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Testimony on Paperwork Burdens on Small Business by Robert J. Byrd
Acting Deputy Commissioner for Management and Systems
Public Health Service
Food & Drug Administration
U.S. Department of Health and Human Services
Before the House Committee on Business, Subcommittee on Government Programs
July 24, 1996
Mr. Chairman and Members of the Subcommittee:
Good Morning, I am Robert Byrd, Acting Deputy Commissioner
for Management and Systems. With me today is Mr. William
Hubbard, Associate Commissioner for Policy Coordination and Mr.
John Friel, Leader of FDA's Industry and Small Business Liaison
The Food and Drug Administration (FDA) appreciates the
opportunity to present to you FDA's efforts to reduce unnecessary
regulations and paperwork burdens upon small business. In your
letter of invitation you asked that we provide a progress report
on our efforts to respond to the burden reduction goals of the
Paperwork Reduction Act of 1995 as well as our response to the
recommendations adopted by the delegates to the white House
conference on Small Business regarding regulatory and paperwork
While FDA principally serves the general public in its health
and safety mission, FDA also recognizes that it has
responsibilities to the industries that it regulates. The public
also demands timely access to medical innovations, especially
innovations that have the potential to save lives, but without
sacrificing health and safety. FDA sees its mission as meeting
both these goals simultaneously. FDA counts small entrepreneurs
among its most valued clients and has consistently sought to
provide special assistance to them in their efforts to comply
with necessary regulations.
Before discussing the relatively new requirements of the
Paperwork Reduction Act of 1995 which was enacted in May 1995,
let me provide a summary of the paperwork reduction and
streamlining actions taken by FDA in recent years under direction
of the Department of Health and Human Services (HHS). In
September 1993, with implementation of the President Clinton's
Executive Order 12866, HHS directed a comprehensive review of
existing regulations with the objective of reducing the burden on
business. To assist in identifying priorities for review of its
existing regulations, FDA solicited recommendations from the
public on its plans for review in a January 20, 1994 Federal
Register notice. On May 8, 1995, HHS again requested public
comment in the unified Agenda of its regulations, seeking
suggestions for furthering regulatory reform efforts.
HHS' review accelerated with the establishment of regulatory
reinvention task forces targeted at specific industries under the
leadership of Vice President Gore. Working closely with the
Domestic Policy Council, the Office of Management and Budget, and
the National Economic Council, FDA played a lead role in the
Reinventing Government (REGO) group on drugs and medical devices.
The President's March 4, 1995, directive challenged HHS to
take additional steps to further reduce unnecessary regulatory
burden and increase cooperation and coordination with the
industries we regulate. Specifically the Department was asked
Conduct a page-by-page review of existing regulations with
the goal of eliminating or reviewing those that are outdated or
otherwise in need of reform;
- Change the way performance is measured by agencies and
front-line regulators to focus on results rather than process and
- Create "grassroots partnerships" by getting out of Washington
and convening groups of front-line regulators and the people
affected by their regulations to discuss issues of concern; and
Take steps to increase efforts to promote consensual rulemaking.
On April 21, 1995, the President further directed departments
and agencies to implement policies to accomplish two additional
- Waive penalties for small businesses by exercising
discretion, to the extent permitted by law, when the violations
is corrected in a timely manner and/or the amount of any waived
financial penalty is used to bring the entity into
- Reduce by one-half (subject to certain exceptions) the
frequency of regularly scheduled reports that the public is
required to submit to the government.
FDA vigorously attended to the Presidential and department
directives and identified and instituted a large number of
regulatory, administrative and management reforms to make FDA
more user friendly to business and to reduce regulatory burden.
Some examples of FDA's accomplishments under the review:
- implemented new procedures for planning and tracking
- withdrew 98 outstanding proposed regulations,
- obtained public comment in January 1994 on its program
areas to identify regulations that are outdated, burdensome,
inefficient, or otherwise unsuitable or, unnecessary.
- conducted a comprehensive retrospective review of the
Agency blood regulations.
- established an Office of Communications, Training and
Manufacturers Assistance in the center for Biologics Evaluation
and Research, providing firms with on line consultants saving
paperwork and time by helping them submit a complete application
the first time
- implemented procedures to acknowledge requests for
exemption under the Small Business Exemption to the Nutrition
Labeling and Education Act.
