demands intensive sampling and examination. Accepted practices such as those concerning chemical additives and food handling in foreign countries are prohibited in the United States. This is particularly true of preservatives and coal tar colors. The pesticide problem is worldwide and calls for constant monitoring. FDA estimates that drug imports will increase from the present level of 8,000 to approximately 8,500 shipments in fiscal year 1967. Import examiners inspected by sample or wharf examations in fiscal year 1967, 7,500 of these commercial drug imports. More manpower is necessary to inspect and analyze all commercial drug shipments. The 30 additional positions proposed for fiscal year 1967 will make possible 100-percent coverage of imported commercial drug shipments not only by checking labels against contents but also by checking potency and purity. Increased emphasis will also be given to the area of potentially hazardous food products. The $20,000 proposed for nonstaff costs would be used for special laboratory equipment required to support the additional scientific staff requested for this program. 1966 estimate: Positions__ Amount 1967 estimate: Positions. Amount 1967 increase: Positions_. Amount.. Drug abuse 42 $408, 000 42 $386, 000 -$22, 000 During fiscal year 1967, we anticipate approximately 6,000 samples will be analyzed by BRC field scientists. We estimate that this workload can be ab sorbed by the currently authorized analytical staff. This support necessary to complement the drug abuse investigation program includes "ballistic" examination of dangerous drugs in order to identify the source of the tablet and thus its route of diversion an whether or not it is counterfeit, and analyses of drugs for identification to support arrest charges. Analyses and "ballistic" examinations will be conducted at four district office laboratories. Since some initial nonstaff costs provided for in the fiscal year 1966 drug abuse supplemental are nonrecurring, a reduction of $22,000 is made in this area. There are an estimated 2,500,000 interstate shipments of raw agricultural products per year, of which FDA has examined approximately 1 percent during the past several years. In fiscal year 1965, multiple residues were encountered in over 50 percent of the samples exhibiting detectable residues. Endrin, dieldrin, DDT, toxaphene, heptachlor expoxide, and chlordane were the residues most frequently encountered in amounts in excess of established tolerances or in excess of analytical guidelines where a "zero" or no tolerance has been established. The toxicity of these is the basic reason for the zero or no tolerance in various commodities. The incidence of detectable residues and the incidence of multiple residues demonstrate the need for continued intelligence in order to fully evaluate trends of usage as well as their impact upon man and his environement. The current level of sample examination provides the minimal intelligence necessary to evaluate the levels of agricultural chemical residues in the Nation's food supply. FDA plans to supplement its pesticide intelligence data with data from cooperating State agencies during fiscal year 1967. Using operations research techniques and the data accumulated during the past several years, FDA is currently reevaluating the pesticide sampling and analysis program. No program increase is requested for fiscal year 1967. Although emphasis is concentrated on the health hazards caused by the food and drug industry, FDA has a responsibility to the consumer who is also exposed to cosmetics, color additives, and household products with potential health hazards and depends on their purity and quality. The Hazardous Substances Labeling Act calls for control of those convenience products found in every home and workshop. New products and the enormous number of bulk distributors, such as gas stations, which handle these products intensify the problems of assuring compliance. Of the 4,200 producers of such substances, FDA made 2,000 inspections in fiscal year 1965. Coverage at this level will continue in fiscal years 1966 and 1967 but with increased emphasis in education about items used in homes which are responsible for injuries and deaths of small children. There are approximately 2,600 establishments producing cosmetics and colors used in foods, drugs, and cosmetics. FDA will inspect about 700 in fiscal year 1966 and continue this level of coverage through fiscal year 1967. The use of colors is controlled by inspections of the food and drug plants which use colors. The potential hazards posed by products of the cosmetic industry exhibit problems which point to the need to consider strengthened legislation for this area in the future. Executive support in each of the 18 FDA districts includes the Director, Deputy Director, hearings officer, administrative officer, and other supporting staff. No increase is proposed in fiscal year 1967. A consumer consultant staff in the field was initiated on a full-time basis in fiscal year 1964. As the full-time consumer specialists have become better acquainted with the mass media and potential audiences within their districts, productivity, in terms of numbers of groups and individuals reached, has risen sharply, and the program has proved its value. The combined audien e reached by these