Budget Battles Continue, Ag Cuts Likely
to Follow Senate ActionsWhile some in Congress contend the contentious $45-billion budget
reconciliation package will be carried into January, House and Senate
leadership late this week ordered their conferees to end negotiations
and get the conference package ready for formal committee action by
the end of the week. The House has said it will work through the weekend
and the Senate is expected to follow suit.
This means that to get to a compromise budget number there will likely
be an additional 1% across-the-board cut in all federal discretionary
spending, including ag programs. It also means any section of the bill
that is vaguely controversial will likely get jettisoned, including
a push to allow drilling in the Arctic National Wildlife Refuges (ANWR).
On the ag side, where conferees need to reconcile $3 billion in Senate
budget trimming with about $3.5 billion in House cuts, it appeared
the Senate path to savings will prevail. By taking the Senate cuts,
which do not include controversial changes to food stamp eligibility
as does the House bill, members avoid being the Scrooge of food aid.
The Senate cuts also extend all existing farm and
nutrition programs through 2011,
not just food
stamps and conservation as the House did. The Administration, however,
isn’t buying it. Secretary of Agriculture Mike Johanns said Senate
action to extend the programs sends the wrong signal to trading partners
about the U.S.’s serious intent to cut subsidies.
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Congress Remains in D.C., Labor-HHS
Approps Unresolved
Congress will continue working through the weekend with the House
shooting for a Wednesday adjournment and the Senate saying the session
could run through Friday, December 23. As for when they will return,
the Senate is scheduled to start on Jan. 18 with the House convening
Jan. 31.
The FY2006 Labor-HHS appropriations bill remains in flux. The Senate
was expected to vote on Thursday; however it did not appear to have
the votes to pass the $142.5 billion spending bill and therefore the
vote was withheld. A vote is expected next week and the Senate could
add the Labor-HHS bill to the Defense FY2006 appropriations bill, the
last one on the table.
Last month, the House voted down the negotiated conference
report on the Labor-HHS bill which includes funding for the National
Institutes
of Health (NIH) and the Health Resources and Services Administration
(HRSA). On Monday evening the conference committee agreed to a slightly
revised report which maintained the $1.4 billion in cuts from last
year's spending levels. The House passed the Labor-HHS conference report
215 to 213 with 11 Republicans joining the Democrats in voting against
the bill.
FY2006 began Oct. 1 and the current continuing resolution for FY2006
Labor-HHS funding unapproved programs expires Saturday. Another short-term
CR is expected.
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Katrina, Ag Disaster, Bird Flu Money Now in Defense Spending Bill
Senate Appropriations Chair Thad Cochran (R-MS) spent most of the
week trying to hold together his $35-billion Katrina/ag disaster package,
while concluding the politically masterful feat of attaching it to
the defense spending bill, the last piece of “must-pass” legislation
on the schedule before the holiday recess.
Negotiators have tried to cut the Cochran plan back
to $25 billion ($3+ billion for drought and other farm disasters),
along with chopping
the White House request for avian influenza money by half. Cochran
is pushing for offsets out of unspent Iraq reconstruction monies, but
may also have to rely on his colleagues to successfully include the
controversial Arctic National Wildlife Refuge (ANWR) language in the
defense package once it was dumped from the budget reconciliation bill.
ANWR is important because it represents over $8 billion in prospective
revenue, so it can be used to offset spending in other
programs.
Further complicating Cochran’s plan is a promise
by Sen. Tom Coburn (R-OK) and others to block any appropriations measure
carrying unrelated
amendments.
Return to top House Panel Approves Bill to Override State Food Safety Warnings
A bill to bring national uniformity – federal
preemption -- to food safety warning labels on food packaging was approved
Dec. 15 by the House Energy & Commerce Committee. H.R. 4167, the
National Uniformity for Food Act, sponsored by Reps. Mike Rogers (R-MI)
and Ed Towns (D-NY) and 216 others, passed by a vote of 30-18, and
was essentially identical to one reported by the committee last year
but
not enacted. The bill, which has lingered through two congresses, is
facing hard sledding in the Senate.