Reinventing Government Initiatives:
Under the Clinton Administration's "Reinventing Government"
initiative, FDA implemented a series of regulatory reforms, which
will ultimately save the drug and device industries about $500
million per year. Most of those reforms will be accomplished
through changes in FDA's current regulations. For example, these
- exempted from Premarket Notification requirements
approximately 125 categories of low-risk medical devices from
premarket review, adding to 441 categories already exempted.
- eliminated Establishment License Applications for most
- excluded drug and biologics manufacturers from requirements
for most environmental assessments under the National
Environmental Policy Act (NEPA)
- harmonized application forms for drugs and biologics,
replacing 20 separate forms.
FDA proposed to delete or reinvent over 1,300 pages, or 74
percent, of its rules that have a regulatory impact, i.e., those
other than approval or classification. If the pages that list
product approvals or classifications, such as new animal drugs
approved for marketing, are not counted, only 479 pages, or less
than 15 percent of FDA's portion of the Code of Federal
Regulations, remain unchanged.
Let us turn to the requirements of the Paperwork Reduction
Act of 1995. As you can see from the examples recounted above,
FDA has made a conscientious effort to comply with the
requirements of both the Paperwork Reduction Act of 1980 and now
1995. While FDA's regulatory mandate is broad -- our regulatory
authority covers products that account for 25 cents out of every
dollar spent by American consumers -- the regulatory burden we
place on industry is only 1/3 of one percent of the overall
The passage of major now legislation, however, during this
decade, has required FDA to promulgate new regulations which
require information collection from the regulated industries.
Despite these new requirements, I an pleased to say, however,
that FDA has managed to maintain a relatively constant level of
burden hours for its information collection requirements as
evidenced by the estimated burden figures for the last 3 fiscal
years for reporting, and recordkeeping:
FY 1993: 20,938,400
FY 1994: 20,963,940
FY 1995: 20,630,422
FY 1996: 21,506,260
The reasons the FDA information collection burden is
increasing in FY 1996 include:
- The increased scope of the PRA
of 1995 which now encompasses third party disclosure. As a
result of this change, the burden figure must now include product
labeling, and notification;
- Small Business Exemption notification requirements
under the Nutrition Labeling and Education Act of 1990;
- Medical Device Adverse action reporting,
Certification and Registration under the Safe Medical Devices Act
Amendments of 1990, and
- Mammography Facilities Accrediting, Quality Standards and
Certification Requirements under the Mammography Quality
Standards Act of 1992.
- Seafood Hazard Analysis critical Control Point (HACCP)
regulations which will help the seafood industry bring to market
safe seafood which in turn will protect the regulations which
will help the seafood industry bring American public from eating
tainted product. While not based on & Statutory directive, these
regulations are necessary because Of the changing nature of the
seafood industry. The seafood industry is in agreement with and
supports those requirements.
We are pleased, however, that we have controlled the growth
of the level of burden despite the new collections driven by new
statutory requirements. And, while we cannot, at this time,
precisely quantify the results of FDA efforts to reduce the
burden, we do know these efforts have mitigated the increases and
will continue to have an effect as some identified reforms are
The challenge for regulatory agencies is to determine ways of
providing direction to industry and collecting information
without compromising our responsibility to the public. we are
looking at other methods to carry out FDA's responsibilities
while reducing the information collection burden on the public.
It will be a major challenge for FDA to meet the specific burden
reduction goals suggested in the PRA of 1995 in the immediate
future. However, we are continuing to make a concerted effort to
control the level of burden through new management initiatives.
These new initiatives will require FDA to:
- Re-evaluate each information collection requirement to
determine if it can be eliminated or made less burdensome.
- Seek public input to help improve our processes through
announcements for comments in the Federal Register and
through outreach efforts by our small business liaison offices at
headquarters and in each of our field offices.
- Increase emphasis on technology to relieve paperwork burdens.
- Streamline our regulations implementation process under
guidance of a recently established Regulations Management Working
- Review the impact of new regulations on small business under
the Small Business Regulatory Enforcement Fairness Act. we have
already formed an in-house task force to review the new law and
to discuss the implications of that act with the chief regulatory
staff within each FDA center. Special attention will be paid to
the requirement to review the impact of any proposed rule that
would have a significant impact on a substantial number of small
SMALL BUSINESS FORUM (SBF) RECOMMENDATIONS
You also asked that we address FDA's response to the
recommendations of the White House Small Business Forum (SEF).
