    [House Hearing, 111 Congress]
    [From the U.S. Government Publishing Office]

       AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND
                    RELATED AGENCIES APPROPRIATIONS FOR 2011

    _______________________________________________________________________

                                    HEARINGS

                                    BEFORE A

                               SUBCOMMITTEE OF THE

                           COMMITTEE ON APPROPRIATIONS

                             HOUSE OF REPRESENTATIVES

                          ONE HUNDRED ELEVENTH CONGRESS
                                 SECOND SESSION
                                    ________
         SUBCOMMITTEE ON AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG
                      ADMINISTRATION, AND RELATED AGENCIES
                    ROSA L. DeLAURO, Connecticut, Chairwoman
     SAM FARR, California               JACK KINGSTON, Georgia
     ALLEN BOYD, Florida                TOM LATHAM, Iowa
     SANFORD D. BISHOP, Jr., Georgia    JO ANN EMERSON, Missouri
     LINCOLN DAVIS, Tennessee           RODNEY ALEXANDER, Louisiana
     MARCY KAPTUR, Ohio
     CHET EDWARDS, Texas
     MAURICE D. HINCHEY, New York

     NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full
    Committee, and Mr. Lewis, as Ranking Minority Member of the Full
    Committee, are authorized to sit as Members of all Subcommittees.
         Martha Foley, Leslie Barrack, Alexander Gillen, and Matt Smith,
                                Staff Assistants
                                    ________

                                     PART 4
                                                                       Page
     Global Food Security.............................................    1
     Farm and Foreign Agricultural Services...........................   49
     Food and Drug Administration.....................................  153
     Drug Safety......................................................  267

                                    ________
             Printed for the use of the Committee on Appropriations

       AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND
                    RELATED AGENCIES APPROPRIATIONS FOR 2011

    _______________________________________________________________________

                                    HEARINGS

                                    BEFORE A

                               SUBCOMMITTEE OF THE

                           COMMITTEE ON APPROPRIATIONS

                             HOUSE OF REPRESENTATIVES

                          ONE HUNDRED ELEVENTH CONGRESS
                                 SECOND SESSION
                                    ________
         SUBCOMMITTEE ON AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG
                      ADMINISTRATION, AND RELATED AGENCIES
                    ROSA L. DeLAURO, Connecticut, Chairwoman
     SAM FARR, California               JACK KINGSTON, Georgia
     ALLEN BOYD, Florida                TOM LATHAM, Iowa
     SANFORD D. BISHOP, Jr., Georgia    JO ANN EMERSON, Missouri
     LINCOLN DAVIS, Tennessee           RODNEY ALEXANDER, Louisiana
     MARCY KAPTUR, Ohio
     CHET EDWARDS, Texas
     MAURICE D. HINCHEY, New York

     NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full
    Committee, and Mr. Lewis, as Ranking Minority Member of the Full
    Committee, are authorized to sit as Members of all Subcommittees.
         Martha Foley, Leslie Barrack, Alexander Gillen, and Matt Smith,
                                Staff Assistants
                                    ________

                                     PART 4
                                                                       Page
     Global Food Security.............................................    1
     Farm and Foreign Agricultural Services...........................   49
     Food and Drug Administration.....................................  153
     Drug Safety......................................................  267

                                    ________
             Printed for the use of the Committee on Appropriations

                         U.S. GOVERNMENT PRINTING OFFICE
     57-781                     WASHINGTON : 2010

                                      COMMITTEE ON APPROPRIATIONS

                       DAVID R. OBEY, Wisconsin, Chairman

     NORMAN D. DICKS, Washington          JERRY LEWIS, California
     ALAN B. MOLLOHAN, West Virginia      C. W. BILL YOUNG, Florida
     MARCY KAPTUR, Ohio                   HAROLD ROGERS, Kentucky
     PETER J. VISCLOSKY, Indiana          FRANK R. WOLF, Virginia
     NITA M. LOWEY, New York              JACK KINGSTON, Georgia
     JOSE E. SERRANO, New York            RODNEY P. FRELINGHUYSEN, New
     ROSA L. DeLAURO, Connecticut         Jersey
     JAMES P. MORAN, Virginia             TODD TIAHRT, Kansas
     JOHN W. OLVER, Massachusetts         ZACH WAMP, Tennessee
     ED PASTOR, Arizona                   TOM LATHAM, Iowa
     DAVID E. PRICE, North Carolina       ROBERT B. ADERHOLT, Alabama
     CHET EDWARDS, Texas                  JO ANN EMERSON, Missouri
     PATRICK J. KENNEDY, Rhode Island     KAY GRANGER, Texas
     MAURICE D. HINCHEY, New York         MICHAEL K. SIMPSON, Idaho
     LUCILLE ROYBAL-ALLARD, California    JOHN ABNEY CULBERSON, Texas
     SAM FARR, California                 MARK STEVEN KIRK, Illinois
     JESSE L. JACKSON, Jr., Illinois      ANDER CRENSHAW, Florida
     CAROLYN C. KILPATRICK, Michigan      DENNIS R. REHBERG, Montana
     ALLEN BOYD, Florida                  JOHN R. CARTER, Texas
     CHAKA FATTAH, Pennsylvania           RODNEY ALEXANDER, Louisiana
     STEVEN R. ROTHMAN, New Jersey        KEN CALVERT, California
     SANFORD D. BISHOP, Jr., Georgia      JO BONNER, Alabama
     MARION BERRY, Arkansas               STEVEN C. LaTOURETTE, Ohio
     BARBARA LEE, California              TOM COLE, Oklahoma
     ADAM SCHIFF, California
     MICHAEL HONDA, California
     BETTY McCOLLUM, Minnesota
     STEVE ISRAEL, New York
     TIM RYAN, Ohio
     C.A. ``DUTCH'' RUPPERSBERGER, Maryland
     BEN CHANDLER, Kentucky
     DEBBIE WASSERMAN SCHULTZ, Florida
     CIRO RODRIGUEZ, Texas
     LINCOLN DAVIS, Tennessee
     JOHN T. SALAZAR, Colorado
     PATRICK J. MURPHY, Pennsylvania

                     Beverly Pheto, Clerk and Staff Director

                                      (ii)

       AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND
                    RELATED AGENCIES APPROPRIATIONS FOR 2011

                                  ----------

                                              Thursday, March 11, 2010.

                              GLOBAL FOOD SECURITY

                                    WITNESS

    THOMAS MELITO, DIRECTOR, GAO; INTERNATIONAL AFFAIRS AND TRADE

                          Ms. DeLauro Opening Remarks

        Ms. DeLauro. The hearing will come to order. First of all,
    our apologies to you, but we just concluded voting on the floor
    of the House and got here as quickly as we could. So I
    appreciate your forbearance--to our guests, and also to our
    guests who are here for the hearing.
        What we want to do is to, first, to welcome you and to say
    thank you for coming here, Thomas Melito, director of the
    General Accounting Office's international affairs and trade
    team. Mr. Melito is here to present the report, which I had
    requested, and that GAO is releasing today at this hearing, on
    our government's current approach to international food aid and
    food security. So, again, we thank you for being here.
        The funding of international food aid is another of the
    fundamental responsibilities of this subcommittee. I am very
    proud of the fact that, together, Democrats and Republicans
    have both worked to increase funding for the Food for Peace
    program, P.L. 480, by 38 percent in last year's appropriations
    bill. And, thanks to Republican champions of food aid like
    Representative Jo Ann Emerson, we also more than doubled
    funding for the McGovern-Dole program, including funding for
    pilot programs and fortified food that will improve nutrition
    for the recipients of this aid.
        So, I am proud of what we have accomplished in this arena
    so far. Nonetheless, because of higher food prices and global
    economic uncertainty, the number of undernourished people has
    increased by over 150 million over the past 2 years. And now,
    for the first time ever, over a billion souls on our planet go
    hungry or are ill-fed. Every six seconds a child in this world
    dies because of hunger or hunger-related causes.
        If that statistic were not, in and of itself, horrible
    enough, that's just the hunger side of the ledger. We also know
    that malnutrition causes all kinds of lingering problems for
    the underfed. Research shows that children's mental and
    physical development are stunted by inadequate nutrition, that
    women are more likely to suffer from conditions like obstetric
    fistulas, and that people's immune systems across the board are
    all adversely affected by malnourishment.
        I believe, and I know many here agree, that the continued
    existence of such famine in our day and age is a moral outrage.
    We have the resources and the ability to confront this kind of
    suffering in our world, and it behooves us to act when and
    where we can put a stop to it.
        You know, even if you do not share the sense of moral
    obligation, however, global hunger is a national security
    issue. We know for a fact that hunger, gnawing, unyielding,
    forces people into desperate acts and dangerous pacts. Famine
    and starvation create the conditions for militant extremism
    around the world, the very extremism that we fight right now in
    Iraq and in Afghanistan.
        Simply put, international food aid is not only an important
    aspect of our diplomacy, it's a crucial aspect of our current
    efforts to combat global terror. We fight hunger, and we
    undercut the recruiting base of those who would threaten us. As
    a former national security advisor, Sandy Berger wrote in the
    Los Angeles Times last year, ``Ensuring that no child goes to
    school hungry is the single greatest investment we can make in
    building prosperous, healthy, and stable societies.''
        This is one reason why I am concerned about the flat
    funding levels in the USDA's proposed budget for the P.L. 480
    Title II program and the McGovern-Dole program. Now, when the
    world needs our help and is looking to us for moral leadership,
    now is not the time to forsake our commitment to funding food
    aid. After all, it is no hyperbole to say that helping to feed
    the world in this manner also helps to keep our troops safe.
        Of course, we must make sure that our food aid is
    distributed effectively and efficiently, and that the money we
    are spending on these programs is getting to the people who
    desperately need it, as the single comprehensive food safety
    agency.
        Based on the report that we have, it seems that we may face
    a predicament in our current approach to global food security.
    We now have 10 agencies that have jurisdiction over our
    international food commitments. And again, perhaps this is an
    arena where some streamlining and consolidation of our global
    food security apparatus would benefit everyone involved, not
    the least all of the hungry that we are trying to help.
        Let me just indicate to you that this is not a new concept
    for me, in trying to get to one single agency that has to deal
    with food safety. There are 15 at the moment. In my view, there
    are 14 too many. So we seem to have a number of agencies that
    are engaged in this effort, as well.
        In any case, I look forward to hearing what the GAO report
    has ascertained about our current multi-faceted food security
    strategy, and I hope and I expect that today's testimony will
    help to illuminate the path ahead, as we consider these issues
    on the subcommittee.
        So, thank you once again for joining with us today, Mr.
    Melito, and let me now recognize my colleague, Congressman
    Kingston, for any opening remarks that he may have.

                          Mr. Kingston Opening Remarks

        Mr. Kingston. Thank you, Madam Chair, and thank you for
    having this hearing. I know that this is a great passion for
    all three of us that are here--in fact, the whole committee and
    most Members of Congress. Yet, at the same time, my perspective
    might be a little bit different than my two colleagues up here,
    from a number of points of view that I want to just talk about
    briefly.
        Number one, very important, do you know what the deficit
    was last month? $223 billion. One month's deficit. One month.
    The deficit projection for this year is $1.6 trillion, about 37
    percent of our entire budget.
        Now, I just heard a Republican colleague of mine, Bob
    English, say--and I'm not sure if this is accurate; I'm going
    to check it out --he said, ``Basically, we have enough money
    that comes in to pay for Medicare, Social Security, and most of
    the entitlement programs. Everything else that the Federal
    Government spends money on is actually borrowed money or
    printed money. It's deficit spending.'' Sobering thought.
        The Republican conference just voted to not do any earmarks
    this year, just sort of as a show. And now we all, as
    appropriators, think that the Administration actually does need
    our input on their budget, and so that's not necessarily a
    position of everybody's here, because if you do not earmark the
    budget or change it, you're essentially agreeing with the
    executive branch, which the legislative branch would not want
    to do. But I think there is the theme that the budget issue is
    huge. And for too long we have chosen to ignore it, both
    parties.
        A second concern of mine is that--and I think you're
    addressing this, it's just the lack of comprehensive data on
    the funding on what are we doing. You know, it's amazing that
    every generation thinks they've discovered something new, food
    aid being one of them, as if we weren't in many of these
    countries for decades already.
        I was recently in Ethiopia. And one of the food aid--we
    went to a food aid program, which I enjoy doing immensely when
    I go to other countries. I want to see the plate in the child's
    hand. Sometimes that's hard to do, by the way. The
    international communities resist you going out and doing site
    inspections. But I don't stop until I see the plate in the
    kid's hand. And one of the workers said to me, ``You know, this
    might be''--and the kind of, I'd say, self-dramatization of
    many aid workers--``This child might only have this plate of
    food today.'' I talked to a local who said, ``That's not true
    at all.''
        Case in point. I lived in Ethiopia in the 1950s. The
    population was around 12 million to 13 million people. Today
    it's 80 million people. Now, they have had all kinds of
    problems with their government, as you may know, all kinds of
    problems with droughts, and so forth. Yet, somehow, they are
    getting food, because their population has gone up so much. It
    could not have done--it could not have happened.
        International aid--and food aid included in that--in Africa
    has been just churning for years. Very few bright spots in it.
    You get a country like Botswana, that's making a lot of
    progress, but we don't allow U.S. developmental aid. And so
    here is a country that, if you will, has kind of graduated from
    the primary care stage, needs technical assistance, but because
    they're prosperous they don't get it any more. And to me,
    that's an inconsistency.
        Switching back to Ethiopia, what's interesting, as we were
    going outside of Addis Ababa to visit this village and this
    school that had a program, we actually had some down time in
    which we saw another school. And I said, ``Well, let's stop at
    this school.'' Both schools, concrete or dirt floor. No
    electricity, no insulation. The kids all sharing a desk, kind
    of a plank table--you've seen those before. But one school gets
    the aid, the other one doesn't. Don't know why. I mean, we can
    say, ``Well, it's lack of resources,'' but what was the
    decision that chose one over the other? Where was the decision-
    making in that?
        Another concern of mine is how much of this is skimmed off
    by corrupt governments? In Zimbabwe, the aid is led by the host
    country. Is that a great idea, with the Mugabe Government?
    Probably not.
        Another issue which I think is very important--and I
    actually think food aid is ahead of most aid on this--is using
    the host country resources. You know, we want to employ as many
    people on the ground as possible for the manufacturing and for
    the distribution. And I think food aid actually is moving in
    that direction, more than some of the other aid. But that's
    something that we need to address.
        And so, I am very interested in this, very committed to it,
    and very curious about it. But, you know, people who are on the
    ground who would give food aid an A plus, I don't know what
    their grade scale is. I think absolute A plus for compassion,
    absolutely A plus for purity in heart and idealism. But in
    terms of delivery, in terms of long-term results, in terms of
    helping impoverished countries so that they don't need aid,
    it's a C minus, at the best.
        So, I am looking forward to your testimony, looking forward
    to a relationship, and working with you in the long term.
        Ms. DeLauro. Thank you very much, Mr. Kingston. Mr. Melito,
    you are now free to engage in testimony, and the full report of
    your testimony will be on the record. And you are free to
    summarize or to characterize your remarks. Thank you.

                          Mr. Melito Opening Statement

        Mr. Melito. Thank you. Madam Chairwoman and members of the
    subcommittee, thank you for the opportunity to discuss our work
    on U.S. agencies' progress toward the development of a
    government-wide strategy to address global food security.
        Global hunger continues to worsen, despite the world
    leaders' 1996 pledge, reaffirmed in the year 2000 and again in
    2009, to halve hunger by 2015. The Food and Agriculture
    Organization recently reported that more than one billion
    people were undernourished, worldwide. In 2009, major donor
    countries pledged about $22 billion for agriculture and food
    security in developing countries, of which the U.S. share is at
    least $3.5 billion.
        Since assuming office, the President and the Secretary of
    State have each stated that improving global food security is a
    priority of this Administration. Consistent with the
    recommendation in our 2008 review of food and security, U.S.
    agencies have launched an effort to develop a government-wide
    strategy to combat global hunger.
        My statement is based on our report released today on
    government-wide efforts to address global food insecurity. I
    will focus on two topics: first, the types and funding of U.S.
    global food security programs; and second, progress in
    developing an integrated U.S. government-wide strategy, and its
    potential vulnerabilities.
        Regarding the first topic, we found that the U.S.
    Government supports a wide variety of programs and activities
    for global food security, but it lacks comprehensive data on
    funding. As a result, it is difficult to determine the full
    extent of such programs and activities, and to estimate
    precisely the total amount of funding that the U.S. Government,
    as a whole, allocates to global food security.
        In response to GAO's data collection instrument, seven
    agencies reported funding for global food security in fiscal
    year 2008. USAID and USDA reported the broadest array of
    programs and activities, while USAID, MCC, and Treasury
    reported the highest levels of funding.
        The seven agencies together directed at least $5 billion in
    fiscal year 2008 to global food security, with food aid
    accounting for about half of that funding. However, the actual
    total is likely greater for two reasons.
        First, the agencies lack a commonly accepted operational
    definition of global food security programs and activities.
    Such a definition would enable U.S. agencies to apply at the
    program level for planning and budgeting purposes.
        Second, some agencies' management systems are inadequate
    for tracking food security funding data comprehensively and
    consistently. Most notably, USAID and State fail to include a
    very large amount of food aid funding in a database they both
    use to track foreign assistance.
        Regarding our second topic, the Administration is making
    progress toward finalizing a government-wide strategy, but its
    efforts are vulnerable to data weaknesses and risks associated
    with the strategy's host country-led approach. The
    Administration has established inter-agency coordination
    mechanisms at headquarters. In addition, it is finalizing an
    implementation document and a results framework, both of which
    are expected to be released shortly.
        However, the lack of comprehensive data on funding levels
    may deprive decision-makers of information on available
    resources and a firm baseline against which to plan.
    Furthermore, the host country-led approach, although promising,
    has three key vulnerabilities.
        First, the weak capacity of host governments can limit
    their ability to sustain donor-funded efforts. For example, the
    multilateral development banks reported relatively low
    sustainability of agriculture-related projects in the past.
        Second, a shortage of expertise in agriculture and food
    security at U.S. agencies could constrain efforts to help
    strengthen host government capacity. In 2008, 3 former USAID
    administrators reported that the agency had only 6 engineers
    and 16 agricultural experts at that time.
        And, third, policy differences between the United States
    and host governments may complicate efforts to align our
    assistance with their strategies. For example, Malawi's
    strategy of providing subsidized agricultural inputs to farmers
    runs counter to the U.S. approach of encouraging the
    development of agricultural markets, and linking farmers to
    those markets.
        In the report issued today, we recommend that the Secretary
    of State work with other agencies to develop an operational
    definition of food security, establish a methodology for
    consistently reporting comprehensive data, and periodically
    inventory food security-related programs. We also recommend
    that the Agency specify measures to mitigate the risks
    associated with the host country-led approach. The agencies
    concurred with our recommendations.
        Madam Chairwoman, this concludes my statement. I would be
    pleased to respond to any questions that you or other members
    of the subcommittee may have. Thank you.
        [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Ms. DeLauro. Thank you very much for your testimony. Let me
    just start right in.
        I am troubled by the discrepancy that you found in the data
    that USAID reported for Title II of P.L. 480, which, as you
    know, is one of the most popular and most effective
    international food aid programs. You report that the Foreign
    Assistance Coordination and Tracking System, the database
    that's used by both the State Department and USAID, included a
    number that was over $1 billion short of the actual 2008
    appropriation of $2.1 billion--a significant discrepancy.
        Mr. Melito. Yes.
        Ms. DeLauro. Troubling, also, that USAID was unaware of the
    mistake until you brought it to their attention.
        Your report also suggests the database was not immediately
    corrected after the mistake was discovered.
        Equally troubling is your conclusion that USDA has no
    established mechanism for reporting data on food security
    programs, and that several different conflicting estimates were
    provided to you after several inquiries.
        Why do you think USAID and USDA had so much difficulty in
    reporting accurate data? What effect is this likely to have on
    the food aid programs at these agencies? How do USDA and USAID
    compare with the other agencies that you reviewed?
        Mr. Melito. Thank you. The situation with USAID was that
    they had a fairly--actually, they had a very accurate number
    for the initial appropriation. Where it broke down was on the
    supplemental. They included a couple of supplemental items, but
    they didn't include the very large Title II supplemental item,
    which was very large and, obviously, very clear to us, when we
    compared it to the IFAR and other documents, including the
    budget.
        We did bring that to their attention, and they did tell us,
    ``Yes, you used a larger number.'' Where there seems to be some
    discrepancy----
        Ms. DeLauro. Was there any reason why they didn't include
    it?
        Mr. Melito. They didn't seem to have a good process for
    updating----
        Ms. DeLauro. I got it, okay, okay.
        Mr. Melito [continuing]. After the budget was supplemented.
        Ms. DeLauro. Okay.
        Mr. Melito. Where we're a little confused is in their
    agency comment letter. They have--they're not seeming to
    indicate that that's a problem. Although, informally with us,
    they agree it was a problem. And they ultimately included the
    number in the official number that we have here. So we're still
    in dialogue with them----
        Ms. DeLauro. Okay.
        Mr. Melito [continuing]. About exactly what processes they
    will have in place, and thus, our recommendation.
        Regarding USDA, I would say that the issue was stovepiped
    within the organization, that there really was no good way of
    cutting across different parts of USDA to see across--for
    something which touches a number of different programs. Also, I
    don't think they initially assigned it to someone at a high
    enough level for them to actually help us with this.
        That all said, I think ultimately we have a pretty good
    USDA number. But it took a lot of work with us to work with
    them.
        We consider all of this to be a problem, though, because
    this strategy is an attempt to be a whole-of-government
    approach. And they're going to be needing--or they're going to
    say they need resources. And we think you can't really give a
    good number on what resources you need unless you know what
    resources you already have. So, this is an attempt by GAO--
    we're working with the agencies to create as good a baseline as
    possible.
        That said, we know in our report this is an understatement.
    There are a number of categories--there is over $800 million of
    USAID funding which overlaps with other programs, such as
    health and such, that we know there is a food security
    component, but we couldn't tease it out. If they had a better
    definition, AID ultimately could tease it out----
        Ms. DeLauro. Well, that's what--we will get to those
    questions.
        Mr. Melito. Right, yes.
        Ms. DeLauro. But I--just quickly, USDA, USAID, a comparison
    to other agencies that you reviewed, or are these the two major
    pieces that----
        Mr. Melito. Those are the two largest discrepancies. State
    Department, we had a lot of problems early on with State
    Department, separate from the issue with the supplemental.
    Their initial number didn't include their contribution to the
    Food and Agriculture Organization, their initial----
        Ms. DeLauro. Oh, okay.
        Mr. Melito [continuing]. Which is $100 million a year.
        Ms. DeLauro. Sure, sure, sure.
        Mr. Melito. And we sat down with them and ultimately----
        Ms. DeLauro. And said, ``You've got to''----
        Mr. Melito. Yes, then----
        Ms. DeLauro. That fits. That fits. Okay.
        Mr. Melito. We thought we had pretty good numbers with MCC.
    The other large player was Treasury.
        Ms. DeLauro. Yes.
        Mr. Melito. There, the numbers were fine. The question was
    the methodology. How do you attribute our contributions to a
    multilateral organization? And I think we came up with a
    mutually agreeable methodology between GAO and Treasury on how
    we're scoring that.
        Ms. DeLauro. I think your point is well taken. I have one
    more question in regard to that before--I know my time is going
    to be up.
        But it would appear to me that what we're talking about
    is--rather than substance--is process here, in terms of getting
    to figuring out how much there is, what a definition is, and
    what gets allocated. It is really the process and not, if you
    will again, the substance of the commitment to doing that, or
    to getting the food----
        Mr. Melito. That's exactly right. That's a separate
    consideration.
        Ms. DeLauro. That's a separate consideration.
        Mr. Melito. Yes.
        Ms. DeLauro. Just quickly, have you seen specific
    improvements with either agency since your initial review? And
    what is your current assessment of--your assessment of the
    current capabilities of USDA and USAID to collect and to report
    data for food security programs?
        What specific steps should each agency take to correct the
    problems?
        Mr. Melito. I would say our story is the current story,
    because we were making adjustments based on dialogue with them
    through the end of February.
        Ms. DeLauro. Got you.
        Mr. Melito. So--but I--they concurred with our
    recommendations.
        Ms. DeLauro. Okay, okay.
        Mr. Melito. So I think they do agree they can do better.
    And I think we've given them a path to that.
        Ms. DeLauro. Okay. Okay, and you've laid out--the specifics
    are laid out in your recommendations?
        Mr. Melito. Yes.
        Ms. DeLauro. My time has expired. Thank you very much. Mr.
    Kingston?
        Mr. Kingston. Mr. Melito, if I am kind of listening to you
    correct, you're the--kind of the bean counter of the operation,
    the cold-hearted accountant guy, right? Do you think they're
    going to listen to you? Do you think Congress or the agencies
    will?
        Mr. Melito. Well, I can only go by what they currently
    said, which is they do agree they need something, a good
    comprehensive number, for planning purposes.
        They have yet to come out with their official strategy. And
    that official strategy should start having some budget numbers,
    going forward. That will be, I think, the first test. And that
    should be in the next couple of months, whether or not they
    actually will act on GAO's recommendation.
        Mr. Kingston. You know one of the things that's interesting
    to me? I deal a lot with USDA employees. And I think they're,
    on the whole, a very, very good group of people, very
    dedicated. And the ones that are international are among the
    sharpest people I've ever met. And you know, you just--it's
    incredible, how smart some of these people are.
        In the planning, are they ever included in the strategy, in
    terms of, ``Okay, what do you need to get out of there in five
    years?''
        Mr. Melito. For this particular assignment, we looked at
    the State Department effort right now to create a government-
    wide strategy. USDA is an important part of the strategy.
        Mr. Kingston. But are the people in the field given input?
        Mr. Melito. You highlight an important issue. We were very
    careful in the report to talk about this as a headquarters
    effort. We were silent on what this will mean on the field,
    because we don't know yet.
        In the past, these kind of efforts have broken down when
    you've gone from headquarters to field. We hope and don't know
    that's true, but that will be one of the important
    implementation steps, which GAO would like us to look at, six
    months or a year from now.
        Mr. Kingston. You know, people who spend their lives in
    third-world countries who could make more back home and live
    more comfortably back home and be with their families back
    home, they're pretty dedicated people. They're very interested
    in what they're doing, not just passionately, but they have an
    understanding and a sense of, ``I want to get something done.''
    And I think we're remiss in not listening to them, and drawing
    them into the process more.
        A problem we have politically is--we're looking at
    international aid, including food aid--is the State Department
    vote rating system. Are you familiar with that?
        Mr. Melito. Just very little----
        Mr. Kingston. Well, I'm not an expert on it. But as I
    understand it, maybe 20 or 30 years ago, Congress mandated that
    the State Department rates UN voting, and there is a sample of
    13 different votes which the State Department deems important.
    And then they publish once a year to Congress how these
    countries have--how every country that's in the UN votes, in
    terms with us. Israel, Great Britain are, you know, in the 70s,
    the 90s. South Korea is in the 70s.
        But then, it just falls. And so many of the countries that
    we give aid to have very, very low rating systems. So when our
    constituents are looking at international aid, foreign aid,
    which generally isn't the most popular thing on the budget, and
    they look at that, then they say, ``Look, look at all the money
    we're giving to people who vote with us 10 or 15 percent of the
    time.''
        Now, that's an outrage, and I like to bring it up when I'm
    on these international meetings. But the truth of the matter
    is, if it was voting--if I was doing the voting, or with my
    colleagues to my right and left, philosophically and spatially,
    they would not have 100 percent, either. Because the votes are
    all about the Middle East, Israel, Cuba boycott, and the death
    penalty. I mean they're just, frankly, stupid votes. And yet,
    that's what our constituents are going to use as a gauge to if
    a country is an ally or not.
        What we, I think, need to do is look at the broader
    context. Take a country like Nigeria, which is very helpful, in
    terms of, you know, looking at Abdulmutallab, The Underwear
    Bomber, you know, the investigation of him trying to tap down
    local dustups in that area of Africa, they are a good ally of
    us, but they don't vote with us in the UN, necessarily.
        So, we need to, I think, change that voting sample to give
    a truer picture. Because it is really detrimental, if you are
    trying to give food aid to people. And, you know, it's so easy
    for us to grandstand. And somebody like Ms. Emerson, who has
    dedicated so much of her life to it, we're pulling out the rug
    from under the efforts.
        And I'm talking to you only because you go in these
    circles, and you can talk to people. But it's something that we
    should say, ``You know what? It's probably proper for us to
    look at UN voting, but not these votes.'' And it's also not
    proper to end it at voting, because if they're sending people
    to Afghanistan, or they're helping with local skirmishes in
    their part of the world, we need to give them some credit for
    that beyond it, so that Members of Congress can go back to
    their folks and say, ``Look, these people are allies, they're
    helpful.'' You know, there is a case for it.
        So, I know I'm out of time, and we will look forward to
    more questions.
        Ms. DeLauro. Ms. Emerson.
        Ms. Emerson. Thanks, Madam Chairwoman. Dr. Melito, thanks
    for being here.
        Mr. Melito. Sure.
        Ms. Emerson. And thanks for doing this study, which is
    quite interesting. And I am hopeful it will be quite helpful.
        I do want to concur with my chairwoman about the need to
    streamline things. It would just be so much simpler just to
    have one place where everything was done. And that way you
    could monitor it, we would know how much money we were
    spending, we could perhaps figure out if we were doing any good
    a lot easier than we are now.
        I also want to say I share your view that we shouldn't
    expect any easy solutions here, and we're dealing with a long-
    term sustained effort that is going to be necessary, I think,
    by every single person, every single government agency, every
    country involved in trying to ensure that we can feed those
    people who otherwise are unable to do so for themselves.
        But let me ask you, just--you know, one of the things that
    is concerning--and I think this plays off of what Jack was
    saying--we really somehow, if you want to look at it from the
    military perspective, we've got to be able to show that there
    is a strong and vested coalition of nations in the fight
    against global hunger, and not just us.
        But--so while you raise the concerns that we lack data
    across agencies, did you look at any opportunities to improve
    data across nations, or efforts to improve international
    coordination of aid efforts?
        Mr. Melito. We wholeheartedly agree that this coordination
    and integration effort has to be much larger than the U.S. That
    said, this U.S. Government effort was much more difficult than
    my team and I ever anticipated it was going to be.
        Ms. Emerson. I think if you probably did that for every
    single piece of the government you would probably say the same
    thing.
        Mr. Melito. It took almost a year. And it was really
    difficult to get the agencies engaged. And once they engaged,
    it became very difficult to get them to coordinate and align,
    and what not. But there probably needs to be a similar
    international exercise, which I think would help. But I guess
    one battle at a time.
        Ms. Emerson. Yes, precisely.
        Mr. Melito. Yes.
        Ms. Emerson. No, it is interesting, though. Hopefully, by
    having engaged all of the agencies, somehow you made them start
    thinking about perhaps we ought to keep better track, or try to
    at least have some cost-benefit analysis done for the work that
    they're doing.
        I also understand your concern about a country-led
    approach. And, you know, obviously it would go without saying
    that the American taxpayer does expect competent and honest
    governments and NGOs with whom to partner.
        But you know, I was reading the discussion that you wrote
    about in Malawi. And it's just interesting, because I happen to
    know the nephew of the president of Malawi, and I know that
    they're trying to do some different things there. Obviously,
    their approach to adding value, if you will, to the producers'
    labor--actually creating subsidies, which is a bad word--I
    think that that is helpful.
        But there is obviously some pushback by some of our
    government agencies about the way that they are helping their
    farmers, and therefore we should take a step back. I would be
    interested just--and your thoughts a little bit more about
    that.
        And, I don't know, I don't know how to fix this, or try
    to----
        Mr. Melito. Right.
        Ms. Emerson [continuing]. Go on the path to make us be
    efficient and streamlined, and be able to help more people. If
    we could just somehow better direct resources.
        Mr. Melito. Malawi was a carefully chosen example. Because,
    if you look at it, you can see that they both have somewhat of
    a credible argument to make. Malawi is a pretty good performer,
    and they're actually meeting the pledge that--they've already
    provided more than 10 percent of their budget towards
    agriculture. But the U.S. has a long-running reason for wanting
    to mark markets.
        So, we chose that example because the host country-led
    approach is going to create conflict and difficulty for
    agencies a number of ways. And this one would be one where,
    basically, two different philosophies, which may have
    justification, are going to clash.
        I mean, we could chose examples where one side looks--The
    policy is not correct.
        Ms. Emerson. Right.
        Mr. Melito. This one, it's debatable policy. So I don't
    think, actually, I can tell you how the U.S. Government is
    going to approach this. We just want them to basically begin
    thinking about this. They're going to be confronting it a lot,
    probably, as they deploy lots of money right now, and think
    about basically reinvigorating U.S. food security approaches.
        Ms. Emerson. Yes, it's going to be--it is going to be
    interesting----
        Mr. Melito. Yes.
        Ms. Emerson [continuing]. Once this whole strategy is
    finalized, I guess, is the best way of putting it. But it is,
    in my opinion--I mean there are great challenges. But, then
    again, there is also an understanding--at least I can
    understand, given that I come from an ag district--that you
    want to help your farmers be able to create some sustainable
    lifestyle.
        So, my time is up. I will wait and ask another question.
    Thanks. Thanks, Dr. Melito.
        Ms. DeLauro. Dr. Melito, let me try to get to the issue of
    the definition of global food security.
        Mr. Melito. Sure.
        Ms. DeLauro. And that--one of your findings in the report
    suggested a cause of incomplete funding is the lack of a
    commonly accepted government-wide definition of global food
    security.
        And you further posit that, without that understanding or
    that definition, many agencies will submit inaccurate funding
    data by defining the term too broadly or too narrowly.
        What you did was you used a working definition of global
    food security, based on your prior work with and in
    consultation with agencies. You included programs, as I
    understand it, containing elements such as food aid, nutrition,
    agriculture development, rural development, safety nets, policy
    reform, market intelligence and monitoring, and future
    challenges to food security. This strikes me as a broad
    definition. Why did you include, for instance, elements such as
    rural development?
        My further question is here--is how do we get to an
    acceptable global food security definition, if that is
    fundamental to our being able to calculate what it is that we
    are--you know, what is it we're doing, and what kind of
    resources we have, and how we can monitor those resources? Why
    rural development, first.
        Mr. Melito. Well, it's a broad category, but it's not
    everything in rural development. But the infrastructure of
    rural areas, most especially the roads, has been pointed out in
    many studies as an enormous impediment to being able to
    effectively take advantage of surpluses.
        So, if you actually do the good work of increasing yields
    and surpluses, but you can't then bring it to the market, then
    your efforts are going to fail.
        Similarly, the issues of microcredit in the rural areas is
    something which--it's often very difficult for the farmers to
    take advantage of new technologies without some kind of credit
    system.
        So, those are two areas. But it's not all the elements of
    rural development, but those are two vital areas which are
    directly linked to ag security.
        You mentioned that our definition is broad. It's broad
    because this is an interactive process. You mentioned correctly
    that we had--in a previous report, our 2008 report----
        Ms. DeLauro. Right.
        Mr. Melito [continuing]. We also had nine different focus
    groups with experts and with practitioners in the field----
        Ms. DeLauro. Okay.
        Mr. Melito [continuing]. So we refined what we had in the--
    for our report, based on that. But then--that became the basis
    for our data collection instrument with the 10 agencies. Then
    we basically went back and forth with the agencies.
        So, some of that will get added--got added--because the
    agencies made a compelling case that we should also add this
    category. So the broadness was also a product of the dialogue
    that we had with the agencies.
        But we also pushed back in places where we thought that
    was--``Your link to food security is way too indirect.'' We're
    not saying these aren't important things, but basic education
    spending is just--you know, obviously, it's a vital development
    goal, but it's not directly related to food security.
        Ms. DeLauro. So help me. So that would include, if you're
    looking at transportation--and I understand that--so then it is
    the amount of resources that we provide that help to build
    roads, deal with reconstruction efforts, and--
        Mr. Melito. Road building is probably the single biggest
    expense there, for that category, although there are other--
    some subcategories, as well. But yes, it's ways of trying to
    improve the marketing of ag products through rural
    infrastructure. And this is done by a number of U.S. agencies,
    as well as the World Bank and others will also work in that
    area.
        Ms. DeLauro. Now, I'm not--I'm just----
        Mr. Melito. Yes.
        Ms. DeLauro. You then multiply the various, you know,
    sources of funding, if you will, in terms of these--you know,
    these efforts, which is--I mean, look, the delivery system is
    important to this.
        I need to think about that, in terms of, you know, how do
    you then do get to this definition of what it is. And if you
    make it so broad, are we ever going to get to a conclusion,
    whereas we're delivering a food product and--because that--
    these are categorized as international food aid.
        And to go back to what my colleague was saying, it's food
    aid. And if we're dealing with all these other pieces in a
    number of ways, it gives you a false view of what we are
    providing to a country in direct food aid, so that you run the
    risk of constituencies who say, you know, ``What are you doing
    here,'' and it's not just the food aid that you're doing, but
    you've got all these other pieces that are linked to it.
        I will be very honest with you. There are a whole lot of
    folks in the U.S. who are not terribly concerned about us
    building roads and reconstructing, you know, countries and
    communities, et cetera. They--I would--I believe I'm standing
    on 100 percent solid ground when I say giving food to people
    who are hungry and who are starving, you bet. You bet they're
    there. But--and so you begin to mix up a process here.
        I need to think about it, because I understand what you're
    saying, but I----
        Mr. Melito. Let me just say this is the kind of thing we're
    struggling with. But we are differentiating in our work, and it
    is also being differentiated in the strategy, between
    humanitarian assistance and development assistance.
        Ms. DeLauro. That's right.
        Mr. Melito. So, the humanitarian assistance is the direct
    intervention on the part of the U.S. and other donors to
    mitigate a serious immediate food crisis. The development
    purpose is to try to get ahead of the crises, to try to improve
    their own----
        Ms. DeLauro. I understand that.
        Mr. Melito. Yes.
        Ms. DeLauro. But we have two pieces here. One is the
    humanitarian, the other is the developmental. And, quite
    frankly, developmental funding has dropped substantially.
        Mr. Melito. You're telling me.
        Ms. DeLauro. Substantially, worldwide. And we now just
    respond to emergencies. So we don't have a balance.
        Now, that's where--but you look at another--you look at
    other portions of our budget, and the USDA budget, which we
    have jurisdiction over, where you can look at developmental
    efforts to deal with productivity. You've got the foreign
    operations subcommittee, which deals with that effort, as well.
    But by commingling them in some way here, it may be some false
    impressions about what's happening with the humanitarian side
    of food aid.
        I will leave it at--my time is well over.
        Mr. Melito. Okay.
        Ms. DeLauro. Mr. Kingston.
        Mr. Kingston. I think the chairwoman has really touched
    something very important to all of us. Because, in my
    experiences going to Rwanda, people are collecting water. Every
    house has a banana plant and a water vat, and--for the rainy
    season. You go to a place like Senegal, where I went in Dakar,
    they don't have it.
        And so, that's a developmental issue. You say, ``Okay, come
    on now. Look, guys, you've got to collect your water.'' And
    that is basic. But the chair is correct. You start getting into
    things where our constituents back home are saying, ``Well,
    you're building water--you're building dams and ponds and
    irrigation over there? Hmm, we don't have it in our own farms
    back home.'' And so that is really a challenge.
        And here is a frustration that I have, as well. I would
    like to know, by your rating system, what works and what
    doesn't. I notice that you did have water here checked off by a
    number of the groups that are involved in it, which is a good
    thing, because you have to have water, and you have to be a
    good water steward.
        But I was in Afghanistan this weekend. And what the--and
    Pakistan. What the Pakistanis and the Afghan folks say is,
    ``Look. We are trying to close the gap between military victory
    and civilian stability,'' civilians coming in and taking over.
        The biggest cash crop in Afghanistan is poppies, $100
    million a year. And it would be so great if we could say,
    ``Hey, you know what worked in some country somewhere is that
    USDA program or the USAID program that we can--we're going to
    take that and we're going to put it in Afghanistan right now,''
    because that's the key to winning the war.
        Secretary Vilsack was here two weeks ago, and requested
    that we go from 14 to 64 USDA employees in Afghanistan. We're
    all going to support that.
        I had a briefing while I was over there, which I haven't
    had a chance to tell you about. It was a really good briefing.
    And, again, very sharp people on the ground over there.
        But what I would love to know is, you know, if we could
    have something that we knew would work, because----
        Mr. Melito. Right.
        Mr. Kingston [continuing]. To get them away from poppies,
    it is one of the most--it just doesn't seem like it could be so
    complicated, but it is real complicated. But you can't
    substitute something with nothing. You have to have a program
    that will really help these folks. And with all of our foreign
    aid around the world all these years, you would think there
    would be five or six surefire programs that could be helpful.
        Mr. Melito. Unfortunately, in the area of ag development
    and food security, the success rates are generally lower than
    other development projects. And, for that reason, assistance--
    development assistance to this area actually dried up heavily.
    It reached its peak in the mid-1980s, and then it steadily fell
    until it was a very low part of development assistance by the
    mid-part of the last decade.
        Ms. DeLauro. Mr. Kingston, would you mind if I asked----
        Mr. Kingston. Sure, sure.
        Ms. DeLauro [continuing]. Why the food assistance is in a--
    --
        Mr. Melito. It's multifaceted, why there is a problem. But
    World Bank did an excellent study in 2008, where it looked
    backwards and did its own mea culpa. And I don't think they
    gave a real satisfying reason. I think everyone is appealing
    right now to an evaluation, as we really need to really
    understand better what's working.
        But the point, though, was by--in the process of pulling
    out of investing in ag sectors, hunger got worse. And the
    instance of emergencies got more frequent.
        Ms. DeLauro. That's right.
        Mr. Melito. So, there is no easy answer here. So we are
    faced with a very difficult development option. But if we
    don't, we know that hunger is going to get worse. So----
        Mr. Kingston. Well, you know, getting back to my point on
    the budget--and I really think we're sitting on the cusp of a
    big taxpayer backlash, and foreign aid is going to be out
    there.
        And so, the question is, which NGOs are the most effective?
        Mr. Melito. I don't have that----
        Mr. Kingston. But could we ask you to give us an
    evaluation? Which ones are really out there, and which ones
    aren't?
        Rosa, this was interesting. Several years ago I was in
    Tajikistan with Chairman Kolbe, when I served on the foreign
    operations committee. And many of the women--excuse me, it was
    Uzbekistan--but many of the women run the village, because the
    men go to Russia to work. I think the population is five
    million, and one million people go to Russia, looking for work.
        And so, we went into this house, and it's, you know, a one-
    room, two-room kind of house, and they don't have beds, they
    all sit up on things, a table, and then it's a bed at night.
    And we sat with the village mayor, if you will, and about five
    or six women, poor as they could be, beautifully dressed, nice
    as they could be, serving us some kind of a native food.
        And so, here we were, richest nation in the world facing
    the poorest nation in the world, ambassador-to-ambassador, if
    you will. And we asked them, ``What can we help you with? What
    do you need?''
        And they talked amongst themselves for a few minutes, and
    then the mayor came back to us and she said, ``Our village
    really needs three more cows.''
        And now, we never heard of Heifer International, but I
    was--we actually came back, passed the hat, and bought them
    three or four cows, you know. But it was the only way to get
    there. And I was just thinking, this is just so--there has got
    to be a better way to fill the micro and the macro big picture.
        Mr. Melito. I think the focus--the new focus on global food
    security is a good thing. We need to, though, learn lessons of
    the past, and learn what is and is not working. You're asking
    me excellent questions about who is more productive, who is
    doing it better. I actually don't think that data exists yet,
    and I think it's vital that we make sure that we do collect it.
        Mr. Kingston. I'm wondering if we could ask you to collect
    it. And I don't know the--but because it would just be so
    helpful. I know there are so many good-hearted groups in
    America who want to do things and can't get overseas. And if we
    could say, ``Look, here are some really good ones. Now, these
    ones talk a good game, they've got great advertising, they've
    got movie stars. But these are the ones on the ground that know
    what's going on.''
        Ms. DeLauro. Ms. Emerson.
        Ms. Emerson. Actually, playing off that, it would be really
    nice to know precisely how many NGOs there are in the food
    security, and then the developmental side.
        I actually have a friend who is working--has been working
    on this project kind of on the side of the World Food Program,
    US-based, to try to do a surveillance, I mean seriously, to put
    together the list and figure out who is doing what where.
        But it seems to me that if there is any way that that
    information could be collected, and instead of having a lot of
    overlap, that we're actually leveraging and maximizing our
    opportunities, you know, with who specializes here and who
    specializes there, and then we do this, and somebody else
    does--I mean, to me, that seems like the most logical, common-
    sense way to do it. I realize that, in reality, that doesn't
    exist.
        But it would be helpful, because we don't have infinite----
        Mr. Melito. Right.
        Ms. Emerson [continuing]. Resources, that we take advantage
    of every opportunity.
        Mr. Melito. I have done some work on AID's data systems,
    and I don't think they are equipped to easily give this answer
    to themselves or to anyone else. They are supposed to improve
    their data systems. I mean this is getting into the contracting
    databases----
        Ms. Emerson. Right.
        Mr. Melito [continuing]. How you can actually aggregate up.
    There is a lot of weaknesses in the contracting databases. They
    have--it's recognized by--they've got this new system called
    GLAAS, which they have been working on, which aspires to reach
    a level where you can do this. But I think they're quite a ways
    away from implementing that.
        Ms. Emerson. Well, it's just worrisome. Based on what you
    say, it's really hard to know what--the right hand doesn't know
    what the left hand is doing.
        I mean, you know, in a--how do I want to say this nicely?
    It doesn't matter. It's just--it seems to me that if we could
    get our arms around this, we could certainly reach more people
    and better utilize the resources that we have right now.
        Mr. Melito. Right.
        Ms. Emerson. And, you know, I think it's important, because
    you know, I love the--I have, up in my office, you know, the
    wheat bags and the rice bags with the red, white, and blue, and
    the USA, whether it went to Cuba or whether it's gone, you
    know, to Africa or sub-Saharan Africa, wherever. And that's
    been a lot of--there has been a lot of goodwill given to us for
    that.
        I wonder if--you know, is anybody paying attention to this
    whole goodwill that we are doing? I mean, are we--how do we
    fix--how do we create, you know, this global strategy and still
    allow us to get some credit for it? I mean the taxpayers are
    going to continue to demand more and more----
        Mr. Melito. Right. Whether or not the U.S. is getting
    sufficient credit for its effort, the U.S. is, by far, the most
    generous country when it comes to providing food assistance.
    And we have been the most generous for 50 years.
        Ms. Emerson. Right.
        Mr. Melito. We provide, at varying points, half of the
    amount of assistance of the world. And everyone else is the
    other half. So we have got a lot to be proud of. We have taken
    a vital leadership role. This has been a bipartisan commitment
    to food assistance.
        Ms. Emerson. Absolutely.
        Mr. Melito. So I don't know if the State Department or AID,
    or whoever is doing--in terms of advertising that, but there is
    a good story to tell.
        Ms. Emerson. Yes, and I mean, you know, it is--I mean,
    hunger, we know, is--knows no politics. So----
        Mr. Kingston. And if the gentlewoman will yield?
        Ms. Emerson. Sure.
        Mr. Kingston. I think, in a lot of instances, the people
    like us. Their governments might not, but people-to-people, the
    relationships, I think we do get goodwill.
        Ms. Emerson. Right.
        Mr. Kingston. It might not be reflected in the government.
        Ms. Emerson. Thanks, Dr. Melito.
        Mr. Melito. Sure.
        Ms. DeLauro. Dr. Melito, there was--I think an interesting
    point in your report is that, according to FAO, from 1990 to
    2004, 2006, there was actually a decline in the percent of
    undernourished people in key areas. Sub-Saharan Africa down
    from 34 percent to 30 percent, South Asia down from 25 percent
    to 23 percent, Haiti down from 63 percent to 58 percent.
        You do note, however, during this period the number of
    undernourished people increased. I presume this was because of
    population growth.
        Mr. Melito. Right.
        Ms. DeLauro. Still, I would just say this. It was
    encouraging that some progress was made. Can you speak to what
    worked during those years in reducing the proportion of
    undernourished persons?
        Also, you have a number of observers who believe that the
    worldwide economic decline in the last two years or so,
    accompanied by steep increases in food prices, could undo
    progress that has been made. And do you share that view? What
    worked in those years?
        Mr. Melito. Well, I would be very hesitant to say anything
    ``worked.'' It gets into a couple of problems that we have
    discussed--we only allude to it in this report, we discuss it
    more fully in our 2008 report--and that comes down to how
    they're measuring the prevalence of hunger, and also problems
    with FAO's own methodology. But it just comes down to how
    they're measuring.
        The 1996 original pledge was an absolute number.
        Ms. DeLauro. Right.
        Mr. Melito. They wanted to reduce hunger----
        Ms. DeLauro. By 2015.
        Mr. Melito. In terms of the number of people. The pledge
    thing got changed in the year 2000--well, they never actually
    rescinded the other pledge, so they're side-by-side. But the
    2000 pledge became a proportion pledge.
        So, the progress, for the most part, especially when you
    look at the poorest countries, in Africa and in Haiti, it's due
    to population growth. So you're having the denominator growing
    faster than the numerator is growing. The numerator is growing,
    which is the number of hungry people.
        Ms. DeLauro. Right.
        Mr. Melito. The places where there has been success has
    been Asia, and it's mostly China and India. There you have
    absolute numbers of people going down, as well as, you know,
    the proportion. But in terms of Africa, the absolute numbers of
    hungry people have steadily risen over this period of time.
        So, what you were looking at there was the proportion of
    hungry people went down. But that's mostly driven by population
    growth.
        Ms. DeLauro. But still, you know, what allowed for that to
    happen?
        Mr. Melito. Right.
        Ms. DeLauro. I mean, I understand what you're saying.
        Mr. Melito. Right.
        Ms. DeLauro. You know, I believe we're all here on the
    first goal, which is to end hunger. But something happened that
    allowed for a decrease here.
        Mr. Melito. I would not characterize this as any success,
    though. I mean, yes, population growing is actually a sign that
    there are some good things going on.
        Ms. DeLauro. Right.
        Mr. Melito. I mean let's not understate that. But that is
    not--those numbers are not being used as an indicator of
    success.
        Ms. DeLauro. Okay.
        Mr. Melito. And even in----
        Ms. DeLauro. By you, or by FAO?
        Mr. Melito. By FAO. We're not the arbiters of this, okay?
        Ms. DeLauro. No, I understand, right.
        Mr. Melito. So, yes.
        Ms. DeLauro. Okay. A shortage of expertise at agencies----
        Mr. Melito. Yes.
        Ms. DeLauro [continuing]. Which you also make reference to,
    USAID, you note in-house expertise in agriculture has declined
    over the years. Efforts need to be made to add foreign service
    officers with technical expertise in agriculture.
        You talk about USDA with oversight of food aid programs and
    recipient countries. FAS regional office is engaged in that
    effort. It is a little troubling, with regard to FAS, because
    they don't maintain nearly 100 offices around the world with
    their efforts.
        What specific effects has this shortage of expertise had on
    programs? Let's just start there.
        And with respect to FAS, is one of the problems the fact
    that overseas FAS staff has focused too much on trade and not
    on food assistance?
        And is there a clearly differentiated role between USAID
    agriculture staff abroad and FAS agriculture staff abroad, or
    are we duplicating the same work?
        So, three questions.
        Mr. Melito. Those are three good questions.
        Ms. DeLauro. Specific effects of the----
        Mr. Melito. Right.
        Ms. DeLauro [continuing]. Shortage of expertise.
        Mr. Melito. In our 2007 food aid report, where we raised
    concerns about the efficiency and effectiveness of food aid, we
    demonstrated that both the AID and USDA had almost no monitors.
    So that's getting even away from providing technical
    assistance. They didn't have any of the expertise of people to
    actually know that the food was going to the right people in
    the right amounts, and that it was having the impact they were
    looking for.
        We are, in this report, highlighting that if you are
    actually going to pursue actively this host government
    approach, you have to recognize that these governments have
    very weak technical capacities on their own.
        So, you are putting in their hands the responsibility of
    running what is, in many ways, a technical exercise without
    them having the technical expertise. We have a responsibility,
    in that case, to assist them. And if we have--we don't have
    technical experts in the field, that's going to be very, very
    difficult to do.
        Ms. DeLauro. And we don't, in terms of your view.
        Mr. Melito. And we don't----
        Ms. DeLauro. We don't have the experts in this area. I
    mean, I understand----
        Mr. Melito. Right.
        Ms. DeLauro [continuing]. About monitors. But your view is
    that we don't have----
        Mr. Melito. Right. So I'm going with two different things,
    but they both impact the way these programs work.
        Ms. DeLauro. Okay.
        Mr. Melito. AID--you know, you had that star quote from the
    former AID director in 2008. They have done a lot of hiring in
    2009.
        Ms. DeLauro. Yes.
        Mr. Melito. But--so they're recognizing and they're acting.
    They are nowhere near where they want to be, but they are
    acting on it.
        FAS has traditionally been very interested in market
    promotion.
        Ms. DeLauro. Trade.
        Mr. Melito. Trade. And they won't deny that. But market
    promotion and development assistance are two very different
    things.
        Now, they are talking about invigorating and adding to
    development assistance, and they're talking about bringing
    somebody to Ethiopia for the first time, and that makes sense.
    Ethiopia is one of the largest recipients of USDA resources.
    This is--needs to be seen. They are making a verbal commitment;
    we would like to see it actually be deployed.
        Ms. DeLauro. Well, so FAS has spent most of its time and
    its resources with regard to market promotion, is that correct?
        Mr. Melito. There aren't that many USDA people in the
    field, to begin with.
        Ms. DeLauro. No, I understand.
        Mr. Melito. Very small numbers----
        Ms. DeLauro. I am just trying to get it, because----
        Mr. Melito. We're getting this from--my team goes to Africa
    regularly on this, and they meet with the USDA representatives.
    And they come back with stories about, basically, the person
    has done very little on the development side, because his
    portfolio is active on the marketing side.
        Ms. DeLauro. Right.
        Mr. Melito. Yes.
        Ms. DeLauro. That's what I'm trying to get at. The
    portfolio is on the market promotion side----
        Mr. Melito. Yes, yes.
        Ms. DeLauro [continuing]. And not on the food assistance
    side, or the development side.
        Mr. Melito. Right, yes.
        Ms. DeLauro. Now, and you just mentioned that your
    understanding is that they are going to try to move in this
    area. I must tell you--and we will go back and check--their
    budget doesn't reflect what you are talking about. But we will
    get to asking----
        Mr. Melito. That's an important point. That's an important
    point.
        Ms. DeLauro. We will go back to ask that question.
        Mr. Melito. Yes.
        Ms. DeLauro. Again, then are we looking at--USAID and FAS
    and that staff that's on the ground, are we doing different
    work or are we doing the--duplicating efforts between these two
    agencies?
        Mr. Melito. Well, we start with the premise that, up until
    now, very little has been happening.
        Ms. DeLauro. I'm there. But----
        Mr. Melito. But moving----
        Ms. DeLauro. But whatever little is happening----
        Mr. Melito. Right, right.
        Ms. DeLauro [continuing]. Tell me about it.
        Mr. Melito. I think, moving forward----
        Ms. DeLauro. Yes.
        Mr. Melito [continuing]. If we actually--and this is--I
    want to say ``if,'' I want to put two underlines on the word
    ``if.''
        Ms. DeLauro. Right, right.
        Mr. Melito. If they actually successfully start
    coordinating at the head, they are going to confront the
    challenge of coordinating at the field level. They are going to
    have to confront that.
        We look for opportunities of leveraging. Do they need to
    have the same people in the same places? They probably do not.
        I guess this is going to be something that has to happen
    over time, as they recognize that maybe they have shortage of
    resources, they can deploy them in ways which may take
    advantage of opportunities, and they may not need to be in the
    same place.
        Ms. DeLauro. I understand the limitations. I understand
    that. As of this moment, today, now, with regard to on the
    ground, are we more duplicating functions or are we dealing
    with separate functions here and now at the present moment?
        Mr. Melito. We are talking about very few people. I think
    there has been----
        Ms. DeLauro. Of the two people there, are both of them
    doing the same thing or two different things?
        Mr. Melito. They are doing two different things, but the
    USDA person for the most part is doing market promotion.
        Ms. DeLauro. The USDA person is doing market promotion.
    Thank you. My time has long expired.
        Mr. Kingston.
        Mr. Kingston. The questions just keep coming. I hope you
    brought dinner. [Laughter.]
        The 1949 foreign aid original concept was spreading some
    goodwill around the world in the Cold War context. That was
    number one. Number two, development of underdeveloped countries
    who needed help with science and investments to overcome
    poverty.
        Number three was dealing with our surplus for our own
    farmers because of our great new production technique, and then
    number four was the leg of developing markets.
        It would appear to me that the answer to the Chairwoman's
    questions should really be at the USDA in Washington, D.C.
    where somebody says okay, any given country, tell us where we
    are in these four areas.
        It is shocking to me that you are saying there is not
    really an answer. I am not picking on you. I am not picking on
    anybody.
        Here is where my question is, can you tell me ten success
    stories? What do we have, 168 countries around the world that
    we have given aid? What are some of the hey, this is where we
    made a difference?
        Mr. Melito. My team has traveled extensively to Africa.
    They went to Bangladesh. They went to Haiti. They came back
    with a number of success stories, but they are success stories
    at a very localized level.
        We at GAO are looking at systems. We are looking at
    processes. We know that yes, this particular version of the
    program seems to be doing well here, but we also see weaknesses
    there. Then we comment on the overall working of the program.
        Mr. Kingston. You are saying maybe in a given region of a
    country, you had success?
        Mr. Melito. Yes. A particular orphanage, a particular
    school district.
        Mr. Kingston. That success would be measured by?
        Mr. Melito. It's tricky. We have concerns with how they do
    monitoring and evaluations. Then it really comes down to more
    ad hoc.
        Mr. Kingston. Switching lanes for a minute, one of the
    things about micro credit, and I traveled to Africa twice with
    the Banking Finance Committee, and one of the things I have
    learned is micro credit, when everybody says let's get a 94
    percent pay back record, one reason is they keep lending money
    to people, so it is not that.
        If it was that good of an investment, the private sector
    would be there.
        A lot of it, you have to keep asking and asking questions
    to really find out, and that is why when you say we have had
    success in an orphanage, the add on question is tell me about
    it, are these people out being productive and doing great
    things.
        Mr. Melito. We hesitate to declare any of the projects we
    look at as going well in GAO. We witness things which are not
    working well. We hesitate to call that a ``failure.'' Again,
    those are just data points to what we were trying to get at a
    larger level.
        Our biggest concerns in terms of effectiveness is there is
    not really a good way for USAID and USDA right now to tell you
    how their programs are working. They do not collect data well.
    They do not do a good job of monitoring and evaluation.
        Ms. DeLauro. We do not have a definition of what this issue
    is, and we do not have a structure that allows us to----
        Mr. Kingston. I think some of the finest people that I have
    met in Government are involved in this program.
        I want to ask you this. You just said half of the world
    food aid comes from America. I have heard that statistic. In
    reading your testimony, you said $22.7 billion with America
    doing $3.5 billion, which is not half.
        What is that?
        Mr. Melito. That is a commitment for new money for food
    security. We are counting food aid as well as part of the
    budget. We are very hesitant to comment on that $22 billion
    number and the $3.5 billion number because we have not quite
    seen exactly how the details are going to work on that.
        There is always the risk there is double and triple
    counting going on.
        Mr. Kingston. Japan is number two?
        Mr. Melito. For food aid, I believe so. EU as a whole is
    number two.
        Mr. Kingston. It might be good if you could rattle off
    that, because one of the things that really shocked me is in
    the Middle East with all the oil rich countries, they do not
    seem to do much, or if they do it, it is all spent locally.
        Mr. Melito. The Middle East countries have a large role in
    IFAD, but I agree, they are not one of the major players in
    food aid. They are not.
        Mr. Kingston. People flying around in gold plated jets, it
    is kind of interesting you do not see much coming from them.
        Why did not the Administration get OMB to conduct the
    cross-cut rather than GAO?
        Mr. Melito. They did not get GAO. GAO got requested by the
    Chairwoman, and we did the exercise.
        OMB, fortunately, after they really recognized what we were
    doing, saw that they themselves could do something like this.
    They could make this call.
        I do not know why they have not yet been asked. We made a
    point of putting in our report that they say they can do this.
    I think that is an important part of how the Administration
    moves forward.
        Mr. Kingston. Would it be helpful for us to insist or write
    a letter? It seems to me that you are actually doing something
    that they do normally.
        Mr. Melito. We recognize that what we did there was
    probably something which was a little non-standard, but it
    could have been very easy for us to write a report to say the
    data was bad, and we really wanted to understand why the data
    was bad and to understand how to make the data better.
        It now needs to be the Administration's exercise moving
    forward and OMB is clearly a vital player, and congressional
    support and pressure is probably a good idea.
        Mr. Kingston. I think Secretary Vilsack would be on the
    same sheet, too.
        Ms. DeLauro. Let me talk a little bit about food quality
    control and nutrition. In your 2007 report, you concluded that
    ``U.S. agencies were not coordinating adequately to respond to
    food quality and delivery problems.''
        You said that ``Various agencies involved different
    tracking systems and were not able to effectively monitor and
    resolve problems that occurred. In some cases, agency country
    offices were unclear about their role in tracking food
    quality.''
        You concluded that ``USAID and USDA had no central process
    for updating food aid products, specifications or nutritional
    standards.''
        You recommended that ``USAID and USDA establish a
    coordinated system for tracking and resolving food quality
    complaints and develop an inter-agency mechanism to update food
    aid specifications and products.''
        In your September 2009 report, you concluded ``The agencies
    have implemented'' your 2007 recommendations on food quality
    control and nutrition.
        Can you just walk us through the improvements that USDA and
    USAID made in nutrition and food quality since your 2007 report
    and what effect are the improvements likely to have on the
    delivery of food aid?
        Mr. Melito. In the case of both recommendations, we wanted
    them to establish processes. Processes have been established. I
    will not go beyond that and say now that means it is working.
        We do have a request that we have just gotten recently
    where we are being asked to look at both the changes on the
    nutrition side and the changes on the food quality side. We
    were going to be launching that as soon as this study ended.
        We have reasons to believe in the case of nutritional
    quality, they are working with Tufts University and NGO,
    SUSTAIN. They have some ongoing studies going on.
        The great frustration we had in 2007, and I am still not
    yet convinced this particular thing is overcome, so that is why
    our new job is going to be important, even when the science is
    clear and even when the interest and desire is there, there
    seems to be bureaucratic inertia to actually get it rolled out.
        This is a relatively inexpensive way of greatly improving
    the effectiveness of U.S. food aid. It will not cost a lot of
    money and can have actually a dramatic impact on nutrition.
        I think our next study is going to be vital.
        Ms. DeLauro. What would be the timing on that next study?
        Mr. Melito. Probably early next year. We have to work with
    the agencies. We have to go and look in the field for what they
    say they are doing. That is usually the hardest part, the field
    work.
        Ms. DeLauro. The Chicago Council, can I talk about them for
    a second here? The Chicago Council on Global Affairs, they have
    been a major contributor on key global policy issues.
        I asked them a while ago, and it was not in relationship to
    this hearing, to get me a memo that raised some of the possible
    areas for our work on this subcommittee and what we could do in
    these areas under our jurisdiction. We like to stretch our
    jurisdiction like any other committee as far as it can go, but
    we do have to move within our jurisdiction.
        One idea was to ask GAO to focus just on USDA's work in
    international agriculture. There is, of course, a lot of
    expertise at the USDA. The thought would be to look at just how
    to leverage its resources to support the work of State and
    USAID.
        This would drill down into their activities in a much more
    intense way than this report. Let me get your thoughts on that,
    then I have a follow up question.
        Mr. Melito. I think there is clearly great opportunities
    for the USDA to play a much larger role here in many ways.
        Their letter and the report that you requested makes the
    compelling argument that in terms of technical expertise, they
    probably are the best in the U.S. Government, in terms of their
    association with the extension programs and the universities.
    They have a lot of national and domestic experts on ag.
        There needs to be a way of integrating that into the
    international effort. They make a compelling argument both in
    the letter and also in our conversations with them, but I do
    not know if they have figured out a way yet to do that in
    practice.
        Ms. DeLauro. That gives us some guidance there.
        Another idea was to do more oversight on the food and
    agricultural organization of the U.N., the FAO. The Council
    believed that its effectiveness has been limited in recent
    years and that perhaps USDA could engage more actively in
    reviewing its capacity, management, strategy and policy making
    and program evaluation.
        One, would that be useful? Do you have any sense of the
    work USDA currently does with the FAO right now?
        Mr. Melito. Yes, without a doubt. FAO, its reason to be is
    food security. FAO is the food security agency. It is striking
    that they are not a major player right now.
        They are, I think, trying very hard to ramp up in certain
    areas like in data collection and really monitoring of food
    crises, but the FAO has a long way to go. I do not have a good
    sense of USDA's involvement in oversight of FAO. I hesitate to
    say anything other than yes, oversight of FAO is a good thing.
        Ms. DeLauro. Jack, let me just ask one more question in
    conjunction with this. Is it a question of resources at FAO? Is
    it a question of statute within the U.N. framework? Is it just
    lack of----
        Mr. Melito. FAO is a complicated organization. It is very
    old, in terms of U.N. organizations, it is over 50 years old.
    It has a large budget, but I think they would make a compelling
    case that they need more money.
        Ms. DeLauro. Where does the money come from?
        Mr. Melito. This is an organization where members are
    assessed.
        Ms. DeLauro. Members of the U.N. are assessed.
        Mr. Melito. They also get bilateral contributions from some
    other members. They had their own internal review last year, I
    believe. They came up with a lot of management weaknesses at
    FAO. That actually gives a starting point for whether or not
    they are taking that review seriously and making those changes.
        Ms. DeLauro. Thank you very much.
        Mr. Kingston. Do you not think it is going to be hard to
    get the FAO to kind of change their culture?
        They have a very lofty definition of ``food security,''
    ``When all people at all times have physical, social, economic
    access to sufficient, safe and nutritional food to meet their
    dietary needs and food preferences,'' that means chocolate ice
    cream, ``for an active and healthy life.''
        USDA has a different definition of ``food security.'' Yet
    it would appear that the definition of FAO can almost make it
    harder for the United States to be seen to have a long-term
    sustained commitment to food and global security.
        It would appear to me at some point we are just going to
    have to agree to disagree with them.
        Mr. Melito. Those definitions are really more the goals.
    Ultimately, those goals are fairly compatible with each other.
    FAO also has a particular operational goal which gets into
    minimum caloric levels. That, I think, could be overcome.
        FAO should be the agency that has the expertise on Africa,
    for example, ag development problems. They should be either a
    repository of what works and what does not work and that should
    be the go to agency, and they need to get to that place.
        Mr. Kingston. Do we have a definition of ``food security''
    that we would measure?
        Mr. Melito. When we talk about an operational definition in
    our report, we are not actually talking about the goal. They
    are saying basically everyone has a sufficient amount of food.
        We are talking about something a little bit more green eye
    shaded in what we are talking about here, where you have these
    budget categories and you have these processes and programs
    that the U.S. Government has, and they aspire to do five
    things.
        It is getting them to really sit down and say okay, this is
    related, this is not related. This sounds boring but really, we
    are trying to be efficient in the U.S. Government and we are
    trying to deploy our resources.
        How do we know what resources we have to deploy? The answer
    is we do not know what resources we have to deploy.
        I find a planning and strategizing exercise where you
    actually do not know what you have to be somewhat bizarre.
        Mr. Kingston. On the host country situation, you are saying
    it is very awkward but then you also say it is promising. I
    think you are darned if you do and darned if you do not.
        There still should be some measurement of host country
    cooperation, you know, we are going to do it your way, but
    inasmuch as we are donating so much, we have to have certain
    results and it has to be moving in a certain direction or we
    are out of here.
        Mr. Melito. Yes. That is to be expected. What we are doing
    is trying to anticipate some of the likely conflicts and make
    sure there is a process in place to deal with it.
        Some countries like Ghana, I think they have a pretty
    healthy relationship between the donors and the country. I
    think there are some models they can use, but it is going to be
    case by case, country by country.
        Ms. DeLauro. Mr. Kingston, because I was going there next,
    let me just add a couple of points. I think a number of the
    agencies involved in this report indicated in their comments
    that they believed you leaned too heavily toward the downside
    of a country-led approach. They indicated their plan is to do
    this in two phases, doing a lower level of funding initially
    and reviewing it before moving forward.
        Does that sound like a sound approach to you and are there
    other steps that the agencies are taking to minimize this risk?
    What steps should they be taking? It is a conflict.
        Mr. Melito. That is clearly one of the important steps.
    That, I think, helps GAO with the first issue which is the
    sustainability of projects, the capacity of the host
    governments themselves. Some of them are just not ready yet.
    Some are ready and some are not ready yet, and to
    differentiate, not to treat them the same is the right way to
    go.
        It does not address the lack of expertise within the U.S.
    Government. That is something we have to do ourselves.
        To try to create some sort of process or sophisticated
    internal dialogue about when we disagree, when is it material
    and when is it not material, a successful process is going to
    have disagreement.
        If you are really going to energize the host governments,
    they are going to come up with home-grown approaches which at
    times we are not going to approve of.
        What are we going to do about that? You do not want to
    necessarily pull the rug out every time that happens.
        They are correct in saying they are starting to approach
    this but we have not seen the final document and we really want
    to make sure they stay on top of this.
        Mr. Kingston. One of the questions I had is there is not a
    consistent goal for food aid that we have, correct?
        Mr. Melito. The goal of food aid is emergency food
    assistance, to mitigate the crisis in a relatively brief
    period.
        Mr. Kingston. That is emergency food aid.
        Mr. Melito. Eighty percent is emergency. Twenty percent of
    food aid has development purposes.
        Mr. Kingston. We do not just stick with a natural disaster
    or war.
        Mr. Melito. Sure.
        Mr. Kingston. The next question is the State Department has
    a FACTS Book that has incomplete data. Is it called the ``Green
    Book?'' USAID has U.S. overseas loans and grants.
        Mr. Melito. ``FACTS'' is an acronym they use for their
    database, Foreign Assistance Coordination Tracking System,
    FACTS.
        Mr. Kingston. What does that track? What is included in
    that?
        Mr. Melito. It aspires to be what you would want right now.
    It aspires to comprehensively show U.S. international
    development efforts across many different categories across the
    U.S. Government.
        The database itself is currently only populated by the
    State Department and USAID, and then they have resolved some
    ambiguities in terms of how to characterize things, but a lot
    of the ambiguities, they have not, and then we highlight also
    they do not necessarily have a great process for keeping it up
    to date.
        Mr. Kingston. If I were to look for the ten best case
    scenarios, would it be in that book?
        Mr. Melito. That does not provide you with performance, but
    it can give you pretty detailed expenditure information.
        Mr. Kingston. It appears to me that we ought to have this
    is the case. Today on television, I saw something called the
    Urban Prep Academy in Chicago where four years ago or five
    years ago, a very small percentage of the kids even graduated
    from high school. Today, something like 100 percent go to
    college. It is the story everybody is looking to find.
        I want to hear that on food aid. Are there not some really
    bright spots?
        Mr. Melito. This is a drum that I keep beating and I am
    going to keep beating it. We do not have a good monitoring and
    evaluation process.
        GAO did a report that came out at the end of September
    which looked at USAID's ag development efforts and found that
    while certain efforts are monitored in certain ways, they
    really do not do good lessons learned, they do not have a good
    approach for then taking the lessons learned and integrating it
    back into how the program works.
        Mr. Kingston. Is that in your report here or
    recommendations?
        Mr. Melito. That is in our report that came out in
    September.
        Mr. Kingston. Could you make sure that I have a copy of
    that?
        Mr. Melito. Certainly.
        Mr. Kingston. In your observation, and you are not going to
    be comfortable answering this, meeting State Department kind of
    diplomacy people on the ground, USDA people, PEPFAR people,
    USAID folks, there is a culture within each agency.
        Who do you think is the most effective or the most
    entrepreneurial in terms of look, we are going to get this
    thing done and we are going to cut some corners?
        I do not want you to really answer that.
        Mr. Melito. Thank you.
        Mr. Kingston. You are way too young to involuntarily
    retire.
        Mr. Melito. That is exactly right.
        Mr. Kingston. It does appear to me that there are different
    cultures. I have been impressed with PEPFAR but I have been
    impressed with USAID on the ground and USDA.
        Mr. Melito. I can easily tell you I do work with multiple
    international agencies of the U.S. Government and I have found
    good people in all of them.
        Mr. Kingston. I have, but I know good people can be
    constrained by bureaucracy. If the bureaucracy is a little bit
    more flexible--I heard a great summary of communism in China,
    and that is what works. They just want to do what works. That
    is what I would kind of look for on the ground, what works.
    Just do it.
        I want the person in Ghana to say hey, we got it done.
        Ms. DeLauro. Just a footnote. It does not come under our
    jurisdiction but State is asking for $14 million for the
    monitoring and evaluation of their global food security
    initiative. That is in the 2011 budget. I think that is very,
    very positive.
        Mr. Melito. I agree.
        Ms. DeLauro. Obviously, we will wait to see what happens. I
    think we ought to encourage the Appropriations Committee
    responsible for that to move forward.
        Maybe Mr. Kingston, the two of us could write to that
    subcommittee and indicate the necessity for this as we try to
    move forward.
        Let me just ask a question. In the letter that I wrote in
    December talking about a request for the report, I commented
    that from the 2008 report, the GAO had recommended that a
    coordinated and integrated government-wide U.S. global food
    security strategy is necessary to address many of the
    underlining factors that cause food insecurity.
        GAO also recommended that the Administrator of the USAID
    program prepare and submit an annual report to Congress on
    progress toward implementation of the first recommendation
    here, which was that GAO found the efforts to reduce global
    food security have been hampered by fragmented and
    uncoordinated nature of U.S. assistance efforts.
        Did we ever get a report from that recommendation and is
    that recommendation a part of the current report if we did not
    get one?
        Mr. Melito. The answer to your first question is no, you
    did not get a report. We consider those two recommendations to
    not yet be closed. We think the current effort is a possible
    means to create that strategy, but there is not any vehicle yet
    for them to report regularly to Congress, and we think that is
    essential.
        Ms. DeLauro. I would concur. Let me ask a question about
    food aid in Haiti. GAO visited Haiti as part of your field work
    effort for this report. Haiti is so close to the United States,
    and as your report points out and I quote ``It is the least
    developed country in the western hemisphere and one of the
    poorest countries in the world.''
        You note that the number of undernourished people in Haiti
    ranges from 4.5 to 5.4 million and will probably grow due to
    the recent earthquake.
        I have three questions in this regard. Would you share with
    us GAO's observation from that trip? Were you able to assess
    food aid efforts in Haiti during the trip, and can you suggest
    steps that could be taken to improve Haiti's food security?
        Mr. Melito. I was not part of that trip but my team had an
    excellent visit to Haiti. We were looking at ag development
    projects. This is again a case where they came back with some
    good stories and some not so good stories. Again, we try to
    look above that to try to understand systems.
        The team did have a strange encounter with a Government
    official in Haiti in terms of monetization of food aid. We were
    surprised to learn that actually Haiti had a Bureau of
    Monetization, which its sole purpose was implementation of
    monetization of U.S. food assistance. We would like to look
    closer at that. We actually are going to do some monetization
    work in the future.
        What is surprising about Haiti is for a western hemisphere
    country, it has a hunger rate that is among the worse in the
    world. It is over 50 percent. That stands out among some of the
    worse cases in Africa.
        Ms. DeLauro. It did not get to that point because of the
    earthquake.
        Mr. Melito. No, not at all. I hesitate to give you a quick
    and easy answer. I believe there is governance issues. This is
    not something that is in my expertise. I have sent teams to
    Haiti several times. GAO has done Haiti related work a lot. We
    are actually going to do probably a large reconstruction based
    on the earthquake.
        I do not know how you differentiate the difficulties of
    development from the difficulties of Haiti. It seems like
    everything is magnified when you talk about Haiti.
        Ms. DeLauro. Mr. Kingston.
        Mr. Kingston. I know we are kind of going over and over
    again on this important accountability, but it is important.
        You did list in your report the numerous agencies that work
    on global food security, but did you say what kind of food aid
    is most effective?
        Mr. Melito. As I mentioned earlier, I do not think anybody
    knows yet.
        Mr. Kingston. Would you ponder that issue?
        Mr. Melito. Yes. I want to address something which
    Chairwoman DeLauro mentioned earlier, which was the letters
    from the agencies said we might have been too harsh about the
    country-led approach.
        We are not too harsh. As the letters came in, we added a
    little more positive language to make sure we are not saying it
    is wrong.
        The donor-led approach to food assistance did not work.
    That is mostly what is preexisting. Telling the governments to
    do X, Y and Z did not seem to have any long-term effect.
        Engaging the governments in that as a partner is the sense
    that maybe this can have some long-term effects, but really we
    are embarking on that path now. That is for the future.
        Ms. DeLauro. Just a quick follow up on that. Does that mean
    we are dealing with different levels of abilities, stabilized
    nations, we are dealing with a whole variety of countries which
    have a whole different set of circumstances that they are
    engaged in?
        In terms of looking at the approach you are talking about,
    what you are saying is there needs to be involvement with the
    host government, so we are clear up front as to what we may
    confront in that effort, we are going to work, there may be two
    steps forward and a step backward, we are trying to calibrate
    how we work together or in some instances, are we likely to
    look like we have not done the right thing?
        Mr. Melito. That is beautifully stated. I could not have
    said it better than you just said. I would only add success is
    going to be a slow, grinding long-term effort.
        Ms. DeLauro. That success is going to take trying of some
    things that may in fact not be successful and instead of saying
    we are done, we are finished, it is over, that we try to figure
    out another way to integrate the systems.
        Mr. Melito. To give you a sense on the same observation.
    The Gates Foundation has made food security one of its top
    priorities. They are spending as much as 20 percent of their
    budget on monitoring and evaluation because they recognize they
    went in using a private sector business model, and I do not
    know, meaning ``I'' the organization, do not know what works
    and does not work.
        What do I do now? I better be spending a lot on R&D. I
    better really create a body of knowledge that we can build
    from. That is their approach. I think we should be taking the
    same approach.
        Ms. DeLauro. Thank you.
        Mr. Kingston. Let me ask you this. A donor-led, is not Food
    for Education donor-led?
        Mr. Melito. Food for Education has a donor involvement. I
    would not necessarily say ``donor-led.'' We are actually going
    to be looking at the program as well in the months ahead, so we
    will see exactly how the rhetoric and policies are working.
    There is donor involvement.
        Mr. Kingston. You are not sure how effective it is; right?
        Mr. Melito. I do not think there has been yet a systematic
    evaluation of the effectiveness of that program. There has been
    a lot of anecdotal success stories on that program.
        Mr. Kingston. How about a farmer-to-farmer approach?
        Mr. Melito. We have not looked into that at all. That is a
    very small program.
        Mr. Kingston. I know it is small but that might be a small
    bright shining light.
        When would we get this follow up on the report back, which
    you just mentioned to the Chairwoman? When would we get some
    more info from you in terms of this getting better and would
    you recommend that we bring the Gates Foundation in here and
    ask them the same type of questions we have been asking you in
    terms of their monitoring?
        Mr. Melito. The answer to your second question first, I
    think you would find discussion with the Gates Foundation group
    quite rewarding. We met with the Gates Foundation, high level
    officials including Mr. Shah, when he was there. It was a very
    stimulating afternoon that we had with them.
        They are providing lots of resources. This is not a small
    effort. They are providing tens of millions of dollars for food
    security.
        Ms. DeLauro. It is overwhelming.
        Mr. Kingston. Another thing, should there not be a
    graduation kind of idea/concept to this food aid?
        Mr. Melito. The humanitarian assistance is situational.
        Mr. Kingston. I understand that.
        Mr. Melito. On the development side, that is almost what
    they are doing with the tiering, the two tiers. There are
    countries that are performing well and countries that are not
    performing well.
        In the back of their own minds, I think, the best
    performance eventually will be no longer need assistance, but
    they are obviously working currently with those countries that
    need assistance.
        I think successful development requires graduation.
        Mr. Kingston. I think so. Who is your Congo expert?
        Mr. Melito. Actually, I think none of my current team have
    gone to the Congo. We have people who have gone to the Congo
    back at headquarters.
        Mr. Kingston. Do you have any comments on it?
        Mr. Melito. Sad. It is a very discouraging situation.
        Mr. Kingston. Under the topic of roads, that is one of the
    biggest challenges.
        Mr. Melito. Yes, it is an enormous country.
        Mr. Kingston. It is very big. Madam Chair, I have about
    five kind of wrap-up questions which are just sort of for the
    record, if you are ready to wrap it up.
        Ms. DeLauro. I am. I would just say to you with regard to
    your comment on graduation, Mr. Kingston, I think one of the
    strengths of the McGovern/Dole program has been countries do
    graduate, they become donor countries, but then they become
    countries that provide resources in order to assist in this
    project.
        Mr. Kingston knows, I am a strong proponent of the
    McGovern/Dole program. I think it does not get its just due.
    That is not just with regard to resources, which it does not
    get, but in terms of its success rate, and that is particularly
    true with women and girls. I think we need to do some
    investigating of that program and how that can be utilized to
    do some other things.
        Mr. Kingston.
        Mr. Kingston. I just wanted to give some closing remarks,
    some closing thoughts, that are just reiterations.
        I would be very interested in your rating of NGOs, who is
    effective and who is not, and I would be interested in going to
    a source who could give me that if you are unable to, and if we
    need to come back to you and task that or whatever way we could
    get there.
        And why again, because as in my opening comments, I am just
    convinced there is going to be a real budget fury coming up
    more and more in the years ahead, and foreign aid people back
    home do not consider it their top priority, so the more we know
    about what works, the better.
        The other thing is the U.N. rating system. If anybody has
    any ideas about that who wants to weigh in on it, it is
    something that I am trying to figure out. It is just such an
    awkward system.
        Number three, poll your folks on the ground. I feel a real
    sensitivity that is what you are doing, you are aware of that,
    but I want to make sure that in Washington, D.C. they are
    listening to the people who really have country expertise.
        It would be so good if we had five or ten great success
    stories that say okay, here is a country, here is a region that
    really turned around because this was U.S. aid at its finest.
    We certainly owe it to ourselves and the taxpayers on that.
        You have given us some reform ideas, but there are a lot
    more that I feel you know that could be done. We would like to
    work on that.
        The Chairwoman and I, the opportunity you have is whenever
    I vote ``yes,'' she votes wrong and votes ``no'' when we are up
    on the House Floor.
        You have two people who are really philosophically at
    different ends of the spectrum, but we both stand for so much
    in common when it comes to trying to do it right and get
    reform.
        If you could get the two of us, there are a lot of people
    in between. Things we could live with.
        Again, just coming back from Afghanistan, whatever you can
    add would be so important to the war effort. There is just so
    far that the men and women in uniform can take this thing.
    Victory in Afghanistan is more in the hands of civilians than
    military at the moment.
        Mr. Melito. That is true.
        Ms. DeLauro. Thank you. When we do both get to the Floor, I
    vote in the correct way and my colleague votes wrong. It is a
    ``yes/yes'' and ``win/win'' on this issue.
        We are really committed to this. That is why we are
    interested in some of the reforms that you proposed. We are
    interested in following up on this evaluation and monitoring of
    the agencies that have the responsibility, and those that have
    a prime responsibility, and we are trying to work within the
    jurisdiction of this committee, which as it affects this issue
    I think is significant in where we can have a role.
        I know we will follow up on how we leverage the work of
    USDA and how we take a look at FAO and what opportunities are
    there.
        Jack has done a lot more traveling in this regard than I
    have and has seen the hunger. We are also experiencing domestic
    hunger at this juncture.
        I think we both at our core believe that we have a moral
    responsibility to be engaged in this effort, and as I said
    about Afghanistan, if the Taliban is providing food for your
    children, I do not care who you are, and you cannot take care
    of your children, you will accept food, and you will swear
    allegiance.
        This is a national security issue. The more we make that
    reality known to our colleagues and to the people we represent,
    I think the more buy-in we have on this issue.
        Thank you so much for being here. Thank you for the report.
    We appreciate it.
        I think I have to formally close the hearing.
                                              Thursday, March 25, 2010.

