In early 2007 family pets were dying. Pet food tainted with melamine appears to have poisoned hundreds, maybe thousands of cats and dogs before anyone in the United States was aware there was a problem.

Melamine, composed of nitrogen, carbon, and hydrogen, was once a popular compound to use in plastics and laminates, but fell into disfavor for general use in the 1970s. More recently, some companies in China have been using melamine as a cheap filler and binding agent in products such as rice protein and wheat gluten, both ingredients in pet food. Not incidentally, melamine mixed with wheat gluten can create the false appearance of a high protein level. Cyanuric acid also was found in the imported ingredients.

Scientists believe the combination of melamine and cyanuric acid produces crystals that, when consumed by animals, impairs their kidney functions, and it was this combination that sickened all those animals in 2007.

Officials from the U.S. Food and Drug Administration (FDA) say that melamine has no approved use for human or animal food in the United States. But in April 2007, The New York Times reported that Chinese companies had been secretly supplementing their animal feed with melamine for years.[1] “It was the melamine case that woke everybody up,” says Ricardo Carvajal, former FDA associate chief counsel who now serves as of counsel at Hyman, Phelps & McNamara, P.C. “We all suddenly realized that we’re importing things from abroad and these things are being widely distributed, and yet we’re uncertain as to the level of quality.”

The melamine scandal did not end with cats and dogs. In 2008 thousands of babies in China were sickened by baby formula tainted with melamine. The FDA said minute levels of melamine and cyanuric acid exposure found in some U.S.-produced formula did not raise health safety concerns.[2]

Meanwhile, U.S. consumers have found themselves deluged with media reports about contaminated food produced both here and abroad—from jalapeño peppers to cookie dough. In the wake of these reports, a question arises: Why didn’t the agency designated to protect consumers stop the tainted food before it hurt consumers?

Critics, the U.S. Congress, and even FDA insiders say the reason is simple—the agency’s powers are antiquated and need to be expanded and modernized for it to do its job effectively. This year may prove pivotal for the agency. Congress is poised to pass legislation to overhaul the FDA, and Commissioner Margaret A. Hamburg, MD, is vowing to change the way the agency is run.

The current food safety system “relies far too often on responding to problems after they’ve occurred and not nearly enough on preventing problems before they occur,” says Joshua M. Sharfstein, MD, principal deputy commissioner at the FDA. “Reforming the food safety system is a top priority.”

Meanwhile, wary food producers and small farmers—and the lawyers and lobbyists who represent them—are worried that new rules will simply lead to higher costs and unnecessary bureaucracy, and might not achieve their ultimate goal of consumer protection. Legislative efforts could “unwittingly” catch “many small-scale and organic farmers in an unnecessary web of regulation, at great cost of the farmers and to FDA, and little benefit to consumers,” says Steve Etka, legislative director for the National Organic Coalition.

While Congress appears focused on increasing the FDA’s food safety authority, there are other areas of potential reform. Questions over the process by which drugs and medical devices get approval are not new, but officials in the Obama administration say they hope to restore confidence in the approval process. Some critics claim the FDA is a bit too cozy with the companies it is supposed to regulate, resulting in dangerous drugs being allowed on the market.

“Dr. Hamburg and I believe in a public health approach to drug regulation,” Sharfstein says. “We have to recognize that some drugs are worth the risk because they are so important to patients and offer critical benefits. On the other hand, other drugs may not be worth the risk. Our goal is to strike the right balance to value both benefit and risk and make the decision that makes the most sense.”

Some practitioners say the interest in FDA reform reflects the increasingly important role the agency plays in modern society. “FDA affects everyone’s lives, so everyone has a stake in it,” says Peter S. Reichertz, a partner specializing in food and drug issues at Sheppard, Mullin, Richter & Hampton LLP. “Everyone is interested in making sure it does the best job possible.”

Global Economy
The history of the FDA is inextricably intertwined with the history of food development in our country. In 1906 Congress passed the Pure Food and Drugs Act (also known as the Wiley Act, named for chemist Harvey Washington Wiley), which prohibited the manufacture, sale, or distribution of mislabeled or tainted drugs, food, liquor, and medicine. The act was passed in conjunction with another law covering meat-packing plants (the Federal Meat Inspection Act). The twin laws came as a result of outrage over conditions in meat-packing factories, as portrayed in Upton Sinclair’s popular novel The Jungle.