FDA is substantially ahead in many SBF priority areas. we have
small business representatives in each of the regional offices
for ongoing outreach to small businesses.
In addition, small industry liaison offices operate in each
of the FDA centers and in the Office of t.he Commissioner.
Further, approximately 80 percent of the cases handled by the FDA
Office of Ombudsman concern small businesses. We have strong
interaction with our state, regional, and local regulatory
counterparts to minimize duplication of paperwork and conflicting
enforcement actions. in addition, FDA has moved aggressively to
modernize its telecommunications network to facilitate the
ongoing exchange of information. Finally, special provisions for
small businesses are features of major FDA enabling legislation,
including the Nutrition Labeling and Education Act, the
Prescription Drug User Fee Act, and such regulations as the
Hazard Analysis Critical Control Point (HACCP) food safety rules.
Following are brief summaries of the specific SEF
recommendations with a notation about their potential impact on
1. REGULATORY DEVELOPMENT
- SBF recommends one or more pilots in first quarter 195
involving use of electronic interactive comment periods in
regulatory development. In conjunction with this, SBF also
recommends use of a question and answer (Q and A) format for
proposed rules. Other efforts to increase public access to, and
participation in, rulemaking could include early identification
of "stakeholders," frequent publication of Advanced Notices of
Proposed Rulemaking, decreased use of interim final regulations,
and increased use of meetings and public hearings to identify and
discuss emerging issues and to share relevant information. The
use of negotiated rulemaking "where appropriate" is endorsed.
To some extent, the above recommendations are being met in
FDA now. For example, CBER maintains a "Fax on Demand" system
whereby regulatory proposals and other materials can be faxed to
FDA has experimented with electronic submissions on proposed
regulations and we are considering such use in the future as
well. A Q and A format for proposed rules are useful in some
instances but have not been found to be appropriate for
complicated rules which comprise most of FDA's rulemaking
activity. The agency often uses this format in its guidance
documents for industry.
The Agency has taken recent steps to increase early
consultation with the private sector in the development of
regulations through a variety of means. The Agency has a long
tradition of outreach to the regulated industry through regular
and ongoing participation in industry's continuing education
seminars and meetings. The Agency has also instituted a series
of "grassroots meetings" around the country to bring together
manufacturers and first line regulators to discuss current issues
of concern. Since the beginning of Fiscal Year 1995, FDA has
held 33 grassroots meetings.
- Extend Comment Period - SBF suggests automatically
extending the comment period on proposed regulations to allow
additional time for small businesses to comment.
Traditionally, FDA has allowed 60 days for public comment on
proposed rules. on December 30, 1993, the President issued
Executive Order 12889, which required Federal agencies to allow
at least 75 days for public comment to technical regulations in
order to give U.S. trading partners under NAFTA sufficient time
to review such regulations. FDA has instituted an internal
policy of allowing 90 days for comment on proposed rules; thus,
allowing the public, including small businesses, sufficient time
to submit comments.
Although comment periods can be extended now upon reasonable
request, there is currently no provision for automatic extension
for any categories of correspondents such as small businesses.
Potential problems with the proposal for automatic extension are
the "hammers" that often occur in FDA legislation whereby
regulations must be finalized within a specific time frame.
Aside from that concern is the overall commitment to speedy
promulgation of regulations, which could be compromised by this
- Implementing Task Forces - SBF recommends that
raderal/private task forces be formed to participate in
regulatory development, compliance activities and to enhance
To a limited extent, FDA has utilized the task force model to
develop legislative and regulatory proposals. This occurred in
regard to the Prescription Drug User Fee Act, the Medical Device
User Fee bill, and the Nutrition Labeling and Education Act of
1990 (KLEA) regulations, among others.