                     FARM AND FOREIGN AGRICULTURAL SERVICES

                                   WITNESSES

    JIM MILLER, UNDER SECRETARY, FARM AND FOREIGN AGRICULTURAL SERVICES
    JONATHAN COPPESS, ADMINISTRATOR, FARM SERVICE AGENCY
    JOHN BREWER, ADMINISTRATOR, FOREIGN AGRICULTURAL SERVICE
    WILLIAM MURPHY, ADMINISTRATOR, RISK MANAGEMENT AGENCY
    SCOTT STEELE, BUDGET OFFICER, U.S. DEPARTMENT OF AGRICULTURE

                          Ms. DeLauro Opening Remarks

        Ms. DeLauro. The hearing is called to order. Let me begin
    by welcoming Jim Miller, the Under Secretary for Farm and
    Foreign Agricultural Services. He is joined by Jonathan
    Coppess, John Brewer, William Murphy, Administrators of the
    Farm Service Agency, the Foreign Agricultural Service, and the
    Risk Management Agency, respectively; and Scott Steele, Budget
    Officer. Thank you all for being here today with us.
        This is one of the most important budget hearings that this
    subcommittee convenes each year, because of the enormous
    portfolio that is covered among the agencies before us today.
    Everything from farm assistance to food aid to exports and
    that's why we rescheduled the hearing from earlier this week on
    the day that the President signed the health care legislation
    that we just passed. We want to try to give the subject the
    attention that it deserves.
        The Farm Service Agency, as you know, administers farm
    credit, commodities, emergency assistance, some conservation
    programs for farmers and ranchers. And through its network of
    county offices, it is, as under secretary Miller notes in his
    testimony the agency that the majority of farmers and ranchers
    interact with most frequently.
        First, I want to congratulate FSA on what appears to be a
    swift and efficient implementation of the 2008 Farm Bill. I see
    from today's testimony that FSA has provided nearly $6 billion
    in direct and counter-cyclical program payments, $1.7 billion
    in conservation reserve program payments, and over $318 million
    for the Livestock Indemnity Program, Livestock Forage Disaster
    Program, and the Supplemental Revenue Assistance payments, the
    SURE program.
        I am particularly impressed with how quickly the agency set
    up the Dairy Economic Loss Assistance Payment Program that we
    established in last year's appropriations. Within three months
    of the passage of the program, it already issued $270 million
    to struggling dairy farmers, and I and they thank you for the
    competent implementation of this program. It was really a
    matter of survival for so many of the dairy farmers.
        What I would like to do is to urge the Under Secretary and
    Mr. Coppess to continue to work in every possible way to ensure
    that the civil rights violations that occurred at FSA as well
    as other USDA agencies are remedied and that they don't occur
    again. I am glad that the government has reached an agreement
    with African-American farmers who were discriminated over the
    years.
        However, remedies for other groups on the receiving end of
    what was systematic USDA discrimination such as Hispanics,
    women, Native American farmers, remain to be provided. We need
    to provide assistance there, and I ask you for your help and
    your assistance with those groups as well.
        Just as a note, Congresswoman Eshoo and myself have
    introduced legislation providing a process by which women
    farmers who were victims of discrimination can make claims
    against a compensation fund appropriated by the Congress. It
    also requires USDA to institute some reforms. One of the issues
    facing the FSA in the past several years as we all know is the
    severe deterioration and the consequent performance problems of
    its IT infrastructure, and I know you know that.
        If this year's budget request is met, Congress will have
    appropriated $250 million to fix this, so it is important that
    the subcommittee gets an accounting for our investment. In
    addition, crop insurance is an area that should be and is a
    great interest to this subcommittee, particularly given the
    concerns about the potential fraud in the program. This hearing
    provides us an opportunity to ask RMA what they are doing to
    combat wasteful spending in the crop insurance program.
        Switching gears, I am also very concerned about the flat
    funding of P.L. 480, the Title II program, the McGovern-Dole
    program in the 2011 budget at a time when we have over a
    billion people who are now going hungry or who are ill-fed, and
    the world is looking to us for some kind of moral leadership. I
    do not believe we should be turning away from our strong,
    bipartisan commitment to international food aid.
        So, Mr. Brewer, I would say to you I'll be curious to hear
    your thoughts about these funding levels. The flat funding of
    food aid is in marked contrast to the substantial funding
    increases for programs under the title of the National Export
    Initiative. I share the President's desire to increase U.S.
    agricultural exports, and we will be holding a hearing on how
    trade agreements affect the public health in the near future.
    And, as an aside, it seems to me that if we really want to
    increase our agricultural exports, one of the easiest ways to
    do it would be to open trade with our neighbor, Cuba.
        Fifty years, 11 Presidents after setting up an embargo
    policy that has failed to change the political dynamic there,
    it seems to me that it's time to shift U.S. policy toward
    greater engagement and a greater opportunity for our export
    markets and a greater opportunity for our farmers. So a number
    of wide-ranging issues on our plate this morning as befitting
    the considerable diversity of responsibilities that are handled
    by these agencies, I look forward to hearing from you today on
    how we can continue to refine, to improve our performance in
    these areas to make good on our commitments to Americas farmers
    and ranchers.
        Thank you very much for being here this morning.
        We look forward to hearing your testimony, and with that,
    Mr. Kingston, I'd like to yield to you for your comments.

                          Mr. Kingston Opening Remarks

        Mr. Kingston. Thank you, Madam Chair. It's great to have
    all you guys here, and Scott Steele's there would never be a
    hearing here without you being present, and you get to hear so
    much of us. So this is the way the chair and I like this, by
    the way, when no members show up so we get the microphone
    time.[Laughter.]
        Ms. DeLauro. That's right. We can do all that.
        Mr. Kingston. This is going to be a good hearing. We are
    eager to hear what you have to say, a couple things I want to
    mention.
        While the chair and I disagree on Cuba, I think certainly
    she has made a good point in terms of trade and opportunities
    for our farmers; and that's why I'm astounded, absolutely
    astounded that this President keeps talking about the South
    Korean trade agreement and the Columbian Trade Agreement
    without moving forward to it. In fact, I don't even know who
    the USTR is these days.
        You know, it used to be a household name under President
    Clinton, President Bush, somebody who was dynamic out there
    explaining markets and opportunities. And I'm being serious.
    You can say, well, that's your fault, but I can tell you that
    the Clinton and the Bush USTRs were far more active, and so we
    have opportunities for agreements with Panama, Columbia, and
    South Korea. South Korea was one; and Mr. Brewer you know well
    having your AIG days look to global threats what a great ally
    that is in the Pacific Rim. And for us to be ignoring that,
    it's to me unbelievable.
        The Foreign Market and Development Cooperation Program--I'd
    like to know about the overlap with MAP and what your thoughts
    are what we should do about that. I'd like to hear some success
    stories with the technical assistance and specialty crops in
    terms of trade, and we hear a lot from MAP and some of the
    other ones, and be interested in that.
        Another thing that I'm very, very interested in having
    served on the Defense Committee and recently gone to
    Afghanistan and gotten briefed by some of your folks over
    there, we have some--not really opportunities, but absolutely
    must-do assignments in terms of getting Afghanistan off of the
    poppies. And I think it's something like 200 million in cash
    crops with everybody in Afghanistan getting some form of the
    benefits from there.
        I'm not sure how we do it. I will tell you that I have
    asked top military leadership what are we doing about the
    poppies, and I cannot get a good answer from them. They
    absolutely, all, everybody agrees it's a huge problem that kind
    of the culture, it's like a toxic to all of them. So we've got
    to come up with some things, and I'm hoping USDA might be able
    to bring some new angle or fresh thinking that the military has
    not been able to capture in our eight years there.
        And then, Mr. Brewer, kind of going back to you in terms of
    P.L. 480 or whatever the food aid programs are--and we're not
    asking questions right now, but Paul Theroux, who as you now is
    a traveling journalist, lived in Africa about 40 years ago.
    He's recently written a book that I'm reading called ``Dark
    Star Safari,'' where he talks about how despite many years,
    four decades of food aid--not food aid, but all aid--that so
    many countries have not made any progress whatsoever, no
    permanent progress or benefited from it.
        So you have a lot of familiarity from the private sector
    and from what you're doing now, and I'd like to hear what are
    some of the success stories that we've had, so a lot of good
    stuff. I've talked and I'll yield the floor, madam chair, and
    again welcome all of you.
        Ms. DeLauro. Thank you very much. And Mr. Secretary, Mr.
    Miller, if you will proceed with your testimony, the testimony
    in its entirety will be part of the record and you are free to
    summarize it any way you would like. Thank you.

                      Under Secretary's Opening Statement

        Mr. Miller. Well, thank you very much, Chairwoman DeLauro,
    Ranking Member Kingston. It's a real pleasure to appear before
    the Committee today to present the 2011 budget proposals for
    the Farm and Foreign Agricultural Services at the Department of
    Agriculture.
        You have already acknowledged the three administrators
    representing the agencies within our mission area as well as
    Scott Steele with our Office of Budget and Program Analysis,
    and I am very appreciative of these gentlemen participating in
    this hearing with me. With your permission I would like to
    summarize the statement that I have submitted for the record.
    And following my remarks, we are certainly happy to respond to
    any comments or questions that you may have.
        First, let me thank the Subcommittee for the support you
    have provided to our mission area and its programs in the past.
    The President's 2011 budget provides the resources needed to
    meet our mission area's priorities next year, and so I'd like
    to begin with the Farm Service Agency. As you noted, the Farm
    Service Agency is the lead agency for delivering farm
    assistance to our producers throughout the country.
        The 2011 budget request for FSA funds essential program
    delivery expenses. For FSA salaries and expenses the budget
    provides $1.7 billion, a net increase of about $116 million
    over the 2010 enacted level in order to sustain essential
    program delivery. This total includes about $95 million to fund
    our IT modernization projects, which we'll discuss further, I'm
    sure, during the questioning period.
        The Committee is aware of FSA's longstanding need to
    upgrade its aging technology and we certainly thank you for
    providing $117 million through the Recovery Act as well as the
    2010 annual appropriations to engage in these activities. This
    funding will enable us to continue our modernization efforts.
    After severe performance problems a few years ago, and while
    challenges certainly remain in order to complete this task,
    important steps are in fact under way to transition FSA to a
    modern, centralized, web-based IT system. Continuation of these
    efforts is our top priority in our 2011 budget request.
        FSA also plays a very critical role for agriculture
    producers by providing direct and guaranteed credit for farm
    families who would otherwise be unable to obtain the financing
    they need for their operations. The 2011 budget proposes a
    total program level of about $4.7 billion for these programs.
    Of this total, over $1.5 billion is requested for direct loans
    and nearly $3.2 billion for guaranteed loans offered in
    cooperation with private lenders.
        Turning to the Risk Management Agency, as you are well
    aware, it administers the Federal Crop Insurance Program, which
    is our primary risk management mitigation program for our
    producers. Our current projection for 2011 shows the value of
    insurance coverage will remain relatively constant with what we
    have seen in recent years at about $84 billion of liability,
    while insuring over 260 million acres.
        The 2011 budget request of $83 million for discretionary
    administrative expenses for RMA includes additional funding for
    pay cost and for the maintenance of the RMA IT system. The 2011
    budget also includes a mandatory request reflecting estimated
    placeholder savings of $8 billion over 10 years resulting from
    changes to the terms in the Standard Reinsurance Agreement with
    our private insurance providers. That agreement is currently
    under negotiation with our private insurance company partners,
    and we expect to complete those contract negotiations by June
    30th of this year.
        The RMA IT modernization project is in its third year. To
    date, approximately $35 million of the $54 million four-year
    project provided in the 2008 Farm Bill has been obligated under
    a two-phase approach. Phase 1 will conclude this summer. Phase
    2 is scheduled for production next year.
        The Foreign Agriculture Service is the lead agency for the
    department's international activities, and it is at the
    forefront of our efforts to expand agricultural trade and
    enhance global food security. Let me begin by expressing my
    appreciation to the Committee for providing additional 2010
    funding for the Foreign Agriculture Service that has helped
    address the financial concerns experienced by the agency in
    2009.
        For the 2011 budget we are proposing FAS have resources
    that represent American agriculture on a global basis and
    create new overseas market opportunities. The budget provides a
    program level of $265 million, an increase of $78 million over
    the 2010 enacted level. This includes $54 million for increased
    export activities as part of the President's National Export
    Initiative. $10 million of this funding will support expansion
    of several FAS export promotion activities. A portion will also
    be used to meet higher, non-discretionary operating expenses at
    the agency's overseas posts, and the initiative also includes
    over $34 million to double the funding for our Foreign Market
    Development Cooperator Program.
        In addition, the initiative provides an increase of $9
    million for the Technical Assistance for Specialty Crops
    Program, which doubles overall funding available for TASC in
    2011. The increased funding for TASC reflects the importance of
    specialty crops in our export strategy moving forward and the
    need to resolve barriers that restrict the trade in those
    crops.
        For the Cochran and Borlaug fellowship programs, the budget
    includes increased funding of $1.5 million. These programs
    provide important training and collaborative research
    opportunities in the United States for our trade partners in
    order to advance food security and to address U.S. trade policy
    objectives. In addition, funding of $14.6 million is requested
    for FAS in recognition that it has assumed full management of
    USDA's reconstruction and stabilization activities, including
    the provincial reconstruction teams in Afghanistan and Iraq. Of
    this amount $13 million is moved from Department Management
    where it was funded in this year's Appropriations act.
        For the McGovern-Dole Program, as well as for Food for
    Peace Title II assistance, the budget provides funding at the
    2010 enacted level of $210 million and $1.7 billion
    respectively. These funding recommendations represent sizeable
    increases over the 2009 levels for both programs. In
    conclusion, I would like again to express our appreciation to
    the Subcommittee for the support it has provided our mission
    area and programs.
        We look forward to working with you as you review our 2011
    budget proposal, and we will be pleased to provide whatever
    assistance you may require as you review this proposal. Thank
    you very much.
        [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                     FSA IT STABILIZATION AND MODERNIZATION

        Ms. DeLauro. Thank you very much, Mr. Secretary. Let us
    begin here. As you pointed out this is with regard to the Farm
    Service Agency. The budget requests an additional $59 million
    for the agency's ongoing IT stabilization and modernization
    initiative. As I said in my opening remarks, if we move in this
    direction, we will have seen about $250 million spent in this
    effort.
        Let me just ask you this, because as I again pointed out,
    there is a growing bipartisan concern about how long this is
    taking and what more is needed to complete it. On the first
    question, when will the project be completed?
        Mr. Miller. Jonathan, would you like to give a specific
    answer?
        Mr. Coppess. Sure. Thank you. And we anticipate if the
    funding continues that the last contracts will be let out in
    2013 and that the bulk of this project will complete in 2014.
    So we're looking at three and a half, four years, to get
    through the modernization part of this.
        Mr. Miller. Madam Chairwoman? If I might, let me point out
    that progress is being made in a very significant way and we
    expect ongoing improvements. For instance, the Farm Loan
    Program delivery system has lowered the loan processing time
    from 41 days to 25 days. Our National Receipts and Receivables
    System is finally beginning to speed payments to producers, and
    we expect after some glitches this year in the transfer that
    that system will be much improved in this interim period.
        Ms. DeLauro. I don't mean to be flip about this. I think
    people were concerned that we were going to put an entirely new
    healthcare system together between now and 2014. We haven't
    been able to get this system up and running for a number of
    years now, so, let me follow-up with a question that I have.
        Quite frankly, we have not been able to get clear answers
    from FSA about how much additional funding is needed to finish
    the project, which is of concern. We are told now that the
    funds we provided specifically for stabilization and
    modernization are being used for other purposes and are not
    remaining in the base for use just for this initiative. We did
    run numbers ourselves.
        Committee staff did that for me and we are assuming that
    the total cost of the project as projected by FSA is about $454
    million. If we provide your 2011 funding request and if
    previously appropriated funding remains in the base for this
    initiative, then you need only about $15.3 million in fiscal
    year 2012 to reach full funding. Alternatively, if you don't
    keep the previous funding in the base and you spend it on other
    things, that will mean another $203 million, or you'll fall
    short by that much.
        There's a difference of $188 million, and we just don't
    have that kind of money. So we need a commitment from you today
    that funding provided for this initiative will be kept in the
    base for this initiative and nothing else, and it will only be
    used for this initiative. And I'm going to ask you for your
    commitment today on that.
        Mr. Coppess. And my understanding is the number on MIDAS,
    about $305 million for this whole project, has been consistent,
    that that is the estimate for the full project. And our
    commitment is to absolutely use this funding to modernize our
    systems, our processes around those systems, and get it
    completed as soon as we can. As the Under Secretary mentioned,
    the National Receivables System that we started using this year
    is a big step forward, and we are learning the problems as we
    go with that. So we're committed to putting this funding to
    that.

                               FUNDING COMMITMENT

        Ms. DeLauro. But I want a commitment that the funding that
    we provide is not used for anything else, that the base number
    stays the same and we build on it. And then we just don't add
    to it. That is essentially, and again, we've had a difficult
    time getting the answers. I don't know what it's going for. If
    you know where it's going to, but money is not staying in the
    base account and it's being used for other things. So we can't
    allow that to happen here.
        Mr. Coppess. I understand.
        Ms. DeLauro. Because the money is just, you know, just
    can't be filling the gap--and you using money to go someplace
    else. So do we have your commitment?
        Mr. Coppess. Yes. We're not moving that money around.
        Mr. Miller. Chairwoman DeLauro, there are two critical
    elements to this project that I know you're very much aware of.
    One is to stabilize the existing system so we can continue to
    deliver programs under the agency. The other is to create the
    modernization, which is both a software and hardware issue, so
    we can get the advantages of these new efficiencies.
        Those projects are, in fact, moving forward and it is our
    top priority. We are committed to utilizing the funding that is
    made available to the agency to ensure that we can move ahead
    with this project and that we can complete it and deliver the
    benefits to our stakeholders.
        Ms. DeLauro. I understand that. The commitment for this
    committee is imperative, and this is on the bipartisan basis.
    We've been asking this question for, you know, last year, the
    year before. And there's a January report that was due to lay
    out where the money is, and to my knowledge we do not have that
    report yet. So we would like to get that report and we would
    like that commitment that says this money is here. It's going
    nowhere else.
        Mr. Miller. Let me make sure that we get that report to you
    as soon as possible. I believe the report is, if not concluded,
    is very close to conclusion and then we will be very happy to
    come up and speak to you.
        Ms. DeLauro. Because the next one is due April 1st, and,
    Mr. Secretary, your commitment on not moving the money out of
    the base.
        Mr. Miller. No, you have that commitment.
        Ms. DeLauro. Fine, thank you. Thank you very much. Let me
    go ahead and yield to my colleague. Start with another
    question.
        Mr. Kingston. Thank you, Madam Chair.
        Mr. Coppess, I just want to say that I think this goes back
    to Henry Bonilla, maybe even Joe Skeen. I was chair of the Leg.
    Branch Appropriation Subcommittee when we were building the CVC
    project that was supposed to be like $260 million, take one or
    two years, maybe three, and it ended up taking seven years. It
    is really, truly not even completed, and it is well over, I
    think, $650 million. And the only way we got any progress out
    of him was just somebody has to be the mean SOB. Is that you?
    You don't look like one, you know? [Laughter.]
        Mr. Coppess. I tried to be too mean.
        Mr. Kingston. Well, Scott's pointing at you. And maybe Rosa
    and I together can constitute a two-headed monster, but really
    and truly, it's just one of those things where nothing has
    happened. Every year we could practically record your testimony
    and play it back through all the other Administrations and
    people have sat in your seat, and we've been hearing it. And so
    you've inherited a long legacy of this is going to happen.
        Mr. Coppess. Yeah, there's a few of those, and I want to
    echo the commitment that we're putting behind this to get this
    moving, simply because as I've come onto this job and gone
    through and met county offices and see what's going on, it is
    absolutely vital that we get this system up and running in the
    modern environment. I mean we cannot continue to serve farmers
    and ranchers if we don't do it. So I'm committed to it, and
    it's absolutely something we want to complete and complete on
    time.
        Mr. Kingston. And the other thing that you're facing as you
    know is the technology vision of three to four or five years
    ago is obsolete. Things are changing so rapidly these days
    that, you know, you're now building a system that was
    yesterday's system. So, you know, you have to cajole. You have
    to embarrass. You have to fire some people. I mean you just
    have to get in there and get it done.

                                  AFGHANISTAN

        Let me switch to the Secretary. Are you familiar with our
    military strategy in Iraq that is a ``Shape, Clear, Hold, Build
    and Transfer''?
        Mr. Miller. Very roughly, sir.
        Mr. Kingston. Okay, well those are the five buzz words that
    we are hearing over and over again from our military
    commanders. And, of course, Shape would be identify your next
    area, which is Kandahar, that we are going to take over. And
    then Clear is the military; Hold; and then you come in, really,
    the last two phases, which would be to Build and then Transfer.
    And then actually you're staying there once the transfer
    happens. And as you also know we have four ambassadors in
    Afghanistan. The reason is to sort of offset the military
    presence with the diplomatic presence and make sure, you know,
    the two and three stars have kind of the civilian equivalent in
    the State Department, but also with USDA.
        And I would like to make sure that, number one, if you guys
    don't feel you're getting enough love from the military-State
    Department side, if you let our committee know. Mr. Boyd and I
    serve on the Defense committee, and they don't listen to us any
    more than they listen to anybody else.
        I think they might listen to him, but, you know, we want to
    make sure USDA is in the forefront of thought when it comes to
    the build and transfer side of the phase. But I would also like
    to see from you what your plan is, because when I was in
    Afghanistan on the 8th talking to your folks over there, and I
    felt that they were very competent, but we're still giving
    technical assistance and it's very hard to get things up and
    running when, you know, the big money is in poppies.
        So what I would like to see, if possible, is if you could
    tell us kind of what you're going to do about poppies, because
    I am just not getting an answer from the military. And then
    what is your plan, as well, because we want to be able to
    support you. You are going to have in this budget, which I will
    support, I think, all Republicans on this side are going to.
    You are increased from 14 to 64 people.
        And as I understand it, in order to get the USDA people
    there, you basically have to double their salary when it comes
    to costs and expenses. Because it is a voluntary thing and they
    are leaving their home--leaving, you know, their families--and
    they're going into a war zone, so, you know, that sort of thing
    is to be expected. But we want to make sure that while they're
    on the ground they're doing a good thing. So I guess my quick
    question is could you give us periodic reports, maybe even a
    quarterly update on what USDA is doing in Afghanistan, how you
    identify the problems and how you're going to attack them.
        And I want to say, because I am absolutely convinced we can
    have military victory, but it's not going to mean anything
    unless we can grow the civilian part of that government; and,
    as you know, it's a very tough part of the world.
        Mr. Miller. Well, Mr. Kingston, let me respond this way.
    Certainly the attitude of Secretary Vilsack in the Department
    of Agriculture, and I believe the attitude across government is
    second to the outstanding job that our men and women in uniform
    are doing in Afghanistan. I think we recognize that if we are
    going to be able to declare real success at some point in that
    part of the world, we have to ensure that the Afghan government
    is capable of governing the country. And that means it has to
    find ways to get more support out in the countryside, and we
    have to ensure that there is economic stability and opportunity
    for the Afghan people in the countryside.

                       AGRICULTURAL ISSUES IN AFGHANISTAN

        You raised the poppy issue. Certainly, shifting the
    agricultural production in--Afghanistan historically has been a
    significant agricultural producer prior to all the turmoil that
    it's been engaged in. Shifting the focus from poppies to other
    commodities, creating market opportunities, and that's more
    than just raising crops. That's providing infrastructure.
        That's providing the opportunity for them to export to what
    had been some traditional markets that had been abandoned for
    years. It's a critical objective for our success. As you
    indicated, USDA is planning on increasing the number of
    individuals that will participate in our Provincial
    Reconstruction Teams in Afghanistan, up to 64.
        Many of those people will be going out into the country
    into the provinces of Afghanistan working in cooperation with
    the locals, first to identify what do they need in order to be
    successful. It does very little good for us to try to impose
    something on them, so it is really a question of finding ways
    to work with the people, find out what they need to rebuild
    their communities, to rebuild their agricultural economy, and
    then finding the wherewithal in initial phases.
        That certainly is technical assistance, but find the
    wherewithal to work with the Afghan people in their government,
    to rebuild that country and create the stability we all would
    like to see. We are happy to provide regular reports to the
    subcommittee in terms of our progress in that areas, because I
    think our work in cooperation with U.S. AID, State Department
    and Department of Defense is a very positive story in a very
    troubled area. Thank you.
        [The information follows:]

        The first report on Afghanistan is expected to be provided in the
    fourth quarter of FY 2010, with subsequent reports on a regular basis.
    The reports will include information on the status of our funding and
    programs for Afghanistan.

        Ms. DeLauro. Mr. Boyd.

                              AGRICULTURAL POLICY

        Mr. Boyd. Thank you, Madam Chairwoman. And I want to start
    by associating myself with the remarks that you made relative
    to the modernization of the technology.
        I guess many know that I have had a lot of experience as a
    customer dealing with Farm Service Agency offices, and
    certainly understand that there are some issues there that we
    need to resolve.
        Secondly, Madam Chair, I want to say for the record in this
    committee that in the last couple of years we've seen
    significant attention given to a couple of severe problems in
    this country. Summer of 2008, we had gasoline, because of the
    rising cost of oil, go to $4.25, $4.50 a gallon, one of the
    largest single factors that put this country in a recession in
    the summer of 2008.
        Now we are in the middle of a very heated polarizing debate
    on another issue that is gripping this country in terms of its
    costs and effectiveness, and that is its health care system.
        I want to remind the Committee members and everybody in
    this room that of all the public forums I have attended--over
    the hundreds of public forums I have attended over the years, I
    have never heard a constituent come to me and complain about
    the lack or access to quality, affordable food supply on the
    shelves of our supermarkets.
        I say that because I hear a lot of people fussing about our
    national agricultural policy, that we have had a policy that
    has worked well for this country for years and years and years.
        I just wanted to go on the record, Madam Chair, as
    supporting that policy, and warning folks about being too
    aggressive in changing significantly that policy.

                          FSA AND NRCS COUNTY OFFICES

        Having said that, I will move to a quick question, and that
    question, I think, Mr. Under Secretary, either you or Mr.
    Coppess could answer it, has to do with the workings of the FSA
    and NRCS Offices, and those two systems, it appears to me, work
    separately.
        I always thought or at least the people around me, the
    folks who use those offices, believed the FSA Office works from
    the bottom up, that is from the farm advisory committees up,
    and the NRCS Offices worked from the top down.
        There has been a lot of talk over the last number of years
    by a lot of folks, including folks in Congress, about a way to
    modernize the way those offices worked together.
        My question really is, I understand a legislative change is
    not necessary to shift administrative work entirely into FSA,
    so that NRCS can get back to doing what they are best at, which
    is technical expertise, technical advice.
        Is this something that you consider or you think the USDA
    should consider doing?
        Mr. Miller. Mr. Boyd, let me respond this way and then I
    will ask Mr. Coppess if he wishes to provide any more specific
    comments in terms of the interaction that his agency has with
    NRCS.
        I believe that over the last year, there has been a
    dramatic change in the way the Department is interacting with a
    variety of agencies that exist down there.
        This is something that Secretary Vilsack has been very
    insistent upon, and I think the relationship, the breaking down
    of barriers or stovepipes, whatever you may wish to
    characterize them, has changed significantly.
        We cooperate with our colleagues at NRCS on a day-to-day
    basis while we implement a wide range of assistance programs
    for farmers. We are also engaged through the Conservation
    Reserve Program and in some ways through the new BCAP in
    conservation program administration through FSA as well.
        All of these programs really become interrelated at the
    farm level, as you very well know. We believe it is imperative
    that we have a good working relationship.
        It is interesting that in many of our county offices, NRCS
    and FSA are co-located. They are just down the hall.
        We are working hard both here in Washington, D.C., as well
    as out in the country to ensure that there is greater
    collaboration between the two agencies to ensure that the
    programs that are available, that the benefits that are
    available, and as you note, the important technical assistance
    that can be made available, is in fact being delivered to the
    producers.
        Also, I should point out that I think as we resolve this IT
    problem, that is going to in a lot of ways improve our ability
    to interact with other agencies within USDA. Just our ability
    to share information and share databases is extremely
    important. Quite frankly, right now, FSA, RMA, NRCS, we are all
    working off different databases.
        Mr. Boyd. Mr. Under Secretary--if I could follow up
    briefly, Madam Chair--I hear what you say. Just being co-
    located down the hall, and I am sure many offices are, I am
    sure most of them are, but if the customer has to go to the two
    separate offices to do the administrative work, the
    administrative procedures are different in one office than they
    are in another, being co-located really does not give you much
    advantage.

