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THE FOOD AND DRUG

IMPORT SAFETY ACT

HEARING

BEFORE THE

SUBCOMMITTEE ON HEALTH

OF THE

COMMITTEE ON ENERGY AND

COMMERCE

HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

ON

H.R. 3610

SEPTEMBER 26, 2007

Serial No. 110–68

(

Printed for the use of the Committee on Energy and Commerce

energycommerce.house.gov

COMMITTEE ON ENERGY AND COMMERCE

JOHN D. DINGELL, Michigan, Chairman

HENRY A. WAXMAN, California

EDWARD J. MARKEY, Massachusetts

RICK BOUCHER, Virginia

EDOLPHUS TOWNS, New York

FRANK PALLONE, JR., New Jersey

BART GORDON, Tennessee

BOBBY L. RUSH, Illinois

ANNA G. ESHOO, California

BART STUPAK, Michigan

ELIOT L. ENGEL, New York

ALBERT R. WYNN, Maryland

GENE GREEN, Texas

DIANA DEGETTE, Colorado

Vice Chairman

LOIS CAPPS, California

MIKE DOYLE, Pennsylvania

JANE HARMAN, California

TOM ALLEN, Maine

JAN SCHAKOWSKY, Illinois

HILDA L. SOLIS, California

CHARLES A. GONZALEZ, Texas

JAY INSLEE, Washington

TAMMY BALDWIN, Wisconsin

MIKE ROSS, Arkansas

DARLENE HOOLEY, Oregon

ANTHONY D. WEINER, New York

JIM MATHESON, Utah

G.K. BUTTERFIELD, North Carolina

CHARLIE MELANCON, Louisiana

JOHN BARROW, Georgia

BARON P. HILL, Indiana

JOE BARTON, Texas

Ranking Member

RALPH M. HALL, Texas

J. DENNIS HASTERT, Illinois

FRED UPTON, Michigan

CLIFF STEARNS, Florida

NATHAN DEAL, Georgia

ED WHITFIELD, Kentucky

BARBARA CUBIN, Wyoming

JOHN SHIMKUS, Illinois

HEATHER WILSON, New Mexico

JOHN B. SHADEGG, Arizona

CHARLES W. ‘‘CHIP’’ PICKERING,

Mississippi

VITO FOSSELLA, New York

STEVE BUYER, Indiana

GEORGE RADANOVICH, California

JOSEPH R. PITTS, Pennsylvania

MARY BONO, California

GREG WALDEN, Oregon

LEE TERRY, Nebraska

MIKE FERGUSON, New Jersey

MIKE ROGERS, Michigan

SUE WILKINS MYRICK, North Carolina

JOHN SULLIVAN, Oklahoma

TIM MURPHY, Pennsylvania

MICHAEL C. BURGESS, Texas

MARSHA BLACKBURN, Tennessee

PROFESSIONAL STAFF

DENNIS B. FITZGIBBONS, Chief of Staff

GREGG A. ROTHSCHILD, Chief Counsel

SHARON E. DAVIS, Chief Clerk

DAVID L. CAVICKE, Minority Staff Director

(II)

(III)

SUBCOMMITTEE ON HEALTH

FRANK PALLONE, JR., New Jersey, Chairman

HENRY A. WAXMAN, California

EDOLPHUS TOWNS, New York

BART GORDON, Tennessee

ANNA G. ESHOO, California

GENE GREEN, Texas

Vice Chairman

DIANA DEGETTE, Colorado

LOIS CAPPS, California

TOM ALLEN, Maine

TAMMY BALDWIN, Wisconsin

ELIOT L. ENGEL, New York

JAN SCHAKOWSKY, Illinois

HILDA L. SOLIS, California

MIKE ROSS, Arkansas

DARLENE HOOLEY, Oregon

ANTHONY D. WEINER, New York

JIM MATHESON, Utah

JOHN D. DINGELL, Michigan (ex officio)

NATHAN DEAL, Georgia,

Ranking Member

RALPH M. HALL, Texas

BARBARA CUBIN, Wyoming

HEATHER WILSON, New Mexico

JOHN B. SHADEGG, Arizona

STEVE BUYER, Indiana

JOSEPH R. PITTS, Pennsylvania

MIKE FERGUSON, New Jersey

MIKE ROGERS, Michigan

SUE WILKINS MYRICK, North Carolina

JOHN SULLIVAN, Oklahoma

TIM MURPHY, Pennsylvania

MICHAEL C. BURGESS, Texas

MARSHA BLACKBURN, Tennessee

JOE BARTON, Texas (ex officio)

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C O N T E N T S

Page

H.R. 3610, to amend the Federal Food, Drug, and Cosmetic Act with respect

to the safety of food and drugs imported into the United States, and

for other purposes. ............................................................................................... 125

Hon. Frank Pallone, Jr., a Representative in Congress from the State of

New Jersey, opening statement .......................................................................... 1

Hon. Nathan Deal, a Representative in Congress from the State of Georgia,

opening statement ................................................................................................ 3

Hon. Gene Green, a Representative in Congress from the State of Texas,

opening statement ................................................................................................ 4

Hon. Michael C. Burgess, a Representative in Congress from the State of

Texas, opening statement .................................................................................... 5

Hon. Diana DeGette, a Representative in Congress from the State of Colorado, opening statement ...................................................................................... 6

Hon. Mike Ferguson, a Representative in Congress from the State of New

Jersey, opening statement ................................................................................... 7

Hon. John D. Dingell, a Representative in Congress from the State of Michigan, opening statement ....................................................................................... 9

Hon. Tim Murphy, a Representative in Congress from the Commonwealth

of Pennsylvania, opening statement ................................................................... 10

Hon. Anna G. Eshoo, a Representative in Congress from the State of California, prepared statement ...................................................................................... 11

Hon. Jan Schakowsky, a Representative in Congress from the State of Illinois, opening statement ....................................................................................... 12

Hon. Heather Wilson, a Representative in Congress from the State of New

Mexico, opening statement .................................................................................. 13

Hon. Darlene Hooley, a Representative in Congress from the State of Oregon,

opening statement ................................................................................................ 14

Hon. Steve Buyer, a Representative in Congress from the State of Indiana,

opening statement ................................................................................................ 15

Hon. Jim Matheson, a Representative in Congress from the State of Utah,

opening statement ................................................................................................ 16

Hon. Marsha Blackburn, a Representative in Congress from the State of

Tennessee, opening statement ............................................................................ 17

Hon. Henry A. Waxman, a Representative in Congress from the State of

California, opening statement ............................................................................. 18

Hon. Tom Allen, a Representative in Congress from the State of Maine,

opening statement ................................................................................................ 20

WITNESSES

Randall L. Luther, Deputy Commissioner, Policy, U.S. Food and Drug Administration, Rockville, MD ....................................................................................... 21

Accomapnied by: David Acheson, M.D., Assistant Commissioner, Food Protection, U.S. Food and Drug Administration; and Steven M. Solomon,

D.V.M., Deputy Director, Office of Regional Operations, Office of Regulatory Affairs, U.S. Food and Drug Administration

Prepared statement .......................................................................................... 25

Answers to submitted questions ...................................................................... 164

William Hubbard, senior advisor, Coalition for a Stronger FDA, Chapel Hill,

NC ......................................................................................................................... 58

Prepared statement .......................................................................................... 59

Hon. Calvin M. Dooley, president and chief executive officer, Grocery Manufacturers Association ............................................................................................ 63

Prepared statement .......................................................................................... 65

Page

VI

Hon. Calvin M. Dooley, president and chief executive officer, Grocery Manufacturers Association—Continued

Answers to submitted questions ...................................................................... 159

Jill Hollingsworth, D.V.M., group vice president, food safety programs, Food

Marketing Institute ............................................................................................. 68

Prepared statement .......................................................................................... 70

Caroline Smith DeWaal, food safety director, Center for Science in the Public

Interest .................................................................................................................. 74

Prepared statement .......................................................................................... 76

Answers to submitted questions ...................................................................... 202

Alan Goldhammer, deputy vice president, regulatory affairs, Pharmaceutical

Research and Manufacturers of America ........................................................... 88

Prepared statement .......................................................................................... 89

Tom Kubic, executive director, Pharmaceuticals Security Institute ................... 91

Prepared statement .......................................................................................... 93

Hallock Northcott, president and chief executive officer, American Association

of Exporters and Importers ................................................................................. 104

Prepared statement .......................................................................................... 105

Answers to submitted questions ...................................................................... 196

SUBMITTED MATERIAL

American Free Trade Association, submitted statement ..................................... 211

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H.R. 3610, THE FOOD AND DRUG IMPORT

SAFETY ACT

WEDNESDAY, SEPTEMBER 26, 2007

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON HEALTH, COMMITTEE ON ENERGY AND COMMERCE, Washington, DC.

The subcommittee met, pursuant to call, at 10:08 a.m., in room

2123 of the Rayburn House Office Building, Hon. Frank Pallone,

Jr. (chairman) presiding.

Members present: Representatives Waxman, Eshoo, Green,

DeGette, Allen, Schakowsky, Hooley, Matheson, Dingell, Deal, Wilson, Buyer, Pitts, Ferguson, Sullivan, Murphy, Burgess, and

Blackburn.

Staff present: Brin Frazier, Lauren Bloomberg, Melissa Sidman,

John Ford, Jack Mariko, Dave Nelson, Robert Clark, Chad Grant,

Nandan Kenkeremath, Andrew Woelfling, and Chris Knauer.

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY

Mr. PALLONE. I call the hearing to order. Good morning to everybody. Today we are having a hearing on H.R. 3610, the Food and

Drug Import Safety Act introduced by our chairman, Mr. Dingell,

and I will recognize myself initially for an opening statement.

Mr. Dingell’s legislation seeks to strengthen our Nation’s import

safety system, and I am also a proud co-sponsor of the legislation.

We all know that while the United States has one of the world’s

safest food and drug supplies and some of the most stringent

standards for consumer protection, recent outbreaks of contaminated products and cases of food borne illness demonstrate that we

have to do better. Contaminated pet food, toothpaste, and seafood

products from China have highlighted the failings of our import

safety system and sparked fear and distrust among consumers.

Democrats in Congress have heard consumers’ concerns, and we

have already begun to address the issue. Last week Congress

passed the Food and Drug Administration Revitalization Act,

which we call PDUFA, I guess, or includes PDUFA, and that bill

provides the FDA with the resources and the authority necessary

to improve our Nation’s drug safety system. Also included in this

measure, however, are improvements to our Nation’s food safety

program including new public notification requirements of outbreaks of illness due to contaminated food. In addition, the PDUFA

legislation will establish an adulterated food registry so that inciVerDate 11-SEP-98 10:23 Oct 08, 2008 Jkt 000000 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 Q:\DOCS\110-68 SCOM1 PsN: SCOM1
2

dents can be reported and the FDA can quickly alert the public. It

also calls for transparency during recalls of human or pet food, and

will require the FDA to post information on recalled products in an

easy to use searchable format.

Now while this was a modest step which was included, as I said,

in the PDUFA bill, a lot more can and needs to be done with regard to food safety. The recent contamination incidents raised

questions about our current food and drug safety laws, many of

them enacted in the 1900s. Have they kept pace with new techniques in food production and processing, are these laws still sufficient to keep us safe. Rather than reacting to outbreaks of contaminated products, we need to change our system to better prevent

such incidents from happening in the first place.

Recently, a White House working group—and I actually spoke to

the FDA Commissioner about this yesterday—released a report on

Government import safety protocols. This report acknowledges the

limitations of our current import safety system and calls for a shift

basically to review not only our imports at the point of entry in the

United States, but also to regulate production abroad. The report

tells us what we already know that the current system isn’t working. The administration recognizes its failings, a lack of coordination amongst agencies, loopholes in the system that allow contaminated products to slip in, but merely reporting on the problem is

too little and too late.

Now Chairman Dingell has taken the initiative in his legislation

that is before us today and proposed a solution for increasing import safety including requiring agencies to conduct research to develop better testing techniques and insuring accurate labeling on

products to prevent consumer deception, and his bill would give the

FDA the authority to recall adulterated products if necessary.

Chairman Dingell’s bill would also insure that products from other

countries are only permitted to enter the United States if they

meet our strict safety standards, and it puts in place regulations

for ports of entry, certification, and inspection that will enable us

to enforce this standard. These new process controls would be paid

for by a new imported food inspection fee.

The Dingell bill also addresses imported drugs by allowing the

FDA to assess and collect user fees on drugs imported into the

United States. These fees will help pay for inspectors, laboratory

tests to detect adulterated drugs, and overseas inspections of drug

shipments. But we know that contamination isn’t limited to imported products alone. In the last few months, E. coli bacteria was

discovered on lettuce and spinach from California. We had to recall

peanut butter due to salmonella contamination, and botulism was

found in canned green beans. All of these recent examples actually

involve domestic products.

There are incidents of serious concern. The Centers for Disease

Control estimates that 76 million people became ill this year and

5,000 actually died from illnesses caused by the presence of microbial pathogens in their food. The spinach contamination alone

caused 200 reported illnesses and three deaths last year. Now I

have also introduced a bill that I have actually had for a number

of years that would strengthen process controls on domestic products by establishing strict inspection and oversight procedures to

3

prevent contamination at food processing facilities. It would require

the FDA to set standards for sanitation and limits for the level of

contaminations in food, and my bill would also require food processing facilities to register annually, and it would increase the

number of inspections at facilities both in our country and in the

country of origin.

And I am looking forward to working with Mr. Dingell and my

colleagues. I know others have introduced legislation to address

these concerns as well. If I could just say in conclusion that I think

that improving our Nation’s import and domestic food and drug

safety programs is of great importance. I wanted to thank, he is

not here, but Mr. Stupak, as you know, has had a couple of hearings in the O&I Subcommittee on this issue. The bottom line is

that American consumers should be able to trust that the products

they purchased have been properly regulated and inspected and

thereby making them safe. And that is why we are here today, and

I thank all of you, and the witnesses who are here to help us in

that regard. And at this point, I would recognize Mr. Deal, our

ranking member, for an opening statement.

OPENING STATEMENT OF HON. NATHAN DEAL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF GEORGIA

Mr. DEAL. Thank you. During the month of August, I held town

hall meetings all across my district and repeatedly heard from constituents who were concerned about the safety of their nation’s food

supply. They asked about country of origin labeling, imports from

China, and wanted to know what was being done to make sure that

the food that they feed their families is indeed safe. Coming from

a town that calls itself the poultry capital of the world, I am also

very familiar with the reciprocal impact that restrictions we place

on producers in other countries can have on our own domestic producers.

In my experience poultry imports are one of the first products

another country bans if they are upset with new United States

trade regulations. I am glad that we are holding this hearing today

so that we can look at these issues and try to strike the right regulatory balance with legislation to help address the concerns expressed by my constituents. However, it is also important to recognize the complexities of these issues and be careful that our legislation does not hamper the reforms being made within the industry

to provide consumer safe food products. I know the administration

will also be making some recommendations shortly on import safety, and I believe it would be useful for us to evaluate those recommendations as we craft legislation on this subject.

Also, during our work on the Food and Drug Administration

Amendments Act of 2007 the issue of counterfeit drugs was highlighted, and I am glad we are continuing to work on this subject.

While I am proud of the drug safety work that we did in that bill,

I want to thank Mr. Buyer of our committee who raised a very

valid point that if counterfeit medicines were entering the drug

supply then in fact it does undermine our drug safety efforts. He

has taken on himself to become perhaps the best informed on a

personal basis of this issue, and I commend him for that.

4

I want to thank our witnesses on the panels here today for their

attendance. I look forward to your testimony on this very complex

issue, and we look forward also to your recommendations as to how

to solve the problems we face. Thank you, Mr. Chairman, and I

yield back my time.

Mr. PALLONE. Thank you, Mr. Deal. And I would recognize now

our vice chairman from Texas, Mr. Green.

OPENING STATEMENT OF HON. GENE GREEN, A

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS

Mr. GREEN. Thank you, Mr. Chairman, for holding this hearing

on the Food and Drug Import Safety Act. There is no question that

glaring gaps exist in our food safety infrastructure. The GAO concurs, and has dubbed our Nation’s food safety program as high

risk. The news media has highlighted the most high profile problem stemming from imports from China. We have also held two

hearings in the Oversight and Investigations Subcommittee on food

safety, with the most recent hearing serving to investigate problems with the safety of food imports.

This bill is a natural response to the problems that have been

uncovered in the news media, and in our own subcommittee investigations. I support many of the provisions in the bill, and applaud

the chairman of the full committee for his commitment to improving the safety of our Nation’s food supply. I will whole heartedly

support provisions granting the FDA recall authority over dangerous food. We learned through our O&I process that the voluntary recall process does not quickly and effectively protect Americans from tainted food, especially given the FDA often issues recalls after the food’s shelf life has already expired.

My goal is for the FDA to become a more nimble agency ready

to respond to food safety threats in a time to make the difference

and keep Americans from getting sick, and I hope these additional

authorities will help them achieve that goal. While the bill has

many provisions I support, I would be remiss if I didn’t express my

significant concerns about the language that would restrict the

number of ports of entry for food imports. I am proud to represent

the Port of Houston, which is the largest port in the country in

terms of foreign tonnage. Granted, a good portion of that tonnage

is related to our energy sector, but the port had made it a point

to increase the number of food shipments it handles, more than 2.3

million tons of food coming through the port of Houston the first

7 months of this year alone.

In fact, the port of Houston is one of only four ports in the country certified by the New York Board of Trade as a coffee exchange,

and we are the only coffee port west of the Mississippi. Despite

these commercial successes, the port would essentially be shut out

of the food import business under this bill since no FDA lab is located in the Houston area. In fact, there is no FDA lab in the State

of Texas. To make matters worse, no FDA lab located in the State

despite the fact that our State shares the longest border with Mexico, one of our most prominent trading partners.

There is so much produce and foodstuffs that comes across from

Mexico through Texas land ports. I would think Laredo, TX may

be the largest inland port in the country, if not the world, and yet

5

there is no FDA lab in Laredo either. And I looked at the investigation from the O&I Subcommittee, and I am proud to serve on it,

and I noticed the inspections that did turn up a number of problems from China but the next biggest country was Mexico. And so

I think we need to do better on figuring out how we can address

that. The situation brings up an interesting chicken or the egg scenario. Given the levels of trade in Texas on our southern border

with Mexico, why isn’t there an FDA lab located somewhere in

Texas? It seems to be a glaring omission that adds more weight to

our argument that the FDA simply doesn’t have enough resources

to adequately protect the Nation’s food supply.

On the flip side, there are only 13 FDA labs in the country, several of which are not located in heavy import areas. My neighbors

in Arkansas would have to forgive me, but I have never considered

Jefferson, Arkansas, a hub of import activity. I understand the

chairman’s desire to prevent port shopping. I share his concerns.

But I question whether the presence of an FDA lab is really an appropriate reference to determine the ports of entry for food products in the country, and I fear this restriction of these imports to

those extremely limited number of metropolitan areas could not

strike the right balance in securing the safety of our food and supporting the flow of commerce, commerce that keeps my port supplying much needed jobs to my constituents who are the longshoremen

who work on those docks.

I look forward to hearing from our witnesses on this issue, and

hope to work with the chairman of the full committee as we move

forward in the process, and I share his goals of improving food

safety, but I hope we can do it in a way that doesn’t bring commercial activity in our country to a grinding halt. Mr. Chairman, I

yield back my time.

Mr. PALLONE. Thank you. Next is the gentleman from Texas also,

Mr. Burgess.

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS

Mr. BURGESS. Thank you, Mr. Chairman. I thank you for having

this hearing today. Just like Ranking Member Deal, I had my town

hall meetings last month, and heard repeatedly about this issue,

and the number of recalls of imported goods clearly caught people’s

attention across the country. And I am extremely concerned about

the safety and security of household products, food supply, and our

Nation’s pharmaceutical supply. While I remain confident that

America has the safest food supply in the world, what I am more

concerned about is the safety of imported goods and particularly

those imported from the People’s Republic of China.

My friend and colleague, Mr. Greg Walden, and myself sent numerous communications to the committee over the past few months

asking for an investigation regarding the many food and consumer

products safety recalls from China. I continue to urge the leadership of this committee to fully examine this matter. I am also looking forward to the Oversight and Investigations staff report from

their recent trip to China, and I believe this report will further inform the legislation that we have under consideration today. AmerVerDate 11-SEP-98 10:23 Oct 08, 2008 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 Q:\DOCS\110-68 SCOM1 PsN: SCOM1
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ica does have the safest, least expensive, most abundant food supply of any country in the world.

In the past, whenever I went into a supermarket to buy food for

myself or my family, you pick it up and you worry about, No. 1,

does it taste good, No. 2, well, if it was in the 1980s, I worried

about fat grams, in the 1990s, I worried about carbs. But now I

worry about is this stuff going to make me sick? We just never had

to stop and wonder about is the food safe to eat, is it going to make

someone in my family ill, and the security of our food supply in my

mind has never been in question, but I believe that while it is safe

and secure the recent outbreaks of both E. coli and salmonella have

caught the country’s attention. Certainly they have caught my attention.

The industry itself can really scarcely afford further erosions in

consumer confidence of its products. I thank Chairman Dingell for

his attention to this matter. Having reviewed the legislation, I

think the intentions are good but, we all know when God is in the

plan, the devil is in the details. I believe that we need to look toward how other Federal agencies have dealt with this issue, and

whether it would be appropriate for the Food and Drug Administration to have similar authorities. I am very interested in a proposal developed by Dr. Bill Hubbard, former FDA associate commissioner. He has been here in this committee, and we have heard

him testify in the past at numerous hearings. His approach would

grant the FDA the authority to embargo if specific food from a specific country, much like the similar authority the USDA has in regard to meat and meat products. My staff and I have reached out

to the FDA on a number of occasions, and now I am gratified that

we are going to be getting together to review some aspects of that

proposal.

I am hopeful that moving forward we can discuss the matter

fully with the agency. Now we just have come through the S-CHIP

battle, Mr. Chairman, and I hope that is a lesson for us in this

committee. This subcommittee is important. This subcommittee has

some of the most intelligent Members of the people’s house on both

sides of the dais, and it is an affront to this subcommittee to push

major legislation through the U.S. House of Representatives without the input of this subcommittee, and I trust we will not see a

repeat of that in the future. I will yield back the balance of my

time.

Mr. PALLONE. Thank you. I recognize the gentlewoman from Colorado, Ms. DeGette.

OPENING STATEMENT OF HON. DIANA DEGETTE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF COLORADO

Ms. DEGETTE. Thank you very much, Mr. Chairman, and thank

you for holding the hearing today. I got involved in food safety legislation some years ago when a meat processing plant in my home

State of Colorado sent out contaminated meat all around the West.

And what I learned is probably the most important thing we can

do as Members of Congress is work hard to protect the health and

safety of our constituents. When our constituents to go the grocery

store and buy a package of hamburger or when they buy spinach

7

to give to their children because they think it is a healthy choice,

they rely on our Government and our food safety agencies, all 13

of them, to make sure that their food is wholesome and safe for

them to eat.

That system has pretty much fallen apart from top to bottom, I

think in large part because of imports from overseas in the last few

years, and people are shocked by the continuing number of food

safety issues we have. That is why I want to thank Chairman Dingell for developing comprehensive draft legislation that will deal

with the issue of both resources and accountability. It seems to me

there is a number of issues we need to discuss in the food safety

issue. The first and key issue is resources. Our food safety agencies

do not have the resources to do the job that we have been asking

them to do and which increasingly they need to do. Second, the administration needs to think about how they are going to insure food

safety. And, frankly, closing down FDA labs like the lab in my own

back yard at the Federal Center in Denver is really not the way

to go.

I have a whole different set of concerns about the FDA labs that

Mr. Green has, and one of them is that we are going to lose scientists who have years and years of experience. The response from

industry has been somewhat more responsive, and I am happy to

hear later today from the Grocery Manufacturers Association about

their proposals. There are a couple of issues I have been working

on ever since I got involved in these issues some years ago. The

first one is giving mandatory recall authority to the FDA. People

are shocked when they find out that the Consumer Product Safety

Commission can recall toys although it is cumbersome but that we

can’t recall tainted baby food that we feed to those same babies. We

need to have mandatory recall authority for a variety of reasons.

Second, and there is a bill, H.R. 3484, that I have introduced

that grants mandatory recall authority to the FDA and to the

USDA. The second issue that I would really—I am glad the chairman has arrived because I would really urge him to look at this

in the legislation. That legislation I have been working on, H.R.

3485, the Trace Act, which would set up a product tracing system

that would track food from the farm to the grocery store which

would enable to recall in the event of contamination. That also

would help us go a long way in keeping our food supply that we

give to consumers safe.

Mr. Chairman, the bill before us is a great start. I am happy that

we are having a hearing on it, and I look forward to working with

you and the chairman of the full committee to making sure that

we pass comprehensive food safety legislation in this session of

Congress. Thank you.

Mr. PALLONE. Thank you. The gentleman from New Jersey, Mr.

Ferguson.

OPENING STATEMENT OF HON. MIKE FERGUSON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY

Mr. FERGUSON. Thank you, Mr. Chairman, and I want to thank

you and Mr. Deal and members of the subcommittee and our witnesses for being here today to discuss this very important issue of

8

the safety and the security of our country’s food and drug supply.

I am pleased that we are again addressing this critical issue in this

most important subcommittee. It is paramount to the citizens of

this country that they are able to have faith in our Government’s

ability to monitor and insure the safety of our food and our drugs.

Recently, that has not been the case with several instances of toxic

food and counterfeit drugs entering our supply chain.

I hope that our witnesses today will be able to provide us with

some insights to why there are perhaps some gaps in the security

of our imported food and drugs. My biggest concern, and I believe

perhaps the biggest concern of many of us, is how counterfeit drugs

are entering our market place. How and why is this happening. My

friend from the other side of the aisle who just spoke, Ms. DeGette,

summarized the situation very well in a hearing earlier this year

at a meeting of this subcommittee. She was speaking about the

topic of a recent New York Times investigation that found that

toxic cough syrup was being manufactured in China and shipped

around the world.

Even under the current construction of the law the dangers of

counterfeit drugs are very, very real. I believe we need to grant the

FDA the power and the authority to seize and destroy and investigate the origin of these counterfeit drugs. Alarming counterfeiting

is happening not only with imported drugs but with our food supply, as we have heard several instances of that mentioned this

morning, before they come here to the United States. Recently, the

Agriculture Committee and the FDA provided testimony concerning

imported aquaculture products from China containing unapproved

antibiotics and contaminants. This is pretty disturbing as to why

these products containing unapproved ingredients that can be

harmful or even deadly to the consumer are making their way to

American supermarket shelves.

This shipment from China was found to contain nitrofurans,

which has been shown to be a carcinogenic in animal studies. It is

really unacceptable that food containing this harmful contaminant

should be entering America’s food supply, I hope that we will be

able to address these and other important safety issues in the coming weeks. I look forward to the testimony of our witnesses. I particularly appreciate Chairman Dingell and his bill and the work

that he has done on his legislation. I appreciate the seriousness

with which he has taken up this issue, so much so that he has

worked on legislation and introduced legislation to do so.

I also hope as we move forward that the work of this subcommittee and this legislative product will include the very, very good

work of our colleague, Mr. Buyer. As Mr. Deal mentioned earlier,

he has really taken it upon himself to do extraordinary work and

research and working on legislation that would address this counterfeit drug issue, and I am very hopeful and optimistic that in a

bipartisan way that our committee, this subcommittee, and our full

committee can come together to incorporate many of the good parts

of the work product that Mr. Buyer is putting together as well.

Thank you, Mr. Chairman. I yield back.

Mr. PALLONE. Thank you. I next recognize the chairman of the

full committee and the sponsor of the legislation, Mr. Dingell.

9

OPENING STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN

Mr. DINGELL. Mr. Chairman, first of all, thank you for holding

this hearing today. I appreciate your leadership, and I commend

you for your vigorous efforts in this matter. Our Nation’s consumers are experiencing a significant crisis, and confidence in the imported food products and other products they import. For months

Americans have been inundated with reports about tainted products shipped from abroad, melamine tainted pet food, antibiotic

tainted seafood, lead tainted toys, tainted counterfeit drugs, and

counterfeit drugs that do nothing that we know of beneficial, and

so on.

As these reports have surfaced, the Subcommittee on Oversight

and Investigations led by our able colleague, Mr. Stupak as chairman, intensified its investigation into how the Food and Drug Administration works to protect the public health against tainted food

and drug and appliance imports. The preliminary results of these

ongoing investigations revealed an under funded importation safety

system equivalent in the terms of holes to a block of Swiss cheese.

It is clear that Food and Drug cannot and is not doing its job for

want of money, for want of staff, for amount of resources.

We hear periodically about how they are going to be a leader organization, and how they are going to do more with less. I have

been listening to that since I came on this committee long ago, and

I must say that today it is as much phooey as it was then. Last

week, Mr. Chairman, you and Chairman Stupak joined me in introducing H.R. 3610, the Food and Drug Import Safety Act. And I

would urge my colleagues here in the committee and others of our

colleagues in the Congress to join us in co-sponsorship with it. This

legislation takes a vigorous proactive step towards correcting the

problem of tainted food and drug imports. It closely resembles the

discussion draft, which I released earlier in August.

I would point out in response to comments I have heard from my

colleagues on both sides it is my full intention that this matter will

be pursued both vigorously and in a bipartisan fashion. And I invite my colleagues on both sides, Republicans and Democrats, to

join in that undertaking, and I assure them that we are anxious

to hear what they have to say about this because this committee

will work best when we cooperate on matters of this importance.

The legislation that we are discussing aims to increase Food and

Drug Administration inspections both at the border and abroad by

instituting a small user fee. That is something we have found is

necessary because without this kind of financing there will be no

adequate performance by Food and Drug, no adequate resources,

no adequate staff or funding.

The fee would also fund laboratory analysis to insure that imports are safe to enter our stream of commerce, and I would observe that the efforts of Food and Drug to close its laboratories

have been met with uniform condemnation particularly from this

committee. Next, it grants the authority to ferret out bad actors

that seek to game the current regulatory system and pass off bad

products as safe for consumption, a problem which we read about

almost daily in the press. As our committee staff stated in their

10

July 2007 report, FDA’s current regulatory approach, which relies

on voluntary guidelines for most foods, is inadequate to assure the

safety of our modern food supply.

I would observe that the credo down there and the mechanism

under which this appears to be done is to trust us, and we have

found to our regret that we simply cannot trust that kind of activity to an agency so poorly funded and so poorly staffed. Finally, the

bill seeks to attempt a balance by rewarding those who employ best

practices allowing them to participate in a voluntary program that

gives expedited movement of food imports through the food inspection system.

Mr. Chairman, I look forward to the comments of my colleagues

today, and the testimony of our witnesses today as the committee

seeks to protect the public health from tainted food and drug imports. I would urge that we be vigorous. I want this to be a bipartisan effort. We will build upon the things which we did in the earlier legislation on this matter, and the commitments I made to my

colleagues—that we would hear all Members when we commence

the process—remain as good today as they were when we made

them earlier. So I urge my colleagues to work together. This is a

serious effort to protect the public health, the public safety, and the

public welfare from serious wrongdoing, which is now hurting us.

I thank you for your recognition.

Mr. PALLONE. Thank you, Chairman Dingell. Next is Mr. Murphy

of Pennsylvania.

OPENING STATEMENT OF HON. TIM MURPHY, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

Mr. MURPHY. Thank you, Mr. Chairman, for holding this important meeting and hearing on an issue that is so vitally important

to America’s livelihood, and actually our lives and our families.

Several things that we are going to cover today are important with

regard to the FDA’s role in protecting our Nations’ medicine cabinets. There is a role for the FDA, I also believe in regulating our

food supply, and such things as counterfeit imported drugs, which

of course mean that you may have people who are taking drugs

with toxins in them or ineffective drugs which actually are contributing to their own health problems. We want to make sure the

FDA focuses as much of its attention nowadays on drug safety as

new drug approval.

As appalling as it is to think that manufacturers would be involved in this outside of the criminal labs, we have to be aware

that we are going to have a more vigilant role in dealing with this.

And that is probably because of the Nation’s increased awareness

of what has been happening with China. China, who we have a

great deal of trade with and we would like to be a good trading

partner, but when we have raised questions about steel dumping

or manipulation of their currency if their response is that they are

going to sell off their treasury bonds to be punitive it hardly seems

to be the words coming from a partner.

Furthermore, they give us the toys with lead paint, bibs and

vinyl lunch boxes with lead, diapers with fungus, contaminated pet

food, reused chopsticks, tires that cause fatal accidents, juice with

11

unsafe color additives, baby bottles with an ingredient that can

alter a child’s hormones, pacifiers with carcinogen, carcinogenic

chemicals, teething rings with toxic chemicals, and also let us not

forget they have spied on us, they have cyber techs in the Pentagon, they have stolen our national secrets, they have provided bullets and bombs and their components are used to kill our soldiers

in Iraq, and to supply the Taliban. This is not the action of a

friendly nation to us.

The FDA is on the front lines of protecting American citizens’

health, but really in the broader scheme of things this can be an

important partnership between the FDA and the American people

in making sure the American people are aware of any problems

with any products, that such products are recalled quickly, that action is taken to inspect at our borders and put increased pressure

on China and any other nation that tries to violate the laws and

the protections that we consider so important for people’s welfare

and health.