varied activities has been estimated to be in the order of 2 million persons. In fiscal year 1967, attention will be devoted to develop better methods and to reaching particular population groups as school groups, senior citizens groups, etc. No increase is proposed. The headquarters staff of the Bureau of Regulatory Compliance is responsible for the direction and coordination of FDA's regulatory activities necessary to enforce the Food, Drug, and Cosmetic Act and other acts. This staff develops enforcement policies within guidelines established by the Commissioner and insures appropriate planning, coordination, operation, and appraisal of all activities at both Washington and field levels of the Bureau. Although workloads will be heavier in this area, no increase is requested. Planned operations research studies to improve and possibly realine methods and functions will better show specific areas where future resources for efficient managment must be devoted. 1966 estimate: Positions 1967 estimate: Positions. Amount.. 1967 increase: Positions Amount.. Extraordinary nonstaff costs 1. Court costs-travel, per diem, and payment of witnesses, $80,000 $797, 000 $1,092, 000 $295,000 During fiscal year 1965, BRC handled approximately 67 court cases and spent approximately $140,000 for the travel, per diem, and payment of witnesses. This amount exceeds the funds available in FDA's budget base by $20,000. During fiscal year 1967, preparation of approximately 100 court cases, at an average cost of $2,000 each, will require approximately $200,000. Since only $120,000 is available in the budget base, an additional $80,000 is requested. 2. Attendance at scientific meetings, $42,000 In accordance with FDA's policy to upgrade its laboratory staff capabilities additional funds are proposed to permit increased attendance for FDA's field analysts. In fiscal year 1967, $42,000 is proposed to permit eight analysts from each district to attend meetings for an average of 2 weeks. 3. Telecommunications network, $35,000 Since the fiscal year 1966 estimate was made, GSA has altered its telecommunications system, and use of the improved and expanded facilities will require an additional $35,000 to fully implement this system. 4. Travel and per diem for General Counsel's Office, $25,000 Travel and per diem costs for staff members of the General Counsel's Office, DHEW, are funded by FDA when this travel pertains to cases recommended by FDA. In fiscal year 1965, these costs amounted to approximately $18,000. On the basis of this experience and an anticipated increase in workload in fiscal years 1966 and 1967, FDA will require approximately $25,000 by fiscal year 1967. funds for this purpose have been budgeted in the past. 5. Scientific, technical, and management workshops, $74,000 No During fiscal year 1967, FDA proposes to hold approximately 15 workshops and conferences for field and headquarters staff. FDA has found that this type of meeting is an extremely valuable way to disseminate new ideas, identify and resolve problems, and to enhance program efforts and accomplishments. 6. Telephone equipment rental, $21,000 In 1965, the districts were authorized to rent an automatic telephone recording receiver for each resident inspector post. These instruments have been proven their worth, and FDA plans to continue using them in the future. The monthly rental cost is $25 per instrument which amounts to $21,000 for the 70 resident inspector posts planned for fiscal year 1967. No funds have previously been budgeted for this purpose. 7. New resident inspector posts, $18,000 FDA will increase its resident inspector posts by seven in fiscal year 1967 (from 63 to 70), at an average cost of $2,500 each. The funds requested are related to rent and certain necessary items of equipment. The fiscal year 1966 supplemental approved by the Congress in August 1965 provides the initial resources required to establish a new Bureau of Drug Abuse Control, whose overall responsibilities are to develop and execute an effective audit and investigation program; to coordinate and guide the functions relating to drug abuse control that are handled by other FDA units, such as requirements in the fields of education and voluntary compliance, research and development, medical evaluation and field laboratory support; and to coordinate our activities with HEW Department and other Federal and State agencies, and outside institutions and groups in furthering the Bureau's mission to curtail the illegal distribution and abuse of nonnarcotic drugs. FDA's fiscal year 1966 supplemental request was based upon the assumption of a phased buildup of its drug abuse control program. The first phase, contained in the fiscal year 1966 supplemental, establishes the nucleus of a field audit program, strengthens FDA's criminal investigative capabilities, provides for the establishment of five field area offices, and makes provisions for a baisc headquarters staff to provide program support under the direction of a new Bureau, the Bureau of Drug Abuse Control. A four-phase buildup is now planned to bring the program to full strength in fiscal year 1969. During fiscal year 1967, FDA proposes to take the second step in widening the scope of its field audit and criminal investigative capabilities by adding several new area offices to its field structure, and at headquarters, supplementing its case assistance staff to guide these operations. 