- Agency Coordination - SBF suggests that FDA meet with the
Food Safety and Inspection Service (FSIS) of the Department of
Agriculture, and the Environmental Protection Agency (EPA) at
least twice per year to coordinate regulatory projects and share
FDA has a history of coordinating with other Federal agencies
on specific projects (e.g., NLF-A), sometimes on an ongoing
basis, e.g., the Centers for Disease Control and Prevention (CDC)
- Name a small business ombudsman
The FDA Office of Chief Mediator and Ombudsman comprises four
professional and two support.staff. A majority of the work of
the office (approx. 80 percent) involves the small business
community. The entire staff of the Office of the Chief Mediator
and ombudsman is available to work with small businesses.
- Educational Efforts. SEF recommends increasing
educational efforts to provide guidance to small firms.
The Agency already makes an intensive effort to educate
regulated industry, including smaller firms. Among the Agency
initiatives are "grassroots meetings," which focus on critical
regulatory topics and are open to anyone. FDA also regularly
participates in conferences sponsored by trade associations.
- Teleconferencing. A recent and growing innovation is the
satellite teleconference, which places firms and Agency experts
in an interactive setting to discuss topics of the day, Firms can
participate in the teleconference downlink and interact directly
with FDA staff. The cost of this technology remains a barrier
to,its proliferation, but if and when costs decrease, FDA will
stand ready to utilize this technology. The Agency has held
several pilot programs in this area and recognizes the clear
potential in this area
Electronic Regulatory Information Center (ERIC) - ERIC
would provide computerized and hard copy information for
regulated industry on regulatory requirements. Regulatory
agencies would provide guidebooks describing their regulatory
process, copies of handbooks, notices, NPRM'A, etc. SBF also
recommends that an electronic bulletin board be established by
each regulatory agency.
The above recommendations are useful and reasonable. Aside
from some initial work in producing materials such as a "plain
English" guide to Agency procedure for small businesses, the
principal expense to the Agency would be in keeping the ERIC
system current on a broad range of Agency initiatives.
The Agency's is responding by providing an Internet
connection in each program area. Internet home pages now is
contain news releases, enforcement reports, drug and device
approval lists, medical device and radiological health news, FDA
Medical Bulletin, AIDS information, FDA Consumer magazine,
Federal Register summaries, congressional testimony, speeches,
upcoming meetings, import alerts, online user guide, regulatory
proposals, existing compliance guidance, regulations, and
statutes. FDA is receiving more information from both industry
and the general public via International and continues to explore
ways to institutionalize and optimize use of this technology.
- CD-ROM - SBF encourages FDA to make proposals available
on CD-ROM. CD-ROM access to FDA manuals and documents, including
major enactments, Federal Register announcements, the FDA phone
book, ORA Guides, CDM guides, etc. is available by subscription
from HHs's office of information Technology Services for $300/yr.
it is updated quarterly.
- Rule summaries - SEP suggests that FDA prepare short
summaries of each rule and use intermediaries to publicize the
Like other Federal agencies, FDA is required to include a
summary description of proposed and final regulations published
in the Federal Exciters. These summaries are intended to be clear
and concise. in addition, FDA is now in the process of
implementing the provisions of the new small Business Regulatory
Fairness Act, which among other things, requires publication of a
"plain English" summary of the provisions of significant new
regulations. FDA currently distributes copies of proposals,
final rules, etc. to trade associations and to the trade press,
which do an effective job of translating them into lay language.
Press releases, talk papers, "Dear Colleague" letters, etc. are
examples of written educational materials which are regularly
developed and distributed widely by the Agency. Additionally,
FDA has an established network of small business representatives
in each of its regional offices, which maintains regular contact
and outreach to small industry.
III. ENFORCEMENT AND COMPLIANCE
- Violations and penalties - SBF is encouraging FDA to be
more open about publicizing its regulatory activities, such as
the nature of violations being sought out and the type of
penalties likely to be assessed.
While an element of surprise is essential to FDA's
"spot-check" enforcement strategy, this does not foreclose a
degree of openness on the part of the Agency about its
enforcement priorities and strategies. we are currently piloting
a program which permits preannounced inspections of some
manufacturers' facilities where there are no public health
concerns at issue. Notes about adjudicated cases are published
monthly in the FDA Consumer. Moreover, FDA participates in
regular public meeting's with industry and the food and drug bar,
at which there is open discussion about the Agency's enforcement
strategies. Finally, FDA Guidance Manuals are available to the
public and set out many specific details about the Agency's
- Measure Compliance - SBF recommends that the Agency begin
measuring success in terms of the rate of regulatory compliance
achieved rather than in terms of the number of citations and
FDA currently has three rewards for "front-line" regulators
that include the criteria of "innovative" regulation. Personnel
performance plans have been changed to be based on efficient
compliance achieved. The Agency has also implemented a
compliance Achievement Reporting System to capture all forms of
efficient and effective compliance.