Mr. Chairman, as we continue on with this and other hearings,

we will hear more and more horror stories of things that have happened, and American companies need to be vigilant. But let us not

forget it is not the companies themselves that are involved with

this. Companies cannot possibly babysit everything that happens

with a nation where they consider it a common practice to go ahead

and have lower health standards, lower wages, pollute the air

more, and expect our citizens to pick up the tab on this or perhaps

turn a blind eye. We will not do that as a nation. We will not do

that as a Congress. And I am pleased this committee is going to

take firm action on making sure that we draw out every possible

exposure of this and get the FDA as a strong partner to protect the

health and welfare of American citizens. I yield back.

Mr. PALLONE. Thank you. I recognize the gentlewoman from

California, Ms. Eshoo.

Ms. ESHOO. Thank you, Mr. Chairman. I am going to waive my

opening statement time and save it for questions. Thank you for

having this really critically important hearing.

[The prepared statement of Ms. Eshoo follows:]

PREPARED STATEMENT OF HON. ANNA G. ESHOO, A REPRESENTATIVE IN CONGRESS

FROM THE STATE OF CALIFORNIA

Mr. Chairman, I thank you for convening today’s hearing on H.R. 3160, the Food

and Drug Import Safety Act, legislation that would give the Food and Drug Administration enhanced authority and resources to inspect imported foods and drugs, as

well as additional authority to protect public health.

Even before reports this year about tainted foods and consumer products coming

into our country, there have been substantial concerns about the safety of our food

supply.

The CDC’s estimates of foodborne illness have been startling: 76 million illnesses,

325,000 hospitalizations, and 5,000 deaths each year.

The domestic inspection and monitoring system for food is not nearly as rigorous

as it should be. The authority of the major food safety agencies to enforce standards

and recall suspect food has been virtually non-existent. That’s why I’m pleased that

H.R. 3160 grants recall authority to the FDA.

The major concern now is the ability of food safety agencies to keep pace with

the rapid increase of food imports.

The FDA, which is under the jurisdiction of the Energy and Commerce Committee, is responsible for ensuring the safety of approximately 80 percent of all food

products—virtually every food item that is not meat or poultry. In the last decade

the volume of food imports under FDA’s purview has tripled. At the same time, the

12

percentage of shipments inspected by FDA has dropped from 1.7 percent to 1 percent.

Unlike the USDA’s Food Safety and Inspection Service, which bars the importation of meat and poultry unless the country from which the product is shipped has

been certified as having standards equivalent to U.S. standards, the FDA does not

require equivalency certifications. Instead, FDA relies on inspections of imported

goods to protect consumers.

My understanding is that the FDA has stated that it does not have the resources

to implement equivalency certifications. H.R. 3160 attempts to address this problem

by imposing user-fees to expand inspections and by requiring equivalency standards.

Much more needs to be done to improve food safety, and the legislation we’re examining today will help plug some of the holes in the food safety system. I look forward to the testimony we’ll hear from today from the FDA and other witnesses.

Mr. PALLONE. Thank you. Ms. Schakowsky.

OPENING STATEMENT OF HON. JAN SCHAKOWSKY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS

Ms. SCHAKOWSKY. I thank you, Chairman Pallone, for holding today’s hearing on the Food and Drug Safety Act. I thank Chairman

Dingell for this important legislation which makes crucial strides

in strengthening FDA’s ability to monitor the safety of our Nation’s

food and drug imports. During the past year, consumer confidence

in our Nation’s food safety framework has been shaken time and

time again particularly by tainted imports. Cases of poisoned toothpaste, antibiotic laden seafood and toxic pet food demonstrate how

we rely on the food safety practices of foreign countries and producers, and illustrates the importance of the legislation before us

today.

More than $75 billion worth of food and agricultural products are

imported into the United States annually, which is nearly double

the value of just over a decade ago before NAFTA and WTO took

effect in the mid-1990s. In 2005 nearly 15 percent of all U.S. food

consumption was imported. Despite the increase in imports FDA

estimates that in 2007 it will conduct border inspections on only a

paltry 0.6 percent of the food it regulates down from 8 percent just

a decade ago. USDA, while not a model of perfection, has at least

managed to inspect 11 percent of the beef, poultry, and other products it regulates in 2007. Chairman Dingell’s bill incorporates several crucial and common sense solutions to the present food safety

crisis. The bill would provide FDA with the additional resources

and authority it needs to certify and inspect food safety procedures

of foreign countries and facilities as well as the products entering

our ports.

It institutes country of origin labeling, something that 92 percent

of Americans support within 6 months of the bill’s enactment into

law. I am particularly pleased that it gives the FDA the authority

to issue mandatory product recalls and halt imported products

until a foreign entity has resolved the problem. These measures

will help prevent future food safety outbreaks and help restore the

shaken consumer confidence. While I strongly support the intent of

this bill and the vast majority of the solutions it proposes there are

some provisions that I believe need more discussion. Sections 3 and

4 require the Health and Human Services Secretary to assess and

collect user fees to fund inspections, lab testing, and research on

testing techniques for food and drug imports.

13

I fully support the emphasis on proactive safety inspections and

testing. However, if we are forced to rely on user fees, I am concerned that we make it clear that those companies that pay those

fees do not have undue influence on agency policies and practices.

The subcommittee has worked to address this problem, and the

FDA’s drug approval process, and I hope, in fact, I am sure, that

we can prevent similar problems here.

I am also concerned with provisions in section 5 that would restrict the number of eligible ports from the current number of more

than 300 to just 13, excluding some of our Nation’s busiest ports

such as Chicago, which I represent part of, and Houston and Boston. While the Secretary has the authority to waive this requirement, I believe we need to create a food safety system that enables

busy ports like Chicago to continue receiving food imports. I am interested in hearing more about the consequences of the drastic reduction on areas with no direct port access as well as how we can

insure transparent and accountable decision-making process with

regard to this waiver authority.

There is much work to be done to restore consumer confidence

in our Nation’s food supply, the kind of food safety framework that

will make the high profile cases of this year a thing of the past.

And I look forward to hearing from all of the witnesses. With that,

I yield back. Thank you, Mr. Chairman.

Mr. PALLONE. Thank you. I recognize the gentlewoman from New

Mexico, Mrs. Wilson.

OPENING STATEMENT OF HON. HEATHER WILSON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW MEXICO

Mrs. WILSON. Thank you, Mr. Chairman. The events over the

last year really highlighted for Americans and raised awareness of

just how vulnerable our food supply is, and it is not just food. It

is food, medicine, consumer products, even our water and the

things that we drink are vulnerable to contamination. Not only accidental contamination or what might have been unintentional or

the result of bad sanitary practices in companies that are poorly

regulated overseas but the potential for intentional contamination

of our food supply. It is a serious issue, and we have a duty in this

Congress to make sure that imported food and goods are safe from

contamination whether accidental or intentional, and make sure

that any problem with the food supply is detected so that we prevent public health problems before they occur.

My colleagues on this committee have recounted the problems

that we have had with China, but it is not a single country issue.

Globalization creates a vulnerability here in the United States and

starting at our border is not where we need to be. I believe very

strongly that we need an integrated system for food safety and security with layers of protection. I look forward to the testimony

here today, and looking at the legislation in front of us to make

sure that we are providing that integrated system for food safety

and security rather than setting up a system where there are single points of potential failure after which public health problems

can occur. We have a food safety laboratory in the State of New

Mexico at New Mexico State University, and I am a strong supVerDate 11-SEP-98 10:23 Oct 08, 2008 Jkt 000000 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 Q:\DOCS\110-68 SCOM1 PsN: SCOM1
14

porter of what they do, not only in food technology and evaluation

but also in a counterterrorism technologies laboratory where they

develop tools in order to make sure that our food supply is safe.

I look forward to hearing the testimony of the witnesses today,

and look forward to working with my colleagues on the committee

to make sure we strengthen our ability to prevent the intentional

or unintentional contamination of America’s food supply. Thank

you, Mr. Chairman.

Mr. PALLONE. Thank you. The gentlewoman from Oregon, Ms.

Hooley.

OPENING STATEMENT OF HON. DARLENE HOOLEY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OREGON

Ms. HOOLEY. Thank you, Mr. Chairman. I first of all want to

thank you and Chairman Dingell for your leadership on food safety

issues. I know this is an issue that the chairman cares about very

deeply, and I am glad we are taking up this legislation. I too want

to make sure that we can assure the American public that our

foods and other products are safe. Recent incidents involving adulterated products from China have again brought to the forefront

the critical importance of food safety. Although the vast majority

of food entering the United States is safe, now is the time to act

to strengthen our system to limit harmful food products from entering the country.

Monitoring the safety of imported foods is a tremendous challenge for FDA. Over 825,000 different importers brought shipments

into the United States last year. Those importers bring products to

approximately 326 ports. The value of U.S. imports has nearly doubled since fiscal year 2000. The FDA’s resources are stretched too

thin to meet the growing demand of its inspectors. Fortunately, I

think almost universal agreement exists on that point, that the

FDA needs more resources to its job properly. I also believe it is

vital to insure that our food is not only safe but that we work to

permit the free flow of goods into the United States. The safe and

secure food importation program is an important step to help expedite the importation of food from those parties willing to abide by

rigorous food safety guidelines established by the FDA.

This program provides the appropriate incentives to importers by

rewarding those who take extra steps to ensure safety. I also look

forward to hearing from our witnesses today regarding the provisions restricting port of entry to only 13 ports. I believe that steps

can be taken to help ensure we are able to better inspect imported

foods, but I believe we can do so in a less burdensome manner. I

have a significant food processing industry in the district I represent. I am concerned about the impact restrictions on port of

entry may have on consumers and the food processing industry by

making them wait longer to get fresh products.

I also fear that having only 13 ports of entry will raise production costs and put food processors in the fifth district at a competitive disadvantage to those cities with an FDA lab, without materially improving safety. I believe we can find other alternatives that

ensure safety and still meet the needs of our consumers and producers. As the author of the country of origin food labeling, COOL

provisions for produce passed in the 2002 farm bill, I believe COOL

15

can be an important resource for consumers. It is also critical to

ensure such requirements can be practically administered.

COOL with processed foods present challenges that are not

present with fresh produce or meat. I hope our witnesses will share

their thoughts on the impact of COOL as it relates to processed

foods in particular, and practical approaches to implementing such

requirements. I look forward to working with Chairman Pallone

and Chairman Dingell as we move forward with this very important legislative process on H.R. 3610. Thank you, Mr. Chairman,

and I yield back the remainder of my time.

Mr. PALLONE. Thank you. Mr. Buyer from Indiana.

OPENING STATEMENT OF HON. STEVE BUYER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF INDIANA

Mr. BUYER. Thank you very much. And to Chairman Dingell, I

want to thank you for giving me the opportunity to work with you

and your staff. As I traveled the country and went to our mail facilities and to our private carriers, I learned that your staff, and,

Mr. Pallone, your staff had also been there. In 3 minutes I can’t

even cover the vast—my summer, what I did on my summer vacation. But what I would like to do is say I believe that our ideal is

to insure the highest standards of health care for Americans. We

do that with regard to health care. The demands for high standards are placed upon our health providers, our pharmaceuticals,

our medical devices, our medical technologies, our medical research.

But with regard to drugs and medical devices, how do we protect

our system? We look to the FDA as the gold standard but then

when you think about this, we just passed PDUFA, and PDUFA,

and all the dollars, the hard work that we put into the reauthorization I believe is useless if we cannot protect the system and close

it off from the harmful products and bad actors who are these

counterfeit criminal syndicates that are preying upon Americans.

We must safeguard citizens from unknown dangers using the information we have on the threats to America’s health. We know that

there are multi-million dollar worldwide criminal enterprises doing

business growing at unfathomable rates to manufacture counterfeit

drugs. 20,000 to 30,000 packages enter each of our 12 international

mail facilities every day, and that is not counting the private facilities.

Less than 1 percent of these packages are screened by FDA. That

means 99 percent of them are sent to individuals across the Nation

without ever being inspected, much of which, in excess of 70 percent perhaps, are unapproved drugs. Now when you look about how

many times we have touched this law, we touched it back in 1938.

Chairman Dingell and his initiatives in 1988 touched this issue. So

if you will indulge us, Mr. Chairman, I hopefully will have a discussion draft, it has been at the leg counsel here for the last 2

weeks, by mid next week. What we propose to do is give FDA the

authority to destroy counterfeit drugs coming into our postal system and the private carrier system, give FDA the authority to seek

the disgorgement of counterfeiters profits.

We want to increase minimal Federal standards to States to use

in licensing prescription drug wholesalers. We want to implement

16

a Federal pedigree standard so we can effectively trace prescription

drug products throughout their chain of custody. This further secures our domestic supply chain from bad actors. We want to establish the electronic pedigree standards to modernize our system and

prevent fraud of paper pedigrees. We want to work toward a goal

of serialization of all products, prescription drugs, so we can further protect them from the counterfeiters.

We will also enlist State’s help in tracking counterfeiters down

by providing them with some financial incentives to help the Federal Government. We also will insure that any repackaged drug

products are held to the same high standard as the original drug

products, insure also that drug wholesalers engaged in criminal

counterfeiting activities are debarred and prohibited from future

work with the FDA. We want to create a study to investigate the

international domestic threats to the Nation’s drug supply. So, Mr.

Chairman, I want to continue to work with you. We will get this

discussion draft hopefully back from leg counsel, get it to your

staff, and we all will get this and work together. And I appreciate,

Chairman Pallone, working with you and Chairman Dingell, along

with Mr. Deal. I appreciate your leadership along with Mr. Barton

and his staff. Thank you.

Mr. PALLONE. Thank you. The gentleman from Utah.

OPENING STATEMENT OF HON. JIM MATHESON, A

REPRESENTATIVE IN CONGRESS FROM THE STATE OF UTAH

Mr. MATHESON. Thank you, Mr. Chairman. Clearly, this is an

issue of great concern. We want to ensure the integrity of our food

supply. And I think it is a complicated issue, and to resolve it, I

think that a good bipartisan effort is the best way to go about it.

I think this committee can really step up to the plate in that regard. I think we need to take a look at this in the context of the

global market place, and we need to look at the whole chain, supply chain, if you will. I would suggest that you could connect this

issue with the toy safety discussion that is also going on in another

subcommittee. In that case, we are looking more at the manufacturing end. In this case, I am hearing a lot about the domestic end

of the equation where we inspect food when it gets to our country.

I would suggest we need more of a blended approach, and we ought

to be looking at the supply chain in general about where we can

make the most rational and efficient efforts to ensure the integrity

of the food supply.

And this discussion seems to be a lot about imported food but we

also of course should not forget our domestic production as well and

make sure that food produced domestically can be assumed to be

safe when it reaches a family dinner table. There are two issues

I just wanted to raise briefly in this opening statement of concern

to me that I think we need to keep in mind as we look at this

broad issue of food safety. The first has to do with the impact on

our relationships with our trading partners. I am concerned that

this effort at addressing food safety concerns could invite a more

protectionist agenda than I think would be appropriate or good for

this country, and I think as we look at this issue we ought to make

sure that does not happen. I think we should recognize that

there—and we should ask questions about how the existing WTO

17

agreement that talks about the application of sanitary and by sanitary measures how that does work and if there are issues that we

ought to think about to make it work better then I think we should

recognize we are in that global market place, and we should try to

maintain the integrity of that global market place.

The second issue I want to raise that we ought to be looking at

has to do with comments that FDA provided during the Agriculture

Appropriations Subcommittee hearing on food safety. FDA issued

some concerns about imported aquaculture products, seafood products, and the issue of antibiotic resistance, based on antibiotics

being used with the seafood product. I think that is a very important issue when it comes to the issue of the development of antibiotic resistant diseases. I plan on introducing legislation this week

with my colleague, Representative Ferguson, which seeks to address this issue about how this country can better position itself for

trying to develop new antibiotics that can take on these organisms

that are currently resistant to current antibiotics, and I think that

is an emerging public health concern and it turns out even in this

food safety discussion that public health concern is now merged as

well, so those are just two quick issues that I think we also ought

to keep in mind as we look at this broad food safety issue. With

that, I will yield back, Mr. Chairman.

Mr. GREEN [presiding]. Mrs. Blackburn.

OPENING STATEMENT OF HON. MARSHA BLACKBURN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TENNESSEE

Mrs. BLACKBURN. Thank you, Mr. Chairman. I would like to

thank the chairman for calling the hearing to discuss all of our

issues with FDA oversight and the food and drug imports into the

country. This is indeed a critical public safety issue as well as a

national security concern, and when we hear the reports as we

have heard in recent days about the episodes around the country,

we do become keenly aware of the potential for terrorists to exploit

these weaknesses. The combined efforts of the food industry and

the regulatory agencies are often credited with making the U.S.

food supply the safest in the world. And we know that we have at

least 15 different agencies administering over 30 different rules related to food safety.

And in spite of this widespread approach, we have a tremendous

track record of success and those involved in that process are to be

commended. We know that the FDA is responsible for insuring that

all domestic and imported food products except most meats and

poultry are safe, nutritious, wholesome, and accurately labeled. Although all imported food products must meet the same safety

standards as domestically produced foods, international trade rules

permit a foreign country to apply its own differing regulatory authorities and institutional systems in meeting such standards

under an internationally recognized concept known as equivalence.

As Americans consume increasing amounts of imported food and

drink and as U.S. producers are demanding more overseas ingredients, we see an increase in this volume. Globalization is playing a

part. It has tripled our imports in the past decade. I was impressed

by the staff that the FDA received more than 10 million imported

18

food entries in 2006 and compared that with less than 2.8 million

entries in 1996. That is an indication of the volume that is before

the agency. Just over 1 percent of these shipments were physically

examined in fiscal year 2006 compared with 1.7 percent in fiscal

year 1996. According to the USDA, the United States is expected

to import a record 70 billion in agricultural products this year.

The legislation before us today causes some concerns to me with

the user fees, the trade implications, new labeling, the negative impact on small business with these user fees and those being passed

on to the consumer, and of course the bureaucracy that is there.

I am also concerned about the restriction of ports of entry and what

that would do to food plants that are not in close proximity to a

metropolitan area. But, Mr. Chairman, I look forward to the discussion, and I thank the committee for the efforts spent on the issue.

I yield back.

Mr. GREEN. Mr. Waxman.

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA

Mr. WAXMAN. Thank you very much, Mr. Chairman. There

doesn’t seem to be a day that doesn’t go by when we pick up the

morning newspaper and we hear about the dangers of some imported product that turns out to be unsafe. We have been hearing

a lot about toys. We have been hearing about lead. And we have

been hearing particularly alarming information about food that

comes into our country from foreign lands that are not safe. So we

need to do something about this issue, and I want to point out that

I think this Food and Drug Import Safety Act of 2007 makes some

critical steps forward getting FDA what it needs to protect the

American public.

And I want to applaud Chairman Dingell for the good work he

has done on this legislation. The bill, as we look at this bill at this

hearing today, makes important improvements to food and drug

import safety, but its most dramatic and in some ways most critical

changes would affect food imports because the bill deals not just

with food imports but other imports within the jurisdiction of the

FDA. If we look at FDA, FDA’s experience with food importation,

we want them to focus on securing the entire supply chain, not just

stopping unsafe foods at the border. The bill would give the FDA

clear authority to require a recall of unsafe foods. The bill provides

for strong civil monetary penalties to hold bad actors accountable,

and it has a strong food regulatory system. All of this represents

an important step forward.

I was pleased to listen to the very thoughtful statement of our

colleague, Congressman Matheson of Utah, where he pointed out

we need to look at the whole chain of the food supply from the

original source. And so this legislation doesn’t just deal with the

problem at the border, it requires that within 5 years FDA would

have to certify that all food importers, either individual facilities or

countries, have a system in place to insure the safety of the foods

that they export to the United States.

I think this makes a lot of sense. If they don’t have a system in

place then FDA would be required to go and examine the facility

19

itself. It may be impossible for FDA to review and certify the overwhelming volume of facilities in countries seeking to enter the U.S.

market. If that is so, we are all going to lose so I hope the FDA

will provide some guidance on what exactly it needs to do this important job. I want to raise an issue of concern about the user fee.

I think we rely too much on user fee, and I also want to point out

as Mr. Matheson did, we have a domestic food supply question as

well, and I know that Chairman Pallone has introduced a bill that

I think is highly commendable on this subject.

But let us go into this issue with the expectations that we are

going to get the job done, but let us don’t fool ourselves. We don’t

provide the authorities, and if we don’t provide the resources FDA

will do the best it can but it will fall short of what needs to be

done. And I hope we don’t have another hearing in another year

that the problems have not got resolved.

Mr. GREEN [presiding]. Mr. Pitts.

Mr. PITTS. I would like to thank the chairman for holding this

vital hearing, this hearing on a very vital issue, food and drug safety for the American people. And I would like to thank the gentleman from Indiana, Mr. Buyer, for his leadership on this issue,

and would like to yield the balance of my time to him.

Mr. BUYER. I thank the gentleman. I would like to say to Chairman Dingell, back in 1988 when you touched this issue, we didn’t

have the Internet, and the Internet is presenting great challenges

to the protection of our system today, so when people believe they

can get on the Internet and they pull up a Canadian Web site, and

these Web sites can go up one day and down the next. For example,

I don’t want to give great compliments to FDA, American people

could go to a Canadian Internet pharmacy, which was

www.rxnorth.com, and they were led to believe the products were

coming directly from London and that they were safe and it is all

legal and it is approved. And what is happening today is that our

Government by way of our policy are being the enablers of these

very complex criminal enterprises. So why I say enablers is the

FDA believes through their interpretation of the law that they do

not have the authority to destroy these drugs when they see them.

Now if it’s a schedule 1 or 2, they do a seizure and they can destroy, but they can send it to a lab and they can destroy it. Many

of them were never sent to a lab. And I felt that the absolute frustration by many of the pharmacists at our international mail facilities working for the FDA that they will place their stamps, FDA

stamps, and things on these drugs, and they have a return to sender policy. Now you think about that. You got a flim-flam operation

here, a snake oil salesman selling bad goods to people, and they are

taking their money, and the Government is giving the product back

to the flim-flam man to go somewhere else to scam people. That is

what is happening here.

And the FDA, they want the ability to destroy these drugs, and

we need to give it to them. And what I am referring to here is with

regard to these criminal enterprises the FDA last summer, they did

an FDA bust in cooperation with British officials at Heathrow Airport. Now these drugs were manufactured in China. They were

shipped transient through Hong Kong to the United Arab Emirates. They went to Heathrow. From Heathrow they then go to the

20

Bahamas to a fulfillment center where that Canadian pharmacy,

rxnorth.com, would then contact the Bahamas, and say, okay, I

have an order that has been placed from somewhere in the United

States. They contact the Bahamas. The Bahamas then fills that

order, send it to Heathrow. From Heathrow then it comes into the

United States.

Now the challenge is to actually take down these syndicates because they are moving transit through so many different countries.

And to give you an example, this is a drug, Fosamax. This is to improve bone density for those diagnosed with osteoporosis. Now

when you look at these packages, you look at them here, which one

is the counterfeit and which one is real? Now the only way that you

can tell is you got to go to the manufacturer themselves. And you

look here and the yellow is just a little bit lighter if you look really

close. That one is real. When you turn to the inside on both of

them, they both have the blister packs. All the way to instructions

it looks real. It is not. It is fake.

When you look at the packages and you go to the bar coding, you

can bar code the counterfeit and bar code the real, and they both

bar code correctly. You go to the lot numbers. The lot numbers are

both correct. You go to the expiration dates. They are both correct.

The sophistication of these criminal syndicates is absolutely extraordinary, and we have to get on our heels and on our toes and

give FDA the authority to destroy these and protect our country.

And that is why I want to work with everyone and anyone who

wants to help protect our system from these bad actors who prey

on the most vulnerable in our society. I yield back.

Mr. GREEN. Thank you. And we have about 6 minutes until our

vote. Representative Allen for opening statement.

OPENING STATEMENT OF HON. TOM ALLEN, A

REPRESENTATIVE IN CONGRESS FROM THE STATE OF MAINE

Mr. ALLEN. Thank you very much, Mr. Chairman. Thank you for

convening this hearing to address the important issue of food and

drug import safety. Like many Americans, I have become increasingly concerned about the safety of our food supply. Food imports

have more than doubled over the past decade, and the Food and

Drug Administration currently lacks the resources and the authority to protect Americans from tainted products. For example, the

FDA first issued an alert on unsafe seafood from China as early

as 2001, but we all know from watching the news in June 2007

contaminant levels were still unacceptably high for many imports,

including catfish and shrimp.

The Food and Drug Import Safety Act of 2007 takes several important steps toward increasing the safety of our food supply. I

want to highlight a few of the provisions I think are particularly

important. First, the legislation would require that all imported

food intended for consumption be subject to the same safety standards already applied to domestically produced food. Most Americans would be appalled to realize that today this is not the case

for many food products. Under the bill, the FDA must certify that

foreign countries or facilities that import food into the United

States are enforcing food safety standards as good or better than

the standards in place here already. I applaud this proactive apVerDate 11-SEP-98 10:23 Oct 08, 2008 Jkt 000000 PO 00000 Frm 00026 Fmt 6633 Sfmt 6633 Q:\DOCS\110-68 SCOM1 PsN: SCOM1
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proach, which has the potential to identify and address problems

in the food supply before the food ever reaches our borders.

Second, this legislation would institute mandatory country of

original labeling for all foods, drugs, and medical devices regulated

under the FDA. All consumers have a right to know where their

food comes from. I am particularly pleased that for the first time

the rule will apply to processed seafood. These foods might be at

greater risk of contamination because of extended processing but

until now have been exempt from the country of origin labeling requirement. Finally, the legislation would help level the playing

field for American producers. For example, fishermen in my home

State of Maine are renowned for safe, sustainable, and high quality

seafood products, yet these hard-working Americans often encounter the economic hardship because the seafood market is flooded

with cheap, lower quality imports that have not had to meet the

same rigorous safety standards applied to home grown or caught

products.

One possible problem I just wanted to highlight, the bill would

reduce the number of ports open to food imports dramatically, and

this is legislation that I think really needs some revision. I do

thank the chairman again for holding this hearing on such an important topic and look forward to working with my colleagues to

advance this important legislation. Mr. Chairman, I yield back.

Mr. GREEN. Thank you. Since we have votes on the floor the subcommittee will stand in recess. We finished the opening statements

so we will get to your testimony as soon as we return hopefully in

about 20 minutes.

[Recess]

Mr. GREEN. The subcommittee is going to come back in order,

and again I appreciate everyone’s patience this morning for our

vote schedule. We may have another one in about an hour on the

continuing resolution, so we will try and get through our statements. Again, I know your time is valuable like everyone else.

I would like to recognize our first panel. Dr. Lutter is Deputy

Commissioner for Policy, Food and Drug Administration, and he is

accompanied by Dr. Acheson, and also Dr. Solomon. So, again, proceed with your testimony, and thank you for being here.

STATEMENT OF RANDALL L. LUTTER, DEPUTY COMMISSIONER, POLICY, FOOD AND DRUG ADMINISTRATION, ROCKVILLE, MD; ACCOMPANIED BY: DAVID ACHESON, M.D., ASSISTANT COMMISSIONER, FOOD PROTECTION, U.S. FOOD

AND DRUG ADMINISTRATION, AND STEVEN M. SOLOMON,

D.V.M., DEPUTY DIRECTOR, OFFICE OF REGIONAL OPERATIONS, OFFICE OF REGULATORY AFFAIRS, U.S. FOOD AND

DRUG ADMINISTRATION

Mr. LUTTER. Good morning. Thank you, Mr. Chairman, and

members of the subcommittee. I am Dr. Randall Lutter, Deputy

Commissioner for Policy at the Food and Drug Administration in

the U.S. Department of Health and Human Services. I am very

pleased to be here today with my colleagues, Dr. David Acheson,

Assistant Commissioner for Food Protection, and Dr. Steven Solomon, Deputy Director of the Office of Regional Operations in FDA’s

Office of Regulatory Affairs.

22

Thank you for the opportunity to discuss the important issues relating to the safety of imported FDA regulated products. I would

also like to take this occasion to thank the committee for all its recent hard work in passing the Food and Drug Administration

Amendments Act of 2007. The programs that this legislation reauthorizes are vitally important to the agency and its continued ability to protect and promote the public health. We look forward to

working to implement this legislation.

I assure you that FDA is committed to ensuring that America’s

supply of food, drugs and other products that we regulate continues

to be as safe as possible. In recent years, the agency has done a

great deal to detect unintentional and deliberate contamination in

imported products. However, increasing globalization and trends

towards production of these products abroad pose significant challenges. Recent incidents involving unsafe imported products underscore the need to renew our focus on integrated product safety

strategies.

Food has recently been in the news. Dr. David Acheson, Assistant Commissioner for Food Protection, provides leadership on strategic and substantive food safety on food defense matters for both

imported and domestic foods. He is developing a strategy to enhance our food safety and food defense systems that will address

changes in the global food distribution system, identify the most

critical needs, and serve as a framework to help us address the

challenges we face.

Our goal is to ensure a comprehensive and robust food safety and

food defense program that focuses first on prevention, second on

risk-based interventions to ensure and verify our preventive controls are effective, third, rapid responses when contaminated food

or feed is detected or when there is harm to humans or animals.

The strategy will provide a risk-based farm to table approach that

coordinates food safety and food defense efforts on both imported

and domestic products and focuses on prevention, intervention, and

response.

The President is engaged directly in the effort to make sure we

are doing everything we can to protect Americans from unsafe imports. On July 18 he issued an Executive order creating a Cabinet

level working group on import safety to promote the safety of imported products. It includes representatives from 12 Federal departments and agencies including FDA and the U.S. Department

of Agriculture, and is reviewing the procedures, regulations, and

practices for ensuring that imported foods, drugs, and other consumer products are safe.

Secretary of Health and Human Services Michael O. Leavitt

chairs this working group, and FDA plays a key role in the group’s

activities. Secretary Leavitt and FDA Commissioner von

Eschenbach have traveled extensively throughout the United

States during the past few months visiting ports of entry and reviewing import operations in the field. The insights that they

gained during their review of field operations helped shape the

strategic framework that was released by the working group on

September 10. That report ‘‘Protecting American Consumers Every

Step of the Way: A Strategic Framework for Continual Improvement in Import Safety,’’ outlines an approach that, like the food

23

protection strategy, is based on the organizing principles of prevention, intervention, and response.

The Strategic Framework recognizes that we must find new ways

to protect American consumers and continually improve the safety

of imports. It identifies the need to shift from the current model

that relies on snapshots at the border to interdict unsafe products.

The new prevention focused approach would identify and target

those steps in the import life cycle where the risks of unsafe products are greatest and verifying the safety of products at those important phases. Such a risk-based prevention focus model will help

ensure that much more information about safety and risk is available to border inspectors and that safety is built into products before they reach our borders.

Supporting the working group model are six building blocks, one

is to advance a common vision, two, increase accountability and enforcement, three, focus on risks over the life cycle of an imported

product, four, build interoperable systems among Federal agencies,

five, foster a culture of collaboration, and, six, promote technological innovation and new science. The interagency working group

on import safety has an aggressive schedule for public comment

and follow up. Next Monday, the working group will hold a public

meeting to identify actions the public and private sectors can take

to promote the safety of imported products.

By mid-November the working group will present an action plan

to the President. The plan will reflect the public comments and recommend specific actions that the Federal Government and stakeholders can take to enhance import safety at all levels. The action

plan will be based on the Strategic Framework that is already public and will lay out a road map for short and long-term recommendations.

In addition to these efforts, FDA has recently initiated a series

of meetings with officials in China to negotiate draft memorandums of agreement aimed at creating a framework to help assure

the safety, quality, and effectiveness of products exported from

China to the United States. The agreements also aim to increase

cooperation and information sharing between the regulatory bodies

of the two nations with the goal of strengthening China’s regulatory process.

Furthermore, FDA is also looking into ways that it can increase

information sharing with other governments that will assist FDA

in better allocating its inspection resources. Recently, FDA has

completed a pilot project with Swissmedic to facilitate such information sharing.

I would like to comment briefly on H.R. 3610, the Food and Drug

Import Safety Act of 2007, which was introduced by Chairman Dingell on September 20. It contains a variety of provisions that relate

to the safety of imported food and drugs in addition to other matters.

The administration has not yet taken a position; however, we

would be pleased to provide technical assistance to committee and

subcommittee staff. We share Chairman Dingell’s interest in enhancing the safety of imported product, and look forward to continuing to work with him and his staff and others on the subVerDate 11-SEP-98 10:23 Oct 08, 2008 Jkt 000000 PO 00000 Frm 00029 Fmt 6633 Sfmt 6633 Q:\DOCS\110-68 SCOM1 PsN: SCOM1
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committee and on the committee. We also look forward to working

with you on the action plan that we discussed above.

Ensuring the safety of imported products is a significant task,

and I want to assure you that FDA is diligently working to efficiently and effectively use the resources and authorities we have

been provided by Congress to help protect American consumers.

Thank you for the opportunity to discuss FDA’s activities to enhance the safety of imported products. We would be happy to answer any questions.

[The prepared statement of Mr. Lutter follows:]

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34

35

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Mr. GREEN. Thank you, Doctor, and I know you heard in my

opening statement about my concerns with the bill’s requirement

that food imports are only allowed to arrive through ports of entry

that have an FDA lab located in the metropolitan areas. Given the

list of the current FDA labs it seems fair to say that there is no

FDA lab presence in not only the No. 1 port that I represent but

also in, in fact, the 10 largest seaports. There is no FDA lab presence in Houston, Charleston, Hampton Roads, Savannah or Miami,

and also coming from Texas we have the largest land port in the

Port of Laredo. There seems to be a disconnect that suggests that

the locations for FDA labs determine the basis for the need for

their presence in heavy import areas. Can you explain the decision

making for determining the location of the FDA labs? Was there

an intent to put them near a port of entry?

