FSMA and the OMB

May 6, 2012

By Ricardo Carvajal

The Washington Post recently reported on the delay in getting clearance from the Office of Management and Budget (OMB) for the regulations that would implement the key provisions of the Food Safety Modernization Act.  Industry groups and consumer advocates purportedly are baffled, but there is a recent precedent for similar delays in the issuance of a regulation backed by industry and consumer groups – the dietary supplement good manufacturing practice ("GMP") regulation

If memory serves, the dietary supplement GMP regulation was parked at OMB for over a year.  A quick perusal of the economic analysis section of that regulation reveals the complexity of the required analyses of costs and benefits, and offers a reminder of some unpleasant truths.  An example of the latter is that the GMP regulation was estimated to place over 170 small and very small manufacturers at risk of going out of business, resulting in the potential loss of @2,250 jobs.  Further, it was estimated that the costs of compliance would discourage new small businesses from entering the industry (the annual costs of that regulation for each business were estimated to range from $46k to $184k, depending on the size of the business).  Moreover, the total quantifiable costs of the regulation handily exceeded the total quantifiable benefits. 

We’re not privy to the precise sticking points in the review of the FSMA regulations, but we bet that the economic analysis sections will make for interesting reading.