to seek the most flexible, least burdensome approaches; to ensure that regulations are scientifically driven; and to
review old regulations so that rules that
are no longer needed can be modified or
withdrawn.
The Unfunded Mandates Reform
Act, the Small Business Regulatory Enforcement Fairness Act, and the Paperwork Reduction Act require that the
analyses pay special attention to a regulation’s impact on state and local governments, economic growth, employment,
job creation, exports, the regulatory effects on small business, and paperwork
requirements, such as record-keeping or
reporting.
“...all regulations promulgated by the FDA using
notice and comment rulemaking are required to
include an economic analysis of the regulation’s
impact on both the public health and industry.”
sion-makers with a concise, logical summary and interpretation of the available
data and science, explaining the implications of the regulatory and policy
options.
Economic Analysis: What It
Does and What It Involves
For the FDA, the purpose of an economic analysis is to learn about the fundamental health problem and the impact
of regulatory action to mitigate the
health problem. This includes determining which consumers are at risk, how
they are put at risk, and what danger
they might face by being put at risk. It
also involves determining which segments of the industry will be affected by
a regulation, quantifying the regulation’s
impact on industry, and estimating the
effect the regulation will have on public
health. Analyses addressing all of these
issues require substantial effort. It takes
time and resources to gather the best
available data, and it takes individuals
with specific skill sets to successfully perform the analyses. For food, cosmetics,
and dietary supplement issues, this effort
is spearheaded by the CFSAN’s Economics Team. Once the Economics
Team completes its analyses, their findings are subject to scrutiny both inside
and outside the FDA. Senior CFSAN
management, FDA’s Office of the Chief
Counsel, the Office of the Commissioner, the Department of Health and
Human Services, the Small Business Administration, and the Office of Management and Budget are all provided with
the analyses and have the opportunity to
query and request additional data to ensure that all the necessary economic issues have been sufficiently evaluated.
The process is rigorous but worth the effort because the analyses provide deci-
Weighing Value
In a working paper, Stuart Shapiro
and John Morrall laid out their plans for
the Herculean task of evaluating the impact of cost-benefit analysis across time,
regulations, and regulatory agencies. 2
They state that studies of the impact of
economic analysis have been limited to
case studies that either praise cost-benefit
analysis for its potential to improve the
economic efficiency of government regulation or criticize it as making it harder
for agencies to issue regulations. In an attempt to develop a sort of meta-measure
of the impact of economic analyses, they
look at past regulations and compare the
net benefits (benefits minus costs) 1) between final and proposed rules, and 2)
between rules issued by agencies subject
to Executive Order 12866 and rules issued by agencies that are not required to
perform cost-benefit analysis. Their findings are mixed; they are unable to conclude that economic analyses positively
impact net benefits in regulations.
This is expected. Regulations are is-
sued for many reasons, and the eco-
nomic analysis is but one input into the
decision-making process, and in many
cases, not the most important one. For
example, the regulatory approaches
adopted by a federal agency are always
limited by the statutory authority that
Congress has granted it. Additionally, a
regulation written at a particular time or
under a particular administration may
have received a different level of scrutiny
if it was written at a different time or
under a different administration. In addi-
tion, some regulations, while important,
efficient, and beneficial to the public,
may simply have fewer measurable bene-
fits or higher costs of implementation
than other important regulations. These
facts make it difficult to measure the im-
pact of economic analyses by observing
final net benefits across regulations,
time, and agencies.
SE and “The Egg Rule”:
A Brief History
SE infection is a significant problem
in the United States. It is estimated that
nearly 220,000 cases of SE infection
occur in the U.S. each year, with more
than 140,000 of those cases stemming
from egg consumption. Most cases result
in mild, short-lived gastrointestinal
symptoms. However, SE infections can
be severe and result in death, especially
for the elderly, immunocompromised,
and children. Finally, a small percentage
of all SE infections result in chronic
reactive arthritis. 4 Thus, SE infection
stemming from egg consumption is a
problem that is worthy of our attention
in both the sheer number of illnesses as