In his opening statement, Committee Chair Joe Barton
(R-TX) noted “it is common sense” to have common food
labels throughout the country. Rep. John Dingell (D-MI), ranking minority
member of the committee (who voted for the bill when the committee
considered it last year), stated he was “troubled by H.R. 4167.” He
cited the lack of hearings, a subcommittee mark-up or other opportunities
for members or consumers to consider the legislation. He noted state
food and drug officials are “worried about the impact” of
the legislation and urged the Barton to postpone the mark-up until
there is greater opportunity for all stakeholders to understand
and discuss it.
Dingell’s comments were echoed by several other
Democratic members, including Rep. Henry Waxman (D-CA), who referred
to the bill as “quite radical” and as changing food law “in
a sweeping way.” Even first responders, he said, are objecting
to the bill. Opposition was also expressed by Rep. Anna Eshoo (D-CA),
who stated it will pre-empt food safety laws in 37 states, not
just in California and Reps. Jay Inslee (D-WA) and Tammy Baldwin (D-WI).
Rep. Lois Capps (D-CA), in her opposition to the bill, noted FDA doesn’t
have the resources it needs to assure all aspects of food safety and
relies on states for many things and that the bill is opposed by the
Association of Food & Drug Officials of the states and by the National
Association of State Departments of Agriculture.
Dingell offered a motion to postpone mark-up of the
bill until Feb. 15, stating although he is “conflicted” because
he supports uniformity and doesn’t believe California should
be able to “make rules for the whole country,” he believes
hearings are needed for controversial measures such as this. The motion
was defeated.
Capps offered an amendment to exempt from the bill
state requirements regarding labeling of carcinogens. The amendment
was defeated 21-22. Inslee, with Waxman, proposed an amendment designed
to clarify the legislation does not pre-empt “the void;” i.e.,
does not prohibit states from acting in cases where FDA has not acted.
Barton, after hearing considerable discussion on this topic, including
technical drafting matters, agreed to work with Inslee and Waxman on
acceptable language to address the concern. This, he said, would be
incorporated in the bill prior to its consideration by the full House.
On final passage, the bill was supported by four Democrats
(Reps. Bobby Rush (D-IL), Al Wynn (D-MD), Mike Doyle (D-PA) and Mike
Ross (D-AR)) and opposed by one Republican (Mary Bono (R-CA)). Otherwise,
the vote was along party lines, with Republicans supporting and Democrats
opposing.
Return to top House Committee Holds Hearing on Internet Sales of Controlled
Substances
On December 13, the House Energy & Commerce subcommittee on oversight & investigations
held a hearing entitled “Safety of Imported Pharmaceuticals:
Strengthening Efforts to Combat the Sales of Controlled Substances
Over the Internet.”
Testifying for the Government Accountability Office
(GAO), Richard Stana, director of homeland security & justice issues,
said a GAO study indicates there is a substantial and increasing volume
of prescription
drugs imported into the U.S. for which FDA cannot assure safety and/or
effectiveness. While acknowledging FDA and Customs & Border
Protection (CBP) are trying to work more effectively and cooperatively
on the matter, resource constraints and other limitations are preventing
further progress on stemming the tide of illegal imports.
GAO specifically recommends reconsideration of requirements that FDA
notify addressees and allow them to provide evidence that packages
are admissible. This, combined with the sheer volume of packages, is
leading to continued release of products from mail and other shipment
facilities. Rep. Bart Stupak (D-MI), ranking minority member, reminded
the subcommittee that both FDA and members of Congress have asked HHS
to propose a mechanism to eliminate the FDA notification requirement,
to no avail.
Other witnesses representing the Drug Enforcement
Administration (DEA), CBP, and FDA essentially acknowledged the enormity
of the problem.
They have a huge task of trying to regulate Internet sellers, many
of which are based outside the U.S. and thus outside U.S. law. Joseph
Rannazzisi, DEA, reported that as of October, DEA had begun 236 investigations
of Internet sales of controlled substances without a prescription and,
in 2004 seized more than $14.5 million in assets after such investigations.
