Department of Health and Human Services, Food and Drug Administration: Establishment and Maintenance of Records Under the Public Health Security and Bioterrorism Preparedness and Response Act of 2002

GAO-05-216R: Dec 22, 2004

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GAO reviewed the Food and Drug Administration's (FDA) new rule on the establishment and maintenance of records under the Public Health Security and Bioterrorism Preparedness and Response Act of 2002. GAO found that (1) the final rule would require the establishment and maintenance of records by persons who manufacture, process, pack, transport, distribute, receive, hold, or import food in the United States and would implement the Public Health Security and Bioterrorism Preparedness and Response Act of 2002 to help address credible threats of serious adverse health consequences or death to humans and animals; and (2) FDA complied with applicable requirements in promulgating the rule.

Department of Health and Human Services, Food and Drug Administration: Establishment and Maintenance of Records Under the Public Health Security and Bioterrorism Preparedness and Response Act of 2002, GAO-05-216R, December 22, 2004

B-295520

December 22, 2004

The Honorable Judd Gregg
Chairman
The Honorable Edward M. Kennedy
Ranking Minority Member
Committee on Health, Education, Labor and Pensions
United States Senate

The Honorable Joe Barton
Chairman
The Honorable John D. Dingell
Ranking Minority Member
Committee on Energy and Commerce
House of Representatives

Subject: Department of Health and Human Services, Food and Drug Administration: Establishment and Maintenance of Records Under the Public Health Security and Bioterrorism Preparedness and Response Act of 2002

Pursuant to section 801(a)(2)(A) of title 5, United States Code, this is our report on a major rule promulgated by the Department of Health and Human Services, Food and Drug Administration (FDA), entitled "Establishment and Maintenance of Records Under the Public Health Security and Bioterrorism Preparedness and Response Act of 2002" (RIN: 0910-AC39). We received the rule on December 9, 2004. It was published in the Federal Register as a final rule on December 9, 2004. 69 Fed. Reg. 71562.

The final rule requires the establishment and maintenance of records by persons who manufacture, process, pack, transport, distribute, receive, hold, or import food in the United States. The rule implements the Public Health Security and Bioterrorism Preparedness and Response Act of 2002 to help address credible threats of serious adverse health consequences or death to humans and animals.

Enclosed is our assessment of the FDA's compliance with the procedural steps required by section 801(a)(1)(B)(i) through (iv) of title 5 with respect to the rule. Our review indicates that FDA complied with the applicable requirements.

If you have any questions about this report, please contact James W. Vickers, Assistant General Counsel, at (202) 512-8210. The official responsible for GAO evaluation work relating to the subject matter of the rule is Ms. Marjorie Kanof, Managing Director, Health Care. Ms. Kanof can be reached at (202) 512-7101.

signed

Kathleen E. Wannisky
Managing Associate General Counsel

Enclosure

cc: Ann Stallion
Regulations Coordinator
Department of Health and
Human Services

ENCLOSURE

ANALYSIS UNDER 5 U.S.C. 801(a)(1)(B)(i)-(iv) OF A MAJOR RULE
ISSUED BY
DEPARTMENT OF HEALTH AND HUMAN SERVICES,
FOOD AND DRUG ADMINISTRATION
ENTITLED
"ESTABLISHMENT AND MAINTENANCE OF RECORDS UNDER THE
PUBLIC HEALTH SECURITY AND BIOTERRORISM
PREPAREDNESS AND RESPONSE ACT OF 2002"
(RIN: 0910-AC39)

(i) Cost-benefit analysis

FDA performed a cost-benefit analysis of the final rule. The estimated annual costs for recordkeeping consist of85,082,000 for learning, $205,239,000 for records redesign, $114,701,000 for additional records maintenance, and $8,508,000 for learning for new firms. Over a 20-year time horizon (assuming a 7-percent discount rate) the total costs are $1,406,356,000.

(ii) Agency actions relevant to the Regulatory Flexibility Act, 5 U.S.C. 603-605, 607, and 609

FDA conducted a Final Regulatory Flexibility Analysis that shows that the final rule will have a significant economic impact on a substantial number of small entities. One alternative used by FDA to reduce the burden on small entities is an extended compliance date.

(iii) Agency actions relevant to sections 202-205 of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1532-1535

The final rule contains a mandate on the private sector of more than112,300,000 ($100 million adjusted for inflation) in any one year. Therefore, the FDA has prepared the required statement including the rule's effects of future costs and exports.

(iv) Other relevant information or requirements under acts and executive orders

Administrative Procedure Act, 5 U.S.C. 551 et seq .

The final rule was issued using the notice and comment procedures found at 5 U.S.C. 553. On May 9, 2003, the FDA published a Notice of Proposed Rulemaking in the Federal Register. 68 Fed. Reg. 25188. In response, FDA received 212 comments, which are discussed in the preamble to the final rule.

Paperwork Reduction Act, 44 U.S.C. 3501-3520

The final rule contains information collections that are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act. FDA has submitted the required information to OMB including the estimated burden hours. FDA expects the recordkeeping burden for the first and second years the rule is effective to be 7,763,000 hours, which includes learning and record redesign. In subsequent years, the burden is estimated to be 3,359,000.

Statutory authorization for the rule

The final rule is promulgated under the authority found in 15 U.S.C. 1453, 1454, 1455; 19 U.S.C. 1490, 1491; 21 U.S.C. 321, 331, 332, 333, 334, 335a, 343, 350c, 350d, 352, 355, 360b, 362, 371, 374, 381, 382, 393; 42 U.S.C. 216, 241, 243, 262, 264.

Executive Order No. 12866

The final rule was reviewed by OMB and found to be an "economically significant" regulatory action under the order.

Executive Order No. 13132 (Federalism)

The FDA has found that the final rule does not have sufficient federalism implications to warrant the preparation of a federalism impact statement.

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