerable institutional expertise and statutory mandate, the Federal
system for regulation of drugs would be disrupted. I will be happy to
include information on the four cases for the record.
[The information follows:]
Bernhardt
In 2000, two individual plaintiffs filed product liability actions
in a New York court against Pfizer, Inc., seeking a court order
requiring the company to send emergency notices to users of the
prescription antihypertensive drug CARDURA (doxazosin mesylate) and
their physicians. The notices would have described the results of a
study by a component of the National Institutes of Health (NIH) that,
the plaintiffs alleged, demonstrated that Cardura was less effective in
preventing heart failure than a widely used diuretic. FDA had not
invoked its authority to send ``Dear Doctor'' letters or otherwise
disseminate information regarding a drug that the agency has determined
creates an ``imminent danger to health or gross deception of the
consumer.'' (21 U.S.C. 375(b).) The plaintiffs, nevertheless, filed a
lawsuit under state common law seeking relief that, if awarded, would
have pressured the sponsor to disseminate risk information that FDA
itself had not disseminated pursuant to its statutory authority.
FDA's views were submitted to the Federal district court in the
form of a Statement of Interest.\3\ The Statement relied on the
doctrine of primary jurisdiction. The Statement also took the position
that the plaintiffs' request for a court order requiring the
dissemination of information about NIH study results to users and
prescribers of CARDURA was impliedly preempted. According to the
Statement, the court order ``would frustrate the FDA's ability
effectively to regulate prescription drugs by having the Court
substitute its judgment for the FDA's scientific expertise.'' The
Statement also noted that, if the court granted the requested order, a
direct conflict would be created between the information required to be
disseminated by the court and the information required to be
disseminated by FDA under the FDCA (in the form of the FDA-approved
labeling).
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\3\ Statement of Interest of the United States; Preliminary
Statement, Bernhardt v. Pfizer, Inc., Case No. 00 Civ. 4042 (LMM)
(S.D.N.Y. filed Nov. 13, 2000).
---------------------------------------------------------------------------
The Statement contended that state law could not provide a basis
for requiring a drug manufacturer to issue drug information that FDA
had authority to, but did not, require. Importantly, the submission did
not argue that the state-law claim was preempted because FDA had
reached a determination that directly conflicted with the plaintiff's
view. Nor did it assert that FDA had specifically determined that the
information on the NIH study requested by the plaintiffs was
unsubstantiated, false, or misleading. In this sense, the Statement of
Interest in Bernhardt was the most aggressive, from a legal
perspective, than the three subsequent DOJ submissions on FDA's behalf
in preemption cases made during the present Administration.
The United States District Court for the Southern District of New
York accepted the primary jurisdiction argument made on FDA's behalf.
(Bernhardt v. Pfizer, Inc., 2000 U.S. Dist. LEXIS 16963, *9 (whether
the additional warnings sought by the plaintiffs were appropriate ``is
a decision that has been squarely placed within the FDA's informed
expert discretion'').) It did not address the preemption issue. The
case was voluntarily dismissed on April 22, 2003.
Dowhal
In 1998, an individual plaintiff in California asked that State's
attorney general to initiate an enforcement action against SmithKline
Beecham and other firms marketing OTC nicotine replacement therapy
products in California. (These products are marketed pursuant to an
approved new drug application.) The plaintiff contended that the FDA-
approved warnings for the defendants' products did not meet the
requirements of a state statute called the Safe Drinking Water and
Toxic Enforcement Act (Cal. Health & Safety Code 25249.5 et seq.),
also known as Proposition 65. From 1996 through 2001, FDA had
repeatedly advised the defendants that they could be liable under the
FDCA for selling misbranded products if they deviated from the FDA-
approved warning labeling for their products. FDA also advised the
state attorney general in writing in 1998 that the defendants' warning
in the labeling clearly and accurately identified the risks associated
with the products and, therefore, met FDA requirements under the FDCA.
After receiving the letter, the attorney general declined to initiate
enforcement action.
Nevertheless, in 1999, the individual plaintiff initiated a lawsuit
of his own in California state court under Proposition 65's ``bounty-
hunter'' provision, which empowers individuals to file enforcement
actions under that statute on behalf of the people of the State of
California. The lawsuit asked the court to award civil money penalties
and restitution, and to issue an injunction requiring the defendants to
disseminate warnings for their products that differed from the warnings
required by FDA. In 2000, the plaintiff filed a citizen petition with
FDA requesting that the agency require the defendants to change their
warnings to reflect the language sought by the plaintiff in the
lawsuit. FDA rejected the proposed language, determining that it lacked
sufficient support in scientific evidence and presented a risk of
mischaracterizing the risk-benefit profile of the products in a way
that threatened the public health. Although the trial court found for
the defendant, the California Court of Appeal rejected the defendant's
contention that the plaintiff's claim was preempted under the FDCA, and
allowed the lawsuit to proceed. (Dowhal v. SmithKline Beecham Consumer
Healthcare, 2002 Cal. App. LEXIS 4384 (Cal. Ct. App. 2002), argued,
Case No. S-109306 (Cal. Feb. 9, 2004).)
FDA's views were presented to the Court of Appeal of California in
an amicus curiae (``friend of the court'') brief and to the Supreme
Court of California in a letter brief and an amicus brief.\4\ All three
documents explained that the warning language sought by the plaintiffs
had been specifically considered and rejected by FDA as scientifically
unsubstantiated and misleading. Including the language would,
therefore, misbrand those products and cause the defendants to violate
the FDCA. The documents explained, further, that principles of conflict
preemption applied to the plaintiffs' claim because it was impossible
for defendants to comply with both Federal and State law and because
the state law posed an obstacle to the accomplishment of the full
purposes and objectives of the FDCA.
