Co-authored by Brian Gross
In our October 25, 2011 post, Food Safety Modernization Act: Did Congress Bite Off More Than It Can Chew? we expressed concern regarding the FDA’s ability to fully implement the Food Safety Modernization Act (“FSMA”) given its budgetary restrictions. As outlined in our prior post, FSMA provides for increased regulation and oversight of the production of food by the FDA, both domestically and abroad, which will require significantly more resources. Accordingly, President Obama proposed a budget of $2.75B for fiscal year 2012, an increase of $300M from 2011. In June, however, Congress approved a 2012 budget for the FDA of less than $2.2B, a significant reduction from its 2011 budget, for a year in which the scope of its responsibilities will increase dramatically.
On Monday, November 14, 2011, Congress reversed course and it appears that Congress is prepared to approve a compromise bill which provides the FDA with a $2.5B budget for 2012, approximately $334M more than the FDA was allocated in June, and $50M more than it received for fiscal year 2011.
Although the FDA’s budgetary increase in 2012 is minimal in comparison to the expansion of its responsibilities provided under FSMA, the fact that it is receiving additional money is significant in light of the Federal deficit. Congress’s decision to allocate additional money to the FDA during a time when Federal spending is being scaled back indicates that the government recognizes the increased importance of food safety. Unfortunately, without continued increases in its funding, it appears unlikely that the FDA will be able to fully implement the mandates of FSMA, particularly with respect to the inspection and regulation of foods imported into the United States. Case in point, Washington Post reporter, Brad Racino’s recent article explained that FSMA requires the FDA to inspect 600 foreign food facilities in 2011, and while the FDA expects to meet that requirement, based on current and expected future funding, it appears unlikely that the FDA can meet its requirement to double the number of foreign inspections in each of the next six years. This is likely to place a heavy burden on those companies which import food products into the United States, which, pursuant to FSMA, must now ensure that such food products meet the same safety standards as domestic food products. The lack of inspections could certainly result in more food borne illness outbreaks, and as a result, an increase in the number of personal injury lawsuits these companies may face.
The implementation of FSMA will occur over a period of several years, and its success will hinge largely upon a number of different factors, but perhaps most importantly on the financial resources afforded the FDA. Accordingly, this week’s development is significant and may suggest that the importance of safe food practices and prevention of food borne illness has finally entered the national consciousness. Unfortunately, the flagging economy and increasing budget deficits may hamper the FDA’s ability to obtain the necessary funding to meet all of FSMA’s mandates, and will force FDA to prioritize certain aspects of its implementation and enforcement. As such, a prudent company must stay abreast of these developments so it can rapidly deploy the necessary resources to meet the challenges presented by FSMA. We will continue to monitor these issues and report concerning any relevant developments.