The 1906 act created a system for food regulation that eventually morphed into the FDA. At that time, the United States was filled with thousands of small farms. Questions over packing and interstate travel reigned. Tainted food could certainly kill people then, as it can now. But in the time before mass distribution, not as many people from distant states were affected at once. In addition, food products were relatively simple compared to today’s processed items with a variety of ingredients and preservatives. This means that tracing a contamination was easier than it is now, as was overseeing the entirety of a product.

“The world has changed,” says Scott Faber, vice president of federal affairs for the Grocery Manufacturers Association. “Now we import food ingredients from at least 175 countries. Ingredients come from every corner of the globe.”

In 1938 Congress created the Food, Drug and Cosmetic Act, which remains the FDA’s principal authority, and it reflects the major safety concerns of the time. The government’s main worries for food products concentrated on manufacturers substituting ingredients or using additives to mask rancid meat and vegetables.

“There’s no question that if you go back 100 years to what was happening with the food supply then and compare that with now, there have been dramatic improvements in the safety of the food and the information we relay to consumers,” says Carvajal, who counsels food manufacturing companies. “At the same time, there has been an equally dramatic shift in the country from an agrarian society to a post-industrial society, with shifts in patterns of distribution and an older, perhaps more vulnerable population.”

In the passing years, Congress has refined its legislation in bits, and the FDA has been given additional regulatory authority. Today’s FDA supervises the safety of blood transfusions, cosmetics, dietary supplements, food, medical drugs and devices, radiation-emitting devices, vaccines, veterinary products, tobacco products, and other related products. The U.S. Department of Agriculture (USDA), not the FDA, has regulatory authority over meat and poultry processing.

The FDA’s budget is $3.3 billion for fiscal year 2010 (covering October 1, 2009, to September 30, 2010), a $614 million increase from the previous fiscal year.[3] Annually, FDA investigators conduct nearly 7,000 domestic food safety inspections, a number, consumer advocates say, that is nowhere near enough to ensure food safety. The FDA itself raised alarm bells more than two years ago when its own science board said the agency was at risk of failing to carry out its mandate.

“The mission is protecting public health,” Sharfstein says. “The challenge is that the industries that the FDA regulates are now global, with hundreds of thousands of entities exporting products into the United States. The agency was designed in a different world, and we have to figure out ways to respond to the challenges of the new global economy.”

Lessons Learned
In the past few years, companies have had to announce devastatingly massive recalls on food items imported from countries such as China and Mexico. But one of the issues involved in globalization is the difficulty in tracking the origin of tainted food. For example, in the spring and summer of 2008, investigators were mystified by a salmonella outbreak that spanned the country, resulting in more than 1,300 reported illnesses in 43 states and the District of Columbia. Investigators first blamed tomatoes. The probe eventually led to jalapeño and Serrano peppers imported from Mexico, but not before tomato distributors lost millions of dollars in sales.

Sharfstein says the agency has learned the importance of establishing a more accurate tracing system, although what that new method will look like remains an open question.

Additionally, because of globalization and mass distribution, an outbreak can quickly spread into a nationwide problem, food safety advocates say. The FDA needs to respond quickly and decisively to prevent more people from getting sick. To do so, advocates add, the FDA needs increased regulatory power. “The key transformation happening at the FDA is that it is moving from being a reactive agency that responds when problems arise to an agency that can be proactive,” says Caroline Smith DeWaal, director of food safety for the Center for Science in the Public Interest.

Tighter import controls, DeWaal says, are also clearly necessary. “Today the FDA uses a take-all-comers approach when it comes to food imports,” DeWaal says. “Any company from anywhere can ship food products to a U.S. port of entry. FDA needs to implement controls before the border and ensure that the products being shipped to the U.S. meet our standards.”

Part of the import problem is quality control, as evidenced in the melamine scandal. “When you have purposeful adulteration of product, it is shocking,” says John W. Bode, a principal and FDA specialist at Olsson Frank Weeda Terman Bode Matz PC. “It means a whole new level of intensity in regulating supply chain management.”