---------------------------------------------------------------------------
\4\ Letter from Robert D. McCallum, Jr., Ass't Attorney General, et
al., to Frederick K. Ohlrich, Supreme Court Clerk/Administrator, Dowhal
v. SmithKline Beecham Consumer Healthcare LP, et al., Case No. S-109306
(Cal. filed Sept. 12, 2002); Amicus Curiae Brief of the United States
of America in Support of Defendants/Respondents SmithKline Beecham
Consumer Healthcare LP, et al., Dowhal v. SmithKline Beecham, Case No.
A094460 (Cal. Ct. App. filed Mar. 22, 2002); Amicus Curiae Brief of the
United States of America in Support of Defendants/Appellants SmithKline
Beecham Consumer Healthcare LP, et al., Dowhal v. SmithKline Beecham,
Case No. S109306 (Cal. filed July 31, 2003).
---------------------------------------------------------------------------
The California Court of Appeal rejected the preemption argument.
(Dowhal v. SmithKline Beecham Consumer Healthcare, 2002 Cal. App. LEXIS
4384, . . . 16-17 (Cal. Ct. App. 2002) (reversing trial court decision
granting summary judgment for defendants on preemption grounds).) On
April 15, 2004, the California Supreme Court reversed the appeals court
decision, finding a direct conflict between FDA requirements and the
state-law warning requirement advocated by the plaintiff. (Dowhal v.
SmithKline Beecham Consumer Healthcare, 2004 Cal. LEXIS 3040.)
Motus
Also in 2000, an individual plaintiff sued Pfizer in a California
court alleging, among other things, that the company had failed to
fulfill its state common law duty to warn against the risk of suicide
the plaintiff alleged was presented by ZOLOFT (sertraline HCl), an FDA-
approved drug in the selective serotonin reuptake inhibitor (SSRI)
class indicated to treat depression (among other things). On numerous
occasions, FDA had specifically considered and rejected such language
for SSRIs as scientifically unsupportable and inconsistent with FDA
determinations as to the safety and effectiveness of the products.
The United States District Court for the Central District of
California (to which the case had been removed on the ground of
diversity) rejected the defendant's preemption argument, allowing the
lawsuit to proceed. (Motus v. Pfizer Inc., 127 F. Supp. 2d 1085 (C.D.
Cal. 2000).) The court later granted the defendant's motion for summary
judgment on non-preemption grounds (196 F. Supp. 2d 984, 986 (C.D. Cal.
2001)), and the plaintiff appealed. DOJ submitted an amicus curiae
brief to the United States Court of Appeals for the Ninth Circuit on
FDA's behalf.\5\ The brief's arguments were essentially the same as the
arguments advanced in Bernhardt. In contrast to the situation in
Bernhardt, however, in Motus, FDA had specifically considered, and
rejected, the language requested by the plaintiff under state law. The
appeals court affirmed the trial court's decision earlier this year
(2004 U.S. App. LEXIS 1944 (9th Cir. February 9, 2004)).
---------------------------------------------------------------------------
\5\ Amicus Brief for the United States in Support of the Defendant-
Appellee and Cross-Appellant, and in Favor of Reversal of the District
Court's Order Denying Partial Summary Judgment to Defendant-Appellee
and Cross-Appellant, Motus v. Pfizer, Case Nos. 02-55372 & 02-55498
(9th Cir. filed Sept. 3, 2002).
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In re PAXIL
In 2001, individuals filed suit in a California court on behalf of
past or current users of PAXIL (paroxetine HCl) against the drug's
manufacturer, GlaxoSmithKline (GSK), alleging that the company's
direct-to-consumer (DTC) broadcast advertisements for the drug failed
adequately to warn about the consequences of discontinuing the drug. In
reviewing the new drug application for the drug, FDA had found no
evidence that it was habit-forming and did not require GSK to address
that risk in FDA-approved labeling. FDA did, however, require GSK to
include in labeling statements regarding discontinuation syndrome, and
the labeling consequently recommends that doctors gradually reduce
dosages and monitor patients for syndrome symptoms. FDA reviewed
proposed DTC advertisements GSK had submitted for Paxil that said that
the drug was not habit-forming. The agency at no time determined that
this statement was misleading. In August 2002, notwithstanding FDA's
determination, the court issued a preliminary injunction prohibiting
GSK from running DTC advertisements stating that Paxil is not habit-
forming. (In re Paxil Litigation, 2002 U.S. Dist. LEXIS 16221 (C.D.
Cal. Aug. 16, 2002).)
On reconsideration, the court declared that the preliminary
injunction challenged only ``FDA's . . . determination that the public
is not likely to equate the words `not habit forming' as used in
direct[-]to[-]consumer advertisements with no withdrawal symptoms.''
According to the court, ``The question of how members of the general
public are likely to interpret (or misinterpret) a statement is within
one of the courts' core competencies.'' Declaring itself ``unwilling to
blindly accept FDA's ultimate determination here,'' the court rejected
the defendants' preemption and primary jurisdiction arguments. It
nevertheless denied the injunction on the ground that the plaintiff was
not likely to succeed in demonstrating that ``non-habit forming''
statement in the advertisement is misleading. Thus, although the court
ultimately declined to award the injunctive relief sought by the
plaintiff, it continued to distinguish between FDA's determinations as
to the adequacy of drug warnings under Federal law, and its own view of
warnings adequacy under state common law. (In re Paxil Litigation, 2002
U.S. Dist. LEXIS 24621 (C.D. Cal. Oct. 16, 2002).)