                            FSA AND NRCS OPERATIONS

        My question really goes to how they work and how they
    operate. NRCS is best at technical supervision. I have said
    this before in this meeting.
        I have a farm that I can show you pictures of coming out of
    the Depression that you would not believe is the same farm that
    it is today.
        Much of that is a result of the work that NRCS helped with,
    with technical advice, and the FSA, then called something else,
    helped us implement.
        My question really is administratively, is this doable,
    that we can shift most of that administrative burden into FSA,
    which they seem much better at--you seem much better at than
    NRCS. That is really the gist of my question.
        Mr. Miller. Again, I think your point is well taken in
    terms of we have to get better at ensuring that we are
    providing an improved level of service to our farmers, that we
    make it as easy and convenient as possible, and to the extent
    possible, that functions between various agencies utilize
    similar forms and other administrative tools.
        I cannot suggest at this point that FSA is willing to
    assume all of those functions from NRCS other than the
    technical assistance, but I do believe it is entirely possible
    for us to develop a much closer working relationship where we
    can streamline processes and make it easier for our
    stakeholders.
        Jonathan, do you have any additional comments?
        Mr. Coppess. I think you have made pretty much all the main
    points. Certainly, Chief White and I have talked many times and
    are continuing to push in an effort to make our coordination
    better for things like land coming out of CRP and going into
    other programs.
        I think both agencies have incredible resources and the
    ability to work together is the first and most important step,
    and as the Under Secretary mentioned, I think as we get
    ourselves in this modern environment--we cannot share
    oftentimes across counties--so to be able to share from a
    centralized database information and work that way in better
    cooperation with other agencies is going to be a big part of
    it.
        Mr. Boyd. Thank you, Madam Chair.

                 SUPPLEMENTAL REVENUE ASSISTANCE PROGRAM (SURE)

        Ms. DeLauro. Thank you. Let me ask you, Mr. Coppess, I want
    to turn to the FSA's implementation of the SURE program. As I
    again mentioned in my opening statement, it is encouraging that
    the regulations were published at the end of last year and the
    payments have been going out.
        I am concerned that it is 2010. The payments that are going
    out are for 2008 losses. That is a long time for these folks to
    have to wait for assistance.
        By the way, the 2008 Farm Bill, this was to be the
    permanent disaster fund, and what Congress did was to say let
    us have a permanent disaster fund so that we do away with this
    ad hoc disaster program.
        2010, we are dealing with losses in 2008. When the
    Secretary appeared before our subcommittee last year, he said
    he would see if there was any way the process could be
    accelerated.
        Can you give us an update on the implementation of the
    program? When do you expect the payments for the 2009 losses to
    begin going out? Why has the process taken so long?
        Mr. Coppess. Thank you. Certainly, we expedited this
    process when we came on board to move things up. I agree with
    you completely that it is very difficult for farmers who had
    losses in 2008, and a bill that passed in 2008, to just now be
    getting payments.
        We expedited that and put a lot of effort behind that--in
    fact, in front of software issues--so that we are actually
    calculating these in the offices and getting the payments out.
        Farmers began signing up for the 2008 losses this January,
    and we have paid out, I believe, over $2 million to date for
    2008. 2009 will begin this year.
        One of the things about SURE is because we have to wait
    until the crop year is done and calculate the national prices
    and everything in the statute, it will not be sort of a
    realtime disaster response.
        It is a supplemental program. You have to have NAP or crop
    insurance. That is sort of closer to the disaster part of the
    safety net. Then we calculate that after the crop year is over
    and then know the prices, know what all the pieces of that
    calculation will be, and then it will generally pay out a year
    to 18 months after the disaster.
        Ms. DeLauro. Are there other steps that we can take to
    accelerate the process?
        Mr. Miller. Let me just remind the Chairwoman of a couple
    of things and then let's discuss how we might be able to solve
    this problem.
        If you recall, it took three years before disaster payments
    began to be calculated in the last ad hoc programs.
        Ms. DeLauro. I am aware. We made some promises to people
    and quite frankly to ourselves because we are going to be
    continuing to do this, but also to continuing to look at ad hoc
    disaster relief programs because people cannot wait as long.
    You will then see supplementals continuing to do this.
        The goal was to have a permanent disaster relief fund. I am
    well aware. As I say, I applaud what you have done but I have
    been out there and I have heard people talk about how difficult
    it is for them, some of the small folks, they cannot survive if
    they have to wait all this time.
        Mr. Miller. As you have noted, we do have the program out.
    Quite frankly, the development of the crop disaster program did
    not really begin until the new team at USDA was in place, less
    than a year ago.
        As Jonathan indicated, this became the top priority for
    FSA.
        I do expect within the requirements of the statute, and
    that is for crop losses, that we need to have the average
    market year prices in order to calculate the payment, but we
    will be getting payments out more quickly in the future now
    that the program----
        Ms. DeLauro. The program is up and running.
        Mr. Miller [continuing]. Is up and running. It is still
    going to be at the end of the marketing year, not directly
    associated with the production year.
        In terms of the other elements of the disaster program,
    however, we are able to make those payments, again, because of
    the provisions in the statute, much more quickly--the livestock
    indemnity program, as well as the livestock forage program.
    Those payments were implemented earlier and payments began to
    flow to producers who were eligible much earlier.
        It is a range, but yes, we have this issue in terms of
    timing, primarily because we are complying with the statutory
    requirement.

                              SURE PAYMENT PROCESS

        Ms. DeLauro. Is there anything we can do to accelerate it?
    Anything that we can help with? Is there anything else you need
    or are there any tools that you need that could help accelerate
    this process?
        Mr. Miller. If it is the desire of Congress to find a way
    to accelerate the process, there are a couple of things that
    could be considered. I am not advocating them. I am providing
    some technical guidance.
        One, you could consider that we develop a way to provide
    advance payments. That would be a partial calculation of what
    an estimated disaster payment would be.
        Another is to potentially reconsider what we are going to
    use for the pricing of these commodities. Right now, we are
    waiting until the end of the marketing year. We are calculating
    prices based on average prices received by producers consistent
    with the statute. That is an element that Congress could
    potentially review if the goal is to find a way so we can make
    these calculations and thereby deliver assistance sooner.
        All of those are going to come at some cost, as you are
    well aware.
        Ms. DeLauro. Thank you very much. Mr. Kingston.

                                  FOREIGN AID

        Mr. Kingston. Thank you, Madam Chair.
        Mr. Brewer, I wanted to talk to you a little bit about the
    foreign aid and the effectiveness of it as much as anything
    else.
        I want to preface that by something that I have learned
    recently, that revenues in our budget cover Social Security,
    Medicaid, Medicare, interest on the national debt, and then
    essentially we borrow about 37 cents on the dollar that we
    spend, which would include agriculture, military, education,
    transportation.
        That is not a political statement. I would attribute that
    to both parties.
        The twist in here, the irony, is that we are borrowing
    money for foreign aid, including borrowing money to give some
    to China, and we are borrowing money from China, which I think
    has a certain twist.
        Again, I am not trying to be political. I am just saying
    this is reality and both parties have dug this hole, but we are
    in it.
        That is statement one. Statement two, I was watching
    Morning Joe today. They had an excellent show on education.
    They had Mayor Bloomberg and Al Sharpton, and kind of a star
    studded bipartisan eclectic group of people who were there, who
    said the new mantra of New York City is actually to challenge
    the status quo.
        They were really emphasizing charter schools, saying they
    have 10,000 kids in charter schools, 30,000 on the list.
        It is kind of an interesting type dialogue that we need to
    see more of in public policy.

                                SUCCESS STORIES

        My question to you on foreign aid and with your private
    sector background, where do you see the success stories? Where
    are we moving the best on alleviating food insecurity? Talk to
    me about U.S. food aid versus host country food aid.
        Let me just ask you the big picture philosophical questions
    on that.
        Mr. Brewer. Congressman Kingston, thank you for this
    opportunity to talk to you about it. The way you posed your
    question really is very expansive, but let me bring it down----
        Mr. Kingston. You have two minutes. [Laughter.]
        Mr. Brewer. A couple of our programs--I think where you
    will see the success stories for us will be in our programs of
    McGovern-Dole as well as Food for Progress.
        Let me say how much we appreciate the Congress' efforts to
    work with us to provide budget authority and increase those
    programs by $500 million in 2010. We appreciate that. We are
    working hard to make those funds effective.

                             MCGOVERN-DOLE PROGRAM

        As you know, with the McGovern-Dole program, that is linked
    to education. We work very hard to make sure that program is
    going to bring this year, we anticipate it will help feed up to
    five million women and children. That McGovern bill was
    definitely a success story.
        Mr. Kingston. Just in terms of our dialogue, and if we go
    over, I intend to come back to you and give you more time on
    this, and this is a long discussion, I am aware, but just
    because we are feeding that many people, that does not
    necessarily mean success.
        To me, another question would be well, what else are we
    doing for them in order to help them help themselves. Not that
    that is the focus of the program per se, but I am kind of
    talking to you philosophically.
        Again, thinking about Morning Joe and this group and they
    are putting their best thoughts together, that is what I am
    trying to get to.
        Mr. Brewer. Again, I apologize if I cannot go as
    philosophical as you want. With regard to McGovern-Dole, it is
    not just that we are feeding people. It is the innovation. We
    are linking it to education. That education is the innovation
    and the success story. It is the manner in which we are
    providing that food that is leading to education, which we all
    believe is the foundation for success and innovation.

                           FOOD FOR PROGRESS PROGRAM

        Also, with regard to our Food for Progress program, again,
    the way in which we provide our assistance, we are doing that
    through the providing of commodities, which those countries
    then are able to sell in an effort to provide economic
    development, economic development opportunities for investment,
    et cetera.
        At the philosophical level that you are talking about, it
    is the way in which we are managing our programs.
        One thing I do want to add is remember in the area of food
    aid, we are part of a whole Government effort. We are working
    with partners in USAID and State. That whole Government
    approach is again an innovative way in which we are providing--
    we are complementing each other's programs.
        I think the way we link our aid to certain areas which lead
    to economic development and advancement of countries as well as
    our comprehensive and collaborative approach are where we are
    making progress in the area you are referring to.
        Mr. Kingston. I am out of time now. I will yield some more
    time to you on my next round. In the next round, one of the
    questions I would like to ask you is what are some of the
    countries that you see with your background in Africa that are
    moving forward, where we are more successful and where we are
    not making progress.
        Thank you, Madam Chair.
        Ms. DeLauro. Thank you, Mr. Kingston. I, too, have
    questions with regard to our food aid programs.
        I am glad to say, Mr. Brewer, I think we share the
    experience of going to the London School of Economics; some of
    the best years of my life was at the LSE.
        Mr. Brewer. I am sorry Congressman Bishop is not here,
    after Morehouse, it is the best.

                           NATIONAL EXPORT INITIATIVE

        Ms. DeLauro. I will tell him. Let me ask about the Export
    Initiative. Fifty-three and half million dollars is the
    increase for the National Export Initiative. It was included as
    the USDA component of the President's initiative, and doubling
    the exports in five years, which is the goal, and to support
    two million jobs.
        To fund the initiative, the budget request increases for
    FAS exporter assistance and in-country promotion activity, the
    Foreign Market Development Program and the Technical Assistance
    to Specialty Crops Program.
        That is $53.5 million in discretionary increases. That
    would be in addition to $43.5 million in mandatory funding,
    which will also be provided for two of the programs, the
    Foreign Market Development and the Technical Assistance for
    Specialty Crops.
        It is about $97 million. What data, and I think my
    colleague, Mr. Kingston, mentioned this earlier, what data do
    you have showing the impact that these programs have had on
    exports to date and how will you measure the success of this
    initiative? How will we know if it is working? What are the
    standards that we have now that intimate that these programs
    are working?
        What data do you have showing the impact these programs
    have had on exports to date?
        Mr. Brewer. The data we have been primarily using
    particularly with TASC and FMD has been the metrics we have
    been using to justify what we have been doing with these
    programs that are currently existing, the FMD program and TASC
    program are currently funded through CCC funding.
        Ms. DeLauro. That is mandatory funding.
        Mr. Brewer. Yes, ma'am. That is mandatory funding that we
    are talking now. The NEI program or the proposal doubles those
    current mandatory programs.
        Ms. DeLauro. I know that. What I want to find out is how do
    we know, tell me about how we have expanded this export
    capacity and how an additional $53.5 million is going to
    further expand that capacity for exporting? I do not have a
    sense of that.
        Mr. Brewer. Let me answer that question through some of the
    success stories that were referred to earlier.
        In the area of TASC, in 2009, using TASC funds, our
    cooperators, our partners, were able to open up the market for
    U.S. seed potatoes in Thailand. That led to an additional
    potential of $1 to $3 billion in additional export sales. That
    assisted the States of Washington, Idaho, Oregon, and
    California.
        We also used TASC funds to assist us in opening a market in
    Mexico for stone fruit, which was very useful to the stone
    fruit producers in California.
        Our efforts to open up markets and those success stories
    are just two examples of the metrics we use or the way in which
    we determine that these programs are useful.
        There are other success stories that I would be happy to
    provide.

                          PROGRAM PERFORMANCE CRITERIA

        Ms. DeLauro. I think it is important to deal with the
    success stories. I would like to see what we view, when we are
    looking at goals that we are trying to reach, how is this
    additional $53.5 million going to deal with our part, ag's
    part, of contributing to doubling the exports, two million
    jobs.
        I would like to know what the criteria are that we measure
    the success of these programs with. As I said earlier, I want
    to increase our ability to export, but I want to know if what
    we are doing now is successful, what are the measures that
    calculate that success. I also mentioned, and I will come back
    again on this, opening up a market to Cuba. We refuse to open
    up a market to Cuba, for a whole variety of reasons, which
    could increase our exports, but we are going to look at $53.5
    million to expand programs.
        What I do not have, and I do not know that the Committee
    has, is any way of judging the use of the current funds, both
    the mandatory funds and discretionary funds, that allow us to
    get to that goal.
        If you can provide us with that, the criteria, we will let
    you know what it is specifically that we would like to have in
    order to look at how we try to treat the $53.5 million for the
    next year.
        [The information from USDA follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Kingston.

                                FOOD ASSISTANCE

        Mr. Kingston. Mr. Brewer, I do want to emphasize that I do
    think we are very interested in which ones are more effective
    and which ones are not.
        One of the things--MAP, for example, has been described as
    corporate welfare in the past, so we do need to be able to get
    back to people and say look, this is where the dollar invested
    brings a dollar return.
        I wanted to go back to you on the food assistance in Africa
    and some other places, on which countries does it seem to be
    working the best and what is our progress, and then anywhere
    else around the globe.
        I know you have a pretty big world vision.
        Mr. Brewer. Thank you, Congressman. A couple of places, and
    again, I want to expand this a little bit beyond food aid,
    again, we are in this whole of Government approach. I will
    expand it a bit further just to aid in general.
        I think Botswana is certainly a country that has, in part
    through U.S. assistance, has moved from a position of being one
    of the poorest nations on the continent to one that is in the
    middle tier, middle income tier.
        Mr. Kingston. I want to mention, right now, they cannot get
    developmental aid because they actually have done so well. They
    are working on a huge water project in the north of the country
    and they cannot get any of our aid on it.
        I raised that question with Secretary Vilsack. You and I
    may want to pursue that. Sorry to interrupt.
        Mr. Brewer. No, that is quite all right.
        Again, Botswana would be one. Just to kind of reach out, I
    will expand a little beyond Africa and go to Indonesia,
    certainly a country which started off as one of the poorer
    nations and has moved forward. Lebanon.
        When we are dealing with a situation as we often are of
    having scant resources or limited resources and a lot of
    demand, we really have to kind of set some criteria, and one of
    the criteria we do use is trying to determine where are
    countries within the income spectrum.
        As I say, Botswana, Lebanon and Indonesia are clearly
    countries that start off needing and receiving a great deal of
    assistance and have now gotten to a level, an income level,
    where that U.S. assistance is not needed as much, so we are
    able to try again to focus our assistance in areas where we can
    work effectively with our partners and get the best bang for
    our buck.
        Mr. Kingston. There are so many other countries that are
    out there.
        Mr. Brewer. A great deal.
        Mr. Kingston. I think we are giving them aid but there is
    no real rhyme or reason where we are going with it or why we
    are going there or whatever.

                         NON-GOVERNMENTAL ORGANIZATIONS

        I know in Haiti, the USDA put out a request recently, this
    week maybe, on aid for Haiti, to NGOs.
        Which NGOs do you think are the best ones?
        We always kind of shy away from that. I know they all mean
    well, but certainly, just like with basketball teams and
    corporations and politicians, you got some who are better than
    others. I think it is time that we start talking in terms of
    what NGOs are really good and effective and not just good P.R.
    people and not just good politicians, but who actually are
    making something happen.
        Mr. Brewer. Congressman, the best way I could answer that
    one now, quite frankly, is I will refer you to the process we
    use. When we are out trying to identify our partners in Haiti
    and in whatever countries we work with and use non-profits as
    partners in those countries, we have a very vigorous compliance
    as well as application process of how we identify our partners.
        If they are successful in our very vigorous process to
    become a partner for us, we see them as a valuable and
    effective partner.
        I think I will leave it there. I do not want to name names.
        Mr. Kingston. Someone could hit a grand slam in one area
    and strike out in another country, and that is actually to be
    expected.
        I think what would be good in-house is for you with your
    business background to take country-by-country looks. In some
    areas, host countries are probably going to be the best way to
    go, and in others, they are not.
        You know, kind of figure out what is working and what is
    not. I think we give foreign aid maybe to too many countries
    too efficiently, and maybe we should every three years take a
    look at the whole thing from ground zero, which ones did it
    really make a difference and were we making progress.
        Mr. Brewer. We are certainly taking steps to do that,
    Congressman. One of the things we are doing and certainly
    paying a great deal of attention to is our monitoring and
    evaluation efforts, our compliance efforts, so we have a
    program certainly of compliance and monitoring and evaluation.
        It is not as strong as we want it to be, but we are
    certainly taking steps to do that. We certainly agree with you
    wholeheartedly, what you are suggesting, and we are in the
    process of doing that. We are doing that and seeking to improve
    it. Again, not only within USDA and our food aid programs, but
    whole Government wide, working closely with our partners, again
    to collaborate, monitor and evaluate our programs.
        We are right on the same page with that.
        Mr. Kingston. Thank you.
        Ms. DeLauro. Mr. Latham.
        Mr. Latham. Thank you very much. I apologize for being a
    little late. I had another hearing going on this morning.

                                 CROP INSURANCE

        Mr. Murphy, I just wanted to ask you, I know you are in
    negotiations, I think, as far as contracts with the crop
    insurance folks, and I guess rather than get into specifics
    about where you are, unless you want to comment, what do you
    see long term as far as where the Department wants to go?
        We have seen the Federal Government take over direct
    student loans, huge expansion of a lot of different areas of
    Government takeover.
        Do you see it remaining in the private sector? What is your
    long-term plan?
        Mr. Murphy. Yes, I think myself as well as everybody in the
    Administration I have dealt with would like to see it stay in
    the private sector, sir; yes. It has been a very efficient
    system.
        The participation numbers are at some 80 percent
    participation, very high levels of coverage. It has been due to
    the private agency system, I think.
        Mr. Latham. There is no discussion of----
        Mr. Murphy. There are always people who have different
    ideas of delivery systems. There always has been. What has been
    a concern lately has been the increasing cost of delivery,
    which is expressed in the administrative and overhead subsidy,
    as well as the underwriting gains.
        In 2006, those costs combined were $1.8 billion. This year,
    2009, it is just short of $4 billion.
        I think the primary concern of everybody is trying to get a
    handle on the costs while ensuring that the program continues
    to be delivered in a very efficient manner across the country.
        Mr. Latham. Okay. Do you have any update about where you
    are?

                         STANDARD REINSURANCE AGREEMENT

        Mr. Murphy. Yes. We just issued the second draft late
    February. We are currently meeting with the companies this week
    in Kansas City. Next week, here in Washington, D.C. That is
    getting their input on the second draft.
        We are going to break out into smaller groups. We just
    agreed with the industry to put together some four or five
    small groups to try to take care of low hanging fruit, where
    there is some minor disagreements. That is going to occur in
    early April.
        We expect to have the final agreement out on the street at
    the end of April, that is what we are looking at now.

                             LEGISLATIVE PROPOSALS

        Mr. Latham. Thank you. I am not sure who to direct this to,
    probably FSA. In the budget request, there is talk again about
    limiting farm payments, storage payments on cotton and peanuts,
    of course, more taxes for businesses in the form of new fees.
        Can I just ask, is there specific legislation you propose
    to change the current Farm Bill that is not that old to begin
    with? The request is going to have to go to the authorizing
    committee to make those kinds of changes. Are you proposing
    anything?
        Who wants that? Probably nobody. [Laughter.]
        Mr. Miller. Congressman, thank you. Yes, sir. There are a
    number of proposals in the budget. I think as you will note,
    compared to last year's budget, the suggestion concerning
    payment limitations is significantly different than what was
    included last year.
        We believe this is certainly consistent with what the
    President had talked about throughout the campaign and since he
    has been in office. This is an issue that has already been
    discussed at various times by the authorizing committee.
        It is a way, we believe, to more clearly target the limited
    resources that we have for commodity program payments to those
    most in need and reducing the number of producers based on an
    adjusted gross income calculation from being able to receive
    full benefits under the commodity program.
        There are a number of other, as you suggest, revenue
    proposals in terms of fees. This Administration has reviewed
    those options and we have looked at what other Administrations
    have proposed in that regard as well.
        We believe this represents reasonable fees for the services
    that the Federal Government is providing.
        We are happy to work with the authorizing committees. We
    have indicated to them our willingness to work with them as we
    find ways to deal with ensuring we can move ahead with a very
    solid foundation in terms of our farm programs and domestic
    assistance to producers while at the same time recognizing the
    fiscal situation that we currently find ourselves in.
        Mr. Latham. I see I am out of time. If I could follow up
    here just for a second.
        Ms. DeLauro. Yes.
        Mr. Latham. Thank you. I guess the frustration you are
    going to see, you know the authorizing committees have not just
    said no, they said hell, no. They are never going to adopt this
    kind of stuff.
        Knowing that, why do you continue to make these kinds of
    requests? It is not going to happen. You know that.
        Mr. Miller. First of all, we are not convinced it is not
    going to happen.
        Mr. Latham. Have you spoken to the chairman over there?
        Mr. Miller. We believe that it is an appropriate approach
    to the farm programs, and quite frankly, there was substantive
    change in the payment limitation regime contained in the 2008
    Farm Bill.
        We believe it should go somewhat further. It is not like we
    are suggesting that the commodity payment programs be
    eliminated, but we are suggesting some additional movement in
    that regard.
        Mr. Latham. Unless you have a news flash, it ain't
    happening. Thank you.

                      FOOD AID AND DEVELOPMENT ASSISTANCE

        Ms. DeLauro. Thank you. Mr. Brewer, earlier this month, the
    Subcommittee heard testimony from GAO. This was on a new report
    of evaluating the Government wide global food security
    strategy.
        One issue that was identified in the report was a shortage
    of expertise at USDA. GAO found that FAS generally oversees
    food aid programs from its headquarters and regional offices.
    The report cited a USDA review of staffing that concluded that
    additional positions are required to support food security
    priorities.
        The witness from GAO also indicated that in reality, FAS
    had been all about trade, not development assistance and food
    aid. He said when his staff visits FAS, staff in the field, and
    this is a quote, ``They come back with stories about basically
    the person has done very little on the development side because
    his portfolio is on the marketing side.'' That is from the GAO.
        Given the conclusions in the GAO report, why is it your
    budget does not propose to hire any new staff?
        Mr. Brewer. Although USDA does not have development--
    dedicated foreign service staff, our foreign service officers
    in the field have the ability to employ the significant
    technical expertise residing in other mission areas in USDA as
    well as in our U.S. land grant university system when we have
    issues of development going on, as well as, again, going back
    to our collaborative work with AID. We--so we have--while that
    assistance can--does not--or that expertise does not sit in our
    offices, per se--and I question the extent of the GAO report.
        I think our people through just the work that they have to
    do, particularly in particular countries, they have a knowledge
    and a working understanding of development issues. But that
    certainly can be supplemented by our contacts and relationships
    within our land grant university system as well as our partners
    in AID. So I think more collaboration, more effective use of
    that.
        Ms. DeLauro. Do you see your role or the role of the agency
    as to be focused on the marketing and the trade side, versus
    the oversight of the--if you will, of the food aid side and
    that effort.
        Mr. Brewer. No, ma'am.
        Ms. DeLauro. Where do you see your priorities?
        Mr. Brewer. I see our priority as both. I think that we
    have a responsibility, and our mission is to open export
    promotion and the management of food aid. So our priority is
    both, and I believe we are doing both, but can effect--can
    certainly do it more effectively by our--the relationships that
    we are building and the contacts that we have among our
    partners in government and outside of government.

                                  FAS STAFFING

        Ms. DeLauro. I understand Land Grant and USAID. There is
    nothing in the budget that shows an increase in staff for work
    on hunger security. And then you've got an increase of $53.5
    million for an export initiative, but you actually have no
    staff attached to that as well. It looks as if the FAS budget
    shows no increase in staffing over 2010. Is that inaccurate?
        Mr. Miller. Madam Chairwoman, let me respond. I think
    you've raised a couple of issues here. First of all, in terms
    of the food aid or more broadly speaking, the food security
    initiatives, as Mr. Brewer has pointed out, we're now looking
    at a whole of government approach. Just last month, the
    Secretary appointed within his office a food security
    coordinator who will be working with our folks at FAS that are
    directly engaged in food aid, food security and capacity
    building initiatives. And we do have a rather robust program
    there, and we do have a group of people that are dedicated to
    those activities. The purpose of the food aid security
    coordinator in the Secretary's office is in fact to ensure that
    we are coordinating our activities with our other partners in
    this, which are primarily State and USAID. We believe there are
    significant synergies that can be developed by that kind of
    coordination. So that we avoid the possibility of duplicating
    activities, we work together to more clearly identify many of
    the areas where we believe we can achieve success, as Mr.
    Kingston suggested we should be doing. And so we are already
    dedicating personnel to this effort.
        In terms of additional personnel, at this point we believe
    that with the assistance of the Secretary's office and the
    other agencies involved, that we can satisfy those needs and
    actually be more efficient and more effective at ensuring that
    our food assistance and food security dollars are achieving the
    results that we all would like to see.
        Ms. DeLauro. I--I'm sorry, Mr. Brewer. I didn't mean to----
        Mr. Brewer. I'm sorry, Madame Chairwoman, if I could just
    add to----
        Ms. DeLauro. Sure. Sure.

                          FAS STRATEGIC RE-ENVISIONING

        Mr. Brewer [continuing]. What the Under Secretary said, as
    well as your question about additional staff. One thing that we
    are doing currently underway in FAS is our re-envisioning
    effort. That is an effort to restructure the agency more
    efficiently and effectively. Part of that effort is to also
    make sure that we are staffed at the appropriate levels. So we
    are underway. That's been going on for the last year, and the
    effort of looking at the way we're structured, our personnel in
    our various program areas. And we are addressing our staffing
    issues through that initiative as well. So we are looking at
    and paying attention to whatever we're asking for within our
    program areas and with our--in our export initiative we are
    certainly making sure that we have the proper staff levels to
    do that, so that's being handled on an ongoing process. We're
    hiring now and have been doing that, and see through that
    process to continue to do that.
        Mr. Miller. Could I follow up with one more comment?
        Ms. DeLauro. Sure, sure.
        Mr. Miller. We focused this in terms of our budget for next
    year and looked at it in terms of what we are doing just within
    the U.S. government and how we deliver on these programs and
    try to achieve success. I also want to point out that this is
    an international effort now, and I think Secretary Clinton's
    initiative supported by Secretary Vilsack suggests that there
    is new emphasis on greater international coordination and
    collaboration in this effort. Quite frankly, I think we all
    recognize that efforts in the past have certainly not met the
    expectations of the United States or other developed countries
    who are very interested in this. I see now a much greater
    effort in again ensuring that we have a collaborative process,
    that we can do things better maybe in the United States in some
    aspects. Other countries bring other things to the table. We've
    got to find a better way to coordinate that effort.

                 COORDINATION OF TRADE AND DEVELOPMENT PROGRAMS

        Ms. DeLauro. I understand that, and I think that that's--
    and I really do, I applaud the initiatives in this area. But I
    will also say I think you do have to come to grips with what
    the GAO said, and it would appear that the people who are on
    the ground in these areas view their portfolio and their
    mission as one that is market oriented, trade oriented and not
    oversight of food aid programs.
        I would also suggest that--and in keeping with something
    that my colleague Mr. Kingston has talked about, I think in
    terms of coordination, we need to take a look at the
    coordination of the trade promotion programs and have a
    coordinator that's looking into those and see where duplication
    is occurring or not occurring. Because we are--and I want to
    promote trade, but it would appear to me just on the surface,
    and we haven't examined that, that we're looking at serious
    duplication in these programs, and we're not looking at--we
    are--and we will continue to do it, emergency aid.
        But part of the mission is to look at development,
    development of these--of agricultural development here and--so
    that you allow these people to be able to produce, produce
    better, get better yield, better crops, to be able to deal with
    their own economic security, rather than us just providing
    emergency aid. And I see, quite frankly--this is not you. I
    mean, this is historically here. I see very little emphasis on
    the development side. And not only from the United States.
        But overall, if you take a look at the Chicago Council's
    report, they have said that development assistance from not
    only the United States, but more broadly, internationally, has
    seriously declined over the last several years or the last
    decade, putting these countries in the position of just being--
    asking for a handout in order for them to be able to survive,
    which ultimately causes us a national security threat. Because
    if they can get food from elsewhere, they're going elsewhere,
    to whomever it is. And what we need to be doing, and I take
    it--you take it seriously--I do, the mission of the USDA is to
    build on the side of production and the development of their
    capacity to be able to grow food and to be able to be
    sustainable. There's--and I think we share that mission, though
    I don't see a document or a budget review that gets--moves us
    in that direction. Sorry, Mr. Kingston. It's----

                             INTERNATIONAL FOOD AID

        Mr. Kingston. Well, thank you, Madam Chair. I wanted to say
    also, you know, on that, I believe the USA gives 50 percent of
    all international food aid. Isn't that correct?
        Mr. Brewer. It's a high number. It sounds right.
        Mr. Kingston. And I think----
        Mr. Miller. It's in that range, yes, sir.
        Mr. Kingston. And I think Japan is second. And it--do you
    know where China is?
        Mr. Brewer. I do not.
        [The information follows:]

        In 2008, food aid to all countries totaled more than 6 million
    metric tons. The United States provided 51 percent of all food aid. The
    European Union provided 6.4 percent, Japan provided 6.0 percent, and
    China supplied 0.64 percent of the total.

        Mr. Kingston. You know, China is doing a lot of, I don't
    know, economic adventurism around the globe, South America and
    Africa. And it seems like while we're feeding the folks,
    they're building the structures, the roads, the bridges, and
    maybe that makes a louder statement, because--and I'm not
    certain that it is or not. But people get agitated that we
    don't have enough forces in the coalitions in Iraq and
    Afghanistan. They ought to look at the food aid. We don't
    have--we really don't have enough international community
    support in that either. And I don't know if you want to react
    to that. I just want to mention that. But I think what the
    Chair is saying is right. I mean, you know, we keep doing the
    short gap food--and I've worked at the homeless shelter at our
    church. And you know, I always say, okay, you want to put on
    your halo, dust it off for the day and feel good about
    yourself. You know, it's a quick fix for you. But--and I just
    don't know if in the long run you're doing as much as you could
    be doing for the people who are getting the aid.
        Mr. Miller. Let me say generally----
        Mr. Kingston. And I would certainly not hold any of you
    guys responsible for this direction. I'm just saying as a
    country we need to----
        Mr. Miller. No. I think----
        Mr. Kingston. We need to start having these discussions.

                             DEVELOPMENT ASSISTANCE

        Mr. Miller. I think we would agree generally with your
    comments. And I think we are in the process of making what
    could be some very substantive changes in what we viewed both
    as emergency food aid in the past, versus developmental
    assistance, as I believe that's the point the Chairwoman was
    getting to. We are going to continue to provide emergency food
    assistance. The disaster in Haiti is a critical example of
    where that is sorely needed, where the United States, whether
    it's through USDA, USAID or other agencies, is going to
    respond. We need to respond. It's our global and moral
    obligation to respond.
        But I think also looking at development assistance is
    something where we've been having a very substantive discussion
    just in recent months as part of Secretary Clinton's global
    food security initiative. And I think you raised a very good
    point, Mr. Kingston. We need to be looking at this in terms of
    first of all, how can we enhance productivity in many of these
    countries? And that's something the Secretary is very
    interested in accomplishing, rather than just providing them
    assistance year to year, and creating that kind of dependence.
        I think you've also identified a key aspect of our whole of
    government approach, as well as what we're trying to do in
    terms of international cooperation, and that is just producing
    an additional quantity isn't adequate. We have to find a way to
    control post harvest losses, which are a huge problem in many
    developing countries, where in some cases half or more of the
    production is lost due to insects, due to the lack of adequate
    storage. We need to help those countries figure out ways to
    build marketing systems, to have input supply systems, to have
    financing if we want farmers to be able to farm and
    consistently raise crops. Those are issues that we're beginning
    to tackle on a very large scale. You know, can we do this for
    everyone in need around the world all at one time? No. I think
    we all recognize that that is impossible.

                         AFGHANISTAN DEVELOPMENT EFFORT

        I think the activities that we have going on in Afghanistan
    with our provincial reconstruction teams and the effort there,
    again across the government effort, is a demonstration of some
    new thinking in that it's not just enough to provide food. It's
    more important that we provide them the opportunity to produce
    food for their own country, potentially to reestablish what had
    been historical markets for their commodities, and improve the
    economy and stability in a country, whether it's Afghanistan or
    somewhere else. And as I often told my friends in commercial
    agriculture who want to trade, the best thing we can do is
    improve the income levels in countries if we want good
    customers commercially in the future. And I think that----
        Mr. Kingston. Have you had a chance to get to Afghanistan
    yourself?
        Mr. Miller. I have not, sir.
        Mr. Kingston. You know, you have a great wheat background,
    and that's the most promising crop. It would be--I think it
    would--you know, when you can, I think you would really be
    valuable on the grounds there, yeah.
        Ms. DeLauro. Mr. Latham.

                             MARKET ACCESS PROGRAM

        Mr. Latham. Thank you very much. And actually, I want to
    commend the department for actually being a part of what I
    think will be the long term solution in a place like
    Afghanistan. I will never forget talking to some of my National
    Guard people who had come back from Iraq, and I asked them,
    ``What's the one thing that you think we needed''--this is back
    when things weren't going so well, that we needed actually for
    the government to do that they weren't doing. And he said,
    ``Basically, you know, the followup. Where's the rest of the
    government?''
        Because the--there was--they would go in and fight these
    battles, clear out the bad guys, and there was no fill behind
    it at all and--with USDA. And I think that's our best
    opportunity in those areas. I think there's other things that
    are involved security wise for those families that are farmers
    over there, that is maybe a larger issue than what crop they
    plant sometimes too. But I digress. I'm sorry.
        But I am concerned about the cuts in the Market Access
    Program. And apparently while I wasn't here you mentioned
    something about how--what the payback is on this. I know the
    wheat people--and I think it's the study that came out--came
    out of FAS, that said that there is a $23 return for every
    dollar invested as far as market promotion, in the wheat
    industry, anyway, according to this article. And I just don't
    understand. At this point in time when you would want to
    promote exports to promote sales--we've got pending trade
    agreements out there that's being stalled for various, various
    reasons, but--you know, which is something that we could open
    up some markets and maybe we wouldn't have to have quite as
    much market promotion, if in fact we were able to sell stuff
    without tariffs overseas. I don't--can you elaborate on the
    thinking behind this? It just seems like the investment is
    certainly well worth what it costs for the return we get.
        Mr. Miller. Mr. Latham, let me respond this way. First of
    all, as you're aware, the budget includes significant new money
    for 2011 for a variety of export promotion activities. In terms
    of MAP, consistent with what the President proposed last year,
    yes, there is a modest cut proposed in the Market Access
    Program funding. But at the end of the day the level of funding
    for the MAP program is still substantially higher than its
    historic average over a period of time. It would be at $160
    million, so that's not an insignificant amount.
        I am familiar with many of the studies such as the one from
    U.S. Wheat Associates concerning the effectiveness of MAP. I
    talked with our cooperators and other MAP participants on a
    fairly regular basis, and yes, they clearly can provide
    information to show their level of success and returns in terms
    of utilizing that as well as our Cooperator--Foreign Market
    Development Cooperator Program. I think the issue with MAP is
    one of if we accept, and I do, that there has been a good
    return to the industries from the MAP dollars that have been
    expended, that the industries could and should probably be
    willing to put a little money of their money into the program
    still with U.S. assistance.
        Secondly, we face some additional challenges in global
    trade that just promotion are unlikely to resolve for us,
    particularly in the areas of sanitary and phyto-sanitary trade
    barriers that are erected that are not based on science. This
    has a big impact on our livestock exports and a big impact on
    our speciality crop exports, one of the reasons for the
    suggested increase in the Technical Assistance for Specialty
    Crops program. We believe we can be more effective in resolving
    a number of those issues with additional funding for FAS to
    directly engage in those kinds of discussions, with additional
    funding for the TASC program and through the Cooperator
    program. In addition, we believe the----

                            PENDING TRADE AGREEMENTS

        Mr. Latham. If I might just interrupt. I ran out--okay,
    thank you. We've got three trade deals sitting there that could
    be done tomorrow with Korea, Columbia, Panama. Is there no one
    at USDA yelling and screaming and saying, ``Let's do these
    things,'' to push this, to open up those markets, so that we
    can have, you know, a fair basis? Obviously, the stuff that's
    being brought into this country, there's no tariff, but for us
    to sell into them, there's a tariff on our goods coming in. I
    mean, I would think someone at USDA would be just going nuts
    over there saying we're spending all this money on market
    promotion and we've got these deals here that would expand our
    markets dramatically. Is there anybody saying, ``Let's move
    these things?''
        Mr. Miller. Mr. Latham, USDA has been supportive of
    concluding the negotiations on those three agreements and
    getting them passed. That was true of the previous
    Administration and is equally true of this Administration. But
    we also recognize that while we believe that there are
    significant benefits to U.S. agriculture that could occur under
    each of the three pending trade agreements, we're also
    cognizant that there still are some outstanding issues
    related--different outstanding issues, but outstanding issues
    that are related to those agreements.
        We also know that pushing Congress to consider those
    agreements when the time is not ready is not a recipe for the
    success that I think we would like to see regarding the final
    conclusion to those. But the President has indicated his
    interest in those agreements. My experience with USTR is that
    they also would like to get to the point where we could
    consider ratification and would, in fact, ratify those three
    outstanding agreements. But it does require, I think
    realistically, that we resolve the remaining outstanding issues
    with those countries. For Agriculture parochially, I think we
    believe that each of those agreements conveys significant
    benefits to U.S. producers and exporters.
        Mr. Latham. Okay, thank you.
        Madam Chairwoman.

                               CUBA TRADE EMBARGO

        Ms. DeLauro. Just on that note, I would ask my colleague
    Mr. Latham and I'll ask you, Mr. Under Secretary, do you think
    that we ought to lift the embargo on Cuba to open up markets?
        Mr. Latham. Well, I think as far as agricultural sales, we
    have that. And it's just a matter of how the credit is applied,
    so that's already in place.
        Ms. DeLauro. Well, no. I mean, Cuba is under severe
    restrictions and there isn't any other country in the world
    that's under those restrictions with regard to the credit, and
    the--cash on the barrelhead as well. It's a very, very
    different set of circumstances. Let me ask you, Mr. Under
    Secretary, and I didn't get to this--do you think we ought to
    lift the embargo on Cuba to open up new markets?
        Mr. Miller. Madam Chairwoman, let me respond this way.
    First of all, in my previous life I was a farmer and actually
    produced crops that would be exported----
        Ms. DeLauro. Right, exactly.
        Mr. Miller [continuing]. Potentially to Cuba.
        Ms. DeLauro. Yes, sure.
        Mr. Miller. So I fully----
        Ms. DeLauro. Connecticut, we can't send tobacco, because
    they--that's not, you know, so--but rice and wheat and a whole
    bunch of other things.
        Mr. Miller. But I do fully understand--
        Ms. DeLauro. Chicken.
        Mr. Miller [continuing]. The interest of U.S. industry and
    exporters in the Cuban market, and appreciate their desire to
    see that market open more fully. Just in the last year, with
    the help of Congress, some strides have been made to make trade
    with Cuba easier. But we all recognize the situation with Cuba
    is complex. It is extremely sensitive. It has significant
    foreign policy implications that I think extend well beyond
    just agricultural trade with Cuba that we recognize as I
    believe you indicated lasted through 11 Presidents. So, you
    know, I'm also cognizant of that. But yes, we believe there are
    significant agricultural opportunities in Cuba, but we're not
    there yet.
        Ms. DeLauro. We certainly are not, and well, that's an
    issue for another time. But there are those of us who are
    working on that aspect of it as well.

                          OIG RECOMMENDATIONS FOR RMA

        So let me move to RMA and let me take a look at some of the
    OIG recommendations, Mr. Murphy. We asked the OIG to give us a
    list of their recommendation in the FFAS mission area that have
    not been implemented, so that we could review them before the
    hearing. There were a few open recommendations for FAS and for
    FSA, but there were a number with regard to RMA over the last
    eight years. The open recommendations about key issues such as
    quality control, incorrect loss determinations, improper
    payments, failure to act on a company's material deviation from
    RMA policies and practices.
        Perhaps the most serious were the many recommendations
    following the IG's conclusion last September that--and this is
    the IG, this is not me, RMA lacks a comprehensive, systemic and
    well defined strategy for improving the integrity of the
    federal crop insurance program. Instead RMA's primary focus is
    on program delivery, providing and expanding crop insurance
    coverage for producers. Disturbing finding, I think you would
    suggest. So--and disturbing I think--you know, we have--the
    subcommittee has, by the way, supported giving RMA additional
    funds for program integrity. But the concerns that are raised
    by the report don't suggest that the money is being well spent.
    What is the problem getting to closure on the recommendations
    and more fundamentally, to building integrity into the crop
    insurance program?
        Mr. Murphy. Well, I'll address the findings first. Some of
    the findings go back quite a few years.
        Ms. DeLauro. Right. I'm not suggesting they're your--on
    your watch.
        Mr. Murphy. Right. Unfortunately, I've been with the agency
    quite a few years, so----
        Ms. DeLauro. Okay. Well, then maybe it is on your watch.
    Then maybe it is on your watch.
        Mr. Murphy. I think a lot of them are being implemented.
    One of them is the combination product that we're bringing out
    in 2011. Final rule is going to be published next week. I think
    that will address--some of those issues go back quite a way. I
    think integrity is a major issue with the agency. I think it's
    institutionalized and in all parts of the agency. Now as to
    whether we have a written overall comprehensive strategy, we do
    not. However, this is a point that the Secretary has taken his
    own time to discuss with me, and we are working with OIG to get
    a written strategy put together for them.

                             RMA COMPLIANCE FUNDING

        Ms. DeLauro. What happened with the $1.8 million that we
    provided? The House did, Senate didn't. We prevailed in the
    conference, and I have to tell you, it wasn't an easy lift to
    prevail in the conference for this effort.
        Mr. Murphy. Right.
        Ms. DeLauro. But no mention of any of that in any of the
    testimonies, et cetera. How has the--how has this helped to
    deal with increased compliance and oversight?
        Mr. Murphy. We are in the process of hiring 10 additional
    compliance investigators to assist. That will be a great help
    to us overall. One of the issues we have is that we're a very
    small agency. We have less than 500 people, and we have a huge
    program, a $90 billion insurance program we have to provide
    oversight to. So that's one of the issues. But I do thank you,
    Congress, for the work you did on that help. But we are in the
    process of hiring those right now. We do have many parts of the
    agency that address--and systems. One of them is data mining.
    This is a project that we have going on. It costs about $4
    million per year. But since 2001, we've gotten about a $700
    million return on it. It is a project that we work with FSA on.
    They are closely involved in it and they assist quite a bit.
    The companies are involved in it. We work with the companies on
    requiring quality controls. We verify those quality control
    programs they have. That's--the last reinsurance agreement got
    into that very deeply.

                          CROP INSURANCE OVERPAYMENTS

        Ms. DeLauro. I'm going to address one more piece of this if
    the--let me ask my colleagues to--because this is a--I want to
    just finish the questions with regard to RMA. And again, this
    is data that is in the public domain. Federal crop insurance
    programs' accuracy rate is declining, and the amount of
    overpayments grew by 23 percent from 2008 to 2009. Let me give
    you a specific example. Again, an OIG report--this is from
    2007, so I--but I guess you were there--reviewed 21 citrus
    indemnity payments, and found that erroneous loss adjustment to
    determinations were made on 15 of those claims. RMA has stated
    it has not been able to identify any trends or policy concerns
    surrounding its overpayments and that it may be several years
    before it can identify what the ongoing problems are.
        You know, look, I sit in these meetings and we all do.
    Just--and you may--we often talk about the Supplemental
    Nutrition Assistance Program. It has about a 95 percent
    accuracy rate. It improves every year. The program is required
    to have continuous improvement in accuracy or it penalizes
    states that fail to meet the grade. And that--SNAP is the
    former Food Stamp Program, as you know. We keep focusing on
    improper payments that go to programs that assist low income
    populations. But FNS has strong measures in place and they are
    consistently improving that accuracy rate. We need to focus on
    programs that aren't showing this kind of an improvement.
        Explain to me, if you can, why we see the rate of
    overpayments rising dramatically in the federal crop insurance
    program?
        Mr. Murphy. Well, I--Madam Chairman, any waste or abuse in
    a government program is a problem.
        Ms. DeLauro. Any.
        Mr. Murphy. I agree a hundred percent. This is taxpayers'
    money. We have to be good stewards of that money. I think when
    you look at the work we have done improper payments at, is that
    our percentages aren't that high compared to other agencies. We
    need improvement. I agree----
        Ms. DeLauro. They appear to be growing, though. That's
    what--that was troubling when I read that.
        Mr. Murphy. Well, I think what OIG was doing there is
    looking at an area that had a known problem, and they went
    down--we do a lot of that ourselves, judgmental selection of
    policies to review when we are aware of an issue. And we do
    find it. We do deal with the companies when that happens.
    Financial penalties, a number of other penalties. We have
    threatened pulling companies out of the program unless they
    made improvements to their quality control programs. So we
    continue to do--but I agree, we have to do better.
        Ms. DeLauro. Okay, thank you.
        Mr. Kingston.

                        BIOMASS CROP ASSISTANCE PROGRAM

        Mr. Kingston. Thank you, Madam Chair. Mr. Under Secretary,
    I wanted to ask you about the BCAP program. And I got to say,
    I'm really distressed on it. I think Mr. Murphy just said, you
    know, we need to cut out waste wherever we can. And much of the
    waste in government certainly is not intended to be there, but
    sometimes we do something on paper. It looks good, and in
    practicality it really isn't.
        And you may remember the tax change for black liquor. I
    come from paper mill country, but it was a $6 billion,
    basically a mistake, given to paper mill companies for the
    black liquor, classifying it as an alternative fuel that
    they've been using all along.
        The BCAP program is not that much different from that. You
    know, for years people in the wood business have always
    collected and gathered and transported materials to paper mills
    for reprocessing or transporting one way or the other. Now
    we're paying them $45 a ton to do it. This program started out
    with a projected cost of $70 million over five years and of
    course it's exceeded that. You're asking for $479 million now.
        And I think our better bet is to just say, ``We just don't
    need this program.'' We're paying people to do what they did
    all along. There's nothing remarkable about free money. You
    know, people are, you know, very excited about this program.
    And what I'm concerned about is if we don't kill it now, it
    will have its own lobbying group. It has a constituency
    growing, and you know how difficult it is to get out of things
    like this. But it could give you, you know, money for other
    things, so talk to me about it.
        Ms. DeLauro. Would the gentleman yield for a second?
        Mr. Kingston. Yes.
        Ms. DeLauro. Because I had a question in this area as well.
    This is a program--there's an escalation in program cost of 30
    times more expensive than the original CBO scoring for this
    program. I just throw that on the table. That is really
    astounding.
        Mr. Kingston. And on paper it looks good, but, you know, if
    you come from paper mill areas, you know this is what they've
    always done. But now--and I kind of say now we're basically
    paying the mileage for kids to get the beer on spring break. It
    just wasn't necessary.
        Mr. Miller. Mr. Kingston, let me make a couple of comments
    and then I'd also like Jonathan Coppess to comment on this.
    This is a program that is administered by the Farm Service
    Agency that was a new program in the 2008 Farm Bill. Last
    summer we issued a Notice of Funds Availability for the first
    half of the BCAP program. It really is divided into two
    sections. One that I believe you're referring to is the
    Collection, Harvest, Storage and Transportation program.
        Mr. Kingston. Correct.
        Mr. Miller. And then the second part is an incentive
    program that has yet to be implemented, to encourage and to
    help resolve kind of the chicken and egg problem we have in
    terms of renewable energy production utilizing advanced
    biofuels. The NOFA was issued. There are a number of facilities
    that signed up to participate in this program, and that has
    become the basis for the budget estimates that you're alluding
    to.
        Just recently in early February, we did issue the proposed
    rule for full program implementation. At the time that that
    rule was published the ability to participate or to sign up to
    participate under the rules of the NOFA were eliminated. Now we
    do have some outstanding contracts. We're letting those run.
    Under the proposed rule, significant changes have been made in
    this program, recognizing, I think, a couple of points that you
    have made.
        One, we have responded to the concern by many in the
    industry that products that had significant value added
    capacity within the industry were--that the government was now
    subsidizing their use for energy rather than to make particle
    board or some other value added product. We have addressed that
    in the proposed rule.
        Mr. Kingston. And I want to point out, though, a lot of the
    wood pellets used for energy are not used in America. The
    market is generally European, and so we're actually subsidizing
    European fuel.

                     ADDITIONAL RENEWABLE ENERGY PRODUCTION

        Mr. Miller. Let me point out the other major change before
    I ask Jonathan to comment further, is the issue of well, are we
    effectively subsidizing mills for what they were going to be
    doing anyway. We have now put a provision in the proposed rule
    for which we're seeking comment that basically requires that
    any payments be subject to additionality. In other words, we're
    trying to find ways to accomplish a number of things. First and
    foremost, we want to get products out of the forest that are
    causing disease and potential forest fire problems. That was
    kind of the initial background of the----
        Mr. Kingston. But now Mr. Secretary, and I'm not arguing
    with you, because this is a Congressional program that we
    started. But foresters do that. They're not dummies. They don't
    need the government to come in there and say, ``Cull your
    forest.''
        Mr. Miller. What we were trying to do is get the slag and
    slash out of the forest that they do leave behind. We recognize
    that they take a lot of that out. They're already utilizing it
    in many cases just to produce energy. We're tightening that up
    significantly. We still want to encourage the forest industry
    to participate in this program, but we want to ensure that what
    we're getting is additional renewable energy production and not
    paying for what they were doing otherwise.
        Jonathan, do you want to----
        Mr. Coppess. Yeah. I think to Jim's point, to the Under
    Secretary's point, it's important that this was a temporary
    aspect and we learned quite a bit as we've gone through this
    NOFA. Our proposed rule attacks--it goes right at some of these
    issues, the additional energy production, whether or not these
    products can go on to higher value. You mentioned black liquor.
    I do want to be clear that we're not paying for black liquor,
    and we made certain that that's not part of that.
        Mr. Kingston. No. It's not part of BCAP. I was just saying
    that's a similar program.
        Mr. Coppess. Yes.
        Mr. Kingston. But that was a $6 billion fiasco.

                                 BCAP POTENTIAL

        Mr. Coppess. Right. And we certainly have no interest in
    seeing that with this program. This program has incredible
    potential. What we're seeing--when you talk about pulling out
    diseased trees or slash, there's not much of a market. And with
    the economic downturn, you're watching timber industry take a
    big hit. There is no place to go with a lot of this. This has
    actually spurred some efforts. I mean, we've seen it going into
    schools that have switched from fuel oil to wood chips and wood
    pellets, so it's beginning to move some of that. There are some
    really good stories that come out of this. But it is a new
    program and we have to learn what the statute says and how some
    of these pieces work with each other, the renewable biomass
    definition with what was eligible material, and that's what we
    saw in this NOFA. So we were able to adjust that as we write
    this proposed rule, and bring that in----
        Mr. Kingston. But in your world, which is our world of
    tightening budgets, you're still paying people to do what they
    were doing. And it might be accelerated now because they're
    getting paid for it, but, you know, it was happening out there.
    And I'm real curious about schools that are now switching to
    wood chips. You're telling me there are a lot of schools that
    have gone to wood chip heating?
        Mr. Coppess. I'm just giving another example on the good
    side of this. I don't have a lot of them that are doing it. I'm
    saying these are some of the things we've seen happen.
        Mr. Kingston. Well, I mean--but, you know, here's where we
    kind of get off. We have this, ``Oh, yeah, a lot of people are
    going to wood chips.'' You know, they either are or they're
    not. I mean, you know, this is your dollar and my dollar too at
    work. The projected 10-year cost of this is $2.6 billion. And
    I'm just saying, ``Hey, gosh, if we can't cut this one, what
    are we going to be able to cut?''
        And I don't know why you all are defending it, because it
    was put on you by Congress. It's not like was the
    Administration's baby that they said, ``Oh, this is a great
    program.'' I mean, I think we can say, ``Look, there were a lot
    of things in the Energy Bill that we did that we supported.''
    In fact, I was one of the Republicans that supported one of the
    Democrat Energy bills, and I'm very interested in a lot of
    these things. And Mr. Latham and I have had discussions about
    ethanol, which he doesn't approve of, you know, in terms of my
    position. But I'm just saying good gosh, this is one that we
    need to not just take back to the drawing board, but we need to
    kill it.
        Mr. Coppess. Well, again, I think we've put some very
    significant restrictions in the proposed rule. As we finalize
    that, I think that will be an important part of it. I guess I
    would be cautious about wanting to kill a program that we
    haven't even gotten implemented fully and up and running to see
    what it does. We're talking about one part of it.
        Mr. Kingston. Yes, but remember--and I don't want to say--
    and I'm arguing with you in a good way, but here, as soon as
    you get this developed, you know what happens in this town,
    association group, lobbying group, and it's--they're never
    going to let it go away, never. So it's not like, well, let's
    give it three or four years and see what happens. The folks out
    on K Street don't care. They know what's happening. They're
    getting free money out of something that they were doing
    already, and these are my peeps.
        Mr. Miller. Well, in----
        Mr. Kingston. They're not in Connecticut.
        Mr. Miller. I understand that, Mr. Kingston. But also I
    don't think it's our view certainly within my mission area, and
    I don't believe it's the view at USDA, that we were in the
    position to selectively determine which aspects of the 2008
    Farm Bill or other legislation that we want to implement
    because we like it. Congress did mandate this in the 2008 Farm
    Bill. We did issue a NOFA. We learned a lot from it. We have
    proposed very substantive changes in this BCAP program.
        I hope you will provide your comments during the comment
    period, which is still open. Those will be certainly taken
    under significant consideration. But it's our goal to try to
    meet the intent of Congress and learn as much as we can, while
    fulfilling I think the real goal of Congress, and that is to
    move us to the next step in terms of renewable energy
    production, and that's what we're attempting to do, sir.
        Ms. DeLauro. Mr. Latham.
        Mr. Latham. I guess I was somewhat taken aback when you
    said you can't pick and choose what part of the Farm Bill--you
    know, in our previous conversation about how you wanted to
    change the Farm Bill that's in place, and--but now you can't do
    that. I was just----
        Mr. Miller. And we are implementing the Farm Bill, we
    believe as it was written. But if there is legislative action,
    sir, we will certainly do our best to implement that, and we
    have proposed some changes.

                            PORK LOAN FIELD GUIDANCE

        Mr. Latham. Mr. Coppess, I hate to leave you alone over
    there. A few questions on the pork industry concerns on this
    loan guidance that you've initiated, regarding your proposal to
    expand poultry loan guidance to include pork operations. It
    seems that USDA is about to regulate the pork industry the same
    way that you do with the poultry industry. Everything about
    pork is dramatically different. I'm sure you're probably aware
    of that, the types of contracts, the length of contracts,
    lending requirements. And I would tell you my pork producers
    out in the country, and if--I don't know how much time you've
    spent in Iowa, but we have about six, you know, hogs for every
    human in Iowa, and so it's a huge industry, obviously.
        In the past, you know, several years, pork producers of all
    kinds have voluntarily and sometimes involuntarily left the
    industry because of the prices and very bad economic climate as
    far as a pork producer and livestock producers in general. And
    it's impacted both producers and the growers alike. A lot of
    the--some of the smaller operations have in good faith built
    buildings and started producing for some companies that then
    went bankrupt and they're sitting there with buildings half
    paid off, and this is going to be a problem as far as them
    securing any kind of credit going forward if these fluctuations
    is out there. They really believe that it will make it more
    difficult for lenders to work with the farmers until they can
    get a contract started and start generating some income in
    these buildings that are empty now. Tell me, doesn't this make
    it more difficult for the pork producers? There is a lot of
    pushback, if you may not be aware, with the pork producers on
    this.
        Mr. Coppess. I am very aware of it, and thank you, sir. We
    actually met with a group of pork producers yesterday to
    discuss this further.
        I want to be clear, and when we talk with them, explain
    this as well: This is not a new regulation or anything on the
    pork industry. What we're trying to do is with the lending
    programs that FSA provides--and it's a limited pool of money
    that we have to be able to help those producers that have
    generally been turned down by other credit institutions to have
    a chance. It's the first opportunity oftentimes to get into
    farming, get started, get up and running.
        So we certainly are very aware of the credit situation and
    the concerns that are out there. What we're putting out is
    really guidance to our lending officers about how we evaluate
    these in light of the credit situation, and how we can serve
    with our funding pool.
        So what we're saying is that, in sort of a business
    justification for making these loans, to make certain that when
    we loan to a pork operation or new pork farmer, that there's a
    contract in place that we then have the justification, we have
    the certainty that those loans can be repayed, and that that
    farmer is set up to be successful, and not have a problem.
        So it's really just evaluating the length of time of the
    contracts, that they can be terminated only for cause, and that
    they are guaranteed sufficient opportunity when they put a barn
    up, that the pigs will be there, that they make money and pay
    back the loans.
        So this is really internal guidance on how we do our
    lending decisions.

