[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:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    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.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                         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:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                         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.
    [The information follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
    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.
    [The information follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
    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

                              ----------                              --
--------
                                                                   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

                                  