DOJ submitted to the court a Statement of Interest and a brief
asserting preemption.\6\ The Statement of Interest contended that a
court order requiring GSK to remove the ``non-habit-forming'' claim
from its advertisements for Paxil would be inconsistent with FDA's
determination that the company's advertisements were proper and that
Paxil is not, in fact, ``habit-forming.'' The brief contended that the
court should find the plaintiff's state-law request for a court order
preempted because it poses an obstacle to achievement of the full
objectives of Congress ``by attempting to substitute th[e] Court's
judgment for FDA's scientific expertise.'' As the brief pointed out,
FDA had specifically reviewed the advertisements, made suggestions
concerning the proper manner of presenting information relating to
whether Paxil is ``habit-forming,'' and, in the exercise of its
scientific and medical expertise, found the advertisements acceptable.
The brief also included a primary jurisdiction argument. The court
reversed its earlier award of an injunction prohibiting the
manufacturer from running advertisements that had been reviewed and
approved by FDA, but the reversal was based on a ground other than
preemption. (In re Paxil Litigation, 2002 U.S. Dist. LEXIS 24621 (C.D.
Cal. 2002).) \7\
---------------------------------------------------------------------------
\6\ Statement of Interest of the United States of America, In re
PAXIL Litigation, Case No. CV 01-07937 MRP (CWx) (C.D. Cal. filed
August 20, 2002); Brief of the United States of America, In re PAXIL
Litigation, Case No. CV 01-07937 MRP (CWx) (C.D. Cal. filed Sept. 4,
2002).
\7\ In December 2003 (296 F. Supp. 2d 1374), the litigation,
consisting of twelve action in eleven Federal judicial districts, was
centralized for pretrial proceedings in the United States District
Court for the Central District of California.
---------------------------------------------------------------------------
Conclusion
As these cases illustrate, courts entertaining lawsuits filed under
state law do not always defer to FDA on matters that Congress has
placed squarely within the agency's authority. In FDA regulatory areas
characterized by comprehensive regulation and requiring a careful and
expert evaluation of scientific data and public health issues, state
coregulation can stand as an obstacle to or directly conflict with the
agency's administration of its statutory mandate. Preemption is the
constitutionally prescribed mechanism for resolving these conflicts.
The practice of citing preemption and primary jurisdiction under
the FDCA in litigation in which the United States is not a party is
well-established and substantially predates the current Administration.
DOJ and FDA participation in these cases is unusual. In the current
Administration, DOJ has participated in private state-law actions on
FDA's behalf only following a judicial finding that the action should
proceed, and only to address a state-law finding that, left
undisturbed, would undermine FDA's execution of its statutory mission
or directly conflict with Federal law. Responsibility for making final
decisions whether to make submissions in private lawsuits, on
preemption, primary jurisdiction, or any other issue, rests with the
Department of Justice--not FDA itself.
Question. These arguments conflict with long-standing FDA policy.
The law appears to contradict what the FDA has argued. What motivated
FDA to change its policy?
Answer. The Government's participation in cases arising under
state-law and presenting preemption issues is consistent with past FDA
practice and with the pertinent law.
The principal enabling statute of the Food and Drug Administration
is the Federal Food, Drug, and Cosmetic Act, FDCA. Under this statute,
FDA has broad authority to protect the public health by ensuring that
foods are safe, wholesome, sanitary, and properly labeled, and that
drugs and medical products are safe and effective. (See 21 U.S.C.
393(b)(2)(A)-(C).) By operation of the Supremacy Clause of the United
States Constitution (U.S. Const. Art. VI, clause 2), the FDCA nullifies
conflicting requirements established by the States in legislation,
regulations, or common law. (See Gibbons v. Ogden, 22 U.S. (9 Wheat.)
1, 211 (1824) (Marshall, C.J.).)
In the past, FDA has addressed conflicting state requirements in
the context of rulemaking. In 1982, for example, FDA promulgated
regulations requiring tamper-resistant packaging for over-the-counter
drugs. In the preamble accompanying the regulations, FDA stated its
intention that the regulations preempt any state or local requirements
that were ``not identical to . . . [the rule] in all respects.'' (47
FR 50442, 50447; Nov. 5, 1982.) Similarly, in 1986, FDA issued
regulations requiring aspirin manufacturers to include in labeling a
warning against use in treating chicken pox or flu symptoms in children
due to the risk of Reye's Syndrome. In the accompanying preamble, FDA
said the regulations preempted ``State and local packaging requirements
that are not identical to it with respect to OTC aspirin-containing
products for human use.'' (51 FR 8180, 8181; Mar. 7, 1986.) In 1994,
FDA amended 21 CFR 20.63 to preempt state requirements for the
disclosure of adverse event-related information treated as confidential
under FDA regulations. (59 FR 3944; Jan. 27, 1994.)