                          PORK AND POULTRY DIFFERENCES

        Mr. Latham. The concern is the recognition that maybe a
    chicken is different than pigs, you know, and that the industry
    is entirely different. And if you're going to use the poultry
    model, it probably will not work in the pork side?
        Mr. Coppess. Yeah. I understand that very well. And if we
    mischaracterized it a little bit--we did this kind of guidance
    earlier last year for the poultry industry. So while the
    guidance is the same, we're not trying to put the two in the
    same--we understand there are a lot of differences, and it's
    really----
        Mr. Latham [continuing]. You release it does.
        Mr. Coppess. Understand.
        Mr. Latham. Yeah.
        Mr. Coppess. And the goal or the point here is just helping
    to further guide the field as they make these decisions in a
    very tough credit environment, to make certain that the loans
    we're putting out, the loans we're making we can get them paid
    back, and that those growers have a chance to be successful.
        And so it's really a part of that.
        We also announced in that advance notice of proposed rule-
    making to get comments in now to help us begin to re-evaluate
    how we look at these across the board. Are there other things
    that we need to be thinking about in terms of how the situation
    in farm counties change over the years?
        Mr. Latham. I would just be sensitive to the differences--
    --
        Mr. Coppess. Absolutely----
        Mr. Latham. Make sure that the pork producers are involved
    in the whole process. And if you're doing something like this,
    to reflect their needs, not just to try and fit them in with
    somebody else.
        Mr. Coppess. Absolutely.
        Mr. Latham. Thank you.
        Madam Chairwoman.

                             DISCRIMINATION BY USDA

        Ms. DeLauro. Thank you.
        Secretary Miller, it's been alluded to--I mentioned this in
    my opening comments--and I think you would agree, I know the
    Secretary has when he's been here about a kind of a long and a
    sorry history in USDA of discrimination against African
    American farmers, women, Hispanic, Native American farmers.
        And there are efforts on a number of the fronts to provide
    some long-overdue remedies to these individuals, and efforts
    that I personally strongly support.
        One area where discrimination has been pervasive is in the
    farm loan programs at USDA. I bring up this issue, because I'm
    looking at some of these settlement costs, which are
    significant. And I think we have to, you know, it's a judgment
    and it's a legal settlement.
        So we're then faced with how do we find the resources for
    these very, very legitimate difficulties? Let me just ask you
    what actions are being taken.
        As I say, this particularly has happened. It's been
    pervasive at the farm loan level. What actions are being taken
    to ensure that such discrimination doesn't happen again? What
    mechanisms that are being put in place for this?
        Mr. Miller. Chairwoman DeLauro, you raise a very important
    issue, one that the----
        Ms. DeLauro. And I know it's a sensitive issue, and I
    know----
        Mr. Miller. One that the Secretary has spoken to a number
    of times.
        Ms. DeLauro. Mm-hmm. Right.
        Mr. Miller. And during my confirmation hearing on the
    Senate, it was an issue that I addressed as well.
        Ms. DeLauro. Mm-hmm.
        Mr. Miller. I would have to say that when I went down to
    USDA personally, I didn't realize how big a problem and the
    scale of the backlog that we had.
        Ms. DeLauro. Mm-hmm.
        Mr. Miller. But the Secretary has certainly recognized the
    problem, both in terms of the class action or proposed class
    action issues, as well as individual cases.
        Ms. DeLauro. Right.

                         REMEDIATION OF DISCRIMINATION

        Mr. Miller. We're working very hard to resolve those, as
    you know.
        Moving forward, we are taking a number of actions, both
    within our national office, but more importantly out in our----
    --
        Ms. DeLauro. In the field----
        Mr. Miller [continuing]. Local offices, both through the
    Assistant Secretary for Civil Rights' office, as well as FSA,
    to first of all go out and see if we can better determine what
    is the root cause of these problems. And the Assistant
    Secretary for Civil Rights is heading up that operation that's
    going on right now.
        We're providing training to our FSA personnel throughout
    the country. We are trying to instill upon them that one of the
    true benefits we have in this country, one of the real assets
    of being in the United States, is the diversity and how
    important that is.
        I think we're seeing great progress. Many of these cases
    are old cases, and we just need to get them resolved and move
    forward.
        I think we have seen the page turn at USDA, and I believe
    also at FSA; but it's something that we're going to monitor on
    a day-to-day basis, I think, for the foreseeable future.
        Ms. DeLauro. If you can provide us with--I don't know if
    anything like this exists--but where the complaints have come
    from. In other words, across the country I know that this
    involves, you know, maybe most of the states, et cetera.
        But I think it would be interesting to see visually where
    these problems are coming from, if you can do that, and provide
    us with that kind of information of where particularly things
    have been a problem.
        Mr. Miller. I'll be happy to work with the Assistant
    Secretary for Civil Rights in getting you the information.
        [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Ms. DeLauro. Sure, thank you.
        Mr. Kingston. Also, I think what would be of interest is
    the lessons learned in the litigation. Can we save that step
    through a legislative solution, rather than court solution, for
    the next round, for the women and the Native Americans?
        Ms. DeLauro. Well, yeah. And there is legislation, as I
    said in my opening comments. There is legislation that would
    address a process, and there is a dollar amount affixed to that
    with regard to the women.
        Okay. Thank you.

                  FOOD AND AGRICULTURE ORGANIZATION OVERSIGHT

        Let me--and I guess this is, Mr. Brewer, or Mr. Secretary,
    let me just, I'm going to try to take this as a whole.
        The Chicago Council on Global Affairs, they've been a major
    contributor on key global policy issues. And they were kind
    enough to prepare a memo for me that raised some possible areas
    for work, for our subcommittee, and that we could do with
    programs that were under our jurisdiction.
        They had several suggestions. And let me just get your
    reaction to them.
        First, they suggested there should be more oversight of the
    Food and Agricultural Organization of the UN. The Council
    believes that the effectiveness of FAO has been limited in
    recent years and that USDA should engage more actively in
    reviewing its capacity, management strategy, and policy-making
    and program evaluation.
        In your view, should USDA do more oversight of FAO? And can
    you tell us what oversight you currently do with FAO, and what
    other work you do with them?
        Mr. Brewer. Sure. Thank you, Madam Chairwoman.
        We believe that the reform process is underway at FAO, and
    provides a unique opportunity to transform the organization
    into a more relevant, focused, and effective organization to
    tackle global food security issues.
        We at USDA take it very seriously and have made it a main
    priority to see that FAO carries out its reforms and its----
        Ms. DeLauro. What kind? Can you lay out for us what kinds
    of things have been done to get to that point?
        Mr. Brewer. Sure. A couple of things is the agreement that
    is already underway to recraft FAO's Committee on Food Security
    as a forum for sharing best practices and developing metrics of
    agricultural development success. That's one of the main ones
    we're working on right now.
        The other is also to provide vigorous oversight to make
    sure that FAO fulfills the number of functions that overlap
    with USDA's strategic objectives. That includes in the
    international regulators the Codex, the IPPC, to make sure that
    FAO establishes the SPS phyto----
        Ms. DeLauro. Phytosanitary----
        Mr. Brewer. Phytosanitary, thank you, related standards,
    and to support the capacity building in developing countries.
        Ms. DeLauro. Who will handle that for you? I mean, who is
    going to do that?
        Mr. Brewer. Within USDA?
        Ms. DeLauro. Within USDA. Who will do the oversight?
        Mr. Brewer. Well, we have an office----
        [Discussion was held off the record.]
        Mr. Brewer. Our mission area, Under Secretary? Is it FFAS?
    I believe we'll handle that.
        So that would be under us. We have an office for Codex, as
    well as within our agency. So let me make sure of that.
        Ms. DeLauro. Okay. But if you can't--just if you can----
        Mr. Brewer. I can get you the exact----
        [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Ms. DeLauro. Right.
        Mr. Kingston, do you mind if I ask just a couple related
    questions in this area? And then I will turn it over to you?
        Yeah, that would be helpful, because that came out in
    there. And I think that, you know, I think you would concur
    with the first view that we need to have a better oversight of
    what is happening at FAO, and then what are the measures and
    the steps that we're going to try to take to get there?
        Mr. Brewer. Absolutely.
        Ms. DeLauro. So.
        Mr. Brewer. The Secretary, the Deputy Secretary are often
    at the FAO conferences. We have a USDA representative, the
    Secretary has a representative there, so we're taking that very
    seriously and working hard to do that.

                       LOCAL AND REGIONAL FOOD PURCHASES

        Ms. DeLauro. Okay.
        The Chicago Council as well talked about McGovern-Dole. And
    as a matter of fact if I can just have some quick reaction to
    the suggestions that they made with regard to that program.
        One, buy some food for the program locally and regionally.
    Let me just get a quick reaction from you on that?
        Mr. Brewer. Madam Chairwoman, we have started, and last
    year we started a local and regional pilot procurement program
    that involved three countries in Africa.
        Ms. DeLauro. But that's not from McGovern-Dole, that was
    for--I mean, you're in Tanzania, Mali, and----
        Mr. Brewer. Malawi.
        Ms. DeLauro. Malawi. Right. But I think that that's for the
    P.L. 480 program. Or maybe, you know, you tell me. I think
    that's P.L. 480.
        Mr. Brewer. I apologize, ma'am.
        Ms. DeLauro. Is that right? Yeah, it's P.L. 480, so now I'm
    looking at McGovern-Dole to look at, you know.
        Mr. Brewer. Is this coming out of a GAO report, you're
    referring to?
        Ms. DeLauro. Oh, no, no. You know, the Chicago Council on
    Global Food Security did a report, and I thought it had some
    good suggestions in some areas. I just want to run them by you,
    to see if, you know, if you have a quick reaction, you know, we
    can do it for further reaction, if you want.
        Mr. Miller. Well, let me react to that.
        Ms. DeLauro. Sure. Mm-hmm.
        Mr. Miller. First of all, in the 2008 Farm Bill, Congress
    did express an interest in looking at local and regional
    purchases and establish some authorities to do that.
        Ms. DeLauro. Mm-hmm.
        Mr. Miller. We're happy to--and the Secretary is very
    interested in looking at local markets, as well. We also, I
    think, would agree that this is consistent with our long-term
    food security goals for these countries.
        So I think it's something that we would be happy to
    explore.

                             MCGOVERN-DOLE PROGRAM

        Ms. DeLauro. Right. Please. That's all. I know I'm just
    looking for ways in which we can better target our funds, or
    how we can expand our--you know, I'm a strong supporter of
    McGovern-Dole and these efforts. And I think that they succeed.
        They further suggested that maybe we'd require some of the
    program funds to be used to support maternal and child health
    work. This is McGovern-Dole.
        Mr. Miller. I'd be open to exploring that as well.
        Ms. DeLauro. Okay. Provide funds specifically for technical
    assistance on school feeding and maternal child health programs
    in developing countries.
        Mr. Miller. Under McGovern-Dole, we can look at----
        Ms. DeLauro. Okay. Can we get this information to you, and
    then have you take a look at that? That would be helpful.

                               FOOD AID PROGRAMS

        Let me just get to the last piece here, which is--I'm
    really pleased, Mr. Brewer, where you talked about in your
    testimony, the leading role that the U.S. does play in
    addressing hunger, malnutrition, global food security. I think
    it's one of the most important priorities in the bill. And we
    have provided significant increases for these programs in
    recent years.
        I am concerned that while your budget proposes a $78
    million increase for FAS, and it would appear that it is
    largely for trade-related work, that it does not request any
    increases in P.L. 480, the Food for Peace Program, or McGovern-
    Dole.
        I am all for creating jobs through fair trade. I want to
    protect U.S. workers, public health. But you say in your
    testimony that we may see the second-highest-ever level of U.S.
    ag exports this year. And that would be without the increases
    that you're requesting for 2011.
        And yet hunger is not going away, and it is not
    diminishing.
        I just think we need to think about, and you need to think
    about, rebalancing the priorities in the request. And I don't
    understand why you don't request--that the request doesn't
    include increases for the P.L. 480 program or for the McGovern-
    Dole program.
        We've got, and I'm apprised by staff, that the--P.L. 480--
    Administration has just asked for an increase in the
    supplemental of $150 million for P.L. 480. And that's for
    Haiti, I understand what it's for. But we're asking for an
    emergency designation for Haiti, as we should do, as we should
    do, in my view.
        But this budget request is zero. I mean, flat. I view that
    as zero in terms of where we're going. It's flat-funded.
        So I ask you, why doesn't it include increases in these
    areas?
        Mr. Miller. Madam Chairwoman, I appreciate your comments,
    and I know you look at those programs very passionately, and I
    equally appreciate your passion for them.
        Ms. DeLauro. Mm-hmm.
        Mr. Miller. But when we look at what this Administration
    has proposed for the two programs, McGovern-Dole and P.L. 480,
    that we're discussing, compared to the 2009 level, I believe
    the McGovern-Dole program was increased slightly over 100
    percent, going into 2010. And we certainly thank Congress for
    agreeing with the Administration's proposal and providing that
    funding.
        For P.L. 480, again, compared to the 2009 levels that were
    agreed upon, the P.L. 480 Title II program was increased 38
    percent. So I don't think in any way this suggests a lack of
    interest or commitment to those programs by the Obama
    Administration. Because we have supported significant increases
    in both of those programs, compared to where we were in 2009.
        Ms. DeLauro. My only point on this--and I want to yield to
    my colleague--is that I think when the request was made in
    2010, there was the sense that we weren't then going to have to
    ask for anything more from supplementals.
        Well, here we are, we have a supplemental. And it's not
    unlike what happens in terms of that disaster relief side,
    where we've got this over here to avoid this over here, and now
    that this is inadequate and we're moving here--which is what's
    happening.
        Mr. Kingston.
        Mr. Kingston. Thank you, Madam Chairwoman.
        I think these are my last questions. But it is interesting
    that I was reading the Gospel of John the other day. I've
    always been curious about this line that after the
    Resurrection, He saw his disciples fishing, and instructed them
    to throw out the net in a certain area, and they caught 153
    fish. And you're giving food aid to 154 countries. And my
    friend always keeps saying that this is a moral obligation. And
    I wonder if it's not a Biblical context there.
        But I've always been curious about that line, why they
    named this specific number of fish.

                                TRADE SANCTIONS

        Now my question though, is just kind of an interesting
    question. Do you think we should continue the sanctions against
    Zimbabwe? And the reason why I say that, you know, we have
    sanctions against Cuba that we've discussed, and that one is a
    little bit tougher politically, because we're really doing it
    on behalf of Great Britain, because of the confiscation of a
    lot of their farmers.
        But any thoughts on that?
        And Mr. Brewer, I always keep calling on your resume from
    the private sector.
        Mr. Brewer. Congressman, thank you. You're kind of pulling
    me into the yard of the State Department. Although I worked
    there early in my career, I would never presume to speak for
    Foggy Bottom.
        You know, our activity in Zimbabwe is what we've alluded to
    several times earlier in this, is we are looking at,--our food
    aid responsibility there is to look at the needs of the native
    population. There is a need there for food assistance.
        Mr. Kingston. Mm-hmm.
        Mr. Brewer. And so believe that it is appropriate for us to
    provide that assistance to Zimbabwe.
        The larger political implications of sanctions are just
    simply something that is--I would feel more comfortable if that
    comment----
        Mr. Kingston. You know what? The question really I'm just
    asking you, because you have some knowledge of it.
        Mr. Brewer. Yeah.
        Mr. Kingston. But you know what? Maybe if you feel like it,
    call me some time.
        Mr. Brewer. Why don't we talk about----
        Mr. Kingston. Because I'd like to--I've been there twice,
    we've met with Mugabe on it. I don't know if it helps or not to
    work with someone like that. And you know, I'm just thinking
    about our situation in Cuba.
        We deal with a lot of very tough countries that have
    governments that do all kinds of things. But you know,
    sometimes if the money's right, we still deal with them.
        Mr. Brewer. I'd really enjoy talking to you off line about
    that.

                                  TRADE ISSUES

        Mr. Kingston. Well, that would be great.
        And then my question also is on China. We've worked real
    hard to open up the poultry. Ms. DeLauro and I have worked hard
    on making sure that the poultry is sanitary. And now they've
    slapped a 64 percent import tariff on American poultry going
    there. At the same time Russia has decided there's an issue
    with the way we process poultry and chlorine in the water and
    things like that.
        Are you guys working with your Russian and Chinese
    counterparts to try to figure this out?
        Mr. Miller. Mr. Kingston, let me respond to that. Last week
    I was in China. We were there talking about some market opening
    opportunities for U.S. commodities. But quite frankly, every
    conversation I've had with the Chinese over the last year has
    been one that sooner or later they do raise the chicken and
    poultry issue.
        And so we are working on that with China. I indicated to
    the Chairwoman before the hearing started that we had been
    having conversations, we've impressed upon the Chinese their
    need to be fully compliant with the U.S. requirements, if they
    expect us to open that market.
        But I think we also recognize, while no one may wish to say
    it, whether it's the Chinese, whether it's the Russians, or
    whether it's the United States, there is always a certain
    amount of linkage between each of these trade problems that we
    face with other problems that are out there.
        We, I believe we've announced the agreement on pork access
    to China. We are also at the point where I believe we can have
    substantive discussions on beef. And I also think that if--and
    this is still a big if--but if we can find a way to resolve the
    Chinese desire to export poultry to the United States, assuming
    they become compliant with U.S. standards--and we have that
    equivalency--then I expect that we may see some Chinese
    reaction to the poultry situation there.
        Three weeks ago I was in Moscow. We've had an ongoing
    discussion with our Russian counterparts on the situation of
    U.S. poultry exports to Russia. We are negotiating what we
    believe can be a successful agreement to re-establish that
    market.
        But I can also tell you, these are very difficult
    negotiations with the Russians. But we are continuing to have
    conversations, and I'm hopeful that we will get this issue
    resolved very quickly, so that we do re-establish our market
    access into the Russian market.
        Mr. Kingston. Well, thanks. Thank you.

                       AGRICULTURAL CREDIT INSURANCE FUND

        Ms. DeLauro. Let me ask, Mr. Coppess, this is about ACIF,
    the Agricultural Credit Insurance Fund.
        Let me just tell you where my concern is. I'll try to be
    concise. The 2011 budget proposes to decrease the level of
    funding available in the ACIF programs. Budget documents assume
    a decline in the demand for the loans and for financial and
    economic conditions to improve.
        We're already beginning to hear that the level provided in
    2010 may not be sufficient to meet the needs of farmers who are
    struggling and looking for assistance through this program.
        Let me put a couple of questions forward here.
        What is the status of the program for fiscal year 2010? And
    do you have enough funding to meet the demand now?
        Mr. Coppess. Thank you, Chairwoman. We have a report coming
    soon to the committee, in fact hopefully within days, on the
    status of 2010 funding and our estimates for that year, or for
    this fiscal year.
        Ms. DeLauro. Right.
        Mr. Coppess. So I will refer to that report as soon as we
    can get that out and to you guys.
        [The information follows:]

        The Agricultural Credit Insurance Fund quarterly report is going
    through the USDA clearance process. As soon as that process is
    completed, the report will be transmitted to the House and Senate
    Subcommittees.

        Ms. DeLauro. Okay. Sure. But again, just because 2009 we
    had problems in getting information about ACIF running out of
    funds. And that presented a problem.
        So you talked about the quarterly report, and I'm going to
    presume that the Department will let us know if we are going to
    run out of funds by the end of the year.
        And again, I don't know if you're going to answer this
    question in there as well, is do you still maintain that the
    program level of $4.7 billion will be sufficient to meet the
    program needs in Fiscal Year 2011?
        Mr. Coppess. That is our estimate.
        Ms. DeLauro. That's, and it's part of this?
        Mr. Coppess. The fiscal 2011 budget, yes. We estimate that
    $4.7 billion to $4.8 billion should meet the need. That would
    put us even above 2009 level. I think we spent $4.5 billion in
    2009.
        Ms. DeLauro. Okay. So you know, we'll get the report and
    take a look at it and see where we are.
        Mr. Coppess. Yes.

                TRADE ADJUSTMENT ASSISTANCE FOR FARMERS PROGRAM

        Ms. DeLauro. Let me ask this first. And this is to
    Administrator Brewer. This is on Trade Adjustment Assistance
    for Farmers.
        Mr. Brewer. Yes, ma'am.
        Ms. DeLauro. It looks as if over the five-year period, this
    program has been authorized at $459 million, but had an outlay
    of only $47 million; $9.5 million of that was for
    administrative costs. And in the same time period, only 30
    commodity petitions were certified as eligible for assistance
    and payments benefited a mere about 8,400 producers.
        Congress made changes to the program in ARRA. Do you
    believe the changes in the March 10th interim rule will result
    in more technical and financial assistance to the producers
    that need it the most? Will they improve the program? And
    finally, do you believe that these changes will enable a
    variety of commodities to take advantage of this potentially
    useful program? Or will a couple of commodities continue to
    receive the vast majority of the funds that are distributed?
        Mr. Brewer. Madam Chairwoman----
        Ms. DeLauro. If you can't answer the question now, if you
    can please get that to us. My experience with trade adjustment
    has been to, you know, workers who found themselves in
    difficult predicaments because of being displaced by trade or
    by overseas developments, et cetera.
        And quite frankly, I've found that Trade Adjustment
    Assistance Program vis-a-vis workers to be woefully inadequate,
    and not meeting their needs. And I don't know if that's the
    case with this Trade Adjustment Assistance, but it seems that
    it's not something that we've focused on very much at all. And
    I would like to see what the program is about, how it's
    running, how it's functioning, and who's benefitting, and why
    haven't--we've used--as I said, $47 million out of $459 million
    over a five-year period.
        Mr. Brewer. So we'll get that answer to you.
        [The information follows:]

        The new Trade Adjustment Assistance (TAA) for Farmers program has
    been implemented. USDA conducted extensive outreach to provide
    opportunities for producers most in need to access the program. Key
    changes were instituted including broadening of the eligibility
    criteria and providing more benefits to eligible producers. In
    addition, the program now provides more technical assistance with the
    objective of keeping producers and fishermen in either farming or
    fishing. Benefits provided under the 2002 Farm Bill program focused on
    retaining opportunities outside of agriculture.
        While the broader eligibility criteria provide more opportunities
    for producers and fishermen to qualify for benefits, petitioners still
    must demonstrate that increased imports during the most recent
    marketing year compared to the previous 3-year average contributed
    importantly to their hardship.
        USDA received a total of 17 petitions under the 2010 TAA for
    Farmers program announcement, which ended on April 14, 2010. Several of
    the petitions received were from similar producer groups that benefited
    under the 2002 Farm Bill program, including shrimp and other
    aquaculture sectors in the Gulf States and Atlantic seaboard. While
    this segment of the agricultural industry continues to show
    considerable interest, other more traditional commodity groups that
    submitted petitions include prunes, asparagus, cut flowers (lillies),
    apples, cranberries, lamb meat, wool, and pelts.
        The TAA statute requires that applicants complete all phases of
    training within 36 months after a petition has been certified. It will
    take as long as 5 years from the date that a petition is certified to
    determine whether the benefits of the program have achieved their goal
    of making U.S. producers more competitive vis-a-vis imports. To track
    the results of the program and its effectiveness over time, USDA has
    procedures in place through the National Institute of Food and
    Agriculture (NIFA) and the University of Minnesota.

                                EXPORT PROGRAMS

        Ms. DeLauro. And again, I know we have talked about this.
    My colleague, Mr. Kingston, has talked about it, and it does
    include the Market Access Program as well.
        But let me just catalogue. We have Foreign Market
    Development Program, Market Access Program, Technical
    Assistance for Specialty Crops Program, Quality Samples
    Program, Emerging Markets Program. These are all programs that
    we are engaged in. They appear to all have the purpose of
    promoting exports, and the programs appear to be similar. And I
    may be wrong about that.
        You know, my questions are, why do we need so many
    different programs for a similar function? Are some of these
    programs essentially doing the same thing? And can you describe
    the process you use to coordinate the activities of these
    programs? And what steps do you take to avoid a duplication
    with this effort?
        And how do we coordinate some of these efforts? Well, I'll
    get to that in a second.
        This is a Market Access Program. And I'm sorry Mr. Kingston
    isn't here. But there is a cut in that program. But $166
    million I think over five years.
        The reasons cited in the budget for the cut were that MAP
    is duplicative of other FAS programs, and ``MAP's economic
    impact is unclear, and it does not serve a clear need.'' That's
    end quote.
        There again, I would like to know why you believe it is
    duplicative and why the economic impact is unclear, and why it
    does not serve a clear need, and why we continue to support
    this proposal?
        Mr. Miller, let me ask you that question.
        Mr. Miller. First of all, with any of these programs, as
    you're aware, there are a number of various metrics that can be
    used to measure the success of the program.
        Ms. DeLauro. Mm-hmm.
        Mr. Miller. And not only does USDA engage in a process to
    try to measure the impact of these programs, but a variety of
    our cooperators, those who participate in the programs, do the
    same thing. And Congressman Kingston provided some information
    on that.
        So there is a lot of information out there.
        Ms. DeLauro. Mm-hmm.
        Mr. Miller. We do believe that in some instances and for
    some of the commodities that participate in both the Foreign
    Market Development Program, as well as the MAP program, that
    there may, in fact, have been some duplicative efforts that
    we're trying to avoid.
        Ms. DeLauro. Mm-hmm.
        Mr. Miller. We also believe that the Foreign Market
    Development Cooperator Program provides a greater opportunity
    in the future, particularly as we seek new cooperators as well
    as small and medium sized businesses that may want to get into
    the export business, as a way to help expand our exports,
    create new jobs, and gain more economic activity out in the
    country.
        In terms of the variety of export programs that you
    identified----
        Ms. DeLauro. It's about $5.9 billion for trade promotion--
    --
        Mr. Miller. Several of those are very specific in order to
    address concerns that have been raised by specific sectors
    within the agriculture community, and Congress has seen fit to
    delineate the program. Such as TASC.
        We believe that program is completely separate from what
    might occur under for-market development, or MAP.
        Ms. DeLauro. Right. But I'm just saying to you--and I've
    asked the question in a way--look, we're going to do trade
    promotion----
        Mr. Miller. Yes, we are----
        Ms. DeLauro. That is for sure. I understand that. But you
    have suggested in this program a cut for the various reasons
    that you have laid out.
        We have a series of these programs. I would very, very much
    like the analysis of the programs. And are they duplicative?

                        COORDINATION OF EXPORT PROGRAMS

        You'll get a whole variety of programs that come from this
    side of the table, that, you know, tell you that we need to do
    this and we need to do that. All of that is fairly subjective,
    in many instances, as to, you know, what our particular
    interests are.
        You have a responsibility and a mission to see how these
    programs play out. And that's why I asked: How are these
    programs coordinated? Are the activities of the programs
    coordinated? What steps are taken to avoid duplication?
        I think they're reasonable questions. You know?
        Mr. Miller. No, I would agree. And we're happy to provide
    you additional information on both the process as well as the
    analysis we've done on these.
        Let me point out generally, several of the programs that
    you pointed out, such as TASC and the Quality Samples Program
    and the Emerging Markets----
        Ms. DeLauro. Emerging Markets, right----
        Mr. Miller [continuing]. Do have some very unique
    characteristics to them in terms of the way they're
    administered, in terms of what would be viewed, I believe, as
    the two large cooperator programs----
        Ms. DeLauro. Probably the Foreign Market Development----

                           NATIONAL EXPORT INITIATIVE

        Mr. Miller. The Foreign Market Development Program, and the
    MAP Program. That is a case where we have made a determination,
    and it's reflected in the President's budget proposal that
    there may, in fact, be some duplication there, that the
    benefits--while we believe that to a number of commodities the
    benefits under MAP, for instance, are still significant--it may
    be a program that could be reduced to ensure that we can use
    limited dollars more effectively in other areas.
        And we do believe that the Foreign Market Development
    Program can be used to serve not only our traditional
    cooperators, but can also be used to stimulate additional
    export activity among small- and medium-sized enterprises. New
    exporters.
        And if we're going to meet our National Export Initiative
    objectives, we need to encourage new exporters, or those that
    may be exporting to one country and to small markets to expand.
        Ms. DeLauro. But this is where, you know, I think there's a
    request for what, somewhere around $34.5 million. And that's on
    top of the mandatory.
        Mr. Miller. Correct.
        Ms. DeLauro. You know, and I've got the sheet here of who
    are the beneficiaries of those programs. And I think basically,
    what I would like to know is: Who and what organizations, who's
    getting these dollars?
        And you know, repeatedly, who is--the unique
    characteristics of some of these other programs and how that
    translates? You know.
        And we go back to where Mr. Kingston and I share this view,
    is what has been the result of this? What are the results?
    We're looking for a new result of doubling; but are we on a
    solid ground with what we have done, that says that adding
    $34.5 million on top of the mandatory money, and that that's
    going to get us where we want to go--when you all may very well
    have the data and the information, this committee doesn't have
    the data and the information that says ``proven track record,
    this is how we have expanded our exports. These are the areas
    in which it's been done.'' And now we come to you and say, ``If
    you give us $34\1/2\ million more to the Foreign Market
    Development Program we are going to get you to our agriculture
    responsibility for doubling those exports.''
        At the moment, we have zero information as to how we can go
    from A to B.
        So that would be helpful.
        Mr. Miller. We'll be glad to--organizations have been
    recipients of Foreign Market Development, and MAP money in the
    past. We're also happy to provide you our view of how the
    additional funds could be used to achieve the objective of the
    National Export Initiative----
        Ms. DeLauro. I want to know on what are the bases for--what
    is the success rate? Where is the--you know, I deal in a world,
    and when I can't get something quantified, I get very nervous.
        I apply that to myself. When I go to my staff and I think
    about my election campaign and what they are doing, and I say,
    ``How many people have you talked to?, and they say to me,
    ``Don't worry, we're talking to them.'' I'm worried about who
    I'm reaching and how they view what I am doing vis-a-vis, you
    know, their comfort level with me. I want to see how we have
    used the money that we have provided, and what is that doing?
    What is its success rate? And I would like to see that. I think
    this entire committee would like to see that.
        Mr. Miller. Well, we'll be happy to provide that to you
    along with the performance metrics that we've used historically
    to judge the programs.
        Ms. DeLauro. Right, that's great.
        Mr. Miller. And the new performance metrics that we're
    developing.
        [The information follows:]

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        Ms. DeLauro. Terrific. That would be great.
        I think--is not the only one here, my good colleague, Mr.
    Kingston, trusts me not to go crazy.
        But so the hearing is concluded, and I thank you very,
    very, very much for your candor and for the good work that you
    do, and we look forward to working with you.
        Thanks much.
        Mr. Miller. Thank you, Madam Chairwoman.

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                                             Wednesday, March 10, 2010.

                          FOOD AND DRUG ADMINISTRATION

                                   WITNESSES

    MARGARET A. HAMBURG, COMMISSIONER OF FOOD AND DRUG ADMINISTRATION
    PATRICK McGAREY, DIRECTOR, OFFICE OF BUDGET, FOOD AND DRUG
        ADMINISTRATION
    NORRIS COCHRAN, DEPUTY ASSISTANT SECRETARY FOR BUDGET, HEALTH AND HUMAN
        SERVICES

                          Ms. DeLauro Opening Remarks

        Ms. DeLauro. The hearing is called to order. Let me welcome
    Dr. Margaret Hamburg, who is the Commissioner of the Food and
    Drug Administration in her first appearance before the
    subcommittee. She is joined by Patrick McGarey, Director of the
    FDA's Office of Budget and Norris Cochran, Deputy Assistant
    Secretary for Budget at HHS. As I've said many times over the
    years, and I'm sure you agree that funding the FDA sufficiently
    is one of the most important responsibilities under this
    subcommittee's purview. The American people expect the FDA to
    ensure the safety of the food they eat, the drugs they take and
    the medical devices that they rely on. They expect us to
    provide the resources that the agency needs to fulfill this
    fundamental mission on behalf of our nation's families.
        With that in mind, I am proud that since taking the chair
    of this subcommittee, we have continued to address our
    responsibilities in this arena, and starting in 2007, this
    committee and Congress have worked in a bipartisan fashion to
    increase the FDA's total budget by more than $878 million. And
    last year, our final conference report funded the FDA at $2.3
    billion, $306 million above 2009.
        We do this because food and medical product safety is
    crucially important to our national welfare. It is in short a
    national security issue. I'm very proud that the agency has
    been able to hire thousands of new employees, scientists,
    inspectors and analysts doing critical work as a direct result
    of those increased resources. And I'm glad to see the newly
    proposed initiatives like the FDA Transparency Task Force that
    will help to improve in my view the functioning and the
    credibility of the agency, and I think that under Commissioner
    Hamburg's direction, the FDA will invest resources smartly,
    improve its efficiency and streamline its organization and that
    the agency's original emphasis on protecting the public health
    will be restored.
        Looking ahead to 2011, I am encouraged by the
    administration's $2.5 billion request for discretionary
    resources provided by this committee, an increase of 6 percent
    over last year. I am also glad to see that many of the agency's
    most important consumer safety initiatives are seeing positive
    funding increases in this budget. The Center for Food Safety
    and Applied Nutrition is slated to receive an additional 9.2
    percent. The Center for Drug Evaluation and Research and the
    Center for Biologics Evaluation and Research both see their
    funding up by 4.2 percent. Other centers are slated for smaller
    increases.
        We will look at the requests for all the centers to make
    sure the budgets proposed are well founded and sufficient to
    enable it to do their critical work. Taken as a whole, this
    budget represents a strong commitment to building on the
    historic levels of investment this committee has made over the
    last four years. Coupled with $1.5 billion in estimated user
    fees, this would give the FDA over $4 billion to meet its
    responsibilities to the American people. And they will need
    every penny.
        In just the past month, we have seen new revelations
    suggesting that the diabetes drug Avanti is unsafe and should
    not have been approved. We have new research from the Yale
    Medical School that even brief exposure to Bisphenol A, a
    common ingredient found in plastics and aluminum cans, causes
    increased risks of breast cancer and uterine cancer for those
    exposed to it before birth. We learned that the radiation
    treatments that cancer and other patients rely on for help are
    in some disturbing cases causing harm. We have witnessed a
    salmonella Montevideo outbreak in crushed pepper that has
    already sickened 245 people. And just yesterday we found out
    that a processed foods company in Las Vegas, Basic Food
    Flavors, knew their plant was contaminated with salmonella and
    decided to proceed with business as usual.
        These recent situations demonstrate again the sheer variety
    of responsibilities that the FDA must continually live up to,
    and the need for resources to ensure the safety of these
    products.
        I also have some concerns about the contingency of budget
    increases for food inspections on the authorizations of user
    fees. As you know, these fees are authorized in the House Food
    Safety bill, but not at the same level in the Senate version.
    So it's an open question how the agency intends to meet these
    fundamental inspection obligations if user fees at the level in
    the budget are not authorized in the final legislation.
        So as we move forward with the budget process this year and
    continue the process of revamping, of innovating at the FDA in
    order to have it meet its mission in the 21st Century, I hope,
    Dr. Hamburg, that you will continue to keep in mind the four
    guiding principles that we have laid down last year. First, we
    must continue to increase funding to support the FDA's mission.
    Second, we must improve the management of the agency and hold
    it accountable. Third, we must push back against potential
    industry influence over the agency. And finally and perhaps
    most importantly, we must let the scientists do their work,
    guided by science and not political interference.
        I should say that the Commissioner's budgeted initiatives
    to improve the regulatory science capabilities of the FDA are a
    good step in this final direction. These are the four
    guideposts that I have used and I will continue to use in
    judging our progress and in evaluating this 2011 budget
    request.
        Dr. Hamburg, I look forward to hearing how you believe the
    FDA plans to move toward these broad guidelines in the year to
    come. I look forward to hearing about new initiatives such as
    the recently established Center for Tobacco Products will fit
    into this vision. And thank you very, very much once again for
    joining us. I would like to recognize my colleague, Mr.
    Kingston, but he is not here at the moment. Mr. Latham--he's on
    his way?
        Mr. Latham. I just want to welcome the Commissioner and
    thank you for coming by yesterday. I appreciate that very much.
    I yield back.
        Ms. DeLauro. Okay. I think what I would like to do if Mr.
    Kingston is on his way, then I would, if you wouldn't mind, I
    would like to wait for him to make an opening statement and
    then we can proceed to your testimony, Commissioner. And with
    regard to the testimony, the entire testimony will be made part
    of the record. Feel free to, you know, summarize or paraphrase
    it, what you would like to do.
        Dr. Hamburg. Thank you.
        [Recess.]
        Ms. DeLauro. I made my opening remarks, Mr. Kingston. The
    floor is yours.

                          Mr. Kingston Opening Remarks

        Mr. Kingston. Well, I had an opportunity to meet Dr.
    Hamburg and talk to her in the past. I think she's got a great
    record of not just public service but service to individuals
    with medical needs and have a great respect for what you've
    done.
        I have expressed to you my concern with FDA as that in the
    last several years you've gotten a large amount of money and
    I'm very concerned any time the government grows so rapidly as
    it has, and expressed those concerns, and that will probably be
    one of the things that I keep talking to you about.
        The other thing is, I do support user fees and believe that
    you can objectively do research on medical devices and drugs
    and not be tainted by user fees. I think that your firewall of
    integrity alone is going to be high enough, but I also think
    that there will be structural firewalls to make sure that your
    scientists in the back room are not influenced by people who
    are trying to get rapid approval. However, I think that those
    who are benefitting from these products should pay more of a
    fee to get them approved as a way of just easing some of the
    burden on taxpayers and the general treasury.
        So with that, Madam Chair, I'll yield the floor.
        Ms. DeLauro. Commissioner Hamburg, we can proceed with your
    testimony and then we'll proceed to questions.

                         Dr. Hamburg Opening Statement

        Dr. Hamburg. Okay. Thank you very much, Chairwoman DeLauro,
    Representative Kingston and members of the subcommittee. I am
    very pleased to be here to present the President's Fiscal Year
    2011 budget for the FDA. And with me is Patrick McGarey, as you
    noted, from FDA's Budget Office, and Norris Cochran, the Deputy
    Assistant Secretary for Budget at HHS.
        My testimony outlines FDA's 2011 budget request. It also
    includes a summary of recent developments related to our new
    responsibilities to regulate tobacco products and some other
    important FDA initiatives. As you noted, this is my first time
    before this subcommittee and I look forward to working with all
    of you. I deeply appreciate the support that you've given to
    FDA, and I know that you share my determination to make sure
    that our nation can count on a strong, fully functional FDA.
        FDA is an essential and unique agency, a science-based
    regulatory agency with a public health mission to promote and
    protect the health of the public. We're responsible for
    programs and activities that affect every American every day in
    very, very fundamental ways. The 2010 appropriation reflects
    your commitment to FDA and the health of the American people.
    Those funds will allow FDA to make real progress across a wide
    range of public health initiatives and priorities which are
    essential to health, quality of life, safety and security for
    all of us. So thank you again.
        The proposed Fiscal Year 2011 budget includes $4 billion
    for FDA programs, which represents an increase of $755 million,
    with $601 million in user fees and $154 million in budget
    authority. We're proposing three major initiatives in areas
    vital to our mission: transforming food security and safety,
    protecting patients, and advancing regulatory science. These
    initiatives are crucial for the modernization of our agency in
    response to the challenges of the 21st Century.
        The Transforming Food Safety initiative reflects President
    Obama's vision of a new food safety system to protect the
    American people and is based on the principles of the
    President's Food Safety Working Group: Prioritizing prevention,
    strengthening surveillance and enforcement, and improving
    response and recovery. FDA proposes an increase of $326 million
    for Transforming Food Safety, with $88 million in budget
    authority and $238 million for new user fees, including $200
    million for food registration and inspection.
        The Fiscal Year 2011 resources would allow FDA to establish
    a foundation for an integrated national food safety system
    focused on prevention. Key elements include setting standards
    for safety, expanding laboratory capacity, piloting track and
    trace technology, strengthening import safety, improving data
    collection and risk analysis for foods, and increasing
    inspections.
        This initiative will allow FDA to make the kinds of changes
    needed to deliver the promise of improved food safety and
    reduce illnesses caused by contamination of the food supply in
    the years to come.
        The Protecting Patients initiative reflects FDA's pressing
    need to modernize our approach to the safety of medical
    products. This is a time when science and technology offers new
    promises for disease prevention, diagnosis and treatment, as
    well as new protections for safety. This is also a time when an
    increasing number of drugs, devices and biologics are being
    manufactured abroad. FDA must act as a strong and smart
    regulator, addressing medical product safety challenges in the
    years ahead.
        The budget proposes an increase of $101 million for this
    initiative, including $49 million in budget authority. The
    balance is for two new user fees, generic drug fees and fees
    for reinspecting medical product facilities. The Protecting
    Patients initiative focuses on four vital areas: Import safety,
    high-risk products, partnerships for patient safety, and
    generic drug review. These activities will have a significant
    impact on public health across the nation. This science-based
    strategy will build new and greater safety capabilities. They
    will result in fewer import safety emergencies and fewer
    serious adverse events associated with drugs, devices and
    biologics.
        As the Chairwoman noted, FDA is proposing a new focus on
    Advancing Regulatory Science with an increase of $25 million
    for this much needed initiative. Regulatory science represents
    the knowledge and tools we need to assess and evaluate a
    product's safety, efficacy, potency, quality and performance.
    It is fundamental to all of our work at FDA, from supporting
    the development of new food and medical technologies to
    bringing new treatments to patients. In many ways, it
    represents the gateway between discovery, innovation and
    opportunity and actual products that people need and can count
    on. Building a strong, robust regulatory science capacity is
    vital to the health of our nation, the health of people, the
    health of our health care system, the health of our economic
    and our global competitiveness.
        During the past two decades, research has dramatically
    expanded our understanding of biology and disease, yet the
    development of new therapies has been in decline, and the cost
    of bringing them to market has soared. New approaches and
    partnerships in the emerging field of regulatory science are
    urgently needed to bridge the gap between drug discovery and
    patient care.
        Investing in regulatory science will yield better tools,
    standards and pathways to evaluate products that offer
    promising opportunities to diagnose, treat, prevent and
    hopefully cure disease. It will also improve product safety,
    quality and manufacturing more broadly, including new
    opportunities to better protect the food supply and support the
    development of healthy foods and healthy food choices.
        I'd like to update you quickly also on our progress
    implementing the Family Smoking Prevention and Tobacco Control
    Act law, which gave FDA important new authority to regulate the
    manufacture, marketing and distribution of tobacco products.
    I'm pleased to report that so far we have met or exceeded the
    statutory deadlines in the Tobacco Control Act. During Fiscal
    Year 2011, we will continue to implement the Act, including
    overseeing and enforcing the reissuance of the 1996 rule to
    prevent smoking and smokeless tobacco use among young people
    and proposing graphic health warning labels for cigarette
    packages and advertising.
        Finally, I'd like to take this opportunity to mention
    briefly some of our accomplishments in response to the recent
    H1N1 influenza pandemic. During the past year, FDA was able to
    license five different H1N1 vaccines in record time, and now
    more than 80 million Americans have been safely immunized. FDA
    also authorized the emergency use of antiviral drugs in
    circumstances for which they hadn't been licensed but where
    they might save lives. These decisions were based on careful
    review of the scientific data available for these products. We
    also conducted an aggressive proactive strategy to combat
    fraudulent H1N1 products.
        So to conclude, FDA's Fiscal Year 2011 budget contains
    important funding for vital public health priorities, including
    Transforming Food Safety, Protecting Patients, and Advancing
    Regulatory Science, as well as to implement the Tobacco Reform
    Act and other key activities. Achieving these priorities and
    critical needs is possible because of your support for the Food
    and Drug Administration, and I thank you.
        [The information follows:]

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                             ENFORCEMENT ACTIVITIES

        Ms. DeLauro. Thank you very much, Commissioner. Let me make
    one comment and then move to a question. This is on the
    enforcement activities within the agency. And very quickly,
    during the last Administration, it often seemed that a warning
    letter or a confiscation of tainted goods or decisive action to
    protect the public was a last resort. I want to tell you that I
    am personally just reassured about the contrast, very honestly,
    and a different approach. On February 3rd, 2010, seizure of a
    product from a company following inspections in November-
    December 2009, of January 2010, again a seizure December 2009,
    FDA issues the first ever debarment of a food importer,
    stopping the individual from importing food into the United
    States for 20 years. August 1st, 2009, FDA seizes contaminated
    product after a company refused to destroy them following a
    June 2009 inspection.
        So there seems to me to be a priority on enforcement, which
    is I say, very reassuring. I will get back to that because I
    want to ask a budget question, get back to you with your vision
    for improved enforcement, and I know you've spoke to this issue
    as well. Let me--but I think that that reflects truly a new
    environment and for me personally, nothing could give me again
    more assurance that we're on the right track.
        This is a complicated budget, Dr. Hamburg, and there are
    lots of moving parts. We've got cross-cutting initiatives,
    multiple pieces, multiple centers, current law user fees,
    increased proposed new fees. In the foods area, the budget
    depends heavily on getting, as I said, $220 million in user
    fees that would be provided in the House bill. This is really
    in two parts. What I'd like to do is if you can, briefly walk
    us through the bullet points in the foods area to give us a
    sense of what is funded by budget authority, what is funded by
    fees. There is the assumption of the fees, as I said in my
    opening remarks, the Senate bill doesn't include the
    registration fee that makes up most of the total amount that's
    in the budget. That bill raises only $65 million. I want to
    also walk through this piece but also ask you to talk about
    your commitment in terms of fighting for the House level when
    this bill goes to conference.

                                  2011 BUDGET

        Dr. Hamburg. Well, thank you for the question. It's a very,
    very important issue, and, you know, we certainly have
    appreciated the support given by this committee to our food
    safety activities and also the passage of the food safety bill
    by the House, and we are hoping to see it go forward on the
    Senate side swiftly. And it will be very important in terms of
    giving us additional resources and authorities.
        It is a complicated budget, and as you note, there are
    elements of our proposed budget that rely on new user fees that
    don't yet exist. In thinking about how we structured the 2011
    budget, we felt that we needed to be prepared for the
    possibility that we would have to go forward without the
    passage of the bill and without those additional dollars and
    resources. The budget authority component is more limited, $88
    million, as you know.
        We have targeted it in certain key ways, and perhaps a
    couple of examples, you know, are important, and we can
    certainly sit down with you and go through, you know, the
    entire food program. That would probably take up our whole
    session. But let me just make a few comments. The budget
    authority in the 2011 budget is really being targeted to
    building essential infrastructure to support program expansion
    and the shift to a preventive approach from a reactionary
    approach, recognizing that you've already made some critical
    investments that have helped us to start the process of
    staffing up, which is very, very key. Now we want to make sure
    that there's a sort of core infrastructure for that staff to do
    their important work and that as we go forward, there's an
    integrated, comprehensive program.

                                  INSPECTIONS

        So in one key area that I know is important to you, the
    area of inspection, in terms of use of budget authority, there
    is going to be less emphasis on inspection. We would be
    targeting our--we would have three FDAs--three FTEs that would
    be hired with budget authority, and they would really be
    targeting on tissue residue inspections, which is a gap. In
    terms of domestic food inspections and foreign food
    inspections, we have, you know, a pretty significant number of
    new investigators in the pipeline. We've hired about 700 new
    investigators, thanks to your recent investment. So it takes
    some time for training to get them up and running in the field.
    So we anticipate that in 2011, they will be moving into the
    field and able to meet some of the demands of inspection. We
    would love to be able to enhance them with additional user fee-
    based hires in the inspection area, but we do believe that in
    terms of the program needs, they're in the pipeline, and so
    we're going to be focusing the budget authority in other areas
    to support those activities and also the transformation of the
    food program and our activities. For example, it's very, very
    important that we strengthen the integration of our food safety
    program in terms of relationships with states and localities.
    And so we would be targeting a big chunk of the budget
    authority dollars, $15.2 million, to our work with states on
    food inspections and regulatory activities, and that's very,
    very important. We hope to be able to supplement that with user
    fee dollars as well. But they need money straight away to help
    them partner with us in these important activities.

                             FOOD SAFETY ACTIVITIES

        We also do need additional money right away to help with
    our expansion of some of our food safety activities in terms of
    import safety and our work to harmonize standards and
    approaches, our work with other regulatory agencies and our
    work to strengthen our international presence as we're dealing
    with an increasingly globalized world and food imports coming
    in from over 150 countries and, you know, literally several
    hundred thousand facilities and producers.
        So, you know, we recognize that this is a challenging
    science with uncertainty. We're going to work very, very hard.
    I have meetings later today on the Senate side to discuss the
    food safety legislation and try to encourage that it moves
    forward. It will be vital in terms of both the additional
    resources and also, as you know, new authorities for FDA to be
    able to do its job better.
        Ms. DeLauro. My time has expired, but I would just say
    this. I want to sit down with you or with your staff and go
    through the food safety piece and what is budget authority and
    what is user fees because I think unless we have the Senate
    move in the direction that the House did that we are going to
    see difficulties. And we should not proceed to a major
    legislation and reform of the system and then doom it to
    failure from the start. That in my view would be a serious,
    serious error. I think my colleagues, you know, on this
    committee believe that. And if we have that information, I
    don't know what the timetable is, though I hope it is soon on
    the Senate side, that what we would want to do is to sit down
    over there as well and try to talk about this issue so that we
    can not find ourselves moving backward instead of forward in
    this area.
        Dr. Hamburg. I so appreciate your support on this issue.
        Ms. DeLauro. Sure. Mr. Kingston.
        Mr. Kingston. Thank you, Rosa. I want to yield to Mr.
    Latham, who's got another committee meeting that he needs to
    get to.
        Mr. Latham. Thank you, Jack. And again, welcome.
        Dr. Hamburg. Thank you.

                           ANTIBIOTICS AND LIVESTOCK

        Mr. Latham. I do appreciate the fact you came by yesterday.
    As we talked about yesterday, farmers supplying consumers with
    probably the most safest, most consistent source of protein
    anywhere in the world, and our producers know that confidence
    in their products is critically important. And again,
    yesterday, we talked a little bit about this, but one thing
    that concerns me a lot is the fact that as we go through some
    these issues, antibiotics and livestock, that there is an
    element, at least the farmers would be involved in the process,
    and I actually would invite you to come out to my district. We
    have the National Animal Disease Center, the Veterinary
    Biologics Center. It's all in my district. We have one of the
    largest animal antibiotic producers, Fort Dodge Labs, has two
    large facilities in my district, and you'll come to Iowa and
    find out that there's 3 million people, but we have about 17,
    18 million hogs in Iowa. That's about three to one, or excuse
    me, about six to one actually of hogs to people. So it is
    obviously a major issue for us and all the livestock
    production, largest as far as egg production in the country
    also.
        But let me just ask you straight out. Is it FDA's
    intention, and I've got, you know, the testimony here or a
    story from the New York Times back last July 14th, Dr.
    Sharfstein saying that he wants to ban antibiotics in
    livestock. Is the FDA's intention?
        Dr. Hamburg. I don't believe he actually said he wanted to
    ban antibiotics in livestock. But I think that the issue you
    raise is a very, very important one. It's a major public health
    concern and we must work together to preserve the effectiveness
    of important antibiotics for both human health and animal
    health. And I think that, you know, what we need to do as an
    agency is work closely with all of the stakeholders and develop
    a science-based approach so that we can in fact ensure that we
    have the antibiotics needed to treat important diseases. And I
    think you've probably read the stories or know from even
    personal experience that this is a real world problem in terms
    of antibiotic resistance in hospitals, you know, having
    patients with disease that can't be treated because----
        Mr. Latham. Right.
        Dr. Hamburg [continuing]. All of the traditional therapies
    have developed resistance. I grappled with this as New York
    City's health commissioner with a devastating problem of TB
    resurgence and drug resistance.
        So we are moving forward on a path----
        Mr. Latham. Is there any science that says there's a
    connection?
        Dr. Hamburg. Yes there is, there is.
        Mr. Latham. Where? Can you----
        Dr. Hamburg. And we know that there are certain antibiotics
    that have been very much associated with the development of
    resistance in terms of their use in animal populations. But we
    want to ensure judicious use----
        Mr. Latham. Can you get me that information?

                             ANTIBIOTIC RESISTANCE

        Dr. Hamburg. Okay. One example is the fluroquinolone drug
    class, which is very, very important for human health and
    animal health. But it actually had to be withdrawn from use
    because of the seriousness of the resistance concerns. We'd be
    happy to provide you with more information.
        [The information follows:]

        There are a number of medically important antimicrobial drugs that
    are used in food-producing animals. Some examples include the
    fluoroquinolones, third generation cepahalosporins, and macrolides.
        These classes of drugs are critically important therapies for
    treating foodborne bacterial infections in humans. Therefore, if
    foodborne bacteria become less susceptible or become resistant to such
    drugs, the effectiveness of these drugs for treating foodborne
    bacterial infections in humans would be impaired or lost.
        The fluoroquinolone and third generation cephalosporin drugs
    currently approved for use in food-producing animals are limited to
    uses that involve administration to individual animals for therapeutic
    purposes and require the supervision of a veterinarian.

        But let me just reassure you that, you know, we are
    committed to a science-based approach to do what's necessary to
    support judicious use of antibiotics. That does not mean an
    across-the-board ban. It does mean that the use of antibiotics
    for growth promotion alone really needs to be scrutinized very,
    very carefully. But for the treatment of infectious disease in
    animal populations and for the prevention of certain disease
    conditions in animal populations, antibiotics have an
    appropriate and necessary use.
        We need to engage the veterinary community and the animal
    agriculture community completely in our efforts, and we've been
    reaching out to stakeholders, meeting. I should come out and
    visit. I have engaged in some visits, as has Dr. Sharfstein.
    But it's a very, very important area for public health, and the
    position FDA is taking is consistent with the World Health
    Organization, with the CDC, with the American Public Health
    Association, with the American Medical Association, and the
    list goes on. You know, this is one of the foremost public
    health concerns in the nation.
        Mr. Latham. Are you waiting for congress to address the
    issue or are you going to be proactive? I just have grave
    concerns about the link supposedly between keeping healthy
    animals, and you're talking about promoting growth. Basically,
    a healthy animal does grow better, yes; but, there's no growth
    hormones or anything being involved, you know. And I honestly
    think that the American people would rather eat products coming
    from healthy animals than maybe animals that are sick.
        Dr. Hamburg. Well, we definitely want to prevent illness in
    animals. We want to prevent illness in people, but we do need
    to do this in a thoughtful way, science-based, that preserves
    essential antibiotics for health and disease prevention. We are
    working closely with industry, listening to their concerns.
        We are not going to move forward and institute a policy
    that we have not been able to base on sound science and
    evidence, and explain to industry and work with them towards
    solutions. There also are regulatory pathways that we're
    looking at in terms of how we would move forward, potentially.
    And, of course, there is a legislative pathway that could be
    pursued as well.
        And, as you probably know, there is one bill that is under
    consideration at the present time, which the administration
    doesn't have a formal policy on. We take a somewhat different
    approach than that legislation in terms of how we think about
    the problem of judicious use of antibiotics, whether for
    treatment prevention or growth promotion, but this is a very
    important issue. I'm very happy to continue this discussion.
        Mr. Latham. Our time.
        Dr. Hamburg. Our time. I apologize for giving a lengthy
    answer, but it's important and I know it's of great concern to
    you and your constituents.
        Mr. Latham. Thank you.
        Ms. DeLauro. Thank you. Mr. Hinchey.