This was a huge increase over DEA actions in any previous year. Difficulties
in attempting to deal more effectively with this problem include unclear
requirements for legitimate Internet prescribing and dispensing of
drugs, the lack of a statutory definition of a valid “doctor/patient” relationship
and insufficiently stringent penalties for illegal sales of Schedules
III, IV and V controlled substances.
Jayson Ahern, CBP, said processes have been modified
to simplify and expedite interdiction and destruction of packages.
Dr. Robert Meyer, FDA, said obtaining prescription controlled substances
undermines the actions of FDA to assure the safe and proper use of
these medications,
many of which are subject to strict risk management plans in the legitimate
marketplace.
Stupak said while Congress has held a
number of hearings on this matter and federal agencies have done a
lot of talking, nothing has happened to solve the problem. Subcommittee
Chair Ed Whitfield (R-KY) asked all of the witnesses to identify the
major obstacle to dealing with the issue. Stana replied it is the nature
of the Internet, which prevents agencies from getting a handle on matters,
and the lack of agency accountability to produce tangible results.
The fact many Internet sites are “fake pharmacies” and
many are overseas means there is no clear regulatory control, according
to Rannazzisi. Ahern stated better information regarding shipments,
in an electronic format, would help. He also reported CBP is taking
action to streamline paperwork requirements and make use of the Abandoned
Property Act to identify illegal shipments and destroy them.
Rep. Michael Burgess (R-TX) questioned FDA’s
Meyer about the role of FDA in surveillance and monitoring imported
drugs to determine
if the products are safe Meyer replied resource constraints
prevent ongoing surveillance. Burgess indicated such surveillance is
essential to assure the integrity of the supply chain, and also noted
his view that FDA should do more to educate physicians about the burgeoning
purchase of drugs via the Internet so they can talk with their patients
about the risks. When asked by Rep. Mike Ferguson (R-NJ) the nature
of the public health threat from the purchase of controlled substances
via “rogue Internet pharmacies,” Meyer said there
is “great therapeutic concern.”
A second panel included representatives of VISA, Mastercard,
FedEx, UPS, Google and Yahoo, as well as of IntegriChain, a company
that recently
conducted a survey of Internet sites selling, or purporting to sell,
controlled substances. Joshua Halpern of IntegriChain reported that
of 180 websites surveyed, they are operated by 129 entities and 65%
of the websites are hosted on U.S.-based servers. Further, the company
determined many of these sites rely on major credit cards and
national/international shipping companies, providing potential avenues
for affecting the sites’ capabilities.
The credit card and shipper representatives reported it is difficult
to take action to try to prevent the use of their services for purchasing
prescription drugs without a valid prescription. For example, credit
card companies must rely on banks to identify problems and take action,
since it is the bank, not the credit card company, that has a business
relationship with the vendor.
Andrew McLaughlin, Google, reported only licensed
pharmacies and pharmacists are allowed to display ads on Google sites,
and Google
provides free advertising to government agencies so they can educate
people about the risks of Internet purchases. John Scheibel, Yahoo,
noted the site prohibits advertisers that say prescription drugs are
available without a prescription. The site also requires vetting and
qualification of all pharmacies advertising the sale of prescription
drugs via the Internet.
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340B Program Examined in House Subcommittee
On December 15, the House Energy & Commerce subcommittee on oversight
and investigations held a hearing entitled “Oversight and Administration
of the 340B Drug Discount Program: Improving Efficiency and Transparency.” The
stated focus of the hearing was on deficiencies and need for improvement
in the management of the 340B program by the Health Resources and Services
Administration (HRSA), for example, whether the drugs sold at a discount
are being “diverted” to non-340B recipients. Yet much of
the questioning instead related to whether companies are accurately
reporting their prices for purposes of calculating the discounts.
The witnesses included representatives from the HHS Office of Inspector
General (deputy for evaluation and inspections Stuart Wright,), HRSA
(deputy administrator Dennis Williams), the Public Hospital Pharmacy
coalition (William Von Oehsen), the 340B Prime Vendor Program (Christopher
Hatwig) and GlaxoSmithKline (David Brown).