In addition, for many years, conflicting state requirements have
been addressed by FDA through case-by-case participation in selected
lawsuits to which the
United States has not been a party. Because FDA lacks independent
litigating authority, this participation has been by the Department of
Justice (DOJ) on FDA's behalf. The practice of addressing conflicting
state requirements through participation in litigation dates back many
years. For example, DOJ participated on FDA's behalf in favor of
preemption in both Jones v. Rath Packing Company, 430 U.S. 519 (1977),
and Grocery Manufacturers of America, Inc. v. Gerace, 755 F.2d 993 (2d
Cir. 1985). In addition, as discussed in our response to the previous
question on preemption, FDA has recently participated in several cases
involving state-law requirements for the communication of risk
information for prescription drugs. Of note, the first--and most
aggressive, from a legal perspective--of these submissions occurred
during the previous Administration--Bernhardt case included in
materials for the record.
NARMS
Question. What is the total amount of funding for NARMS, and from
what account does it come?
Answer. The total amount of funding for NARMS in fiscal year 2004
is $7.634 million. This funding is located in the Salaries and
Expenses, or S&E, account.
Question. How much is FDA giving to USDA and CDC in fiscal year
2005? How does that compare to fiscal year 2004? Please describe what
factors are used to determine the division of funds.
Answer. At this time, FDA has not determined the exact funding for
CDC and USDA for NARMS for fiscal year 2005 but plans to make decisions
by Fall 2004. In fiscal year 2004, FDA funding on NARMS will be reduced
due to government-wide rescissions. In fiscal year 2004, FDA provided
funds of approximately $1.6 million to USDA and $2 million to CDC. It
is important to point out that a large portion of the funds provided to
CDC is given to the states for the collection, isolation and
identification of bacterial isolates, which are then shipped to CDC and
the Food and Drug Administration's Center for Veterinary Medicine--
NARMS retail arm--for susceptibility testing. In determining the funds
provided to CDC and USDA, we analyze the entire NARMS program,
including the retail food arm of NARMS, and strive to fill in data gaps
and avoid duplication of organisms to be tested.
Question. How much NARMS money is currently being spent in foreign
countries, specifically Mexico? How is this money being used?
Answer. FDA is not spending any current year NARMS funding in
Mexico or other foreign countries.
Question. Does USDA or CDC spend any of their NARMS money in
foreign countries?
Answer. In fiscal year 2004 FDA is providing USDA and CDC, $1.6
million and $2 million respectively. FDA does not keep detailed records
of USDA and CDC funding for NARMS.
COUNTERFEIT DRUGS
Question. In February, FDA released a report on combating
counterfeit drugs. Several new technologies were mentioned that could
be used to this effect, including Radiofrequency Identification
tagging, color shifting inks, and holograms. Specifically regarding
color shifting inks, which I understand are currently available, has
FDA taken any action, or do you have any plans to pursue this option?
Answer. It is true that color shifting ink technology is currently
available for use on drug packaging and labeling. However, we heard
uniformly from all stakeholders that this technology is expensive and
requires significant investment of resources and time prior to
implementation. Due to the wide variety of products, packaging, and
labeling on the market, we heard from manufacturers, wholesalers, and
retailers that the decision to use color shifting inks, or any other
authentication technology, should be made by the manufacturer after a
manufacturer initiated product risk assessment. Without such an
analysis, use of color-shifting ink, or other authentication
technology, could lead to an unnecessary increase in the cost of drugs
to consumers. For example, we heard that color-shifting ink could be
appropriate for use on a very expensive, high volume brand name drug
product that is likely to be counterfeited, but not on a generic or low
volume drug product that is less likely to be counterfeited.
Based on our discussions with manufacturers, we estimate that it
would take a minimum of six to twelve months to implement a technology
such as color shifting ink from the time a decision is made to use the
authentication technology on the packaging and/or labeling of a drug
product. It could take longer if the technology, e.g., color-shifting
ink, is used on the product itself because safety studies might have to
be performed to ensure that the technology, e.g., the ink, does not
affect the safety or stability of the product.
ANIMAL DRUG COMPOUNDING
Question. Dr. Crawford, on February 10, I submitted a letter to Dr.
McClellan regarding FDA's new Compliance Policy Guidelines, issued July
14, 2003, regarding animal drug compounding. I received a response from
FDA on March 31st, and I thank you for that. However, I do have a few
more questions in light of the response.
First, the letter stated that FDA issued the CPG for immediate
implementation because of the ``urgent need to explain how it intended
to exercise its enforcement discretion regarding compounded drugs for
animal use in light of Thompson v. Western States Medical Center.''
However, this case dealt only with compounding in human drugs, not
animal drugs. How does this create an urgent need to deal with animal
drugs?
Answer. After the Western States decision, FDA revised its
enforcement policy on pharmacy compounding of human drugs. FDA was
concerned that without updated guidance regarding compounding of animal
drugs, the public would remain uncertain about whether and how FDA
would change its enforcement policy with respect to compounded animal
drugs. In addition, agency staff would lack clear guidance on
enforcement matters.
As FDA stated in its letter, although prior public comment was not
sought in this case, pursuant to the good guidance practices
regulations the public was invited to comment on the CPG when it was
issued and may comment on it at any time (68 FR 41591 (July 14, 2003)).
FDA has been reviewing those comments and will revise the guidance as
appropriate upon completion of our review.
Question. Second, the response states that two Federal appeals
court decisions have held that ``the Federal Drug & Cosmetic Act does
not permit veterinarians to compound unapproved finished drugs from
bulk substances, unless the finished drug is not a new animal drug.
These cases support FDA's position that new animal drugs that are
compounded from bulk substances are adulterated under the FD&C Act and
may be subject to regulatory action.'' I have been informed that the
cases cited deal only with veterinarians compounding drugs, not
pharmacists. Why do you limit pharmacists as well as veterinarians? Is
this supported by any congressionally-enacted statutory authority,
legislative history or case law?