                           FRONT OF PACKAGE LABELING

        Mr. Hinchey. Thank you, Rosa. Commissioner Hamburg, I want
    to thank you very much, because all the things that you're
    doing are improving the FDA and making it more responsible, and
    making it better and stronger for the people of this country.
    But there are a number of other things that I think really
    still need to be done, if you haven't been there all that long.
    But I wanted to ask you about a couple of them.
        Taking the initial step, for example, to rein in the food
    manufacturer and the misleading claims about the nutritional
    value of those products, and the fact that they can under the
    existing set of circumstances be 20 percent wrong, be 20
    percent mistaken. That's something that really needs to be
    addressed. The FDA developed this margin of error after the
    bill was passed back in 1990, but it made no provision
    whatsoever that there could be that deep margin of error. So
    I'm wondering why that happened, and, even more important, the
    fact that that should be changed.
        So I just wanted to ask you. Do you think the margin of
    error, 20 percent, is much too high? Or, do you agree with most
    of us, along with what Dr. Susan Roberts of Tufts University
    said recently, that a 20 percent permissible margin of error
    was too high and should be lowered to a maximum 10 percent.
        Dr. Hamburg: Well, I appreciate your question, and we are
    putting a lot of new attention and focus on front of package
    labeling and various kinds of nutritional and health claims on
    food products. The 20 percent margin of error question, I
    think, relates to the issue of calorie counts; and I think
    there are some technical issues in terms of, you know, calorie
    counts vary, and also the technology. But I think this is an
    area where we want to be as precise as possible, because it
    really matters to people as they try to make healthy choices
    for their diets. I think it's an area where we can bring new
    technology and advances in how we make these assessments to
    bear, and that's part of our Advancing Regulatory Science
    initiative.

                            NUTRITIONAL INFORMATION

        I think that along with addressing those kinds of questions
    and how can we sort of tighten up and make more accurate our
    presentation of information, we are looking at other important
    components such as serving size, because that can be quite
    misleading. I think very few people eat six tortilla chips, but
    that's what's, you know, sort of given as, you know, a serving
    size in some instances. I don't know if that's an exact
    example, so we are looking at those issues very seriously now
    trying to update our nutritional guidance on standards, and
    also looking to how we can better present nutritional
    information on the front of packages and also talking with
    industry about concerns of inappropriate or inaccurate or
    misleading claims that may be made on food packaging. And, you
    know, we just recently, I think it was just last week sent out
    some 20 warning letters concerning inappropriate----
        Mr. Hinchey. So you're determined to improve this
    situation?
        Dr. Hamburg. We are determined to improve it. We have a
    team working very actively on it. We're working with industry
    so they understand our concerns.
        Mr. Hinchey. What about the 10 percent? Do you think that
    that 10 percent is achievable quickly?
        Dr. Hamburg. You know, I would have to get back to you on
    the specific details. You know, perhaps even look at the paper
    that you're referencing, but it's something that our team would
    certainly be eager to look at and get back to you on.
        [The information follows:]

        The 20 percent figure is not a margin of error. FDA's compliance
    criteria, including the 20 percent allowance for variation in naturally
    occurring nutrients, were developed as part of the 1973 final rules for
    nutrition labeling. In the January 19, 1973 Federal Register, FDA
    published a regulation which established a statistical approach to
    determine compliance with nutrition labeling requirements. The natural
    variation in the nutrient content of food products was well recognized,
    and the need to set practical limits of variation in nutrient levels
    for compliance purposes was the subject of extensive discussions. In
    developing the nutrition labeling system, it was important to provide a
    sufficient tolerance so that manufacturers could provide useful
    nutrition information on the label while meeting consumers'
    expectations that nutrition labeling would honestly represent the
    composition of the products that they purchased. The objective of the
    regulation was to secure compliance with requirements for average
    nutrient levels for units in a lot with only as much variability among
    units as is inherent in the naturally occurring nutrients when foods
    are processed under current good manufacturing practice. FDA is
    currently working on updating the nutrition facts label, and this is
    one item that we may consider re-evaluating based on more recent
    science. However, additional research on the variability of nutrients
    within foods may be needed to determine if the 20 percent figure could
    be modified.

                            PHARMACEUTICAL INDUSTRY

        Mr. Hinchey. Okay. Well, I appreciate it if you would and I
    would appreciate all the things that you are doing. And if you
    would continue to focus on this kind of situation, and
    additionally among a variety of others the relationship between
    the pharmaceutical industry and FDA.
        Over a course of time there has become a very sort of close
    relationship between these two operations: the pharmaceutical
    industry and the Food and Drug Administration who is supposed
    to oversee the pharmaceutical industry. A lot of the funding
    for FDA comes out of the pharmaceutical industry, which brings
    about a relationship which is inappropriate and really
    shouldn't be allowed to be there. The close relationship
    between the pharmaceutical industry and the FDA is something
    that is not being helpful to the people of this country. And I
    think it is hurting the FDA's ability to be objective and
    careful, and overseeing and engage in the right kind of
    oversight that is going to make the pharmaceutical industry's
    products safe and secure.

                             POSTMARKET DRUG SAFETY

        Now, we have seen a number of examples of that just
    recently and we continue to see them over time as to the kinds
    of dangers that can occur if the operation is not as effective
    as it should be. So there should be an improvement in the
    agency's post-market drug safety operations, and I am sure that
    you agree with that. And I am just wondering what kind of
    activities may be intended to be engaged in to bring about the
    very effective separation between oversight and the
    pharmaceutical industry and the fees on drug company
    advertising to better monitor some of the ads that are put out.
    And when these ads are not accurate and not nearly as accurate
    as they should be, and, in effect, provide false information to
    people who makes them make decisions that may not be in their
    interest. So I know it's a complex set of circumstances, but I
    would appreciate it if you could give us some idea as to what
    the FDA might intend to do now to overcome this cozy, close
    relationship, instead of the oversight between FDA and the
    pharmaceutical industry.
        Dr. Hamburg. Well, thank you for the question, and I do
    understand and appreciate your concerns. I think you actually
    asked about six questions there, so I'll try to see if I can
    capture all of them.

                             CONFLICTS OF INTEREST

        Mr. Hinchey. Well, we have a few minutes. So, you know.
        Dr. Hamburg. But your opening component focused on how can
    we assure that we have appropriate firewalls and that we have a
    decisionmaking system that is based on the best possible
    evidence and sound science, and not undue, external influence
    from industry or other sources. That is very, very important to
    me, and, you know, I feel very strongly that our agency must
    have the resources that we need to fulfill our important
    mission, but that we have to be grounded in science.
        You know, examining the integrity of our decisionmaking and
    assuring that it is free from conflict of interest and other
    concerns is one of the most essential elements of FDA being
    able to do its work, being able to have the trust and
    confidence of policymakers and the public, and certainly one of
    my highest priorities. So we take it very seriously.
        We have established firewalls in terms of the use of user
    fees. We are committed to a science-driven decision-making
    process, and it's a dynamic concern. We can't just sit back and
    say our systems are in place. Move on to the next issue. It's
    something we have to continually be monitoring, continually
    responsive to concerns as they're raised and ensuring that we
    have the right checks and double-checks.

                                  ADVERTISING

        With respect to your question about advertising and the
    volume of advertisements to be monitored is huge, and some of
    the investments that this committee has helped to support to
    expand resources in that key area and others has been very,
    very important. We are not able to review everything in as
    timely a way as we would like, but we are strengthening our
    staffing in that area and expanding our capabilities.
        I think we also are trying to work with companies around
    how they can be more responsible in terms of their advertising
    strategies and messages, and hopefully bringing in some public
    health education about disease conditions as well as
    advertising their product and strengthening our capabilities
    around risk communication in terms of these issues as well. But
    in a world where we now have the internet as another
    advertising arena, it only is getting more complex and more
    challenging.
        Mr. Hinchey. That's another example of why it really needs
    to be overseen. So I am introducing some legislation, which
    deals with the subjects that we've just been talking about and
    some other things that really need to be addressed in the
    context of ensuring the safety and security of the people of
    this country.
        I would appreciate it deeply if you wouldn't mind taking a
    look at it and giving me your impression and how you might
    follow through on the recommendations contained in this
    legislation. And thank you very much.
        [The information follows:]

        FDA will be happy to review your draft legislation and provide you
    with FDA's views.

                                   USER FEES

        Ms. DeLauro. Let me just make a point that this committee--
    is it two years ago--actually appropriated funds and quite
    frankly refused to deal with user fees in this area by the
    companies overseeing their ads, which I would continue to
    oppose. I am glad to see it is not in the budget, but we were
    willing to provide resources in order to address this issue and
    would continue to do that. And I won't get into it. Maybe Ms.
    Emerson does, but in fact we do have legislation with regard to
    directive consumer advertising and moratorium. With that, Mr.
    Kingston.
        Mr. Kingston. Thank you, Madam Chair. I wanted to touch
    base a little bit more on Mr. Hinchey's questions, because one
    of the concerns that we have and, I think, you just need to
    always be mindful of that firewall.
        I am actually okay with the user fees, but I agree with
    everyone on the firewall issue. And one of the things that
    blurs is the revolving door of FDA employees leaving and going
    to work with a pharmaceutical company, or whatever. And, you
    know, we certainly are always accused of that in congress.
        So what do you do to prevent that? Do you have as members
    of congress have a one-year ban on lobbying if they assume
    another job? Do you have anything like that?
        Dr. Hamburg. No.

                                 FDA EMPLOYEES

        Mr. Kingston. And is it a common practice for FDA employees
    to go to work for somebody that they had been regulating?
        Dr. Hamburg. You know, I am sure that we have some numbers
    on that. I don't know. One of the things I've been struck by is
    how many employees come to FDA and stay at FDA throughout their
    professional careers, despite the fact that they could in fact
    be making much more money on the private sector side. But,
    certainly, there are people who leave FDA and go to work for
    industry. But, you know, we can go back and try to get you some
    numbers.
        [The information follows:]

        There is no data that can be extracted from the FDA Central
    Personnel Data File to identify FDA employees who have left the
    organization to work for private industry.
        It is only possible to identify FDA employees who have left FDA to
    work for another government agency. Such employees can be identified if
    the FDA agency code is maintained by the Office of Personnel Management
    and is listed in the employee's Central Personnel Data File.
        Former employees are subject to certain restrictions once they
    leave Federal service. The post-employment restrictions are contained
    in Title 18, U.S.C., Section 207, a criminal conflict of interest
    statute.
        18 U.S.C. 207(a)(1) prohibits a former employee from making any
    communication or appearance on behalf of another, with the intent to
    influence, before any employee of the United States in connection with
    a particular matter involving specific parties in which the former
    employee had personally and substantially participated as an employee.
    This is a lifetime prohibition.
        18 U.S.C. 207(a)(2) prohibits a former employee from making any
    communication or appearance on behalf of another, with the intent to
    influence, before any employee of the United States in connection with
    a particular matter involving specific parties that was pending under
    the former employee's official responsibility during the former
    employee's final year of government service. This prohibition lasts for
    two years from the time the employee teminates government service.
        18 U.S.C. 207(c) prohibits a former ``senior employee'' from making
    any communication or appearance on behalf of another, with the intent
    to influence, before an employee of his or her former agency for one
    year after terminating the senior position. This restriction applies to
    any matter pending in the agency on which the former senior employee
    seeks official action on behalf of another and is not limited to
    particular matters involving specific parties.
        All of the above restrictions apply only to communications or
    appearances made on behalf of another with the intent to influence
    official action. The statute contains less common prohitions, such as
    prohibitions involving trade or treaty negotiations and former senior
    employees aiding or advising certain foreign entities. The statute also
    contains a number of exceptions, such as exceptions for actions taken
    as an elected official of a state or local government.
        Under a separate statute, 41 U.S.C. 423(d), there is also a one-
    year ban on contractor compensation for certain employees who had
    worked on a contract in excess of $10 million.

        But I think your point about appropriate firewalls is
    absolutely key in terms of the use of the user fees and in
    terms of the relationships with the industry. It is important,
    obviously, that we work with industry, since we're reviewing
    products produced by industry and products that have huge
    benefits for public health.

                            TRANSPARENCY INITIATIVE

        I believe that an area where FDA can do better and we are
    starting down that road is in terms of transparency, being much
    more clear and explicit about what we are doing, how we are
    doing it, what decisions we have made, how we've come to those
    decisions. We have a whole transparency initiative, which is
    moving forward, and the first stage of it is in place in terms
    of just a sort of a FDA, ABC, or FDA 101, were on the web.

                               NUTRITIONAL CLAIMS

        Mr. Kingston. Well, let me ask you this. I think that it
    is. The system has been working a lot better than it was 10
    years ago, so I think a lot of progress has been made.
        Mr. Hinchey also talked about advertising, and, you know, I
    love seeing these: ``Buy the little purple pill and then you
    too can dunk the basketball like LeBron James,'' even though
    you're 80 years old, and you're dancing and riding bicycles,
    and doing extreme sports. But, you know, it's not just
    pharmaceutical companies driving that.
        A lot of times you look at the food packaging, and
    something's called light or low fat or healthy choices. And I
    read a nutrition action newsletter, and it always will look at
    a label of a specific product and say why it is misleading. And
    I'm not one for bigger government and more lawsuits in this
    world, but where is the line, and do you have oversight over
    packaging like in terms of the promises?
        Dr. Hamburg. Well, we do have a responsibility to look at
    health and nutritional claims, and we do work with companies to
    try to assure the accuracy of those claims, and we also do take
    certain, more aggressive actions, when they are not in
    compliance with the requirements around appropriate claims. And
    we recently, as I said, sent out warning letters about
    nutritional claims, health claims that we thought were
    inaccurate, misleading or fraudulent.

                            HEALTHY CHOICES PROGRAM

        You mentioned the healthy choices program. You know, when
    that first came out, we looked at it and we were very concerned
    about some of the products that were getting a healthy choice
    check. And we wrote to industry and expressed our concerns, met
    with industry representatives, and they actually did withdraw
    that program because there were concerns that it wasn't
    providing consumers with the accurate information that they
    needed. And we're now working towards a more science-based and
    more easily understood program for front of package labeling.
        Mr. Kingston. And I don't think that there's necessarily
    any sort of deviousness on the part of the food industry. It's
    just that we live in a culture where if somebody eats two
    donuts instead of three, they feel like they're ahead of the
    game. It would never occur to us to eat an apple. So, you know,
    I think if somebody said, ``yeah, look. This is lower
    calories--lower calories than what you've been eating, fatso.''
        Dr. Hamburg. Right.
        Mr. Kingston. And it's a step in the right direction, so I
    don't know that it is really disingenuous. It's just that it is
    culturally, we don't.
        Dr. Hamburg. No, I think that's right. And I think, you
    know, I also have to underscore that what we do with respect to
    nutrition is just one component of a comprehensive program that
    will really make a difference in terms of education and access
    to healthy foods and other things.
        Mr. Kingston. Okay. Well, thank you, ma'am.
        Ms. DeLauro. Mr. Jackson.

                                      BPA

        Mr. Jackson. Thank you, Madam Chair.
        Dr. Hamburg, I would like to applaud the FDA as you have
    reversed the agency's position on the safety of BPA to express
    concern about possible health risks and provide information to
    consumers on how they can reduce their exposure to this
    chemical, which is commonly found in plastics and canned goods.
        The ``Journal of American Medical Association'' reported
    last year that humans with higher levels of BPA in their blood
    have, and I quote, ``an increased prevalence of cardiovascular
    disease, diabetes and liver enzyme abnormalities.'' As a father
    of younger children I know I share the concerns of parents and
    other individuals on the safety of BPA. I understand that the
    FDA has planned a targeted, two-year study to determine what
    actions are necessary to protect public health. Could you
    please elaborate on the plans of the $30 million study of BPA?
        Dr. Hamburg. You are very correct that FDA has recently
    reviewed the scientific literature. And we have, I think,
    enhanced our level of concern about BPA based on emerging,
    scientific studies, also identified some critical gaps in our
    knowledge about BPA and the need to address them, and working
    with colleagues in government, the NIH and the CDC undertaking
    research activities. It's a $30 million research undertaking,
    as you know.
        And it's to try to better understand how data that's
    emerged from low level exposure studies in animals actually
    relates to the effect of BPA and those exposures and human
    beings. The animal models are not exactly equivalent to humans.
    The animals metabolize BPA differently. It recirculates more in
    the animals than in humans that excrete it more quickly. So we
    need to understand, you know, how to compare the animal models
    with the human models.
        And there are some additional studies that need to be done
    as well; and, of course, there is ongoing research beyond what
    we are doing and funding that needs to be reviewed. And we are
    going to be looking at the totality of the data going forward.
    In the meantime, we do recommend that consumers that are as
    concerned as you are, understand how they can reduce their
    exposure to BPA, especially mothers of newborns who are very
    concerned about baby bottles. We've been encouraging industry
    and working with industry to eliminate BPA from baby bottles
    and sippy cups. And most American bottle manufacturers have
    done so. Also, recommendations, you can find them on our
    website about other ways to reduce exposure to BPA, but it's
    very, very important that they will have that information.
        Ms. DeLauro. Would the gentleman yield for a second and
    then I'll provide you additional time?
        Mr. Jackson. I appreciate that. I would be happy to.
        Ms. DeLauro. On this issue, because I have a question as
    well, and I mentioned this in my opening statement. How long is
    this study going to take, Dr. Hamburg?
        Dr. Hamburg. Well, we expect to have results in 18 to 24
    months.

                                 YALE BPA STUDY

        Ms. DeLauro. So it's up to two years. Now, I will tell you.
    I started to read the report. I am not a scientist, so I will
    get it translated for me into lay person's language. But it is
    just a group of scientists at Yale University School of
    Medicine, Department of Obstetrics/Gynecology/Reproductive
    Sciences. It was recently published, ``Journal of the
    Federation of American Societies of Experimental Biology.'' It
    found that exposing a fetus to BPA can cause serious damage.
        One of the researchers likened BPA exposure to DES, which
    is deeply disturbing. This is on the front page of the ``New
    Haven Register'' just this week: ``Yale study details how and
    why of BPA's danger.'' They specifically talk about women and
    infertility and uterine cancer. Again, what I don't understand
    about this, and I would just add to what my colleague, Mr.
    Jackson, has said here is that in the interim while we move at
    this we proceed very cautiously.
        I am not against proceeding cautiously, but two years to
    deal with this issues, and we take as our guidepost, it would
    appear, the science that is developed by the industry. Instead
    of taking the science that is developed by academics, et
    cetera, who have serious concerns about this and say, okay,
    industry, we're going to stop this while we examine the
    academic science that is telling us that we've got some serious
    problems here. That is very, very troubling with this issue,
    and we've been going round and round on BPA now for a while. So
    you'll get your time, Mr. Jackson, but I thought it would be
    appropriate to, you know, add that question at this juncture
    with regard to your concerns about this mission.

                               RADIATION EXPOSURE

        Mr. Jackson. It is more than appropriate, Madam Chair.
    Recently, the Chicago City Council voted to ban BPA in bottles
    and sippy cups in May of 2009. I have a final question
    regarding this.
        I recently met and the chair recently met with the CEO of
    Green Planet Bottling Company, an Illinois-based company, which
    produces petroleum-, chemical- and BPA-free bottles that are
    completely biodegradable. I am wondering what more the FDA can
    do to direct concerned parents and their families to options
    that are BPA and chemical free. Does this committee and/or this
    congress need to statutorily require the elimination of BPA in
    these bottles? And let me ask one final question given my time
    constraints.
        Dr. Hamburg, last month the FDA announced that it would be
    implementing steps to more stringently regulate medical
    regulation, specifically forms of ionizing, radiation,
    including CT scans, nuclear medicine studies, and
    fluoroscopies, which increases a person's lifetime cancer risk.
    The average American's total radiation exposure has doubled in
    the last three decades, according to the FDA. Last month many
    of the manufacturers of CT scanners announced that they will
    begin installing safety controls, which would alert machine
    operators when the settings exceed recommended levels.

                        REGULATION OF MEDICAL RADIATION

        Commissioner, what steps will the FDA take to better
    regulate medical regulation, and what protections are currently
    in place to ensure that patients received the smallest dose of
    radiation necessary for these tests? Also, Homeland Security
    and TSA recently announced the addition of full body scanners
    at many of the nation's airports. What role, if any, will the
    FDA play or has played in ensuring that these devices will be
    safe once they're installed?
        Thank you, Madam Chair.
        Dr. Hamburg. Well, a very important question. FDA cares
    very deeply about this radiation safety concern and in fact has
    been quite proactive in responding in terms of recognizing when
    some adverse event reports came in about evidence of
    inappropriate, excessive exposure to radiation from CAT scans
    that there might be a broader issue here and really started to
    look at it in more depth.
        We are working with companies that make these machines to
    try to move towards having systems that are less prone to
    error. You know, it is human error in terms of the dosage
    delivered; but, there are ways, you know, sort of systems
    engineering, to help reduce the likelihood of such errors
    occurring. So working to improve the quality of these devices
    and the safety of these devices is very, very important.
        Putting out information for healthcare providers and those
    that are operating these machines is also very, very key, and
    we have been moving forward in that arena, continuing to
    monitor for problems as they occur, and, of course, educating
    consumers and providing information. We would like to move
    towards a system where actually individuals could keep track on
    a personal level of their dosage exposures over time, because I
    think that's important information, you know, for their own
    safety, and also to be able to provide their medical providers
    since people often move from one physician to another.

                                  TSA SCANNERS

        So that's another area where we think we can help be a
    catalyst to activities that will improve patient safety. With
    respect to the role of the scanners used in airports, the level
    of exposure is much, much less. We are talking on the medical
    side, equipment that has to penetrate the skin to visualize
    organs. The TSA scanners are really looking just very
    superficially. They're not penetrating in the same way, so the
    level of exposure is markedly lower. So the risk is really
    minuscule.
        Mr. Jackson. Does the FDA have a role in that? Given that
    the number of people who travel through the airports, and will
    be exposed to the machines?
        Dr. Hamburg. You know, even with multiple--I know many of
    you travel frequently.
        Mr. Jackson. It is a concern.
        Dr. Hamburg. It is a concern that I would understand, but
    in terms of the level of exposure, it is minuscule, because it
    is not penetrating in the same way. But we would be involved in
    terms of any indications of medical complications or adverse
    reactions to that scanning technology.
        [The information follows:]

        There is no indicator of excessive exposure on Transportation
    Security Administration passenger screening scanners. The
    Transportation Security Administration's Rapiscan Secure 1000 Single
    Pose backscatter x-ray systems, used in passenger screening, have
    engineered safety systems to prevent a dose above the manufacturer's
    specification.

        Mr. Jackson. Well, that's an important question. I don't
    honestly know the answer, but I will go back and ask that
    question and I hope we can address it.
        Ms. DeLauro. Thank you very much, Mr. Jackson. Mrs.
    Emerson.

                               ANIMAL ANTIBIOTICS

        Mrs. Emerson. Thanks, Madam Chair, and Dr. Hamburg. Thanks
    for being here today and thank you again for coming to my
    office yesterday. It was good to visit with you there.
        Let me just ask a very, very brief, or mention a very brief
    follow up on the issue of animal antibiotics. I've got a very,
    very, very rural district and so I will have counties that
    might have a hundred thousand, a hundred fifty thousand head of
    cattle or what have you and maybe one large animal
    veterinarian. And so, it puts us into a real dilemma as you all
    develop new policies with regard to the use of antibiotics. And
    I just would like to have you, as you proceed, you know, keep
    that in mind that it's, that it is an issue in many
    circumstances for, and I would imagine that our colleagues who
    live out in Montana and Nevada and New Mexico, you know,
    they've got much farther areas with which to deal and probably
    have the same issues with regard to lack of large animal vets.
    So, let me make that comment.

                         COUNTERFEIT PRESCRIPTION DRUGS

        Let me go onto my question, which deals with the existence
    of counterfeit prescription drugs within our borders. And I do
    remain very concerned about the fact that we still have big
    problems with this. And you know, it's obvious that the high
    prices of many name brand drugs make counterfeiting well
    worthwhile and this is an extremely important safety issue for
    millions of American consumers.
        I'm also told that counterfeit drugs are produced and enter
    our system from both outside and within our borders and I'm
    also told that the counterfeiters have gotten so good and are
    so adept now at not only replicating the look of the pills they
    are trying to impersonate but as well as the packaging and even
    the bar codes on the boxes can scan at the pharmacy checkout
    without sending up any kind of red flags.
        So, I have three questions with regard to this issue.
    Number one, how prevalent is the problem in your opinion? Can
    you talk a little bit about the efforts undertaken and planned
    by you all at the FDA to locate counterfeit drugs and get them
    out of the U.S. supply chain and tell me what kind of measures
    are needed to continue to reduce the opportunities for
    counterfeits to get into the hands of American patients. And
    then I guess at the very end, how do you all share this
    responsibility with the state boards of pharmacies? Thank you.
        Dr. Hamburg. Thank you for the question. This is a huge and
    growing concern and it's a problem within our borders. It's
    also a problem around the world and, in fact, in some parts of
    the developing world some studies suggest that between 30 and
    50 percent of some of the drugs available actually are
    counterfeits, so this is really a huge concern that affects the
    health of us all.
        We take it very seriously and we do undertake
    investigations to try to identify counterfeit products and
    their manufacturers. We welcome input from all sources when
    concerns are raised. When we do find problems, of course, we
    work with the appropriate enforcement agencies to take serious,
    swift, and decisive action and also to provide information to
    consumers about the risks. You are absolutely right that both
    the volume and the quality of counterfeits is increasing and it
    adds new challenges and I think FDA has a special role to play
    there and has made contributions already but some of the
    investments in science can help us to do a better job.
        We have developed new technologies so that we actually, and
    we've put out guidance around, substances that can be put into
    pills that aren't harmful or affect the use of the product but
    can enable validation of the authenticity of a product.
        We've also developed technologies, I was recently at JFK
    where a lot of important drugs come in, and they had me put on
    some funny glasses and use, you know, special light where you
    can actually scan products to determine if they're counterfeit
    or not. Because often the pills themselves look exactly right.
    Some of the counterfeits you see coming in are laughable and
    you wonder why anyone would possibly take this product if, in
    fact, they ordered it and it was presented to them.
        But it's really a very, very serious problem. It's one that
    I think the answer has to be undertaken on an international
    basis because it's their products that are produced
    domestically but a large part of the flow is coming in from
    imported drugs. And the World Health Organization is actually
    taking this up at its World Health Assembly this spring and of
    course, we'll be participating, but working with other
    regulatory authorities and law enforcement worldwide, as well.

                     RESOURCES TO PREVENT COUNTERFEIT DRUGS

        Mrs. Emerson. Do you have any suggestions? Well, first of
    all, any suggestions about what type of technology might be
    helpful in abating the problem of the counterfeiting, number
    one, and number two, do you have within your budget the means,
    let's say hypothetically, that you've come up with this idea,
    whatever it might be, you know, using those funny glasses or
    what have you. Do you have enough money in your budget to
    really monitor every kind of drug coming into this country? And
    that obviously is what is produced here.
        Dr. Hamburg. Yes. We do not have enough resources or the
    complete authorities that we need to really address this
    problem worldwide and I hope that over time I'll be able to
    work with all of you to address this important issue. It's a
    huge concern.
        I should have mentioned also that unique identifiers and
    the ability to really have a pedigree to assure authenticity is
    very, very important. And that's, you know, something that we
    are trying to move forward on, but it's also an arena where
    some additional authorities would be necessary.
        But this is so key and it's only a growing problem and it's
    a tragedy that, you know, people are counting on drugs to treat
    serious medical problems or to prevent important conditions and
    unknowingly, you know, are taking something that at best will
    do no harm, but may actually make their condition worse or make
    them sick.
        Mrs. Emerson. So what kind, what specific authority might
    you need from us?
        Dr. Hamburg. Well, I think, you know, number one, we need
    to continue to be able to expand our global presence in terms
    of being able to monitor products and how they're made and to
    be able to assure the supply chain in ways that are critically
    important to prevent counterfeits, but also to prevent economic
    adulteration and other forms of contamination of products. We
    need also to have the ability to really track and assure
    authenticity of products through a pedigree approach.
        We need to be able to continue to strengthen our, you know,
    inspectional capabilities at the border, but recognizing that,
    you know, the volume of stuff coming in, you know, will always
    make that a challenge, but we are now developing ways to target
    in a more risk-based approach and including strengthening our
    intelligence networks, so it means working with other partners
    to have a better sense of manufacturers and importers that have
    had problems in the past and to share information with other
    regulatory authorities when problems emerge.
        Mrs. Emerson. Well, we certainly, I know, Madam Chair, it
    would be helpful for us to be able to work with you to try to
    come up some good solutions to this and we'll look forward to
    working with you. And thanks for letting me go a little bit
    over.
        Ms. DeLauro. Sure, no, thank you, and it's an important
    area and we'll work with you on what kinds of authorities are
    needed. Mr. Bishop.

                                   SALMONELLA

        Mr. Bishop. Thank you very much. Welcome, Dr. Hamburg. As a
    result of recent FDA investigation into a case of salmonella in
    Tennessee, it was found that hydrolyzed vegetable protein was a
    source of the salmonella, which was found to be a commonly-used
    ingredient and a flavor enhancer for many processed foods
    including soups, sauces, chili, stews, hot dogs, gravies,
    seasoned snack foods, dips and dressings.
        My first question is, how would the administration's new
    standards of food safety have prevented this latest case of
    salmonella and in particular, its potentially far-reaching
    penetration in the food chain?

                          FOOD INSPECTION METHODOLOGY

        Secondly, I wanted to ask, with regard to the possibility
    of creating a new federal food inspection methodology, that
    based on the fact that many people are of the opinion that the
    FDA is not able to exert the needed leadership accountability
    on food safety issues because it has no single official whose
    full time job it is, and who has a line authority over all the
    elements of FDA's food safety program?
        So, my second question would be, given that view, don't you
    think that it's time, and it would be appropriate, for Congress
    to change the way that we currently manage the food safety
    program?
        And my third question has to do with reaction versus
    prevention with regard to food safety. The newly adopted
    inspection regime, which is basically an audit program, and
    you've got an additional $396,000 in one new employee to try to
    address that through audit with the prevention. And my question
    there is, how will this new prevention program with just one
    employee and just $396,000 actually work to accomplish our food
    safety, your food safety, mission?
        Dr. Hamburg. Okay. First question, I'm happy to be----

                            REPORTABLE FOOD REGISTRY

        Mr. Bishop. One additional, I should mention.
        Dr. Hamburg. Right. I'm happy to be able to tell you that
    with the recent salmonella contamination of the hydrolyzed
    vegetable protein product, there was actually a new program
    that had been put in place, our reportable food registry, that
    enabled us to quickly identify the contamination with this
    product and actually to act before there were any human
    documented cases of disease associated with it.
        So, I think it's a good example of being more preventive
    than reactive. We also, I think, can learn from this case about
    how important the----
        Mr. Bishop. You reacted soon enough to prevent further
    damage.
        Dr. Hamburg. Prevent human cases, which is--. There has
    been no disease associated with it. There has been a
    significant cost to industry in terms of product that can't be
    used, but we were able to get out a bit in front. Our goal is
    to get out even further in front in terms of preventing these
    problems in the first place. And with the passage of the new
    food safety legislation and with some of the activities that
    we're doing to transform our food safety program, we will be
    working with companies in order to put in place preventive
    controls so that we can identify where are the points in the
    life cycle of a product that are most vulnerable to
    contamination and how can we shore those vulnerabilities up and
    prevent the contamination from happening in the first place.
        So, it is our hope that we will be able to make sure and
    steady progress moving forward, especially with additional new
    resources and hopefully with some additional new authorities to
    really have a preventive program in place.

                          DEPUTY COMMISSIONER OF FOODS

        With respect to your concerns about the organization of
    food safety activities within FDA and accountability and there
    being no single person at a high level in charge, I'm happy to
    say that one of my first actions as the new Commissioner was to
    address that problem. And the individual is sitting right here,
    Mike Taylor, who is Deputy Commissioner for Foods. He has my
    ear 24 hours a day. He is responsible for aligning all of the
    different components for food safety and nutrition within FDA.
    He is responsible and accountable.
        It also, by having this higher level individual, gives us,
    I think, a higher level of coordination with other critical
    partners inside government and outside government. So, I think
    that the establishment of that position and his recruitment,
    and now the operationalization of a much more coordinated
    program has benefits and will continue to accrue benefits.
        Mr. Bishop. Was his assumption of those duties just by
    designation, by regulation, or by statute?
        Dr. Hamburg. It was a formal reorganization, which came up
    to the Hill for approval or sign off----
        Mr. McGarey. Notice. Notice.
        Dr. Hamburg. Or notice.
        Mr. Bishop. So it was regulatory? It was through----
        Dr. Hamburg. It was bureaucratic is all I can say. I mean,
    I couldn't just come in and do it, I had to, through the
    department, and then with notice to Congress, undertake a
    formal, official reorganization.
        Mr. Bishop. APA, the Administrative Procedures Act, is what
    you used?
        Dr. Hamburg. You know, I turn to----
        Mr. McGarey. I'll comment and say that we did, subsequent
    to sending the notice to Congress, submit the full details in
    the Federal Register. So, they were published under that
    document.
        Mr. Bishop. All right. Okay.
        Dr. Hamburg. And your last question, I sort of answered in
    my earlier answer about the importance of moving towards a
    preventive rather than a reactive approach, which saves lives
    and saves money.

                                  FOOD SAFETY

        Ms. DeLauro. Thank you. I know Mr. Kingston is coming back
    but we'll proceed on. I do think in some ways Mr. Bishop
    endorsed, if you will pardon me, a single food agency hearing
    his comments. So, thank you, Mr. Bishop.
        I want to ask some questions about food safety. We get lots
    of references from the administration to the membership of the
    food safety working group and they talk about major
    departments, agencies, several offices of the White House
    participate. My understanding, and I want to put on the record
    that, in fact, one of those offices is the Office of the U.S.
    Trade Representative. And I personally find it troubling that
    the USTR has said, and I've got his citation here.

                                      USTR

        ``The USTR is the lead agency for matters relating to
    international trade and therefore plays a significant role in
    food safety issues as the United States both imports and
    exports significant quantities of food. As such, USTR is an
    active member of the President's food safety working group.''
        What expertise does USTR have on food safety?
        Dr. Hamburg. You know, I can speak to the FDA role in food
    safety far better than I can speak to the USTR. What I can say
    is that clearly, issues of food and food safety are important
    trade issues but that my first priority, and I think, you know,
    what the American people, you know, really care about is that
    they can have confidence in a safe and wholesome food supply.

                           FOOD SAFETY WORKING GROUP

        Ms. DeLauro. What role does it play in the working group?
        Dr. Hamburg. To date, the issues that have been taken up in
    the working group, you know, have really focused on the
    framework for the program defining the pillars of the program
    in terms of strengthening prevention, inspection and
    enforcement and response and recovery. I don't believe, but I
    haven't been at all the meetings of the working group, that
    specific trade discussions have been undertaken at the working
    group. I'd be happy to find out and get back to you.
        [The information follows:]

        The President created the Food Safety Working Group on March 14,
    2009, to promote a public health-focused approach to food safety based
    on three core principles: prioritizing prevention, strengthening
    surveillance and enforcement, and improving response and recovery.
    Consistent with these principles, the Food Safety Working Group seeks
    to promote better coordination in Federal efforts to improve food
    safety and to develop short and long term strategies to make food
    safer. The FSWG is chaired by Secretaries Sebelius and Vilsack, and
    participating agencies include the Food and Drug Administration, Food
    Safety and Inspection Service, the Centers for Disease Control and
    Department of State, the Environmental Protection Agency, and several
    offices in the Executive Office of the President, including OMB, OSTP,
    and USTR. Each of these agencies is called upon by the Food Safety
    Working Group to offer input to their areas of competence in
    furtherance of the overarching goal of ensuring that the nation's food
    supply is safe.

                                     CODEX

        But, you know, I think there has been, you know, a
    continuing dynamic, both domestically within the government and
    internationally through CODEX and other entities, about these
    issues of the relationship between public health and trade
    concerns and my feeling is that at the end of the day, the
    public health voice must be very clear and very strong because,
    you know, protecting the health of the public is the first
    priority.

                            TRADE VS. PUBLIC HEALTH

        Ms. DeLauro. Well, I think you know, and Mr. Taylor knows,
    as well, my concerns in this area. What we've seen over the
    years is that, in fact, trade has trumped public health. And I
    will go back, just in some recent history about a working group
    under prior Administrations, in the Clinton Administration, and
    I just don't want to speak off the top of my head to see if the
    trade representative, you know, participated in those. I don't
    think so, but I'm not sure, so I don't want to talk about what
    I'm not of. But I think that immediately sends off, and I'm not
    asking you to comment, this light bulb's in my mind, in terms
    of what, where our priorities are. Clearly, our priorities need
    to be about the public health.
        With regard to the working group, is that just going to
    continue on or is it going to make a series of recommendations
    and then that will get implemented or this just an ongoing
    group?

                         COORDINATION AND COMMUNICATION

        Dr. Hamburg. My sense is that it will be ongoing. It offers
    an important forum for coordination and communication of
    activities. As you well know, there're many components of
    government that are involved in food safety issues. I think
    fifteen different components of government are part of the
    working group. It's chaired by HHS and USDA and, of course, FDA
    and USDA represent, you know, the bulk of the food safety-
    related activities.
        But, there're other important components and I think it
    does give an important venue for coordination and communication
    that otherwise probably wouldn't happen even with the best of
    intentions.

                              EQUIVALENCY PROCESS

        Ms. DeLauro. Let me, and I'm just going to make a comment
    on this because I think it's an item for another time. I don't
    know where you're going on the equivalency system, like USDA
    has for imported meat and poultry. I remain very concerned
    that, in fact, this approach compromises public health for the
    sake of trade. I've just seen so much of it over the years.
        Last year, this subcommittee held a hearing about the
    equivalency process and trade at USDA. This is an issue that
    I'm going to continue to follow very closely and intend to have
    future hearings which address the influence of trade on our
    food safety and our public health. And I think, quite frankly,
    I think our trade agreements, and some of those that have
    already been passed, and when we have not taken due
    consideration of public health in a formidable way and we find
    ourselves in a position where, if we want to correct those
    things after the fact and knowing about what the adverse
    conditions are, that then we find ourselves in a position of
    subject to litigation. So, my view is that we ought to
    anticipate these issues, be very stringent with regard to our
    food safety, as it applies to our trade agreements and have a
    hearing that is solely focused in that area so that we can look
    at it and make some recommendations.
        My time has elapsed, but I do have three or four other
    questions with regard to food safety but we'll come around
    again.
        Ms. Emerson. Why don't we go to you?

                            FOREIGN FOOD INSPECTIONS

        Mrs. Emerson. Let me go back, if I could, Madam Chair. We
    were talking a little bit about the food safety bill. Yesterday
    we talked about the number of foreign, the additional 1,900
    domestic food inspectors and 150, well, maybe it's 1,900
    additional domestic food inspections, and 150 additional food
    inspections done internationally.
        And I guess I'm a little bit concerned about the low number
    for the international inspections, particularly given the 20
    percent or so of the food consumed in the United States is
    imported.
        Do you think that we're dedicating enough resources to
    inspecting foreign food?
        Dr. Hamburg. Well, I think we need, you know, more
    resources and more activities to address the overall import
    safety concerns. I think it is important to recognize that what
    we're asking for in fiscal year 2011 is part of a comprehensive
    strategy to use the additional resources that you have given us
    over time and that it's not that we think that domestic
    inspections are more important than foreign inspections, but
    it's that we have teed up in our hiring pipeline and new FTEs,
    individuals that will be enhancing our international
    inspections.
        So, our overall number of inspections that will be
    accomplished in fiscal year 2011 will be more than----
        Mrs. Emerson. The number of inspections?
        Dr. Hamburg. The number of inspections that are mentioned
    there in terms of additional new dollars. In addition, you
    know, we have created a cadre of experts in foreign inspection.
    They're not the only ones that will be doing foreign
    inspections, but they have expertise around an important set of
    issues that have to do with food safety and foreign
    inspections. So, those resources will augment what we're doing.

                                 IMPORT SAFETY

        And I think, realistically in terms of dealing with the
    import safety question, we have to recognize that we have to
    have strategies that extend much beyond simply doing
    inspections. We really need to work with other regulatory
    authorities to try to ensure that the standards of production
    are equivalent to what we're undertaking. We need to work with
    international bodies to try to put in place, you know,
    harmonized standards and approaches. It's going to have to be a
    multi-layered strategy because the challenge of import safety
    is just so huge and growing. So, we're bringing a range of
    different tools to bear, expanding our foreign presence, also
    expanding our inspectional capability.

                           INSPECTIONS AND USER FEES

        Mrs. Emerson. Will the addition of more inspectors and/or
    inspections be contingent on new users fees, for example?
        Dr. Hamburg. Some of our inspectional capability, in terms
    of the fiscal year 2011, is very much linked to, I mean, almost
    all of it is very much linked to the new user fees. And, of
    course, the new legislation is quite prescriptive in terms of
    inspectional responsibilities, particularly on the domestic
    side. So, you know, if we are to meet those goals, as outlined
    in that legislation, we're going to need resources to do so.
        Mrs. Emerson. So, is it, I mean, in your opinion, do you
    think it's too prescriptive with regard to, for example, a
    southeast Missouri vegetable farmer as compared to a Chinese
    food processor?

                              RISK-BASED APPROACH

        Dr. Hamburg. You know, I think that the number of
    inspections, as laid out in that bill, you know, clearly put,
    you know, a more rigorous focus on domestic inspections, but I
    think that how we target inspections should really be using a
    risk-based approach. And that one of the opportunities that we
    now have as we move towards transforming our food safety system
    and really trying to have a preventive approach and a more
    risk-based approach, is to use what will always be limited
    resources in terms of the contrasts between, you know, the need
    and what we might like to do in the best of all possible worlds
    and what we can do, you know, we want to be wise about how we
    do it. And we want to apply the best possible science and
    technology so that we can make inspections more efficient, as
    well.
        Mrs. Emerson. I just got a little bit worried perhaps that
    we could've been a wee bit overly prescriptive just because I
    keep remembering in my head, watching that 60 Minutes report on
    some of the fish that is farmed over in southeast Asia and, you
    know, I'm always now very label conscious when I buy any kind
    of seafood. And so those things make me nervous. And I think,
    you know, that is generally more of a problem than the guy in
    my district who does actually grow vegetables or cantaloupes,
    or watermelons, or the like, and so I just want to make sure
    we're doing enough with the increased importation of food.
        Dr. Hamburg. It's a huge area of interest and concern to me
    and I look forward to working with you as over time, you know,
    we shape this program.
        Mrs. Emerson. Thank you. Thanks, Madam Chair.

                               RISK-BASED AT USDA

        Ms. DeLauro. Before I yield to Mr. Kingston for a special
    introduction, let me just say, and we can't go into it now, but
    this is by way of, by testimony because the Commissioner just
    started to talk about risk-based inspection and that's in the
    budget. Risk-based does not currently have, FDA does not have
    current, currently have adequate data-gathering tools and
    systems comparative risk evaluation models, or the internal
    structure needed to apply risk-based approach to recognizing
    response to the emerging evolving food safety issues and
    problems.
        We can't talk about it now, but we need to talk about that.
    I've watched risk-based at USDA and it was, they had to stop
    what they were doing because, in fact, there wasn't the
    adequate data and the research, et cetera, on which to be able
    to make that kind of risk-based determination.
        You're a student of this. We cannot move forward without
    data and analysis before we deal with risk-based. And I believe
    you agree, and so we will continue to talk about that. And with
    that, Mr. Kingston, let me just yield to you. This is very
    exciting. Mr. Kingston, go ahead.
        Mr. Kingston. Thank you, I don't know why I said that.
        Ms. DeLauro. Well, we were talking about food. So----
        [Laughter.]
        Mr. Kingston. But it's a great pleasure for me to introduce
    one of the greatest athletes in the United States' history. And
    that is Hershell Walker, Heisman Trophy winner, and national
    championship--Hershell from the University of Georgia.
        [Applause.]
        Mr. Kingston. And Hershell, the reason why he's so relevant
    is we spent so much time in this committee talking about
    childhood obesity, childhood hunger, nutrition, physical
    fitness, and getting these kids away from the Nintendo game.
        He's also with Larry Franklin of the Franklin Glove Company
    and Bill Sales of the Sporting Goods Manufacturer's
    Association. And they've been all over this, trying to get kids
    healthy and active.
        And I want to let Hershell say ``Hello.'' But one thing I
    want to say that he will not tell you. At the age of 47, he
    decided to take up the mild pansy sport of mixed martial arts.
    And he defeated in two minutes and 17 seconds most recently a
    26-year-old professional boxer.
        So he doesn't sit down. And Hershell, do you want to say hi
    to everybody?
        Mr. Walker. I didn't know I was going to get put on the
    spot. So first, you know, I'm glad you guys are here, because,
    you know, what I'm here doing is talking about obesity.
        You know, as a kid growing up, I was a little bit
    overweight, chubby, fat, or whatever you want to call me. And I
    also had a speech impediment. But I was very fortunate to have
    two parents, and also to have a PE coach that talked to me
    about being physically fit.
        And because this PE coach gave me a program to do, I became
    valedictorian of my class. Because it gave me confidence, and
    because I had the right parents. They gave me the right things
    to eat and the right things to keep me healthy.
        And so that's what I'm here to do, is to talk about that we
    got to continue to get all the kids healthy, continue to keep
    them healthy. Because I think a fit kid is a fit adult. And I
    think that's going to help a lot out in the long run.
        My mother always say, ``Why don't we take care of these
    small problems first? And it won't grow into a big problem?''
        Because no matter what everyone thinks, that baby is the
    prettiest, no matter how ugly the child may be.
        [Laughter.]
        Mr. Walker. But that's one thing we have to do.
        I want to just thank all of you for giving me this
    opportunity, because you guys got a lot more important things
    to do than to listen to me talk about this here.
        But I want to thank you. And you know, Mr. Kingston, we've
    known each other for a long time. He's helped me out in so many
    things. And I want to just say thank you, God bless you.
        Thank you, guys, for giving me this chance.
        Ms. DeLauro. Thank you.
        [Applause.]
        Ms. DeLauro. Mr. Hinchey.

                              NUTRITIONAL CONTENT

        Mr. Hinchey. Thank you very much, Madam Chairman.
        I just want to return briefly to this 20 percent issue. And
    first of all, I just want to thank you once again for all the
    work that you're doing.
        This Food & Drug Administration is so critically important
    to the safety and security of the people of this country. That
    20 percent margin of error is on the nutritional content of the
    products, the overall nutritional content of the products.
        So it's very, very important. And that 20 percent margin
    was initiated by the FDA. I wonder if you know why the FDA did
    that long before you got there?
        Dr. Hamburg. Right.

                         TWENTY PERCENT MARGIN OF ERROR

        Mr. Hinchey. Why they did it? What was, you know, the
    origin of that? And do you think it would be reasonable to
    require food manufacturers to add a disclaimer on a nutritional
    content label, that would just let the people who are buying
    the product know that the FDA allows a 20 percent margin of
    error in determining the accuracy of the nutritional content of
    the material that they're buying and eating?
        Dr. Hamburg. Well, I think that the best answer to your
    question is for me to actually go back and get you the real
    information to your specific and rather technical question. I
    mean, I can imagine that it was established, based on the
    technical capacities of laboratory tests to determine. I mean,
    there's always a margin of error.
        But I don't know. And so we will get back to you on that.
        [The information follows:]

        The 20 percent figure is not a margin of error. FDA's compliance
    criteria, including the 20 percent allowance for variation in naturally
    occurring nutrients, were developed as part of the 1973 final rules for
    nutrition labeling. In the January 19, 1973 Federal Register, FDA
    published a regulation which established a statistical approach to
    determine compliance with nutrition labeling requirements. The natural
    variation in the nutrient content of food products was well recognized,
    and the need to set practical limits of variation in nutrient levels
    for compliance purposes was the subject of extensive discussions. In
    developing the nutrition labeling system, it was important to provide a
    sufficient tolerance so that manufacturers could provide useful
    nutrition information on the label while meeting consumers'
    expectations that nutrition labeling would honestly represent the
    composition of the products that they purchased. The objective of the
    regulation was to secure compliance with requirements for average
    nutrient levels for units in a lot with only as much variability among
    units as is inherent in the naturally occurring nutrients when foods
    are processed under current good manufacturing practice. FDA is
    currently working on updating the nutrition facts label, and this is
    one item that we may consider re-evaluating based on more recent
    science. However, additional research on the variability of nutrients
    within foods may be needed to determine if the 20 percent figure could
    be modified.

        But I agree with your underlying concern that it's very
    important that consumers get accurate information, established
    when making choices for health. And I think that we have an
    important role to play in making sure that the information
    that's provided is as accurate as possible.
        And then I think we have to work with others, including
    people like we just heard from, in terms of educating the
    public about making healthy choices. And so I think, you know,
    it's an important question, and we'll get back to you.
        Mr. Hinchey. Okay. And if you wouldn't mind, take a look at
    that situation, to make a determination as to whether or not
    that would require them to put a disclaimer on the product that
    they're manufacturing. So people just know what they're
    getting. And maybe reduce that 20 percent to at least 10
    percent as soon as possible. And that would be a very positive
    thing to do.
        Dr. Hamburg. Okay.

                                    FOSAMAX

        Mr. Hinchey. If I could just ask you one other question. As
    we know what happened with ABC News, and how they ran a story
    on Monday, which talked about Fosamax, a drug used by women to
    prevent broken hips and, you know, how all of that process got
    so complicated and people got seriously ill as a result of--
    cause of--broken legs in a number of women.
        The story also said that Merck, the manufacturer, did not
    change the labeling on the drug for 16 months, to reflect the
    side effect after the FDA raised the issue. So the FDA raised
    the issue with them, told them what they saw was going on and
    their concern about it, and that it was 16 months before Merck
    did any change in the labeling to inform people.
        So I'm wondering why it took so long for Merck to take the
    appropriate action, and why the FDA didn't require Merck to act
    sooner? And what are we doing now? What do you think the FDA
    should be doing, or is doing now to really address this issue?
        Dr. Hamburg. Well, this is obviously a situation of
    enormous concern. Many woman take this product in order to
    protect their bones. And we want to ensure that there are not
    complications, such as you were just describing.
        It is also one of those situations, where it's very, very
    important to look at the science and take a thoughtful
    approach, and whether it is very clear that a large number of
    women taking this medication did have fractures. I think what's
    less clear is whether the medicine was the cause of the
    fractures. And that's the question that has to be critically
    examined and answered. And there is a team at FDA looking at
    the data we need, I think to move as swiftly as we can, looking
    at all of the available data, to make determinations.
        I know that in an earlier point in discussions with Merck
    around labeling, I think, you know, actually that Merck was
    prepared to go forward with the label, but that the group at
    the FDA did not feel that the data actually demonstrated this
    enhanced risk.
        But it's an area that we will be working on very
    intensively. I think it is very, very important that we ensure
    within FDA that we have a strong approach to assuring drug
    safety.

                                  DRUG SAFETY

        I'm moving forward with some strategies to enhance how we
    address drug safety, because especially as we strengthen our
    activities in the post-marketing surveillance area following
    the 2007 enactment of the FDAAA, we got additional authorities
    to strengthen our ability to follow a drug, beyond the time of
    approval, to really understand its use in people in the real
    world, you know, that we're seeing an increasing number of
    safety signals. We need to be able to respond as quickly as
    possible and as authoritatively as possible to emerging safety
    concerns, always, always, always bringing the best signs to
    bear on those critical decisions.
        Mr. Hinchey. Well, I appreciate that very much, and I thank
    you for everything that you're doing. But I just think that
    these things need an awful lot of attention. And I know that,
    you know, you haven't been here very long, I mean, on this
    particular job. And the things that you're doing are exemplary,
    as far as I know. And that's something that really, really
    needs to take place.
        But why it would take somebody, you know, like Merck to
    take a year and four months to make the kind of correction that
    could be critically important for the safety and even the life
    of some people, is a mystery to me. And I think it's something
    that really needs to be overcome. And there needs to be a very
    more effective, perhaps relationship between the Food and Drug
    Administration and the agencies that are being overseen.
        And I know that over time, there has become a very close
    sort of relationship, including the funding that comes out of
    those agencies to Food and Drug Administration.
        And all of things, I think, really need to be looked at
    more carefully, and hopefully improved, so that the safety and
    security of people in this country can be improved, as well.
        And I thank you very much, for everything you're doing.
        Ms. DeLauro. Mr. Kingston.

                         TOBACCO OUTREACH AND EDUCATION

        Mr. Kingston. Thank you, Madam Chair.
        Dr. Hamburg, on the tobacco outreach and education money,
    it would appear that with the decline in tobacco use and all
    the other efforts that are out there through the Master
    Settlement Agreement, that that would not be the best use of
    FDA's funds. Since you are going to have the regulatory burden
    already, it would appear to me that the education issue is
    somewhere being handled.
        I know a government agency would never turn down an
    opportunity to expand its budget. But it just seems that that's
    not necessarily the best expenditure of the dollar.
        Dr. Hamburg. Well, I appreciate your question. You know, a
    couple things. One is that, you know, we are not seeing the
    continuing declines in tobacco use that we would like to see in
    this country, and it has huge implications for public health.
        So I think we need to continue our overall tobacco use
    prevention and cessation activities. In terms of the FDA role
    that the Tobacco Act actually requires us to address a couple
    of key areas that are not specifically education, but in fact
    it's on marketing, labeling, and the manufacture and
    composition of tobacco products.
        So I think we will actually be, through this activity,
    making a unique contribution in some key areas. For the first
    time, for example, we will actually have information about the
    ingredients in tobacco products and be able to really assess
    scientifically the health implications of these products.
        We also will have authorities to address some of the
    labeling issues, which are very, very important in terms of
    getting information to consumers about products and----
        Mr. Kingston. Well, I understand that aspect of it. But it
    would appear whether you could coordinate the education and
    outreach through some other recipient of MSA money, rather than
    you need to do it yourself.
        Dr. Hamburg. And we're not actually undertaking through
    this set of activities education and outreach activities, per
    se. We are working in coordination with other parts of
    government and also, you know, with state authorities and
    others, in terms of some key aspects of the law, the education
    and outreach being one. And also you know, some of the
    enforcement activities will be undertaken at the state level,
    as well.
        But your point is well taken about assuring good use of
    resources. But we actually, you know, talk about prescriptive
    pieces of legislation. There's a very clear set of activities
    that we are required to undertake, under the law. We are very
    pleased to have this new responsibility, and believe that we
    will make a real difference in public health, reducing
    preventable disease, disability, and death.
        But we are really targeted in a couple of key areas, some
    of which really are novel in terms of government regulatory
    activity.
        Mr. Kingston. Also, I wanted to give you some numbers that
    I had from your budget from 2007; that in 2007 there was a 6
    percent increase, 2008 14 percent, 2009 23 percent, and in 2010
    17 percent, and the proposed I think 23 percent for the
    request.
        And that's just so out of whack with the household budgets
    and the recession that, you know, that is where my concern
    about money in the big picture comes from, is just there have
    been some healthy increases, which I wish I had that in my
    retirement account. I wish I had that in my own salary. I wish
    I had that in my own household budget. As do most American
    people at this point.
        But you know, that's not keyed into the economy.
        Dr. Hamburg. Well, what I can tell you is that in all
    honesty, I think that the budget increases that FDA has
    received in the last couple of years and the request in 2011,
    is vitally necessary and appropriate in terms of the essential
    and unique mission of FDA and what has, in fact, been a history
    of chronic underfunding in many, many vital areas to protect
    the health of the public.
        I think when you----
        Mr. Hinchey. Now let me kind of, having said that, and I
    know my time's up, but these numbers come from the CDC: 76
    million food-borne illnesses are reported a year, 76 million, a
    big number. Three hundred thousand hospitalizations, 5,000
    deaths. Although the deaths aren't always attributable to food-
    borne illnesses.
        Dr. Hamburg. Mm-hmm.
        Mr. Kingston. But 5,000 associated deaths. Big numbers. CDC
    numbers. Three hundred million Americans, though, eating
    approximately three meals a day, never snacking.
        Dr. Hamburg. Unlikely.
        Mr. Kingston. That would be 900 million meals a day, or 328
    billion a year. So if we divide 76 million by the 328 billion,
    we'd have a food-borne illness rate of 0.0002 percent, or 99.98
    percent success rate, in terms of what we're consuming.
        CDC numbers standard math, no editorial in there. Now I'll
    begin the editorial comment, which we all share a great goal of
    food safety here. But if funding is always inadequate,
    something's going on beyond the government. And thank goodness
    that funding, that concerned is the private sector, that even
    if they didn't care, that want your repeat business, and
    they're not going to get if they're poisoning you.
        So there's a lot going on in terms of food safety well
    beyond Washington, D.C. Otherwise, we wouldn't have such a
    remarkable success rate.
        And so often, when we talk about increasing budgets,
    because of, you know, some processing plant having salmonella,
    we sort of overexploit that, overdramatize it, in order to beef
    up budgets here.
        And it's good politics for everybody, and it actually
    certainly comes a lot more from us than it does from you. But I
    always like to inject those numbers in the record. And I know
    I'm out of time.
        Dr. Hamburg. Can I comment? You know, I think these are
    very difficult economic times. We have to be very responsible
    stewards of our resources.
        But I really think, you know, that this is a major public
    health concern. We're talking, numbers are, you know, not
    completely accurate. They vary. But, you know, using your
    numbers, 5,000----
        Mr. Kingston. No, not my numbers, CDC numbers.
        Dr. Hamburg. CDC's, okay. I'm sorry. But, you know, we're
    talking about, you know, preventable deaths and a lot of
    preventable illness. We're talking about additional costs to
    the health care system. We're talking about lost productivity
    in the work place, because of these illnesses. We're talking
    about very significant costs to industry, because of food-borne
    outbreaks, when there was the Georgia peanut contamination
    problem with the Peanut Corporation of America. And it costs
    the peanut industry a billion dollars.
        Mr. Kingston. But that actually was a criminal activity.
        Dr. Hamburg. Well, you know, sadly some of what we see in
    terms of food safety does have to do with intentional, you
    know, contamination. And we've seen that internationally, and
    we've seen that there is irresponsible-becoming-criminal-
    activity, that has allowed contamination situations to develop
    and persist.
        But I think that, you know, this is really a very, very
    important problem that has to be looked at and measured in many
    different ways.
        And you know, I've been very frankly surprised and
    encouraged by how much the food industry actually supports the
    idea of a strong, fully functional FDA, because they see it as
    in their best interests. I think we all recognize that the
    problem is large, that the responsibility is shared. But the
    benefits in terms of improving health and strengthening the
    economy is real.