Mr. LUTTER. I am unaware of the history of how the labs actually

ended up where they are currently. As you may know, we have developed a plan to consolidate labs. That is temporarily suspended,

and we will examine that when the time comes in the future.

Maybe I can ask Dr. Solomon from the Office of Regulatory Affairs

if he knows about the history of how labs got located where they

are.

Dr. SOLOMON. I don’t think there is any relationship necessary

to ports of entry. I think there were locations throughout the

United States to make sure that the domestic industry was primarily covered, and that was the genesis of initial thinking on the

establishment of labs. Of course, that has been over many years.

Mr. GREEN. Do you think it would be reasonable that in that provision in the bill that if the labs were more geographically available

that that requirement that it only be in a port that has an FDA

lab, you could have inspectors there without necessarily having the

lab. I know you could send samples to anywhere literally very

quickly. I assume that is what happens now with FDA even though

the lab may not be there.

Dr. SOLOMON. That is correct. With today’s ability to ship products, samples are collected at many different ports of entry and

they are sent to laboratories. There is a lot of benefit of having

large volume laboratories because that creates good throughput

and quality assurances in those laboratories. That is currently

what we do.

Mr. GREEN. And you could even have mobile laboratories, I assume, if you had a heavy port. For example, if you didn’t have a

lab in Laredo, TX, and if you stand there and watch those trucks

come across from Mexico that are bringing all sorts of food products

then you could easily have a mobile lab there.

Dr. SOLOMON. We actually do have two mobile labs. One is a

microbiology mobile lab, one is a chemistry lab, and we do take

those and rotate those around to different ports of entry.

Mr. GREEN. OK. FDA actually has inspectors at 90 ports of entry

and you do inspections there but you really only have the 13 labs,

and so it would be almost unworkable to have it only at a location

where there is a lab.

Dr. SOLOMON. The numbers you said are correct.

Mr. GREEN. Dr. Lutter, and other FDA panel, the other question

I had was the bill allows the Secretary to waive the restriction of

37

food imports and ports of entry located near an FDA lab. To do so,

however, the Secretary must certify that the import would not increase the probability of adverse health effects. I can only imagine

there would be an influx of waiver requests to the FDA based on

the provision and the fact that the current FDA lab structure does

not cover those ports with heavy traffic. From the FDA’s perspective, are there any concerns about the workability of the provisions? Does the FDA currently have the resources to meet the potential high demand for these waivers much less the inspections?

Mr. LUTTER. We haven’t yet had an opportunity to examine that

particular provision so I think at this point what we can say is

workability of new requirements and legislation is always a concern to us, and we will have to get back to you on the specifics regarding that one point. I would like to reiterate what Dr. Solomon

pointed out a moment ago with respect to labs. What we are really

concerned with is the capacity overall of facilities within FDA to do

laboratory analysis, and the location is something that is relatively

secondary from our perspective. What we would really like is the

opportunity to do throughput of laboratory analysis everywhere,

and that is the overarching concern that we have rather than the

particular location of the facilities.

Mr. GREEN. Well, if we are going to expand your responsibility,

we would hope you would both have the staff and the resources to

be able to do that.

Mr. LUTTER. Absolutely.

Mr. GREEN. Thank you. Our ranking member, Congressman

Deal.

Mr. DEAL. Thank you. Dr. Lutter, your written testimony does

not appear to actually cover the legislation which is the subject of

this hearing. When will the administration be in a position to send

us a written review of the actual legislation?

Mr. LUTTER. We are working on it now. We look forward to offering technical assistance absolutely as soon as possible. It is probably a matter of some weeks. As I mentioned earlier in the oral,

we are also developing a food protection strategy, and the President

will receive a report in mid November on import safety, and I think

all of that will provide information that may be of some value to

the committee and to the subcommittee.

Mr. DEAL. Could you tell us what agencies might be involved in

legislation such as this, and I understand there is an interagency

task force on imports, and would everyone in that interagency work

group potentially be involved in this kind of legislation?

Mr. LUTTER. Well, the interagency working group on import safety involves actually a very large number of agencies. Maybe I could

speak—I will let David talk to the actual list. It does include USDA

and USTR, and also the Department of Commerce and maybe you

can add more to that list.

Dr. ACHESON. Yes, there are at least a dozen departments and

agencies that are a part of that that cover a whole gamut of imports so it is related to the trade issues, the customs and border

protection issues, as well as the product safety issues.

Mr. LUTTER. And so, for example, it also includes a consumer

product safety commission which has regulatory authority over toys

which have been mentioned earlier in this session.

38

Mr. DEAL. The bill before us I think has user fees that seem to

apply by line item, and can you explain to us what a line item is

and how would that impact facilities such as restaurants that import various items of food, maybe an ethnic restaurant, for example?

Dr. SOLOMON. A line item is an entry, a shipment that comes in

of one commodity that is all covered under one customs tariff code,

so if there are products of different commodities that come in the

shipment, they would all come as a different line entry as they are

submitted to the FDA.

Mr. DEAL. Would that mean then that an ethnic restaurant who

uses a lot of different line item products would be paying fees on

each of those line item products?

Dr. SOLOMON. Each different product that would be entered

would come under a different line entry.

Mr. DEAL. Does that have the potential of being adversely punitive to small restaurants as opposed to maybe larger restaurants

who are buying in greater bulks?

Dr. SOLOMON. Well, certainly as currently structured each line

item that has a separate charge would have different fees associated with it.

Mr. DEAL. Dr. Lutter, in your talk, you talk about risk-based prevention focus model that would seem very different from a simple

border inspection. Would you describe the model in greater detail

for us?

Mr. LUTTER. Yes. Thank you. The vision that many people have

about inspections at the border is essentially an FDA inspector who

is being asked to physically examine a product to ensure whether

or not it meets certain standards for safety; and of course, this is

fundamentally an approach that is potentially very inefficient and

lacks promise of full safety and effectiveness in ensuring that the

products actually meet appropriate standards. Ideally a risk-based

model that we had envisioned would take into account a full set of

information over the life cycle of the product from when it was first

produced overseas including information about its storage, how it

was produced, what other regulatory agencies may have thought

about that product, including the ones in other countries such as

China or ones in third-party countries such as the United Kingdom

or Canada; and in that sense, the risk-based approach that we envision would look at a wide variety of physical characteristics of a

product, who produced it, whether it is vulnerable to certain types

of contamination, what we know about it over the life cycle, and

what we know about what other parties may have thought about

what risk may have been associated with that in determining how

we should view it at the border.

Mr. DEAL. Is there indication that other countries who are trading partners would cooperate in that kind of model?

Mr. LUTTER. I mentioned that we have completed a pilot project

with Swissmedic which is a medical products agency in Switzerland where we’ve done joint inspections with them to develop confidence and trust about the results of their inspections in their facilities and how they might compare with the result of our inspections. Yes, we’re making progress in that regard.

Mr. DEAL. Thank you.

39

Mr. GREEN. Congresswoman Eshoo?

Ms. ESHOO. Thank you, Mr. Chairman, and thank you to each of

the witnesses that are here today. I want to address my questions

to Dr. Lutter.

In your testimony you note that each imported food and drug

shipment is ‘‘screened’’ meaning that importer has provided prior

notice of the shipment and the notice has been reviewed to determine the shipment’s potential risk. Now, you reported that FDA reviews more than 33,000 of these notices each day, but the estimates are that only about 1 percent of the shipments are physically

examined; and I think there’s a big gap here between screened and

physically examined. It is also estimated that fewer than 500 FDA

inspectors are covering 300 to 400 points of entry. So with only 1

percent of food shipment being inspected, how is it that the FDA

can demonstrate that the current ‘‘screening’’ and inspection regime is adequate? I mean, do you really believe that this is adequate?

Mr. LUTTER. We think there is a lot of room for improvement. We

are working on a food protection strategy that will outline steps for

that. With respect to the current process, we acknowledge that the

physical inspection is conducted for a very small percent of the food

products coming in.

Ms. ESHOO. Has the FDA in the last year or 2 years come to the

Congress to say that we see that there are problems and we need

resources, a plan, here is the plan and these are the resources that

we need to address this? I mean, from a consumer standpoint, it

seems to be kind of one scandal after another.

Mr. LUTTER. We are developing very actively and very vigorously

a food protection strategy. We expect to be able to issue that before

mid-November.

Ms. ESHOO. When was it begun? Before, during, or after these

major reportings?

Mr. LUTTER. Dr. Acheson has had the lead developing it, and

maybe I should let him answer that question.

Ms. ESHOO. I have more questions. I didn’t do my opening statement so that I could ask as many questions as possible. Maybe we

can get to Dr. Acheson to finish this.

Do you believe that there should be more physical examinations

of imports?

Mr. LUTTER. I think there should be more physical examinations

of imports, but more importantly than that, I think that the vision

of how to ensure safety of imported products is not simply a question of increasing physical examinations at the border.

Ms. ESHOO. Then what else would you do?

Mr. LUTTER. It is important to build safety in over the lifecycle,

it is important to ensure that there are processes and procedures

abroad by pushing our borders out to ensure that the production

and the processing of foods overseas is conducted in a manner to

ensure that the products are safe and comply with FDA standards.

Ms. ESHOO. Do you think that equivalency standards provide a

more cost-effective way to accomplish this to increase food safety?

Mr. LUTTER. I am not sure exactly what you mean by equivalent

to.

40

Ms. ESHOO. Well, we have equivalency in the legislation that has

been introduced, and it is at the heart I think one of the drivers

of today’s hearing. Has the FDA reviewed the bill?

Mr. LUTTER. We have looked at the bill. We are not prepared

today as I mentioned to offer any specific comments——

Ms. ESHOO. OK. Fair enough. I would like to get to the OASIS

database. How old is it?

Mr. LUTTER. Dr. Solomon, do you want to take that?

Dr. SOLOMON. It is a database developed in the 1990s. It has

been around for some period of time.

Ms. ESHOO. So maybe about 20 years, do you think? It is the collection point for shipment notices and other related information,

and it is the tool that the FDA uses I am told to assess risk, is it

not?

Dr. SOLOMON. It is the point for entry and admissibility that the

data reviews. It is one of the places where we put risk factors into

it. That is correct.

Ms. ESHOO. So it is an important tool for the FDA?

Dr. SOLOMON. Yes, it is.

Ms. ESHOO. Now, one of our other witnesses today, Mr. Hubbard,

who is a former FDA Associate Commissioner notes in his testimony that the FDA’s information systems are ‘‘old and out of date.’’

In a July 2007 report on food imports from China, CRS that we pay

a lot of attention to, we rely on CRS for very clear information and

facts, they reported and found it difficult to get certain information

from FDA in part because of technical problems with OASIS. CRS

could actually not even determine the total number of food shipments, nor could it find a volume of products that were rejected at

the border.

So these are my questions. Do you think today that the OASIS

database is really a robust tool for examining the risk?

Dr. SOLOMON. We have been looking in replacing that system

with a new system called MARKS. This system integrates various

different databases as you are aware of.

Ms. ESHOO. When is that scheduled to be accomplished and how

much of your budget has been allocated to this change?

Dr. SOLOMON. We can get back to you with that information. I

don’t have that.

Ms. ESHOO. All right. Now, it is because it has technical problems that you just described what you did?

Dr. SOLOMON. As we described, it is a system developed many

years ago that has exceeded the capacity of entries, has exceeded——

Ms. ESHOO. When do you expect the system to be brought up to

date?

Dr. SOLOMON. I don’t have a date for that.

Ms. ESHOO. I think that the committee needs to know that because you are reliant on this system, and as you have said, the system is about 20 years old.

Dr. SOLOMON. We will be sure to supply those answers to you.

Ms. ESHOO. Good. Thank you very much. Either now or later in

writing, can you tell the subcommittee the volume of shipments

that have been refused entry into our country in the last 12

months?

41

Mr. LUTTER. We will have to provide that later to you.

Ms. ESHOO. And can you tell the subcommittee the overall number of food shipments that are coming into the country?

Dr. ACHESON. That is on the order of, for 2007, around about 9

million lines.

Ms. ESHOO. I think we need really accurate numbers on this, and

I am asking the last set of questions because they are questions

that CRS reported that were difficult to find. So I think it is important for the subcommittee to get it and information——

Mr. LUTTER. We would be happy to provide and answer that.

Just one word of caution about this. Historically, these numbers

have been growing very, very rapidly, more than 10 percent per

annum. So one question is simply what period, so we will give you

an estimate of that for the most recent period.

Ms. ESHOO. Well, let me just ask the chairman, the subcommittee chairman. What time frame? We want to be specific with the

FDA so that we get information that is going to really help us fill

out our case.

Mr. GREEN. Well, again, The chairman of the full committee and

the sponsor of the bill is here, and I would hope we would have it

as quickly as possible. I would hope we would have it as quickly

as possible because this bill——

Ms. ESHOO. He is saying the period of time, though.

Mr. LUTTER. The last 12 months.

Ms. ESHOO. Well, we will let you know.

Mr. GREEN. Whatever is reasonable, 30, 60 days at the maximum, probably.

Mr. LUTTER. Thank you.

Ms. ESHOO. No, not the period of time in which they have to respond but the period of time relative to the shipments. How broad

of a lens do we want, a snapshot do we want of this, an accurate

accounting for shipments? The committee staff will get back to you

on that, but we don’t want to spend 6 months trying to get the

right numbers. CRS doesn’t have it. We need it.

Mr. GREEN. Yes.

Ms. ESHOO. Thank you very much.

Mr. GREEN. Thank you. Mr. Murphy.

Mr. MURPHY. Thank you, Mr. Chairman. I just want to ask a

couple questions. In my opening statement I raised a number of

issues about the medications, the drugs that come in from other

countries such as China, and I wanted to see what things we can

expect from the FDA on this with regard to medications and dealing with counterfeit drugs. I know there was some reference to

that. For example, do we see any hope in stemming the tide for

this, are there any increase, decreases, do you see that some of the

other inspections will work on this, do we need to take other steps?

Any of you.

Mr. LUTTER. The problem of unapproved foreign drugs coming

into the United States and being available to U.S. consumers concerns us deeply. These products include not only counterfeits which

are made by people who have concern for profit but not the health

of the people who are consuming the drugs but also substandard

products which contain active ingredient in levels that are too low

or too high or occasionally not at all, as well as contaminants and

42

bad labeling. Currently we face a very large volume, even a flood

of such unapproved products at international mail facilities and

courier facilities. This is a problem that we have wrestled with.

Currently our strategy and overall stance has been one of public

communications. We communicate to the public the risks associated with these products and to dissuade them from using them by

being sure that they understand the risks.

Mr. MURPHY. Are you saying here that in this there are some

who are unscrupulous, involved with criminal activity; but are

other ones a matter of companies that do not properly inspect the

materials that are being manufactured over there when it comes to

dealing with medications or are these counterfeits coming from

them?

Mr. LUTTER. I think the products come from all different types

of sources as we have reported in the past. We noted, for example,

in intercepts of products coming in from four foreign countries,

India, Costa Rica, Israel, and Vanuatu in the Pacific. Nearly half

of the products coming in from those countries had documentation

indicating that they were in response to orders placed by Americans on Web sites that purported to be Canadian in some form.

And this is an inherently misleading practice. Who knows where

the products actually originated from? Almost half, again, of those

products had some documentation indicating that they came from

a set of countries all over the world. I think that set listed 26 countries including Eastern Europe. This is an international market

filled by people who are looking for a quick buck in trading finished

pharmaceutical products that have unknown origins, unknown

handling, and they are intrinsically unsafe—and consumers

shouldn’t be buying them. It is somewhat akin to an unregulated

market that in many other respects Americans and the U.S. Government have rejected as unsafe at least a century ago.

Mr. MURPHY. What do you see is the main way that consumers

are getting these drugs? Are they trying to order them from what

they consider legitimate sources?

Mr. LUTTER. They sit at their home computers I believe and log

onto the Web site that might be selling these and then place orders

over the web, and in that sense this is relatively easy for consumers; and because of that, it is one that we lack the resources at the

borders to stop, so our effort over all has been to try and persuade

people through public health announcements and advisories that

this is an unsafe practice that they should be very wary of.

Mr. MURPHY. All right. I just want to shift gears here and ask

one quick question on food issues about some of the risks you see

for food and what are our greatest concerns for health and how do

you overall see that some of the issues that have come by lately

with regard to food and manufacturing and contamination, et

cetera, that you would be able to deal with those?

Mr. LUTTER. If I may, I would like to ask our food expert, Dr.

Acheson, to answer that.

Dr. ACHESON. I would be happy to. I think the risks associated

with food are going to be dependent whether we are talking about

domestic food supply or imported food supply. Essentially what we

consider to be high risk are those foods where we see repeated

problems, where we have seen repeated outbreaks leading to seriVerDate 11-SEP-98 10:23 Oct 08, 2008 Jkt 000000 PO 00000 Frm 00048 Fmt 6633 Sfmt 6633 Q:\DOCS\110-68 SCOM1 PsN: SCOM1
43

ous adverse health consequences, hospitalizations. So obviously a

recent example would be leafy greens where we have seen repeated

problems over the last decade with leafy greens becoming contaminated. When you get to imported products, similar fresh produce

from various parts of the world as we have seen recently with imports from China or there can be other foods, too.

Mr. MURPHY. Well, I know I am out of time here, but I just think

it is so important for American consumers, who I think over the

last year have developed grave concerns about the safety of imported foods and even some domestic ones, too. It is so essential

that we take an aggressive role in trying to address this because

it is one that we cannot afford basically what is more death, more

sicknesses, and more problems with our healthcare system. I know

that one of the greatest things that has contributed to life expectancy in people in this country has been such things as clean water

and clean sewer systems, better sewer systems. Now, we are dealing with some other levels here that have to do with the medicines

and food that we have taken for granted for so long that were

healthy we recognize are tainted too; and we cannot take that for

granted, so we look towards all of you being extremely aggressive

in helping hunt down anybody who is bypassing any laws, domestic

or international. Thank you.

Mr. GREEN. Thank you, Mr. Murphy. The committee will stand

in recess. We have another series of votes, and it will be hopefully

about 20 minutes and we will be back.

[Recess.]

Mr. PALLONE [presiding].We will reconvene, and I believe the last

person who asked a question was Mr. Murphy; so I will move to

the chairman, Mr. Dingell.

Mr. DINGELL. I again commend you for this excellent hearing. It

is very important to the business of this committee and, I think,

the business of the country.

First I ask unanimous consent that I be permitted to include a

letter or other letters which we are going to be sending to the Food

and Drug Administration with regard to the subject matter of this

hearing today .

Mr. PALLONE. So ordered.

Mr. DINGELL. And I ask that the record be kept open for that

purpose.

Mr. PALLONE. So ordered.

Mr. DINGELL. To Mr. Lutter, staff from FDA has informed our

staff that between 2,000 and 3,000 pharmaceutical companies in

foreign countries are registered with the U.S. and are likely to ship

drug products to the United States that should be subject to surveillance inspections. Is that correct?

Mr. LUTTER. It is our understanding that is right, sir.

Mr. DINGELL. All right. Now, the next question is, I understand

that FDA has personnel and funds to undertake only 25 inspections due to resource restraints. Is that true?

Mr. LUTTER. I would like to refer that to my colleague, Dr. Solomon.

Mr. DINGELL. We were informed by your staff. Is that correct or

not?

44

Dr. SOLOMON. FDA conducts several hundred foreign inspections

of drug manufacturers.

Mr. DINGELL. We will give you a specific question on this, but I

want to know how many foreign inspections you make a year. We

were told that the number is 25. Please submit that for the record,

and I would like to have it for the last 10 years.

Now, the committee staff has accompanied inspectors to India.

The investigators have come back and told us that durations of

greater than 2 or 3 years make it difficult for there to be an accurate picture of what is taking place inside a typical overseas firm.

Isn’t 3 years a difficult situation to enable you to know what is taking place in a foreign firm? Yes or no. My time is limited. Please

respond.

Mr. LUTTER. It is very difficult to answer yes or no, sir. I think

longer periods are more problematic than shorter periods, yes.

Mr. DINGELL. Under the law you are supposed to investigate

American firms every 2 years, isn’t that correct?

Mr. LUTTER. Yes.

Mr. DINGELL. All right. But can you investigate these foreign

firms every 2 years?

Mr. LUTTER. We are not able to do so now, sir.

Mr. DINGELL. Now, I come down that 2,000 or 3,000 firms being

able to investigate 20 a year gives you 100 years to get the firms

all investigated, is that correct, just using the arithmetic?

Mr. LUTTER. The arithmetic is correct, sir.

Mr. DINGELL. The arithmetic is correct? I would like to know how

often you can get around to investigate these foreign firms which

are exporting drug products into the United States. Now, isn’t it

true that we have firms importing drug products to the United

States that have not been investigated in 8, 10, or more years or

never? Is that true?

Mr. LUTTER. That is correct.

Mr. DINGELL. So we are attempting to investigate and inspect domestic firms every 2 years in a well-regulated environment but we

are having terrible times providing the necessary investigation and

inspections of firms which do not have either a good regulatory law

or which do not have proper investigation of their products as they

are entering into the United States, is that a true statement?

Mr. LUTTER. That is correct, sir.

Mr. DINGELL. All right. You have mentioned in your testimony

that FDA currently reviews approximately 33,400 prior notice submissions per business date. How many FDA staff review these

prior notice submissions? Can you tell us now or do you wish to

submit that for the record?

Mr. LUTTER. Put it in the record, please.

Mr. DINGELL. All right. How many prior notice submissions are

received on weekends? Would you submit that for the record? How

many staff would review these submissions? You say that FDA performs routine surveillance inspections. Can you tell us the frequency of these routine surveillance inspections?

Mr. LUTTER. We will have to put that in the record, sir.

Mr. DINGELL. All right, if you please. Now, you stated in your

testimony that the FDA has the authority to commission other Federal officers and employees to conduct examinations and investigaVerDate 11-SEP-98 10:23 Oct 08, 2008 Jkt 000000 PO 00000 Frm 00050 Fmt 6633 Sfmt 6633 Q:\DOCS\110-68 SCOM1 PsN: SCOM1
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tions. You note that FDA has commissioned over 9,900 customs

and border patrol officers. When CBP officers are commissioned, do

they work solely on FDA examinations and investigations or do

they work on other matters?

Mr. LUTTER. It is our understanding they work on other matters

as well.

Mr. DINGELL. All right. How easy is it for CBP officers to be

pulled off their FDA duties?

Mr. LUTTER. We would have to get back to you on that, sir.

Mr. DINGELL. All right. Now, I am interested, how many ports

are approved for admission of foreign manufactured pharmaceuticals? Please submit that for the record.

Mr. LUTTER. We do not approve ports, sir, so any port of entry

would be permissible.

Mr. DINGELL. What percentages of your imports of pharmaceuticals are examined by FDA inspectors? Do you have any idea?

Mr. LUTTER. We would have to get back to you on that, sir.

Mr. DINGELL. All right, if you will submit that for the record.

How many food shipments or what percentage of your food shipments are investigated by FDA investigators?

Mr. LUTTER. Physically inspected?

Mr. DINGELL. Physically inspected, yes. Please submit that for

the record. We will have a letter on this particular point. Now, inform me how many inspections you make of devices and appliances

that are regulated under your jurisdiction, that are imported from

abroad?

Mr. LUTTER. Inspections of the shipments coming in or of the——

Mr. DINGELL. Yes, coming in.

Mr. LUTTER. We will get that to you on the record.

Mr. DINGELL. All right. First of all, American manufacturers are

required to comply with the law by observing best manufacturing

practices. Do you apply the requirements for best manufacturing

practices to be performed by foreign companies which export pharmaceuticals to the United States?

Mr. LUTTER. The requirements——

Mr. DINGELL. Yes or no.

Mr. LUTTER. The requirements for good manufacturing practices

apply independent of location, so yes, facilities abroad that we inspect and that are approved for the——

Mr. DINGELL. So the answer is you really don’t do that, is it? And

you really don’t have any inspectors to do that, do you?

Mr. LUTTER. That is correct.

Mr. DINGELL. For example, how many inspections have you done

in China to make sure that good manufacturing practices are carried forward by Chinese manufacturers that export to the United

States?

Mr. LUTTER. We do not now have inspectors permanently located

in China.

Mr. DINGELL. How many inspectors do you have over there looking at this question?

Mr. LUTTER. We don’t have any right now that are permanently

located in China, sir.

Mr. DINGELL. Now, please inform me, how many will you have

under your next budgetary request?

46

Mr. LUTTER. We will have to get back to you on that, sir.

Mr. DINGELL. You will submit that for the record?

Mr. LUTTER. Yes, sir.

Mr. DINGELL. Now, please inform me, what happens to prescription pharmaceuticals that you find that are unsafe at the point of

entry and what happens to foods that you find to be unsafe at the

point of entry? What happens to them? They are rejected, they go

back out of the country, is that right? Yes or no.

Mr. LUTTER. Foods are refused, yes, sir, and the drugs are also

refused.

Mr. DINGELL. They go back out of the country?

Mr. LUTTER. Yes.

Mr. DINGELL. Is that true in all cases or sometimes you let them

go through?

Dr. SOLOMON. If the product can be made in compliance, then

that can be considered.

Mr. DINGELL. If it can be made in compliance? I wanted to ask

you some questions on it because my time is expiring. Now, I want

you to please tell me what percentages of those commodities that

are rejected at the point of entry can you assure us are not coming

in at another point of entry?

Mr. LUTTER. we will have to submit that to the record, sir.

Mr. DINGELL. All right. I want you to give me that. Now, I want

you to tell me, and I will ask you to submit this to the record, how

you are going to substitute for the laboratories which you had proposed to close under the earlier rulings and orders of your agency

and the Office of Management and Budget? I want you to submit

that for the record if you would please. We will have you a letter

on this.

Mr. Chairman, I ask unanimous consent that the record remain

open so that we can get this because this will tend to show us that

the Food and Drug which says it is being leaner and meaner is just

being leaner and weaker and is not capable of carrying out its important duty of protecting the American public, and I intend to try

and get you folks, whether you like it or not, the resources and the

authorities to do the things that you have to do to protect the

American people.

Mr. Chairman, I thank you for your courtesy.

Mr. PALLONE. Thank you, Mr. Chairman. Mrs. Wilson.

Mrs. WILSON. Thank you, Mr. Chairman. The chairman of the

full committee asked a number of questions that were very interesting and some of the answers I know you will have to get for the

record, but did you want to elaborate on any response that you

were not allowed or not able to make in the last round of questions?

Mr. LUTTER. No, thank you.

Mrs. WILSON. Fair enough. I just wanted to give you that opportunity. You mentioned in your testimony risk-based methods, and

particularly the Bioterrorism Act that includes provisions that

push the FDA in this direction. Could you talk a little bit more

about risk-based methods for ensuring security, how that works

and how it is working, how this is being implemented?

Mr. LUTTER. Let me turn to my colleague, Dr. Acheson, to address that.

47

Dr. ACHESON. Sure, would be happy to. In relation to imports, is

that what you are asking about?

Mrs. WILSON. Yes.

Dr. ACHESON. OK. Essentially that has got multiple components.

The machinery that makes it work is the prior notice center, but

the prior notice center is primed with information derived from vulnerability assessments that have been done internally within FDA,

and essentially what those vulnerability assessments are doing is

asking the question, which foods are most likely to be contaminated with an agent that could cause maximum harm. So it has

essentially been ranked based on the type of food and the type of

agent that you might have concern. That information is fed into the

prior notice center, and it is then combined with other intelligence

information and law enforcement information and customs and border protection information to screen entries. So every time a line

of food arrives in the United States, prior notice has to be submitted. The time up front varies with whether it is an air or truck or

ship. That is reviewed electronically, and if it is a food that is of

higher concern or origin is of higher concern or something to do

with the importer or the person receiving the goods kicks a message out through studying the classified law enforcement systems,

that will flag that product for specific action which is usually in the

form of an inspection and/or sampling.

Mrs. WILSON. Are you developing new tools in this prior notice

center or new things to enhance the ability to screen based on risk?

Dr. ACHESON. Prior notice center as I have described is entirely

focused on deliberate attacks on the food supply. It is a food defense, bioterrorism tool. We work internally within the agency to

change those parameters as necessary based on identification of

new risks. As we move toward integrating food safety and food defense into an overall food protection strategy, those concepts of how

do you define risk based on a variety of parameters need to be built

into that. We are not completely there yet, but the food protection

strategy that we are developing currently will address those broader issues.

Mrs. WILSON. Let me ask if you would elaborate a little bit about

the food safety strategy you have under development, both the timing of it and who is involved, what are the issues you are addressing, what are the major thrusts of this new strategy?

Dr. ACHESON. The strategy was started in the beginning of May

when the Commissioner created the position that I fill. It is a strategy that is focused on food and feed, domestic and imported products, and it is focusing on the full product life cycle. In the context

of domestic, that takes you right back to the process of where the

food is coming from and likewise for imports. It will be a risk-focused, a risk-based strategy because what we need to do is to look

at those risks to find where the resources need to go. The other

very important part of this is a major shift toward prevention. The

agency has heavily focused on interventions through inspections

and reacting to situations. What we need to do is get ahead of that

curve and focus on preventative strategies, and that is a huge part

of what the plan is going to look like.

Mrs. WILSON. In this effort to develop a food safety strategy to

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lem, have you involved private industry in these efforts, particularly for their input whether it be grocers or restaurants or food

processors in thinking about these strategies and what they bring

to the table?

Dr. ACHESON. That is part of the strategy, to involve them. What

we want to do is to basically—

Mrs. WILSON. But are they being involved in the development of

the strategy or just in its implementation?

Dr. ACHESON. They will be involved in implementing it and helping us figure out how to implement it. The strategy essentially is

laying out the broad directions of prevention, intervention, and response. One of the very first deliverables in the strategy is going

to be to have dialogs with various stakeholders, consumers, industry, State partners, on how to implement it and how to adjust it

so that it is going to fit. But we want to roll out with something

for people to respond to.

Mrs. WILSON. In your working group, and this is my final question, Mr. Chairman, and I appreciate the latitude, to develop this

food safety strategy, are you involving experts in other elements of

government who have worked on other safety and security kinds of

strategies or is this mostly FDA?

Dr. ACHESON. At this stage it is an internal FDA strategy, and

it is more than food safety. It is food safety and defense, so it is

a food protection strategy that integrates, too. We are starting internally, but we anticipate that we are going to work with other

stakeholders as it rolls out.

Mrs. WILSON. I would encourage you to do so, particularly we

have National Laboratories whose expertise is systemic approach is

to security and defense whose experience in other realms may be

helpful to you.

Dr. ACHESON. I appreciate that. There is no question, we will.

Mrs. WILSON. Thank you, Mr. Chairman.

Mr. PALLONE. Thank you. I am going to recognize myself for

questions. I wanted to ask Dr. Acheson if I could. I am just reading

from a publication that said that you testified yesterday I guess before the House Agriculture Appropriations Subcommittee that the

agency needs more powers to police the Nation’s food supply, and

I guess there wasn’t a time for the chairman of the subcommittee

to ask what new authorities the agency might seek. So I would

simply ask that. What kind of authorities, Mr. Acheson, would you

seek? Are these in the Dingell bill by reference or would they be

something beyond the Dingell bill, if you would?

Dr. ACHESON. There is currently a very active dialog going on

within FDA and HHS to address exactly what new authorities we

would seek as part of this plan. So at this point, it is not fully defined, but there are a number of areas that are under consideration.

Mr. PALLONE. You want to comment on some of them at all or

just give us some idea?

Dr. ACHESON. At this stage, I am not able to really say much beyond what I just articulated.

Mr. PALLONE. All right. Well, I would ask you if you could get

back to us in writing and give us some indication.

49

Dr. ACHESON. Absolutely, and I would hope in the future as the

plan starts to take shape, that we could work jointly between what

we are developing and what the subcommittee is developing so that

we have a holistic view of this that is fully integrated, building the

best of all these ideas.

Mr. PALLONE. Absolutely. Then I want to go back to Dr. Lutter.

Everyone knows that part of the problem with the food safety system is the lack of resource that the FDA has available to perform

its responsibility. It is a recurring theme. I have heard it for years.

Can you talk about the financial resources that the FDA has to

perform its safety responsibility and has that budget increased or

how has that budget increased if any? I will ask you some more

specific things, but just in general?

Mr. LUTTER. I would prefer to pass that question onto my colleague.

Mr. PALLONE. Sure.

Dr. ACHESON. Yes, in recent history while there have been increases in the budget on the food side, they have largely been used

to keep pace with inflation and pay increases, and there have not

been substantive increases in programmatic support.

Mr. PALLONE. And do you have a specific percentage each year

over the past 5 years, or you just say just to keep up with inflation

essentially?

Dr. ACHESON. I would have to get back to you with specific numbers. I don’t have it with me.

Mr. PALLONE. All right. I would appreciate it if you would, but

basically you said what keeps up with inflation and that is it. Well,

do you think that an importation fee like what Mr. Dingell was

proposing is a good way to fill in the gaps and the lack of resources?

Dr. ACHESON. User fees are a double-edged sword. I think that

there can be potential advantages to them. Clearly as you have articulated as have many of your colleagues in order to make a new

system work that is going to be radically different, you have go to

adequately resource it. So those resources have to come from somewhere. User fees are a potential source of revenue to do that, but

one has to be very circumspect about whether you can implement

them in a meaningful way that is fair that is actually going to get

you where you want to go. It is an option.

