Agency Budget Summary
Department of Health and Human Services
Food and Drug Administration
I. Resource Summary
NOTE: FY 1999 through FY 2000 relfect the transfer of $900,000 to SAMHSA's Opiod Treatment Accrediation Program beginning in FY 1999.
II. Methodology
- The resources used in the Alcohol and Tobacco program area are determined by the active workload expended in carrying out FDA's efforts to implement the President's Executive Order calling for the regulation of nicotine - containing tobacco products.
III. Program Summary
- As a result of an Executive Order in 1996 restricting the sale and availability of tobacco products to minors, FDA is working to reduce the availability and appeal of tobacco products to children and teenagers and educate young people about the health risks of tobacco use. As a result of this program's activities, FDA expects a 50 percent decline in young people's use of tobacco over the next seven years.
- On August 23, 1996, FDA issued its final rule for its regulations concerning nicotine-containing cigarettes and smokeless tobacco products. The final rule limits the availability of tobacco products to young people. This also limits the access that young people have to tobacco products by setting a minimum age of purchase, requiring that retailers check a photo identification of all customers under the age of 27 when purchasing tobacco, banning self-service and vending machine sales, and banning free samples. This rule limits the appeal these products have for young people by imposing stringent advertising restrictions on most advertising media, including banning billboards within 1,000 feet of schools and playgrounds, banning all non-tobacco items identified with a tobacco brand and banning sponsorship of events by tobacco companies.
- Reducing young people's use of tobacco is an enormous undertaking with potential for great public health outcomes. FDA recognizes that close coordination with the Secretary's office, and other agencies within the Department, such as the Substance Abuse and Mental Health Services Administration (SAMHSA), the Centers for Disease Control (CDC), and the National Cancer Institute (NCI), is essential. These coordination efforts are underway and working effectively.
- Coordination is key between FDA and SAMHSA. SAMHSA has the responsibility of implementing the Synar Regulations, which complement the access provisions in FDA's final rule. There are three areas where coordination between FDA and SAMHSA will be the most effective (1) sharing information about state tobacco control programs and contracts; (2) providing a consistent message to states about how to best reduce young people's use of tobacco; and (3) encouraging states to monitor compliance with the FDA requirements.
- In addition, FDA is coordinating its state-oriented efforts with CDC's Office of Smoking and Health and NCI. The CDC IMPACT program and NCI ASSIST program both involve tobacco control activities at the state and local levels. The state officials participating in the IMPACT and ASSIST programs are potential partners for the implementation of FDA's final rule. FDA is focusing on activities which are intended to halt the supply of tobacco products to children. CDC's focus, and that of the FY 1999 CDC Youth Tobacco Prevention Initiative, are those activities which are designed to deglamorize and diminish the demand for tobacco products.
IV. Budget Summary
1999 Program
Goal 1: Educate and enable America's youth to reject illegal drugs as well as the use of alcohol and tobacco.
- FY 1999 includes $34.0 million for the costs associated with the full implementation of the age and photo identification aspect of this regulation, as well as the implementation of other provisions of the rule as they become effective.
- FDA will continue to ensure fundamental progress in all states -- in partnerships with state and local authorities -- to reduce young people's use of tobacco products. FDA will engage primarily in three activities: Outreach, Enforcement and Product Regulation. A sizeable portion of the funds will be provided to state and local officials who will help enforce the rule by conducting investigations to ensure tobacco products are not sold to minors.
- The goal of this program is to reduce the availability and appeal of tobacco products to children and teenagers. FDA's long-term goal is a 50 percent decline in young people's use of tobacco within seven years of program implementation.
Compliance Outreach
- A strong outreach program is one of the most effective ways to increase compliance with this rule. It will ensure that those directly affected by this rule understand what are their responsibilities, why such measures are needed, and what happens to those who fail to comply. Further, it will make it easier for retailers to comply with the rule by giving them useful and eye-catching materials that will remind clerks not to sell to minors and will encourage smokers 18 - 27 to cooperate by showing their photo ID.
- FDA will continue efforts to work to reduce the availability and appeal of tobacco products to children and teenagers and educate young people about the health risks of tobacco use.
Enforcement and Evaluation
- In FY 1999, resources primarily will be devoted to inspecting retail facilities and taking enforcement actions against establishments that have violated the age and ID restrictions.
