An unnecessary regulation

FDA stands for Food and Drug Administration. So why is a food and drug agency trying to regulate ballpens, detergents, paints, stationery and, yes, toys and much else? None of these were designed to be used as food or medication.

The strict rules for food and drugs don’t make sense for other products. Since food and drugs directly enter the body, they are rightfully subject to a very high standard of scrutiny. It’s an area the FDA should, and is mandated to, control.

Yet the products that the FDA now wants to control include school and office supplies, laundry detergents, toys, room fresheners, batteries, toners, waxes, bleaches, paints, adhesives, sealants, polishes, and ever so many more. None of these are eaten or ingested by humans.

None of these products are controlled by an FDA or its equivalent in the United States, the European Union, Japan, or our Asean neighbors. These products are already regulated by other government agencies to ensure their safe use. Thus, compliance to FDA regulations would add an additional layer of bureaucratic requirements without benefit to public safety. This would conflict with the third point in President Duterte’s well-thought-out economic agenda of simplifying the bureaucracy, as well as the proposed Ease of Doing Business Act/Expanded Anti-Red Tape Act pending in the Senate.

Global best regulatory practice calls for a risk-based approach to regulation based on data and risk analysis, employing analytical methods to prioritize the allocation of limited resources to manage risk most effectively. The Department of Health (DOH) applied this global standard in September 2015 when it lifted licensing and registration requirements for these products with Administrative Order No. 2015-0038 because of the minimal risk they imposed.

So why does the FDA want to repeal this order less than two years later? There have been no cases of poisoning or harm to humans cited from the products to be covered in the new draft AO. Nor was there any scientific research or data presented about any risks presented by the affected products, making it seemingly just an arbitrarily developed list.

The FDA itself has said it lacks the manpower to cover its current mandate. Companies applying for product registration for their innovations have experienced waiting over a year to get a new product registered because of this lack. The FDA should not be wasting its time looking at products that, according to the DOH itself, have very little risk. In fact I have argued, and will again here, that if a product being imported has acquired approval from the FDA, or the equivalent organization in the exporting country, it should be automatically approved here. Just accredit the FDAs in other countries that meet Philippine standards. That accreditation can be done by the Philippine FDA. Why check a product twice?

The economic costs are enormous. The FDA requires the manufacturers and sellers of products it regulates to obtain a license to operate (LTO), with fees ranging from P3,000 to P15,000 per vendor annually. Certification for product registration (CPR) currently costs P2,525 per variant every three years. As an example, it’s estimated that the cost for some 168,000 establishments in the stationery industry to secure an LTO at P3,000 and a CPR for about 45,000 primary and variant products is over P500 million per year.

This would result in higher prices for consumers, make Filipino companies less competitive, and discourage Filipino entrepreneurs from starting new businesses. Not only would Filipino companies become less competitive in export markets, but the Philippines would also violate the equal treatment agreements within the Asean Economic Community. It’s lose-lose-lose-lose-lose for Filipino entrepreneurs, Filipino companies, Filipino jobs, Filipino consumers, the Filipino economy.

DOH AO 2015-0038 was a step in the right direction in aligning the Philippines with global best regulatory practice. The FDA’s move to repeal it would be a backward step out of line with what the rest of the world is doing. It makes little sense and should be canceled.

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