The current oversight system for food and drugs is based on the Food, Drug and Cosmetic Act, passed into law 70 years ago, in 1938. That was a simpler time. There were no biologically created drugs; it was nine years before the granting of a patent for manufacturing penicillin, and several years before the first cancer chemotherapy agent was tested. It was a time when most of the fresh fruit and vegetables consumed by people in cities came from farms not more than 50 miles away.
Food and drug production is very different in 2008 than it was in 1938. Sophisticated lifesaving drugs often rely on raw materials from faraway places. They require multiple manufacturing processes that can be outsourced to several suppliers in different locations where the FDA may have little or no presence. Food comes from all across the world, with Mexico, China and Canada being the top three suppliers to the United States. But the funding has not kept pace with the challenges.
Between 2001 and 2007, food imports grew 75 percent, but FDA-inspected firms shrunk by 7 percent. According to a June 2008 report by the Government Accountability Office, the number of domestic food firms within the FDA's jurisdiction increased to about 65,500 from 51,000 while the number of them inspected declined. The FDA plans to spend about $90 million during fiscal years 2008 and 2009 but, according to FDA estimates, inspecting every firm would cost about $524 million.
Fixing the oversight process for food and drugs, by comparison to other crises, would be a relatively straightforward process and would yield rapid, tangible results. No matter who becomes our next president, it should be a top priority for the upcoming congressional session.
By breaking up the FDA and consolidating responsibility for food into one agency and drug safety into another, we would increase accountability, reduce costly duplication, speed response to threats and improve the quality of oversight to protect ourselves and our children. Such a move would make economic sense as well, reassuring consumers throughout the world that food and drug products produced and consumed in the United States are safe and effective.
Millions of lives depend on it for their personal safety and just as importantly; it could be a step toward a restoration of faith in our government.
Steve Brozak is president of WBB Securities, an independent broker-dealer and investment bank specializing in biotechnology, medical devices and pharmaceutical research. Larry Jindra is director of research for WBB Securities.