Mr. PALLONE. But clearly you do think that your resources are

inadequate? You agree, we need more resources, right? I didn’t ask

that question because I thought it was obvious.

Dr. ACHESON. It is obvious.

Mr. PALLONE. OK. Then I wanted to go back to Dr. Lutter unless

you want to pass it over to him again. Let me say this. Mr. Dingell’s bill directs funds specifically to strengthen imports, the system to regulate and inspect imports. But some of the recent contaminations, and I mentioned in my opening statement, have involved domestic products, not imports. Considering the current

funding levels and the fact that very little money is targeted for

imports regulation, how do you perceive strengthening inspection of

national products while simultaneously managing the new import

regulations? In other words, if we were to spend more money on

imports, how are we going to strengthen inspection of domestic

50

products given the fact that we don’t have a lot more money available so far?

Mr. LUTTER. The food protection strategy that we are developing

would be holistic and integrated in the sense it addresses both imported foods and domestic foods, as well as risk from deliberate

contamination and accidental contamination and over the life cycle.

So in that sense the approach would be intended to encompass both

domestic foods, and we have acknowledged that there are risks

that are worthy of concern and additional action particularly with

respect to leafy greens which the recent outbreaks have been domestic. So yes, we share concerns about that.

Mr. PALLONE. OK. All right. Thank you. I recognize Mr. Buyer

from Indiana.

Mr. BUYER. Sure. I have no problem if you have further questions. You are on a roll. OK. Dr. Solomon, as Deputy Director for

the Office of Regulatory Affairs, is it fair to say that you would

have a good understanding of FDA’s work at the international mail

facilities?

Dr. SOLOMON. It is not my area of expertise, but I am heavily

involved in import operations and familiar with processes and procedures at many of our import facilities.

Mr. BUYER. At these mail facilities and the private ports of entry,

Customs will identify a particular package. Both of you, as I understand, have target search systems, am I correct?

Dr. SOLOMON. That is correct.

Mr. BUYER. So it is easier when you have a manifest as it is

going through the private systems, FedEx, UPS, et cetera. When

they have a manifest, you can examine it by your target systems,

and so you kind of know what you are looking for, right?

Dr. SOLOMON. We have more information going through those

systems, correct.

Mr. BUYER. Right. So as the packages are coming down the conveyor belt, it has been identified. So now you have a targeting system, there is an overlap, Customs has a targeting system, and the

handler also has their own targeting system. So into the FDA bin

get kicked a lot of packages, isn’t that correct?

Dr. SOLOMON. That is correct.

Mr. BUYER. Is it fair to say that around 5 percent of those packages are inspected?

Dr. SOLOMON. Yes, sir.

Mr. BUYER. And these packages that go into the FDA bin at

FedEx and UPS, the FDA, you don’t work at night while others

work, i.e. other Federal agencies and obviously the shippers. You

work during the day to put the input with the data to identify from

the manifest what packages you want sent to your bin, is that correct?

Dr. SOLOMON. Yes, products can be placed on hold and then examined the next day.

Mr. BUYER. Right. So then you come in the next day to examine.

So 95 percent of these shipments, though, just gets kicked right

back into the system?

Dr. SOLOMON. A large percentage of the products are not examined.

51

Mr. BUYER. OK. Now, of the packages that the FDA examines so

a pharmacist can actually look at them, not all of these packages

are forwarded to a laboratory, is that correct?

Dr. SOLOMON. That is correct. Only a percentage of them need

further laboratory exam.

Mr. BUYER. OK. So when Customs will look at a package and

prima facie, on its face, they can identify this is counterfeit, I know

it is counterfeit, they destroy it. If they are not particularly sure,

they also kick it over to the FDA. So now FDA, your investigators

or inspectors look at this and you have got the pharmacist on site;

and he looks at this and goes, no, we are not going to let this come

into the country. Do you put some type of a sticker on it, don’t you?

Dr. SOLOMON. The product is marked and set aside and then it

is going to be detained.

Mr. BUYER. How is the product marked?

Dr. SOLOMON. I am not familiar with the exact mark on that.

Mr. BUYER. At two of the ports of entry that I went to in Chicago

and at JFK, the pharmacist on site said that they keep seeing their

own marks on counterfeits coming back to the system. Would that

be accurate?

Dr. SOLOMON. That is possible.

Mr. BUYER. So earlier from my statement that the Federal Government, we are becoming an enabler to a criminal enterprise because people get the Internet, they think that, from that Canadian

Web site, that it is OK because it says it is OK. These are legal,

lawful drugs. It is OK. And when the criminal enterprise, the counterfeiters then send that product into the United States, they take

the person’s money from the credit card, then we, the Federal Government, by virtue of your policy or an interpretation of the law

then, return to sender. That is what we do, is that correct? We take

that product and return it to sender?

Dr. SOLOMON. That is for the most common products. Some products that are clearly of concern are not sent back to the sender.

Mr. BUYER. Excluding your schedules 1 and 2, right? Those

would be destroyed. If in fact the package does not have a formal

entry, a commercial formal entry in the amount of 2,500 or more,

you can give your notice, and if they don’t, within 30 days, respond

it can be destroyed?

Dr. SOLOMON. That is correct.

Mr. BUYER. So I understand there are exceptions to that, but in

general, most of these small packages either get through the system or if your inspectors are able to identify them, then they are

returned to sender, correct?

Dr. SOLOMON. That is the most common procedure.

Mr. BUYER. Most common procedure? Now, as a policy standpoint

from the FDA, do you think that is good policy to give back to the

criminal enterprises their products so they can continue to send

them back and prey upon people, whether it is our own country,

hemisphere, or other countries and hemispheres around the world?

Dr. SOLOMON. I will let Dr. Lutter from the policy perspective——

Mr. LUTTER. We are concerned about the continued circulation of

counterfeit and substandard products that might be sent overseas

to the sender and then might be reintroduced again into the United

52

States. These products, if they were unsafe the first time, they are

surely unsafe the second time.

Mr. BUYER. So if this committee puts into the law giving the authority to the FDA to destroy, stop this return-to-sender-policy, you

would support that?

Mr. LUTTER. It is something we would look at very seriously to

the extent that it mitigates this public health concern of ours. I

think there are a couple of questions pertaining to destruction

methods and the destruction costs and also whether or not the adequacy of due process before destroying goods. To the extent that it

protects public health, we would look at it very seriously.

Mr. BUYER. Well, with regard to costs on destruction, Mr. Chairman, I think the FDA should be able to tell us, if we are going to

protect the American system and America’s health and ensure high

standards, cost shouldn’t be the problem here; and if in fact, you

think that is a barrier to this, please let us know what you estimate the cost to be able to destroy is and how to handle that because Customs is doing that right now. And in your testimony, Mr.

Chairman, they say that they anticipate these imports to triple by

2015. If in fact that is true, we have got to get off our heels and

on our toes. So I want to work with you. When I mentioned in the

opening that as soon as this gets from Legislative Counsel, we will

get it to the chairman and Chairman Dingell and to the ranking

members. I will also ship this down to you, and we want your comment. I know you agree with some of these areas, whether it is serialization or the pedigree issues, let us work through these. As I

said earlier, this is an issue that Congress doesn’t touch very often.

1938, 1988, and now. So I appreciate the chairman’s indulgence,

and I look forward to working with everyone.

Mr. LUTTER. Thank you. Likewise.

Mr. PALLONE. Thank you. Ms. DeGette.

Ms. DEGETTE. Thank you, Mr. Chairman. Dr. Solomon, I was curious to hear your answer in response to Mr. Green’s concerns

about FDA lapses at ports. We don’t have very many ports in my

district, but what we do have is an FDA lab; and I thought I heard

you say that there is a great benefit in having many labs. Is that

correct?

Dr. SOLOMON. No, I think what I was alluding to is the benefit

of laboratories, as Dr. Lutter explained before is the lab capacity

to get a lot of throughput through those labs to ensure the quality

of those products and labs. Lab capacity is the most critical issue

versus the——

Ms. DEGETTE. OK. So you didn’t intend, if you did say there is

a great benefit in having many labs, because you are aware, aren’t

you, that the FDA has a proposal out to reduce the number of labs

from 13 to seven.

Dr. SOLOMON. We are aware of that and as discussed earlier,

that is in abeyance.

Ms. DEGETTE. Dr. Lutter, I also heard you say that, and I know

it is in abeyance, that what you are really looking at with these

labs is the ability to do analysis and the location is really secondary, correct?

Mr. LUTTER. One of our concerns is to be able to do the most possible analysis of suspect products given the resources we have.

53

Ms. DEGETTE. And for example, in the Denver lab, you have people who have been doing some of these very specialized food analyses for 23, 25 years, is that correct?

Mr. LUTTER. I am told that is the case.

Ms. DEGETTE. And these are also people, and I will just tell you

in case no one has, I have talked to them personally and I don’t

blame them. Anybody who lives in Denver, CO, and has for 25 or

30 years doesn’t want to move to a centralized lab. So those people

will all quit. So my question is I know that you have temporarily

suspended the reorganization. Mr. Dingell’s bill would do it permanently, and I am wondering if the administration would be ready

to drop the plans to close these laboratories and just go along with

our committee proposal at this time?

Mr. LUTTER. We are committed to ensuring that the products

that we have——

Ms. DEGETTE. OK. I don’t need that kind of answer because I

have only got 5 minutes. Yes or no, are you willing to drop this proposal at this time?

Mr. LUTTER. No.

Ms. DEGETTE. You are not? OK. In that case, previously I asked

the FDA witness at other hearings to provide with an analysis justifying the closure of the food safety labs. Is the FDA prepared to

do that, either a cost benefit analysis or a quality control analysis

or any other kind of analysis? Can we get that from you?

Mr. LUTTER. I think we are working on one and will have to get

back to you on——

Ms. DEGETTE. When will I be able to receive that analysis?

Mr. LUTTER. I will have to look into it and get back to you.

Ms. DEGETTE. OK. When will you get back to me about when you

can get back to me about the analysis?

Mr. LUTTER. Later this week.

Ms. DEGETTE. Thank you. I will look forward by October 1 to

having that timeline from you. The reason I am a little frustrated,

I have been having difficulty getting requests from the FDA and

other agencies, so I appreciate your comity in this area. One of our

witnesses today is going to testify that the FDA only inspects 1

percent of imported food. Is this accurate?

Mr. LUTTER. With respect to physical inspections, yes.

Ms. DEGETTE. OK. Do you think that is adequate?

Mr. LUTTER. I think the key message is not the physical inspections but the information available to us to identify which products

are really risky.

Ms. DEGETTE. OK. So given the available information to you, do

you think that 1 percent of actual, physical inspection is sufficient——

Mr. LUTTER. No.

Ms. DEGETTE. OK. So if we gave you more resources you would

like to be able to actually, physically inspect more food?

Mr. LUTTER. We would endeavor to inspect more food, but that

is only part of the solution.

Ms. DEGETTE. Absolutely.

Mr. LUTTER. The real part is to put together a system that ensures the products are safe when they arrive at our borders.

54

Ms. DEGETTE. I agree that physical inspection can’t be the only

thing, and I think that is right. Does the administration have any

idea what percentage of actual, physical inspection would be beneficial or is that part of the whole plan that Dr. Acheson and others

were talking about the quality control?

Mr. LUTTER. It is really the latter. What we are really looking

at is a transformational strategy that will use much more information to ensure that the inspections at the border are well-targeted,

are efficient in figuring out which products are safe, but also to ensure that the products themselves are safe when they arrive at the

border.

Ms. DEGETTE. Absolutely.

Mr. LUTTER. And so it is not only the physical inspections that

we should be focusing on.

Ms. DEGETTE. Right. I agree with that. And so my question, I

was very pleased to hear your response to one of the other members when they said would it be fair to say you don’t have adequate

resources and you said yes. Does the administration have any idea

how many additional resources it would take so that you could adequately perform these duties, and does the FDA support the user

fees that are included in the bill?

Mr. LUTTER. With respect to the user fees in particular, the question that we would have in examining the proposal more closely is

the extent to which they are adequate to perform the services they

were expected to do as part of the bill, and we will have to get back

to you on that. We look forward to offering technical assistance to

the committee on that key question.

Ms. DEGETTE. And do you have any idea how many additional

resources you are going to need to perform your job in the way you

would like to?

Mr. LUTTER. I think that information also will have to come later

as part of the food protection——

Ms. DEGETTE. OK. So for those two things, does the FDA have

some idea when it will have the answers to those questions?

Mr. LUTTER. We expect to go public with this by mid-November.

Ms. DEGETTE. Mid-November? OK. Thank you very much, Dr.

Lutter.

Mr. PALLONE. Mr. Waxman.

Mr. WAXMAN. Thank you very much, Mr. Chairman. I know that

Secretary Leavitt is working on a proposal, and I am pleased that

he is because I understand he is taking personal charge of the matter; and we should be working closely with the administration because we all want the same goals. I think we can all agree that

the concept behind the provisions of this bill make good sense. We

want to have every confidence that the foods we import are from

countries and from facilities that have systems in place to ensure

those foods are safe, and who better to give us that confidence than

FDA. So before imported foods would be permitted to enter the

U.S., the bill would require FDA to certify that those foods come

from a country that has in effect food safety standards at least as

protective as ours. FDA would have also to certify that the country

is monitoring for compliance with those standards in taking appropriate enforcement actions when that compliance is lacking. If FDA

is unable to make that certification as to the entire country, the bill

55

would give FDA the option to certify each company on a facilityby-facility basis and I agree with this concept. But I want to be

sure we are giving the FDA the appropriate authorities and resources so that this is a job they can handle. If you don’t think the

agency will be able to do this job, I would hope you would give us

specific suggestions about how to make it work. That responsibility

lies with the agency. So I think we need to get an understanding

here on the size and scope of the job we’re asking the agency to

do.

Let us just look at China for an example. Obviously given the

many recent incidents of unsafe imported Chinese foods, it seems

unlikely that FDA would be prepared to certify the country as a

whole anytime soon. Would you agree with that, Dr. Lutter?

Mr. LUTTER. Dr. Acheson recently returned from China, and I

would like to have him——

Mr. WAXMAN. Are we ready to certify that China has in place a

system as reliable as the one we have here in the United States?

Dr. ACHESON. Not yet.

Mr. WAXMAN. If FDA could not certify the country as a whole,

FDA would be faced with the prospect of certifying each of the Chinese facilities seeking to export their foods to the U.S. before those

foods would be permitted to enter the country. Could you give us

the sense of the scope of accomplishing that task. For example, can

you give me any estimate of how many Chinese facilities there are

currently exporting foods or food ingredients to the United States,

and what kind of resources would FDA need to be able to inspect

each and every one of these firms? Dr. Acheson, do you have an

idea of that?

Dr. ACHESON. Yes, based on the information provided on recent

visits to China, there are about 400,000 food or feed manufacturers

in China of various sizes. Currently about 12,000 to 15,000 of those

are registered with AQSIQ who is the import/export authority in

China. According to their law, they have to be registered in order

to be a certified export. One of the problems is that foods are being

exported from China that are not certified, and according to Chinese law they are essentially illegal exports. And at least a third

of the exported food apparently is falling into that category.

Mr. WAXMAN. One would think if foods are being exported inconsistently with the law of China that even if we look to China to

have in place a system like an FDA to inspect and review all the

safety issues, there would probably be a lot of products that would

go under that law, too, wouldn’t it?

Dr. ACHESON. Well, to get to your point, if this is going to work,

we have to ensure that it is meeting our standards. And you asked

about resources. I think we would have to examine that, how many

firms we are talking about, but it would be significant to ensure

that number of firms were in compliance.

Mr. WAXMAN. Well, we are going to look forward to your recommendations, and I assume this is going to be part of the administration proposal because this is a huge undertaking if we work

along this theory of making sure the country has in place a system,

that they are enforcing it, and if they don’t, we go facility by facility. Of course, China is only one of the countries that we are dealing with.

56

Dr. ACHESON. Right.

Mr. WAXMAN. FDA currently inspects only 1 percent of all imported food. This is quite a grim figure, but it is also true of the

domestic food supply. Dr. Acheson, there has been a serious problem with leafy greens in the United States. There have been 20

outbreaks related to fresh produce alone in the past 12 years, and

the number of food safety staff has fallen significantly in recent

years; and funding for domestic food safety investigations has been

dramatically reduced over the past 5 years. While we obviously

have got serious problems on our hands because Americans are

looking to FDA to restore their confidence in the safety of their

food, has FDA formulated some ideas about how and what it needs

to do to remedy this situation? We need to know how many more

inspectors the FDA would need, whether your information technology infrastructure is adequate to effectively and efficiently monitor the life cycle of products as you indicated is necessary, what

new authorities you need to deal with other countries as well as

domestic firms to know that adequate safety procedures are in

place. So I guess what I want to ask your personal assurances that

you are going to work with Secretary Leavitt to give FDA’s full and

candid assessment of the needs of the agency in this area, and we

need this assessment now. We can’t wait for the next outbreak.

Dr. ACHESON. We are already working with the Secretary and

others in HHS and FDA, and this essentially is what the food protection plan strategy that we are currently working on is all about,

is to examine the changes that we are facing in 2007 that evolved

over the last 10 years or so and put a plan in place that is going

to begin to move forward. But I want to emphasize, this is not an

overnight fix. We need to build a solid foundation of a plan adequately resourced and be looking for in the medium term to put

this back on track. It is not something you can just throw money

at, flick a switch, and the problem is solved.

Mr. WAXMAN. Thank you very much. Thank you, Mr. Chairman.

Mr. PALLONE. Thank you, Mr. Waxman. It is not my intent to

have a second round of questions because I want to move to the

second panel, but Mr. Buyer said that he wanted to ask a question;

so I will recognize him.

Mr. BUYER. I appreciate the gentleman’s indulgence. This is a

very complex and serious issue, so I appreciate the gentleman. On

page 6 of your testimony, sir, you go into great detail how FDA,

in order to comply with regard to imported drugs, your biologics,

certain devices for pre-market approval with regard to authenticity

to ensure that they comply with U.S. labeling requirements, et

cetera. So earlier when I held up these two drugs, the Fosamax,

and when you look at it, my gosh, it complies with everything. So

what I look here is you are working very hard with regard to the

authenticity, and these counterfeiters are getting better and better

and better with regard to packaging and labeling. And obviously

we have a great challenge ahead of us. So with regard to the proposed legislation that I am going to send to you, one of the things

that I hate doing is studies. I don’t want to create a commission,

but I think there is one thing that we are going to have to really

look at and that is whether to have FDA, in cooperation with our

manufacturers, create a database that interfaces with your targetVerDate 11-SEP-98 10:23 Oct 08, 2008 Jkt 000000 PO 00000 Frm 00062 Fmt 6633 Sfmt 6633 Q:\DOCS\110-68 SCOM1 PsN: SCOM1
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ing system. And what I mean by that is if I am a manufacturer,

I now disclose to you—you already know where their manufacturing facilities are but not only these are our manufacturing all

around the world, but here are our approved wholesalers. Pick a

company. This is who we work with. So if you are getting a particular product, so here is the legitimate product; and this runs

through a legitimate wholesaler in Germany, and someone in Germany has purchased that product, they are sending it to a relative

who is only visiting on a legal visa to the United States, you let

that come through. But if your targeting system knows that this

is coming from Singapore and I have no wholesalers licensed in

Singapore, there ought to be some kind of alert system out there.

So the more we get sophisticated and these computer systems are

enablers for us, I think we have an opportunity here to zero in on

the authenticity because right now, I just wanted to let you know,

you can work very hard to comply with the law and do everything,

but the counterfeiters seem and appear to be one step ahead of us.

Do you have a comment with regard to any of these ideas?

Mr. LUTTER. We share very much your concerns about the

threats to public health posed by counterfeit products, and the

point that you are making about the inability to distinguish the

counterfeit from the genuine product is one that I have actually

made in this room on past occasions, and we agree very much with

that. We have trained pharmacists and physicians who, confronted

with the counterfeit, can’t distinguish one from the genuine product. With respect to the opportunity to develop an electronic database that might facilitate the identification and the authentication

of genuine products and permit the distinction of those from counterfeits, that is something we have explored repeatedly in the past

in the context of a counterfeit task force. It was organized at FDA

and has issued a series of reports. It is unclear who should own

such a database or who should manage it. There are a variety of

views on that, but the idea that electronic pedigrees and electronic

track and trace technology would allow for a low-cost way of authentication so as to reduce the risk of counterfeits is something

that we pointed toward, advocated in the past, and we think that

is an appropriate way to implement mandates of past legislation

and also the regulation on pedigrees that we have adopted. We

think there are a lot of opportunities there, and we look forward

to offering technical assistance to you.

Mr. BUYER. That is excellent, Mr. Chairman. That is going to put

us here on the Hill on common ground with the administration

with regard to this legislation. The last thing I would say is please

recognize your front-line personnel for FDA. Your inspectors and

your pharmacists, they are very challenged and frustrated; and

they want the ability to destroy when they find these counterfeit

drugs, rather than a return-to-sender policy. With that I yield back,

and I thank the gentleman.

Mr. PALLONE. Thank you. I want to thank all of the panel and

obviously we have got a lot of work ahead of us; and please get

back to us with a lot of these questions that have been asked as

quickly as possible.

Mr. LUTTER. Thank you very much for the opportunity to present

our views, Mr. Chairman. Thank you.

58

Mr. PALLONE. Thank you. And I will ask the second panel to

come forward if you can. Thank you all for being here, and let me

introduce everybody from my left to right.

First we have Mr. William Hubbard who is senior advisor, Coalition for a Stronger FDA, and then we have my former colleague,

Congressman Cal Dooley. I am really pleased to see you here

today, and he is president and CEO of the Grocery Manufacturers

Association. Then we have Jill Hollingsworth who is group vice

president for food safety programs at the Food Marketing Institute.

And then is Caroline Smith DeWaal who is food safety director for

the Center for Science in the Public Interest; Dr. Alan Goldhammer

who is deputy vice president for regulatory affairs with PhRMA,

the Pharmaceutical Research and Manufacturers of America; and

then we have Tom Kubic who is executive director of Pharmaceuticals Security Institute; and Mr. Hallock Northcott who is

president and CEO of the American Association of Exporters and

Importers.

You have 5 minutes for your opening statement. They will be

made part of the record, and at the discretion of the committee, we

may submit questions, ask you to get back to us, in which case we

would ask you to answer those in writing for inclusion in the

record at a later time. So I will start with Mr. Hubbard. You are

recognized for an opening statement. Thank you.

STATEMENT OF WILLIAM HUBBARD, SENIOR ADVISOR,

COALITION FOR A STRONGER FDA, CHAPEL HILL, NC

Mr. HUBBARD. Thank you, Mr. Chairman. Given the size of the

panel, I will be very brief. I have a written statement. I will just

point out that we like to think that our food supply is the safest

in the world, but to some extent, the world’s food supply is becoming ours. This country now imports $2 trillion worth of goods, and

that will triple in the next few years. So we are being inundated

by these foreign products, and you have pointed out the inadequacies in the current system, so I won’t repeat all of that information.

But I will say two main points, first, FDA is incapable of protecting

the food supply vis-a-vis imports with its current resource staffing.

They only have 450 inspectors to look at what is approaching 20

million imports. So they are simply inundated by that. Second, I

believe a paradigm is broken or the process is broken. It is 100

years old. It once worked in the 1920s or 1930s, but it puts all of

the burden on this one small agency to identify a problem. And so

the producer, the exporter, and the importer essentially don’t have

that responsibility. We need to move toward a system where everyone is accountable.

Let me give one example. Let us say you have got a fish farm

in China or Vietnam or Indonesia, and now he has got incentives

to be as efficient as possible. He is crowding the fish into a pond,

he is feeding them perhaps chicken livers, chicken droppings which

are fairly high protein, and the water is becoming very polluted.

The fish are getting fungal and bacterial infections. So he is adding

drugs to keep the fish alive until they can be harvested. Well, that

farmer is producing an unsafe food, and we see that all the time.

The problem is no one is checking him. He has the incentive to

produce this unsafe fish. His distributor in China has no responVerDate 11-SEP-98 10:23 Oct 08, 2008 Jkt 000000 PO 00000 Frm 00064 Fmt 6633 Sfmt 6633 Q:\DOCS\110-68 SCOM1 PsN: SCOM1
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sibility to do anything about that. The exporter, the importer in the

United States, it all comes down to whether FDA will actually look

at that fish and test it. And with an inspection rate of less than

1 percent, that is not going to happen. So we have the problem

there that you can’t depend on an inspection process at the very

end of the food chain. You need it sooner.

So I am recommending that we consider much as your bill does

and as section 7 of Mr. Dingell’s bill does moving toward a system

of prevention. Imagine that fish farmer now knows that the importer is taking some responsibility and saying, well, who am I getting that fish from? Is he producing safe fish? And then the exporter in China is doing that, and then the wholesaler in China is

doing that. All the message down to that farmer is, if I don’t

produce safe fish, I am going to be checked by the people in the

supply chain, and I am going to be out of business. We need to give

FDA the authority to set up a process like that I believe and then

fund it so that it can verify the system is working. And I believe

with that we can have a safe food supply. In fact, many of the

major food and drug companies do this now. Cargill, or someone

like that, is already securing their supply chain. So we need to

bring all the other guys who aren’t doing that up to that standard,

and then I believe we will have a safe food supply that everyone

can agree is managed in an effective way.

With that I will pass onto the next witness.

[The prepared statement of Mr. Hubbard follows:]

STATEMENT OF WILLIAM K. HUBBARD

Mr. Chairman and members of the committee, I am William K. Hubbard. Before

my retirement after 33 years of Federal service, I served for many years with the

U.S. Food and Drug Administration, and for my last 14 years was an FDA Associate

Commissioner responsible for, among other things, FDA’s regulations and policy development. Although I have remained retired since my departure from FDA in 2005,

I provide advice to The Coalition for a Stronger FDA, an organization comprised of

patient, industry, and public interest groups whose mission is to urge that FDA’s

appropriations be increased. I will be providing comments on FDA’s resource constraints on behalf of the Coalition, but my comments on specific legislative changes

do not necessarily reflect the Coalition’s views and are solely my own (as the Coalition does not take positions on non-appropriations issues). During my career at

FDA, I was deeply involved in seeking improvements in FDA’s ability to assure the

safety of foods, drugs, medical devices and other products that are imported into the

United States from around the world. Accordingly, I wish to thank the Committee

for moving quickly this year to consider legislation that would strengthen FDA’s

ability to oversee imports of food and other products from other countries.

BACKGROUND

This committee has often raised concerns about our Nation’s vulnerability to unsafe foods and drugs imported from abroad, and illustrated those concerns with examples of illegal pesticides on fruit from Latin America, deaths associated with raw

drug ingredients from China, and other instances of unsafe goods produced in developing countries. FDA’s scientists have agreed with you that imports were a growing

concern, as they noted with increasing alarm the volume of imports moving from

a trickle to a stream to a flood, with no new resources or authorities to deal with

the problem. Perhaps the events of this year—the deadly pet food ingredients, toothpaste tainted with antifreeze, seafood laced with illegal drugs, and other examples

of dangerous imports—will serve as the national wake-up call that is sometimes

needed to get our institutions moving toward effective solutions. And solutions are

indeed needed, for, Mr. Chairman, there can be no doubt that our current system

for overseeing food and drug imports is broken, and therefore cannot protect us as

it is currently structured.

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THE CURRENT FDA IMPORT SAFETY SYSTEM

As was noted in July’s Oversight and Investigations Subcommittee hearing on imports, the current FDA system predates the creation of the Food and Drug Administration. First established in 1896, the system was designed to authorize Federal inspectors to open and examine (and sample, if necessary) foods and drug imported

into the United States. It was folded into the original Food and Drug Act that established the FDA in 1906. And when the current statute authorizing FDA to protect

our foods and drugs was enacted by Congress in 1938, the import provision was the

only one of the original 1906 authorities that were believed to have worked well

(and were thus continued in the Food, Drug and Cosmetic Act that remains FDA’s

principal legal authority). Congress’ judgment at the time was correct, as most imports were foods and FDA inspectors could generally oversee imports via technology

of the early and mid–20th century—tools such as visual inspection, a well trained

sense of smell, microscopic examination, and laboratory analysis. But as we neared

the end of the century, it became increasingly apparent that changes in the nature

of imports were overwhelming the ability of the FDA to assure their safety, namely:

• A huge increase in volume, for instance, from 2 million shipments of imported

products regulated by FDA in 1993 to a level approaching ten times that today.

• A tremendous surge in foods, drugs, medical devices, cosmetics, animal foods,

and dietary supplements from developing nations that have little or no established

regulatory authorities overseeing production of those commodities.

• A shift in the types of commodities from ‘‘finished’’ products ready for consumption toward components that are used to make finished products in the United

States, such as the active ingredients for our drugs from India and many of our

basic food ingredients from China.

• A greater range of risks, such as new pathogens in food unknown to science in

past years, and the intentional but dangerous addition of industrial chemicals and

cancer-causing drugs in products produced overseas.

AN AGENCY OVERWHELMED

Several times in recent years, examinations by Congressional committees, the

Government Accountability Office, the National Academy of Sciences, and other expert panels have concluded that FDA’s ability to protect us from unsafe foods and

drugs has been steadily deteriorating. No better example of that erosion exists than

in the import area. Let me give you just a few measures of how FDA’s capacity lines

up with its responsibilities for imports:

The volume of imports, as I noted earlier, has grown to the point that it is nearing

20 million annual shipments of foods, drugs, medical devices and other FDA-regulated products. Yet the number of import inspectors has not been increased, and

today the agency has only 450 inspectors to cover this massive inflow of products,

which means that less than 1 percent of imports receive Federal inspection.

• Imports of FDA-regulated products enter the United States at many ports of

entry. [Depending on how one counts a ‘‘port,’’ between 300 and 400.] But inspector

staffing is so low that they can man only about 40 ports, and many of those only

part time.

• Despite the fact that there are thousands of facilities oversees making products

for our medicine cabinets and dinner tables, the number of FDA inspections of those

facilities is tiny. For example, only 125 inspections of foreign food manufacturers

were conducted last year, and that was down from only 209 in 2001. This year, the

agency will do even less, about 100. And for other products the numbers are even

more dismal—two dietary supplement foreign inspections last year, zero animal food

inspections, and zero cosmetics inspections.

• FDA’s information systems, particularly those focused on imports, are old and

out of date. They cannot interact directly with other agencies’ systems, such as

those at Customs, and cannot even distinguish imports of road salt from table salt.

• FDA inspectors lack modern scientific tools to make rapid assessments of imported goods for contaminants such as bacteria, viruses, heavy metals and industrial chemicals. They must undertake an expensive and time consuming process of

collecting a sample and sending it to laboratory for analysis, often having to wait

days for results.

• With so few inspectors, FDA’s laboratories cannot be adequately used, and the

agency has attempted to close some for that reason. The result is that only a small

number of products even receive laboratory analysis. For example, only 20,000 samples of imported foods were sent for laboratory analysis last year, out of about 10

million shipments. There were about 200,000 shipments of food from China last

61

year, for example, so if ALL of the laboratory analyses were directed toward China

alone, FDA would have been able to analyze just 10 percent of those imports. • All in all, the parts of FDA that do not receive user fees (for new drug and medical device review) have been growing steadily weaker over the past decade, as the

agency has lost a thousand scientists and inspectors who would have been protecting us from products on the market and those being imported from overseas.

A BROKEN PARADIGM

If the signs of FDA’s failure to adequately oversee imports are so clearly evident,

then what can we say about how we got to this point? There are, in my opinion,

two principal reasons for our current dilemma, both revolving around the paradigm

that current exists for imports—namely, FDA inspection, at the border, to ‘‘catch’’

problems before they make it into our homes.

First, FDA’s budget has not kept pace with its growing responsibilities. The agency has sustained either a flat appropriation or actual cuts in their budgets for more

than a decade, at a time in which new problems and new regulatory challenges have

been thrown steadily at the agency. The food safety program is a good example. It

was almost half of FDA’s budget in the 1970’s, but today is only about one quarter. Let me give you a more recent example. FDA’s food safety budget was $407 million in 2003. If the agency had received sufficient funding since then just to stay

even with inflation, the food safety appropriation for this year would be $626 million. But it was actually $450 million, which means that the agency lost $176 million in buying power for food safety in recent years. The result has been a loss of

20 percent of its food scientists, and over 600 inspectors, during that time.

One would think that with a growing domestic food industry, soaring imports of

food from other countries, numerous new technologies (such as biotechnology) being

used to produce food, an increase in food borne disease outbreaks associated with

foods regulated by FDA, and declining public confidence in FDA, our leaders would

be anxious to assure that the regulatory structure would be strengthened.

Similar analyses can be done for other FDA programs, such as drug and medical

device safety, dietary supplements, and animal foods and drugs. These trends are

alarming, and underscore the reasons for the creation of The Coalition for a Stronger FDA. While the Coalition’s members often disagree on policy outcomes with respect to regulation, they are all concerned that a weak FDA is detrimental to domestic business, international trade, and, most importantly, public safety.

The second reason for our current vulnerability with respect to imports is that the

regulatory paradigm for those products simply does not work in the 21st century.

It is a system fraught with flaws in today’s world:

• It is reactive system that looks for problems in foods and drugs after they’re

arrived in the United States, rather than preventing the export of contaminated

products at their source • It would need massive new resources to be significantly improved, requiring hiring thousands of new inspectors at a cost of billions of dollars, and even then may

not be able to meet our expectations

• It continues to place all of the burden of assuring safety on this one small agency—the FDA—rather than requiring accountability by those who produce and import these commodities,

• It provides little incentive for foreign governments and foreign producers to be

vigilant in producing safe goods for sale to the United States, and

• It does not take into account modern principles of product quality assurance

that have recently been developed and proven to work effectively in the production

of food and other products.In sum, Mr. Chairman, I believe we must re-engineer our

system of import oversight in ways that will not only strengthen the FDA but also

bring our trading partners and their producers into a comprehensive safety assurance system.