Answer. The principle established by the courts applies equally to
compounding by pharmacists and veterinarians.
Veterinary medicine has not traditionally utilized the services of
compounding pharmacies to the extent that they have been utilized
within human medicine. The increasing activities and presence of
compounding pharmacies in veterinary medicine is a relatively recent
development.
The Federal Food Drug and Cosmetic Act, or ``the Act'', and its
implementing regulations do not exempt veterinarians or pharmacists
from the approval requirements in the new animal drug provisions of the
Act, 21 U.S.C. Section 360b. In the absence of an approved new animal
drug application, the compounding of a new animal drug from any
unapproved drug or from bulk drug substances results in an adulterated
new animal drug within the meaning of section 21 U.S.C. Section
351(a)(5). The compounding of a new animal drug from an approved human
or animal drug also results in an adulterated new animal drug within
the meaning of 21 U.S.C. Section 351(a)(5), unless the conditions set
forth in 21 CFR 530.13(b) relating to extralable use are met.
FDA is concerned about veterinarians and pharmacists that are
engaged in manufacturing and distributing unapproved new animal drugs
in a manner that is clearly outside the bounds of traditional pharmacy
practice and that violates the Act--such as compounding that is
intended to circumvent the drug approval process and provide for the
mass marketing of products that have been produced with little or no
quality control or manufacturing standards to ensure the purity,
potency, and stability of the product.
Pharmacists and veterinarians who engage in activities analogous to
manufacturing and distributing drugs for use in animals may be held to
the same provisions of the Act as manufacturers.
Question. Finally, the final paragraph of the FDA response states
``Accordingly, the regulations that implement AMDUCA provide that
extralabel use by compounding applies only to compounding of a product
from approved drugs, and that nothing in the regulations is to be
construed as permitting compounding from bulk drugs.'' Is there in the
agency's view anything in AMDUCA's regulations or the Act that is to be
construed as not permitting compounding from bulk substances?
Answer. As previously noted, under the Federal Food, Drug and
Cosmetic Act, in the absence of an approved new animal drug
application, the compounding of a new animal drug from a bulk substance
results in a new animal drug that is adulterated as a matter of law.
This has been FDA's longstanding position, which is supported by two
Federal appeals court decisions, United States v. Algon Chemical Inc.,
879 F.2d 1154 (3d Cir. 1989) and United States v. 9/1 Kg. Containers,
854 F.2d 173 (7th Cir. 1988).
______
Questions Submitted by Senator Byron L. Dorgan
DRUG REIMPORTATION
Question. In Canada and the European Union, all drugs sold in those
countries must meet the safety requirements of those countries. Given
that, why is the FDA opposed to legalizing the importation of drugs
that stayed within their systems? In what areas does the FDA believe
that the Canadian or European drug regulatory systems are inferior to
its own? Please provide specific examples.
Answer. We have concerns about medicines purchased outside of the
United States because they are typically not FDA-approved and they have
been manufactured, processed, shipped, and/or held outside the reach of
the domestic Federal and State oversight systems intended to ensure
that all drugs are safe and effective for their intended uses. The
Medicare Prescription Drug, Improvement and Modernization Act of 2003,
directed the Secretary of Health and Human Services to conduct a study
on the importation of drugs. The Conference Report detailed the
information to be included in the study. The information you have
requested as to assurances of the safety of imported drugs from Canada
and the European Union is information requested as part of the study.
We have been actively involved in collecting, analyzing and assessing
information, including the safety of such products, the economic
implications, the cost of implementation, and expect to provide a
comprehensive study to Congress before or by the due date.
Question. How much funding and new personnel do you estimate that
the FDA needs in order to implement a safe system of drug importation?
[In 2000, FDA estimated that it would need $23 million for the first
year of implementation.] What specific additional authorities does the
FDA feel it needs to ``police imports''?
Answer. FDA made several cost estimates during consideration of the
MEDS Act in 2000 and during consideration of other importation
legislation. In 2000, FDA estimated that implementation of the MEDS Act
would cost $21 million in each of the first 2 years following passage
of the legislation, as the agency drafted implementing regulations.
Other figures were provided in direct response to particular inquiries.
It should be noted that the figures previously calculated were specific
to the different legislation and programs reviewed and include
limitations on the types of importations. For the MEDS Act, if the
program was fully implemented, the cost estimates rose to more than
$100 million per year. The information you have requested as to what
additional authorities FDA needs to ``police imports'' is information
that is being assessed as part of the Medicare Section 1122 study.
Question. The drug importation provision in the new Medicare law
(Section 1121) gives the HHS Secretary the authority to write
regulations that ``contain any additional provisions determined by the
Secretary to be appropriate as a safeguard to protect the public health
or as a means to facilitate the importation of prescription drugs.'' Is
this not enough additional authority to allow FDA to police imports?
Answer. This information will also be assessed as part of the
Medicare study, as noted above.
Question. Recently, edible bean shipments were stopped by at the
U.S. border from Canada because the beans were contaminated with the
chemical ``Ronilan,'' which is banned from use on edible beans in the
United States. I come to find out that according to the Food and Drug
Administration, less than one-half of 1 percent of the edible beans
imported into the United States are inspected. North Dakota is the
number one State in dry edible bean production in the country. My
farmers have a vested interest in seeing that their industry is
protected the importation of contaminated edible beans. What will the
FDA do to increase inspections to insure that our edible bean industry
is protected?