1966 estimate: Positions Amount 1967 estimate: Positions_ Amount 1967 increase: Positions Amount.. Field programs Three major elements affect FDA's establishment of field programs and a field structure for the Bureau of Drug Abuse Control: 1. The need for intensive review and surveillance of stimulant and depressant drug production and distribution to detect the diversion of these drugs from legitimate channels. Several factors are of particular importance in this area during fiscal year 1967: The need to audit, within 3 years, all firms required to register and keep records of stimulant and depressant drugs under the drug abuse amendments; the ability to review in depth where evidence and leads indicate the necessity; and the ability to begin spot check and followup operations concerning pharmacies, hospitals, practitioners, etc. 2. The need for increased criminal and undercover operations coordinated with the audit function to provide followup support and investigation of such activities as counterfeiting which are not connected with the legitimate manufacturers or distributors. 3. The need for flexibility and capability to meet varying problems of drug abuse in different socioeconomic and age groups as they are found in different parts of the Nation, and provide field support to FDA's research, medical, educational, and other programs as they pertain to drug abuse control. Audit investigation.-The audit provisions of the drug abuse control amendments require that records of receipt and sale of depressant and stimulant drugs be maintained throughout the chain of distribution. Effective February 1966, these records must be available for inspection by FDA for a period of 3 years. FDA's responsibilities in this area are to devise and implement an audit program that will identify the diversion of drugs from legitimate channels. FDA's experience has shown that diversion may occur at the basic chemical level, in dosage form at the manufacturer level, and from wholesalers, pharmacies, hospitals, etc. Current estimates indicate that there are approximately 4,000 establishments that will be required to register under the provisions of the amendments, comprised of 1,600 manufacturers, compounders, and processors; 1,500 wholesale druggists; and 900 jobbers and distributors. FDA has an immediate responsibility to systematically audit these establishments in order to: (a) quickly identify and take action at major points of diversion, (b) review operations, in depth, of those establishments where the initial audit or leads from other sources suggest illegitimate activities, (c) compile production and distribution data that will permit an accurate assessment of the quantities of these drugs produced and their channels of distribution and (d) promote a thorough understanding of the law and a desire on the part of the regulated industry and the public to assist FDA in the curtailment of the diversion and abuse of dangerous drugs. FDA's goal in auditing the 4,000 establishments required to register is to complete an initial audit of all establishments by fiscal year 1969, and at the same time provide for adequate manpower for rechecking and auditing in depth where necessary. In addition to the bulk producers and distributors of psychotoxic drugs, there are approximately 65,000 pharmacies, hospitals, and clinics and 330,000 practitioners and researchers who are the final major link in the distribution chain. In this area, FDA must develop a flexible program of immediate followup and systematic spot checking in order to quickly identify and correct violations and to promote voluntary compliance with the law. During fiscal year 1967, FDA will inspect the records of practitioners, researchers, clinics, pharmacies, and hospitals in those cases where there are specific leads or complaints. It is estimated that in future years routine coverage will be extended to these groups on a spot check basis as well as by followup investigations. The following table shows the estimated manpower required for these audit program goals through the second phase of a proposed four-phase buildup. 1 Effective man-years indicates the amount actually devoted to the audit work after an estimated 8-week training period. Fiscal year 1966 positions are lapsed at 50 percent. ? Positions cover number required for both initial audit and followup. It is anticipated that coverage of establishments requiring full audit will reach the projected level in fiscal year 1969; greater emphasis will then be given to expanding followup investigations of hospitals, clinics, practitioners, etc., as necessary The man-years required to cover the workload of auditing operations concerning potentially hazardous drugs are calculated from FDA's limited experience with record examinations in this field. Estimates such as 40 hours to audit a manufacturer or 16 hours for pharmacies and clinics were divided into an inspector's actual time available for investigation, exclusive of his training, travel, and administrative time, to determine the number of inspectors necessary to cover the industry in the projected 4 years. These estimated averages may be materially increased by findings of poorly kept or scattered records, illegal activity and |