                         PEANUT CORPORATION OF AMERICA

        Ms. DeLauro. Just--and you can get back to us on this, Dr.
    Hamburg--what's the status of any criminal prosecution of those
    involved with the Peanut Corporation of America? So that if
    somebody could get back to us on that? Because as my colleague
    pointed out, it was a criminal activity.
        [The information follows:]

        In accordance with DOJ policy, the U.S. Attorney's office for the
    Middle District of Georgia is responsible for answering any questions
    about any open investigations about this matter.

        I would just say that in Iraq after 9-11, where we were
    surprised with the deaths of, you know, 3,000 people or more,
    we went to war in Iraq, and we spent trillions of dollars to do
    that. We know that 5,000 deaths are preventable. That we did
    not know was happening. We know 5,000 people die or roughly
    that number every year.
        I believe we ought to go war, and that responds to this
    effort as well, because we know that these deaths are
    preventable.
        Ms. Kaptur.

                                 ACCOUNTABILITY

        Ms. Kaptur. Thank you, Madam Chair. Welcome very much.
    Really glad to have you here, doctor. And wish you well in your
    work on behalf of our country.
        I wanted to just compare something that's happening with
    invasive species and the cost to the American taxpayer of trade
    agreements that are terribly flawed and do not account for
    environmental health, and an analogy to your agency.
        If we look down the list of what USDA in its role has in
    trying to control invasive species, everything from Emerald
    Ashborers, which are destroying 20 million trees in our area,
    due to their import, on landscape material, it is staggering.
    We're losing ten percent of our tree cover. And all the costs
    of that remediation are being born by the U.S. taxpayer.
        Asian longhorn beetle, destroying our hardwoods. Same
    thing.
        We don't deal very effectively with holding those
    responsible accountable. We put the cost on the taxpayer. It's
    a great deal if you can get it. That means the importer's not
    responsible, the foreign company's not responsible. All the
    people that made money, not responsible.
        There's no international tort system that actually would
    place the blame where it belongs, and rigorously, then, control
    that behavior, because they would actually be made to pay for
    the harm that they've done.
        As I look at your responsibilities, I look at things like
    heparin being imported, or recently now this hydrolyzed
    vegetable protein recall. And I'm asking myself the question--
    I'm looking at your budget, and you're asking for a lot more
    money--$747 million, nearly a billion dollars, three-quarters
    of a billion dollar's increase--and I'm saying to myself, so
    we're going to put inspectors in China, we're going to put
    inspectors in Mexico.
        Who's going to pay for all this?
        We've got more imports, bad stuff. Melamine in pet food,
    heparin killing people.
        And my big question to you is, how do we hold them
    accountable? What's the system to hold them accountable? Rather
    than our taxpayer money going into paying for their wrongdoing
    and never holding them accountable? Because that's a great
    deal.
        They'll just keep doing it; they'll do more of it, because
    they don't get caught that much.
        So my first question is that.

                                     CHINA

        And my second one is related to China, since a lot of
    what's been happening relates to countries that don't have
    really good environmental standards. How can FDA assure, in
    working with undemocratic countries like China, that don't have
    transparent legal systems, they don't have environmental
    standards--who would want to live in all that pollution,
    anyway--how do we hold those who are profiting off that very
    clever system of non-responsibility? How do we get at them?
        Dr. Hamburg. Well, I think, you know, we need enhanced
    accountability in both cases that you describe and very
    important challenges.
        In terms of our ability to hold people accountable, with
    respect to food and medical products, you know, there are
    varying ways that we can do it, and varying strengths of legal
    leverage that we have. And it varies by product.

                                    HEPARIN

        Ms. Kaptur. Well, let's take heparin. Let's take heparin.
    How do we hold responsible--maybe describe the process to me,
    and I'll ask additional questions for the record. How much of
    heparin's ingredients are imported versus manufactured
    domestically? Who does it? And what would your guess be, would
    most of the ingredients for heparin be manufactured in the
    United States now?
        Dr. Hamburg. Well, with heparin, you know, an important
    precursor product was being manufactured in China, and still is
    largely manufactured in China, from what I understand.
        An American company was responsible for the ultimate
    product; but they, with the heparin contamination case, had the
    problem that the supply chain had this contamination upstream.
    Now there are much more rigorous systems in place, recognizing
    that type of problem in terms of trying to assure the safety of
    the supply chain, which industry has the responsibility for,
    and we have a responsibility for----
        Ms. Kaptur. I'm going to interrupt you, Commissioner,
    because I've only got 26 seconds here. You know how you diagram
    a sentence--Maybe you're too young--back when we were taught in
    school we learned how to diagram a sentence.
        Dr. Hamburg. Right.
        Ms. Kaptur. How can you diagram for me what happened with
    heparin? From the American integrator, U.S.-based integrator, I
    guess, and all the component parts that went into heparin--
    let's just take that one----
        Dr. Hamburg. Yeah.

                             ADDITIONAL AUTHORITIES

        Ms. Kaptur. I'd ask you for the same on melamine, if you
    can do that in the pet food disaster. How do we figure out
    who's the subject of the sentence? Who are the dangling
    participles? Can you do that at FDA?
        Dr. Hamburg. You know, I think one of the reasons why we
    are so eager to get the additional authorities that would come
    with that food safety bill--and we talked about earlier the
    need for some additional authorities as well as resources on
    the import safety, is that securing the whole supply chain is a
    complex issue, and it's getting more complicated in our
    globalized world.
        Ms. Kaptur. Well, could I ask you, then--you say wait for
    this food safety bill. Well, right now I don't want to wait for
    that bill. I support it, I support Congresswoman's DeLauro's
    leadership on this so much.
        But can you provide, just with one product, can you diagram
    for us what happened? Does FDA today have that capability?
        Dr. Hamburg. You know, I don't know whether going through
    heparin is the best way to get at what I think you're asking
    for, which is accountability in terms of when there are
    problems, what actions can be taken----

                               PRECURSOR PRODUCTS

        Ms. Kaptur. I want to know just what happened in this
    situation. Which companies are responsible? Which
    subcontractors are responsible?
        Dr. Hamburg. Yeah. The problem was that the precursor
    product--and you know, I wasn't at the agency at the time, so I
    don't know all the details--but the precursor product was
    coming from many different sites, with very little regulatory--
    --
        Ms. Kaptur. More than 100 sites, would you guess? More than
    100?
        Dr. Hamburg. You know, I just don't know. I'd be happy to
    have someone brief you on the whole heparin situation----
        Ms. DeLauro. Great.
        Dr. Hamburg. But it's coming in. There was adulteration
    that was quite deliberate, and actually, you know, fairly
    sophisticated in terms of the compound that was used to sort of
    extend the volume of material, and reduce the cost of
    production.
        So there was a contaminant that was introduced. There was
    not an appreciation that that had happened. It was able to go
    undetected by the existing screening methodologies. And we
    learned of it when people started getting sick.
        The additive that was used caused allergic reactions in
    people.

                               PRIVATE INTERESTS

        Ms. Kaptur. You know, Madam Chair, what I would really
    appreciate--because this is complicated--but if we could take a
    product, like heparin, and track it back and see what happened,
    then we can better understand where your systems break down,
    and where you are not able to guarantee public health and
    safety.
        And we can look at the private interests that are doing
    this to us. Right now, we're all talking generally. But if we
    could have a couple examples--I'm thinking of heparin and
    melamine as the two that are really important to us here--if
    you can help us unwind that, I think it would greatly
    illustrate what we're trying to get to here.
        Mrs. Emerson. Will you yield just for a second?
        Ms. Kaptur. I yield to the gentlelady.
        Mrs. Emerson. Because before you got here, Marcy, we
    actually talked about, you know, what authorities would the
    Commissioner need in order for us to better track, if you will,
    all of the different ingredients, et cetera, that go into the
    chemical makeup, if you will, or the parts of a pill or however
    the medicine is delivered.
        And so we're going to work real closely on that, because
    that hopefully would then solve the problem that is very
    prevalent in some cases, that you're talking about today.
        So----
        Ms. Kaptur. Thank you.
        Mrs. Emerson. So maybe you would help us do that too?
        Ms. Kaptur. Yes, I'd be glad to work with the gentlelady on
    this, obviously. Thank you very much.
        Mrs. Emerson. And I would welcome the opportunity to work
    with you on this, because it is, you know, such an important
    issue. And I think, you know, whether you're looking at heparin
    or melamine, it's emblematic of a much larger set of concerns,
    where we really need, you know, a new paradigm for our
    approach, and we need to make sure that we have the tools and
    resources to do the job.
        Ms. DeLauro. Thank you. Mrs. Emerson.
        And then----

                                     LABELS

        Mrs. Emerson. Thank you. I just have one more question, Dr.
    Hamburg.
        And it's something that I brought up with you yesterday,
    but I'd like to go back into it a little bit more. And it has
    to do with a potential rule published in the unified agenda of
    FDA that the law that defines a label as written, printed--I
    have to read this--or graphic upon immediate container, for
    prescription drugs. And I know that you all at FDA have
    announced a safe use initiative to reduce preventable harm by
    identifying the specific preventable medication risks and
    developing implementing--this is in your written description--
    ``implementing and evaluating cross-sector interventions with
    partners.''
        However, the unified agenda announces FDA's intention to
    make professional prescription inserts electronic only, without
    any backup system. And I mean, we all remember with great
    sadness what happened during Hurricane Katrina. And we just
    really need to think about that to illustrate, in my opinion,
    the inadvisability of having no printed information backup
    system in place.

                              ELECTRONIC INTERESTS

        Because we have cable malfunctions, you have electric
    outages, minor storms. I mean, I couldn't get my Internet to
    work in my house this morning at 7:00 a.m.
        So anyway, these things happen. And the fact that we have
    in my district a very heavy senior population that these folks
    don't use computers.
        And so going to simply electronic inserts to describe side
    effects of medicines and the like, to me, well, it scares me,
    number one. Because I think that it could cause huge problems.
        But can you explain why you all want to change a step as
    important as that labeling in the patient professional
    prescription process, at least before you even do a risk
    analysis?
        Dr. Hamburg. Well, yeah, I think and talk to people. You
    know, obviously, our goal is to try to meet the information
    needs of people and to help support people in the safe and
    appropriate use of medications that they need. I don't think
    the intention is to not make that information available to
    people through other means, but their important benefits from
    having a system that is electronically based, the benefits are
    that number one, it's more easily accessible.
        You can't lose it. And it can be rapidly pulled up by
    physicians at the time they might be prescribing a drug and
    very significantly it can be updated in a way that paper
    inserts cannot be. So if new safety information on a product or
    new recommendations for appropriate use emerge, it can be
    rapidly modified on an electronic label. But we also want to
    have what is referred to as a single patient leaflet, which is
    an informational that can be given to a patient at the time
    that they are prescribed a drug that contains the up-to-date
    information on the use of that drug.
        But, you know, it's important enough that I raised the
    question after our conversation yesterday, but I will be
    getting more information on it to make sure that I fully
    understand the issues at hand, and I certainly take your
    concern about the older Americans that may not be computer
    savvy and have no interest in ever becoming computer savvy.
    And, of course, those are among the people that are using the
    most drugs. And under the most complicated circumstances in
    terms of appropriate use, so we have to be sure that we are
    reaching those senior populations with the best, most accurate,
    and understandable information about appropriating this.
        Mrs. Emerson. Well, I mean I am assuming that. So what
    you're basically saying is that people will not go without
    getting some kind of extra little piece of paper in their
    little bag with their prescription outlining the side effects,
    et cetera. But if you need more up-to-date information, you
    would be able to then electronically get it.
        Is that what you're saying? Because I would think that the
    pharmacist would go ahead and print out for you, if that
    person, the pharmacist, is asked to do so, which I think has
    got to be mandatory here, because, you know, when you're taking
    six different drugs, you just don't know necessarily they react
    with one another.
        Dr. Hamburg. What's going to be electronic, the in-package
    insert, is actually, I think, viewed by most people as not what
    the patients use, but many do. But there's other guidance, of
    course, about appropriate use of medications that come with the
    drug, the prescription, and can be made available to patients.
    But the information is very important to have access for
    providers and that's where having it electronic, it also can
    link it in to other databases that are important for full use
    of the information. So having it electronically is clearly a
    benefit, especially in terms of this ability to update as new
    guidance emerges and all of that.
        Mrs. Emerson. Sure. I have no problem with that whatsoever.
        Dr. Hamburg. But it's absolutely key that patients that are
    actually using these medications have ready access in whatever
    form they are likely to use to the material and that's what I
    will, as I said, go back and ask additional questions. But on
    my first foray into understanding the issue that you raised
    with me, I was told that the intention was not to prevent
    people from getting access to paper information about the
    appropriate use of the medications, the contraindications to
    use.
        Mrs. Emerson. Right.
        Dr. Hamburg. And other, really important and risk-related
    information.
        Mrs. Emerson. No. I appreciate that and I look forward to
    working with you. I just want to make sure.
        Dr. Hamburg. Yeah. No. We aren't going to make assumptions
    that people will know to ask for something.
        Ms. DeLauro. Sorry. Mr. Farr.
        Mr. Farr. Thank you very much, Madam Chair. Thank you very
    much for being selected, an honor to have you here as the
    ``drug czar,'' I guess.
        Dr. Hamburg. The drug and food czar, and cosmetics and
    tobacco.

                                  FDA AND USDA

        Mr. Farr. Yeah, everything. Well, I got elected to Congress
    and learned after going through local government and state
    government that Washington as the Federal Government is what we
    do here is silos. And when you think of silos you think of
    agriculture. Right? So, this committee, and, in fact, this
    committee does a lot of silos itself, but it's the only
    committee in the House or the Senate that has jurisdiction over
    both USDA appropriations and FDA appropriations. So this is
    really the only chance to have one stop for what I think
    frankly is very awkward. And I doubt that my wife could tell me
    the difference between what the Department of Food Safety and
    Inspection does and what FDA does.
        I don't know how many people in this room know the
    difference, you know, and you think when you see the Department
    of Agriculture, it relates to food. And you see the agency that
    says the Department of Food Safety that it has to do with food,
    everything in food, but indeed it doesn't and it's only meat,
    poultry and eggs. A lot of the discussion here, frankly, is
    because the issues of drugs and drug safety is so keen, and we
    are dealing with food safety. And I apologize for not being
    here during that dialogue. I was actually at Homeland Security.
        We were talking about FEMA and about One Stop. And it seems
    to me that ideally we'd have one stop for food. We wouldn't
    have two different departments administering these things,
    because it just becomes awkward. But on the other hand, the
    majority of the food safety aspects, other than what USDA does
    is in your department. And the emphasis in the department has
    been probably more on drugs than on food, in reality, and
    frankly your incredibly distinguished background. And the
    experiences you have have been more of the urban side of
    medicine and the delivery of medicine. And I was thinking that,
    you know, in FEMA I mentioned this morning what we try to do
    for responding to this kind of thing is to prevent it from
    happening in the first place, and there's a lot of emphasis in
    the FEMA budget to do prevention.
        In essence, I mean, if you're doing your job, which is to
    prevent these wrongs getting into the process of allowing
    illnesses to develop, it is in the prevention business. So, in
    medicine, you don't have a national emergency room response.
    Emergency rooms are on the local level. So what I am trying to
    get at is that I think you have an incredible role. We
    discussed this in my office, a little bit of trying to bring
    together. And, frankly, Madam Chair, perhaps in the future we
    ought to have the hearing on the USDA food safety at the same
    time we're having the hearing, so we can really get into the
    entire range of food safety, because you have now the
    responsibility, as we do this new food safety bill, of building
    credibility.
        I represent a really incredible amount of productive
    agriculture and it's really fresh. I mean there isn't a kill
    step when you go to lettuce. You know. You don't cook lettuce
    and eat it. You can wash it with chlorine, but so the emphasis
    is now on growing practice. It's the prevention. And I would
    really love to see you be that crossover director that can
    bring both USDA and FDA together on food safety, because I
    don't think it's ever been done. And whenever there's an
    outbreak, you know, it's a crisis between who's supposed to
    respond.

                              CRISIS COMMUNICATION

        And, frankly, as I've said, I think there's a whole need to
    do crisis dialogue, crisis communication. Because when the
    spinach, which most of the spinach in the United States is
    grown in my district, 70 percent of all the spinach, and there
    are certain seasons and months when spinach can come in from
    other states and other countries, but year round. So we got
    hit, probably lost $200 million in private investment. A lot of
    people went out of work.
        A lot of farmers and poor people were out of work. Farm
    workers couldn't get jobs. And the problem is we just did a
    voluntary recall, so the companies didn't collect on insurance,
    because it was voluntary. You didn't have a disaster. If this
    had been declared a natural disaster they would have had
    disaster insurance. If it had been declared that we have to
    condemn it, we would have had a takings payment, but voluntary.
    And so all these people voluntarily took all the spinach off
    the shelves and buried all the spinach in the fields and dumped
    all the spinach in the trucks, and did all that stuff, and then
    found out nobody would help them.
        So then it got into, you know, maybe the call. The message
    didn't come out very well, the disaster message, and perhaps we
    should have thought it through before we just said--because
    frankly to this day we've never recovered the consumption of
    spinach and a lot of other leafy greens were affected, so I'm
    not going to ask any questions right now other than because
    I've submitted some to you and we've talked some in our office.

                                FARMERS AND FDA

        My point here is I think you have a remarkable role and
    this committee is the place to really bring this crossover
    between USDA, because the farmers don't trust FDA. They have
    never worked with FDA and you've only been there as the bad cop
    in a sense, and so I think we have to win. How do we make the
    FDA the support group for food safety and agriculture, because
    we're going into ways that we've never done before. And what
    I'd like you to do is use the ability to have a level playing
    field across this country for agriculture, if indeed the best
    management practices and food safety practices are being done
    in some states, then require all the states to do that.
        That will make for equal competition and equal reliability
    in food safety. Thank you.
        Dr. Hamburg. Thank you.

                                FOOD SAFETY--GAO

        Ms. DeLauro. Thank you, Mr. Farr.
        Let me try to just run through a series of questions, if I
    can, because I've got a lot of questions. And again with regard
    to food safety, August 2009, GAO called for changes by both
    USDA and FDA, and how they act when calls involving school food
    take place.
        Recommendations: FNS, FDA, should complete an MOU on how
    they are communicating during investigations and recalls that
    might involve school food. Have FDA revise its recall audit
    checks to make sure schools are adequately represented. Where
    do you stand in terms of implementing these recommendations?
        Dr. Hamburg. You know, we are working I think really quite
    closely with USDA. My sense is, you know, it's a more
    coordinated effort than in many past years. We have the luxury
    of having high level people on our staff that used to work at
    USDA and they have high level people that used to work at FDA,
    so there is already an openness and understanding of culture.
    It's very, very important.
        Ms. DeLauro. Are we going to implement those
    recommendations at FDA that we mentioned with regard to the GAO
    report?
        Dr. Hamburg. You mentioned a memorandum of understanding. I
    don't know precisely what that is. We can get back to you.
        [The information follows:]

        In its report, the GAO Report stated: ``We recommend the Secretary
    of Agriculture direct FNS and that the Secretary of HHS direct FDA to
    jointly establish a time frame for completing a memorandum of
    understanding on how FNS and FDSA will communicate during FDA
    investigations and recalls that may involve USDA commodities for the
    school meal programs, which should specifically address how FDA will
    include FNS in its prerecall deliberations.''
        FDA and FNS have collaborated to develop a Memorandum of Agreement,
    or MOA, that will address the GAO's recommendation. Specifically, the
    MOA is between the Department of Health and Human Services, Food and
    Drug Administration and the following agencies within the United States
    Department of Agriculture: the Agricultural Marketing Service, the Food
    and Nutrition Service, and the Farm Service Agency. The MOA is intended
    to strengthen and facilitate the exchange of information among the
    participating agencies during investigations and recalls that may
    involve USDA commodities such as those offered through the National
    School Lunch Program, and the Woman, Infants, and Children Program.
        The basic framework of the MOA is complete and is under review by
    the agencies. Final clearance will follow, with a targeted completion
    date of the summer 2010.

        Ms. DeLauro. Okay. If you can get back to us on the
    implementation of those recommendations that came out of the
    GAO report in August 2009.
        Dr. Hamburg. Yeah. Yeah, but we take those kind of
    recommendations very seriously and, you know, see that that
    partnership is key. And, especially as Mr. Farr was saying, you
    know, get more involved in terms of activities dealing with
    farms and agriculture.
        Ms. DeLauro. Okay.
        Dr. Hamburg. It's essential.

                               BINDING STANDARDS

        Ms. DeLauro. You talked in your testimony about binding
    food safety standards and funded by $4.5 million, and budget
    authority $21.5 million in user fees. I am delighted to see
    reference to binding standards. Would these only be possible if
    new FDA food safety regulation is passed or are you
    contemplating some way to do them under the authorities you
    have now?
        Dr. Hamburg. I think we want to move forward under
    authorities that we have now. There may be some elements that
    would be greatly enhanced by additional authorities, but I
    think that there are avenues for us to pursue. You know, I'm
    not exactly sure what all you're looking at there in terms of--
    --
        Ms. DeLauro. Well, we've always dealt with guidance, and I
    tell you. If I see the word, I want to scream when I see the
    word ``guidance.'' We have dealt with that for so long. You now
    started to talk about binding standards, binding food safety
    standards. So if you can let us know there again with regard to
    that what your reference is in terms of its binding and the use
    of current authority to do some of this versus having to wait.
        [The information follows:]

        FDA is planning to propose regulations setting clear, enforceable
    standards for fresh produce safety at the farm and packing house. FDA
    intends to propose a rule with the purpose of reducing the risk of
    illness associated with contaminated fresh produce. FDA intends to base
    the proposed rule on prevention-oriented public health principles and
    incorporate what we have learned in the past decade since the agency
    issued general good agricultural practice guidelines entitled Guide to
    Minimize Microbial Food Safety Hazards for Fresh Fruits and Vegetables,
    known as the GAPs Guide.

        Dr. Hamburg. Okay. I hear you on guidance. I have to also
    in the spirit of full disclosure say that as I've been in this
    role, I can see the real utility of guidance in terms of being
    able to move much more swiftly than in other domains, so that
    we're going to have to have a balance.
        Ms. DeLauro. You're going to have to redefine guidance for
    us and happy to be open to that. But I'm up to here in guidance
    for the last several years.
        Dr. Hamburg. Okay.

                             GENERIC DRUG USER FEES

        Ms. DeLauro. So, as you know of not getting us anywhere,
    you know, and I appreciate the new translation of guidance.
        So generic drug user fees are $38 million. 2011 proposed a
    number of times. Predecessors have been optimistic about it. It
    has gone nowhere. So I know about the backlog and what we need
    to do to move forward and I believe in trying to move this
    process forward. I would like to see a generic user fee
    enacted, but without the kinds of strings attached that we have
    with PDUFA.
        It is my view that the performance standards have imposed
    unreasonable deadlines on FDA drug reviewers and it is bad
    morale, bad for public health. We recently had an executive of
    one of the major generic manufacturers who is quoted as saying:
    ``We support user fees. The only thing we ask is performance
    metrics.'' Referring to the brand name companies he said, and I
    quote: ``They pay their $1.2 million and they get their files
    acted upon. I would like assurances that we would not go down
    that path with a generic user fee.''
        Dr. Hamburg. I would only underscore ``acted upon'' doesn't
    necessarily mean approved.
        Ms. DeLauro. There is so much pressure on the reviewer, and
    we have seen some of the adverse reactions to that recently and
    have talked about them. And so I would really like the
    assurance that we are not going to go that same road.
        Dr. Hamburg. Well, you know, we're just beginning those
    conversations. I am guardedly optimistic. I hope I won't fall
    into the category of my predecessors of hitting a brick wall.
    You know, I think we clearly have a situation at the present
    time that's not sustainable. It is not acceptable to have
    backlogs, especially when these generic drugs represent very,
    very important drugs for people at affordable prices. So we are
    about to begin those discussions and we will be mindful of your
    concerns and the concerns expressed by others on this
    committee.
        Ms. DeLauro. Exactly, because we have gone down not a good
    road.
        Dr. Hamburg. Right.
        Ms. DeLauro. And the other direction should be visited.
        Dr. Hamburg. And I think, you know, the other aspect of
    this is that we want to have accountability in everything we
    do, but we also don't want cumbersome metrics that actually end
    up slowing the process and distracting us from the ability to
    actually address the review process and the backlogs, and make
    the decisions that need to be made. So I think, you know, those
    are going to be certainly issues for me going into these
    discussions.

                       BLOOD COLLECTION AND THE RED CROSS

        Ms. DeLauro. A quick question. First of all, I applaud the
    work of the Red Cross, and I think they do just wonderful,
    wonderful humanitarian work. On the other hand, we have for a
    quarter of century the FDA has really grappled with issues
    related to blood collection by the Red Cross.
        FDA has two consent decrees, assessed the Red Cross at
    least $20 million in fines. The problem still seems to be
    unresolved. How do we fix this?
        Dr. Hamburg. You know, this has been a saga that has
    persisted for much too long. We have been in intensive
    discussions. We see measurable progress and that's encouraging,
    but we haven't gotten far enough. We are trying to really sit
    down and figure out a systematic oversight mechanism so that we
    can be extremely explicit about what we expect and how we are
    going to measure their progress towards those goals. And, you
    know, we are going to use the other tools, regulatory tools we
    have in terms of fines as we also work with them.
        Ms. DeLauro. Red Cross deals with 40 percent of the
    nation's blood supply. Look. This is an October 30, 2009 letter
    to the Red Cross. FDA said about 231 significant violations at
    12 Red Cross facilities across the country. As I say, you know,
    they're the first on the scene. There's all kinds of
    humanitarian great work that they do, but this smacks of a very
    serious problem that they have. They oversee 40 percent of our
    blood supply.
        Dr. Hamburg. Right.
        Ms. DeLauro. So, you know, this is not one where I think--
    you know, we've got to get it done. It's got to get done fast.
        Dr. Hamburg. You know, I hope that very soon I can report
    back to you that we have made the kind of measurable progress
    that you're looking for. You know, we have asked them to do
    some very rigorous changes in their program management and
    oversight. They have modified, you know, their systems and
    their governance. We are still, you know, watching and working
    with them very carefully because they are not where they need
    to be. And, you know, it has been surprising to me to look at
    the record and how long this has persisted. And I share your
    concern that this cannot go on as it has been going on.
        Ms. DeLauro. Well, and continue to let us know how we can
    be helpful in this regard. I mean, this is outrageous that this
    has gone on for so long.
        Ms. Kaptur.

                          ECONOMIC COSTS OF VIOLATIONS

        Ms. Kaptur. Yes. Thank you, Madam Chair.
        Commissioner, how does one quantify the true economic cost
    to our country of the food and safety violations that your
    agency regulates? Has GAO ever done a study on that?
        Dr. Hamburg. You know, I don't believe that there's been
    that kind of comprehensive analysis. You know, we have talked a
    little bit about how that kind of analysis would be helpful to
    us in terms of I think talking about, you know, the funding of
    FDA and the resource base, and our ability to fulfill our
    mission, I think if people really understood the broad,
    economic consequences and inability of FDA to fulfill its
    important roles and fulfill them well, you know, I think
    perhaps it would be more understandable why the kind of
    investments that have been made in the last couple of years are
    appropriate and necessary, and are moving us towards getting us
    to where we need to be.
        Ms. Kaptur. Thank you. I think, Madam Chair, this is an
    area we ought to think about encouraging to take a look at the
    full, weighted cost of this, and the budget that the FDA has,
    because we have the costs of obviously illness, people not
    being able to go back into the workplace. There are all kinds.
    There's a quantification that one could be of what the true
    costs really are, and perhaps we can ask the GAO by letter to
    do that as a part of our work.
        Ms. DeLauro. With regard to that, I understand that there
    was a peer study that has done some work in that area, and why
    don't we take a look at that and see how comprehensive it is
    and see what else we might be able to do.
        Ms. Kaptur. Then I have a series of questions. You may not
    be able to respond to all of them, but you'll get the trend of
    the thinking, and perhaps the agency can respond.
        Dr. Hamburg. Okay.

                                    HEPARIN

        Ms. Kaptur. Okay. Describe to us what Heparin is medically
    used for. What is its cost to the average patient who is billed
    under Medicare for that product? How many pharmaceutical
    companies supply the final product in our marketplace? Would it
    be more or less than 10 companies? And give the names of those
    companies. How large is that market in this country, the
    dollars annually expended for the procurement of that product?
        How many companies do the separate ingredients come from?
    That goes back to my sentence diagramming I referenced in the
    prior questioning period. And what percent of Heparin's
    ingredients are domestically produced versus foreign produced?
    Do you have a feel for any of that at this point, any one of
    those questions or how you could obtain that information?
        Dr. Hamburg. Well, I can tell you what it's medically used
    for.
        Ms. Kaptur. Okay.
        Dr. Hamburg. I can't answer your questions about cost or
    number of producers.
        Ms. Kaptur. Is FDA able to get inside information?
        Dr. Hamburg. We can certainly give you a much more
    comprehensive and informed response than if I tried to answer
    now. I mean it's an important drug in terms of its medical use
    for thinning of blood and preventing clot formation that can
    cause stroke and pulmonary embolism and other complications. It
    is a product that has a supply chain that involves
    international sources for the precursor products. It has, I
    think in terms of the production. I think there's one U.S.
    manufacturer at the present time, but, you know, I think we
    should get back to you.
        Ms. Kaptur. Yes. Would anyone on your staff know that and
    be able to state it for the record at this point? And that so-
    called provider would actually be an integrator of components
    that come from somewhere else. Am I hearing this correctly?
        Dr. Hamburg. Yeah. I mean many of the drugs that are used
    in this country are composed with components that come from
    other places. Actually, about 80 percent of the active
    pharmaceutical ingredients in drugs that we use in this country
    come from overseas, so Heparin is not unique in that way.
        Ms. Kaptur. I am hearing you.
        Dr. Hamburg. But I think we'd be happy to provide you with
    a detailed response.

                            PHARMACEUTICAL COMPANIES

        Ms. Kaptur. If you could give us straight what's going on,
    and I'm very interested in looking at the Medicare payouts and
    the Medicaid payouts for the use of these pharmaceuticals, and
    who is benefiting in this marketplace. When I find the name of
    the company, companies, then I'm going to go to the stock
    exchange and see if they're there, and what their profits were
    last year.
        I am very interested in this marketplace and who actually
    controls it. If it's only one supplier, wow. That's pretty
    amazing. I thought, I mean, there obviously aren't a hundred
    suppliers of Heparin is what you're saying to me from your
    knowledge.
        Dr. Hamburg. You know, I am reluctant to be specific
    because I don't actually know the details. That information
    exists. I'd much rather go back and get you accurate
    information, and I think we can supply that.
        Ms. Kaptur. As a physician, do you know if I am in the
    hospital and I am a patient, how many bags or how does this get
    injected into the patient? Do you need it forever?
        Dr. Hamburg. No, you need it in an acute setting.
        Ms. Kaptur. An acute setting?
        Dr. Hamburg. It is intravenous medication.
        Ms. Kaptur. And what would be the cost of that? As a
    physician do you happen to know in New York City if you have to
    have Heparin how much are you charged in the hospital?
        Dr. Hamburg. It's been more than a decade since I've
    administered or prescribed Heparin, so, you know. Let me get
    back to you with, you know, the concrete data that you are
    asking for, because that information exists.
        Ms. Kaptur. Okay.
        Dr. Hamburg. But I would be fishing if I tried to provide
    that to you now.
        [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Ms. Kaptur. Thank you very much. Thank you, Madam Chair.
        Ms. DeLauro. Mrs. Emerson.

                          DIRECT CONSUMER ADVERTISING

        Mrs. Emerson. Dr. Hamburg, let me follow. The Chair had
    started the discussion about direct consumer advertising, and
    let me just discuss it a little bit more in detail and ask you
    a couple of questions. There's a ``New York Times'' article of
    March 5th that talks about the amount of money that drug makers
    spent in advertising in 2009. It says that the drugmakers spent
    a combined $4.51 billion on directed consumer ads for
    prescription medicines. Two-thirds of that or $3 billion went
    for TB. Another 1.9 billion was spent on magazine ads, with
    both levels nearly the same as they had been the year before.
        Newspaper ads increased by 11 percent to 162.6 million.
    Radio ads jumped by 112 percent to 46.3 million. Spending on
    Internet ads, which has doubled over the last five years, hit
    117.4 million, up 31 percent, while 7.6 million was spent on
    outdoor ads such as billboards. Now, I do know on the Internet,
    I mean I have more spammed drug ads coming to my BlackBerry
    than I know what to do with. But, anyhow, be all that as it
    may, the Chairwoman and I are sponsoring legislation that would
    ban direct consumer advertising for new drug and device
    products in the first three years after approval of the
    product.
        And certainly now, just by looking at these ad numbers, it
    is probably not something that is particularly popular among
    the drug industry and our broadcasting and media friends. But
    we are only one of two countries in the world, with the other
    being New Zealand, that do allow DTC.
        So my question is: What are you all doing about these ads
    to make sure that they are accurate and properly warn consumers
    about the side effects? What are you doing to make sure that
    FDA's increased resources are protecting the public from
    misleading ads? Has the FDA used its increased resources to
    hire more people to review the direct-to-consumer ads for
    devices and for prescription drugs?
        Dr. Hamburg. A very, very important set of questions. And I
    have to say I was startled when I learned that we were one of
    two countries in the world that had direct-to-consumer
    advertising.
        And I think that we have expanded our activities in terms
    of review in the direct-to-consumer arena thanks to additional
    resources. But it has been an area of FDA activity that has
    been very minimal in terms of staffing vis-a-vis, you know, the
    volume of products.
        I think you raise another important question about the
    timing of when ads go up. And we certainly do know that most of
    the advertising is focused on new products, and that is early
    when we know less about potential safety issues that may
    emerge. You know, so that is something that I have been
    thinking about and worrying about.
        We do review the ads and can take action when we think
    that, you know, there are misrepresentations or inadequate
    presentation of risks, et cetera. But the volume makes this
    very, very difficult, the fact that, you know, we don't review
    them, sign off, and then they go up, so we are sort of always
    running to keep up.
        I think it is an area that requires more scrutiny.
    Obviously, there are important First Amendment issues here and
    other things. But from a public health perspective, you know,
    we want to make sure that people get information to help them
    make the right choices to protect their health.

                       ADVERTISING AND THE PUBLIC HEALTH

        Advertising certainly is a very effective way of
    communicating messages. I would like to see advertisements
    contain more fundamental public health information, even if
    they are advertising a product; it is an opportunity to
    potentially provide some basic information about the underlying
    medical condition to help consumers know more and make better
    choices.
        But, you know, it is a very important area. I think it is
    an area where we are strengthening our activities. But I cannot
    say that I think that we have reached the appropriate,
    necessary system in terms of our oversight ability. And also, I
    think further discussions with many partners--you know, the
    public policymakers and industry about how we can address this
    issue in a way that, you know, really makes sense for the most
    important people, which are----
        Mrs. Emerson. Well, half the time--no, I shouldn't say half
    the time; that is an exaggeration. In some instances, you know,
    it seems that I, at least personally, have learned about new
    diseases that I never knew existed simply because now there is
    a drug being marketed to tell us about like restless leg
    syndrome.
        For example, I mean, seriously, if I got a crazy horse in
    my leg at night, I got a crazy horse in my leg, got up, walked
    around, and it was gone. I mean, it is just--I just--I feel
    real strongly that it needs to be--I mean, the oversight
    probably needs to be much tighter.
        But I also am a little bit concerned, too, about the
    proliferation or the possible proliferation of these ads on
    social networking--Twitter accounts, Facebook, I mean, all
    sorts of things where there is really no ability to provide any
    kind of--what do you have, 40 characters or 40 words? There is
    no way to say, you know, this side effect has blah blah blah,
    like all the TV ads do.
        So, I mean, it is very worrisome to me.
        Dr. Hamburg. No. There are real issues.
        Mrs. Emerson. And I think we need to have some special
    attention focused.
        Thank you, Madam Chair.

                                      BPA

        Ms. DeLauro. Thank you. Let me again try to run through a
    whole bunch of questions.
        As a quick followup on the BPA discussion, Commissioner,
    are you aware of the study that was done by the Yale
    scientists?
        Dr. Hamburg. You know, I have not looked at it directly. I
    understand that it was a study that was done in mice, and using
    much higher doses than humans would normally be exposed to.
    But, you know, I think----
        Ms. DeLauro. I know you will read it. Let me just--or have
    your folks take a look at it. I would love to be able, you
    know, to review the findings and see what we have there. I
    think that would be helpful.
        Dr. Hamburg. It is very important, you know. You and I
    share a commitment to having our decisionmaking be driven by
    data and evidence. And we need to look at everything that is
    out there, assess it, engage in a robust discussion of the
    science, and then hopefully make the best possible decisions.

                             SALMONELLA MONTEVIDEO

        Ms. DeLauro. Great. This Salmonella Montevideo recall, this
    is an interesting one because we are dealing with, I think,
    salami and black or crushed red pepper. And excuse me for
    saying this again. This is, you know, being reviewed by two
    different agencies, USDA and the FDA.
        But there is a likelihood that the pepper was imported. Can
    you tell us where the pepper--what country or countries the
    products in question came from?
        Dr. Hamburg. I believe that there were a couple of sources
    for the pepper, and that they were international sources. I
    hate to start pointing fingers when I don't know. Vietnam was
    one of the sources--and Mike Taylor has disappeared. But, you
    know, we can get you the specifics.
        [The information follows:]

        The FDA, working with the Centers for Disease Control and
    Prevention, the USDA Food Safety and Inspection Service, the State of
    Rhode Island, and other states, are investigating the recent Salmonella
    Montevideo outbreak associated with salami products. During the
    investigation, FDA collected 238 samples of black pepper, red pepper,
    environmental samples and other spices. Of the samples collected, 211
    were negative for Salmonella, 6 were positive for Salmonella Montevideo
    matching the outbreak strain and 6 were positive for Salmonella
    Montevideo which did not match the outbreak strain. FDA is still
    processing fourteen samples.
        All positive Salmonella samples were collected at the manufacturer
    of the salami products, Daniele International. The positive samples
    traced back through different supply chains to Vietnam, India, and
    possibly China.
        Based on the evidence it currently has, FDA has not been able to
    conclude where in the supply chain the contamination may have occurred.
    as part of the investigation and as a precaution, FDA established
    additional import controls on spices from firms or countries associated
    with these supply chains. As a result of these import controls, FDA has
    found one positive sample involving a strain that is not association
    with the outbreak.

        Ms. DeLauro. That is fine.
        Dr. Hamburg. But there were international sources, and
    there were, you know, multiple sources in terms of the
    companies involved.
        Ms. DeLauro. Okay. Now, I also understand that FDA started
    a risk profile on spices last spring. When do you expect that
    to be completed?
        Dr. Hamburg. Again, I need to get back with you on that.
    But spices do represent, you know, a special concern because
    once they get into the food supply, they are everywhere.
        [The information follows:]

        FDA is in the process of taking a closer look at the
    handling of spices from farm to table. In the spring of 2009,
    FDA began work on a spice risk profile. A risk profile is
    designed to capture the current state of knowledge related to
    an issue under FDA's jurisdiction and identify any knowledge
    gaps.
        This particular risk profile focuses on microbiological
    contaminants and filth issues related to spices. Some members
    of the spice industry have already agreed to provide data to
    FDA for the risk profile. The risk profile will provide vital
    information to FDA officials who make risk management
    decisions. The information will also help FDA determine the
    best way to mitigate foodborne illness issues associated with
    spices. Specifically it can help FDA determine how to allocate
    resources, whether guidance for industry or for FDA inspectors
    is appropriate and whether there is a need for new rulemaking.

                                CLINICAL TRIALS

        Ms. DeLauro. Right. A quick question on the oversight of
    clinical trials and your acknowledgment that FDA currently
    inspects less than 1 percent of clinical trial sites. And, you
    know, the issue is that without inspecting these sites, it is a
    matter of time before we have bad data that might lead to bad
    decisions.
        There is also, as I understand it--we have got, you know,
    the outsourcing of clinical trials, which is posing--and
    offshoring the trials, which has been--at least, newspaper
    accounts talked about some concerns about the lack of
    safeguards for the participants.
        I was pleased to see that in the budget, you are looking at
    the problem. The request is for $500,000 in one FTE for
    bioequivalence in generics. Let me just ask you: Don't we need
    more to deal with this?
        Dr. Hamburg. You know, this is why I gave Congressman
    Kingston my response about, you know, I don't see our budget
    increases as being excessive. I think that, you know, we have
    such a depth and breadth of responsibilities, and
    responsibilities that are so essential in so many different
    ways.
        And, you know, in many instances--in most instances--we are
    undertaking activities that nobody else is prepared to do if we
    don't do them. And so, you know, yes, there is more work to be
    done. You know, we are building on a foundation that has been
    strengthened thanks to the investments that this committee has
    helped to spearhead for us in recent years.
        We have to be realistic about how much we can absorb each
    year in terms of really putting those dollars into practice in
    a responsible, accountable way. But, you know, I cannot come
    before you and say that we don't need to keep continuing to
    expand in some essential areas that are a priority for health.

                                      GRAS

        Ms. DeLauro. Yes. Well, it would seem to me that that would
    be one of them.
        Let me ask a question about GRAS substances. A GAO study
    again, how FDA handles what are referred to as generally
    recognized as safe. I have real concerns about some of the
    substances that are allowed in the foods through the GRAS
    process.
        I have looked at the diacetyl issue, you know, for the last
    several years, diacetyl in popcorn and lung disease. The system
    is voluntary. Companies can make these decisions without
    informing the FDA. To me, that is unacceptable.
        What is your position on reforming the GRAS system?
        Dr. Hamburg. Well, you know, I think it is one very
    important area of, actually, a number of arenas of activities
    where I think we have a responsibility to sort of systemically
    look at how, in the modern era, we need to upgrade, modernize,
    or modify our regulatory frameworks.
        And some of that, of course, will require ongoing work with
    Congress. Our new general counsel, Ralph Tyler--who was here, I
    think--and I have had the discussion about how important it is
    that we look at some of this because, you know, FDA has a
    wonderful history. But many of our authorities and our
    procedures and our legal framework was put into place in a very
    different era. And we need to address that.

                                 NANOTECHNOLOGY

        Ms. DeLauro. Because, I mean, I think we are also looking
    at the regulation of nanotechnology materials in foods under
    that GRAS determination. You know, if this is all voluntary, we
    have no way of knowing what foods contain nanotechnology.
        I am going to maybe answer the question I asked you. I have
    to imagine that it is an affirmative. Do you think this is a
    safe way to regulate materials that we know little about? I
    mean, the answer to that--how can it be, you know, a safe way
    to do that?
        Dr. Hamburg. You know, I think it may be useful in certain
    categories, but for other categories, it is not. And I think we
    have to look at that, you know, and ask just the questions that
    you are asking. I share your concerns.
        Ms. DeLauro. But let me ask this: Has FDA decided to allow
    these materials in food with no warnings or labelings before we
    have had adequate research on these? Are we allowing
    nanotechnology?
        Dr. Hamburg. With respect to nanotechnology? Well, you
    know, nanotechnology is present in a whole range of products.
    We take very seriously our responsibility to look at the
    emerging technology in terms of safety concerns, short-term and
    long-term safety concerns. But it is an issue that we need to
    address with respect to foods, with respect to cosmetics, with
    respect to drugs and devices as well.
        And we are--you know, this budget has requests for
    additional dollars to strengthen our nanotechnology activities.
    And, you know, we have a program that was put in place. We are
    also working with some external experts to help us look at the
    data and ask these questions, too.

                              DIETARY SUPPLEMENTS

        Ms. DeLauro. I would just say this. I think that if we are
    looking at funding to check into this and doing the research, I
    don't think we can do two things at the same time. We need to
    get the research in order to do it, in order to say they are
    safe, and so you can say that without equivocation.
        And so that is what I would just, you know, offer, to say
    this: You can't do both things at the same time. Let's get the
    research and then make the determination as to whether or not
    they are safe. And it seems to me that we don't have the
    research now that allows for them to be designated as safe,
    which again calls into question this area, which I take you at
    your word that you are investigating.
        Let me move to dietary supplements, a GAO report on FDA's
    work on dietary supplements, January 2009. This has all kinds
    of statistics on how rapidly growing the industry is. I found
    interesting that there was no reference in the budget for
    additional funding for dietary supplement work by the FDA. You
    know, is that correct? And if so, why?
        But also, I wanted to get your view on the bipartisan view
    in the Senate, Dorgan and McCain, that would require supplement
    manufacturers to register with FDA, to disclose all the
    ingredients in their products. It would also give FDA mandatory
    recall authority to remove dangerous products from the market.
        This is a recommendation of that 2009 GAO report. Do you
    think you should have these powers?
        Dr. Hamburg. I haven't had a chance to review that bill.
    But, you know, I share your concern about assuring that these
    dietary supplements that people take, assuming that they are
    safe and will actually promote good health, we need to make
    sure that they are in fact what they purport to be and that
    they will not do harm.

                                     DSHEA

        You know, we got new authorities through DSHEA, and we are
    still moving towards full implementation on the good
    manufacturing practices side. For example, we expect that all
    of the businesses, including the small businesses, will be on
    board by 2010. But that is very important.
        Ms. DeLauro. The safety issues are critical.
        Dr. Hamburg. The adverse event reporting has been very,
    very important. You know, I think it was in 2007 you gave us
    that additional authority. And based on that, we have taken
    enforcement actions. You raised that in the beginning, you
    know, removing some dangerous products from the shelves and
    providing consumer information as well.
        I think that we do have money in the 2011 budget, and we
    had additional new money in the 2010 budget. So we are
    continuing to expand activities in that area. And of course,
    the inspectional activities are part of that.
        But, you know, I will look with interest at this bill in
    terms of what additional authorities are----

                                 FOOD LABELING

        Ms. DeLauro. I will tell you what I think I would like to
    do in this area. And I think that in the course of our hearing
    process is to--I mentioned earlier we will do one on trade and
    food safety. I think we need to do a hearing on dietary
    supplements. I think we need to look at this area.
        When you have got 50,000 safety violations or incidents a
    year and issues, I think that merits us taking a look at what
    is happening here. And this is not--I just think it is a very,
    very big issue that hasn't been discussed at all, you know. And
    so we need to really move in that direction.
        Affirmative labeling. Front-of-package nutrition labeling.
    And I guess a couple of my colleagues have mentioned that. You
    know what a strong advocate I am of your role in regulating the
    packaging and the issue of confusing and misleading labels. And
    I commend you for the actions that you have taken. And we went
    through this issue with the Smart Choices piece.
        But there is a guidance letter, I guess, in 2009 regarding
    food labeling. You say that the FDA will proceed with
    enforcement actions against products that have false or
    misleading labeling. The guidance document, can you update us
    on the activities of that?
        Dr. Hamburg. Last week, we in fact sent out 20 warning
    label letters, I think, on that topic.
        Ms. DeLauro. That is right. You said that.
        Dr. Hamburg. So we are, you know, taking it very seriously.
        Ms. DeLauro. One of the concerns--you have got the Journal
    of the American Medical Association carried an article
    suggesting that the problem of front-of-package labels has
    become so serious that we should consider banning claims from
    the front of packaging. What do you think about that idea?
        Dr. Hamburg. Well, there certainly are a lot of claims on
    the front of packaging.
        Ms. DeLauro. Right.
        Dr. Hamburg. You know, every available space is used for
    something. You know, I think----
        Ms. DeLauro. I know you are looking at developing criteria
    in this area, and part of the budget document is----
        Dr. Hamburg. Yes. I think that the front-of-package
    information is mixed in its value. I mean, I think there is a
    very positive, proactive value to providing accurate, science-
    based nutritional information on the front of the package. I
    think, you know, the concern is about the sort of cacophony of
    other messages, you know, that are on the front of package.
        Ms. DeLauro. Right.
        Dr. Hamburg. And I think, you know, the question about a
    ban obviously extends far beyond, you know, the
    responsibilities of FDA and get you into other domains.
        But I think, you know, it is very, very important that we
    have the opportunity to provide important nutritional
    notification that people want. I think it is very, very
    important that that not be clouded by claims that are
    misleading, inaccurate, or fraudulent.
        Ms. DeLauro. Are you going to put together a regulation in
    this area? Is that what you are going to do? And what is the
    timing on that?
        Dr. Hamburg. Well, we currently are undertaking some
    consumer research about how people respond to information. We
    are working on, you know, and looking at sort of different
    models for presenting information.
        We are working on standards for nutritional information
    that would be used in whatever presentation format was decided
    upon, where we are trying to work with industry, with
    manufacturers and retailers, to find a presentation approach
    that they are comfortable with. Actually meeting with the
    Grocery Manufacturers of America later today to talk about some
    of these issues.
        We are trying to learn from the experience of other
    countries that have moved, either voluntarily or mandatorily,
    to different types of front-of-package nutritional labeling. So
    we are moving forward. I mean, I hope by the end of the year we
    will have a strategy well established and even beginning to
    implement.

                                 SMART CHOICES

        Ms. DeLauro. As part of this discussion, when I--and this
    was on the issue of the Smart Choices debate that we had--when
    I talked to the folks from Smart Choices, you know, several
    months ago--and obviously you moved in a very aggressive
    direction here, which was laudable--one of the things they said
    that they were dealing with was nutrients to limit--total fat,
    saturated fat, trans fat, cholesterol, added sugar, sodium, in
    some cases calories. And they were following that guide.
        And the point I want to make here is that they said, in
    particular, the limitations set for saturated fat, cholesterol,
    and sodium are equal to or lower than FDA's healthy
    regulations, and the level set for trans fat is consistent with
    FDA policies, where no governmental level has been set.
        Regarding added sugars, it is important to note that FDA
    does not restrict added sugar levels in any of its applicable
    nutrition-related regulations. So by addressing added sugars,
    the Smart Choices criteria go farther than FDA regulations in
    this regard.
        Are you looking at that?
        Dr. Hamburg. We are looking at the issue of added sugar,
    and we, I think, plan to have that as part of our updated
    standards.

                                 INDOOR TANNING

        Ms. DeLauro. Great. Thank you. Thank you.
        A couple more areas here. Indoor tanning devices, which we
    have talked to. And there again, I believe you have an advisory
    committee meeting coming up some time this month?
        Dr. Hamburg. Yes. Yes. Yes. Yes.
        Ms. DeLauro. Assuming the advisory committee confirms the
    new data and finds that there is an increased risk of using
    these devices, what are the next steps the agency intends to
    take, and what would be the timetable for those next steps?
        Dr. Hamburg. Well, you know, of course, I am not going to
    jump in front of the advisory committee. But we will take very
    seriously their recommendations, and I think we will move
    towards action steps quickly. This issue, as you know, has been
    out there for a while, and I think we do need to take
    definitive action.
        And I think, you know, as you have pointed out, there are
    issues around the adequacy of the warning, and there are issues
    around the safety of the procedure.
        Ms. DeLauro. Right. In addition to examining the
    possibility of reclassifying the devices, you are going to look
    at the current labeling requirements for indoor tanning
    devices. Is that right?
        Dr. Hamburg. Yes.
        Ms. DeLauro. Okay. Let me--really, I truly only have a
    couple more questions, I promise you. So----
        Dr. Hamburg. No one can accuse you of being disinterested.

                         ANIMAL BIOTECHNOLOGY PRODUCTS

        Ms. DeLauro. Animal biotechnology products. Whoa. I can
    start by saying that this is--your budget requests $1.9 million
    to build expertise for the regulation of these animal
    biotechnology products. It is not a large amount of money. It
    is large in comparison to some of the other increases in the
    budget.
        Understanding the value of these products, I hesitate when
    I read that: ``This investment will create a regulatory pathway
    for animal biotechnology.'' I think--I mean, I know FDA over a
    year ago approved the first biological product produced by
    genetically engineered animals three weeks after issuing
    guidance on the regulation of such animals.
        So I have a question there: Shouldn't the pathway already
    exist and have been used for the February 2009 approval? How
    will this pathway differ from the regulatory pathway for other
    drugs to treat human disease? And how many applications are
    already in the queue at the FDA? Can you talk about which
    stakeholders the FDA plans to work with on this initiative, and
    how you hope to increase public confidence in the FDA's ability
    to regulate this technology.
        Dr. Hamburg. Well, you are right. There was, you know, the
    action that you cited taken at an earlier time. But there are
    different--we are talking about sort of different products and
    uses here so that there isn't one common pathway because there
    is the possibility of products that are produced by animals
    using these recombinant technologies, and there is also the
    possibility of these technologies being used for food
    production.
        Ms. DeLauro. Right.

                          ADVANCING REGULATORY SCIENCE

        Dr. Hamburg. You know, these are areas of emerging science.
    And this is why, you know, those investments that we talked
    about before in Advancing Regulatory Science are so important
    because, you know, these are areas where we need to have the
    in-house scientific capability to assess fully these emerging
    technologies.
        We also have to have the access to appropriate outside
    experts. They do raise, you know, complicated issues that go
    beyond simply the science of safety as well. You know, you
    appropriately addressed the issues of confidence of the public
    and openness of information to consumers.
        So it is a complicated area. And I think, you know, we are
    moving forward in a stepwise, thoughtful, and science-based
    way. But, you know, there definitely is a need to address this
    in a way that isn't a cookie cutter approach or just, you know,
    a stamp it kind of bureaucratic approach.
        And it is an area where, while there is a limited number of
    products that have come before us, you know, I think we can
    only sort of anticipate that as science advances, that we will
    be asked to look at more products and different types of
    products.
        Ms. DeLauro. I think I just want to say on this, and maybe
    it would be a more informal gathering because, really, I mean,
    there are, you know, new dimensions. And for the entire
    committee, both side sort of the aisle, maybe we could do
    something in an informal way that talks about--an informal
    meeting where you can lay out for us some of these new areas.
        You know, I am not a scientist, so mysteries to me. And I
    look at, you know, a chart like that and I say, whoa, you know.
    Where are we going?
        Dr. Hamburg. Yes. Yes.
        Ms. DeLauro. But, you know, I mean, I think that there are
    new areas. And we need to stretch the edge of the envelope in
    terms of that research. But I also think it would be enormously
    helpful for those members of the committee, again, on both
    sides of the aisle that would like to get the benefit of
    understanding what those new areas are where we can ask
    questions about it and have everybody be able to ask questions
    about it.
        Dr. Hamburg. Okay. I think that would be useful for
    everyone.

                             FOOD SAFETY REGULATION

        Ms. DeLauro. I essentially have one more question. I
    actually have two. But the food safety legislation, I just want
    to ask you, because the Senate is going to act, what are the
    critical pieces of what has happened in the House that you
    believe we have to come out with in the Senate?
        Dr. Hamburg. Well, you know, I do think that the user fee
    issue is absolutely essential in order to give us the resources
    that we need to undertake the job. I think mandatory recall
    authority is essential in order to have the kind of swift
    action and accountability that we all know is important.
        I think routine access to records is critically important
    so that we can really assure a preventive approach in
    compliance with these activities. I would say those are
    probably the most essential.

                                  TRACEABILITY

        Ms. DeLauro. For my purposes, the performance standards and
    the, you know, traceability process----
        Dr. Hamburg. Yes. Yes. Absolutely.
        Ms. DeLauro [continuing]. I think are absolutely critical
    to getting us where we need to go, and recall authority,
    obviously; we have been talking about that for a long time. So
    obviously, we are going to--you will. We are going to keep a
    close watch on what is happening in the Senate.