Answer. Based on sampling conducted and residues found, FDA does
not believe that additional testing/sampling beyond what is currently
planned is warranted. The common violations involve a pesticide use on
a food for which no United States tolerance has been established for
that particular food although that pesticide has been registered with
EPA and has a tolerance established on other foods. If new information
becomes available indicating a compliance problem, whether from FDA
sampling or other valid sampling, the FDA will consider increasing the
priority for pesticide testing for dried edible beans.
______
Questions Submitted by Senator Dianne Feinstein
LARIUM (MEFLOQUINE)
Question. Mefloquine is an anti-malarial product that is approved
and prescribed in the United States but is used by consumers overseas
to prevent or treat malaria infections. There have been many reports in
the press about mefloquine's potentially dangerous side effects and FDA
issued a press release describing these side effects. With most of the
consumers of mefloquine using the product abroad how can we be certain
that the reporting of adverse events experienced overseas is occurring
sufficient for adequate assessments of risk and benefit during the
post-marketing period?
Answer. Adverse event reporting is voluntary for consumers and
health care providers. Health care providers or consumers may report to
the drug manufacturer (who is required to forward the report to FDA
under 21CFR 314.80) or directly to FDA. The reports received are then
entered into the AERS database, which is used to evaluate the adverse
events associated with a particular drug in the aggregate. This data is
used to identify potential drug safety concerns, on which FDA can
either take immediate action, or study further in some way. In the case
of mefloquine hydrochloride, the response to your next question
demonstrates that we are receiving reports of serious adverse events,
even though the drug is primarily used while patients are overseas.
Question. How many and what types of adverse events are being
reported? Who is submitting the reports, the consumer experiencing the
adverse event or the practitioner? Given the serious nature and
potential for long term side effects is there a registry or follow-up
of consumers of this product, either during use or after finishing use
of the product?
Answer. As of April 13, 2004, the FDA's Adverse Event Reporting
System (AERS) post marketing database contains 2,786 cases with Lariam
(mefloquine hydrochloride) as a suspect drug. Case reports have been
received since Lariam was approved in 1989 and continue to come to the
Agency at a rate of more than 100 per year. For example, AERS has
received 139 posts marketing adverse event cases1 associated with
Lariam since April 1, 2003. As with most drugs, many types of adverse
events are reported for Lariam. However, the largest number of reports
is for neuropsychiatric events; of the 2,786 Lariam cases in AERS,
1,821 contain at least one event categorized as neurological and/or
psychiatric in nature. Seven of the ten events most frequently reported
for Lariam (see below) are neuropsychiatric in nature:
Dizziness 381 cases; \1\ Headache 235; Anxiety 360; Fever 196;
Depression 303; Hallucination 179; Insomnia 268; Diarrhea 169; Nausea
238; Abnormal dreams 148.
---------------------------------------------------------------------------
\1\ This raw count from AERS probably contains some duplicate
cases, as well as cases resulting from literature articles and studies.
---------------------------------------------------------------------------
The Lariam labeling (package insert) was recently updated to
include stronger warnings about neuropsychiatric events. In addition,
an official Medication Guide discussing neuropsychiatric and other
adverse events, and describing malaria chemoprevention, is required by
law to be given to every patient to whom Lariam is dispensed.
Lariam reports are being submitted from multiple sources.
According to AERS, of the 2,786 reported cases, 512 cases were reported
by consumers and 1,540 by health professionals.\2\
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\2\ The categorization by source includes a large number of cases
with null values. In addition, more than one source can be indicated
for a given case (for example, both ``health professional'' and
``literature'').
---------------------------------------------------------------------------
Although most Lariam adverse events occur while the users are
traveling, more than 1,500 of the 2,786 Lariam cases were reported
from the United States. This indicates that travelers are notifying
their health practitioners, Roche Pharmaceuticals, and/or the FDA
directly of adverse events associated with Lariam upon their return to
this country.
There is no registry for follow-up of Lariam adverse events. It
should be noted that post-market reporting is only one component of
FDA's adverse event monitoring. Controlled comparative trials give us
the most reliable data, and there are many such trials in the published
literature. In addition, there are publications describing active
surveys, which provide information on very large numbers of patients in
a relatively controlled manner.
Question. DOD has begun an investigation into psychiatric adverse
events in soldiers and plans a study of mefloquine. DOD has stated that
it has not included in its assessments several incidents in soldiers
who have taken mefloquine or soldiers who do not demonstrate blood
levels of the drug. FDA's News Release of July 9, 2003 states that
``Sometimes these psychiatric adverse events may persist even after
stopping the medication.'' What is being done by FDA to investigate the
incidents of suicides in soldiers while on or returning from
deployment?
Answer. As a general matter, FDA takes numerous steps to improve
product and patient safety and reduce medical errors. Suicides in the
military are not investigated by FDA and would fall presumably within
the purview of DOD. Frequent discussion between DOD and FDA has
occurred related to antimalarial prophylaxis, and DOD has not
communicated concerns regarding soldier suicides and the use of
Lariam. Since Lariam was approved in 1989, AERS has identified 17
cases of suicide worldwide, associated with Lariam use. These cases
are reviewed on an ongoing basis. Many of the cases lack sufficient
evidence to conclude that the suicide was related to Lariam. The
relationship between suicide and Lariam is not conclusive since many
of the cases involve previous psychiatric disease or other confounding
factors. Only five of the reported cases occurred in U.S. residents,
and none of them were soldiers. One, however, was a former Marine who
had taken Lariam while serving in Somalia, more than 6 years before
his eventual suicide. Suicides have also been reported with other
antimalarial agents including chloroquine and malarone.