The Inspector General’s office reported on the
340B pricing issue in the past and is continuing to review the issue.
Wright’s
testimony stated the IG, based on its reviews, has concluded “that
the 340B program may not be functioning as intended to ensure that
appropriate discounts on drugs are available to eligible entities.” The
IG has made a number of recommendations to HRSA, some of which have
been implemented, including the agency audit of manufacturers and wholesalers
to verify ceiling prices are being calculated correctly and provided
to the eligible entities.
It was called to the subcommittee’s attention by Ranking Democrat
Rep. Bart Stupak (D-MI) that a 2001 IG report indicated half or more
of drugs sold to 340B providers were exceeding the government ceiling
prices and, despite HRSA’s promises to strengthen its oversight
of the program, the problem has not declined. The IG is continuing
to oversee the matter and will be producing an updated report in the
next year.
Subcommittee Chair Edward Whitfield (R-KY) attempted to get at the
question of whether the government has sufficient authority to “require” ceiling
prices. The HRSA representative said they have no such authority, but
companies are required themselves to report their ceiling prices to
CMS, which reports them to HRSA. This elongated process recently has
been revised, so now HRSA will be directly involved in the information
gathering and calculation. Williams said this should allow for improved
oversight. However, his response did not satisfy the members who wanted
the government to have the ability to dig deeper into price calculations
to ensure that the intent of Congress – i.e., 340B providers
get a maximal discount – is being satisfied.
A representative of GlaxoSmithKline testified the company voluntarily
provides the government with its prices calculations because of the
company’s commitment to provide the most favorable pricing to
these providers. Williams stated HRSA hopes this will serve as an example
to other companies and more will provide detailed pricing information
for purposes of calculating the ceiling price.
Subcommittee members including Reps. Diana DeGette (D-CO) and Tammy
Baldwin (D-WI) emphasized their continuing concern about this issue,
and Whitfield promised to hold additional hearings on the matter.
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Canada Slaps Provisional Anti-Dumping Duty on U.S. Corn
The Canadian Border Services Agency (CBSA) this week
came to a preliminary decision finding the U.S. is dumping subsidized
unprocessed corn,
but determined processed corn did not violate the anti-dumping statutes.
The decision leads to a provisional anti-dumping duty on U.S. corn
moving into Canada of 58 cents per bushel and a countervailing duty
of $1.07 per bushel. The duties cover goods moving into Canada beginning
Dec. 15, 2005 and end when the CBSA terminates its investigation.
That decision is expected by March 15, 2006. The Canadian International
Trade Tribunal begins its inquiry into potential injury to Canadian
industry, with a decision expected by April 14, 2006.
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DOHA Inches Along, No Progress on Ag; EU Refuses to Increase
Offer on Subsidies, Access
The World Trade Organization’s (WTO) Hong Kong ministerial meeting
this week produced almost no progress on agriculture issues, and most
fingers were pointed at the European Union (EU) as the roadblock to
achieving any substantive changes in global ag subsidies, tariff reduction
or market access.
U.S. Special Trade Representative Rob Portman said
progress was likely unachievable at the Hong Kong forum. He proposed
ministers
from all 148 WTO member countries meet in Geneva before March 31. Portman’s
request was echoed by several other trade ministers.
The EU’s trade minister, Peter Mandelson, was
reminded during the talks that EU officials have no authority to make
any new offer
on subsidy reduction or market access. That reminder came from the
Committee of Agricultural Organizations (COPA), the largest European
farm cooperative, which participated in the Hong Kong meeting as a
nongovernmental organization (NGO). Further, COPA said it has assurances
from the head
of the European Commission that there will be no overhaul of the EU
common agricultural policy until it expires in 2013.
Meanwhile, other EU officials said they will not set a date on ending
subsidies until they see from the U.S. an offer to reduce international
food aid, as well as offers on ending export credit guarantees and
restraining state trading entities, such as the Australian and Canadian
wheat boards.