                             OFF-LABEL ADVERTISING

        A final question is the off-label marketing guidance that
    was issued at the end of the last Administration, six days
    before it ended. This is about guidance to facilitate off-label
    promotion of drugs and medical devices by drug and medical
    device companies.
        I don't know what your views are on that policy. And will
    you move to withdraw it or to revise it?
        Dr. Hamburg. You know, I am not prepared to speak
    specifically to the question that you posed, but to say that I
    take the issues of off-label advertising and promotion very
    seriously because, you know, I think it is moving health care
    providers and consumers to understand that a use of a
    medication is proven when, you know, it hasn't been approved by
    the FDA for that indication.
        In the practice of medicine, you know, there has always
    been the flexibility to provide medications based on your best
    clinical knowledge and experience. But I think to mount, you
    know, campaigns to encourage use and provide what is often
    limited scientific studies to support a perspective that isn't
    fully vetted and hasn't had the benefit of formal review, I
    think is not good for patients. And I think the legal system
    has also demonstrated that it goes beyond the boundaries of
    what is appropriate practice and legally sanctioned.
        Ms. DeLauro. Well, I hope you will give it some thought and
    see what you will do either to revise or to withdraw the
    guidance. And we can talk further about that.
        Dr. Hamburg. Okay.
        Ms. DeLauro. With that, I want to say thank you to you for
    your candor, for your clarity, and for elucidating a number of
    issues. And I appreciate it. Look forward to working with all
    of you.
        I applaud all the initiatives so far, and the
    aggressiveness with which you are approaching, if you will, a
    restructuring of the FDA and bringing it to what both sides of
    this committee have talked about for a long time, is restoring
    that gold standard to the Food and Drug Administration.
        Thank you very, very much. Appreciate it.
        Dr. Hamburg. Thank you.
        Ms. DeLauro. The hearing is concluded.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                           Wednesday, April 28, 2010.

                                  DRUG SAFETY

                                   WITNESSES

    HON. CHUCK GRASSLEY, RANKING MEMBER, SENATE FINANCE COMMITTEE
    HARLAN KRUMHOLZ, M.D., MSc, HAROLD H. HINES JR. PROFESSOR OF MEDICINE
        AT YALE UNIVERSITY SCHOOL OF MEDICINE
    DR. SIDNEY WOLFE, DIRECTOR OF THE HEALTH RESEARCH GROUP AT PUBLIC
        CITIZEN
        Ms. DeLauro. The hearing is called to order. First I want
    to welcome today's speakers. On the first panel we have the
    Ranking Member of the Senate Finance Committee, Senator Charles
    Grassley of Iowa. And on panel two, Dr. Harlan Krumholz, Harold
    H. Hines Jr. Professor of Medicine at Yale University School of
    Medicine, Dr. Sidney Wolfe, Director of the Health Research
    Group at Public Citizen.
        I want to say a thank you to all three of you for being
    here today for your hard work on the issue of drug safety. And
    Senator, I want to say a particular thank you to you for taking
    the time for joining us on this side of the Hill. I'll be
    honest, members here who don't often see senators cross the
    divide and come and do hearings on this side. I want to thank
    you for your leadership as well in producing the staff
    committee report that will be discussed today. And also
    personally I would just say is you and I have interacted on the
    drug safety issue, but also on the farm bill when we sat
    together for all of those hours trying to do what's best for
    this nation with regard to its farmers and to rural America. So
    it's an honor and it's a pleasure to have you here with us
    today.
        Regarding this troubling report, first--let me just say
    this. The report poses many questions, and as the subcommittee
    with jurisdiction over the FDA, it behooves us to look at it,
    to address it. While we did not invite representatives from
    Glaxo and the FDA to discuss the matter today, on account
    specifically of their own pending negotiations, we do have the
    senator with us of course. We have two independent experts to
    help us to sort through the information today.
        Regarding the troubling report, let me first say that by
    bringing lifesaving drugs to the marketplace, pharmaceutical
    companies are applying our country's greatest resource, its
    innovative spirit to help people live longer, healthier, more
    productive lives. Most people at some point experience the
    direct reach and the power of these drugs to cure illness, to
    heal wounds or to halt disease. I am here today as someone who
    has felt that power when more than 20 years ago I was diagnosed
    with and survived ovarian cancer. And so when the FDA is
    weighing whether or not a particular drug is safe enough to be
    on the market, I understand that there are often many competing
    issues in play. Sometimes people suffering from a given illness
    after consultation with their doctors will willingly accept
    some extremely severe side effects for a chance at relief or
    recovery. Case in point, chemotherapy, where we factor in some
    truly terrible consequences only because the disease of cancer
    is still more life threatening than the cure.
        So as both the preeminent guardian of the public health and
    an agency whose mandate emphases innovation, part of the FDA's
    responsibility is to carefully weigh these sorts of pros and
    cons before coming to a conclusion about the safety of a given
    drug. But to be able to make these important, indeed life or
    death decisions on behalf of the public health, the FDA
    scientists and regulators need to have all the pertinent
    information about a given drug at their disposal. They need the
    regulatory tools and the regulatory science capacity to draw
    their own independent and unbiased assessments of a drug's
    safety. And if a drug is in fact deemed unsafe by the agency,
    the agency needs the structural and the political capacity to
    ensure its recommendations are subsequently put into action,
    followed and enforced.
        Which brings us to the case before us today concerning the
    diabetes drug Avandia. As you all know, the Senate Finance
    Committee staff investigative report revealed that for many
    years the manufacturer knew much more about the risks of the
    drug than it revealed to the FDA. This report poses several
    troubling questions for this subcommittee. Most obviously if
    Avandia is unsafe, how did it ever get on the market in the
    first place? For that matter, why is it still on the market
    right now? What does the case of Avandia tell us about the
    FDA's current ability to conduct its drug safety
    responsibilities?
        Looking at the details of the Avandia story, the major
    studies suggesting this drug was safe was the Record trial, R-
    e-c-o-r-d, sponsored by its makers GlaxoSmithKline. As we now
    know and as the Senate committee staff report reaffirms,
    serious questions have been raised about this clinical trial's
    scientific merit. And last month the Mayo Clinic released an
    analysis which found 90 percent of the scientists who published
    articles supporting Avandia had financial ties to Glaxo.
        Astonishing to me is the fact that in June of 2007, two
    scientists at the FDA's Drug Safety Office, after going over
    all the evidence recommended that Avandia be removed from the
    market. But nothing came of this decision, and in fact, Avandia
    is on the market right now, pending the findings of the TIDE
    study which is expected to be published in 2015. 2015. We
    should not take so long to study a drug about which such
    serious safety issues have been raised. As the Senate report
    and others have noted, lives are at stake, and one has to
    wonder what is the purpose of a drug safety office if its
    recommendations are ignored at the agency.
        Consider how long this process has already taken. When this
    drug was approved in 1999, the FDA requested that Glaxo conduct
    a post-market study, the ADOPT study, which finally came out in
    2006. In the intervening years, Glaxo continued to praise their
    new drug even as scientists on their staff began to recognize
    and flag serious problems with Avandia. And now we are talking
    about waiting until 2015 before a reevaluation. Simply put,
    this process should not take 16 years, and particularly not
    when the drugmaker in question has a record of promoting a drug
    even in the face of dire warnings.
        We are here today to ascertain what the Avandia case tells
    us about drug safety at FDA, but in many ways, this is not a
    new story. We saw similar problems with Merck, who used
    ghostwriters to promote their own studies of their pain
    medicine Vioxx, or consider Trasylol, the heart surgery drug
    linked to kidney failure that the FDA failed to remove from the
    market in a timely fashion, resulting in an estimated 22,000
    preventable deaths. Cases and controversies like these, or
    Ketek, that goes on. It's alarming to all of us, and with every
    new case they look less and less like outliers and more and
    more like symptoms of a dangerous and a systemic failure in our
    regulatory apparatus.
        In testimony before the Senate Finance Committee in 2004,
    Dr. David Graham, an epidemiologist at FDA, testified that
    because of the culture at the Center for Drug Evaluation and
    Research, the U.S. was virtually defenseless against another
    drug safety disaster like Vioxx, and it would be a question of
    time before another disaster would strike. It may be that
    Avandia is that disaster. From every indication we have seen,
    this looks like an instant replay of what transpired with
    Vioxx.
        So I hope that today we can work toward identifying exactly
    what happened with Avandia, what went wrong, when, who knew
    about it, and more importantly, hope we can begin to figure out
    ways to address the continuing drug safety problems with the
    agency. On one hand, we clearly need to establish more
    independent regulatory science capability so that the agency
    can make evaluations about drug safety free of industry
    pressure. We obviously need more disclosure, transparency from
    the pharmaceutical companies themselves so that we do not have
    another situation where the only safety assessment of a given
    drug is the one, as what appears to be clearly compromised as
    the Record trial.
        In restructuring the FDA towards a more scientific bent and
    in mandating the industry post-summary level results of
    clinical trials online, the FDA amendment that we passed in
    2007 has and should continue to make a difference on these
    fronts. But as we know, increased scientific capacity and more
    industry transparency are only part of the solution. We need to
    change that culture at the FDA, make it more proactive rather
    than reactive, to assure that there are clean, consistent, well
    defined, delineated lines of communication between the
    scientists examining the drugs and the regulators making
    decisions.
        In this last regard, the evidence suggests that we should
    look into strengthening either the independence or the powers
    of the FDA's Drug Safety Office so that its recommendations no
    longer go unheeded.
        Senator Grassley, thank you very, very much, and I thank
    Dr. Krumholz and Dr. Wolfe for being with us today to help us
    get at these continuing problems. And with that, let me ask our
    Ranking Member, Mr. Kingston, if he would like to make a
    statement.
        Mr. Kingston. Thank you, Madam Chair. And Senator Grassley,
    it's great to have you here. And I am--have read your report,
    and I am very interested in the fact that during this period of
    time since 2007 to now, FDA funding has actually gone up
    substantially, and yet it seems like the results--I'm a
    believer that funding isn't the FDA's biggest issue as much as
    reform is, and I think this is all part of that. So I look
    forward to hearing your comments and I yield back.
        Ms. DeLauro. Okay. And with that, Senator, let me just say
    that throughout your career you have really been a champion of
    improving both the FDA and our drug safety in particular. We
    owe you a debt of gratitude for your steadfastness in this
    area. You've been a member of the Congress for 35 years, a
    senator for three decades. You've worked to cultivate an
    independent and transparency at this agency and to restore the
    preeminence of scientific inquiry on which it was founded. So I
    commend you on this proven record of leadership. And also let
    me just say thanks to you for being here today, and
    particularly after a 5K run this morning. Bless you. And
    Senator, we'd love to hear your testimony this morning.
        Senator Grassley. My time was nothing to brag about.
    Chairman DeLauro and Ranking Member Kingston, and of course all
    the distinguished colleagues who are here, I appreciate very
    much the invitation to speak and the kind words that the
    chairman has expressed. Far too often we read press reports
    about partisan warfare and a do nothing Congress, so I'm glad
    to see both the Senate and the House, Democrats and
    Republicans, coming together to work to protect the American
    supply of pharmaceuticals.
        As Ranking Member of the Senate Finance Committee, I have
    made it my job to look into various aspects of the health care
    industry. I do this to protect the public's health and to guard
    the taxpayers' pocketbook. As part of this duty, I've taken a
    keen interest in the Food and Drug Administration and the
    pharmaceutical and device industries.
        Back in May of 2007, Senator Bachus, who I've had the
    privilege of working with on ten years on this committee, four
    years that he's been chairman, six years that I was chairman,
    anyway, we opened up an inquiry into Avandia, a drug sold at
    GlaxoSmithKline to control glucose levels in diabetes. We
    started this inquiry because the New England Journal of
    Medicine published a study which found that Avandia may cause
    heart attacks. Obviously, this was bad news because one of the
    things diabetics are most at risk for is of course heart
    attacks.
        The Finance Committee staff spent over two years combing
    through hundreds of thousands of pages of documents. So I will
    give you the opportunity to decide what you want to do with the
    staff report, but I'll leave it with you. Back in 1999 when
    Avandia first came on the market, executives of GSK intimidated
    a physician. I want to emphasize, intimidated a physician at
    the University of North Carolina. The physician was worried
    that Avandia might cause heart attacks. To suppress his
    comments, top officials at GSK called his superiors and had him
    sign a form that he would no longer criticize the drug. Senator
    Bachus and I released a report on this finding, and I will
    leave that document for the record if you wish. The 2007
    study----
        Ms. DeLauro. Without objection.
        [The information follows:]

        [The report can be found at: http://finance.senate.gov/newsroom/
    chairman/release/?id=bc56b552-efc5-4706-968d-f7032d5cd2e4.]