‘Red Flags’
Tainted food is not exclusively an importing problem. In September 2006 at least three people died and more than 200 people became ill from eating spinach contaminated with E. coli.[4] It took the FDA months to find the farms responsible for the outbreak. Then, in late 2006, there was another recall, this time for lettuce grown in the United States.[5]

In late 2008 and into 2009, a salmonella outbreak killed at least nine people. The FDA identified the source of the outbreak—tainted peanut products processed by the Peanut Corporation of America. The subsequent recall spanned every product the company had made in the preceding two years, including crackers, dog biscuits, ice cream, and peanut butter. The FDA reported that its investigators, on-site after the recall, found a leaking roof, rodents, and cockroaches at the company’s plant in Blakely, Georgia.

FDA critics say the agency’s response took too long and that Peanut Corporation was able to do business for years with dismal safety practices. Investigators, lacking the authority under the relevant FDA legislation, had to use governmental authority under the Bioterrorism Act of 2002 just to get access to the company’s records.

The FDA says Peanut Corporation’s own testing found salmonella strains 12 times in 2007 and 2008. While the Federal Bureau of Investigation is investigating the company, the federal government has not filed criminal charges, and it is unclear whether it will.

Some safety advocates and FDA practitioners point out that the Peanut Corporation catastrophe had been foreshadowed only two years earlier. In 2007 there had been a recall of Peter Pan and Great Value peanut butter over a multistate, salmonella outbreak. At the very least, experts say, the fact that there had been safety concerns related to other peanut processing companies should have prompted investigators to pay visits to their neighboring plants.

“The fact is that FDA inspectors, at the time of this crisis, had not been to the plant since 2001,” says Jean Halloran, director of food policy initiatives for the Consumers Union. “There were plenty of red flags along the way that should have alerted them to give special attention.”

At the time, Peanut Corporation said there “were regular visits and inspections of the Blakely facility by federal and state regulators in 2008,” and that independent auditors inspected the facility and gave it positive ratings.

Lawsuits to Follow
The FDA oversees 80 percent of the country’s food supply. Food illnesses kill about 5,000 Americans each year, according to government statistics. The FDA estimates 76 million cases of food-borne illness occur in the United States every year.[6] Predictably, the plethora of contaminated food scandals has led to a slew of lawsuits brought under the theory of strict liability. Bill Marler, a personal injury attorney specializing in food-borne illness litigation, says the field first developed with E. coli cases in ground beef in the 1990s.

Marler came into his practice with an outbreak in 1993 linked to Jack in the Box hamburgers. That outbreak alone brought individual and class action settlements totaling more than $100 million, a precedent-setting amount at the time, Marler says.

Just when the E. coli outbreaks in ground beef seemed to subside somewhat, there was an increase in incidents involving other food items—spinach, lettuce, and then, of course, peanut butter. The tainted peanut butter cases were “the first time that a lot of personal injury lawyers jumped into the mix,” Marler says. Since then, he says, there has been more competition when a national poisoning incident occurs.

Food-tainting scandals not only hurt business reputation, but they also cost companies millions of dollars in recall efforts and then, ultimately, lawsuits. Many companies choose to settle class action lawsuits rather than go through the intensive media attention of a trial. In the pet food scandal, Ontario, Canada-based Menu Foods Income Fund—along with other pet food makers and retailers—settled a class action lawsuit with U.S. pet owners for $24 million.[7]

Peanut Corporation filed for bankruptcy protection soon after the salmonella outbreak. At this point, it remains to be seen who is deemed eligible for compensation under the company’s $12 million insurance policy fund approved by a bankruptcy judge in Virginia.

As Marler puts it, if a company is forced to pay enough in damages, it may ultimately find it cost-beneficial to improve its food safety efforts, if it doesn’t go out of business first. And sometimes it simply takes a national crisis to force a company to change its ways or risk public wrath, he adds.

Marler says he supports FDA reform because it will improve food safety. “But,” he adds, “I do not believe it will put me out of business. As the population increases and as the food supply becomes more industrialized, one small mistake in one small food processor can amplify very quickly to a major outbreak.”

Congressional Response
Riding the wave of concern over food safety, Congress has drafted proposed legislation to help modernize the FDA and facilitate a more effective food safety monitoring system. In July 2009 the U.S House of Representatives passed, by a vote of 283 to 142, the Food Safety Enhancement Act. The Senate Committee on Health, Education, Labor and Pensions unanimously approved the Food Safety Modernization Act in November 2009, but the bill has not yet gone to the Senate floor. Congressional insiders expect behind-the-scenes discussions this spring to facilitate a compromise bill acceptable to both the House and Senate.