Portman continued to hold hope that he and other ministers
from developed nations would be able to make an announcement on a proposal
to provide
duty-free and quota-free access to the U.S. market for products from
49 “least developed” nations, a program similar to that
in place in the EU. However, countries which would not qualify for
the trade status blocked progress on the program.
In the U.S., House Ag Committee Chair Bob Goodlatte (R-VA) said he’s
disappointed the EU’s “obstinacy” is blocking progress
on global trade reform. “Until the EU is willing to make a more
realistic proposal, these negotiations will remain at a standstill…,” Goodlatte
said. He said attacks on U.S. food aid are simply a ruse to distract
from EU “doggedness.” Sen. Charles Grassley (R-IA), chair
of the Senate Finance Committee, said the EU is afraid of agriculture
reform.
Return to top South Korea to Impose Fewer Restrictions on U.S. Beef Imports
South Korea will place fewer restrictions on U.S.
beef imports in the wake of this week’s decisions by its livestock
quarantine committee that U.S. beef is safe and recommended the government
lift
its two-year ban. The reopening of the market could come as early as
next week, and was expected once Japan lifted its beef import ban.
The Koreans will take beef from animals 30 months
of age or younger in contrast to Japan’s 21-month-old age restriction.
While some Korean farmers wanted to see a policy similar to Japan’s,
the Korean government tried to assuage concerns by pointing to its
country-of-origin
labeling program that begins in 2007.
Return to top House Subcommittee Approves Ammonium Nitrate Bill
A House Homeland Security Committee subcommittee this
week approved a bill to regulate the production of ammonium nitrate
by requiring
any person who produces, sells or buys ammonium nitrate to register
with the U.S. Department of Homeland Security (DHS). An amendment accepted
in subcommittee would require sellers to record the purchaser’s
drivers license number or other photo identification and the amount
of ammonium nitrate purchased. Records would have to be retained for
three years. DHS would be authorized to make grants to states to enforce
the law, and record audits would be conducted during other state inspections
of fertilizer facilities. There’s no word on when the full committee
will vote on the bill. A similar bill in the Senate has seen no action.
Return to top U.S. Trade Deficit Hits Record High
The U.S. trade deficit hit a record $68.9 billion in October, fueled
by record imbalances with China and Europe. The October figure was
$2.9 billion more than in September, and so far this year, the trade
deficit is running at a rate of $718 billion, significantly above last
year’s $617.6 billion.
Return to top
New Bills
A number of new bills have been introduced. Click
here to send a request for a copy of the text or more information
about the bill.
S.2085
Sen. Max Baucus (D-MT) offered a bill that would provide a supplemental
payment to assist agricultural producers in mitigating increasing
input costs, including energy and fertilizer costs.
S.2087
Sen. Saxby Chambliss (R-GA) introduced the “Agricultural
Employment and Workforce Protection Act” that would amend
the Immigration and Nationality Act to provide for the employment
of foreign agricultural workers.
S.2104
Sen. Joseph Lieberman (D-CT) introduced the “American Center
for CURES Act of 2005" that would establish the Center within
NIH to accelerate the development of public and private research
efforts towards tools and therapies for human diseases with the
goal of early disease detection, prevention, and cure.
H.R.4502 & 4503 & 4504
Rep. Charlie Norwood (D-GA) offered three bills that would amend
the Migrant and Seasonal Agricultural Worker Protection Act to
provide for an exemption for workers who work year-round, mandatory
mediation, and recovery of attorneys fees and a statute of limitations.
H.R.4340
Rep. Roy Blunt (R-MO) introduced a bill that would implement the
United States-Bahrain Free Trade Agreement.
H.R.4520
Legislation offered by Rep. Fortney “Pete” Stark (D-CA)
and 31 co-sponsors would amend part B of title XVIII of the Social
Security Act to assure equitable payment for physicians’ services
under the Medicare Program.
H.R.4544
Rep. Bobby Rush (D-IL) proposed a bill that would revise and expand
the section 340B program to improve the provision of discounts
on drug purchases for certain safety net providers.
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Inside
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