        Senator Grassley. Okay. Well, thank you. So this 2007 study
    that first caught the committee's attention was submitted to
    the New England Journal of Medicine by Dr. Steven Nissen,
    professor and cardiologist at the Cleveland Clinic. However,
    GSK got a copy of the manuscripts before it was published. One
    of the experts who was peer reviewing the study found the New
    England Journal of Medicine leaked it to GSK. This allowed GSK
    to launch a public relations campaign to undermine legitimate
    concerns that Avandia might cause heart attacks.
        Then last February, Senator Bachus and I published a
    committee staff report on Avandia. This report is about 15
    pages long and contains another 300 pages of attached internal
    documents, charts and e-mails. With this report, we wanted to
    let the people of America know what the company knew and when
    the company knew it. Here is what we found. Shortly after GSK
    got a copy of Dr. Nissen's study, they had their own
    statistician dissect it. GSK's statisticians found the study to
    be scientifically sound. However, GSK immediately drafted
    talking points to undermine Dr. Nissen's study. At times, these
    talking points run counter to legitimate concerns of Avandia's
    very own safety that was raised in e-mails by GSK's own
    scientists. In an internal e-mail, GSK's head of research
    discussed, quote/unquote, ``take home messages'' of the
    research on Avandia.
        If you look through the report that the Finance Committee
    released, you'll find this e-mail on page 163. In that e-mail,
    GSK's head of research pointed out that Avandia has an
    increased risk of cardiovascular death. So let me emphasize the
    word ``death,'' cardiovascular death. Not heart attack, not
    heart failure, but death. Well, the American public never knew
    about this risk until the committee released the Avandia
    report. And you still can't find any mention of quote/unquote,
    ``cardiovascular death'' in the warning section of Avandia's
    label.
        There are other findings in this report, but I would also
    like to discuss some internal FDA documents that we came across
    during our inquiry. When concerns were first raised by the
    safety of Avandia, the FDA responded by requiring GSK to do a
    safety study. Well, some safety, drug safety experts inside FDA
    looked at this study that GSK was doing with patients, and
    wrote that it was, in their words, ``unethical.''
        Here's the troubling thing about the study. The patients
    that enrolled in that safety study never learned that FDA's own
    safety experts thought that the trial was unethical. At least
    they didn't know this until the Finance Committee made the
    internal FDA documents public in February.
        This is not the first time questions have been raised about
    whether or not a study sanctioned by the FDA was ethical. In
    2006, I inquired about FDA's decision to allow a study of the
    blood substitute Polyheme to proceed without adequate prior
    informed consent from the potential study participants. I
    raised questions about the FDA's decisions, especially in light
    of the fact that another office within HHS, the Office of Human
    Research Protections, disagreed with the FDA. In particular, I
    was concerned that during this study when subjects arrived at
    the hospital after being treated with the blood substitute and
    a real blood became available, the real blood was withheld from
    the patients as part of the study protocol.
        To end, I would like to highlight that I feel that we can
    all learn from FDA's handling of the drug Avandia. Because I
    think that we all want to move forward and make this agency
    better. The Avandia case is another example of why I twice
    introduced legislation to establish independent Office of Drug
    Safety at the FDA, and this is something I could talk about for
    as long as you want to listen, but we don't have time for that.
    So I will concentrate on what I was trying to accomplish in
    this legislation.
        The center, the legislation proposed a center of post-
    market drug evaluation and research. And it would tackle the
    lack of equality between the Office of New Drugs, which decides
    whether to approve a drug in the first place, and the Office of
    Surveillance and Epidemiology, and I'll refer to that as OSE.
    OSE is the office that monitors a drug's safety once it's on
    the market and being sold to the patients, and maybe it's
    better to say just post-marketing surveillance.
        The imbalance between the Office of New Drugs and let me
    just say post-market surveillance, was apparent in the Vioxx
    controversy about six years ago, and we can see it today in
    instances involving Avandia. Individuals in the office
    responsible for post-market surveillance should be allowed to
    provide an independent opinion based on best available
    evidence. FDA employees dedicated to post-market surveillance
    should be able to express their opinions in writing and
    independently without fear of retaliation, reprimand or
    reprisal, and we run into that all the time. And thank God that
    there are really people within the agency that want the public
    to know, and when they don't get the attention of the people
    within the FDA, they have guts enough to come forward to people
    like me and probably like you, Madam Chairman.
        Instead, the FDA physicians and scientists committed to
    post-marketing monitoring of drugs have sometimes, as I've just
    indicated, been suppressed. In the case of Avandia, it appears
    that they have been worse than suppressed. They've just simply
    been ignored.
        Before I conclude my remarks, I'd like to call to your
    attention another matter related to drug safety. As you may
    have seen in press reports over the last two years, FDA has
    been taking action against some unapproved drugs. The problem
    is, FDA does not have a complete and accurate list of all of
    the products sold on the U.S. market, including unapproved
    drugs. So the agency can't take appropriate enforcement action.
    I hope that we can work together to ensure that the FDA has the
    resources and tools to ensure that the drugs in our medicine
    cabinets are safe and effective and approved for use by FDA.
        This concludes my testimony, and once again thank you for
    the invitation, but also to tell you that I look forward to
    working with you as you continue your oversight of our
    country's pharmaceuticals, which remain vital to our public
    health. And I appreciate your leadership and the work of the
    committee in this area. Thank you.
        [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Ms. DeLauro. Thank you, Senator, and we appreciate again
    your leadership. I know you are pressed for time. I know my
    colleague, Mr. Kingston has a, he says a very quick question
    here, so I'll do that because I don't want to hold you up.
        Mr. Kingston. Thank you, Madam Chair. I'm going to yield my
    time to you because I think the senator covered my question
    with the 2006 incident, because what I wanted to know is how
    often does this sort of thing happen, and your testimony did
    mention 2006 and also Vioxx, so that was my question and I'll
    yield to you if the senator has time.
        Ms. DeLauro. What I would love to do, Senator, if what we
    can do is you do have a piece of legislation that dealt with
    the restructuring of the agency in this regard, with regard to
    the Office of New Drugs and surveillance and epidemiology, and
    I think that the committee would be very interested in taking a
    look at that document to see--you make very, very valid points.
    The report does. There have been GAO reports, others who have
    intimated that that is a direction that we ought to go in.
        I think there is indicative of the approval of Avandia in
    1999 the particular person who signed the approval in fact is
    now the person who is reviewing the process. So, therefore, you
    inherently build in difficulty to start with, and you don't get
    the kind of independence that you need. So we would love to
    work with you on that.
        Very, very quickly, with regard to the TIDE study, and I
    noted in your letter to Commissioner Hamburg that you expressed
    concern about the safety of that study. Do you have any
    thoughts as to whether or not that ought to continue, whether
    that should stop, or are you taking a look at that?
        Senator Grassley. Well, we're taking a look at it. I
    haven't drawn any conclusions yet. But I think that you--
    there's some evidence of the same concerns that we have
    throughout, whether it's Avandia or other things that we have
    studied and looked into, and, you know, you're trying to get at
    the basic culture of the organization and trying to change that
    culture. And one of the ways I think is the best way to change
    is to make sure that there's a clear separation between post-
    marketing surveillance and approval of the drug beforehand.
        I just think it's human nature for people that approve a
    drug to ride herd on those that, after it's out in the public
    and millions of people are using it instead of tens of
    thousands of people in the study, that you're obviously going
    to have some reactions that ought to be taken into
    consideration, and that there shouldn't be any obstacle to that
    being made public and warning people about it. And then you
    have kind of the people that approve the drugs not wanting egg
    on their face if they've originally approved it. And we found
    that so often, and so many good people in post-marketing that
    are willing to come forth and tell us that they think things
    are wrong, and they've been right so often, you know. And
    there's so much intimidation, you know, on publishing papers of
    some of these people that I could go into a whole history and
    give you all sorts of intimidation that comes in that area. And
    maybe it's a problem throughout government, you know, but you
    can't look at every agency in government, but, you know, it's
    typical of people to want their agency to look good, and I just
    think that the more that you try to cover up things, the more
    you end up when the truth finally comes out.
        So the idea is to get people to think in terms of working
    for the American people and not just working for their agency,
    and for agencies to think in terms of well, we're all in this
    game together. We ought to be pulling together for the
    taxpayers and the American people as opposed to worrying about
    our--like one agency I referred to as ``our institution.'' And
    it wasn't the FDA, and I won't name the agency, but ``our
    institution.'' And I said, you know, that's what's wrong with
    you. It's not your institution. You work for the American
    taxpayers, and we're all in this together, and the people are
    our boss, you know.
        Ms. DeLauro. Mm-hmm. Well said. And I would say even with
    regard to other agencies, and this is where you have really
    made a mark is the fact that this agency particularly with
    regard to the independent review and the science, this agency
    deals with life and death. Some of our other agencies do not do
    that. And so the consequences are severe.
        Senator Grassley. And if people have respect for the
    scientific process, the scientific process, sound science is a
    heck of a lot better than political science, because it's got a
    process that proves itself. You know, every position a
    scientist takes is subject to peer review. Let the process work
    out, see. But you find too much human intervention in the
    scientific process, not just in FDA and a lot in EPA, you know,
    in a lot of our trade issues overseas, political issues or
    interfering with the so-called safety of a product, you know.
    Let science prove itself. We got a whole bunch of scientists in
    pairs that say whether food is safe or not, you know, and make
    a scientific judgment. But you've got politicians interfering
    all the time. So to some degree, you've got, maybe not elected
    politicians, but politicians or political views intervening
    now. I don't mean Democrat Republican.
        Ms. DeLauro. No, I understand. Right. Thank you very, very
    much, Senator. We're grateful for your testimony and grateful
    for spearheading this report which I think will help to make a
    difference. We look forward to working very closely with you
    and with your staff in this effort. Thank you.
        Senator Grassley. Just call me anytime and I'll come over
    to your office.
        Ms. DeLauro. Will do. Thank you. Thank you.
        Senator Grassley. Not too many senators offer that.
        Ms. DeLauro. Right. Not too many senators offer that
    effort. We will ask Dr. Wolfe and Dr. Krumholz to join us at
    the witness table.
        Let me introduce our panelists. Dr. Sidney Wolfe, you have
    been a fierce and a formidable advocate for American consumers
    and families for decades as both a physician, as director of
    the Health Research Group.
        I must tell you that I do office hours every weekend and I
    go to a library, I go to a stop and shop, and the area is
    notified that I'm going that be there, and I had a woman, her
    name is Captain Lou Morowitz, who stopped by the office hours
    in Woodbridge, Connecticut on Saturday. She had no idea we were
    doing a hearing, what we were doing. And she said to me, have
    you ever read the newsletters that Dr. Wolfe sends out? And she
    handed me the whole sheaf of the newsletters. So, well known,
    well known. And this is obviously the document is Public
    Citizen's Drug Safety Information pamphlet, so you make a
    difference in people's lives, and I applaud you for your
    service.
        And I also want to introduce Dr. Krumholz, who is the
    author of more than 250 journal articles as well as the book,
    ``The Expert Guide to Beating Heart Disease,'' a member of
    numerous cardiovascular care communities, including the
    American Heart Association and the American College of
    Cardiology. You two have spent a career helping us to better
    understand, look after your heart, your public education
    efforts on heart disease and your strong advocacy of hospital
    reform have done credit to your university and to our state.
    Dr. Krumholz is affiliated with Yale University in my home town
    of New Haven. And I thank you for joining us today. I thank you
    both for looking into these issues of drug safety at the FDA
    and sharing your wisdom and knowledge and expertise with us
    today.
        Dr. Wolfe, if you will proceed, and then we'll move to Dr.
    Krumholz. And as you know, your full statements will be part of
    the record, so you're free to summarize in any way that you
    choose. Dr. Wolfe.
        Dr. Wolfe. Congresswoman DeLauro, members of the
    subcommittee, thanks for letting me testify on the serious
    dangers of the diabetes drug, Avandia. I will present arguments
    strengthened by new information since we originally asked FDA
    to ban this drug in October 2008 as to why an unethical
    international experiment in 14 countries involving the drug
    called TIDE requested by the FDA must be stopped immediately.
    We're in the process of writing to Commissioner Hamburg going
    into some of these details. I'll sketch some of them out today.
    And simultaneously, why rosiglitazone must be removed from the
    market.
        Almost at the same time as our petition to ban the drug, an
    expert committee representing the two largest organizations of
    diabetes experts in the world, the American Diabetes
    Association and the European Association for the Study of
    Diabetes, issued a consensus statement based on a careful
    safety review that quote, ``Given that other options are now
    recommended, the consensus group members unanimously advised
    against using rosiglitazone.''
        It's of particular interest that one of the members of this
    committee was Dr. John Buse, who Senator Grassley referred to
    as the North Carolina physician who Glaxo tried to intimidate
    out of being critical of the drug and resisting the
    intimidation he signed off on this consensus statement that
    basically you should not use this drug. So the leading diabetes
    organizations in the world say don't use it.
        Since then, considerably more evidence since our petition
    concerning unique risks and any lack of a unique benefit of
    rosiglitazone have been published. But nevertheless, starting
    in May 2009, the manufacturer, Glaxo, as ordered by the FDA,
    started to recruit for a large 16,000 person randomized trial
    to evaluate the cardiac safety of rosiglitazone in comparison
    to standard treatment and in comparison to another drug in the
    same family, pioglitazone.
        Thus in the face of recommendations not to use the drug by
    the leading diabetes organizations, a large human experiment to
    further establish the dangers of rosiglitazone under the urging
    of the FDA has begun. And I'd like to add a little detail to
    that, which is something must not be working out very well in
    terms of recruiting for the study.
        In the last four weeks, that's from March 31st until now, a
    number of new places where these experiments are going on have
    been added. And I'd like to mention these places. India,
    Pakistan, Mexico, Latvia and Colombia. So we are moving into,
    amongst other things, some third world countries under the
    urging of the FDA to try and do an experiment that is
    completely unethical.
        I just want to review a couple more recent studies that
    point out how dangerous this drug is. One is Glaxo's own study,
    referred to by you, Congresswoman, and by Senator Grassley,
    called Record. The FDA is reviewing the study. But in the
    meantime, under the gun I think of the FDA, the company is
    starting to publish some things that are a little less
    favorable for the drug than what they did before.
        This is a study involving four-and-a-half thousand people.
    These are all people with diabetes who weren't being adequately
    controlled with one diabetes drug, so they split them in half.
    Half of them were given rosiglitazone and the other half were
    given another older diabetes drug. And what happened was, a
    significant doubling of heart failure deaths, significant
    increase in hospitalizations of the group given rosiglitazone,
    and although it doesn't appear in the summary of the study, we
    did a little statistical analysis, those people admitted to the
    hospital with heart failure, there was almost a fourfold
    increase in all subsequent cardiovascular deaths in the group
    getting rosiglitazone.
        This study is extremely relevant for looking at how
    unethical the TIDE study is because it answers one of the very
    research questions of that study. How does rosiglitazone
    compare to standard diabetes treatment? The answer is very
    poorly.
        Another even more recent study, or this study was done by
    Canadian researchers on their Canadian single payor database,
    all the people in Ontario over the age of 66, 40,000 people.
    This study showed--and this was looking at rosiglitazone versus
    pioglitazone--and this study showed that for every 120 people
    getting rosiglitazone instead of the other drug, one of them
    would be hospitalized for heart failure and there would be a
    number of deaths. The conclusion of this study published in the
    British Medical Journal in August was thousands of additional
    adverse outcomes, including deaths, from the use of
    rosiglitazone rather than pioglitazone.
        And this study answers the other question of the TIDE
    study, which is how do these two drugs compare with one
    another. It's an observational study, not a randomized
    controlled trial, but the two groups were just about identical.
        And finally, Johns Hopkins researchers reviewed 40
    different randomized controlled trials looking at a variety of
    diabetes drugs, including rosiglitazone and pioglitazone. The
    only drug that improved cardiovascular outcomes was the old,
    relatively inexpensive drug, metformin. The only diabetes drug
    that increased cardiovascular risk was rosiglitazone. It was
    not quite statistically significant, but it was an increased
    risk of 1.7 times.
        In addition, looking back at all of the quote,
    ``controversy'' about the increased heart attack risk, there
    was a study done five years ago showing that if you take
    rosiglitazone, you come out much worse in terms of your serum
    cholesterol, serum triglycerides than you would if you took
    pioglitazone. So there's even some plausible reason why there
    may be increased heart attacks.
        So in summary, there are many studies showing increased
    cardiovascular risk of rosiglitazone compared with
    pioglitazone. There's not one study showing the opposite,
    namely an increased risk with pioglitazone compared with
    rosiglitazone, one of the main purposes of this TIDE study.
        And I want to just close by briefly reviewing the reasons
    why this trial is unethical and must be stopped before
    additional preventable injuries and deaths occur. As was
    mentioned by you, Congresswoman DeLauro, this study, which
    started recruiting in May of 2009, is scheduled to go until
    2015. So during a period of time when it is quite clear that
    this drug is dangerous in comparison with old diabetes drugs
    and dangerous in comparison with Actos or pioglitazone, they
    are recruiting from all over the world, including the United
    States and Canada but now recently Pakistan and India, which
    from an ethical perspective, it gives our international
    reputation a huge step downward to be recruiting people in
    countries that we are trying to have good relationships with,
    but the study itself is unethical.
        Dr. David Juurlink, physician, pharmacologist, head of
    internal medicine in Canada at one of the Sunnybrook Health
    Sciences, one of the University of Toronto teaching, had a lot
    of input into this because he was the principal author of the
    Canadian study that showed when you look at rosiglitazone
    versus pioglitazone, rosiglitazone comes out much worse. And so
    he and I went over some of these reasons why this trial is
    unethical.
        The primary purpose of this trial is to establish with
    certainty whether or not rosiglitazone is indeed more dangerous
    than pioglitazone. However, now there are well documented
    differences in the risk and I have gone over some of them
    between the two demonstrated in several studies in the United
    States, Canada and the UK. The TIDE trial defies a basic tenet
    of clinical trial design. The trial should be conducted to
    determine the balance of risk and benefit and not simply to
    provide absolute proof on harm, because rosiglitazone has no
    safety or efficacy advantage, not even a theoretical one, over
    pioglitazone, and because a wealth of data now suggests
    rosiglitazone carries greater list than pio, it is not possible
    to advance a cogent argument that this trial is ethical.
        Another reason why the trial is unethical is absence of
    equipoise, which means in English that when you go into a
    study, there should be reasonably equal possibilities that one
    arm of the study is going to do as well as the other one. In
    other words, it refers to the fact that no subject receive an
    intervention known to be inferior to current standards of care.
    They're justified only in cases where expert scientific
    community is unsure about the comparative merits and
    interventions.
        This is clearly not the case for rosiglitazone. Several
    guidelines and medical reviews have all demonstrated
    rosiglitazone has an inferior safety profile to pio and to the
    positions of the American Diabetes Association. And the final
    reason is unfavorable balance of benefits and risks, which I
    have gone over. The risk of harm with rosiglitazone is
    substantial, and it's highly unlikely and statistically
    improbable that patients in the rosiglitazone part of the study
    will derive any additional clinical benefit beyond that
    provided by pioglitazone.
        As I mentioned before, there is now 137 places in the world
    involved in this study. Fifty more were added just between four
    weeks ago and now, and it includes a number of countries
    including the developing countries I mentioned. And in summary,
    the TIDE trial continues to recruit patients despite a lack of
    equipoise, exposing thousands of high risk patients, because in
    order to get into the trial you already have to be an increased
    cardiovascular risk, to a drug with an unfavorable safety
    profile with no clinical advantage over its comparator.
        It is almost certain that prospective study subjects are
    deprived of the opportunity to make a fully informed decision
    because the consent form, at least the version we've seen,
    doesn't clearly present the kinds of information that we know
    about the drugs that I've just gone over.
        It is difficult to imagine that a patient would willingly
    participate in a trial involving a drug that according to the
    American Diabetes Association has concerns--has safety concerns
    that leave it with no present day role in the management of
    Type 2 diabetes, which is what those organizations concluded.
    The TIDE trial can only continue with the misplaced objective
    of proving definitively what many studies have already
    suggested, that rosiglitazone is indeed more dangerous than
    pioglitazone. The price of such definitive proof will almost
    certainly be measured in the lives of study subjects who have
    been incompletely informed about the available evidence
    regarding the risks and benefits of participation.
        And just one more thing, which is these are the data
    showing that in 2006, there were 11.3 million prescriptions for
    rosiglitazone, 11.3 million for pioglitazone. After the
    concerns started getting voiced, the last year we have complete
    data for, 2008, there had been a slight increase in
    pioglitazone, Actos, 12.5 million. Rosiglitazone had fallen to
    3.1 million. So aside from being rejected by the American
    Diabetes Association, the drug is being rejected by most
    doctors in the country. Four times as many doctors are
    prescribing Actos than Avandia.
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        Ms. DeLauro. Thank you very much, Dr. Wolfe. Thank you very
    much.
        Dr. Krumholz.
        Dr. Krumholz. Thank you for allowing me this opportunity to
    prevent testimony about what we need to do to improve
    decisionmaking by patients, clinicians, policymakers, about
    pharmaceutical products. It is indeed an honor for me to be
    here. Thank you very much.
        My name is Harlan Krumholz. I am a professor of medicine at
    Yale, a practicing cardiologist, and an expert in outcomes
    research, a field of investigation that involves practical
    research that's intended to guide clinical care in health care
    policy. I am also a member of the Institute of Medicine.
        While the focus of today's subcommittee meeting is on
    Avandia, my focus is a bit broader. The nation's experience
    with Avandia makes it abundantly clear that in order to improve
    public health and safety, we need to ensure that information
    from clinical drug research is available to make sound,
    reasonable decisions about the drugs and devices being
    evaluated and to improve the communication of trial research.
        I would like to touch on just a few of these opportunities
    very briefly. First, we need to make sure that the information
    from clinical trial research is available to make these sound
    decisions that I am talking about. When the public health is
    involved, patients, clinicians, policymakers must know what can
    be known about these drugs.
        We must have access to all available, clinical trial
    research for comprehensive analyses to enable us to enable us
    to have the most complete understanding of the balance of risk
    and benefits of drugs. It's not happening. We too often are
    making inferences about drug safety based on inadequate data.
    Now, in part, this is because sometimes we lack the appropriate
    studies that we need. The studies haven't been completed; but,
    in part, and disturbingly, the situation occurs because not all
    clinical research is published. It's not put into the public
    domain.
        Maybe half of the trials that are conducted never go
    through peer review, so there is knowledge out there that never
    comes before our eyes that we aren't even aware of. And then in
    addition not all the data that are collected that are relevant
    to questions about safety even among the published studies get
    out in front of us so that we can make judgments about them.
    These data are rarely available for analysis by independent
    groups; not just the FDA rarely has it. But then even beyond
    the FDA are independent groups having access to this?
        Because science is based on the fundamental ability to
    reproduce findings, reanalysis of data by independent groups
    ensures that it reflects the truth. It gets out there. You
    can't hide it if many people have the data; and, it can't be
    done unless those data are available. And I think
    Representative Kingston mentioned Vioxx. Vioxx has been
    mentioned. It's an instructive example to us. As a result of
    the Vioxx litigation our research group was granted access to
    all of Merck's internal data. This is outside the trial. We did
    this as research, not funded by the litigators, anything, but
    we were able to get access because of the litigation.
        So we were able to get all of the hard drives of raw data
    sent to us, stacks of it, and go through it for every trial
    that had been conducted on Vioxx, and actually look at what had
    been collected. And it turns out that when you look at that
    data and you analyze it carefully, despite the claims by the
    company that there was no evidence of harm, you could see harm
    emerging from the trials from their own data as early as 2001.
        Remember, the drug was approved in 1999. 2001 you can see
    what their data--if you had been looking at it--the harm. It's
    'til 2004 that it's taken off the market, because that harm
    becomes manifest in another trial. Now, I'm not here to say
    that Merck was hiding information. I'm not here to say that
    they knew that, but I'm saying it is what could have been known
    had their data been produced, had independent groups been
    looking at it.
        I'm going to leave neutral the fact of what was known in
    the company. I'm just going to say that this is the kind of
    thing that is possible to know, and if you have the privilege
    of selling the drug, I think that privilege comes with the
    responsibility of sharing the data upon which that drug's
    justification is based upon which its approval is based, upon
    which our assumptions of safety are based.
        Now, take the case of Avandia. There are unfortunately
    parallels here. The concerns that are being voiced about
    Avandia are based on analysis of data that were only in the
    public domain because of the Paxil litigation. If there is no
    litigation for Paxil, and Spitzer in his settlement is not
    having the company need to put in the public domain all their
    data, then there is no opportunity to look at the entire world
    experience in the trials of this.
        And when Nissen, as you've heard, and his colleague were
    able to look at this, it's when the concerns about the heart
    attack risks emerged. Now, there was some question about it
    earlier, but this was when it began to gain force, and more
    people began using this in getting the study. Now, he did that
    though without the raw data. This is a much less definitive,
    much less authoritative look. I'm here to tell you I still
    don't think we know the full story on Avandia.
        We have not been able to see the raw data files; and, even
    at the FDA, I'm not sure that they have all the files. I know
    they have Record. I'm not sure they have all of them. I'm not
    sure it's being systematically evaluated. I am sure there are
    no academic groups that are having access to this to do this
    independently.
        Now, here's what I recommend. We need to increase
    transparency in the clinical trial research enterprise. As the
    ``FDA Amendments Act of 2007'' now requires that all summary
    level results from clinical trials be posted within 12 months
    of study completion, and that was a good move. That was
    excellent. It was a move towards transparency. You said that
    the results had to be available, but they're raw results. I
    mean they are summary results, and they are not always
    comprehensive and they are not always easily accessible.
        I strongly recommend that raw data files from the trials
    that are relevant to these drugs be made available. They can be
    made available under data use agreements, but the independent
    groups in cases where congress or the FDA or others are raising
    critical safety concerns.
        Nissen writes his article in 2007 based on the litigation
    available summary data. In 2010 we still do not have the
    disseminated raw data files for independent analysis to tell us
    where we stand with this drug; and, meanwhile, I said maybe
    heralding the fact that four out of every five prescriptions
    are for actives, the drug remains a billion-dollar drug.
        There are millions and millions of prescriptions being
    written; and, today, we still do not, I believe, know the full
    answer of the risks of the drugs because we haven't been able
    to go through the raw data files. Second, if concerns are
    raised by congress, the manufacturer, the FDA or by outside
    investigators, I believe that we should insist that there be
    independent replication of those results that can be done
    quickly by groups outside the FDA who are commissioned to do
    this work so we can ensure that we can be confident in the
    results. This is too important.
        We are seeing millions of prescriptions. The chance of this
    drug doubles heart failure. It increases by 30 percent risk of
    heart attacks. Millions of Americans are taking these pills.
    This is, I believe, an urgent situation. It's not one where we
    have the luxury to wait a long time; so, quickly, the other
    issue for me is about the need to communicate the results. We
    need more effective ways of conveying information about what is
    known, what we can know; and, particularly, about these safety
    concerns.
        Many patients assume that treating their diabetes will
    improve their outcomes, and they would be surprised to hear the
    conversation that we are having today that in fact it may do
    the opposite. Importantly, in the ``Patient Protection
    Affordability Care Act of 2009,'' Section 3507, there is a
    requirement for the addition of quantitative summaries of
    benefits and risks to prescription drugs under standardized
    format. Bravo for that, but it's going to be the keys to the
    implementation.
        How is it implemented? What would we improve about the
    communication of Avandia? Well, first of all, we might say that
    Avandia lowers blood sugar levels and improves the control of
    diabetes, but we would want to disclose to any patient taking
    it that we have a high level of uncertainty of whether that
    makes any difference in terms of their life. And, we have a
    fairly good certainty that it doubles the risk of heart
    failure. And we are pretty sure that it may increase by 30
    percent the risk of a heart attack. And if you look at ads
    traditionally, it's in the smallest print.
        I mean you've got to have a magnifying glass to read this
    kind of information on many of the promotional materials where
    it says this drug has not been shown to reduce heart attacks or
    improve survival, when in fact we should be saying it may
    increase and it should be in big print in any of these
    promotional things. So I believe it's our responsibility to
    disclose. I wonder how many of the millions of Americans taking
    this drug have had that disclosed.
        Have they signed an informed consent, ``I am willing to
    take this drug,'' in practice? But, I recognize it could have
    big risks, so my recommendation is we need to clearly disclose
    this kind of information to patients. We have to work hard to
    make sure we know what can be known and we make sure that
    people know it. And this is going to be the devil's in the
    details, but it can be done. These themes about transparency
    and communication are resonating throughout medicine in many
    parts.
        I am very involved in quality care work with CMS and with
    the public reporting of outcomes. We are moving in this
    direction. I believe it's had very important, positive effects
    on quality of care. I believe it can do the same for drug
    safety.
        Thank you.
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        Ms. DeLauro. Thank you both very, very much.
        Let me ask you just right off the bat, Dr. Krumholz. Would
    this TIDE study that we are moving toward in 2015, and I don't
    know the scope of the trial, would that allow for the full
    disclosure of the raw data that you are talking about? Do we
    know that so as to get at the issue in terms of coming to some
    view as to what?
        I have of sense of where Dr. Wolfe is coming from with
    regard to the TIDE study, but I want to find out if what you
    are advocating here, and very strongly advocating, which makes
    enormous sense, is that part of this effort. And is that the
    direction we are going in?
        Dr. Krumholz. Thank you very much. Here is what I am
    saying. Almost 50 trials have been conducted with Avandia, and
    as of now, I know when I say raw data. It seems like inside
    baseball stuff. You know, raw data, what does he really mean by
    that?
        I am saying that when you are forced to just look at
    summaries in spreadsheets and then sort of take the numbers
    from the counts that have already been summarized by others,
    then you can't standardize the analysis across the studies. You
    can't do the kind of sophisticated statistical work that is
    really required to make the very best and most definitive
    inferences about what it actually shows. So I am saying,
    tomorrow.
        What I don't understand is the drug is called into question
    earlier in 2003, a little bit, 2007 with great force. Why
    didn't that mean an immediate call to say you know what?
    Tomorrow, we want all the raw data that you have upon which we
    made decisions about approval available to the FDA who is going
    to conduct their own independent analysis and get two
    independent, academic groups.
        Maybe we can put drug A, drug B. We don't even have to tell
    the groups which drug is which. Tell us what you think these
    data show with the very best data that are available to me.
    That's the minimum of what we would expect, and we would want
    to get a speedy analysis and determination about whether we
    have a problem. Now, so, Congresswoman, that's sort of what we
    could do with what already exists.
        TIDE is just trying to prevent information to us in 2015. I
    don't know who would sign up for TIDEs. I mean, I'm trying to
    think would any of us sign-up for a trial where we say, first
    of all, the comparison with Actos. I mean there are other
    options too, so both Actos and Avandia increased the risk of
    heart failure by about double. So they both have some problems,
    but more than that, I am asking you to sign-up for a trial to
    say, you know, I want to make sure one of these drugs isn't
    harmful. Would you mind joining the trial?
        And, you know, you are going to go to one arm or the other.
    And the best result of this study is that you are not going to
    be harmed if you're in the group that we're concerned about.
    And I don't know how the informed consent writes. It's somebody
    says, ``Well, what do I get out of this?'' Well, you may
    contribute to medical research and you may be in the group that
    doesn't get harmed; or, we may find out, actually, that the
    group you're in that we thought was going to harm you didn't. I
    mean, it doesn't. I don't quite get how it works.
        Ms. DeLauro. Should we stop it?
        Dr. Krumholz. I think it should stop. I don't think it will
    help us make a determination about the trial.
        Ms. DeLauro. Where do you think in terms of the issue of
    raw--is this on so I'm not taking up all the time?
        Court Reporter. It's on.
        Ms. DeLauro. Okay. Dr. Wolfe, do you agree with Dr.
    Krumholz about raw data files, publicly available, not just the
    summary results, and how are we going to? What arguments are
    the companies going to use against such a requirement?
        Dr. Wolfe. We have, as Dr. Krumholz has, for a long time
    argued that there should be almost immediate and complete
    access to all the data. If you were a company and you stand to
    gain $5 billion, if the data shows that the drug is safe and
    effective, and you stand to lose a lot of money if it doesn't,
    you will put your spin on it. And unless people who don't have
    a financial spin have access to the raw data, so they can
    actually look at it and see what it really shows--not what it
    shows in the best financial life of the company--we just can't
    trust the process at all.
        And, we also as mentioned before have a difficult time
    trusting the process at the FDA when the people who approved
    the drug and seem too often to tenaciously hang onto the drug,
    no matter what kind of safety concerns are raised, are the
    decisionmakers. Dr. Jenkins in 1999 was amongst the people
    approving the drug, and now he's charged with the FDA's safety
    review on the drug. It is not likely based on what FDA has done
    so far that he is going to come out in what we would call the
    correct posture, which is this drug is too dangerous.
        The trial, which is besmirching the reputation of FDA and
    this country being done all over the world should be stopped,
    so I certainly agree with Senator Grassley and others who
    believe that there should be much more independence within the
    FDA of people looking at this. And as Dr. Krumholz says, other
    people, even outside the FDA in addition should have a right to
    look at these data and help make the decisionmaking in a way
    that's best for patients or patients in clinical trials that
    should not be going on as opposed to what's best for selling
    this drug.
        I meant to say when I showed or talked about those data
    that there four times more prescriptions for Actos than for
    Avandia, but that still leaves three million prescriptions in
    2008 and probably not that many fewer in 2009. So there are
    huge numbers of people being exposed in the marketplace to a
    drug and then more in the human experimentation place. It's got
    to stop.
        Dr. Krumholz. I will just add. I mean I believe that
    there's proprietary interest prior to approval. I mean
    companies are trying to develop drugs that have made
    substantial investments. They want to try to protect certain
    strategies that they are undertaking.
        Once it's approved, I believe the privilege of selling in
    the marketplace, as I said, comes with the responsibility of
    providing. What would you want to hide at that point? I mean
    the drug is approved. You're out selling it. All of the
    information that is available to know about the drug should be
    in the marketplace of ideas about, you know, what does this
    drug do, what does it provide. And that kind of debate can
    occur in an unintimidated forum. And that's what I'm not sure.
    I mean, and in this digital age it's not so difficult to pull
    together. If you can't as a company, pull together your raw
    data files, it makes me wonder about the quality of your
    internal research.
        Ms. DeLauro. Let me make two quick points, and then I want
    to yield to Mr. Kingston. One is that as I understand it, as a
    condition of approval that the company was supposed to engage
    in a trial--an adopt--that's the adopt. Right. That took almost
    seven years to, you know, get done. That in and of itself in
    terms of where along the continuum there had been raised
    serious issues about what was going on with this drug.
        But, I also just want to reinforce something that Dr. Wolfe
    said, that this is a testimony from Dr. Jenkins before the
    Energy and Commerce Committee--I say this for my colleagues so
    that this is not just made up--Dr. Jenkins says, ``I was the
    senior member of the review team that reviewed Avandia back in
    1999. I actually signed the approval letter for Avandia in
    1999.'' Now, again, this is the individual who was doing the
    review of the review, so I think the point is well taken.
        Mr. Kingston.
        Mr. Kingston. Dr. Krumholz, I was wondering. On the raw
    data it is proprietary, and so what you're saying is the moment
    that the drug is approved and on the market, then it should be
    revealed.
        Dr. Krumholz. Thank you. So, you know, that would be I
    believe the best case scenario that we allow the sort of
    transparency upon which the drug is approved. That kind of data
    can be available for analysis, but at the very least, when a
    threshold of concern about safety emerges from congress, from
    the public, from the agency, from other sources, there is some
    support for concern as there was in Avandia.
        At least at that point, I mean, if we're not going to make
    it available on approval and I think that might be a bridge too
    far, that would be wonderful; but, let's just even talk about
    when concern are raised like this we should spring into action
    and say we need to know what can be known based on what's
    already done.
        Ms. DeLauro. We being the FDA?
        Dr. Krumholz. We being the public. We being Americans. I
    mean this is being sold. Our mothers, our fathers, our friends,
    our neighbors are taking these drugs. There should be people
    who can independently pursue this, and there's no reason for
    the data not to be available. And that's my principle concern.
    And, again, the Vioxx episode was instructive. Had that data
    been available, many people looking at it, three years before
    it was taken off the market, I think it would have emerged that
    there were issues that needed to be addressed; and that's what
    I'm advocating.
        Mr. Kingston. You know, on the independent groups.
        Ms. DeLauro. Dr. Wolfe, congressman.
        Dr. Wolfe. Well, finish congressman. Finish your question,
    please.
        Mr. Kingston. Do you have something on the questions?
        Dr. Wolfe. No, just finish what you're talking about with
    him. I just have something.
        Mr. Kingston. Just inspired, I want to say.
        Dr. Wolfe. By you.
        [Laughter.]
        Mr. Kingston. Well, I'll yield to you in a second. I guess
    the question that I have on the independent groups so often in
    Washington and Senator Grassley had talked about the
    politicians and not necessarily meaning the elected
    politicians. But, you know, everybody in this town often has a
    bias. And, the independent groups, who would they be that, you
    know, because there are a lot of groups who make a living off
    ``the sky is falling''--and it doesn't matter what the issue
    is--they're on all sides of it.
        How do you keep it scientifically pure?
        Dr. Krumholz. Yeah. I'm glad. I don't think there is such a
    thing as scientific purity, and people do come at these with
    different points of view and different relationships as well.
    That's why even my suggestion was, one, if it's in the public
    domain, there's many people who can look at it. You may hear
    different views of it, but at least it's getting it out there
    too.
        If you can get two independent groups where it's even
    shielded, then that can give you more confidence about it. But
    any group that does it, and it could be there are lots of
    groups with expertise, academic groups and also companies that
    do this kind of work, they've got to be transparent on what
    they do. You know, nothing they do can be like here's the black
    box. We did a lot of stuff. Here's the results.
        Everything they do has to be able to say here are the steps
    we took. Here's the decisions we made. Here's the results we
    found, because I don't trust, you know, you can totally
    insulate. Everyone's got a little point of view, but that's why
    when it's out there, no one's point of view is saying you
    haven't seen the data. I have, and here's what it says.
        Mr. Kingston. Well, you know, one of the things that's
    coming out with the miracle, biological drugs that are coming
    out is that we have certain firewalls to keep the FDA approving
    the drug, talking to the scientists within the drug community
    who's developing it. And I think, you know, that's a well-
    intended firewall. Yet, at the same time, some of the stuff is
    so specialized that it's almost saying, well, you cannot talk
    to Einstein about the theory of relativity, since he developed
    it. And so I think that sometimes, that with good intentions we
    may have done something that we're not quite thinking through
    in terms of scientists. And I just wanted to comment on that.
        Dr. Krumholz. I really appreciate that, and here's what I
    think when it comes to safety. I mean I should be able to
    explain it to my mom. I mean, you know, this isn't rocket
    science stuff. I mean I don't need to explain to her the
    underlying mechanism of the drug. I don't need to explain to
    her the theory of how all this works and what's going on in the
    human body. She just needs to be able to count.
        Mr. Kingston. Well, no. I'm talking about inside the FDA.
    Should the FDA be able to talk to the scientists who developed
    it?
        Dr. Krumholz. Yeah. I don't believe we should be separating
    people in different corners where they can't talk. I mean there
    are a lot of discussions about how these kind of interactions
    should occur. There are low integrity and high integrity
    interactions at every different level of groups, and I think in
    the FDA we want to try to promote high level, high integrity
    transparent conversations.
        Sometimes, they have to occur proprietary, because they're
    early in the development. But you want the people, I think, to
    be talking to the FDA about what the path is, but the data
    needs then to be really clear and open.
        Mr. Kingston. I am watching with a lot of interest the
    reform of derivatives; and, the more I've looked into that, the
    more I've realized how few people know it.
        Dr. Krumholz. Understood it.
        Mr. Kingston. And so I do think a lot of this is talking to
    each other and more information, and trying to keep a high
    firewall.
        I was going to yield to Dr. Wolfe. I don't know where the
    time is. But, I did want to ask you how was Dr. Cruze forced to
    sign this paper?
        Dr. Krumholz. Dr. Buse?
        Mr. Kingston. Buse, excuse me.
        Dr. Krumholz. Well----
        Dr. Wolfe. Well, the company literally made threats to him
    that, ``If you don't keep quiet, we are going to get you in
    trouble with your university,'' whatever. It was fairly
    intimidating. And I think that, you know, anyone in that
    position would be intimidated.
        He fortunately, as I mentioned, signed off on this document
    saying unanimously, ``Don't use this drug,'' so the
    intimidation didn't work very well. But it's very unseemly,
    it's----
        Dr. Krumholz. Well, they sent somebody of a high level, who
    was a prior academic and then in industry, to his boss----
        Dr. Wolfe. To try and get him in trouble.
        Dr. Krumholz. And his boss talked to him, and I think he
    thought it's not worth the aggravation. I mean, what are they
    going to do? They're not--there is only so much they can do.
    But they can make it uncomfortable for him. And they--according
    to documents that came out of the report, they--when your boss
    calls you in and says, ``You've got to stop this,'' you can
    either say, ``I don't care what you say,'' or you can say,
    ``It's not worth the aggravation.''
        Ms. DeLauro. Let me just--and, Congressman Kingston, I will
    make you a copy of this--this was the report that went before
    the Finance Committee, ``The Intimidation of Dr. John Buce and
    the Diabetes Drug Avandia,'' and it talks very specifically
    about who did go to see him, and who communicated with him.
        And he wrote--and they referred to his letter as a
    retraction letter. They used it, quite honestly, pretty
    politically to make a demonstration. He said, ``The company's
    leadership contacted my chairman and ensured an ugly set of
    interchanges occurred over a period of about a week, ending in
    my having to sign some legal document, in which I agreed not to
    discuss this issue further in public.''
        He ended his--it says, ``I was certainly intimidated by
    them. It makes me embarrassed to have caved in several years
    ago.'' But I will get you this document so that you can take a
    look at it. Thank you.
        Mr. Kingston. Thank you.
        Ms. DeLauro. Mr. Farr.
        Mr. Farr. Thank you very much, Madam Chairwoman. We
    appreciate having this hearing. And the FDA is always coming
    out in national polls as the one entity of government that
    people usually trust. And I think it's got the highest ratings
    of anything in the Federal Government. And it's interesting, we
    spend very little time on drug issues, because most of it's on
    agriculture. But on the whole food safety issues before us, the
    concern here is that the FDA would over-react to put small
    farmers, organic growers out of business, because it would
    require that everything be grown in a sterile environment.
        But it's interesting that we are using today's hearing to
    talk about, you know, erring on the side of caution on
    prescription drugs. As I read the Department's annual--they put
    before this committee the whole, you know, explanation of what
    they're responsible for, and it says that the Department is
    responsible for ensuring that prescription, generic, and over-
    the-counter drug products are adequately available to the
    public, and are safe and effective. The program is also
    responsible for monitoring all drugs that are marketed in the
    United States for unexpected health risks, and for monitoring
    and enforcing the quality of those drug products.
        It seems like Senator Grassley's statement says that the
    FDA does not even have a complete or accurate list of all the
    products that are sold in the U.S. market, including unimproved
    drugs, so that the Agency has no ability to take the
    enforcement responsibilities that they have. And you are
    pointing out that they're just--they failed to, essentially,
    recognize, in approving the drug, just recognize its risks.
        So, my question really goes, doesn't this open up a huge
    liability issue, if the responsibility for the Federal
    Government is to ensure the safety of this? And that our safety
    checkers are erring on the job? And what does it do for your--
    in your world of practicing physicians who prescribe these
    drugs--they still have to be prescribed--what risk does it open
    up to them?
        It seems to me that this is--could--I mean, it's huge
    litigious issues here.
        Dr. Wolfe. Yes. Well, I mean I--Dr. Krumholz, I'm sure,
    will have something to say on this also.
        I am reminded about three or four years ago Congresswoman
    DeLauro had a hearing on drug safety. And Dr. Woodcock, who is
    head of drugs at the FDA, was a witness, and I was a witness.
    And at 8:00 the night before the hearing, the FDA suddenly
    announced that they had a new initiative, and it was called,
    ``Safety First,'' and we all wondered what was going on before
    then.
        I think the FDA should be leading in drug safety in this
    country. And, instead, it's really following in drug safety.
    When the American Diabetes Association says, ``Don't use this
    drug,'' when most physicians are rejecting the prescribing of
    it, where is the FDA? They have had the information. They
    really haven't done anything. We warned readers of the
    newsletter that Congresswoman DeLauro held up years ago to stop
    using this drug. We warned them to stop using Vioxx many years
    before it came off the market.
        So, when there is enough data to look at it objectively and
    say the benefits are clearly outweighed by the risks, why is
    the drug on the market?
        Mr. Farr. Why would--with that information, why would
    doctors still prescribe it?
        Dr. Wolfe. Well, the company----
        Mr. Farr. Because aren't you at risk in doing that?
        Dr. Wolfe. Doctors are frequently influenced by the drug
    industry. Some Canadian researchers estimated a couple of years
    ago that $52 billion a year is spent in this country
    advertising and promoting drugs. And one of the main sources of
    information for too many doctors is the drug company, as
    opposed to reading articles or going even further. There is a
    lot of information on FDA's website, which most people don't
    know exists, that the average practicing physician doesn't have
    a chance to look at.
        So, the prescribing practices are not terrible, but they
    could be much worse if doctors got more information, if
    patients got more information. Just as we said----
        Mr. Farr. So----
        Dr. Wolfe [continuing]. No one fully informed about this
    TIDE study would ever participate. No patient would knowingly
    allow their doctor to prescribe this drug if they knew about
    the risks of the drug.
        Mr. Farr. Well, yes, and I think that goes to Dr.
    Krumholz's point of transparency.
        The one question I have--I mean, here we are in politics,
    and we--you know, everything we have to do is transparent, to
    being a candidate for office, and certainly transparent on
    everything, your whole--sources of income, everything like
    that.
        But what you see in this field is also what you call hit
    pieces, where the opposition takes that information and turns
    it into a negative. You have a lot of competition out there, a
    lot of money to be made on these break-through drugs. And, boy,
    if you get one, your company and your stock is going to go
    crazy.
        What would prevent an adversary company, knowing that there
    is about a break-through development, just doing everything
    they can to poison the process so that you really don't have
    any fair judgement about--I mean, I believe in transparency.
    Obviously, we live on it. But on the other hand, I think you're
    seeing a lot of misinformation in America right now, and people
    believing the misinformation.
        Dr. Wolfe. Ten seconds, and then Dr. Krumholz. The point
    that Dr. Krumholz focused on, transparency, if things were
    really transparent and independent people were able to look at
    it, the ability of a renegade company or a company like that to
    be able to undermine something like that would be severely
    limited. It's because so much of this information is secret and
    not available to everyone that things like that could go on.
        Dr. Krumholz. Yes, I think that's the best way to
    prophylax, is to have information available and have people be
    able to use it.
        But you know, I think you're identifying a key issue here,
    which is that--and that's why I talked about transparency, I
    talked about being able to analyze the best data, and I talked
    about communication. If you've got three million prescriptions
    still going on--I can't--in our area I've talked to the
    diabetologists. I said, ``Who is using this drug, still?'' None
    of them are using it. But people are. A lot of people still
    are. And there is a lot of promotion of the drug still, now.
        And you look at azitamide, for example, a cholesterol
    lowering drug, I mean, everyone said this should be a drug of
    last resort, because we won't know if that drug is safe and
    effective until 2013--after the drug was introduced in 2001. I
    mean, this is replaying out in many different scenarios. And
    even though everyone says, ``Look, it's okay. We don't know if
    it's harmful''--we don't have the information on harm like we
    do here--but you know, that ``we won't know for a long time,''
    it's still selling, you know, two billions of dollars of drugs.
        Phenofibrate was just shown in two trials not to be
    effective. It's a $1.3 billion drug. I mean--and it's a lot on
    the promotion.
        So it's, I think, our job to make sure that the data upon
    which we have this is out, and that the communication is clear.
    And you're absolutely right, there is risk for people doing
    things. But the truth is it's on the market. So the assumption
    is, if it's on the market, it must be okay. And, you know, we
    need to get out clear messaging, I think, and that's----
        Mr. Farr. Do you think that Senator Grassley's bifurcation
    of the FDA's responsibilities is the right way to go?
        Dr. Krumholz. Yes, that's another issue. But I do think
    it's very hard for the group that was invested--just cognitive
    psychology, you know. You made a decision, and for you to go
    against that decision, some of the data which still may have
    been even knowable back then, it's very difficult. I think an
    independent group that has no dog in the fight, that basically
    is empowered--we do have to encourage innovation.
        I mean, we have a fine balance here. We don't want to
    create so many barriers and difficulties that we can't get new
    and important drugs out in the market. So I don't think--you
    know, it's this balance we have got to strike. And--but on the
    side of safety, that's why I'm pushing for the transparency.
    Let us know what can be known, and then let us figure out what
    we need to know in order to move forward.
        Dr. Wolfe. In terms of the bifurcation question----
        Ms. DeLauro. If I could just interrupt for a second,
    Doctor----
        Dr. Wolfe. Yes, please.
        Ms. DeLauro [continuing]. Because we will get to that.
        Dr. Wolfe. Yes.
        Ms. DeLauro. I want to try to get to Mr. Hinchey's
    questions, because Farr's time has run out. And so let me go to
    you, Mr. Hinchey.
        Dr. Wolfe. We need to talk to more pharmacists.
        Mr. Hinchey. Well, I hate to interrupt you.
        Dr. Wolfe. No, no, please go on.
        Mr. Hinchey. This is fascinating. Thank you very much,
    Madam Chairwoman, and thank you very much for drawing attention
    to this issue. This is critically important, and it's, in a
    perverse way, fascinating. And it's clear that the motivation
    of money to be made is one of the driving forces in the context
    of dealing with this issue, and dealing with it in ways that
    are harming so many people. So, Dr. Wolfe and Dr. Krumholz,
    thank you very, very much.
        I want to also express my appreciation to Senator Grassley.
    And I share his views about ensuring that there is an
    independent office within the Food and Drug Administration that
    would be responsible for post-market drug safety, and that can
    analyze scientific data and solicit the opinion of experts
    without fear of reprisal or interference from the drug
    manufacturers.
        And, coincidentally, I have introduced the FDA Improvement
    Act, which creates a center for post-market drug safety and
    effectiveness, independently, in the context of the FDA. And--
    which will provide an independent opinion about drugs currently
    on the market. And I think one of the main reasons that I have
    introduced the FDA Improvement Act is because I believe the
    relationship between drug manufacturers and the FDA has become
    much too close, and it has resulted in action or inaction, not
    in the public interest. In fact, as we have seen, very contrary
    to the public interest.
        Dr. Wolf, I wanted to ask you, can you elaborate on the
    results of the clinical trial conducted by GlaxoSmithKline that
    was ordered by the FDA? And you talk about it, and you state in
    your testimony that many of the participants who took Avandia
    died during the trial, as I understand it. Is that correct?
    They died during the trial?
        Dr. Wolfe. Well----
        Mr. Hinchey. Why hasn't the FDA stopped the trial?
        Dr. Wolfe. Well, I was talking about the trials that were
    finished. In the trials that are finished, both the one that
    Glaxo did, the record study, and in the retrospective study
    done in Canada, there was an excess of people dying--being
    hospitalized. There is no question those studies are over now.
        And what I was saying is that the study that the FDA
    ordered, the new one, the TIDE study that's just beginning a
    year ago, is continuing to do the same thing. In other words,
    Einstein made the most cogent definition of insanity, which is
    if people keep doing things and expecting different results,
    that's what insanity is. Once you have done enough studies to
    show the drug is harmful, why do more studies?
        And I think it's particularly bad, because the FDA
    wonderfully--thanks to the congress--has this new authority in
    2007 to order companies to do studies. And they should be using
    the authority to order them to do studies that are ethical and
    that are going to provide new information. And this study
    doesn't do any of that, and that's why the FDA needs to stop it
    before people in India or Pakistan or Colombia or the United
    States or Canada are further damaged, as the predecessors were
    in the studies you're referring to.
        Mr. Hinchey. Thank you very much for that. Would you--do
    you believe that an independent post-market drug safety office
    would help prevent things like Avandia-type incidents in the
    future? And what other changes would you have us make, or
    recommend for us to make within the FDA, to improve the
    oversight of drug safety?
        Dr. Wolfe. This is now--I find it hard to believe, myself--
    this is the 39th year since I left NIH to start doing this kind
    of work. And a chronic theme that has never changed--if
    anything, it's getting worse lately--is the lack of
    independence of the people who are skilled, expert in
    epidemiology and drug safety, to have their views acted upon.
    It's always been going on.
        They've changed the name of that office four or five times
    in response to criticisms, but the function and the dependence
    and the subordinate position of that office, compared to the
    office of new drugs, has stayed the same.
        So, the legislation you've introduced, the legislation in
    the Senate, really needs to be passed. It needs to be in the
    FDA. There are some people who think that it should be outside
    the FDA. I think that's not a good idea. Your legislation says,
    ``Let's have it in the FDA, but let's have them do things that
    can be paid attention to.''
        The list of drugs that the people in the office of drug
    safety--to simplify its name--have said are dangerous and
    should come off the market keeps growing and growing, and it
    takes way too long for this to happen. They just--the funding--
    you know, this year more than $700 million in drug industry
    money--goes directly to the drug part of the FDA. Most of it is
    used to pay for the review of drugs.
        So, this office of new drugs that keeps putting its thumb
    on the safety people is getting a huge amount of money. They
    should be getting money to do their purpose, but they shouldn't
    be getting it from the drug industry. It's clearly having a
    negative impact. So repealing that law that funds the FDA
    through the drug industry is just as important as the
    legislation you're talking about, which is separating out,
    empowering for the first time, the drug safety people.
        Ms. DeLauro. That law being PDUFA. Mr. Kingston.
        Mr. Kingston. Thank you, Madam Chairwoman. I wanted to get
    back to the question on the malpractice, because how exposed
    are doctors on this? It would appear to me there would be a lot
    of concern in the individual practice. Even though I understand
    the influence that the pharmaceuticals might have on them, it
    still seems like they would be cautious.
        Dr. Wolfe. Well----
        Mr. Kingston. And maybe that's what is driving this, as
    much as anything.
        Dr. Wolfe. Yes, there is a precious small amount of
    litigation against doctors for prescribing problems. There is a
    small amount of it. But not very much. It is not very big, in
    the scope of all litigation brought against doctors.
        And, of course, if you are the company, as long as the drug
    is on the market and your lawyers tell you, ``Put enough
    warnings in there so that if these doctors still prescribe the
    drug it will be on their ticket and not on ours,'' that's part
    of what happens with labeling. But that, of course, is not the
    issue with a drug that shouldn't be on the market in the first
    place.
        I guess the only--Dr. Krumholz was just talking about
    before what would you put on the label of Avandia that would
    take care of this, and it should say, ``Do not use.'' But ``Do
    not use'' means that the FDA screwed up and left it on the
    market when nobody should be using the drug.
        So, I think that your point is a good one, that some
    doctors may not be prescribing as much, not simply because of a
    fear of malpractice on that issue, which isn't very good, but
    because they don't want to practice bad medicine. I don't think
    any doctor intentionally wants to harm their patient.
        And they see studies showing increased heart attack, and
    then they see other studies with heart failure and so forth.
    They say, ``Why not prescribe another drug that works through
    the same mechanism''--Actos, for example--``or why not, even
    better, prescribe these older drugs that are safer, we know
    more about them, there are fewer surprises?''
        So I think that, in the sense that you're talking about,
    the marketplace, as in doctors' prescribing practices, are
    moving in a better direction--not fast enough, but they are way
    ahead of the FDA, which is sort of frozen on this issue.
        Mr. Kingston. Dr. Krumholz, let me move to another
    question, and let you answer this and, if you want to, backfill
    some of this stuff.
        In terms of international testing and international record-
    keeping, how standard is it and how practical is it to be able
    to take Canadian tests or European tests and shed light on a
    question like this?
        Dr. Krumholz. You mean studies?
        Mr. Kingston. Yes. Excuse me, yes.
        Dr. Krumholz. Yes, it's not a problem at all. I mean there
    are standardized approaches. They are actually getting these
    trials together for the FDA. I mean they need to follow
    standard principles, in terms of studies, and----
        Mr. Kingston. Is their data more accessible, particularly
    the raw data?
        Dr. Krumholz. In other countries?
        Mr. Kingston. Yes.
        Dr. Krumholz. I'm not aware that the companies are making--
    no, because we would get access to it, too. I mean, nobody is
    doing this. And what I don't understand is, again, once
    millions of people are taking this, why that transparency
    doesn't exist, why we can't promote that.
        I want to just quickly--just to give you some insight,
    because you may be puzzled, like, ``Why is anyone prescribing
    this drug?'' There are a couple of things that happen. One is,
    in medicine, we become enamored of making people's lab tests
    look good. I mean, this drug makes people's lab tests look
    better. We think, if we lower their blood sugar levels, it's
    better for them.
        The truth is it may or may not be, because some drugs
    actually have beneficial effects, some don't. Just like
    cholesterol, there are some drugs that lower cholesterol that
    actually even can cause harm. Some drugs that lower cholesterol
    can have benefit. Drugs have thousands of effects. When we
    measure one singular effect, like what does it do to a single
    blood test, it doesn't often tell us what it does to the person
    in their life. You've got to study that in these kind of
    trials.
        So, a doc uses it, they're used to giving it to patients,
    they see good lab tests come back. Some people are hedging
    whether there is harm. Some people have different
    relationships. When you have statements that say it's harmful,
    they are in documents that, you know, sometimes not everybody
    sees. Meanwhile, they are getting a lot of promotional
    material. And they are thinking about thousands of decisions.
        And so, it's sort of easy to kind of stay with the status
    quo, and it takes something strong, some strong messaging, to
    overcome that.
        Mr. Kingston. Well, let me ask you about the status quo,
    because a lot of drugs say, ``Do not take if you're pregnant,
    or if you have a heart disease,'' or if you're older, or
    whatever. Maybe there is something else that we need to know
    about that people should be cautious of, and I don't know what
    it is.
        But it is true that some drugs work for some people and
    they don't' work for somebody else, and we're not sure why,
    right?
        Dr. Wolfe. Well, I don't think there is any identifiable
    group of people for whom this drug has benefits that outweigh
    the risk. I think that what you're--we are all in favor of the
    FDA maximally using its ability to warn, educate doctors,
    patients, for a drug that has some unique advantage. But, as
    mentioned earlier, the main thing that adult onset type II
    diabetics die of is cardiovascular disease. And, therefore, the
    test of a diabetes drug is does it decrease cardiovascular
    disease? When it increases cardiovascular disease, something is
    very, very wrong, and the drug just shouldn't be around.
        So, instead of saying, ``Well, if you could identify a
    group of people that shouldn't use it, and others who have
    benefit, leave the drug on the market,'' no such group has been
    identified. Of all countries--because, in other ways, they are
    not that progressive--Saudi Arabia banned this drug recently
    because they did not think that there was any evidence that
    there was a group for whom the benefit outweighed the risk.
        Dr. Krumholz. But let me say it's a good question. I mean,
    are there responders and non-responders? And you always want to
    look for it. So far, there hasn't been a group.
        The other benefits for diabetes drugs could be decreased
    amputations, blindness, kidney function, there is a whole range
    of things that we're interested in. And so far----
        Dr. Wolfe. A lot of them are cardiovascular-related,
    though, right?
        Dr. Krumholz. And so far, this drug hasn't been shown in
    that area, either.
        Ms. DeLauro. With regard to FDA standards and the overall--
    there seems to be we have got systemic failure here at some
    level. But you look at the FDA standards. This is a Wall Street
    Journal article recently that said that, ``Senior FDA officials
    have asked their staff to review how FDA makes decisions about
    drug safety and in particular what evidence it needs about a
    drug's risks to take it off the market.''
        Now, I commend and appreciate the drug safety decision that
    the agency is now making to take a look at that. You know, that
    is as I said commendable. But it is a little stunning to read
    this. It is a little bit about safety first within less than 24
    hours of a hearing on safety. Shouldn't the FDA have known for
    years what evidence it needs to take a drug off the market?
    What is the systemic failure within the process now that--you
    know, which there is Avandia there is Vioxx--there may be,
    there are lots of examples of the failure here. How do we begin
    to look at addressing that failure so that we are not five
    years from now trying to figure out what the process should be?
    I think that is the fundamental issue that we need to grapple
    with here.
        Dr. Krumholz. Thank you. I think that is a very important
    comment, and I guess what I wonder as a citizen--I mean I don't
    know that I have special knowledge of what they should do, but
    I mean where is the emergency?
        Dr. DeLauro. You do.
        Dr. Krumholz. Well where is the emergency response? You
    know, once--where is the predictable triggering of events? It
    is sort of like preparedness, right? I mean, we know that even
    with best intentions and best data we can approve drugs that we
    are going to learn about as they are taken by millions of
    people. The companies should want to know with clear
    transparency what are the steps that are being taken and what
    are the expectations. It is not good for them either to be
    uncertain about this kind of thing. And there should be clear
    protocols processes.
        It is just preparedness saying--you know, no one should be
    surprised and when something like Nissen's article released in
    2007, we should not be in 2010 saying we still don't have all
    the data, we still don't have all the facts, and we are in the
    same place we were when this came out. After the companies own
    med analysis said there was a 30 percent increase in heart
    attacks, after four other or three or four others came out and
    said it, and nothing that has come that has come out since has
    been sufficiently reassuring to say that this isn't the truth.
        Now, it may be that the FDA says well, with kind of risk
    and no unique benefit we think it should stay on, and they can
    justify that. But it has got to--so, okay. Where is the
    process? But that should have correlatively quickly. I just
    don't think three years down the line we are still wondering,
    what is the exact process by which this should happen? I mean
    we should know this is predictably occurring and how do we deal
    with it?
        Ms. DeLauro. Well, the thing about it--let me just
    interrupt for a second. The fact of the matter is, is that as I
    understand it, the company Glaxo would not accept the fact of
    an independent review by Dr. Nissen, but said that their
    statisticians had to examine the information.
        Now, what I also want to figure out--yeah, there is clearly
    you know, the company piece, but there is also an FDA piece
    here. And where we set out the parameters or the guidelines or
    the dictates of what needs to get done when you are looking at
    those results. And I will make this one point before I kneel to
    you Dr. Wolfe--whenever we get into the difficulty and there is
    a question asked to the science, the outcome, we always we
    always appear to act on behalf of the industry. Whether it was
    Vioxx and four years later this drug and now it is a number of
    years later. We do not act saying, okay we have a--the notion
    is let us leave this go on for another several years while more
    people die before we truly do address it and err on the side of
    public health.
        Dr. Krumholz. Well, so I agree that it is important to be
    erring on the side of public health. I want--I envision a world
    where we are basically we are not polarizing, we are basically
    telling the companies this is the way business gets done. We
    want you to make a profit. We want you to do well by doing
    good. We want new products that are going to enhance people's
    lives, but we also need to work together. And as representative
    Kingston said, ``You know, there is no necessarily independence
    since we have to bring it out of the companies, we have to get
    the real data, we have to say is this all of it? And we have to
    decide what it says and then make decisions based on it.''
        But you are absolutely right. I mean the tail can't wag the
    dog here. I mean basically the public's interest is what should
    dominate and--I totally agree with you.
        Ms. DeLauro. Dr. Wolfe and then Mr. Farr.
        Dr. Wolfe. One place the FDA to my knowledge hasn't begun
    to look in this little process you described is other
    countries. As you know, because I sent you a copy of this
    letter, I wrote to the FDA a couple of months ago saying,
    ``Here are three drugs. We have asked you to ban all three of
    them. None of them have any unique advantage in terms of
    effectiveness. Two of the three: Darvon, Darvocet and Meridia
    sibutramine, the diet drug, have been taken off the market in
    Europe. The third which is Avandia has now been taken off the
    market in Saudi Arabia.'' So, why is that other countries have
    a mechanism that when for drugs that don't have any unique
    benefit there is well documented risk that clearly outweighed
    whatever benefit minimal though it may be, they moved to take
    these off the market?
        The FDA as Dr. Krumholz just alluded to sort of--the
    default is, well, it doesn't have any unique advantage. It has
    some clear risk but we just aren't quite up for taking it off
    the market. I mean I have had many conversations with Dr.
    Woodcock about this and she is just uncomfortable being a
    regulator. And I think that for someone who is the heads of
    drugs at FDA, being uncomfortable with being a regulator is
    incompatible with being the head of that division. And example
    after example after example are occurring.
        We are a laughing stock of other countries for leaving
    these drugs on the market. We are going to be more than the
    laughing stock of these countries when we are doing what FDA
    insisted on in this trial in Pakistan, Colombia, et cetera, et
    cetera, et cetera. So I think that there is something wrong
    with the decision making but they seem to be approaching it in
    a theoretical kind of way and not being that interested in the
    individual examples. What went wrong?
        I mean, when I was a resident in medicine if someone died
    and you didn't understand what was going on, 70 or 80 percent
    of the time we had an autopsy done, and you learned something.
    The FDA seems very reluctant, resistant to doing an autopsy on
    the mistake after mistake after mistake after mistake they keep
    making. One thing that they would conclude as just alluded to
    by representative Hinchey is that part of the autopsy is
    because they didn't listen to some of their own scientists
    there. I mean every one of these instances where another
    country is taking a drug off the market, we haven't.
        There are people in the FDA who said it has no unique
    advantage, it has unique risks, get it off the market. No one
    paid any attention to them. So, the process is really filed
    off. It needs to be changed before more people die from these
    drugs. The three drugs that I wrote you about--wrote this to
    Commissioner Hamburg and Deputy Chief Commissioner Sharpstein,
    25 millions prescriptions a year for the three drugs. More for
    anything than--you know, more for Darvon. But, these are people
    being exposed to drugs, being injured, killed, with no hope of
    any significant benefit.
        Ms. DeLauro. Very very quick because my time is about to
    run out, but are there other countries that you speak of Dr.
    Wolfe, have they separated out the function of new drugs and
    then the review process?
        Dr. Wolfe. The FDA has more employees and drugs than the
    entire rest of the world combined. And I am not sure they even
    in some countries get to that level of sophistication. But they
    are more attuned to the public health than the FDA seems to be
    and are protecting the public instead of protecting companies.
        Ms. DeLauro. Thank you. Mr. Farr.
        Mr. Farr. I want to follow up on that question, although I
    don't want to beat a dead drug but----
        Dr. Wolfe. Please do.
        [Laughter.]
        Mr. Farr. We have experienced where the Secretary of
    Transportation in 9/11 that day shut down every single aircraft
    in the air immediately over U.S. airspace. We saw the FDA
    demand--and it is a voluntary recall of all the spinach in the
    United States, whether it was in your refrigerator, whether it
    was in the store, whether it was on the way to the store in
    trucks, whether it was in the growing fields in my district
    because that is where most of the spinach is grown, and they
    did it immediately.
        When it gets to drugs why can't they just stop it? I mean
    why don't--is it a liability issue? We got into a discussion
    with them on sort of the crisis communication. I mean was it a
    smart thing because we--what happens is that if--I think this
    is the case--if the government orders a destruction
    particularly in livestock or anything like that, then there is
    a taking and you have to compensate for it. They didn't really
    have the authority to demand a recall on spinach so it was a
    voluntary recall. But everybody thinking, well if the
    government asks for this we are going to comply because we want
    to be good stewards of the product; a lot of people have died
    from this, but we will probably get compensated. And they
    didn't. So that was a whole issue of how you do it.
        Is that the issue? Is it they are worried that somebody
    will file a lawsuit because there is a taking because you have
    decided this drug is no longer effective, and it is dangerous,
    and it ought to be off the market? I mean you said something
    Dr. Wolfe about a number of drugs that are out there that have
    already been banned and are still on the market.
        Dr. Wolfe. In other countries.
        Mr. Farr. Oh, in other countries. But when we ban them in
    this country they are no longer on the shelves. I didn't know
    whether they----
        Dr. Wolfe. Well, right. I mean they may be in people's
    houses and everything. I mean, it is interesting you mention
    this food example because the thing that precipitated my
    writing in March to the FDA was the FDA wisely, cautiously
    ordered a recall of thousands of food products that had these
    textured vegetable proteins because there were some bacterial
    contamination. No one had gotten sick yet, no one had died.
    They though correctly from a public health perspective, that is
    the thing to do. It is similar to----
        Mr. Farr. Err on the side of caution.
        Dr. Wolfe. Err on the side of caution. And yet quite the
    opposite in the drug area there. Erring on the side of
    recklessness.
        Mr. Farr. What is that? Why not? Is it a liability issue?
    What is it?
        Dr. Wolfe. It is bad judgment. Whatever it is, it is
    obviously affected in not a case by case basis by taking $700
    million a year from the drug industry; there are a bunch of
    things. The drug industry has enormous power here. There are
    more drug lobbyists than there are total members of the House
    and Senate. So they have a huge amount of power in Washington,
    and to me it isn't surprising. It should be unacceptable that
    this keeps going on drug after drug after drug after drug.
        Dr. Krumholz. I will just say it is a very complicated
    situation. And in the case of someone eating bad spinach or
    meats, I mean you actually can identify the person who dies. In
    this case, it is probabilistic. A bunch of people take the
    drug, there is a 30 percent increase in risk of heart attacks,
    so that gets kind of deluded. You give it to them, their blood
    sugar gets better. People are getting lulled into a sense of
    security. The company gets out to keep opinion leaders, and
    academics are giving talks who don't emphasize the problem.
    There are articles that are ghost written, and I am talking
    generically within the institute, there is marketing efforts
    and this information doesn't always get out.
        Mr. Farr. But as you said we have a cop in charge of this.
    We have somebody whose responsibility and judgment,
    professional judgments are hired for. There has got to be an MD
    or I think. Don't they have to be----
        Dr. Krumholz. I think it is where the thermostat is set. So
    on the food side it seems like the thermostat is set if there
    is a concern let's be safe. On the drug side I think the
    thermostat said--you know, and I have often said, where is the
    burden of proof? Isn't the burden of proof on showing it is
    safe not assuming it is safe until beyond of a doubt it is
    proven to be harmful? I mean, I think that is too stringent.
        I think in efficacy when you are actually trying to show
    benefit and you are going to give people drugs, it should be
    beyond a shadow of a doubt that it is beneficial. On safety, if
    more likely than not this is causing harm, I think I have to
    say that we have to wait until we get more information, we can
    be reassured. I think there are two different thresholds.
    Benefit, you need to really be sure unless it is a disease for
    which there are no options, and there is you know, people are
    desperate for anything. But in most cases they really need to
    have strong evidence about benefit to get out there. Safety, it
    shouldn't be probably safe. It needs to be we are very
    confident about the safety.
        Ms. DeLauro. Mr. Hinchey.
        Mr. Hinchey. Thank you again Ms. Chairman. This is very
    fascinating and it is something that is very very important.
    And one of the things that you keep pointing out I think is the
    relationship, well not directly, but the relationship between
    the FDA and the prescription drug companies. And I think that
    the questions that were just asked show how the FDA can work
    very effectively, be very positive, do good strong things. And
    how at other times it can be very very bad not doing the kinds
    of things that really need to be done.
        I was really amazed learning about that problem with
    Avandia. That the FDA ordered GlaxoSmithKline to conduct a
    safety study, and then it later labeled that safety study as
    unethical.
        Dr. Wolfe. We labeled it as unethical. The FDA thinks it is
    very ethical thus far unfortunately.
        Mr. Hinchey. Yeah, right. They do. That is right. So it did
    not disclose the opinion of the volunteers participating in
    that study. That was--the whole thing just seems to be quieted
    down or secret now in some ways. Does the FDA have procedures
    that it failed to follow that would have required it to
    disclose its concerns to those volunteers and elsewhere?
        Dr. Wolfe. Well, what you are talking about is the informed
    consent. We have seen the February 2009 informed consent sheet
    and there were some things lacking on it. It is said, and we
    have not been able to get a copy of it, that the informed
    consent sheet is better now. It is not possible that the
    informed consent sheet remotely reveals all of the information
    that should be there. If it did, it would come to the same
    conclusion as the American Diabetes Association which is you
    shouldn't use the drug. It would not be recruiting subjects for
    an experiment if the conclusion was don't use the drug. I mean
    if the American Diabetes Association information was on the
    sheet, the informed consent sheet was we diabetes doctors say
    don't use it, I don't think a lot of people would sign up for
    the trial.
        And in fact, even with what I would bet is a less than
    adequate informed consent sheet, there aren't a lot of people
    signing up for the trial, which is why I think they are
    desperately going to all these other countries around the world
    to try and recruit more people.
        Dr. Krumholz. To be fair and just so you know what others
    would say is they did all have to go through institutional
    review boards so the--ethics boards that have approved this
    study in order for it to go forward. What seems strange is if
    we wouldn't use the drug anyway, why would you randomize people
    to be on it just to prove that maybe it is not harmful? It
    seems to me, I don't understand it but, I mean just to be fair
    I am going to let you know that people are going to say that
    investigators are going to say we went through institutional
    review boards.
        Dr. Wolfe. But I am not sure. I think that is absolutely
    correct, and I think that the initial decisions by some of
    these institutional review boards to approve the study were not
    informed now with the new information that keeps coming out on
    the newer evidence of risks.
        Dr. Krumholz. And they are not expert in this area, and may
    have assumed if someone is bringing it forward that it is a
    reasonable effort equipoise.
        Mr. Hinchey. What do you feel about the post market drug
    safety operation? Should that be put into play? Is it going to
    be positive?
        Dr. Wolfe. Well, 30 years ago as opposed to now, if there
    were safety questions about a drug it would be more likely the
    FDA would say, okay, well let's wait a minute, let's get the
    answer. Now, too often they say, well yeah, there are some
    safety problems. Let's approve the drug and do a post market
    study. And now the FDA has the authority to fine companies if
    they don't do these and so forth.
        But the idea of waiting until after a drug is mass marketed
    to find out things about it particularly if it doesn't have any
    unique advantage, as opposed to finding it out before it is out
    of the barn door, just does not seem like a good thing.
    Clearly, the number of post marketing studies that have been
    recommended or asked for by the FDA has gone way up and in many
    cases they should have held the drug up.
        Mr. Hinchey. Dr. Krumholz, what do you think?
        Dr. Krumholz. Well you know, I think these are critical
    studies. There are some things that you can't know until
    millions of people take the drug. I think that we need to have
    oversight about what the experience is, particularly around
    these new drugs with novel mechanisms for which we don't have a
    lot of experience and we are uncertain about what is going to
    happen to people. I think that information needs to be widely
    shared. We need to be able to follow it and there needs to be
    independence of that group that is doing it.
        I worry about the mice guard and the cheese if you are
    really putting it in position where basically you got a company
    where they can drag their feet or--I mean again, these need to
    be independent efforts in which we are all working together for
    the common good. And again, there are many good people in these
    companies who want to know the answers. It is when marketing
    mingles with science that we get into trouble. But there are
    many good respectable highly admirable individuals, and we need
    to bring those people out. We need to work together and we need
    to create independence of that post marketing experience; it is
    very important.
        Mr. Kingston. In NASA or space exploration, had they been
    in charge of Europe during the days of Columbus, we would
    probably still be living in Europe. I feel they have become
    very risk-averse.
        And, as you know, I mean, that's the tendency of a
    bureaucrat, is to--safest way to deal with something is not to
    make a decision. And that's a concern that I have. Because, you
    know, one of the balances here is that if you're a drug company
    and you've got this sweetheart deal of keeping your patent on
    the market now for--is it 12 years? Then, you know, really, you
    know--no, I think it's been extended now, under the health care
    bill, from 5 to 12.
        Ms. DeLauro. No, that's Biologic.
        Mr. Kingston. Biologic, okay. But you know, you don't
    really care if--I mean, you do care, but you know, there is a
    monetary incentive not to have a new drug out on the market--
    get out there.
        And so, if you have FDA, who is too risk-averse, not
    wanting to make decisions, and a drug company that maybe can
    wink and nod about the whole thing saying, ``Well, you know,
    we've got a new drug coming down, but--can't get it done, but
    in the meantime we've got our 5-year''--and 12-year, if you're
    Biologic--``patent,'' that could also be a formula for
    disaster.
        So our, you know, concerns could have an effect that we're
    not thinking about.
        Dr. Wolfe. Yes, I--this is an issue that comes up from time
    to time. We are all in favor of drugs that appear to be break-
    through drugs, really adding an important thing to what we can
    prescribe for patients, getting approved as quickly as possible
    and as safely as possible.
        It's interesting. The drugs that wind up being discussed
    here, none of them are really break-through drugs at all. So
    it's really a matter of slowing down, putting the brakes on the
    drugs that don't even arguably have some reasonable theoretical
    advantage, and letting FDA spend more time, and more quick
    time, on the break-through drugs.
        This country is really not in any kind of problem because
    there are drugs that should have been approved that haven't
    been. It's quite the opposite. I mean, there used to be a myth
    about 30 years ago called the drug lag. And there was a
    commission which Congressman Gore and former Congressman
    Scheuer were on, and they could not find any example of a drug
    that had gotten on the market--an important drug that had
    gotten on the market--in any other country before the United
    States.
        So, I think that the concern is there. But all the drugs
    that get in trouble, by and large, are these me-too drugs that
    really don't offer any advantage. And it's--if the FDA
    asymmetrically says, ``Let's put the brakes on those, and, if
    anything, speed up safely the break-through drugs,'' I think we
    will all be fine, and the concerns that you and others have
    would just not be carried out.
        Dr. Krumholz. Yes, we tolerate safety issues in drugs that
    provide unique benefit.
        Dr. Wolfe. Cancer drugs, for instance.
        Dr. Krumholz. But it's a question of the balance.
        Dr. Wolfe. Right.
        Mr. Kingston. Thank you. Yield----
        Ms. DeLauro. To that end, there are a number of drugs
    approved for type II diabetes. So, I mean, it's the whole issue
    of, you know, some of the drugs may offer benefits that are
    less--where you're at less of a risk. And you know, but yet we
    move to these other efforts.
        Dr. Wolfe. Well, I mean, this record study that Glaxo did
    pretty much showed that. Looked at--old diabetes drugs are
    safer, more effective----
        Ms. DeLauro. Oh, my God.
        Dr. Wolfe [continuing]. Than the new ones. As----
        Dr. Krumholz. And, let's just say----
        Dr. Wolfe [continuing]. In Rosiglitazone.
        Dr. Krumholz. And less expensive. I mean, as the health
    care system is looking for value, it's actually the----
        Dr. Wolfe. Yes.
        Dr. Krumholz. Anyway, those are----
        Ms. DeLauro. Let me--a couple of pieces--well, one of the
    things that is coming up, can you ever have these post-market
    surveys run by the company that--are you going to have some
    independence? I mean, there is--you think we can----
        Dr. Krumholz. The companies shouldn't be running the post-
    marketing surveillance.
        Ms. DeLauro. That's--yes, okay.
        Dr. Krumholz. Yes, right.
        Ms. DeLauro. Again, my--you know, one of the--we're talking
    about, you know, independent review and looking at the data and
    in the public domain. And yet, what's the function of the FDA?
    What is the function? And who at the FDA ought to be reviewing
    these, and what about the expertise at the FDA that is
    independent?
        So shouldn't it be housed at the FDA, rather than having a
    company conducting a study? Or either another--or another
    independent body looking at it? Isn't that what the FDA----
        Dr. Krumholz. Well, this is happening with devices, I
    think----
        Ms. DeLauro [continuing]. Is all about?
        Dr. Krumholz. It's happening with devices more often, but
    yes. It should be housed within the FDA, who is finding
    contracts and others who can do this under jurisdiction of
    high--and with high standards about what that information is
    going to be.
        Dr. Wolfe. Yes, I mean I--I think, as you--I'm on FDA's
    drug safety advisory committee. So, aside from the FDA staff,
    FDA has the ability to get people from academia, from
    wherever----
        Ms. DeLauro. Right.
        Dr. Wolfe [continuing]. To augment what they may not know
    in certain areas. There are certain specialists in
    cardiovascular disease who are brought in by FDA to look at a
    drug, to hear an advisory committee.
        But I think that the focus needs to be on the FDA, its own
    staff, free of conflict of interest, the advisory committees
    much more----
        Ms. DeLauro. Free of conflict.
        Dr. Wolfe. And more than they used to be, freer of conflict
    of interest, as opposed to out there with the company, who is
    sort of putting their spin on it, and saying, ``Well, I think
    this,'' and they don't give you the full raw data, and
    therefore their conclusion is difficult to challenge.
        Ms. DeLauro. Or they have financial interests.
        Dr. Wolfe. Always.
        Ms. DeLauro. So let me just--PDUFA, PDUFA. I'm not going to
    go through it all. But your views, should we move away from the
    reliance on user fees and binding performance that the FDA has
    to negotiate with the drug companies in exchange for the fees?
        Dr. Wolfe. Well, the law has been in effect for 18 years
    now. And it came into being at a time when the budgets were
    tight, as they always are, and Congress essentially said, de
    facto, ``Hey''----
        Ms. DeLauro. Can't afford this.
        Dr. Wolfe [continuing]. ``The drug companies are going to
    have to pay this money, because otherwise they won't be able to
    put in new drug applications,'' so they're sort of like ducks
    in a barrel, or something like that.
        And whereas the idea of getting more FDA staff to review
    drugs and so forth is a good idea, it's too important to leave
    to the financing of the drug industry. I mean, the amount of
    money, compared even with the NIH budget--and the NIH budget,
    which is--I come from NIH, so I like the idea that NIH is
    getting adequately funded--but their budget is over $30
    billion. Why is it that Congress can't allocate the $700
    million, as opposed to $30 billion, that would take away the
    industry's financial input into the FDA?
        So, I think the law should be repealed. It keeps getting
    worse and worse. And originally it was just drugs, then
    devices, then biologics----
        Ms. DeLauro. Now they're looking at generics.
        Dr. Wolfe [continuing]. Veterinary drugs----
        Ms. DeLauro. Generics.
        Dr. Wolfe [continuing]. And it will--and it's moving in the
    direction of generics. I think it's had a lot of negative
    influence.
        The whole attitude at the FDA is--we surveyed doctors at
    the FDA in 1998 to see what impact it was having, and they said
    the standards they believe are lower, they are being told to be
    more quiet at FDA advisory committee hearings. So I think the
    whole culture there is not good, they have lost a huge number
    of people who felt that the atmosphere was changed
    significantly, once that law was passed in 1992.
        Dr. Krumholz. Yes. I mean, here is my quick view. I think,
    on the performance side, we need the performance. I mean, we
    need the accountability. I mean, we need to be able to move
    things through in an efficient----
        Dr. Wolfe. Absolutely.
        Dr. Krumholz [continuing]. And high-quality way. So that
    should be an expectation of government, about how that agency
    works.
        Dr. Wolfe. Without industry funding.
        Dr. Krumholz. The industry funding, I think, is just--is
    misplaced. I mean, it's not fair to the companies, it's not
    fair to the public. It creates bad psychology, in terms of
    relationships. There should be independence.
        And, you know, I don't see how that--I see it was a
    convenient thing to do. Certainly, though, the companies should
    expect, when they're working with the FDA, that they're going
    to get timely responses, good guidance, it's going to be
    clarity, transparent. They should get--sure, every--that should
    happen.
        But to think they have to pay for it, and then--it creates,
    I think, a dynamic that ends up changing the thermostat even in
    ways that are maybe unintended.
        Mr. Kingston. Madam Chairwoman, would you yield a minute?
        Ms. DeLauro. Sure.
        Mr. Kingston. I have asked this question of the FDA many,
    many times. And I get assured over and over again there is a
    big firewall. And so, I'm interested in your comments.
        But it also strikes me that when physicians go on their
    continuing education seminars and they're underwritten by drug
    companies, that could be a bigger issue, in terms of the use of
    things. And I don't know what the practice is now. I think a
    lot of them have backed off the ``We'll bring you a lunch for
    your entire staff on Friday.'' But I do know that when they go
    to the continuing education things, the open bar is sponsored
    by ``Blank Pharmaceuticals,'' and you know, some of this other
    stuff.
        Dr. Wolfe. That's a big problem, there is no doubt about
    it. But--and I don't think that there is any drug-by-drug
    corruption. I don't think that's what the drug company money is
    doing. It's just changed the attitude and the culture there.
        And Dr. Krumholz is absolutely right. We should always
    expect the FDA to be accountable to the public, to the
    companies that are doing these studies and sending them in. It
    shouldn't take greasing the wheels with $700 million a year to
    do that. Good congressional oversight would do that, even if
    the drug company weren't funding.
        But I think the continuing medical education is a disaster.
    It appears to be getting better. A lot of cosmetic things are
    being done. But the companies are still spending a fortune,
    because it works, to influence doctors prescribing----
        Dr. Krumholz. It's still a big problem. They're paying for
    infomercials, they're funneling the money through CME
    companies, so that even with the sunshine laws you won't see
    it. It's the subject of another hearing.
        Dr. Wolfe. Yes.
        Dr. Krumholz. I mean it's a huge issue, but it's beyond
    this issue about what's going on----
        Dr. Wolfe. Yes, absolutely.
        Dr. Krumholz. Yes. An important one, though.
        Mr. Hinchey. Well, I think--I just want to thank you for
    everything that you've done, all that you've said. And I think
    that this is something that we really will have to deal with.
    The relationship between the prescription drug companies and
    too many physicians is not a pleasant set of circumstances----
        Dr. Wolfe. Or pharmacists, also.
        Mr. Hinchey. Yes, pharmacists also. This is a situation
    that----
        Dr. Krumholz. All health care professionals.
        Mr. Hinchey. Amen, yes. It's creating a lot of problem, and
    it's something that we have to deal with.
        Dr. Wolfe. Yes, agreed.
        Mr. Hinchey. Thanks.
        Ms. DeLauro. I think I have just got two or three more
    questions, and then we're just so grateful for your time and
    your candor with these issues.
        This is--and obviously, to the two of you--the OSE, Office
    of Surveillance in Epidemiology, and the Office of New Drugs
    signed a memorandum of agreement in June 2008. That states
    that--FDA's intent for the two offices to contribute equally in
    determining regulatory actions related to drug safety.
        As part of the agreement, FDA transferred authority for one
    pre-market regulatory responsibility from OND to OSE, and plans
    to transfer authority for two post-market responsibilities, but
    has not set a time frame for doing so. The authority that was
    transferred is the pre-market review of proprietary drug names.
    Proprietary drug names, looking at the names and the brands.
        Do you think that this is an important priority for the
    Office of Surveillance in Epidemiology? Are there higher
    priority pre-market safety activities that they should--or
    post-market activities that they ought to be focusing their
    time and attention on?
        Dr. Krumholz. I'm not sure of the background of the names.
    There is a lot of interest in patient safety, by the way, and
    trying to ensure that drugs don't sound the same, so they don't
    get confused. I'm not sure that that's a major responsibility.
    It's certainly important, by the way, that we not lead to
    systems--that lead to easy confusion between drugs, so that
    people can be trying to get one and end up with something else.
    I mean that's happened far too often.
        But I think we're coming together on this idea that, first
    of all, particularly in this post-marketing issue, is that once
    the drugs are released--and often times, particularly on drugs
    that are working on surrogate end points--so this is going to,
    I think, become increasingly important. There is going to be an
    IOM report next month about surrogate end points, there is
    going to be a lot of attention to this. Drugs can be approved,
    based on what they do to lab tests, and the assumption about
    what that change in lab tests means for their lives.
        And yet, we have seen many instances where, as I've said,
    changes in cholesterol, changes in blood sugar don't translate
    into the expected benefit for patients. And as we are approving
    drugs based on that, it puts a great onus on us to figure out
    what actually happens when people take this drug. Because all
    of the trials are just about saying, ``I gave it to a bunch of
    people, and this group had a better lab test.'' But we
    sometimes can find that, yes, people die more often with better
    lab results in some of these studies when they're looked at
    long-term.
        And so, it puts a great onus on independence and
    concentration of resources in tracking what actually happens to
    people when they take these drugs. We haven't talked much about
    this issue, but it's relevant to Avandia, because it does make
    your blood sugar look better. But the truth is, there hasn't
    been one trial that said, ``Does the strategy of using this
    drug actually improve patient outcomes?'' I mean, everything we
    have said is sort of compared to other things, but there hasn't
    been a trial that really lets us know that when it was
    approved, it was approved based on what it did with blood
    sugar.
        And this is--there needs to be a concentration, more hand-
    off into this area, and they need to--their views need to be
    respected.
        Dr. Wolfe. Just----
        Ms. DeLauro. Yes, Dr. Wolfe, because my point was there is
    that--one of the authorities that was transferred to OSE was
    the pre-market review of proprietary drug names. So my question
    there was, you know----
        Dr. Wolfe. Aren't there more important----
        Ms. DeLauro [continuing]. What else are we talking about
    here, pre-market and post-market?
        Dr. Wolfe. No. I mean what Dr. Krumholz was just talking
    about, the--the FDA held this hearing after a number of
    diabetes drugs got into trouble. They said, ``Maybe, when we
    approve a diabetes drug, we should make sure it doesn't harm
    people,'' which is different from saying it actually benefits
    people. And they agreed that that should be done, but
    unfortunately didn't agree that it needed to be done before a
    drug comes on the market.
        So, it's still the case that a diabetes drug gets approved
    based on its effect on sugar. And then afterwards--not before--
    you start doing some studies to find out whether it benefits--
    or, more likely, because of recent examples--it actually harms
    people. And the last thing in the world, as I said before, that
    a diabetic needs is something that increases their
    cardiovascular risk, like Avandia seems to do--to a much lesser
    extent, Actos Pioglitazone does it.
        So, I think the kind of--more trivial kind of delegation to
    OSE is sort of, yes, we're giving them more things to do, but
    in comparison with the big things, these are not the most
    important things to do.
        Ms. DeLauro. Well, and just to expand on that for a moment,
    this is the GAO study, the November 2009 GAO study. And this
    was in conversation with the staff involved in these reviews.
    The staff involved in these reviews estimated that
    approximately 90 percent of their time is spent on such pre-
    market activities, which leaves little time to spend on their
    other post-market drug safety responsibilities, such as
    analyzing reports of medication errors.
        It makes you wonder that, you know, the reason for just
    passing this on is just like a pat on the head, ``Okay, go over
    and do this, we're still going to maintain our authority and--
    over this process.''
        And I have--and I will ask you both to comment on this, but
    particularly Dr. Krumholz. This was the American Heart
    Association and the American College of Cardiology on Avandia.
    Understanding that the Heart Association, the--are not
    recommending that doctors prescribe Actos over Avandia. The new
    story on their view said that the organization said there was
    inconclusive evidence of cardiovascular concerns.
        Now, these are organizations representing the experts in
    cardiology. Why do they think that the evidence is
    inconclusive?
        Dr. Krumholz. Well, yes, and I was concerned about that.
    Actually, I wrote and invited commentary to that statement,
    which disputed their findings, because I didn't agree with
    them.
        I think it gets to what Representative Kingston said, which
    is that there are people with different views. I'm not saying
    it's biased, but different points of view. A person who led
    that group had published an article which had questioned some
    of the methods that Nissen had used. I don't think that they
    were necessarily apprised of all the new information that was
    out, and they were reluctant to make a call on it, you know,
    and that's what they came out with.
        But again, that's why I think it gets confusing to the
    practicing doctor when this statement comes out. I think it
    does show that there is some--there are some experts who remain
    unconvinced about this, and they came out in that major
    statement and failed to identify this as a major problem.
        Dr. Wolfe. Yes, and you wonder why, after really careful
    review and looking at least at what was available at the time,
    which was the end of 2008, all these experts in diabetes, who
    actually treat these people--they're the experts----
        Ms. DeLauro. Right.
        Dr. Wolfe [continuing]. Decided that they don't want to use
    the drug. I mean it may not be----
        Ms. DeLauro. That's interesting.
        Dr. Wolfe [continuing]. 100 percent conclusive. But from
    their perspective----
        Ms. DeLauro. It's conclusive enough.
        Dr. Wolfe [continuing]. It was conclusive enough, and there
    are other drugs to use. End.
        Ms. DeLauro. Right. Okay. This has been enormously helpful.
    I have a housekeeping thing to do here for a moment, but I want
    to just say thank you for the dialogue and the back-and-forth
    and, again, the candor. And I will speak for myself. I'm not a
    scientist. We do have some in the congress, but I don't know
    that there are any on this committee. But the way in which you
    help us to understand these issues is critically important.
        My hope is that we can make some of this information
    available, really, to the FDA. They are going to meet in July--
    I think it's July 13th and 14th--to do a review here. And I
    would very, very much like them to have a sense of what was
    debated or discussed here this morning, and that it would carry
    some weight.
        We also would like to work with you to get your best
    advice. This committee has an opportunity to make
    recommendations, or to do some things with our appropriations
    bill. And, assuming that we will get an appropriations bill out
    this year--we did last year--that I think we would like to
    address some of these issues, and see not being authorizers,
    but appropriators--how far we can go with addressing some of
    these issues to make the changes that are necessary to ensure
    the safety of these drugs. So, I thank you very, very much.
        And now, if I can, we received this morning a statement
    from GlaxoSmithKline in response to the hearing, and I ask
    unanimous consent to put the GlaxoSmithKline statement into the
    record.
        [No response.]
        Ms. DeLauro. Without objection.
        [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Ms. DeLauro. Thank you. With that, again, our deepest
    thanks to you, and for taking the time. And thank you for what
    you do in your professional lives to ensure the public health.
        Dr. Wolfe. Can I just make one comment----
        Ms. DeLauro. Please.
        Dr. Wolfe [continuing]. Which is back in the 1970s and
    1980s, when I first started doing this, there was just a
    plethora, very importantly, of congressional oversight over the
    FDA. One Senate small business subcommittee held 135 days of
    oversight hearings on the drug industry and the FDA in the
    1970s and 1980s.
        Ms. DeLauro. Wow.
        Dr. Wolfe. What this hearing represents to me--well, it
    seems like too much, but there is almost none. Senator Grassley
    held a hearing--now six years ago--on Vioxx, and there have
    just been very few hearings that have actually gotten down to
    the issue of here is a problem, a drug. What does this say
    about, A, the drug; and B, about the general process? And I
    just commend you for having this hearing.
        Ms. DeLauro. Thank you.
        Dr. Wolfe. And I hope that you have more that hold the FDA
    to task for what it is doing.
        Ms. DeLauro. Yes.
        Dr. Wolfe. And the industry, too.
        Ms. DeLauro. Yes, we will continue. I promise you that.
    Thank you.

                               W I T N E S S E S

                                  ----------
                                                                       Page
    Brewer, John.....................................................    49
    Cochran, Norris..................................................   153
    Coppess, Jonathan................................................    49
    Grassley, Hon. Chuck.............................................   267
    Hamburg, M. A....................................................   153
    Krumholz, Harlan.................................................   267
    McGarey, Patrick.................................................   153
    Melito, Thomas...................................................     1
    Miller, Jim......................................................    49
    Murphy, William..................................................    49
    Steele, Scott....................................................    49
    Wolfe, Dr. Sidney................................................   267

                                   I N D E X

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                                                                       Page

                          Food and Drug Administration

    2011 Budget......................................................   172
    Accountability...................................................   200
    Additional Authorities...........................................   202
    Advancing Regulatory Science.....................................   225
    Advertising......................................................   179
    Advertising and the Public Health................................   218
    Animal Antibiotics...............................................   185
    Animal Biotechnology Products....................................   224
    Antibiotic Resistance............................................   175
    Antibiotics and Livestock........................................   174
    Binding Standards................................................   208
    Blood Collection and the Red Cross...............................   209
    BPA.............................................................182,218
    China............................................................   201
    Clinical Trials..................................................   220
    Codex............................................................   190
    Conflicts of Interest............................................   178
    Coordination and Communication...................................   191
    Counterfeit Prescription Drugs...................................   185
    Crisis Communication.............................................   206
    Deputy Commissioner of Foods.....................................   189
    Dietary Supplements..............................................   221
    Direct Consumer Advertising......................................   217
    Dr. Hamburg Opening Statement....................................   155
    Dr. Hamburg Written Statement....................................   159
    Drug Safety......................................................   197
    DSHEA............................................................   222
    Economic Costs of Violations.....................................   210
    Electronic Interests.............................................   204
    Enforcement Activities...........................................   172
    Equivalency Process..............................................   191
    Farmers and FDA..................................................   207
    FDA and USDA.....................................................   205
    FDA Employees....................................................   180
    Food Inspection Methodology......................................   188
    Food Labeling....................................................   222
    Food Safety......................................................   189
    Food Safety - GAO................................................   207
    Food Safety Activities...........................................   173
    Food Safety Regulation...........................................   226
    Food Safety Working Group........................................   190
    Foreign Food Inspections.........................................   192
    Fosamax..........................................................   196
    Front of Packaging Labeling......................................   176
    Generic Drug User Fees...........................................   209
    GRAS.............................................................   220
    Healthy Choices Program..........................................   181
    Heparin........................................................201, 211
    Import Safety....................................................   192
    Indoor Tanning...................................................   224
    Inspections......................................................   173
    Inspections and User Fees........................................   192
    Labels...........................................................   203
    Mr. Kingston Opening Remarks.....................................   155
    Ms. DeLauro Opening Remarks......................................   153
    Nanotechnology...................................................   221
    Nutritional Claims...............................................   181
    Nutritional Content..............................................   195
    Nutritional Information..........................................   177
    Off Label Advertising............................................   226
    Peanut Corporation of America....................................   200
    Pharmaceutical Companies.........................................   212
    Pharmaceutical Industry..........................................   178
    Postmarket Drug Safety...........................................   178
    Precursor Products...............................................   202
    Private Interests................................................   203
    Questions for the Record, Mr. Boyd...............................   236
    Questions for the Record, Mr. Farr...............................   228
    Questions for the Record, Mr. Hinchey............................   248
    Questions for the Record, Mr. Jackson............................   252
    Questions for the Record, Mr. Latham.............................   255
    Questions for the Record, Mr. Latourette.........................   262
    Questions for the Record, Ms. Kaptur.............................   238
    Radiation Exposure...............................................   183
    Regulation of Medical Radiation..................................   184
    Reportable Food Registry.........................................   188
    Resources to Prevent Counterfeit Drugs...........................   187
    Risk Based Approach..............................................   193
    Risk-Based at USDA...............................................   193
    Salmonella.......................................................   188
    Salmonella Montevideo............................................   219
    Smart Choices....................................................   224
    Tobacco Outreach and Education...................................   197
    Traceability.....................................................   226
    Trade vs. Public Health..........................................   191
    Transparency Initiative..........................................   181
    TSA Scanners.....................................................   185
    Twenty Percent Margin of Error...................................   195
    User Fees........................................................   179
    USTR.............................................................   190
    Yale BPA Study...................................................   183

                     Farm and Foreign Agricultural Services

    Additional Renewable Energy Production...........................   120
    Afghanistan......................................................    94
    Afghanistan Development Effort...................................   114
    Agricultural Credit Insurance Fund...............................   134
    Agricultural Issues in Afghanistan...............................    95
    Agricultural Policy..............................................    96
    BCAP Potential...................................................   121
    Biomass Crop Assistance Program..................................   119
    Coordination of Export Programs..................................   137
    Coordination of Trade and Development Programs...................   111
    Crop Insurance...................................................   107
    Crop Insurance Overpayments......................................   118
    Cuba Trade Embargo...............................................   116
    Development Assistance...........................................   113
    Discrimination by USDA...........................................   124
    Export Programs..................................................   136
    FAS Administrator's Written Statement............................    75
    FAS Staffing.....................................................   110
    FAS Strategic Re-Envisioning.....................................   111
    Food Aid and Development Assistance..............................   109
    Food Aid Programs................................................   131
    Food and Agriculture Organization Oversight......................   127
    Food Assistance..................................................   106
    Food For Progress Program........................................   101
    Foreign Aid......................................................   100
    FSA Administrator's Written Statement............................    66
    FSA and NRCS County Offices......................................    96
    FSA and NRCS Operations..........................................    97
    FSA IT Stabilization and Modernization...........................    92
    Funding Commitment...............................................    93
    International Food Aid...........................................   112
    Legislative Proposals............................................   108
    Local and Regional Food Purchases................................   130
    Market Access Program............................................   114
    McGovern-Dole Program..........................................101, 131
    Mr. Kingston Opening Remarks.....................................    51
    Ms. DeLauro Opening Remarks......................................    49
    National Export Initiative.....................................102, 137
    Non-Governmental Organizations...................................   107
    OIG Recommendation for RMA.......................................   117
    Pending Trade Agreements.........................................   115
    Pork and Poultry Differences.....................................   123
    Pork Loan Field Guidance.........................................   122
    Program Performance Criteria.....................................   103
    Questions for the Record, Mr. Farr...............................   150
    Questions for the Record, Mr. Kingston...........................   146
    Remediation of Discrimination....................................   125
    RMA Administrator's Written Statement............................    85
    RMA Compliance Funding...........................................   117
    Standard Reinsurance Agreement...................................   108
    Success Stories..................................................   101
    Supplemental Revenue Assistance Program (SURE)...................    98
    SURE Payment Process.............................................   100
    Trade Adjustment Assistance for Farmers Program..................   134
    Trade Issues.....................................................   133
    Trade Sanctions..................................................   132
    Under Secretary's Opening Statement..............................    52
    Under Secretary's Written Statement..............................    56

                              Global Food Security

    GAO Report.......................................................     7
    Mr. Kingston Opening Remarks.....................................     3
    Mr. Melito Opening Statement.....................................     4
    Ms. DeLauro Opening Remarks......................................     1

                                  Drug Safety

    Dr. Krumholz's Written Statement.................................   295
    Dr. Wolfe's Written Statement....................................   286
    GlaxoSmithKline Statement........................................   325
    Ms. DeLauro's Opening Remarks....................................   267
    Sen. Grassley's Written Statement................................   274