- Volunteers- - SBF recommends that, when businesses
volunteer to assist the Agency in conducting a study they be
"held harmless" for any violations that may be uncovered in their
This is done by FDA on a regular basis. Examples include
drug companies which have opened their plants for visits by
reviewers of drug applications. In addition, food canners have
opened their plants for visits by FDA inspectors to observe the
canning process during HACCP training.
- Grace Periods - SBF recommends that, where permitted by
law, the Agency allow grace periods before enforcement of
In appropriate situations, FDA currently permits grace
periods prior to enforcement of new regulations. Recent examples
have included the HACCP rules and provisions of the Nutrition
Labeling and Education Act (NLFA).
IV. REDUCTION OF PAPERWORK AND RECORD KEEPING BURDENS
- Electronic Forms - SBF recommends the utilization of
electronic forms, where applicable.
To date, the Agency has two pilot programs (in CDER and CBER)
involving electronic filing. A number of filings of abbreviated
new drug applications (CANDA's) and product licensing
applications (CAPLA's) have been done by computer and this system
appears to be very promising, especially in the case of larger
clinical trial-s. A preliminary analysis suggests that review
times can be reduced by 15 - 25 percent through use of electronic
- Stated/Federal - SBF suggests that the Agency work to
coordinate with the states to avoid duplication of effort and
This is an area where FDA has been active for some time and
we are continuing to do more. The FDA Office of Regulatory
Affairs includes an Office of Federal/State Relations, charged
with coordinating Agency enforcement efforts with state and local
counterparts (health departments, offices of attorney general,
etc.) The FDA's National/Regional/State Telecommunications
Exchange Network allows daily interactions with the State and
regional food and drug authorities about enforcement priorities
and plans. Frequent meetings occur throughout the year between
FDA and State and regional officials. FDA has provided financial
support to the Association of Food and Drug Officials (AFDO) to
allow a full contingent of state officials to attend.
FDA also provides training to some 200 State and local
officials each year.
In some categories of enforcement, FDA relies completely on
the States -- shellfish sanitation and interstate milk shipment
are two examples. In other cases, FDA contracts with the States
to conduct inspections and other enforcement activities. Health
fraud is an area wherein FDA works hand in hand with the States'
Recently, FDA announced an expanded effort to create a new
partnership with State, regional, and local food and drug
officials and with industry and academia. "ORA 2111 is fostering
development of a broad range of partnerships to avoid duplication
and share resources. This effort envisions joint efforts
involving training, public education, enforcement priorities,
decision-making, information gathering, emergency response, and
Obsolete regulations - SBF recommends that the Agency work to
eliminate obsolete and redundant regulations.
As recounted earlier in this testimony, in 1993 FDA
eliminated a substantial backlog of old and obsolete proposed
regulations. In 1995 FDA identified for elimination, 735 pages
governing the regulation of antibiotic and insulin products from
its Code of Federal Regulations. These regulations were written
as required by provisions in the Federal Food, Drug, and Cosmetic
Act which are seen as obsolete. The Administration is working to
repeal the sections 506 and 507 of the FDC Act.
- D. Different sizes - SBP recommends tailoring regulations
to different sized entities and utilizing phase-ins and
exemptions. Tailoring regulations to differing sized entities is
something FDA does widely. A recent example is the financial
disclosure regulations, which contain special disclosure
provisions for small clinical investigators.
In summary, since 1993, with the implementation of the
President's Executive Order on regulatory planning and review,FDA
has been working vigorously in the game spirit Congress has
adopted in the Paperwork Reduction Act of 1995. We have
identified unnecessary regulations and eliminated or streamlined
reporting requirements resulting in significant decreases in the
burden of our regulations. To control paperwork burden in the
future, we have developed a paperwork reduction management plan.
We will continue to work with you and the industry in that
spirit while fulfilling our health and safety mission.
This concludes my remarks. My colleagues and I would be
pleased to respond to any questions you may have.
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