Both bills give the FDA the authority to step up inspections, and contain a mandate that the FDA ultimately inspect high-risk facilities at least once a year. The House bill requires that all other facilities be inspected every three years; the Senate bill says every four years. Both require food manufacturers to identify where problems could occur in the food-production process and then take steps toward preventing any contamination. Manufacturers also will be compelled to provide safety plans to FDA investigators. As for controlling imports, both bills require importers to verify the safety of their food and provide for an inspection system.

However, the Consumers Union is still pushing for import controls that are more in line with the USDA’s requirements for meat and poultry, Halloran says. Under the USDA requirements, a country cannot export meat or poultry unless it has an inspection system that either equals or surpasses the U.S. system.

Both bills give the FDA the authority to force the recall of a food product that it suspects is contaminated. Right now, the FDA can make recommendations, but it does not have the power to insist upon a recall if the company refuses. Many food safety advocates say that giving the FDA recall power will allow it to quickly respond to a crisis. But some food safety and FDA lawyers argue that recall authority may actually result in a slower response time. “Right now the government can cajole a company into a recall by threatening a negative press release about the contamination,” Marler says. “But if the government has recall authority, then you have to give them due process, which could make things take longer.”

The House bill requires food producers and importers to pay an annual $500 registration fee to help cover the total cost of $3.7 billion over five years for the food safety overhaul. Some 360,000 companies in the United States and abroad would be required to pay the fees, an amount small farm lobbyists have protested as too hefty a sum. The Senate would fund core activities through an appropriation of $825 million for fiscal year 2010.

Some food producers and manufacturers are fighting increased fees, and negotiators are battling out a compromise behind the scenes, say those close to the discussions. Additionally, Faber says that the Grocery Manufacturers Association would like to see user fees go toward rebuilding the FDA’s scientific research capacity rather than funding the inspection system. But the Consumers Union says that funding from fees would ensure that Congress could not decide a year from now that it wants to cut the budget.

“There has been a long period of declining budget for food safety,” Halloran says. “Now there’s attention to the issue. But let’s say we don’t have any more terrible food safety incidents for a couple of years. Congress could decide we don’t need so much money for food safety because we don’t have a food safety problem, and we would be back in a cycle where resources would decline until we had another big crisis.”

Etka, of the National Organic Coalition, says it is “illogical to have a flat-fee structure that results in a small, organic farmer paying the same fee as a large multinational corporation.” However, Etka was encouraged by the part of the Senate version of the bill requiring the FDA to coordinate with the USDA’s national organic program in developing standards.

The Senate bill also establishes pilot programs to examine how best to trace outbreaks to their source. While it is apparent the FDA and the USDA will be working together to establish food safety rules, it is unclear what will be done to address the FDA’s complex system of relying on states and local authorities for food inspections.

The majority of domestic food inspection is conducted by states, as it has been for decades, under the traditional view that police powers should be carried out by the states. Each state has its own counterpart to the FDA that conducts food safety inspection, with differing budgets and administrative priorities. “There you have the 50-piece jigsaw puzzle, with some states where those activities are grossly underfunded and other states where they are very well-funded,” Carvajal says. “Tweaking national food safety laws isn’t going to address that issue.”

A New Face
Since President Barack Obama took office, the FDA has touted a new, aggressive policy to ensure food safety. Hamburg has thrown in her support for FDA overhaul legislation and has been on a public relations blitz, letting everyone know that the FDA wants to step up its role, but it needs money to do so. “We have to do better,” Hamburg said during a November 2009 appearance on Good Morning America. “The food safety programs at the FDA have been woefully underfunded for years. There are serious gaps, and we can do better.”[8]

In a September 2009 keynote address at a National Food Policy conference, Hamburg said the FDA is “pressing forward with a new agenda … to prevent harm by keeping unsafe food from entering commerce in the first place.” She said the FDA is hoping to hire about 300 employees in the coming year, with an increased budget for 2010.[9]

In October 2009 the FDA warned manufacturers that it would crack down on inaccurate nutritional labeling because of concern that companies are misleading consumers about the health benefits of certain foods. But critics say these efforts are not enough, and that the agency is putting on a new face without any teeth. One of the main problems is figuring out how to deal with manufacturers that deliberately disobey the rules.

“If the laws aren’t enforced, how is a scrupulous, honest business going to be able to compete with somebody who is cutting corners and underselling?” Carvajal asks.