Current labeling of Lariam includes the following warning:
Mefloquine may cause psychiatric symptoms in a number of patients,
ranging from anxiety, paranoia, and depression to hallucinations and
psychotic behavior. On occasions, these symptoms have been reported to
continue long after mefloquine has been stopped. Rare cases of suicidal
ideation and suicide have been reported though no relationship to drug
administration has been confirmed. To minimize the chances of these
adverse events, mefloquine should not be taken for prophylaxis in
patients with active depression or with a recent history of depression,
generalized anxiety disorder, psychosis, or schizophrenia or other
major psychiatric disorders. Lariam should be used with caution in
patients with a previous history of depression. During prophylactic
use, if psychiatric symptoms such as acute anxiety, depression,
restlessness or confusion occur, these may be considered prodromal to a
more serious event. In these cases, the drug must be discontinued and
an alternative medication should be substituted.
A Medication Guide was developed that communicates these issues to
the patient.
EMERGENCY CONTRACEPTION
Question. There are reports in the press that decisions about OTC
approval of Plan B contraception are being made differently than
decisions about other products, made outside the Center, at the
Commissioner level or above. Could you explain if this is true, if FDA
is politicizing the approval process and why this is the case? Why is
the Plan B OTC approval being handled differently from other products?
Answer. The review and decision-making for the Plan B application
is not being made differently than other applications. The review is
occurring within the FDA's Center for Drug Evaluation and Research. FDA
will have signatory authority of the application. The Center commonly
involves the Office of the Commissioner in prominent regulatory
decisions.
Question. Given that advisory committee members voted unanimously
that Plan B Emergency contraception was safe under OTC conditions of
use and that studies investigating the OTC instructions, including
contraindications, side effects and precautions were well understood by
users of the product and that there was low abuse and misuse potential,
why has the decision to approve OTC use of Plan B emergency
contraception been delayed? When does FDA plan to make a decision on
OTC use of Plan B emergency contraception?
Answer. Since the December 2003 joint meeting of two FDA advisory
committees, the sponsors of the supplemental new drug application (NDA)
submitted additional information to FDA in support of their application
to change Plan B from a prescription to an over-the-counter product.
This additional information was extensive enough to qualify as a major
amendment to the NDA. Under the terms of the PDUFA, major amendments
such as this automatically trigger a 90-day extension of the original
PDUFA deadline. The PDUFA extension will permit the FDA to complete its
review of the application, including additional data on adolescent use
that was submitted by Barr and WCC in support of the application. The
new PDUFA deadline is May 21st. Such extensions are required so that
FDA staff has adequate time to review the additional medical and
scientific evidence. FDA's final decision will be based on sound
science and in full compliance with the applicable laws and
regulations, while taking into consideration the recommendations of
these advisory committees.
Question. Plan B, levonorgestrel, has been proven most effective
when taken within 24 hours of coitus. Retaining prescription status of
this drug impedes the ability of consumers to use the product when it
is most effective. If FDA does not anticipate approving Plan B
emergency contraception for OTC status, please explain the rationale,
when the product has been identified as safe and effective and eligible
for transfer to OTC status under the 1951 Durham-Humphrey Amendment to
the Food Drug and Cosmetic Act, that this change in status was not
approved?
Answer. FDA is still reviewing the application, so therefore we are
unable to answer this question until the review is complete and a
decision has been made based on this review.
Question. Some questions were raised by groups against the approval
of Plan B as an OTC product, that use of an OTC emergency contraceptive
may promote promiscuity in teens. Studies indicated that this was not
the case. Is this still an issue for the FDA?
Answer. FDA is still reviewing the application, so therefore we are
unable to answer this question until the review is complete and a
decision has been made that is based on the safety and efficacy in an
OTC setting, which includes comprehension of the label and usage of the
product.
______
Questions Submitted by Senator Richard J. Durbin
DIETARY SUPPLEMENTS
Question. Do you agree it would be easier for the FDA to remove
unsafe dietary supplements from the market if supplement manufacturers
were required to submit serious adverse event reports your agency?
Answer. Adverse event reports are one way that FDA may become aware
of a potential safety problem.
In evaluating the safety of dietary supplements containing a
particular dietary ingredient, we consider evidence from a variety of
sources, including: (1) the well-known, scientifically established
pharmacology of the ingredient or its constituents; (2) peer-reviewed
scientific literature on the effects of the dietary ingredient or its
constituents; and (3) adverse events reported to have occurred
following consumption of dietary supplements containing the dietary
ingredient or its constituents. Therefore, a conclusion that a
particular dietary supplement or dietary ingredient should be removed
from the market will still rest upon a determination that the available
scientific information supports a finding that is adulterated.
Question. How do you respond to the IOM's conclusion in their
recent dietary supplement report that ``a core issue that constrains
the development and utility of a scientifically based framework for
evaluating the safety of dietary supplements is the lack of data
readily available for evaluation? Without amendment to DSHEA by
Congress, the FDA is not empowered to require the submission to the
agency of such key information as adverse events.''
Answer. In evaluating the safety of dietary supplements, FDA relies
on all available information including, the well-known, scientifically
established pharmacology of an ingredient or its constituents, peer-
reviewed scientific literature on the effects of the dietary ingredient
or its constituents, and adverse events reports. Certainly, FDA
welcomes the submission of any safety-related information that a firm
may have, and such information may facilitate FDA's evaluation of the
potential hazards of a dietary ingredient.