BUILDING QUALITY IN

Let me give a brief history that I believe will illustrate the concept of building

safety into our food and drug supply. Many Americans do not know the name F.

Edward Deming, but he is revered in Japan as one of the leaders in their postWorld War II effort to rebuild their economy. Deming convinced the Japanese that

traditional production methods, which relied on post-production inspection, would

not assure product quality, and advocated instead a process whereby defects in a

product’s manufacturing are prevented from ever occurring. The Japanese embraced

the concept and began a transformation in their production of automobiles, electronics and other consumer products that enabled Japan to shift from an image of

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a producer of cheap, shoddy products—some would say analogous to China today—

to an economic superpower with a reputation for product quality. American manufacturers eventually adopted Deming’s quality assurance philosophy, which has been

credited with improving quality in recent years of a host of U.S.-produced consumer

products.

This quality assurance concept was implemented for food by the Pillsbury Corporation in 1960, when they were tasked by NASA to develop food for the U.S.

manned space program. A food borne illness resulting in vomiting or diarrhea could

be catastrophic in the weightless space environment, so Pillsbury developed a food

production process to ensure that no contamination could occur as the food was

being produced, thereby ‘‘building safety in’’ to the food as it was produced. This

concept, known by the acronym ‘‘HACCP’’ (for Hazard Analysis Critical Control

Points) was quickly used by FDA to solve a series of contaminations in the 1960’s

in canned foods, then used more recently to improve the safety of seafood and juice.

Meanwhile, the Agriculture Department adopted the concept for improving meat

safety in the United States, and the European Union has legislated HACCP into its

food safety laws. FDA also developed regulations, utilizing the same quality control

concept, for drugs and medical devices, to minimize production defects in those products.

AN EMERGING CONSENSUS ON A SOLUTION—BUILD SAFETY IN

As dismaying as the recent contaminations of seafood, pet food, toothpaste and

other commodities have been, they have focused the various stakeholders in ways

that would not have been likely a few months ago. I believe, Mr. Chairman, that

we are seeing the development of the elements for needed change in the regulation

of imports that could be a wonderful, even historic, opportunity to ‘‘fix’’ imports for

the foreseeable future.

Two weeks ago, the Interagency Working Group on Import Safety created by the

President this summer released a ‘‘strategic framework’’ that emphasizes a ‘‘life

cycle’’ approach to the management of imports that builds prevention in upstream

from the FDA. Last week, the Grocery Manufacturers Association/Food Products Association issued its ‘‘Four Pillars’’ for import safety, which emphasizes the need for

all parties in the production and sale of imports to be accountable for the safety of

foods. Consumer groups have long urged that a system of continuous quality controls over food production be adopted to reduce food borne disease. And your committee’s draft import bill includes provisions that emphasize the need for safety assurance across the supply chain.

My point is that I believe you are all saying fundamentally the same thing—that

the answer for import safety is a system based on prevention that requires producers, exporters, importers, U.S. purchasers ‘‘everyone in the chain of supply—to take

greater responsibility for the safety of imports, and give FDA the authority and resources to implement and oversee such a system.

A SYSTEM BASED ON PREVENTION

I urge you to accept this emerging consensus among the various stakeholders as

a sign of a tremendous opportunity to re-engineer our import safety system in ways

that will save lives, reduce illnesses, enhance our citizens’ confidence in their government, and perhaps even improve some of our trade relationships. The elements

of legislation that would focus on a system of prevention could include:

• An express requirement for a foreign supplier quality assurance program that

importers would implement to provide greater assurance of the safety and quality

of imported food products and ingredients;

• Enhanced international standard setting, for better consistency in safety standards across the globe;

• Agreements with exporting countries that would improve their capacity and

willingness to better oversee producers within their borders;

• Procedures to assure that verification is made that safety standards are being

followed, and

• A strengthened FDA, with resources to strengthen the agency’s scientific base;

to gather and utilize new technologies for screening imports; to create modern IT

systems to track the movement of imports; and to recruit and train inspectors to

oversee the new system—both by better, risk-based inspections at the border and

by more frequent inspections of foreign facilities.

I believe it is entirely possible for the Congress to bring together the disparate

interests involved in import safety and, keying off of the very basic concept of prevention throughout the supply chain, craft legislation that could be accepted by conVerDate 11-SEP-98 10:23 Oct 08, 2008 Jkt 000000 PO 00000 Frm 00068 Fmt 6633 Sfmt 6633 Q:\DOCS\110-68 SCOM1 PsN: SCOM1
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sumers, the industry, and the current administration. Obviously, there would be

many details to consider, but, in the end, the goal of a better, more effective import

screening system is achievable. And, of course, there are other authorities that

members of Congress have considered in the past, such as country of origin labeling,

new recall authority and more. But those additional authorities would not, in my

view, address the fundamental problem of why FDA cannot assure the safety of imports. Thus, I urge the committee to consider making a system of prevention your

primary objective, and I thank you for allowing me to express my views on this subject.

Mr. PALLONE. Thank you. Congressman Dooley.

STATEMENT OF HON. CALVIN M. DOOLEY, PRESIDENT AND

CEO, GROCERY MANUFACTURERS ASSOCIATION

Mr. DOOLEY. Well, thank you, Congressman Pallone, Congressman Buyer. It is a delight to be here. I have the honor and privilege of representing over 300 companies in the U.S. that manufacture food and beverage products. So every time you go into the grocery store and you see those brands on the aisles there, quite likely

they were produced by my member companies; and they are absolutely committed in working in partnership with all of you and this

committee to ensure that we can build upon what we consider the

safest food supply in the world to make it even safer.

What we have proposed, the Grocery Manufacturers just recently, is what we call the four pillars for safer food; and we are

trying to build upon that foundation of an incredibly safe food supply. But the underlying premise of this is much like Mr. Hubbard

talked about is we can be most effective by focusing on prevention

because while we know there is work to be done and there are improvements, when you look at all the food products that are in a

grocery store today, we are fortunate that it is a small, a very, very

small number of those that pose any health or food risk to a consumer. And so what we need to be focused on is that we understand we have a small problem, but it is not a large problem. It

is almost like how do you find that needle in the haystack with

that needle being that food safety concern? So our objective needs

to be how do we limit the number of needles and also how do we

reduce the size of that haystack so that it makes it easier for FDA

to allocate their resources in order to make a difference.

Our pillar one is really to develop a mandatory foreign supplier

quality assurance program, and under this pillar, all importers of

record, which is a company that is importing a food product, would

be required to develop mandatory protocols that would ensure that

they have a greater confidence in the safety of those products that

they are importing. We would ask FDA to develop guidance in

terms of what would be the components for this mandatory foreign

supplier quality assurance program. And the reason why we are

going down this path is that every one of our member companies,

the greatest equity that they have in their company is the brand

of their product; and that brand of their product is what makes a

difference in whether or not that consumer will take it off the shelf.

And if that consumer has any concerns in terms of the safety of

that product, they in fact, will not purchase it. And so we are totally committed, and we think we are in the best position to really

make a difference in preventing contaminated food products.

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The pillar two really works on the voluntary qualified importer

food safety program, and this is really focused on how do we reduce

the size of the haystack understanding that there are some food

products that we are importing or ingredients that are in fact of

lesser risk, and there are also opportunities for food producers and

processors to work in cooperation with FDA to provide them with

additional information which in fact can lower the risk of concern

of a food safety problem.

And pillar three is something we think is absolutely critical is

that this Government and FDA needs to be working to build the

capacity of foreign governments to develop equivalent food safety

programs within their countries.

And also pillar four is something that we have been working very

closely with many of the organizations that are represented at this

table, is that we have to expand the capacity of FDA. We are a part

of the coalition for a stronger FDA which is asking for a doubling

of the budget of the Food and Drug Administration over the next

5 years because we are not going to be successful in giving the FDA

the resources to enhance their participation and partnership in this

effort to achieve greater food safety if they do not have additional

resources.

The one thing that I would like to spend just a moment in talking about some of our concerns with the legislation that was in fact

implemented. The industry and my member companies have great

concern about a user fee approach as we think that food safety is

a public good, it is a responsibility of the Federal Government, and

it should be paid for out of general fund dollars. We are concerned

about whether or not you can actually in fact implement an equitable user fee approach that doesn’t have unintended consequences.

And I just brought two products, two little props here, which can

kind of demonstrate that. If you have a line item, a user fee of $50

per line item, I have a product here that is Madras Lentis that is

a product of India. This product would come in under one line item

and thus would pay that one $50. We could have a very similar

product coming in, a vegetarian chili product, that was manufactured in the U.S. that has a number of different ingredients in it.

Those ingredients, many of which would be imported into this

country, would be paying a separate line item or that user fee on

each of those ingredients. You are creating a perverse incentive for

many food processors and manufacturers to locate their processing

facilities across the border in order that they could minimize the

cost of a user fee that would be coming into this county.

There are also concerns similar to this on part of the country of

origin labeling. All processed foods that are coming into the country

today has to be labeled as to the country of origin where it had substantial or significant transformation. We are concerned, and there

is a lack of detail on the country of origin labeling requirements,

that again this product from India could be a product of India, but

this product manufactured in the United States might be required

to have separate line items in terms of where each of the ingredients was sourced, further complicating the marketing and the

packaging of this product.

We also have concerns that have been articulated in terms of the

port of entries. We do not think that you can restrict it to the 13

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or so that have FDA lab facilities. We think that is of great concern

to us. We also have concerns, too, with the certification process

being prescribed. We think that just the testimony that Dr. Acheson gave, there are 400,000 food suppliers in China alone. There

are almost that many in India. We are looking at millions of food

suppliers throughout the world that we would have to be in the position to try to certify, and we think that would become such an

onerous and costly burden and wouldn’t be the best allocation of

FDA funds. We think that our proposal will ensure the private sector can provide better information, that we can share that information with FDA in a manner that we can achieve the shared objective of enhanced level of food safety.

[The prepared statement of Mr. Dooley follows:]

STATEMENT OF HON. CALVIN M. DOOLEY

I am Cal Dooley, president and CEO of the Grocery Manufacturers /Food Products

Association. I am here today to discuss an issue of paramount importance to our

members—ensuring the safety of imported foods.

Food producers have an abiding interest in safe food. Maintaining consumer confidence in our products, our brands, and our companies is the single most important

goal of the food, beverage, and consumer packaged goods industry, and product safety is the foundation of consumer trust. My industry devotes enormous resources toward this goal, and effective regulation and oversight by Federal regulatory agencies

such as the FDA are critical and complementary elements of the fabric of consumer

protection.

This month, GMA/FPA issued ‘‘Commitment to Consumers: The Four Pillars of

Food Safety,’’ a comprehensive proposal designed to protect consumers by strengthening, modernizing, and improving the system governing food imports. Our proposal

envisions new mandatory requirements for the food industry to assure the adequacy

of foreign supplier food safety programs and new responsibilities for FDA. Other elements include a new program to help identify and prioritize imports of potential

concern, new efforts by FDA to help enhance the capacity of foreign governments

to prevent and detect food safety issues, improvements to FDA’s scientific capabilities and its use of information technology, and a significant increase in FDA resources.

Underlying this comprehensive set of proposals is a fundamental emphasis on prevention.

Let me put the challenge before us in plain terms. As the volume of imported food

steadily increases, the FDA’s job at the border can be compared to trying to find

a needle in a haystack. We need to approach this task from different angles: (1) by

reducing the number of needles to find; and (2) by reducing the size of the haystack

in which to find them.

A complete copy of the ‘‘Four Pillars’’ proposal has been submitted with this written testimony. Before I provide comments on the Food and Drug Import Safety Act

introduced last week, I will take just a few minutes to briefly outline each of the

four pillars for you now.

Pillar One: Mandatory Foreign Supplier Quality Assurance Program—Under this

pillar, all importers of record would be obligated to adopt a foreign supplier quality

assurance program that assures that all imported ingredients and products meet

FDA food safety and quality requirements. Food companies would utilize FDA guidance to adopt food safety programs and practices needed to ensure food safety, such

as audits, testing, good manufacturing practices, good agricultural practices,

HACCP plans, food defense programs, product management systems, and recall programs. Requiring importers of record to ensure the safety and quality of their supply chain—and giving FDA the authority to review the effectiveness of these programs—would reduce the number of needles in the haystack.

Pillar Two: Voluntary Qualified Importer Food Safety Program—To help prioritize

FDA resources and to relieve congestion at ports, we further propose that importers

of record who are able and willing to meet additional standards and conditions than

those required under Pillar One could voluntarily participate in a program entitling

them to expedited entry at U.S. borders. This is similar to the Safe and Secure Food

Importation Program Chairman Dingell has proposed in the Food and Drug Import

Safety Act introduced last week and builds upon the C-TPAT program currently in

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place. In addition to demonstrating the presence of well-designed and implemented

food safety systems, importers could demonstrate a secure supply chain and conduct

and share additional testing and program data with FDA to be eligible for expedited

entry. By permitting expedited entry for imported foods that pose no meaningful

risk, Congress can reduce the size of the haystack needing closer scrutiny by the

FDA.

Pillar Three: Build the Capacity of Foreign Governments—FDA would work with

foreign governments to improve their capacity to prevent and detect threats to food

safety. FDA would work with foreign governments to expand training, accelerate the

development of laboratories, ensure the compliance of exports with U.S. regulations,

permit appropriate FDA inspections of foreign facilities, and ensure adequate access

to data and test results conducted abroad. In addition, FDA would be encouraged

to use Codex to harmonize requirements among countries. The food industry has

long supported international harmonization through Codex, and we believe that

FDA must once again provide international leadership towards the adoption of

strong, science-based international food safety standards. All of these foreign capacity building steps would further reduce the likelihood of contamination and thereby

further reduce the number of needles for FDA to find at the border.

Pillar Four: Expand the Capacity of FDA—Expanding FDA resources—including

personnel, equipment, laboratory capacity, and scientific expertise—is an essential

component of an effective food safety system. FDA resources have not kept pace

with the demands posed by rising imports and current food safety challenges. To

meet these needs, Congress must provide significant new funds to dramatically improve FDA’s analytical testing capabilities, to increase and target inspections conducted by FDA, to obtain real-time test results, and to enhance communications

during crisis events. With additional resources that are well-deployed, FDA should

be much better positioned to find any remaining needles before they cross the border and enter U.S. commerce.

We believe that the adoption of these four pillars of food safety will result in significant improvements in our food safety net. By focusing our efforts on prevention—and by expanding and improving our ability to detect threats to public

health—we believe that our proposal will do far more to ensure the safety and quality of imported food products and ingredients than would the adoption of many of

the provisions of the Food and Drug Import Safety Act and will build upon the partnership between FDA and the food industry.

Food companies recognize that growing food imports pose new challenges and we

share the same goal as the committee: to continually improve the safety and quality

of food products and ingredients. We are grateful for the opportunity to work with

you to develop comprehensive imported food safety legislation which makes the prevention of contamination the cornerstone of our food safety net.

While inspecting products at the border is an important element of a comprehensive approach to food safety, we believe that inspections alone will not provide

enough improvement to the safety of our food supply. We strongly agree with your

desire to find more resources for FDA, which needs to restore its scientific base as

well as its capacity to conduct an appropriate level of inspection and examination.

However, we strongly oppose the user fee provision in the Food and Drug Import

Safety Act. We have five significant concerns with the user fee.

One, we believe that the benefits of a safer food supply accrue to the public generally, much like the benefits of a strong national defense, and believe that the costs

of providing FDA with sufficient resources to perform the various responsibilities to

protect the public health that have been given to it by the Congress should come

through taxes, not user fees. As you know, a user fee is appropriate when the benefits of the government service flow to an individual (such as postage stamps, recreation fees, or public transportation) or to a particular business (such as harbor

maintenance fees, accelerated review of prescription drugs, or bankruptcy filing

fees). The benefits of inspection and research clearly flow to all Americans, not simply to food companies.

Second, the proposed user fees would impose significant financial burdens on U.S.

companies, not just on importers. This is especially true for companies with facilities

in both the U.S. and Canada, for example, where there is a steady flow of ingredients and finished products, all of which would be subject to import user fees. We

are in the process of collecting data to estimate the added costs to U.S. businesses,

but we have reason to believe they would be substantial.

Third, the imposition of the user fee on imported products and ingredients could

create an incentive for companies to locate production facilities outside the United

States. Let me provide an example of why this is so. Suppose a company makes a

product in the United States that consists of 20 ingredients, half of which are imported. Under the user fee proposal, a fee would be imposed on ten of those ingrediVerDate 11-SEP-98 10:23 Oct 08, 2008 Jkt 000000 PO 00000 Frm 00072 Fmt 6633 Sfmt 6633 Q:\DOCS\110-68 SCOM1 PsN: SCOM1
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ents each time they are imported. If, on the other hand, the production facility was

located in Mexico or Canada, for example, the fee would only be imposed once: when

the finished product was brought into the United States.

Fourth, we are concerned that a user fee on imports would violate our trade commitments by creating a preference for domestic sources of food products and ingredients. We’re also concerned that such a fee could invite other countries to place similar fees on our food exports. Finally, we are concerned by the mechanics of the user

fee. By charging $50 per line of food, the user fee in the Food and Drug Import Safety Act places an unfair burden on importers of many distinct products.

We strongly agree that FDA needs more resources to increase inspectors, improve

its scientific capabilities, and meet other critical needs. For the past year, GMA/FPA

has worked with the Coalition for a Stronger FDA to substantially increase FDA

funding. In our view, FDA does not simply need ‘‘more’’ resources, but needs the

‘‘right’’ resources. In particular, we believe that the agency needs additional resources for both its ‘‘science’’ and its ‘‘compliance’’ activities. The agency cannot operate effectively without both. Our goal is to double FDA’s food-related spending

over five years, and we applaud Chairman Dingell for his efforts to seek additional

FDA spending.

We have other major concerns with the Food and Drug Import Safety Act and we

look forward to working with the committee to address these and other challenges.

One, we are concerned that proposals to limit imports to certain ports and to require the development and implementation of certain tests could create havoc at the

border and create costly and unachievable new burdens on FDA and the food industry. In particular, we are concerned that the proposal to limit food imports to ports

of entry located in the same metropolitan area where FDA has a laboratory could

unintentionally block food imports to many ports. While there are more than 300

ports of entry, there are only 13 FDA labs. As a result, many ports—including all

ports in Texas and Florida—would no longer be able to import food products and

ingredients. We believe a better course would be to expand and better target FDA

inspectors, as we have proposed in our second ‘‘pillar’’ and Chairman Dingell has

proposed in section 7 of the Food and Drug Import Safety Act, and to expand FDA’s

capacity to quickly analyze food products and ingredients.

We are also concerned about requirements to develop rapid tests within three

years and to test all processed food products. While we share your desire to make

rapid-tests and other sampling methods widely available, we are concerned that requiring the development of such tests within three years may be unrealistic. We are

also concerned that a requirement, included in Section 12 of the Food and Drug Import Safety Act, that all processed food be tested to detect substances that make the

food adulterated creates an impossible burden: there is simply no way to test for

all potential causes of product adulteration. In our view, requiring every importer

of record to implement a foreign supplier quality assurance program—and placing

the focus of imported food safety efforts on prevention, rather than detection—would

significantly improve the safety of imported food to a far greater degree and build

upon the strong partnership between food companies, our suppliers, and FDA.

Two, we are also concerned about two new labeling requirements included in the

Food and Drug Import Safety Act. First, packaged food products are already required to bear country of origin labeling. Second, we are concerned that the proposal

to require country of origin labeling for all food could create huge new burdens on

food companies while providing little or no benefit. Many of our food companies combine ingredients from dozens of countries to create a single product. Would the proposed country of origin labeling requirement mean that each ingredient has to be

labeled with its country of origin? We are also concerned that a ‘‘safety notice’’ on

meat, poultry or seafood that contains carbon monoxide to affect coloring would

needlessly mislead the public. As you know, this practice has been subject to exhaustive testing and has been declared safe by FDA.

Three, we are also concerned that Food and Drug Import Safety Act violates our

trade agreements and would invite retaliatory actions by our trading partners. As

I mentioned, the adoption of user fees would create a clear preference for domestic

food products and ingredients and would invite the adoption of similar fees on our

exports. In addition, we are concerned that a requirement that all foreign facilities

importing food into the U.S. obtain FDA certification would place enormous new

burdens on FDA, would violate our trade agreements, and would invite reciprocal

demands by our trading partners. Further, we do not believe that there are likely

to be resources available—even with user fees—for FDA to certify tens of thousands

of foreign facilities located in about 150 different countries.

Four, there is ample evidence that the current recall system works well. We are

concerned that the due process protections that necessarily accompany the recall

proposal in the Food and Drug Import Safety Act could actually delay, not accelerVerDate 11-SEP-98 10:23 Oct 08, 2008 Jkt 000000 PO 00000 Frm 00073 Fmt 6633 Sfmt 6633 Q:\DOCS\110-68 SCOM1 PsN: SCOM1
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ate, efforts to address public health threats. As you know, food companies have powerful incentives to remove adulterated products from commerce as quickly as possible and have worked closely with FDA to implement recalls quickly and effectively. We strongly support efforts to expand FDA’s ability to communicate the risks

posed by adulterated foods.

In conclusion, we share your commitment to the improving the safety of imported

food. We also share your commitment to increase FDA’s resources, including resources to increase our ability to detect adulterated food at the border. However, we

believe that far more emphasis must be placed on the prevention of threats to food

safety throughout the supply chain and look forward to working with you to make

a safe and secure supply chain the responsibility of every importer of record and

to expand the capacity of foreign governments to detect and deter threats to public

health.

Our ‘‘Four Pillars’’ proposal builds on the long history of public-private responsibilities and cooperation in ensuring food safety, while providing new and innovative approaches to the latest challenges to our Nation’s food safety net. Its focus on

prevention would be complemented by an enhanced ability to quickly detect and address public health threats. Meeting the challenges of the modern supply chain requires additional public resources for FDA and related agencies and demands an integrated approach that leverages the significant investment of the private sector in

product safety. We look forward to working with the committee to fashion comprehensive legislation that will address the new challenges posed by rising food imports and will continually improve the safety of our food products and ingredients.

Mr. PALLONE. Thank you. I just realized, Calvin, you went over

5 minutes. I didn’t pay attention. So I will ask the others to stick

to the 5 minutes, even though he used twice the time; but that is

all right, you are a Congressman, so we will allow it.

I do have to tell everyone, though, that we will have two votes;

so I am going to try to get in one or two of you before we go vote,

and you will have to wait until we come back.

So next is Dr. Hollingsworth.

STATEMENT OF JILL HOLLINGSWORTH, D.V.M., GROUP VICE

PRESIDENT, FOOD SAFETY PROGRAMS, FOOD MARKETING

INSTITUTE

Dr. HOLLINGSWORTH. Chairman Pallone and members of the

committee, thank you for the opportunity to appear before you

today to present our views and suggestions on H.R. 3610. I am Dr.

Jill Hollingsworth, the group vice president at the Food Marketing

Institute, FMI, where I have been head of the Food Safety Program

for over 10 years. FMI is a national trade association with 1,500

member companies representing food retailers and wholesalers in

the United States and abroad. Our members represent over 75 percent of all retail food store sales in the U.S., accounting for $340

billion in annual sales.

In my capacity at FMI I often have to draw upon my past experiences at USDA where I worked for 15 years. While I was there, I

not only implemented the investigation of the E. coli outbreak at

Jack-in-the-Box, but I was responsible for developing and implementing the public health and recall programs that exist today in

the Food Safety and Inspection Service.

At FMI I worked closely with the supermarkets and their wholesalers to ensure that we are doing all that we can to achieve a safe

food supply, but we are very concerned about the recent decline

that we have seen in consumer confidence in the food safety system. In January 2007, FMI’s own survey of consumers called U.S.

Grocery Shopper Trends found that consumers’ confidence in the

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safety of the food purchased at supermarkets dropped from 82 percent down to 66 percent, and for restaurants that drop in confidence declined to 43 percent. Numerous recalls and the lack of

confidence in both the food system and the Government have actually caused consumers to actually change their purchasing habits

with over 38 percent of consumers saying they no longer buy certain items such as spinach because they are afraid of the safety of

the food. Enhancing the safety of our food supply would require active effort and aggressive support of the business community such

as food wholesalers and retailers working with the Government.

This is a farm-to-table challenge, and it will take a farm-to-table

solution; and it is both a domestic and an international problem

that we must address together.

As the retailers and wholesalers of this country, we are working

to improve safety through four focused programs. First, we want to

ensure that our suppliers, whether they are domestic or international, are actively managing a science-based food safety program. We do that through our own Safe Quality Food Program, a

global food safety training, audit, and certification system. Second,

we train and certify our own supermarket employees in safe handling practices through education programs called SuperSafeMark,

and we have trained this year alone over 15,000 food store managers.

Third, we provide consumers with practical science-based advice

on food handling in the home through the cooperation for the Partnership for Food Safety Education. This is a public/private sector

program that brings together consumer groups, FDA, USDA, CDC,

and the industry sector. Our president, Tim Hammonds, is the

founding chair and immediate past chair of this educational partnership.

Fourth, FMI’s Board has appointed a food safety task force made

up of chief executives from retail and wholesale companies. The

task force is currently looking at ways that we can improve our Nation’s food recall communication system to make it more effective

and efficient. As I mentioned, there is a need to restore consumer

confidence and to reduce food borne illnesses. To that end we would

want to work with this committee, but we also want to be sure that

we can do so without hindering the ability to serve our customers.

To that end, any changes that we consider must be able to answer

some questions: Can they be supported by science, do they in fact

provide measurable benefits, are they affordable, realistic and practical, and can they be implemented without unintended consequences.

For example, in H.R. 3610, we support the concept of an expedited review process for those companies that comply with FDA

guidelines. Here is an example of where the private sector can be

of assistance. Through our safe quality food program, we are able

to audit all of our suppliers as often as we need to, and we can

grant them accredited certification when they meet the standards

at or above FDA’s. We also support the operation of the FDA field

labs. Rapid tests should be developed based on the seriousness of

the threat posed by the pathogen or chemical, and we also feel that

these tests should be used to monitor the food safety system, not

to inspect food. Another provision that we may be able to support

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is mandatory recall. Under our current recall system, food companies have an outstanding history of compliance, and we do not

want to change anything that would possibly slow down the recall

system. However, if the Secretary had the option to mandate a recall, in the event that a company were to refuse, then we could consider supporting such a provision. This is slightly different from

the bill language. We would be more inclined to supporting the Secretary with the authority to option, if a mandatory recall is necessary, rather than telling the Secretary he must issue a mandatory recall.

FMI cannot support the proposal for user fees on imported foods

and drugs. Not only will this raise the cost of food for the American

consumer but we also feel it presents a conflict of interest. FMI and

its members are very concerned about the provision to restrict U.S.

ports of entry. I think we have heard many examples of why the

system will just be damaging to our country. Ultimately the consumer will be the loser with higher costs for food and less availability of quality, fresh foods. We also do not support the proposed provision for carbon monoxide labeling of meat, poultry, and seafood.

Both FDA and USDA have recognized this technology as being

safe, and it is not the only packaging system that is currently used

to extend color of foods. We are not aware of any scientific basis

for singling out one technology for a warning label.

The bill also contains a provision requiring country of origin labeling. FMI strongly objected to the mandatory Country of Origin

Labeling Law created in the 2002 farm bill because it placed the

entire burden for labeling on retailers. Retailers are the last link

in the supply chain, and we should not, in fact we cannot, be accountable for ensuring the location of where food originated. The

concept of certifying foreign governments and countries by FDA

sounds very promising as we move toward a risk-based system and

one that we can support.

That system is one that we would support, but there does need

to be a more pragmatic approach as to how this could be accomplished. We look forward to working with you on these and other

concerns. Thank you.

[The prepared statement of Dr. Hollingsworth follows:]

TESTIMONY OF JILL HOLLINGSWORTH, D.V.M.

Chairman Pallone and members of the committee, I am honored to appear before

you today to present our views and suggestions on House bill 3610, the Food and

Drug Import Safety Act. I am Dr. Jill Hollingsworth, group vice president of the

Food Marketing Institute (FMI). I have been in charge of food safety programs at

FMI for the past 10 years

FMI is a national trade association that has 1,500 member companies made up

of food retailers and wholesalers in the United States and around the world. FMI

members operate approximately 26,000 retail food stores with combined annual

sales of $340 billion, representing three quarters of all retail food store sales in the

United States. FMI’s retail membership is composed of national and regional chains

as well as independent grocery stores. Our international membership includes some

200 companies from more than 50 countries.

In my capacity at FMI, I often draw upon my past work experience at the U.S.

Department of Agriculture (USDA). I spent 15 years there and led the investigation

of the Jack-in-the-Box E. coli outbreak in 1992. I subsequently set up food safety

and recall programs and a liaison program with the Center for Disease Control in

Atlanta and the U.S. Public Health Service. While there I also served as a VeteriVerDate 11-SEP-98 10:23 Oct 08, 2008 Jkt 000000 PO 00000 Frm 00076 Fmt 6633 Sfmt 6633 Q:\DOCS\110-68 SCOM1 PsN: SCOM1
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nary Inspector, Special Assistant to the Administrator of Food Safety and Inspection

Service (FSIS) and Assistant Deputy Administrator of FSIS.

Presently, I work closely with supermarkets and their wholesalers to ensure we

are doing all we can to guarantee a safe food supply—operating clean and safe

stores; adhering to science-based best practices; responding to emergency situations;

educating the public about safe food handling practices; and, working with our Federal, state and international partners to improve food safety programs.

In 2007, consumer confidence in the food supply reached its lowest point since

1989. FMI’s own survey of consumers, U.S. Grocery Shopper Trends, found that consumer confidence in the safety of foods purchased at supermarkets dropped from 82

percent in 2006 to 66 percent in 2007. And for restaurants, the drop in confidence

was down to 43 percent. Recalls and the lack of confidence in both the food system

and government have caused consumers to actually change their purchasing habits,

with 38 percent of consumers saying they have stopped buying certain food items

because of food safety concerns. For example, in January of this year, 71 percent

of consumers reported they no longer buy spinach.

We realize that restoring consumer confidence and strengthening our food safety

system is of paramount importance. We understand and support your goals. Enhancing the safety of the food supply requires the active effort and aggressive support of the business community—such as food wholesalers and retailers—as well as

government. This includes our work with suppliers, especially beyond our borders,

our commitment to train our own people and our outreach to consumers. It is a

farm-to-table challenge that needs a farm-to-table solution. It is both a domestic and

an international problem we must address together.

Accordingly, the retail food industry is actively involved in improving food safety

in the U.S. We are doing this through four focused programs: SQF (Safe Quality

Food program); SuperSafeMark; the Partnership for Food Safety; and, our Board

Level Food Safety Task Force.

I would like to highlight a few of the retailer/wholesaler food safety initiatives in

place. First, we work with our suppliers to ensure that they are following best practices. We have been aggressively implementing a new standard in food safety—one

based on science, for all suppliers, from the smallest farm to the largest manufacturing plant. This program is called Safe Quality Food, or SQF. The SQF standard is

one of only five programs in the world that has received recognition from the Global

Food Safety Initiative, a group of international food safety experts. What makes

SQF unique is that we require suppliers to carry out risk assessments, and after

they have put their food safety program in place, we monitor their performance

through third-party audits. Only those companies in compliance with this international standard can receive SQF certification.

Second, on the domestic front, we train and certify our supermarket employees

in safe food handling through a program especially designed for retail called

SuperSafeMark. Currently, we train and certify about 15,000 store managers a year

and we train thousands of store employees so that they comply with the FDA Food

Code.

Third, we provide consumers with practical, science-based advice on food-handling

in the home. We do this through The Partnership for Food Safety Education. This

is a joint private-public sector project that brings together consumer groups, the

FDA, USDA, CDC and a wide variety of other industry associations. Our president,

Tim Hammonds, is the founding chair and immediate past chair of the partnership.

The Partnership is responsible for the FightBAC campaign to teach food safety to

children and others; the Chill Out program to remind consumers about keeping

their home refrigerators cold; and, most recently, the Be Food Safe promotion providing retailers with the tools they need to educate their customers about safe food

practices.

Fourth, FMI’s Board has appointed a food safety task force made up of the chief

executives from retail and wholesale companies around the world. The task force is

looking at how we can make our nation’s food recall communications system more

effective and efficient. We are working in concert with our trading partners and will

be glad to communicate with this committee on our progress as we work toward improvements in the recall system.

As I mentioned earlier, there is a need to restore consumer confidence and to reduce the burden of foodborne illness; to that end we want to work with the committee to accomplish our shared goals but in a way that does not hinder our ability

to serve our customers and ensure an affordable and abundant food supply. Many

of the proposals in H.R. 3610 are well founded, but we must be sure that any

changes to our current food safety system meet certain criteria. They must:

• Be supported by science,

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• Have measurable benefits,

• Be affordable,

• Be realistic and practical,

• And, be implemented without unintended consequences.

MANDATORY RECALL AUTHORITY

Regarding mandatory recall authority, we realize that under our current voluntary system of recalls, a company has never refused to withdraw adulterated

product at FDA’s request or they have taken action on their own. However, if the

Secretary is given the option to mandate a recall in the event a company did refuse,

we can see where this would build confidence in the recall system. We note that

this approach differs somewhat from the current bill language, which would require

FDA to issue a cease distribution order upon a finding of food adulteration.