Some FDA practitioners are wary of discussions about enforcement tactics, which often focus on more aggressive monitoring and heftier fines, yet potentially neglect extensive outreach. “The agency needs to be careful that as it ramps up its enforcement actions, it is implementing changes in a fair way that comports with due process,” says James S. Cohen, a shareholder in the food and drug practice at Buchanan Ingersoll & Rooney PC. “Most companies just want to know what the rules are so that they can comply. They need as much guidance as possible.”

New legislation requiring more inspections and establishing additional requirements is “both good and bad” for food companies and the lawyers who represent them, Bode says. “The new legislation would very substantially expand the authority of the FDA. That means our clients would be responding to regulatory requirements in numerous ways they did not have to in the past.”

‘Constructive Conflict’
Food safety, while clearly a priority, is not the only area of concern, especially for FDA practitioners. Since President Obama took office, his administration has repeatedly stated its commitment to “an unprecedented level of openness in Government.”

As part of this commitment, the FDA formed an internal transparency task force to develop recommendations for making FDA activities and decision making more accessible to the public. The emphasis is on disseminating relevant FDA-related facts in a timely, user-friendly format, while protecting information deemed to be confidential.

“There’s a tension between transparency and the rights and privileges of a company that submitted information,” says Neil F. O’Flaherty, a principal at Olsson Frank who represents medical device companies. “FDA needs to find a way to have more openness and transparency, but at the same time make sure they are not damaging the confidences of companies.”

In addition, FDA practitioners say that the agency’s internal computer system is outdated, stalling its decision-making process. “There’s a problem with internal information-sharing and data collection,” Cohen says. “It’s extremely outdated. How can you make critical and responsible decisions if you can’t adequately access information or share it internally?”

Meanwhile, the FDA has faced repeated criticism over medical devices and drugs the agency has approved, but which critics say are unsafe and should be taken off the market. “There are many drugs that the FDA is not doing the right thing on,” says Sidney Wolfe, MD, director of health research at the consumer advocacy group Public Citizen. For years Wolfe has argued that the FDA has been devastatingly easy on the companies it monitors, allowing faulty devices and bad drugs to get on or stay on the market. “The FDA has to have constructive conflict with the industry—otherwise what’s the point of the FDA?” Wolfe asks.

Sharfstein says he hopes the FDA’s focus on transparency will help the public regain its faith in the agency. “It’s very important for FDA to be transparent and explain the basis for its decision,” he says. “Otherwise its very easy for people on all sides of an issue to jump to conclusions and lose confidence in the agency.”

The FDA only recently adapted to the extra duties of overseeing tobacco products. In June 2009 President Obama signed the Family Smoking Prevention and Tobacco Control Act, which granted the FDA the authority to regulate tobacco products. Thus far, company efforts to fight the law have proven fruitless.

Certainly, the FDA’s regulatory duties have expanded over the decades, and modernization efforts target the agency’s increasing role in society. FDA critics argue that there are many areas that are in need of increased congressional oversight and legislative intervention. But revamping food safety policy appears to have Congress’ attention at the moment, and seems destined for an immediate overhaul.

“Reform occurs when there’s enough sick and injured people that bureaucrats and senators can’t ignore it anymore,” Marler says. “That’s the truth.”

Anna Stolley Persky wrote about the Ted Stevens prosecution in the October 2009 issue of Washington Lawyer.

Notes
[1] David Barboza and Alexei Barrionuevo, Apr. 30, 2007. “Filler in Animal Feed Is Open Secret in China.” The New York Times.
[2] Martha Mendoza and Justin Pritchard, Nov. 27, 2008. “FDA Finds Melamine Traces in U.S. Baby Formula.” San Francisco Chronicle. www.sfgate.com.
[3] U.S. Food and Drug Administration.
[4] U.S. Food and Drug Administration, www.fda.gov/NewsEvents/Newsroom/Press Announcements/2007.
[5] U.S. Food and Drug Administration, www.fda.gov/NewsEvents/Newsroom/Press
Announcements/2006.
[6] U.S. Food and Drug Administration, www.fda.gov/Food/ResourcesForYou/Consumers/.
[7] In re Pet Food Products Liability Litigation, MDL Docket No. 1850, Civil Action No. 07-2867.
[8] Good Morning America, http://abcnews.go.com/GMA.
[9] U.S. Food and Drug Administration, www.fda.gov/NewsEvents/Speeches.