Such information often does not resolve the safety questions about
an ingredient, however, that is because the major limitation to
establishing that a particular dietary ingredient or dietary supplement
presents a significant or unreasonable risk is the relatively
incomplete scientific information about the pharmacology and effects of
many dietary ingredients rather than lack of FDA access to the
information a firm may have assembled.
Amending DSHEA to provide FDA access to a firm's safety information
would not resolve the basic issue that in many cases there is
inadequate information to understand the risk, if any, that a
particular dietary ingredient may present to consumers. FDA believes
that actions to facilitate the conduce of scientific studies of the
composition, pharmacology, and effects of dietary ingredients would be
useful in generating the data that the IOM believes is necessary to
develop a scientifically based framework for evaluating the safety of
dietary supplements.
Question. The definitions of ``unreasonable risk'' used by FDA in
the ephedra rule and the IOM in their report require that only a
likelihood of future risk be shown, which would allow the FDA to take
supplements that are harmful off the market faster. Do you agree?
Answer. Yes. As FDA stated in the ephedra rule, ``unreasonable
risk'' does not require a showing that a dietary supplement has caused
actual harm to specific individuals, only that scientific evidence
supports the existence of risk.
Question. I am concerned that the FDA does not have the proper
tools, systems, and resources to promptly implement the new
``unreasonable risk'' standard for dietary supplements in future
situations. For example, the agency's interpretation of the
``unreasonable risk'' standard relies in part on an evaluation of the
benefits (or lack of benefits) of a particular supplement. What
mechanisms, if any, does FDA have in place to evaluate the benefits of
dietary supplements?
Answer. In evaluating the benefits of dietary supplements, FDA
reviews published studies and other relevant sources of scientific
information. Collaboration with academic centers such as the National
Center for Natural Products Research (NCNPR), Federal partners such as
the National Institutes of Health and the National Center for
Toxicological Research, and our consumer and industry stakeholders is
important in developing a comprehensive risk-benefit evaluation of
dietary supplement products. We believe that efforts to strengthen our
relationship with scientific centers that emphasize primarily efficacy
research is the best approach to ensure that such information is
available, when needed, for safety evaluations under the ``unreasonable
risk'' standard. Further, it is important to recognize that in
circumstances in which there is clear and persuasive evidence of a
substance's risks but information on its benefits is incomplete or
absent there is no barrier to FDA action. Under the risk-benefit
analysis that FDA described in the ephedra rulemaking, having efficacy
data is not a prerequisite for acting against unsafe dietary
supplements; that is, if there is adequate evidence that a product
presents a known or reasonably known or reasonably likely risk but
there is no data sufficient to show that the product has known or
reasonably likely benefits, FDA can take action against the product
based on unreasonable risk.
Question. Commissioner McClellan promised enforcement action
against bitter orange and usnic acid in the wake of the ephedra
decision. Yet, all the agency has done so far is to reiterate its
warnings to the public that these supplements pose hazards. Is the lack
of efficacy information for these substances hindering prompt FDA
regulatory action?
Answer. In a speech at the University of Mississippi in January,
Dr. McClellan indicated that FDA might ``take a closer look'' at the
safety of other dietary supplements, specifically naming some ephedra
substitutes, such as bitter orange (citrus aurantium) as well as usnic
acid. FDA is actively engaged in coordinating research on bitter
orange.
At the present time, FDA is examining the available scientific
information to determine what safety concerns, if any, may be
associated with the use of dietary supplements containing bitter orange
and usnic acid. Although FDA cannot predict ahead of time what the
findings of this review will be, FDA can assure you that if the
evidence establishes that the use of these ingredients in dietary
supplements presents an unreasonable risk of injury or illness, FDA
will take action to address those risks. In the interim, the Agency
feels it is important to keep consumers informed of safety concerns
about these substances so that they may make informed decisions about
whether or not to use dietary supplements containing them.
Question. The May 2004 edition of Consumer Reports Magazine
contains a list of 12 dietary supplement ingredients they recommend
consumers stay away from. One of the ingredients is andostenedione, and
anabolic steroid, which has already been banned. Will you commit to a
full scientific safety review of eleven remaining substances listed by
Consumer Reports?
Answer. We continually monitor the marketplace and the scientific
literature to identify dietary supplements and dietary ingredients that
may present safety concerns. The potential risks presented by different
dietary ingredients vary widely. Depending on the specific facts
surrounding the characteristics and use of each substance and the risks
it may present, FDA will make every attempt to allocate resources to
address those that present the most significant public health concerns.
As part of on-going dietary supplement marketplace monitoring efforts,
FDA will critically examine the list of substances identified by
Consumer Reports Magazine and consider the safety risks that they
present and what action by FDA may be warranted.
SUBCOMMITTEE RECESS
Senator Burns. Dr. Crawford, I did not have a question for
you. We can get together offline, sir.
Mr. Bost, nice to see all of you here today, and again,
thanks for your good work. I think you all are to be commended.
That is not to say that we should let our guard down because we
know that we still have--any time that you deal in this area of
food and food safety and especially for our consumers. They
come first. I think the industry is of a mindset they want to
do the right thing but make sure it is the right thing to do,
that we just do not give some cosmetic look at it and not
address the real problems.
Thank you for coming. These hearings are closed.
[Whereupon, at 2:21 p.m., Thursday, April 1, the
subcommittee was recessed, to reconvene subject to the call of
the Chair.]