The House passes food safety enforcement legislation that falls $2.2 billion short of covering FDA's costs over five years and that may also face opposition or revision in the Senate.

The Food Safety Enhancement Act, H.R. 2749, which passed July 30 in a 283-152 vote, provides FDA new food safety tools and authorities, including mandatory recall for food products and increased access to firms' records, and imposes new requirements on industry.

The bill calls for general and targeted user fees on food manufacturers and processors, including dietary supplement firms, to generate funding for FDA (¹ Also see "BPA Study Added To Food Safety Bill, But Supplements Remain “Gray Area”" - Pink Sheet, 22 June, 2009.).

While Senate members including influential Iowa Democrat Tom Harkin have stated support for expanding FDA's authorities, assistant majority leader Dick Durbin has said only food safety reform that imposes targeted user fees -- such as re-inspection fees rather than annual registration fees -- will have bipartisan support in the Senate.

Durbin's FDA Food Safety Modernization Act, S. 510, has remained in the Health, Education, Labor and Pensions Committee since its introduction as the committee, like the entire Senate, has largely focused on health care reform this year.

However, S. 510 is largely known as the Senate's food safety reform vehicle, and the Illinois Democrat's influence likely will sway a majority of members in the chamber to oppose imposing general user fees to pay for food safety reform (² 'The Tan Sheet' March 12, 2009).

In the House, H.R. 2749's chief author, Rep. John Dingell, D-Mich., said the bill "is a monumental piece of bipartisan legislation that will grant FDA the authorities and resources needed to effectively oversee an increasingly global food marketplace."

However, Dingell and other Energy and Commerce Committee Democrats failed to expedite passage of H.R. 2749 a day earlier in a vote that required two-thirds approval. The House voted 280-150 for the bill under suspension, which limits debate time and cuts off amendments, but a 288 majority is needed to pass.

Some members said they opposed pushing the bill through so quickly while others said they had concerns about the bill's impact on agricultural interests.

On the House floor July 30, Rep. Rosa DeLauro, D-Conn., supported the bill with a statement reflecting a common Capitol Hill attitude about food safety reform.

"This bill is a solid first step in creating a comprehensive farm-to-fork safety system that can protect American families from the many dangers of contaminated food," said DeLauro, chairwoman of the House Appropriations subcommittee with FDA oversight.

However, she also reiterated her call to eventually split FDA into separate agencies, one regulating food and the other drugs and medical devices (³ Also see "Waxman And DeLauro Continue To Differ On Means Of Food Safety Reform" - Pink Sheet, 4 May, 2009.).

"This is a good start, but there is more work to be done. I strongly believe that the best way to protect the public health and keep our food free of contagion is to streamline the FDA into two separate agencies."

H.R. 2749 imposes annual registration fees; current FDA regulations require one-time registrations by food facilities. The bill also requires the agency to perform inspections of high-risk facilities that manufacture or process food every six months to a year and low-risk facilities every 18 months to three years. Facilities that hold food would be inspected every five years.

The bill authorizes FDA to collect fees for recall costs and importer registrations as well as to collect annual registration and export certification fees.

"This bill does a lot of the things that most people believe that needs to be done and that is: Get the agency on preventive footing and get it focused on public health and give it the authority to oversee the safety of the food supply in an appropriate fashion," said Center for Science in the Public Interest attorney David Plunkett.

CBO Report Says Fees Not Enough

However, the Congressional Budget Office says user fees called for in H.R. 2749 would not cover FDA's costs.

In a July 24 ⁴ report, CBO estimates the fees imposed by the bill would amount to $1.4 billion over five years, 2010-2014; but FDA would need an additional $2.2 billion in that period to support all the activities the bill requires.

According to the report, "Because of the magnitude of the inspections required under the bill, CBO estimates the fees collected would not offset all of the costs."

CBO also points out that, based on FDA information, the agency -- or state or foreign governments it assigns authority to -- would be responsible to inspect 360,000 domestic and foreign facilities under the legislation. Additionally, facilities that fail inspections would be re-inspected. While the registration fees would cover FDA's initial inspection costs, additional fees would be charged for re-inspections.

Energy and Commerce passed the bill in June with annual registration fees set at $500, down from $1,000 proposed in the original FSEA Dingell and Chairman Henry Waxman, D-Calif., introduced. The committee-approved bill also set a $175,000 cap on annual registration fees for businesses that operate multiple facilities. The original bill did not set a limit.

CBO estimates that from civil penalties the bill authorizes for food safety violations, FDA's total revenues from penalties would increase $10 million during 2010-2014 and $20 million during 2010-2019.

FDA Knows The Price Of Reform

Both FDA Commissioner Margaret Hamburg and recently appointed Senior Advisor Michael Taylor have told Congress that H.R. 2749's fee revenues would not support all the activities called for in the bill.

The executives encourage Congress to give FDA greater food safety authorities, but caution members that legislation must provide sufficient funding to pay for the agency's additional work.

Mark Mansour, an attorney with the firm Bryan Cave, said the CBO report should make clear to Capitol Hill that food safety reform requires additional spending.

"If Congress fails to appropriate enough money to fund this huge mandate, then FDA will be set up to fail," Mansour said.

Steven Grossman, president of Silver Spring, Md.-based consulting firm HPS Group, agrees that under-funding reform would put FDA's authorities in peril.

Unfunded mandates will threaten the agency "and may even destroy the successful effort to rebuild and strengthen FDA," Grossman said in an early July entry on his personal online blog, FDA Matters.

On the other hand, CSPI expected CBO's cost estimate to be higher. Calling the report's estimations "a good deal," Plunkett said, "Hopefully we will see the appropriations be made available and we can struggle through our budget problems in the next few years and get the government on a footing where it can manage these kinds of costs and keep FDA healthy."

"FDA was going to have to improve its inspection system, whether it is mandated in law or whether it is done administratively," Plunkett added.

He noted a 2008 report by FDA's Science Board said the agency was vastly under-funded. But food safety reform, like other improvements in FDA's performance, must come no matter the costs, Plunkett said.

"We're going to bear these costs in the budget or we're going to bear these costs in society," he said.

Eventually, with improved food and drug safety enforcement -- and "all the players are moving in that direction" -- costs can be reduced and FDA's funding also should drop, Plunkett added.

He referenced the salmonella outbreak this year after peanut processor Peanut Corp. of America released contaminated product into the supply chain. Peanut farmers and other food industry stakeholders told Congress the industry lost $1 billion in sales due to product recalls and to not being able to sell peanut products at anticipated prices.

Not only were other industry losses not factored into that number, but 90 jobs were lost when PCA went bankrupt and "the costs just keep mounting," Plunkett said, adding that paying for tighter enforcement should consider that in "in one year, one bad actor in the food supply has cost one industry a billion dollars."

While not explicitly mentioned in either H.R. 2749 or S. 510, dietary supplement firms likely would be subject to food safety legislation because their products are regulated as food. The industry's concern is to avoid a redundant layer of requirements by keeping FDA's good manufacturing practices for supplements as the regulatory standard.

-- Katie Stevenson (k.stevenson@elsevier.com)

House Passes Food Safety Bill That May Not Be Appetizing To Senate

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