A long-awaited review of the Food and Drug Administration’s Human Foods Program, partly funded by the FDA, is out. The conclusion from the Reagan-Udall Foundation is that the FDA is a great deal for consumers and would be a much better deal if the agency had a lot more money and power.
As the French would say, “Quelle surprise.”
The review found that in 2021 we invested $284 million in the FDA Center for Food Safety and Applied Nutrition’s food budget and received a return of $11 in consumer benefits for every dollar spent. That’s not even close to correct, and it distracts us from focusing on better strategies for the FDA.
First, the public pays for this budget and to comply with the program’s regulations (through higher food costs). My research shows that compliance costs (including other market costs of regulation) are generally about 33 times those of individual agency funding. If the average agency compliance/budget cost was applied to the FDA, the total cost would be more than $9 billion.
The benefits side — improved food safety and nutrition — was apparently generated by adding up those expected in the year’s economic analysis: $3.1 billion. The evidence for those kinds of results is unconvincing. It’s more likely we are getting less than a dollar back on our investment than a fanciful 11-to-1 return.
Let’s look at what we know about the actual outcomes of food safety and nutrition policies. The report notes that each year 46 million Americans are sickened by food-borne illnesses. The FDA has been reporting that exact figure for decades. That would cast doubt on the effectiveness of their food safety policies, especially over the long term.
For nutrition, the report mentions that 75 percent of Americans are overweight or obese, with diet-related diseases costing $7.6 trillion yearly. The U.S. obesity rate was only 12 percent in 1990, when food labels came out, and is now 42 percent (plus around 33 percent overweight). After 30 years, consumers still find FDA-mandated food labels confusing.
I counted 84 mentions of the “urgent need” for increased funding, not just because the food program is supposedly a great deal but because other FDA centers have been getting more. Envy isn’t their best argument. However, as the report suggests, the FDA has too many diverse responsibilities for one agency, and breaking it up makes sense.
Still, the report says that the FDA needs more power, including more flexibility for enforcement without proof of an actual problem or the ability to pre-approve every food label. That’s a bold ask, considering that the FDA has already been called “the most powerful regulatory agency in the world.” Once again, there is no evidence that more power and money are the answer.
There are many food solutions that the FDA could implement right now. For safety, better traceback mechanisms are available that would allow the agency to get contaminated products off the shelves more quickly. Following that up with more investigation of the root causes of outbreaks and publishing the findings quickly would incentivize manufacturers to make changes that will help them avoid costly recalls.
The FDA also has the tools to do risk and benefit-cost assessments identifying the most effective regulations — i.e., evidence-based regulations that are better investments than those influenced by politics or unreasonable risk aversion. They can also encourage firms to sell their foods to their own employees at a fraction of the retail sales price to motivate best practices.
Tinkering further with food labels is not likely to help. One innovation the FDA has turned down in the past is icons indicating healthy foods. They’re a lot simpler than complex food labels and are a good start toward healthier diets. More excitingly, we are seeing emerging nutrition wearable devices that track what we eat and, based on personal health and dietary preferences, advise consumers on food choices. FDA should review its medical device regulations to make it easier to get these to market.
Ultimately, we will need to create safer and healthier foods from their inception. Neither trying to reform every food manufacturer’s process around the world nor educating every consumer on how to use food labels to make healthy food choices is a viable long-term strategy. We need a new way of regulating, not more money for the old ways.