Rapid Testing Techniques for Use in Inspection of Imported FoodsAnother area

of potential agreement is the development of rapid testing techniques for use in inspections of imported foods. We urge the committee to pursue this avenue as long

as scientists and researchers prioritize this work. Developing rapid or screening

tests should take into account: the seriousness of the threat posed by the pathogen

or chemical; how frequently it occurs as a food contaminant; and, the likelihood that

a rapid test methodology would be successful. We would also encourage FDA to

work with USDA, CDC, and other public and private entities to share expertise, resources and laboratories in pursuing this.

SAFE AND SECURE IMPORTATION FOOD PROGRAM

The provision for a safe and secure importation of food program that recognizes

those companies that comply with new FDA guidelines in exchange for expedited

review of their product is a good idea. Here is an area where the private sector can

be of assistance if companies demonstrate their compliance to a food safety standard

through an accredited certification program such as SQF. SQF requires that a company be in compliance with the regulatory requirements of both the exporting and

importing country, in addition to the standards set by the retail buyers. Although

not intended to be a substitute for government oversight, the private sector can add

an additional layer of ‘‘policing’’ for products entering into the U.S. food supply. We

would need to see the details of FDA’s plan as many factors such as tracking compliance, the security of the company’s supply chain, etc., would need to be taken into

consideration. It would also be important to coordinate these efforts with USDA,

Customs and other Agencies.

CONTINUED OPERATION OF FDA FIELD LABORATORIES

We fully support the continued operation of FDA Field Laboratories. These labs

provide needed scientific support and credibility. One consideration for reform would

be to determine the capabilities at each of the labs and designate certain ones as

a ‘‘center of excellence’’ for a selected type of test or procedure.

USER FEES ON IMPORTED FOODS AND DRUGS

Although we strongly agree that FDA and its food safety programs are underfunded, FMI cannot support the proposal to impose user fees on imported foods and

drugs. Not only will this raise the cost of food, but we also consider such fees to

be a conflict of interest by the Agency in charge of inspecting and raising money

for its own budget. We are unsure what direct impact user fees on food will have

on our retailers and have asked them to review this.

RESTRICTING THE PORTS OF ENTRY FOR IMPORTED FOODS

FMI and its members are very concerned about the provision to restrict U.S. ports

of entry for imported foods. We understand that the provision is modeled on the

USDA system, but when applied to the broad spectrum of products under FDA supervision, it becomes unworkable and prohibitively expensive.

Mr. Chairman, U.S. ports are already busy to the point of congestion. And there

is increasing concern in the retail community that the growth in port capacity is

simply not keeping pace with the growth in demand. Limiting the number of ports

food can enter into through legislation will not only aggravate congestion and

delays, it could also increase the cost of food for the American consumer.

As you know, quite a bit of food that enters the country is perishable and needs

to be shipped, sold and consumed in a limited period of time. A shipment of apples

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or pears cannot be left sitting on a dock for an extended period of time. As delays

increase, so does shrinkage, waste and—unfortunately—costs.

FMI is particularly concerned about the ability of these ports to handle the spike

in imports of perishable commodities during the winter months, when the U.S.

growing season for a number of products is over. The only way to meet demand for

certain fruits and vegetables during this period is through imports. But again,

delays at the port-level threaten our ability to bring these products to market in

a timely manner and increase costs. And unfortunately, it is the American consumer

who bears the brunt of this increase, particularly poorer Americans. As prices rise,

consumers do not just pay more, they often consume less. When talking about fruits

and vegetables, this is clearly not the desired outcome.

I would also note that there are significant costs involved with closing ports of

entry and shifting freight elsewhere. Food importers that have distribution centers

at or around the ports that will no longer accept food will have to move their operations and face the expense of building and setting up new centers. Long-established

supply lines will have to be reworked, which can be both expensive and costly. And

the impacted districts are likely to see a decline in employment and tax revenues

as the importers shift employees to their new operations.

As an example of the disruption of trade, ninety percent of seafood shipments

enter through 14 ports (Los Angeles; New York; Miami; Portland ME; Seattle; Boston; Norfolk; Tampa; Savannah; San Francisco; Houston; Philadelphia; New Orleans; and, Nogales, AZ), according the National Fisheries Institute. Of the 14 ports,

only four are co-located with FDA laboratories: New York, Seattle, Savannah (Atlanta laboratory) and San Francisco. This would render states such as Florida unable to accept seafood products.

COUNTRY OF ORIGIN LABELING

Section 6of the bill would require labeling to identify the country of origin of food,

drugs, and medical devices and would require FDA to promulgate final regulations

within 180 days of the law’s enactment that would likewise take effect within 180

days of enactment. We have several concerns with this provision in terms of timing,

necessity and efficacy.

In terms of timing, based on our experience with the regulations for country of

origin labeling for seafood alone, we can report that the development of regulations

for the 80 percent of the food supply that falls within FDA’s jurisdiction within 180

days would be virtually impossible. Moreover, the Tariff Act already requires imported food products to bear country of origin labeling, leaving open the question

of what additional service this provision would apply and what standard the bill intends for the industry to use. That is, given the breadth of countries that may be

involved in sourcing ingredients (and ingredients of ingredients) for processed foods,

what country should be listed as THE country of origin for any given food product

if a different standard is to apply? More importantly, however, identifying one—or

twenty—countries from which food or its ingredients derives does not enhance the

safety of the underlying food product. The resources that would be required to develop and implement the complex system that such labeling would entail would be

far better spent on measures that would actually have the potential to improve the

safety of the product.

CERTIFYING FOREIGN GOVERNMENTS AND COMPANIES

The concept of certifying foreign governments and companies by FDA sounds

promising as a nod toward a risk-based system, but it gives rise to many questions.

For example, how would FDA implement a mandate of this magnitude? FDA does

not have the financial or personnel resources to take on this endeavor even with

the $300 to $500 million projection from the user fee provision of the bill. Before

moving forward with this, FDA, USDA and others should map out a plan for how

such a system might work.

We would also encourage the committee to remember that a number of developing

countries may face severe difficulties in meeting the requirements of any certification programs. At the very least, both FDA and USDA need to be prepared to provide both technical and monetary aid to support capacity building in those areas.

We agree that foreign governments should be held accountable for demonstrating

that they have regulatory systems in place equivalent to those in the U.S.; evaluating other government programs might be a more realistic starting place. We would

also suggest using some of the existing resources of USDA, APHIS and others who

are already in those countries and ask them to take part in inspections and possible

certifications.

Adequate Testing of Processed Food Products

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Providing adequate testing of processed food products post-production presents

challenges because there is no objective way to ensure testing is truly ‘‘adequate.’’

It is more effective to implement and monitor prevention programs, and use testing

as a measure of how well those food safety programs are performing. This approach

supports risk-based systems where resources are directed toward making sure products are safe through process control, such as HACCP (Hazard Analysis Critical

Control Points) and certified third party audit programs.

CARBON MONOXIDE LABELING FOR MEAT, POULTRY AND SEAFOOD

We do not support the proposed provision for carbon monoxide labeling of meat,

poultry and seafood. Both FDA and USDA have recognized that carbon monoxide

is generally recognized as safe for its intended purpose. We are not aware of any

scientific basis for singling out this one technology for labeling.

Thank you for the opportunity to testify. We appreciate the efforts set forth in

H.R. 3610 to help restore confidence in the food safety system and reduce foodborne

illness. We remain available to the committee for further discussion and information

should you need it.

Mr. PALLONE. I think we only have about 6 minutes left, so I am

going to recess. We only have two votes, so it should be about

maybe 15, 20 minutes. Thank you. The subcommittee is in recess.

[Recess.]

Mr. PALLONE. The subcommittee will reconvene, and we left off

with Ms. DeWaal.

STATEMENT OF CAROLINE SMITH DEWAAL, FOOD SAFETY

DIRECTOR, CENTER FOR SCIENCE IN THE PUBLIC INTEREST

Ms. DEWAAL. Thank you, Mr. Chairman. I am Caroline Smith

DeWaal, and I direct the Food Safety Project for the Center for

Science in the Public Interest. We represent over 900,000 consumers, both in the U.S. and Canada; and I need to tell you that last

year consumer confidence in the safety of the food supply declined

dramatically by 16 percent in just 1 year. Concerns about imported

food was also very pronounced; and in July, 83 percent of shoppers

expressed concern about food from China, and 61 percent were concerned also about food from Mexico. This concern is really, totally

understandable given the fact that we have so many outbreaks and

recalls last year from contaminated food.

For years CSPI has advocated for new, legal structure to modernize FDA’s Food Safety Program, and we really congratulate the

chairman on his leadership in introducing the Consumer Food

Safety Act. Recently, the Bush administration and the food industry both agreed that the systems in place today are not sufficient

to ensure the safety of imported foods. In fact, the food industry’s

Four Pillars Reform Proposal recognizes several essential areas for

modernization. Such broad agreement clearly signals that the time

is right for Congress to act on reforming the country’s food safety

laws.

Congress also appears poised to address this problem and to fund

it adequately as just last week in the PDUFA legislation, you

passed a sense of Congress that talked about the need to do this

and Congress’ commitment to it. And the emergence of coalitions

like the Coalition for a Stronger FDA including groups which are

traditionally estranged or on opposite sides of the table, consumer

and industry organizations, this gives Congress a unique opportunity to appeal to many constituencies as it creates a modern food

safety system.

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Change is hard, but it has been done before and in many other

countries. The United Kingdom reformed its food safety program

and established the Food Standards Agency in 1999; and this agency has proven effective in reducing the incidents of food borne illness and in rebuilding public confidence. In fact, food borne illnesses declined 18 percent within the first 3 years of the new agency, and public confidence in the safety of the food supply rose from

44 percent to 60 percent. This change came after food scares, most

notably from mad cow disease in the 1990s which led all sides to

recognize both the need for change and built the momentum to

reach workable compromises.

I believe that we are at the same nexus of crisis and consensus

in this country that Britain faced in the 1990s and that the momentum for building a stronger food safety system is growing.

I have a number of specific comments with respect to Chairman

Dingell’s legislation, and they are mostly included in my written

testimony. I do want to mention that the certification procedure in

the bill has greatly improved from what was originally announced

in August, but it does need to probably be fine tuned with some

regular audits of foreign national programs, including inspections

of facilities.

In addition I am concerned that the user fee proposal may distract from many important questions about legal authority, so I

would hope that the user fees, if they are going to move forward,

doesn’t bog down the process.

The bottom line though is while this bill contains many excellent

components, we believe that really to restore consumer confidence,

Congress must go further and enact comprehensive legislation to

address today’s food safety hazards, both foreign and domestic. Preventive control systems implemented by the food industry and performance standards monitored and enforced by the Government

must form the heart of needed reforms to FDA’s legal structure.

Only such comprehensive reforms will protect the food supply and

restore consumer confidence.

U.S. food safety laws are more than 100 years old and were

never designed to deal with the modern issues such as escalating

imports, bioterrorism, or tainted produce. Legislation is needed

that creates a program that puts public health at the forefront of

food safety. We urge Congress to take action before the next congressional election to modernize food safety laws and to fully fund

our National Food Safety Program. Thank you.

[The prepared statement of Ms. Smith DeWaal follows:]

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Mr. PALLONE. Thank you. Dr. Goldhammer.

STATEMENT OF ALAN GOLDHAMMER, DEPUTY VICE PRESIDENT, REGULATORY AFFAIRS, PHARMACEUTICAL RESEARCH AND MANUFACTURERS OF AMERICA

Mr. GOLDHAMMER. Thank you very much, Chairman Pallone. It

is a pleasure to return to the subcommittee and talk about this important issue. PhRMA looks forward to continueing to work with

the full committee to ensure patient safety because patients and

their healthcare providers quite reasonably expect that our medicines will safely and effectively treat the diseases that they are diagnosed with. American patients trust that the drugs dispensed for

their conditions are not counterfeit, and our companies obviously

don’t want patients getting counterfeit medicines because such

medicines could result in effectual or even dangerous medical outcomes.

The Prescription Drug Marketing Act which originated with this

committee was a critical piece of consumer legislation passed as a

result of Congressional concerns regarding the integrity of the drug

distribution system that existed at that time. The passage of this

legislation established the closed distribution system that we have

today. The PDMA, coupled with the exacting regulatory requirements of the FDA helps to minimize the possibility of a consumer

receiving a counterfeit drug. The pharmaceutical industry is already intensively regulated. Our companies manufacture products

following exacting standards that have been reviewed and approved by the FDA. They employ extensive quality systems to assure that innovative medicines provide consistent, positive health

outcomes. However, even the most effective medicines cannot help

patients if those medicines were compromised by loopholes or

breakdowns in the pharmaceutical distribution system which could

provide opportunities for diversion or counterfeiting.

The remainder of this testimony will focus on the FDA regulatory

system that assures quality, steps that manufacturers take to implement quality systems, and finally some thoughts about what

policymakers might consider to further secure the pharmaceutical

supply chain.

Throughout the drug development process, our companies focus

on the quality of the product and put into place manufacturing controls that result in a medicine that is consistent from lot to lot with

respect to purity and potency. Information is collected on the product’s stability so the patient may be assured, the expiration date

is based on sound science, and that the medicine, if used within

this period of time, will provide the therapeutic dose the doctor has

prescribed. All of this information is submitted to the FDA for review in the license application. FDA not only reviews all this data

but conducts the preapproved inspection in the manufacturing facility to ensure that it is in compliance with good manufacturing

practice regulations.

These GMPs cover the quality control unit, buildings and facilities, equipment, control of components and drug product containers, enclosures, production and process controls, packaging and labeling control, clothing and distribution, laboratory controls, record

and reports, and finally, returned and salvaged drug products.

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When companies use outside vendors or contract manufacturers for

any components or parts of the finished medicine, extensive qualification and standards testing regimes are put in place to ensure

the materials received meet the standards established by the pharmaceutical company. Companies regularly audit these suppliers to

make sure that source materials are produced in a manner consistent with the specifications outlined in the manufacturing agreements. Quality assurance is also an ongoing part of the business.

It does not stop when the NDA is approved and production commences. Companies have a regulatory responsibility to continuously monitor so that each lot released in the commercial distribution system meets the FDA approved specifications.

While PhRMA believes the United States drug distribution system is the safest in the world, there are some steps we have advocated that will further secure the pharmaceutical supply chain.

First, we need increased requirements for repackagers. PhRMA believes that FDA should reassess its policies and procedures regarding repackaging operations. Repackaging has been identified as a

weak spot in the drug distribution system that can be used as an

entry point and distribution center for diverted and counterfeited

drug products. Repackagers remove drug products from their original packaging and labeling thereby destroying any counterfeit-resistant technologies employed by the original manufacturer. Consequently, additional oversight is necessary to ensure that repackaged drug products are authentic and not compromised by such repackaging operations.

Second, we believe the Federal requirements for wholesalers and

distributors should be strengthened. We support efforts to strengthen licensure requirements for wholesalers and distributors. Recent

investigations in Florida have identified systemic weaknesses in

the oversight of the wholesale drug industry, and there have been

many newspaper articles detailing this as well. These weaknesses

permit individuals, even those with prior felony convictions, to obtain wholesale licenses for operations that deal in diverted and

counterfeit drug products.

Third, we believe that there should be increased criminal penalties for counterfeiting activities. We believe that the criminal

penalties for counterfeiting prescription drug products must be significantly increased. The current penalty under the Federal Food,

Drug, and Cosmetic Act, a maximum of 3 years’ imprisonment,

does not reflect the serious public health risks associated with

counterfeit drugs or serve as an adequate deterrent to prospective

counterfeiters. We thus support increasing the maximum criminal

penalty for counterfeiting drug products from 3 to 20 years imprisonment.

We look forward to working with the committee as you move forward with this important legislation. Thank you very much.

[The prepared statement of Mr. Goldhammer follows:]

STATEMENT OF ALAN GOLDHAMMER

Thank you Mr. Chairman and members of the Energy and Commerce Committee.

My name is Alan Goldhammer, Ph.D., and I am the deputy vice president for regulatory affairs at the Pharmaceutical Research and Manufacturers of America

(PhRMA), a trade association representing the leading research-based pharmaVerDate 11-SEP-98 10:23 Oct 08, 2008 Jkt 000000 PO 00000 Frm 00095 Fmt 6633 Sfmt 6633 Q:\DOCS\110-68 SCOM1 PsN: SCOM1
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ceutical and biotechnology companies. We are pleased to have been invited as part

of this discussion, and look forward to continued work with the committee to ensure

patient safety.

PhRMA members alone invested an estimated $43 billion in 2006 in discovering

and developing new medicines, and patients and their health care providers quite

reasonably expect these medicines to safely and effectively treat the diagnosed medical condition. America’s patients trust that the drugs dispensed for their conditions

are not counterfeit. Pharmaceutical companies obviously don’t want patients getting

counterfeited medicines, because such medicines could result in ineffectual or even

dangerous medical outcomes.

The Prescription Drug Marketing Act of 1987 (PDMA), was a critical piece of consumer legislation passed as a result of Congressional concerns regarding the integrity of the drug distribution system that existed at the time. The passage of this

legislation established the closed distribution system that we have today. The

PDMA coupled with the exacting regulatory requirements of the Food and Drug Administration (FDA) helps minimize the possibility of a consumer receiving a counterfeit drug.

Pharmaceutical companies manufacture products following exacting standards

that have been reviewed and approved by the FDA. They employ extensive quality

systems to assure that innovative medicines provide consistent positive health outcomes. However, even the most effective medicines cannot help patients if those

medicines are compromised by loopholes or breakdowns in the pharmaceutical distribution system, which could provide opportunities for diversion and counterfeiting.

The remainder of this testimony will focus on the FDA regulatory system that

assures quality, the steps manufacturers take to implement quality systems, and finally some thoughts about what policy makers might consider to further secure the

pharmaceutical supply chain.

Throughout the drug development process, pharmaceutical companies focus on the

quality of the product and put in place manufacturing controls that result in a medicine that is consistent from lot to lot with respect to its purity and potency. Information is collected on the product’s stability so that the patient can be assured that

the expiration date is based on sound science and that the medicine if used within

this period of time will provide the therapeutic dose the doctor has prescribed. All

of this information is submitted to the FDA for review in the New Drug Application

(NDA) (or Biologics License Application (BLA) for biologics and biotechnology products). FDA not only reviews all of this data but also conducts a pre-approval inspection of the manufacturing facility to insure that it is in compliance with Good Manufacturing Practice (GMPs) requirements as outlined in 21 C.F.R. Parts 210 and 211.

The GMPs cover the quality control unit; buildings and facilities; equipment; control of components and drug product containers and closures; production and process

controls; packaging and labeling control; holding and distribution; laboratory controls; records and reports; and finally returned and salvaged drug products. When

companies use outside vendors or contract manufacturers for any components of the

finished medicine, extensive qualification and standards testing regimes are put into

place to assure that the materials received meet the standards established by the

pharmaceutical company. Companies regularly audit their suppliers to make sure

source materials are produced in a manner consistent with the specifications outlined in the manufacturing agreement(s).

Quality assurance is an ongoing part of the business; it does not stop when the

NDA is approved and production commences. Companies have a regulatory responsibility to continuously monitor so that each lot released to the commercial distribution system meets the FDA approved specifications.

While PhRMA believes that the Unites States drug distribution system is the

safest in the world, there are some steps that we have advocated that we believe

will further secure the pharmaceutical supply chain.

1. Increase Requirements for Repackagers. PhRMA believes that FDA should reassess its policies and procedures regarding repackaging operations. Repackaging

has been identified as a weak spot in the drug distribution system that can be used

as an entry point and distribution center for diverted and counterfeit drug products.

Repackagers remove drug products from their original packaging and labeling,

thereby destroying any counterfeit resistant technologies employed by the original

manufacturer. Consequently, additional oversight is necessary to ensure that repackaged drug products are authentic and are not compromised by repackaging operations. PhRMA believes that FDA could better regulate the authenticity and quality of repackaged drug products if it had authority to require prior approval of repackaging operations. At a minimum, FDA should increase its inspections of repackagers and, where appropriate, initiate enforcement action. In addition, repackagers

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should be subject to the same requirements regarding overt and covert counterfeit

resistant technologies as original manufacturers.

2. Strengthen Federal Requirements for Wholesalers/Distributors. PhRMA supports efforts to strengthen the licensure requirements for wholesalers and distributors. Recent investigations, particularly by the Florida Grand Jury and the Washington Post, have identified systemic weaknesses in the oversight of the wholesale

drug industry in many states. These weaknesses permit individuals, even those with

prior felony convictions, to obtain wholesaler licenses for operations that deal in diverted and counterfeit drug products. PhRMA supports efforts by Florida and Nevada to strengthen requirements for the licensure of wholesalers by, for example,

requiring the posting of a substantial performance bond (e.g., $100,000) and conducting detailed pre-licensure background checks and facility inspections. PhRMA

believes, however, that licensure requirements should be strengthened consistently

across all states to prevent diverters and counterfeiters from re-locating to states

without strong licensure requirements. This can best be accomplished through revisions to 21 U.S.C.0 § 503(e)(2) specifying higher minimum standards for state licensing of drug wholesalers and distributors similar to those currently in place in

Florida and Nevada. FDA also should review state requirements for the licensure

of wholesalers to ensure that they meet any enhanced minimum Federal regulatory

requirements.

3. Increase Criminal Penalties for Counterfeiting Activities. PhRMA believes that

the criminal penalties for counterfeiting prescription drug products must be significantly increased. The current penalty under the Federal Food, Drug, and Cosmetic

Act (FFDCA)—a maximum of three years imprisonment—does not reflect the serious public health risks associated with counterfeit drugs or serve as an adequate

deterrent to prospective counterfeiters. PhRMA thus supports increasing the maximum criminal penalty for counterfeiting drug products from three to twenty years

imprisonment. PhRMA also believes that criminal penalties should be imposed

against entities that create a market for diverted and counterfeit drug products by

purchasing drug products without adequate due diligence into the source and authenticity of such drugs. PhRMA thus supports making it a prohibited act under the

FFDCA to purchase prescription drugs from a wholesale distributor without first obtaining and verifying the information provided on a drug pedigree.

Mr. PALLONE. Thank you, Doctor. Mr. Kubic.

STATEMENT OF TOM KUBIC, EXECUTIVE DIRECTOR,

PHARMACEUTICALS SECURITY INSTITUTE

Mr. KUBIC. Thank you for this opportunity to provide comments

concerning an issue of growing importance to all Americans, the

safety and security of their medicines as well as their food.

Today there are trans-national criminal organizations who ignore

regulations formulated by drug regulatory authorities and who regularly violate laws designed to ensure the integrity of medicines

that are widely available here in the United States. They manufacture, they distribute counterfeit medicines indiscriminately without

any regard to the current good manufacturing processes.

I hope that these discussions today will help lead to a better understanding that the risks facing the public today are indeed real.

My name is Tom Kubic, and I am the executive director of the

Pharmaceutical Security Institute. PSI is comprised of 24 security

directors of the major manufacturers of pharmaceuticals. They

have operations in more than 160 countries.

The goal of PSI is to support our members in their efforts to ensure the distribution of pharmaceuticals that are safe and effective.

PSI’s mission is to collect, to analyze, and to disseminate information about counterfeiting, theft, and the illegal diversion of medicines. This information is then shared with the authorities so that

they can initiate appropriate investigations and activities. In my

opening remarks, I just want to make a few statements about the

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nature and extent of counterfeiting, the counterfeiting facts, if you

will.

PSI conducts an annual assessment of the worldwide situation

regarding counterfeit medicines. In the Fifth Annual PSI Situation

Report, we found that many individual criminals and criminal organizations continue to be actively engaged in pharmaceutical

crimes. The support of this statement is the fact that last year PSI

reported 1,371 new incidents, roughly 22 percent as an increase

over calendar year 2005. Throughout the year we added another

150 incidents that actually occurred in 2005, and the 2-year total

exceeded 2,494, roughly 100 incidents around the world each and

every month.

The increases in 2005 and 2006 were not an isolated trend. In

fact, the 5-year trend line includes generally speaking double-digit

increases in counterfeiting incidents around the world. Some would

say this number of incidents is small. In fact, what we see is an

increase in quantity of medicine and an even wider variety of medicines that being counterfeited. For example, in November 2006, in

Mexico City itself at 14 locations, 11 tons of counterfeit medicines

were seized. In July 2007, in Jakarta, Indonesia, 41⁄2 tons of illegal

medicines were seized. In contrast to 2006, when each incident had

either one to 45 different drugs found that were counterfeit, in

2007 the Jakarta seizures, for example, 88 different types of medicines were counterfeited.

The numbers of countries experiencing counterfeiters remain

about the same in 2006. There were 100, the preceding year it was

101. However, we have seen a concentration on fewer numbers of

drugs with the exception of 2007. In 2006, 560 different types of

medicines were counterfeited, and then in 2005, it was 687 different products.

Counterfeiting is no longer limited to the so-called lifestyle drugs.

In fact, virtually every type of medicine has been determined to be

counterfeited.

So what has been the law enforcement response? In calendar

year 2006, worldwide there was an actual 10 percent reduction in

counterfeit arrests. There were a total of 755 documented individuals arrested for this activity in over 56 different countries. While

it was encouraging to see that the majority of these arrests occurred in the Asian region, fully 33 percent of the worldwide arrests, it was also important to note that those arrests, the largest

category, was for manufacturing of counterfeit medicines versus the

sale or distribution of counterfeit medicines.

In summary, the challenge of counterfeits, stolen, and diverted

pharmaceuticals is fairly clear from the Situation Report. More incidents have occurred, fewer arrests have been made. Americans

need to know that the U.S. markets have been, is now, and will

continue to be an area that is of keen interest to these organizations. Their safety today is endangered whenever they venture outside of the closed system of acquiring their pharmaceuticals and

they move into such bizarre places such as the Internet. Thank

you.

[The prepared statement of Mr. Kubic follows:]

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Mr. PALLONE. Thank you. Mr. Northcott.

STATEMENT OF HALLOCK NORTHCOTT, PRESIDENT AND CEO,

AMERICAN ASSOCIATION OF EXPORTERS AND IMPORTERS

Mr. NORTHCOTT. Good afternoon, Chairman Pallone, members of

the committee. My name is Hal Northcott, and I am here representing the American Association of Exporters and Importers,

and we very much appreciate this opportunity to speak on H.R.

3610.

AAEI is a cross-section of the Nation’s supply chain in that we

are made up of manufacturers, distributors, retailers, freight forwarders, insurers, brokers, foreign trade zones, and ports all across

the country, both large and small business. Each of these businesses is engaged in actively getting stuff in and out of the United

States. That is what they do, that is who we represent.

With this background, let me say that we are here today to address by section only those portions of the bill on which our trade,

security, and logistics knowledge may be of some benefit to the

community.

So if I might, let me begin with section 2 on port inspection,

which for brevity, we will comment on in linkage with section 7

covering restricted ports of entry. Here I would like to make three

points. First, the use of a tried and true inspection system like that

of the USDA is very initially appealing. However, taking that

model which has been applied to a comparatively small scope and

volume of meat, poultry, and eggs and then trying to apply it

across the enormous volume of imports, food in particular, nationwide creates a whole new logistical ballgame. Frankly, it is highly

problematic.

Second, the application of the restricted port inspection system

will have predictable but significant impact nationwide in that

there will be clearly perceived winners and losers. That would

make 313 ports losers and 13 winners. However, let me assure you

that even the perceived winners will face some serious new problems and we believe unintended consequences.

Third, we would urge the committee to take a serious look at the

enormous volume of data that has been referenced over and over

again during this testimony. In this we commend to you CBP’s developing ITDS, or International Trade Data System, which for

rough purposes is roughly comparable to the air scoop on the hood

feeding crucial data to the engine block which in this case is the

automated commercial environment. This is a good thing, and

frankly it enables the very important drive toward one face at the

border which our friends at CBP are also spearheading. And may

I note here that CBP, like FDA, is badly lacking necessary resources, and we encourage your action in that regard.

So separately, we ask that you appreciate that while a successful

import safety program with its data must have transparency, data

is private property and it is highly valuable. It must not be given

away to the bad guys in a world filled with foreign governmentowned and subsidized industries and extensive industrial espionage. In the name of American competitiveness, data protection is

crucial.

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Now let us turn briefly to section 6, the rules or origin, and here

frankly we have two requests, both very short. We ask that you

please do not permit this Congress to confuse rules of origin labeling with an effective safety program. It is certainly a useful consumer element, but it doesn’t do much if anything to solve the real

world’s import food safety problems. And second, in looking at rules

of origin, we suggest that the Congress please do not impose yet

another country-of-origin standard upon your import/export industries. Believe me, with the further proliferation of new and differing rules of origin found in existing and forthcoming FTAs, it is

sufficiently confusing for industry already. Please look to existing

standards.

I am going to go briefly to section 7 and say that we endorse the

concepts here and have been actively engaged with the FDA in trying to create this type of program for the last four years. The personnel with whom we have worked do a fine job. The low-risk

model will go a long way in promoting America’s huge food export

markets. But all of the above, I would say as a final point, one fundamental springs to the top of any supply chain list, and here we

would ask that you recognize, despite important similarities, that

trade, security, and product safety are not the same. They are fundamentally different. They may look and feel the same on the surface, but they are truly worlds apart. At its most basic, trade security is concerned with the integrity of the supply chain, ensuring

that the box or container and its contents have not been tampered

with in packaging or transport. Thus, it is secure. In direct contrast, what you are addressing today, food product safety, is focused on the individual item inside those boxes. Product safety targets the composition, functionality, quality, and overall integrity of

the food product. It is inside versus outside, the two must not be

confused.

And with that, thank you very much. We would like to conclude

our testimony and offer again our appreciation.

[The prepared statement of Mr. Northcott follows:]

STATEMENT OF HALLOCK NORTHCOTT

A. INTRODUCTION AND OVERVIEW

Chairman Dingell, Ranking Member Barton, Ranking Member Deal, and members of the committee, my name is Hall Northcott and I am president and CEO of

the American Association of Exporters and Importers (AAEI). AAEI appreciates the

opportunity to offer its comments on your effort to address import product safety

in the Food and Drug Import Safety Act of 2007 (H.R. 3610)

AAEI is a trade association comprised of U.S. and multinational manufacturers,

distributors, retailers, freight forwarders, insurers, brokers, foreign trade zones and

ports across the country, each engaged in the import and export of merchandise to

and from the United States. In one fashion or another we truly represent the scale

and scope of America’s supply chain. We have helped educate and then externally

represented the trade community in domestic regulatory, legislative, and public policy arenas since 1921 and in recent years have moved to assertively represent American import and export interests in multiple international forums.

AAEI’s primary focus has long been ‘‘getting things in and out of the United State

in the most efficient, practical and responsible manner seen worldwide.’’ In this we

have long been a strong supporter of supply chain integrity and security as well as

facilitation throughout the full-range of trade community issues affecting customs

and international commerce. In short, AAEI believes that it is vital for the government and the trade community to work closely together and coordinate supply chain

security, facilitation and import product safety for the United States to maintain a

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critical balance between the free flow of legitimate trade and safe and secure goods.

However, we are not expert in food product safety matters and thus are to here to

support the committee in its efforts impacting supply chains, trade processes and

those multiple aspects of today’s global trade reality with which we are very familiar. It would be our pleasure to support, assist and encourage the committee in

these efforts.

It is indeed a privilege to appear before you on behalf of Chairman Charlene

Stocker, our Board of Governors, and our members, found in every industry nationwide. Our testimony reflects the trade community’s eagerness to work with the committee to ensure that the Nation’s product safety measures work—for consumers,

the government, manufacturers, importers and exporters. In particular, we hope

that we can assist you in your efforts to advance product safety by both fully exploring and thus utilizing all the current trade related statutory and regulatory tools

available.

Since 9/11, AAEI and the U.S. business community have worked diligently with

the Department of Homeland Security, U.S. Customs and Border Protection and

multiple government agencies at the Federal, state and local levels to develop programs designed to maximizing homeland security protection primarily through reducing the likelihood that the global supply chain could be used by terrorists as a

delivery system for weapons of mass destruction. Frankly, we have long been and

remain concerned that many important trade facilitation functions can be relegated

to secondary status in the press of today’s critical security environment. Thus, it has

been our intent to assist in ensuring that robust security practices enhance the flow

of legitimate trade such that the twin goals of trade security and trade facilitation

are mutually complementary. In this, while we often have significant disagreements

as to details and applications, we would strongly commend the efforts and personnel

of the CBP and related DHS leadership for their commitment to vital national goals.

In relation to the above trade and supply chain concerns, we have recently begun

to explore, in depth, related product safety issues and believe that ensuring product

safety and integrity should be viewed as an important ‘‘third leg of a stool’’ which

strengthens the other two legs—security and facilitation. Although balancing these

interests is unquestionably a difficult task, we believe that H.R. 3610 has provisions

of great value in further structuring the overall framework. We look forward to

working with you to safeguard achieving this productive balance between these roles

is a vital national interest and those U.S. policies and programs critically important

for the United States to remain competitive in the global marketplace. In this we

will support your efforts to further encourage the growth of our nations reliable, efficient and successful international trade system. This system must remain healthy

if our Nation is to retain and enhance its position at the head table of global commerce.

B. SETTING A FRAMEWORK FOR IMPORT PRODUCT SAFETY DIFFERENCE

AAEI’s testimony on Setting a Framework for Import Product Safety touches upon

four topics which we understand to be of particular interest to this committee 1.