- FDA's rule requires that retailers not sell tobacco products to anyone younger than 18 and that they check a photo identification for anyone younger than 27. FDA will enforce these restrictions by commissioning state and local officials to conduct unannounced purchase attempts using young people under the age of 18.
- The process for training and commissioning selected state and local officials is in place. The first commissionings took place starting in July 1997. Additional state and local agents willbe commissioned in FY 1999. FDA's goal is to enter into contracts with all 50 states, depending on their willingness to do so. Thus far, the FDA has received no indication that any state is reluctant to be less than a full participant in FDA's enforcement efforts.
Product Regulation
- In FY 1999, FDA will design and, to the fullest extent permitted under any court orders addressing such activities, begin to implement a regulatory program for cigarettes and smokeless tobacco products under the Food, Drug and Cosmetic Act.
2000 Request
Goal 1: Educate and enable America's youth to reject illegal drugs as well as the use of alcohol and tobacco.
- The total drug control request for Goal 1 activities for FY 2000 is $68.0 million, a net increase of $34.0 million over FY 1999. Funding increases in FY 2000 will be used to expand FDA Outreach, Enforcement, and Product Regulation activities.
V. Program Accomplishments
The Tobacco Rule
- In FY 1998, FDA remained committed to completing the creation of a new program to implement its final tobacco rule. The most important responsibility related to implementation of the final rule, during this first full year of operation, was the establishment of an effective regulatory program to ensure that retailers were aware of and in compliance with the new rules prohibiting sales to minors.
- The age and photo identification requirements of the final rule went into effect on February 28, 1997. FDA engaged in two major activities in support of its rule -- enforcement and outreach. In FY 1998, most of the program's funds were expended in support of investigations to ensure that tobacco products were not sold to minors and to ensure that those industries directly affected by the rule were aware of their new responsibilities.
Enforcement
- In FY 1998, the Agency expanded its enforcement efforts and solicited bids from all 57 states and territories to contract with FDA to do compliance checks. By the close of FY 1998, FDA had signed contracts with 43 states and territories totaling $16,382,912. Under these contracts, the states will conduct more than 188,000 compliance checks by September 30, 1999.
- Existing contracts resulted in 39,439 attempted and completed compliance checks during FY 1998, including reinspection of retailers found to have violated the rule. If a violation occurred during reinspection, FDA sought to impose a civil money penalty. The Agencydevised and established the framework for the imposition of civil money penalties, sent out complaints, and negotiated or litigated contested cases. In FY 1998, FDA began seeking civil money penalties from those retailers found to have already violated the rule's restrictions on sales to minors for a second time.
Outreach
- In FY 1998, the Agency designed a comprehensive outreach program designed to inform and ensure compliance. This multi-faceted program consisted of advertising, direct mail, press events/materials, exhibits and speeches, and dissemination of materials requested via a hotline or mail order.
- FDA conducted a tracking study in 10 media markets to evaluate the effectiveness of the FDA's multimedia campaign. Preliminary findings indicate that awareness of the photo identification age provision rose dramatically from approximately one-third of retailers to more than one-half of all retailers, there was a three-fold increase in awareness of the fine for repeat violations in the test markets and twice as many clerks used 27 as the cut-off age after the campaign compared to before the campaign.
Defense of the Agency's Action, Technical Assistance to Congress, and Other Activities
- On April 25, 1997, the Federal District Court in Greensboro, North Carolina, ruled that FDA has jurisdiction under the Federal, Food, Drug and Cosmetic Act to regulate nicotine-containing cigarettes and smokeless tobacco as drug delivery devices.
- The Court upheld all restrictions involving youth access and labeling and struck down, as unsupported by statutory authority, the Agency's advertising restrictions. The Court stayed implementation of all provisions, except those involving age and ID, pending appeal.
- Appeal was taken and oral argument was held in August 1997 and reargued on June 9, 1998 in the Fourth Circuit Court of Appeals. On August 13, 1998, the Fourth Circuit issued its decision finding the FDA's assertion of jurisdiction and issuance of regulations invalid. On November 10, 1998, the Fourth Circuit denied the government's Petition for Rehearing and Suggestion for Rehearing en banc.
- The Department of Justice intends to file a petition for a writ of certiorari with the Supreme Court. The Fourth Circuit has granted FDA's requests for a stay of the court's mandate pending filing of a request for Supreme Court review. The filing of the certiorari petition with the Supreme Court will maintain the status quo while the Supreme Court considers the request.