Low risk and account-based management works and can be used to enhance import

product safety; 2. trade security and product safety are different and are based on

divergent principles including different risk tolerances; 3. Interagency cooperation,

particularly data exchange through the International Trade Data System (ITDS), is

essential; and 4. Enhancement of manpower and resources for multiple agencies

both directly and through third parties should be approached with an eye to significantly enhanced capabilities.

Frankly, at some point in the future, we would welcome the opportunity to discuss

with the committee a number of subjects including 1) the multiple impacts, since

9/11 upon commerce and, in particular, small and medium business of the substantial number of security programs launched, as stand alone efforts, 2) the cumulative

affect of proliferating Federal agency actions outside of CBP jurisdiction which increases the complexity and cost of the import process, 3) Federal agencies movement

towards harmonizing U.S. regulations with international standards, 4) additional

compliance requirements, 5) ongoing pressure on agencies to impose new user fees

on importers that are, at best, ‘‘toll booth taxes’’ rather than fees for additional government services, and 7) new proposals each year seeking market data demands as

well as more transparency and resilience from the global supply chain than can be

digested and implemented by the trade community in the short period of time required by statutory deadlines.

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LOW RISK AND ACCOUNT-BASED MANAGEMENT IS HIGHLY EFFICIENT

Account-Based Management. For many years, the trade community has partnered

with CBP and DHS to develop low risk importer programs for both trade security

and trade compliance purposes. In regulating over 825,000 importers, CBP had to

make strategic choices in deploying its already scarce, and increasingly depleted, resources while the volume of trade continued to increase. CBP’s strategy, going back

to the 1980’s, incentivizes companies with good security procedures and internal

controls to join voluntary programs for mutual advantage and, dependent upon the

program, a menu of trade facilitation advantages through reduction of processes or

complexity of steps required. A critical part of this strategy, as directed earlier by

the Congress, is treating importers as an ‘‘account’’ by reviewing the companies’’

record of compliance for all their importations, rather than individual transactions.

By treating importers as an account, CBP is able to quickly determine a company’s

compliance profile and work with the company to remedy any deficiencies. CBP can

then concentrate its resources on companies which do not demonstrate a high level

of compliance and present the great risk for violations. In these efforts, CBP serves

as an excellent model.

One example of a flourishing public private partnership at work today is found

in the risk management operations of a widely accepted account based program now

in its 6th year. This is the Customs Trade Partnership Against Terrorism (CTPAT)

program which today, while truly voluntary, has, in many industries become the acknowledged standard upon which business is done. C-TPAT is a government-business initiative to strengthen and improve overall international supply chain and

U.S. border security. Those businesses that choose to apply are making a commitment to work toward the goal of creating a more secure and efficient supply chain

in partnership with CBP.

One key feature, that we would specifically note for the committees consideration

is that, after multiple discussions with industries and congressional committees

committed to this program’s success, CBP did not fall prey to the easy answer of

imposing a ‘‘one size fits all’’ approach in this wholly new effort. Instead of the ‘‘one

size fits all’’ approach, CBP and DHS succeeded in developing a successful program

by recognizing that different products, sourcing regions, and supply chains have different operations and levels of risks. We would strongly urge the committee to explore the many reasons for adopting this approach. In this effort, one vital aspect

is the ongoing verification and recertification program. Here, for instance, they

issued and used extensively in the ongoing verification process, a Supply Chain Security Best Practices Catalog to provide importers with a compendium of the optimum and most effective efforts developed by other companies. This catalog has

helped promote CTPAT’s wide acceptance in the trade community as evidenced by

the fact that there are over 7,500 certified participants in C-TPAT. As of today, approximately, 5,000 validations have been completed and we expect the remainder

will be validated by the end of the year. However, we would hope that any efforts

that the committee might wish to initiate would from date of implementation be

adequately staffed for efficiency in implementation.

In a significant precedent, Congress has already accepted and enhanced C-TPAT’s

risk management approach to security by providing statutory recognition of this program in the Security and Accountability for Every (SAFE) Port Act. In this legislation, they sanctioned its voluntary nature, and tiered levels of participation linked

to specific benefits. For most U.S. companies with global supply chains, C-TPAT

membership is a requirement in today’s business environment. C-TPAT has also

serves as a model for the European Union’s Authorized Economic Operator certification for security and the World Customs Organization’s (WCO) adoption of the

‘‘Framework of Standards to Secure and Facilitate Global Trade’’ (the Framework

of Standards). Here we see an international strategy, based upon clearly established

U.S. principles to secure the movement of global trade in a manner that does not

impede it, but instead, facilitates the movement of global trade. In this, AAEI has

been privileged to support various initiatives in multiple international forums.

TRADE SECURITY AND PRODUCT SAFETY ARE DIFFERENT

AAEI recognizes that though there are important similarities, trade security and

product safety are fundamentally different. We have noted and attempted to incorporate those differences in our now four year effort to assist FDA in the development of low risk importer programs which, in our opinion, would have substantially

benefited all parties. We remain hopeful that important progress towards this goal

can be made through both the regulatory and legislative processes.

It is fair to say that, at its most basic, trade security is primarily concerned with

the integrity of the supply chain and ensuring that the ‘‘box’’ (i.e., the cargo conVerDate 11-SEP-98 10:23 Oct 08, 2008 Jkt 000000 PO 00000 Frm 00113 Fmt 6633 Sfmt 6633 Q:\DOCS\110-68 SCOM1 PsN: SCOM1
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tainer) has not been tampered with during transport so that no weapons of mass

destruction or other harmful substances are surreptitiously placed in the box after

sealing at the point of stuffing. On the other hand, product safety is focused on the

integrity of commodity in the box. Specifically in FDA jurisdiction, we understand

there needs to be focus on microorganisms, toxins, pathogens, pesticides and problematic chemicals. In this effort, there is clear recognition that regulated food testing requires examination outside of the containers. In other words it is our understanding your product safety effort is specifically directed to ensure for the Nation

the quality, functionality, safety and overall integrity of the product. This is not

even comparable. Frankly, with apologies, in the contrast of ‘‘inside the box’’ and

‘‘outside the box,’’ we must point out that these are, as my niece has said, simply

apples and zebras. One element which this committee could appropriately explore

is an import safety is current company or independent testing policies at FDA. Currently, AAEI is unaware of any variety or method of internal testing which a company can do to reduce processing and inspection time for food, drugs and medical

devices. However, it is important to note that would be a fundamental change in

culture and resource requirements for FDA to fully implement a programs which

take advantage of ongoing extensive domestic industry efforts. Thus, any efforts

which the company makes do not help without agency facilitating product delivery.

Perhaps the nearest match to product safety requirements in today’s business environment is in the quality assurance process (QA)—which so many American companies excel in and can help by providing valuable lessons for the committee’s use in

crafting language.

INTERAGENCY COOPERATION IS ESSENTIAL—ITDS IS A VITAL TOOL

In fostering necessary interagency cooperation, and thus effective and efficient import and export programs, the Congress made an important first step in strongly

encouraging what has become known as ‘‘One Face at the Border.’’ The effort has

been designed to eliminate lack of coordination and even agency cross purposes, at

our land, air and sea ports. Achievement of this goal was initiated in the creation

of the Department of Homeland Security. Over the past several years, AAEI has testified to the importance of both preventing restoration of and further eliminating

the extraordinarily burdensome and inefficient processes which have been suggested

by a variety of special interests.

Increasing the government-wide focus on product safety, including CPSC leadership and multiple agency participation in the enforcement of Intellectual Property

Rights protection, along with tracking financial transactions that may be financing

terrorism are extremely worthy goals. Unprecedented cooperation and formal coordination of efforts, whether legislative or administration driven, would make all the

difference.

In this, AAEI and the trade community have long supported the government’s

multi-agency automation efforts and the use of data to provide more transparency

to the supply chain and import clearance process. One of our top priorities in the

passage of the SAFE Port Act was the inclusion of a provision mandating Federal

agency participation in the International Trade Data System (ITDS). ITDS is intended to be a ‘‘single window’’ of trade data for government agencies to advance

electronic access trade data provided by the importer in order make the import

clearance process a seamless process for importers, CBP, and other Federal agencies

that license imported products or have ‘‘release and hold’’ authority for regulated

imports. In a rough analogy, ITDS is the air scoop on the hood feeding vital data

to the engine of the Automated Commercial Environment System (ACE).

We continue to believe that interagency cooperation and, at minimum, data exchange through the ITDS is essential. While full data sharing may not always be

possible, alignment of agency goals with our nation’s regulatory framework is crucial. In sum, use of the ITDS tool, if fully supported by vital agencies and bureaus,

is highly beneficial for all involved and its maturation should be a much higher priority. We are gratified that the President’s Interagency Working Group on Import

Safety highlighted the importance of ITDS by recommending the acceleration in the

development of ITDS in its initial report to the President, ‘‘Protecting American

Consumers Every Step of the Way: A Strategic Framework for Continual Improvement in Import Safety,’’ issued on September 10, 2007. We hope the committee can

take advantage of this important tool in development of its overall legislative strategy to improve product safety.

A. U.S. BUSINESS DATA CONFIDENTIALITY

Among the emotionally charged issues that the U.S. trade community and AAEI’s

member companies have confronted in today’s evolving environment are the extenVerDate 11-SEP-98 10:23 Oct 08, 2008 Jkt 000000 PO 00000 Frm 00114 Fmt 6633 Sfmt 6633 Q:\DOCS\110-68 SCOM1 PsN: SCOM1
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sive and substantial concerns regarding the confidentiality of proprietary business

data submitted to government agencies. In crafting this testimony, we wish to recognize the committee’s dedication to preserving and even expanding individual data

privacy and we hope that the committee will recognize that for business this is an

effort which should be preserved with equal vigor. Frankly, commercial data is property and inadequate protection is a ‘‘give away’’ to the bad guys. We need not look

far to see a repugnant record of foreign firms and interests engaging in grand scale

industrial espionage. In trade policy terms, these concerns are driven both by private sector competitiveness issues and international business ownership and management. In addition, we are deeply concerned about some Federal agencies’’ dismal

record of compliance with the Federal Information Security Management Act

(FISMA). We would ask that the committee carefully examine the breadth of concerns we convey today and support further study in this area.

The immediate issues which we ask you to consider exploring and incorporating

into your efforts are driven by several ‘‘real world’’ competitiveness concerns. Among

business community concerns are: 1) the increasing range, depth and amount of

total data that is being requested by multiple Federal, state and local agencies often

without cooperation and certainly without integration; 2) the Federal sharing of

‘‘sensitive’’ data with an ever widening range of domestic and international trade

bodies where neither a devotion to crafting future program requirements nor a tradition of confidentiality (or record of advanced training programs) or have even been

apparent to the private sector; and 3) the Federal Government’s increasing reliance

on unproven electronic systems to manage confidential commercial data including

product entry and risk assessments about products based on such data.

In today’s environment, we are quite concerned with the development of policies

within international bodies where multiple U.S. data streams are provided to merge

and commingle with other Nation’s data. In this we applaud recent Department of

Commerce’s initiatives toward data security for the Automated Export System

(AES). In any instance, sharing of data regarding ‘‘risk analysis’’ must be done in

such a fashion so as to avoid commercial implications as much as is humanly possible.

Notably, it is the practice of a number of foreign governments, which are traditional and significant U.S. trade partners, to subsidize certain industries which compete directly with their U.S. counterparts. In many of these governments, both in

developed and developing nations, it has been AAEI’s experience that the US tradition of data confidentially and specific agency retention of data, is both absent, and

frankly, unwelcome. This is particularly true of a significant number of competitive

nations which have neither sufficient customs nor enforcement capacity. Thus, internationally, we particularly encourage the committee to explore development of policies to address the sharing of sensitive information with other governments, in particular foreign customs and business promotion agencies.

In noting that a variety foreign governments have substantially invested finances,

national pride and whole industrial development strategies in industries and specific business enterprises that compete directly with the U.S. private sector, we

must also note that, as the committee is well aware, significant commodity supports

are found globally. Clearly our concern here is in the impact of government subsidies and credits among other financial commitments may have upon the absence

of appropriate prohibitions, or regrettably the apparent ‘‘blind eye’’ to data misuse

or abuse.

In addition, a significant concern here is, the apparent lack of controls or restrictions to be imposed upon these foreign governments by any international body on

a commerce driven mandate, particularly, as noted, those which may have a financial interest in such a competitor to a U.S. company or which lack important legal

safeguards restricting the use and dissemination of trade data belonging to U.S.

companies necessitate AAEI’s concern. To be candid, those FDA regulated U.S. businesses which are of interest to you today must have firm assurances that information potentially to be supplied to foreign governments for safety, and related, purposes would not be used against them in a competitive business context. At present,

AAEI member companies are not sufficiently convinced that their proprietary trade

data in multiple industrial sectors will be secure.

ALLOCATION OF MANPOWER AND RESOURCES—BOTH DIRECT AND THROUGH THIRD

PARTIES

Among vital areas the significant enhancement of manpower and resources for

multiple Federal, and perhaps state and local, agencies through third parties should

be carefully considered by the committee. As noted earlier, this may be the time to

review existing FDA lack of recognition or benefit from internal testing and controls.

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We look to you, in those areas of your concern, for potentially significant changes

in the way government provides for and otherwise supports import safety, risk management and control and thus imports writ large. We would be happy to discuss

CBP’s significant under funding and lack of sufficient manpower in the face of expanding responsibilities, but this is not the proper forum. In specific program terms,

our experience has demonstrated that the CBP model for gaugers and, more recently third-party validations for C-TPAT certified partners’’ shipments from China,

may prove useful to the committee along with the Environmental Protection Agency’s long-standing program of licensed importers and Coast Guard’s periodic regulatory inspections. AAEI believes that a fundamental element in the design of such

systems must be the economic impact upon small and medium size enterprises.

However, the overall impact upon small businesses nationwide; of implementing

multiple trade-related approaches to enhanced product safety is subject to the unforgiving rule of unintended consequences. ‘‘To do no harm’’ is a difficult mission when,

even for a vital purpose, modifying long-established importation and distribution

patterns and requirements will be part of the mission. It is indeed necessary, but

the committee may wish to explore the use of an incremental approach.

CONCERNS WITH H.R. 3610

AAEI’s testimony on specific provisions of H.R. 3610 touches upon the following

seven topics: 1. Inspection at Port of Entry; 2. User Fee on Imported Food and

Drugs; 3. Restricted Ports of Entry; 4. Country of Origin Labeling; 5. Safe and Secure Food Importation Programs; 6. Penalties; and 7. Recall Authority; and 8. Inspections.

1. SECTION 2—INSPECTION AT PORT OF ENTRY

We believe that emphasis on inspection at the border goes against the current administrations ‘‘push out the border’’ policy that has been embraced by Congress with

respect to trade security and must be considered in development of this approach

to food safety. However, those amendments which have already been suggested to

simply adopt the pattern of current homeland security policy, i.e. to push the borders back- to foreign soil is problematic in foods. It is our belief that to prevent any

or all FDA regulated product from ever being loaded into U.S. bound containers- to

certify the safety of products- has huge supply chain implications for customer access and pricing.

In addition, though we are not experienced in USDA matters, we certainly appreciate the value of their current system of labs and import safety. However despite

this appreciation,, we suggest that trying to take a limited volume and scope ‘‘system’’ which works well for certain kinds of goods and apply it across the board,

sends U.S. policy in altogether new directions. As we will discuss shortly, we find

a number of these possible directions problematic.

1. SECTIONS 3 AND 4—USER FEE ON FOOD AND DRUGS

AAEI is concerned about this proposed user fee on imported food for the following

four reasons:

AAEI is opposed to user fees levied against the retail community and other importers when we know that global trade has a positive effect on the United States

as a whole. We believe that both existing user fees imposed upon certain commodities (such as medical devices) and future fees under consideration are problematic.

We consider that their impact frequently appears to be the kind of unequal burden

created when the government agency in procurement or resource allocation among

others chooses to treat products differently. The assessment of fees (or tariffs) upon

retailers and importers of only specified commodities is said to limit the opportunities to cost effectively bringi9ng in goods of all genres. Frankly though this witness

is certainly not an expert on fees versus tax policy it has been our analysis that

such fees can unfairly burden certain industries, commodities and communities.

Here we note disparate treatment of food and drugs, which are already highly regulated commodities.

It is our observation that the disparate treatment of imported product safety and

domestic product safety is highly problematic in terms of U.S. industry’s ability to

trade internationally. To prevent serious, unnecessary damage to our huge export

economy, U.S. interests must be understood in today’s complex WTO environment

and our growing framework of trade agreements. With the enormous degree of

international competition in food commodity production already facing our companies and industries, we are extremely concerned, as noted earlier, that reciprocal acVerDate 11-SEP-98 10:23 Oct 08, 2008 Jkt 000000 PO 00000 Frm 00116 Fmt 6633 Sfmt 6633 Q:\DOCS\110-68 SCOM1 PsN: SCOM1
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tions, particularly in countries with our U.S. traditions of fair trade, could prove

very difficult trade barriers to overcome.

From conversations with our retailer members, it is our impression that fees assessed per line item will disproportionately impact small and medium enterprises

(SME’s), particularly those that import a wide variety of products currently regulated under the Food Drug and Cosmetics Act. We are informed that these would,

as one example, specifically impact, specialty food retailers who may cater to traditional ‘‘geographically’’ based consumers. However, we believe that such data is not

yet available and anecdotal evidence is all that we can rely upon at this point.

The possibility exists that the fee amount per line item may actually exceed the

value of the good. In this case, importation of the product is likely to dry up regardless of the lack of any domestic production. This diminishes the value of our global

economic power in directly benefiting the American consumer and penalizes importers who currently provide low cost food to the average American household.

One fine example of this has been provided by an allied trade association in which

they pointed out that( MR I think that here we can just Insert NCBFFA Mexico

example

2. SECTION 4—USER FEE ON IMPORTED DRUG

a. AAEI is concerned about this proposed user fee on imported drugs for the following four reasons:

AAEI is opposed to user fees levied against importers when we know that global

trade has a positive effect on the United States as a whole. Again, this witness is

not expert in the arena of fees assessed.

However, to prevent serious, unnecessary damage to our huge export economy,

U.S. interests must be understood in today’s complex WTO environment and our

growing framework of trade agreements. Prominent among these have been both the

nature of the assessment (tax on value) and constitutional limitations (tax on exports). Frankly, from our preliminary review, it appears that each of the methods

commonly discussed does appear to require extensive review so as to avoid unanticipated economic and trade repercussions. To assist in this effort, we suggest that the

committee consider an annual report of all such revenue collected from the spectrum

of Federal customs-related fees and their allocation in the budget would be of value

to the committee.

The possibility exists that the fee amount per line item may actually exceed the

value of the good. This diminishes the value that our global economy has the power

to bring to the American consumer and appears to penalize importers who provide

low cost food and drugs to the working class families and senior citizens who live

on a fixed income. As referenced earlier in this testimony, the impact upon specific

niche but very important marketplaces could be profound.

It is our understanding that utilization of user fees to pay for government programs and projects reportedly undertaken in the public good, rather than applying

primarily or exclusively for the benefit of a specific and defined set of users, would

be a significant departure from widely accepted policies. It appears to us that it is

simply a tax imposed upon this segment of American industry. Yes, we as a Nation

need to gather the resources required, but this is not the way to do it. From our

perspective, it is highly prejudicial against imports, falls disproportionately on a variety of industries and impacts most heavily on the ultimate U.S. consumer.

3. SECTION 5—RESTRICT PORTS OF ENTRY

AAEI believes that restricting ports for entry of food is an unwise choice because

our industries trade and logistics providers must always be prepared to adjust to

the dynamic economic environment. In fact, any major corporation’s supply chain

team can provide you with—virtually on demand—multiple alternate methods and

location of delivery with minimal product cost or availability implications. In fact,

we all need to keep in the front of our minds the all too real possibility that any

number of occurrences (i.e., natural disasters, labor strikes or terrorist attacks)

could cripple any one of our major ports for weeks or months. Under this proposal,

if that port or ports, since many are located in relative proximity, in the case of natural disasters among other factors were to be closed the options available are markedly reduced and the impacts, while negative, are highly unpredictable.

In a global environment, it is unwise to place insurmountable restrictions on either specific imported products or individual ports due to the need to maximize the

limited remaining flexibility that still exists in the US trades overcrowded and aging

infrastructure.

For Example, as noted above, if an incident of any kind occurs, it will be extremely difficult to adjust the import clearance and distribution of food product in

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a timely manner. The lack of pathways, in our current and emerging multimodal

environment will restrict the flow of necessary food items to localities that need

such products and will inevitably create a backlog in processing shipments through

food specific imports.

Today, such adjustments for multiple perishable and time sensitive products are

routine and often occur overnight.

With respect to the food industry, both a necessity and highly perishable commodity, this is a very dangerous shackle to burden our country with at a time when

the need might be at a crescendo. Industry’s ability to adjust current import and

distribution methodologies in the event of an incident is an essential and highly

supported element of today’s Homeland Security Strategic planning at the Federal,

state and local levels. We would urge members of the committee to consult with

those local and state officials most familiar with these concerns to fully evaluate the

repercussions.

It is our understanding that application of the USDA restricted port model for individual product imports, food and otherwise, would mean, in very simple terms,

that specified kinds of products can only be imported and distributed through certain ports—both land and sea. The impact upon the 50 states and literally hundreds

of ports, out of roughly 300, can only be calculated with full understanding of the

consequences of economic dislocation in Congressional districts nationwide as well

as the anticipatable impact upon land ports along either border. It is important to

note that the Congress has, since the Second World War, repeatedly resisted such

plans for multiple products and industries. It is our experience that, to date, proposals of such policy for multiple product and industry imports have often been offered

by those whose primary concern would appear to ease and simplicity of government

processing without equal regard for economic impact.

Under such a proposal the added logistical costs for an importer, even assuming

that nothing catastrophic occurs, can be prohibitive particularly when—as is very

common in this country—a product enters a given port, is transported to a second

relatively convenient location for packaging or modification and then delivered to a

third perhaps distant market for final distribution and consumption. The implications for the small and medium business owner unable to compete with the large

retailers for inexpensive product would be substantial. In terms of industry, as we

know there are multiple highly competitive pharmaceutical and food products where

profits, under normal circumstances may range for one to four percent. The impact

upon these, often generic or house brand products could be highly problematic, if

not prohibitive, based upon location of established facilities and long term distribution patterns.

As noted earlier, the reported over-crowding, current massive infrastructure requirements and highly limited expansion or even rebuilding of a number of the

ports specified has another side to it. Here, we must be concerned about the impact

upon those areas where labs currently exist or where one of a limited number may

be added. As noted, we are looking at the immediate need for substantial infrastructure costs—official structures, roads, tracks, additional docks and many other elements. We are facing immediate and significant congestion and citizen disruption

in that virtually all of these ports are contained with major metropolitan areas. We

are also looking at potentially substantial overall environmental impact and quality

of life concerns. To understand this, we ask that you simply note the enormous volume of product where, at the largest ports, of which these are, roughly 20,000 containers arrive a day. With total current national meat, poultry and egg importation

of 2.6 million containers a year being absolutely dwarfed by projected totals coming

through each of these ports.

Among many, one particular example of definite concern to the import community

would be the Port of Los Angeles. Here the infrastructure requirements, increased

congestion and projected, environmental disruption would obviously be of lifestyle

concern to those citizen groups and policy leaders already actively engaged in operations and planning.

I would like to note, finally, one additional item which may be of interest to the

committee. In conversations with some of our historically minded members I am reminded that, when it was first discussed here in the late 1700s, this concept, apparently known as ‘‘Port Goods Selection’’, might have been a viable option when there

were fewer ports around the country, a dearth of well established industries at highly diverse locations and far less global trade flowing through interior ports,. However they suggest that it is certainly not feasible for 2007.

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4. SECTION 6—COUNTRY OF ORIGIN LABELING

AAEI is concerned with the burden being placed on the trade with respect to the

further development of multiple agency Country of Origin rules. This is, for instance, evident with respect to CBP and FDA. Today’s situation can be roughly described as CBP being harmonized internationally though the WTO and multiple

FTA’s and FDA having an independently developed and implemented system that

lacks even a nexus of compatibility or overlap with CBP’s regulatory regime.

5. SECTION 7—SAFE AND SECURE FOOD IMPORTATION PROGRAM

AAEI wholeheartedly supports voluntary programs for security and safety, and

was an enthusiastic participant in the development of C-TPAT. As a result, AAEI

would, in terms of trade facilitation and security concerns, be pleased to both support and assist in the development of voluntary programs for product safety. However, such a program should be based on risk management principles that are compatible with and enhance both the current and future food security programs.

Foreign exporters of product to the U.S. utilizing non-performance of voluntary

standards as a competitive tool against U.S. manufacturers who do adhere to these

essential standards—pose a growing problem which must be firmly and quickly addressed. While complex legal issues will arise, the idea that ‘‘voluntary’’ means that

any one player, by virtue of geography, doesn’t have to pay attention to them is just

plain wrong. Equally, the merits of our current system permitting export of U.S.

made products failing to meet domestic agency safety standards will need to be fully

explored and addressed.

The committee should be aware of the enormous complexities, as well as range

of other the difficulties, that AAEI members have encountered in dealing with the

multiple Federal agencies whose regulatory jurisdiction and oversight for certain imported goods overlap with other Federal agencies. As mentioned, our member companies have been at the forefront of cooperating with CBP by joining its trade security and trade facilitation partnership initiatives, such as C-TPAT and the Importer

Self-Assessment (ISA) Program. We believe that these programs have a valuable

role in achieving AAEI’s often stated goal of a productive balance between trade security and trade facilitation, which AAEI believes will be achieved on regulatory

issues only when Federal agencies work in close partnership with one another and

the U.S. trade community.

Regretably, today, many AAEI member companies tell us that they do not receive

the full benefit of these partnership programs because they are indeed regulated by

multiple Federal agencies that neither recognize nor accept the risk-based methodologies of existing partnership programs. They continue to face the kind of d hurdles which should be a thing of the past in today’s security environment. Such reluctance affects nearly 36 percent of the entries for imported goods that are subject

to the ‘‘release and hold’’ authority of the U.S. Food and Drug Administration (FDA),

the U.S. Department of Agriculture (USDA), and the U.S. Fish and Wildlife Service

(FWS), which are the primary Federal agencies that impact most of our members

potentially impacted by the current proposals.

As you can see the Congress’ design for ‘‘One Face at the Border’’ was well founded and based upon concerns to serve land, air and sea port traders with full and

equal rights. If successfully implemented it should, and hopefully will, eliminate

much of the perceived inequities which have been reported in the past.

In this pursuit, AAEI has worked closely with the Congress and has spearheaded

private sector efforts to initiate and develop a dialogue and working relationship

with these other Federal agencies. AAEI is particularly pleased that the earlier referenced industry dialogue with FDA has resulted in some recent initial successes.

Most notably, AAEI has provided comments to FDA on its Secure Supply Chain

Pilot Program which builds upon the investment U.S. companies have made in CTPAT since FDA’s program requires applicants to be C-TPAT certified at Tier 2 or

higher.

In the same vein, we are also working with FDA concerning possible adoption of

proven and practical risk-based methodologies. One which we believe is worthy of

consideration, as a purely voluntary element, is the Importer Self-Assessment program where the foundation of the ISA program is CBP’s finding that U.S. companies

which have good internal controls are highly compliant with U.S. customs laws. It

is AAEI’s experience that ISA member companies are pro-active in meeting their

compliance responsibilities for all Federal regulatory agencies, not just customs.

However, as with other items mentioned, making this program mandatory would

have difficult impacts upon the competitiveness of small and medium sized enterprises. Overall, AAEI believes that the committee’s interest in FDA and CBP coordination is an important step toward encouraging coordination and integration of

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other Federal regulatory agencies in maintaining and demonstrably enhancing our

efficient and reliable import process.

SECTION 8—PENALTIES

Again this is not an area where AAEI has specific expertise but we comment

based upon the strong belief of our members that significantly increased and burdensome monetary penalties levied against manufacturers and importers will do little in today’s international marketplace to effect change and enhance product safety

without implementation of a firm correlation to the level of culpability found during

an investigation. We would urge that the apparent lack of delineation in the varieties and levels of company involvement in the introduction of a product for introduction should be carefully evaluated by the committee. We do not understand the

reasoning behind the apparent intent to make no differentiation between those supply chain participants who had no reason to know and those willing and knowingly

participating companies. We believe that the bad actors should be punished. Examples of perhaps more useful deterrents which the committee may choose to explore

include tying the fines to certain thresholds of negligence and/or intentional violations.

SECTION 10—RECALL AUTHORITY

AAEI supports providing FDA with necessary recall authority. However, as before, we cannot comment upon the specifics of such a provision in light of our focus

on import, export and supply chain matters. Nonetheless, we are obviously familiar

with domestic distribution networks and would urge the committee to examine the

full implications of such a proposal. It is, frankly, the velocity with which those

products under discussion move through the global supply chain from manufacturer

to often independent distribution to multiple retail facilities and ultimately to the

consumer that causes our concern. It seems to us that today’s rapid and efficient

distribution system could well place the importer in the untenable position of chasing down every shipment transported long after delivery to retailers and probable

consumption. We suggest that the committee may wish to recognize that FDA regulated products often move in very different patterns than consumer electronics or

automobiles or apparel but are often facilitated by the same players. In this regard,

we ask that you examine recall policy, a necessarily reactive remedy for the government, with an eye toward economy wide impact.

. SECTION 11—INSPECTIONS

AAEI remains concerned that merely increasing random inspections, sampling

and testing of food imports will not sufficiently enhance food safety because such

actions will be done at our borders. We suggest that there are other ways which

the committee could consider in devising solutions. In this effort, one vital step to

the ultimate goal of protecting the American consumer from harm will likely lie in

the prevention of tainted food and drugs entering the supply chain. However, we

believe that the committee will wish to indicate that the importer’s failure to find

and obtain products once released, and not ‘‘caught by regulators’’ at entry, will not

lead to penalties upon the importer—in particular if there is no finding of intentional distribution . Thus, something that must be done outside the supply chain

to ensure that the supply chain does not end up as the dumping ground for any

and all catch-all provisions aimed at regulating this complex and sensitive area of

trade.

Though the committee may wish to fully explore providing additional U.S. certification of foreign facilities, it could choose to both augment and take advantage of

the strength of ongoing U.S. efforts to concentrate on development of international

harmonization standards. Such efforts, pursued by both the public and private, sectors could provide a model that the committee could use to assist the promotion of

U.S. foods and FDA regulated products.

In addition to our export interests we suggest judging the real world impact, upon

U.S. consumers. It is vital to note that there are today tens of thousands of foreign

shippers to the U.S. which provide critical products and substantial price competition in marketplaces nationwide. We believe that, with the tremendous growth in

multiple overseas marketplaces which may not yet or ever choose to impose similar

certification regimes upon these very same exporters, American retailers and the

consumer could suffer a significant diminution in quality and variety. Despite our

attraction as a marketplace the growing sophistication of worldwide consumers

could have a major impact.

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During our 85 year history, AAEI has a long record of working together with

those Federal departments and agencies, which have had jurisdiction over customs,

trade policy, ports, transportation, tariffs, security, and immigration regarding the

variety of other issues that impact the import and export of goods and services to

and from the United States. We actively participate in multiple international forums and in support of excellence in this arena. In this light, it is our view that

effective models for FDA and trade cooperation should include a wide variety of private sector perspectives—particularly those trade related organizations which have

not always been part of the current food and drug related equations. Though independent organizations provide vital information and perspective, one highly instructive model can be based on the foundations of the well regarded Commercial Operations Advisory Committee (COAC). COAC authorized under the Federal Advisory

Committee Act (FACA) is a key mechanism to foster and encourage public and private sector interaction. While significant aspects have evolved over time, COAC remains extremely useful and its mission is vital to assisting CBP and DHS craft appropriate trade security and compliance programs that not only do not interrupt the

flow of legitimate trade but serve to facilitate trade in many ways. It is worth noting

that the operations and reach of COAC itself were significantly enhanced in last session’s passage of the SAFE Port Act and this effort may prove helpful to the committee.

From our perspective, dedicated private sector organizations and individuals,

where appropriate, assisting FDA and related agency consultative efforts could

highly productive and organizations can be encouraged which are specifically devised to incorporate the breadth of private sector consumer and trade related voices

in their consideration of policy development and implementation. In addition to

these groups and other beneficial multiple channels of communications between the

public and private sector regarding vital import safety, trade security and trade facilitation issues for both U.S. importer and exporters, a body comprised of private

citizens authorized under FACA to confer with FDA modeled on COAC would be a

constructive initiative. Such a COAC like body could provide vital support and assist

in making these programs both robust and effective. We would ask the committee

to examine options and consider its options in imitating utilization of a Federal advisory committee in the development of vital Executive and Legislative branch coordination and direction for these vital trade related issues.

In conclusion, we wish to thank the House Subcommittee on Health of the Committee on Energy and Commerce for its invitation to provide our observations, comments, and suggestions about ‘‘H.R. 3610, the Food and Drug Safety Import Act.’’

We greatly appreciate the committee’s efforts and hope that we can assist it to ensure that consumer confidence in our product safety regime serves as the third leg

of a stool balanced partnership with trade facilitation and security. We strongly believe that the committee’s continued oversight and active promotion of import safety

with recognition of existing trade security and trade facilitation programs and initiatives can make an enormous difference.

We hope that our testimony will prove useful as the committee considers measures to enhance FDA’s capabilities in handling imported food and drugs. AAEI looks

forward to both supporting this committee’s active involvement and to continuing

our partnership with FDA in pursuit of these goals.

Mr. PALLONE. Thank you very much. Let me start the questions

with the panel. I wanted to start with Congressman Dooley. I had

a couple of questions I wanted to ask you, Cal. In your testimony,

you speak about GMAFPA’s four pillars, one, mandatory foreign

supplier quality assurance program; two, quality import food safety

program; three, build the capacity of foreign governments; and

four, expand the capacity of FDA. Now, when I look at Mr. Dingell’s bill, some of his provisions include, one, a new requirement

that imported food meets the same standards as domestic foods;

two, a voluntary program for companies that import food to agree

to abide by specific safety guidelines; three, significant new resources for food drug safety via an importation fee, I mean the

question I have, Cal, is that you state that your proposal will do

more to ensure the safety and quality of imported food products

and ingredients than with the adoption of many of the provisions

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of the Dingell bill, but I don’t see the difference on how your plan

is superior. You want to just tell us why you think it is better or

why you think it would do more to ensure safety and quality?

Mr. DOOLEY. Sure. The way I would respond to that is that the

proposal that we have tabled really relies much more on prevention

than from inspection. Our assessment of Chairman Dingell’s bill is

that it really is looking at how do you enhance the level of inspection capacity and resources of the FDA to try to enhance a level

of food safety. We think that we need to approach this by defining

what the private sector can do most effectively and complementing

that with the defined role where FDA can best utilize its resources.

And so where the Dingell proposal would rely on perhaps a certification of what is, by FDA’s testimony today, would literally be hundreds of thousands of foreign suppliers of ingredients which we

don’t think they have the capacity to do, that our approach would

be to have a partnership with the private sector where the private

sector would have to develop these mandatory supplier import programs that would embody almost without question audits of those

facilities and those suppliers, and that would be a private sector

approach that would mitigate the need for FDA to have to go out

and certify again these literally hundreds of thousands of facilities.

And we think that would be a role that would be more effective and

certainly more pragmatic with our approach.

Mr. PALLONE. Well, you mentioned about the different models

the FDA could adopt to strengthen their efforts to regulate food

safety, but are there things your members are doing to mirror

those FDA efforts at this point?

Mr. DOOLEY. Well, what you find is that the reason that we really have a limited number of food safety incidents even as it relates

to imported food products is that most importers of products today

do in fact have best practices in place that are including the supplier audits, they do have the chain of custody that they can account for throughout the supply chain, do have testing protocols to

ensure that there’s not an adulteration of a product. They have

those practices in place, but unfortunately there are limited number of people in the industry that aren’t deploying that same level

of best practices. What our proposal would suggest is that we need

to mandate that those best practices apply to any company that is

importing a food ingredient or food product, and they would have

to be in compliance with those guidelines and guidance that would

be developed by FDA.

Mr. PALLONE. I wanted to ask you about the import user fee because you are pretty critical of that, and you have a number of reasons for your opposition. For example, you said user fees are generally appropriated when the benefits accrue to individuals or individual companies and that the benefits of import inspections and

research go to all Americans. Of course, I don’t agree with you on

this because we just went through the PDUFA process and the

MDUFMA process, and it is very similar where you have the industry paying for a user fee that essentially helps all Americans or all

consumers; and I don’t really see how a user fee on imports would

be any different than a user fee on drugs or device applications. So

I guess my question is what is your answer to that? I mean, it is

no different in my opinion. Do you think it is?

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Mr. DOOLEY. Yes, I think it is dramatically different because

when a pharmaceutical company is working with FDA to gain approval of a product that they are going to provide into the marketplace, they have a proprietary interest. They get a protection of a

product that is going to have a patent protection for a period of

time which derives financial benefits to that company who is paying that user fee. In this case, we have no proprietary interest on

what we could be paying for, is that we are paying for basically a

public good in terms of an inspection of a food ingredient that we

have no proprietary interest in it. Even if we go in and we have

a food additive that a member company in the food industry might

be requesting that FDA approve, that food additive immediately

goes into public domain and we have no financial benefit from that.

So we think it is a dramatically different approach.

Mr. PALLONE. Of course, a lot of what we just passed in PDUFA

was post-market, too. In other words, that was the big issue, that

it is not just for the approvals, a lot of what we are doing in the

new bill is post-market. I don’t want to argue with you. I mean,

I do but you know where I stand.

Ms. DeWaal or Mr. Hubbard, did you want to comment on that,

and I am already over the time. I wanted to give the loyal opposition or whatever they are the opportunity.

Mr. HUBBARD. Ms. DeWaal may differ with me, Mr. Chairman,

but I was very much involved in the creation of the original user

fees for drugs in 1992. The downside has been as the drug program

has gotten wealthier, the appropriators and the budgeteers and the

OMB have seen an opportunity to cut back on appropriations, and

the problem is because the drug money had to be kept up, based

on provisions in the law, they cut it out of foods in the field and

inspectors. So the FDA has lost 1,000 people in the food safety and

inspection area since PDUFA was created.

So my fear here is that if you do this user fee, they will find a

way to use that to supplant appropriations, and we won’t be any

better off for it. So, if you could find a way to prevent that, great,

but I am pessimistic about user fees.

Mr. PALLONE. I understand. Ms. DeWaal?

Ms. DEWAAL. Thank you. We don’t have a fundamental problem

with the concept of user fees, but in this context we are very concerned that the user fee proposal in this narrow construct where

it is only applying to one segment, the imported food, and also

there may be some restrictions in how that money is used, it could

actually distract from the important work the committee needs to

do in terms of looking at the authority. So while we are happy to

work with the committee on what the overall structure might look

like, I think it is just vitally important that you really focus on

what authorities are needed today that will improve the safety of

the products, both domestic and imported, going to consumers tomorrow.

Mr. PALLONE. Sounds like the same arguments that we heard in

PDUFA and MDUFMA, and of course, we ended up doing it anyway because we didn’t know where the money was going to otherwise come from. Mr. Buyer?

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Mr. BUYER. Thank you very much. I am focusing on the drug

side, so I apologize to the witnesses here with regard to food. Mr.

Dooley, it is good to see you again, and I appreciate your testimony.

I will go back to our ideal, the ideal being safety and efficacy of

drugs that come into the United States through legal means. Our

challenges are these that come through illegal means, and so I

have some questions here for Messrs. Hubbard, Kubic, and Dr.

Goldhammer. There are some givens. One of the givens is that the

mail facilities are overwhelmed, that there appears to be an inadequacy of FDA personnel and of resources that due process is becoming extraordinarily burdensome with regard to the 30 days; and

this 30-day process or giving notice of due process I highlighted because what I am learning here is that the, quote, by exception of

FDA policy is becoming the rule of the day and being exploited by

these counterfeiters. So I would ask the three of you to comment

on my assessment.

Mr. HUBBARD. That is right, Mr. Buyer. The FDA created an exception for compassion in cases of people who had a serious disease

and could not get the drug in the United States, a very small number of people. These Web sites use that and say to people, you can

buy prescription drugs like Viagra or something over the Internet

using this exception from the FDA. So first of all, that is a lie to

begin with. Then the drugs arrive in these mail facilities, thousands of packages a day. The FDA has no place to store them. They

might have the size of a high-school locker to store things. Customs

is saying, we got to move this stuff out of here, there is more coming tomorrow; and the FDA has the choice of either taking each

package, sending a letter to the addressee and waiting 30 days for

them to explain that the drug should come in usually unsuccessfully or just letting it in. And unfortunately, that means they are

just letting it in, and that is a bad outcome for everybody because

people are getting all kinds of drugs from all kinds of countries all

over the world that can be counterfeit, expired, or otherwise unsafe; and FDA really has no choice in my view than to let it in

under current law.

Mr. BUYER. So you would endorse my initiatives to have

FDA——

Mr. HUBBARD. We actually proposed that when I was there. Just

give Customs the authority. If it’s a pill, burn it which is what they

do for controlled substances.

Mr. BUYER. Thank you. You are right. Dr. Goldhammer?

Mr. GOLDHAMMER. Our position on it is very simple. A patient

should only buy drugs through the normal supply chain, and if

they go on the Internet they should only buy through verified

Internet pharmacies that have been certified by National Association and Boards of Pharmacy. We believe any other Internet Web

site is not an Internet pharmacy site, it is simply an Internet drug

seller that is trafficking in illegal drugs.

Mr. KUBIC. Your observations are entirely correct, and I share

the views expressed by my colleagues on the panel. I would say,

however, that there is another thing that needs to be done here,

and rather than try to stop the flood of these drugs that are arriving at the mail centers on a daily basis, which is frankly overwhelming, I think there needs to be a refined investigative effort

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on a national basis to go after the people who are really behind the

Web sites. Earlier, sir, in your statement you mentioned a specific

site that the FDA had identified. That particular investigation is

ongoing, and I won’t go into a lot of details; but suffice it to say

that they are into their third Assistant U.S. Attorney who has had

that case in the particular Federal District Court, the prosecution

has not even begun. So there seems to be some rhetoric about the

importance of these things, but when it gets down to it and cases

are made and cases are presented by the FDA, their Office of

Criminal Investigations, they seem to somewhat fall by the wayside.

Mr. BUYER. On page 6 of your testimony, you spoke about the

counterfeiting, legal diversion, products, that arrests have decreased by 10 percent, even though we have double-digit increases

of activity. So what is your explanation of this dissonance?

Mr. KUBIC. Well, what we saw law year, for instance, is that

there was a shift of law enforcement effort. Early on in our initial

reporting, we saw a lot of arrests that were being made at the

point of sale. This is kind of a low-hanging fruit. I mean, it doesn’t

take a very extensive investigation to go to an open-air market

anywhere in the world and conduct an enforcement action. In contrast, if you are going to identify a manufacturer of counterfeit

medicines in China, you are going to have to spend some time and

effort. The private sector does some of this with their security

staffs in concert with ICE, CBP, and the FDA. So as you look at

the higher-level targets, it will certainly take more time; and I

think that is one of the reasons why there has been a dimunization

of the number of arrests. It is in fact a reduction, but we see a different person being arrested over the last year at least.

Mr. BUYER. Thank you, Mr. Chairman.

Mr. PALLONE. Ms. DeGette.

Ms. DEGETTE. I guess I will try to cover food and drugs somehow

because I think we should be concerned about both of them. So I

would start by asking Mr. Kubic and if any of the other drug representatives have anything to add. I agree with you, I think that

the counterfeit drugs are a huge problem. We have been having a

number of hearings over the years in Oversight and Investigations

Subcommittee about this issue, and I think greater enforcement is

needed but when you look at the pictures of the vast quantities of

these drugs that are coming in through our points of entry, it almost seems like it is a barrage that is just coming in. I am wondering if there are independent efforts by any of your organizations to

educate consumers about what you just said which is that you

should only buy drugs from approved sites, and my other question

is how are consumers going to know what the, and maybe that is

a question for Dr. Goldhammer, what are the sites that would be

safe for them to buy drugs on the Internet from?

Mr. GOLDHAMMER. The National Association Boards of Pharmacy

actually has a seal. I believe the acronym is ‘‘VIPPS’’ that goes on

those Internet sites that they certify.

Ms. DEGETTE. And how do consumers know that that is the way

they can tell that those——

Mr. GOLDHAMMER. Well, we have been doing a number of education campaigns over the last several years in this area. There is

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a Web site BuySafeMedicines.org which we are part of. There are

a number of consumer groups that are a part of this as well that

has a lot of information. Also the Food and Drug Administration,

on their Web site has their own independent page on safe purchasing of pharmaceuticals over the Internet.

Ms. DEGETTE. Well, Mr. Kubic, do you have any ideas what else

we could do?

Mr. KUBIC. Sure. I could add, just to expand a little bit on Dr.

Goldhammer’s comments, there is a Partnership for Safe Medicines

where anyone, any person who has got a prescription drug medicine that they are taking can sign up for free and they get an email alert if there is in fact then an official announcement made

by the FDA about a counterfeit medicine here in the United States.

Ms. DEGETTE. About how many alerts are going out every year,

do you know?

Mr. KUBIC. By the FDA? I would have to defer to the FDA. I am

not quite sure of the specific number, but that would direct a person who is taking a specific medication that has been found to be

counterfeit to that site. So, the FDA does a fine job of alerting professionals, the doctors, pharmacists and so forth. But the partnership is designed for the target audience to be the person who takes

the medication.

Ms. DEGETTE. I am wondering if any of you think it would be

a good idea for us to do an idea that Mr. Dingell and I disagree

with, but a lot of our other colleagues on this side of the aisle agree

with, which is drug reimportation. Seems to me that it would make

the problem worse. Mr. Hubbard, why don’t we hear from you?

Mr. HUBBARD. Well, when I was with the FDA, we certainly opposed reimportation because drugs that have been made here and

gone elsewhere could have been contaminated, but more likely,

they didn’t really start here to begin with.

Ms. DEGETTE. Right.

Mr. HUBBARD. So the FDA is very much opposed on safety

grounds.

Mr. GOLDHAMMER. I think you know that is the PhRMA physicians——

Ms. DEGETTE. Right. Yes, yes. I just want to turn quickly to Ms.

DeWaal and ask her a couple of questions about food safety because as you know, I have two pieces of legislation, one for mandatory recall and one for traceability. And you mentioned very briefly

in your testimony that the language in the Dingell bill could be improved significantly on mandatory recall. I am wondering if you

can briefly talk about how you think that could be improved?

Ms. DEWAAL. First of all, all recalls done, both the USDA and

FDA, are voluntary; and one of the problems we are finding in that

system is actually getting information into the hands of consumers

who need it. So we would have specific proposals to actually extend

that portion of the bill down to the consumer level to ensure they

get effective recall notice. But also Congresswoman DeGette, I

think your issue of traceability is also vital here. To have an effective recall, we need to know where that food went, and in a recent

recall actually that the FDA handled, it wasn’t effective down at

the retail store level, and they had to actually send out otherwise

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fully employed food, drug, and medical device inspectors to retail

stores to pull back cans of foods that may have contained botulism.

Ms. DEGETTE. And as I understand it, it is not from a food distribution standpoint, it wouldn’t be difficult to do, traceability. You

could actually do that in both the foods under the FDA purview

and the USDA purview, correct?

Ms. DEWAAL. That is right. And part of a comprehensive bill

which we are urging this committee to consider, I think traceability

would be a critical element.

Ms. DEGETTE. Thank you. We will keep working with you on

those issues. Thank you, Mr. Chairman.

Mr. PALLONE. Thank you. Before I recognize Mr. Matheson, I

know Mr. Buyer had a unanimous consent request.

Mr. BUYER. Yes, Mr. Chairman. I would move that all Members

may have 10 legislative days to ask questions for witnesses to answer for the record and insert additional material.

Mr. PALLONE. Yes, so ordered. Didn’t you have a request to include this document from the American Free Trade Association?

Mr. Matheson?

Mr. MATHESON. Well, thanks, Mr. Chairman, and thanks to the

panel. I want to address first a question to my former colleague,

Mr. Dooley. It is good to see you again. As you know, the Ways and

Means Committee already had a mock markup but the House will

begin consideration of this trade agreement with Peru, and one of

the issues that has been raised in relation to this agreement has

been food safety. And I am hoping you might be able to clarify to

folks on the committee how the standards included in the Peru free

trade agreement affect existing U.S. safety standards as well as

whether this agreement would limit the ability of the U.S. to raise

food safety standards.

Mr. DOOLEY. Congressman Matheson, there is nothing in the

Peru FTA agreement that would in any way pose any jeopardy to

the existing food safety regulations that we have in the United

States. And in fact, there is nothing in the Peru FTA agreement

that would preclude the United States from even developing more

stringent science-based food safety standards as long as they applied to domestic and imported products in a similar manner.

Mr. MATHESON. And beyond Peru, is it also not true that under

the WTO standards that exist today, even without a bilateral free

trade agreement, those capabilities exist for the U.S. in dealing

with any other country that is a member of the WTO?

Mr. DOOLEY. That is absolutely correct.

Mr. MATHESON. The next question I wanted to ask you is you

have testified that the focus of our efforts to improve food safety

ought to be placed on prevention in your words to reduce the number of needles in the haystack. How much of this burden should be

placed on the food industry and how much should be placed on the

public sector?

Mr. DOOLEY. Well, I think, clearly we are going to be most effective at one that is a partnership, but it is clearly the private sector

that can make the biggest difference. And what we are suggesting

that if we really are objective and we look at the scope of this problem, the vast majority of our food products are safe, those that are

imported as well as domestic. And the reason for that is that most

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manufacturers are currently today deploying best practices that

provide that level of food safety. So what we are suggesting is that,

there might be some folks out there that need to change some of

their operation protocols, and why don’t we work again in partnership with FDA and the consumer groups to help develop some

mandatory guidance that would ensure that those best practices

are being deployed by anybody that is importing a food product into

this country. And then in fact we think, well, further enhance and

build upon the already safe food supply that we have today. Where

we are somewhat concerned in terms of the difference between

Congressman Dingell’s approach is on relying more on an inspection approach. People were talking today we are inspecting 1 percent of the food that is coming into this country. OK. So if we inspect 10 percent, is that going to give us that much greater margin

of safety? We would argue it might help on the margins, but your

greatest difference is going to be by finding that effective partnership with the private sector to ensure that these best practices are

being put in place.

Mr. MATHESON. As I said in my opening statement, while the

issues are not completely the same, when we are talking about the

toy safety issue in another subcommittee on this committee, we are

talking about doing preventive measures back at the source along

the manufacturing chain, whereas on the food safety, the proposed

legislation seems to be focusing more on the back end, and I think

it might be healthy for us to consider the benefits of looking at the

overall supply chain. I suspect you probably agree with that. Dr.

Hollingsworth, quick question for you. The proposed legislation

seeks to give FDA the authority to recall products. Since this would

be a new authority as I understand it for FDA, I am interested to

hear ideas on what would make recalls more effective from the retailers’ perspective.

Dr. HOLLINGSWORTH. I think from a retailers’ perspective, the

biggest issue that we are challenged with is the communication

system of recalls, getting the information from the manufacturer

who is initiating the recall, whether it was mandatory or voluntary.

It is getting that information down to the retailers so they know

what products need to be recalled and also allowing retailers to be

involved in the initial discussions. Retailers are excluded from any

discussions about possible recalls until that information is given to

the media. And so we are always trying to play catch-up on a recall. We would like to be engaged earlier, and we are working to

find better ways to help those communications and also ways that

we can be sure that the word gets out to the customer, if in fact

they have bought that product.

Mr. MATHESON. I was going to ask you, also you talked about

communication to the retailer, and I was also going to say how

does it work for communication directly to the consumer? Do you

think there are better ways in the public and private sector to partner in this communication?

Dr. HOLLINGSWORTH. I think there are ways we can do better,

and that is one of the things that our board task force is looking

at now, having more uniformity in the announcements and the

messages so that people will understand what is being recalled and

what to do with that product.

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Mr. MATHESON. Mr. Chairman, I know my time expired but I

just would emphasize I think this issue of communication is one

that would merit our review of it on the committee. I think that

is a really relevant issue both communication with the retailer and

on down to the consumer level. I think that is a healthy issue for

us to discuss. I will yield back.

Mr. PALLONE. Thank you. I am going to ask a couple more questions, too, so if you want to you can. I just had two questions of

Mr. Hubbard. In your testimony you talk about building safety into

products, and you specifically cite Hazard Analysis Critical Control

Points as a model adopted by the FDA and the Department of Agriculture in the 1960s. But given all the recent contaminations we

have had with spinach, peanut butter, and other products, I am

wondering why this model no longer appears to be effective? What

has changed exactly?

Mr. HUBBARD. Well, it is not in place for those products. It is

only in place for meat and poultry at USDA and for seafood and

juice at FDA. In fact, I understand there have been press reports

that the FDA leadership requested that the Secretary allow him to

move to adopt that for produce, meaning in February, but was denied. So, I think it has been proven first by the industry and later

by FDA regulation that the concept of HACCP does work because

it builds in safety and it is much as Mr. Dooley was describing, you

have got the people in the supply chain now taking some responsibility rather than putting it all on the FDA to inspect a product

at the end which has proven not to work. You don’t want to rely

on that inspection at the end because it will fail. You need to have

everyone producing safe food and then letting FDA be the regulator

that comes in and verifies that folks are in fact building safety and

keeping records so that you know that they are doing that and

keeping them honest. And then you have in my opinion a safe process.

Mr. PALLONE. OK. And then the second question, in your testimony you state that you think that reengineering our import safety

system could actually improve some of our trade relationships, but

there are Members who are looking at this legislation, especially

the import user fee, and see it as a possible trade barrier. Can you

elaborate on why you think this may be good for trade?

Mr. HUBBARD. Well, let us take the case of China. They have

been hit pretty hard by this. They produce a tremendous amount

of goods for our country. Most of it is very safe. We have got a

small problem here. One would hope that if processes are in place

that say to the producers in China, produce safer food, then the

overall Chinese export economy will improve. I am told by experts

on China and a number of them that the Chinese Government does

not have the wherewithal to assure the safety of exports to us, that

they don’t have the reach into the hinterlands of China, they don’t

have the regulatory structure. It could take years to develop such

a thing. So if by putting into place the preventative system we are

talking about to have the Chinese producers producing safer food,

the sense I get is the Chinese Government would say we win in

that because then products coming out of China are safer products.

And then they have a better reputation in the world market. I

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would defer to a trade expert on that, but I would argue that in

the end they win, too.

Mr. PALLONE. OK. Thank you. Did you want to ask anything

else? All right. Let me just remind everybody that Members may

submit additional questions for the record to be answered by all of

you, and those questions should be submitted to the clerk within

the next 10 days, and then the clerk will notify you if we have any.

And again, I just want to thank you all. I know it has been a long

day here with the interruptions from the floor, but that is the way

things go. Mr. Dooley is certainly familiar with it. And without objection, this meeting of the subcommittee is adjourned.

[Whereupon, at 3:40 p.m., the subcommittee was adjourned.]

[Material submitted for inclusion in the record follows:]

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STATEMENT OF AMERICAN FREE TRADE ASSOCIATION

The American Free Trade Association (AFTA) is a trade association of importers,

distributors and wholesalers providing American consumers throughout the country

with alternative sources of brand name, genuine and unadulterated food products.

AFTA appreciates the opportunity to provide the Health Subcommittee with its comments and testimony in response to Congressman Dingell’s introduction of H.R.

3610, the Food and Drug Import Safety Act of 2007.

Members of the American Free Trade Association applaud all efforts to ensure the

safety and integrity of the domestic supply of foods and drugs. AFTA believes (i)

that American consumers must know that the products entering this country are

safe for their children, safe for their pets and safe to enter the commercial marketplace; (ii) that American consumers must be able to continue enjoying the benefits

of a competitive global marketplace—one that thrives because of the successful relationship forged between product safety, trade facilitation and supply chain integrity;

and (iii) that any legislative initiative intended to ensure the health and safety of

American consumers do so in a manner encouraging continued viability of lawful

small and medium sized importers and distributors. H.R. 3610 is an important step

forward in our country’s efforts to protect its citizens from harmful food and drug

imports. AFTA looks forward to working with the bill’s sponsors to ensure that the

legislation is made even stronger and is even better able to reflect the symbiotic

needs of consumers, the industry and the government.

In light of the foregoing, AFTA is pleased to offer the following specific comments

to the proposed legislation included within the Food and Drug Import Safety Act

of 2007.

SECTION 2: RESEARCH ON TESTING TECHNIQUES

Testing food imports at ports of entry to determine product safety and ensure no

adulteration of food products within 60 minutes of arrival is a laudable goal. However, this idealistic objective must be tempered with the practical realization that

not all food shipments will be able to undergo such testing without risking loss of

product integrity and without the creation of substantial, additional and very expensive infrastructure capabilities that do not presently exist. As Congress is already

aware, earlier this year, the FDA had announced its intention to close at least half

of its existing laboratories due to lack of use and deterioration. Although that decision has since been suspended, the reasons for the initial announcement cannot be

forgotten. FDA lacks the resources, human and financial, to carry out the functions

and operations even of its existing laboratory facilities. To undertake research hoping to develop additional and more stringent testing protocols than currently exist

before ‘‘fixing’’ the Agency’s current problems may be, respectively, premature and

not the best utilization of current and anticipated agency resources.

Even in today’s commercial environment in which sampling of less than 1 percent

of food shipments occurs, more and more importers—large and small—complain

loudly of unnecessary entry delays and port congestion. Even if user fees were to

be assessed (which we do not believe should occur), even if the FDA was required

to maintain its current roster of laboratories, even if Congress appropriated substantial additional resources to facilitate such port level testing, the port congestion

and entry delays resulting from required port of entry testing of all food shipments

would measurably and painfully disrupt the distribution of critical food supplies into

the American marketplace.

In light of the foregoing, AFTA urges the Secretary to consult comprehensively

and often with affected industry and trade associations such as the American Free

Trade Association as it researches and develops appropriate testing methods to prevent entry of intentionally adulterated imported food product. This type of industrybased consultation and collaborative effort is the only means for the Agency to ensure that its research consider both the needs and mandates of the government

agencies, as well as the practical business realities of the importing trade community.

SECTIONS 3 AND 4: USER FEES FOR FOOD AND DRUGS

The FDA is charged with protecting the American consumers from unsafe products. The funding required for the agency to carry out its mission should be legislatively appropriated and not passed onto American importing companies and traders,

the majority of whom are small and medium sized businesses already suffering from

the decreased value of the American dollar and increased global competition. Food

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safety efforts are intended to benefit all residents and visitors in the United States,

and the costs to assure food safety is most appropriately born by that broad class

and not the import community. Moreover, it is not reasonable to pass along the

costs of increased product testing and border enforcement responsibilities solely to

importers of commodities required and needed by American consumers, especially

when the problems leading to the proposed assessment were primarily caused by

parties other than domestic importers!

Summarily and admittedly painting a picture with broad strokes, the tainted food

products giving rise to legislation such as H.R. 3610 became adulterated at the place

of manufacture, not because of any action or inaction taken by the importer or lawful product distributor. While it may be reasonable to hold product manufacturers

responsible for ensuring product safety and mandating that manufacturers commit

the investment necessary to so protect American consumers from any threats to

health or safety, there is no justification to switch this burden onto the backs of

small and medium sized importers and global traders.

H.R. 3610 proposes a $50 per line item user fee on all shipments of food products

and $1000 per line item on all shipments of drug products. Oftentimes, this exceeds

the domestic value of that line item and collectively may easily surpass any revenue

hoped to be realized by the importer. Importers into the United States provide

American consumers with the benefits of being a participant in the global marketplace. It is not appropriate to tax these traders for the privilege of doing business

in their own country. To do so would be to discourage an entire industry; to do so

would be to limit domestic supply of critical food and drug products; to do so would

be to say to the American consuming marketplace that the only way our government

can afford to protect you is to charge you more money for your basic and critical

consumer commodities.

It is, respectfully, inappropriate and inaccurate to represent that the only source

of funding sufficient to enable the FDA to carry out its mission of ensuring the safety of imported food products is to assess user fees against lawful small and medium

sized importers such as those represented by the American Free Trade Association.

These traders do not dictate product specifications nor do they contract with overseas suppliers for processing of manufactured product. Third party importers supply

branded merchandise to American consumers believing in the reputation and quality control mechanisms instituted by the product manufacturer itself—- the same

beliefs held by American consumers, who have come to depend upon AFTA’s members’ businesses to provide cost effective and alternative sources of these brand

name and allegedly reputable foodstuffs.

Food and drug manufacturers and not importers should be held responsible for

any funds not legislatively allocated to the FDA to ensure product safety. AFTA’s

members provide American consumers with food products at competitive prices and

at more outlets throughout the country than those products would otherwise be

made available. If these importers and distributors are required to add user fees to

the costs of entering these products into the country, the United States would certainly have less and more expensive food for its consumers. This cannot be the goal

of any legislation intending to make our country’s marketplace safer or of any legislation intended to meet the consumers’ needs for safe and accessible food products.

SECTION 5: RESTRICTING THE NUMBER OF PORTS FOR FOOD SHIPMENTS

Imported food products serve critical needs of American consumers throughout the

country. It is impractical to limit these imports to selective ports in metropolitan

areas surrounding existing FDA laboratories that the FDA itself concedes are

underutilized and in poor physical condition. Moreover, the increased costs of in

land transit from those ports to ultimate customers are costs that are bound to be

passed on to consumers.

The myriad and volume of food shipments into the United States demands that

importers be provided with more than merely a few ports in which to enter their

products. The port congestion and delays that will inevitably occur if over 10 million

annual food shipments were entered through only several U.S. ports of entry is too

vast to even estimate or reasonably contemplate.

Importantly, there are currently no FDA laboratories at either the northern or

southern border crossings. Does this mean that all food shipments will necessarily

and only be able to enter on the east or west coasts? The United States has major

food distributors and wholesalers located on both the Northern and Southern borders, all of whom could very well be forced to close their doors if required to bear

the increased costs of transporting perishable foodstuffs over land from ports hundreds of miles away. The resulting economic catastrophe will be astronomical and

will quickly surpass the product safety crisis currently facing our country.

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SECTION 805: SAFE AND SECURE FOOD IMPORTATION PROGRAM

AFTA supports any program facilitating the identification of low risk importers.

To this end, it is critical that FDA consult closely with industry and trade associations to make sure that the programs instituted are practical and reflect industry

realities, bearing in mind the variety of distribution systems supplying the domestic

marketplace with safe food products and the need to protect proprietary business

information. AFTA looks forward to being a part of this constructive and collaborative effort.

SECTION 8. CIVIL PENALTIES

Intentionally introducing unsafe and adulterated food product into U.S. commerce

should be severely punished in any legislative solution intended to ensure entry of

only safe foodstuffs into the U.S. Accordingly, AFTA believes that H.R. 3610 must

be appropriately amended to so reflect such a knowledge and intent standard, as

a predicate to penalties sufficient to immediately close the doors of any small or medium sized innocent importer or manufacturer.

The existing language in H.R. 3610 assesses penalties of up to $1,000,000 against

importers and/or manufacturers introducing adulterated food product into interstate

commerce. Without a doubt, intentionally introducing adulterated food into interstate commerce must be prohibited and severely punished. However, global market

realities include the possibility that certain perishable products may become adulterated without the importer or manufacturer’s knowledge during transit; products

may contain pesticides or other contaminants not known by the processor or the importer at the time of product purchase. It is imperative that any provision for civil

penalties be based on the knowledge of the importer or manufacturer that the product at issue was knowingly adulterated with the intention to cause harm to the

health or safety of the American consumer.

As currently drafted, the contemplated civil penalties may be assessed against

‘‘any person who introduced into interstate commerce’’ an adulterated food article.

HR. 3610 must clarify who is actually potentially liable for these contemplated civil

penalties or the legislation will merely serve as a means for increased litigation. For

example, is it possible that a customs broker or freight forwarder could be personally liable for ‘‘introducing’’ adulterated food into interstate commerce about which

he or she had no direct knowledge? Does this mean that a third party importer who

purchases product from a food wholesaler, which lawfully transacts business perhaps even in a country ‘‘certified’’ as contemplated by this legislation, is nevertheless personally liable if without his knowledge that product enters U.S. commerce

with a contaminant or ingredient not known to the importer or identified to the importer at the time of purchase? Without clarification as to financial liability, it is

reasonable to assume that no party within the supply or distribution chain will

knowingly assume any such risk and distribution of food products within the U.S.

marketplace will literally come to a standstill. AFTA does not believe that this is

the intent of H.R. 3610 and looks forward to working with the bill’s sponsors to clarify this provision.

SECTION 9. CONTINUED OPERATION OF FIELD LABORATORIES

While certainly the FDA should be required to maintain its current laboratory facilities and operations, even with its existing laboratory infrastructure the Agency

has not met its burden of ensuring entry of only safe products. Accordingly, while

without a doubt the FDA should not be permitted to lessen its current capabilities,

Congress should require the Agency to create additional laboratory facilities to expedite sampling and laboratory analysis in order to improve the Agency’s capacity to

ensure the safety of imported foods and drugs.

SECTION 419. INSPECTION AND OTHER STANDARDS; APPLICABILITY; ENFORCEMENT;

CERTIFICATIONS

The Bioterrorism Act of 2002 purported to create a system for foreign food facility

registration sufficient to ensure the safety of the domestic food supply. To now require certification of these same foreign food facilities because the existing system

did not, in hindsight, provide enough assurances of product safety to the U.S. government will certainly infuriate many U.S. trading partners and put U.S. importers

in the unenviable position of having to convince their suppliers once again to comply

with yet another new, unique and burdensome U.S. law as a condition of market

access.

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Moreover, to require certification of foreign food facilities or, in lieu thereof, to require certification of foreign governments, while not requiring the same certification

of domestic factories or distributors is to invite unnecessary and undesirable, WTO

scrutiny into what may certainly be perceived as a discriminatory and clearly discriminatory trade practice. If Congress and/or the FDA encourages importer verification of supply chain security and product safety, as it should, and works with the

industry to develop the appropriate program guidelines and protocols, there is no

basis to also require certification of foreign shippers, which, as already stated, will

necessarily create havoc for the United States as it seeks to act within the parameters of the global marketplace.

The American Free Trade Association appreciates the need to expeditiously pass

Federal legislation or implement similar regulatory initiatives satisfactorily ensuring the safety of imported foods and drugs. AFTA also appreciates, however, the importance of crafting legislation that not only protects consumers’ health and safety,

but also guarantees consumers’ continued access to safe, unadulterated and competitively priced food products.

AFTA looks forward to working with Congress to craft legislation ensuring entry

of unadulterated food products into the United States and appreciates the opportunity to submit this testimony to the esteemed subcommittee members.

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