Government shutdown impacts herbal industry

The U.S. government officially began its first shutdown in 17 years on Tuesday as Republicans and Democrats in Congress continue to disagree on legislation to fund federal agencies after Sept. 30. 

While it is impossible to predict the full impact of the shutdown, a review of various government communications and contacts provides some understanding of how the federal government shutdown could be felt in the herbal products industry. 

Food and Drug Administration
Before the shutdown, the Department of Health and Human Services (HHS) issued a "Contingency Staffing Plan for Operations in the Absence of Enacted Annual Appropriations." The HHS contingency plan says that of the 14,800 total FDA employees, 8,180 were expected to keep working and 6,620 were expected to be furloughed. 

In terms of the activities that will be continued with this reduced FDA staffing, the plan states:

"FDA will be unable to support the majority of its food safety, nutrition, and cosmetics activities. FDA will also have to cease safety activities such as routine establishment inspections, some compliance and enforcement activities, monitoring of imports, notification programs (e.g., food contact substances, infant formula), and the majority of the laboratory research necessary to inform public health decision making." 

HHS says FDA will continue limited activities including "maintaining critical consumer protection to handle emergencies, high-risk recalls, civil and criminal investigations, import entry review, and other critical public health issues," according to the HHS plan. 

The HHS plan also identifies staff that will be excepted from the shutdown. More than half of the staff excepted "for the protection of human life" are FDA staff. This includes: 

 What does this all mean for herbal products companies under FDA's jurisdiction? To begin with, it appears that FDA will not be initiating any new cGMP inspections during the shutdown. On the other hand, the agency did post its weekly list of Warning Letters this morning, though it is unclear whether this was automated for distribution prior to the shutdown. And the fact that FDA has retained staff that oversee adverse event reporting should remind companies that their obligation to submit any received serious reports within 15 days is not in any way affected by the shutdown. On a similar issue, FDA's Reportable Food Registry portal appears to be fully operational, and ingredient and food companies that must comply with this regulation should assume that reporting requirements are unchanged during the shutdown.

Of most importance to importers, AHPA staff was informed by an FDA inspector on the job today that FDA is not expecting in-transit import shipments to be delayed. On a related detail, some of FDA's electronic functions appear to be operational, and a review of FDA's Prior Notice System Interface found that it is allowing submission of the forms required by importers when originating shipments into the U.S.

National Institutes of Health
NIH is also part of HHS so is also covered in the above-cited HHS contingency plan. The plan reports that of the 18,646 total NIH employees, 4,948 are expected to keep working and 13,698 are expected to be furloughed. AHPA has observed:

Department of Agriculture
The USDA website has been temporarily replaced with a statement that site is not currently available due to the shutdown. In addition, USDA's Animal and Plant Health Inspection Service (APHIS) states in its contingency plan that all staff from the National Organic Program, the Pesticide Data Program and pesticide recordkeeping will be furloughed, and that activities performed by these programs will cease until funding becomes available. 

These office closures will not immediately affect marketers of organic products or regulated use of pesticides, but companies will apparently not be able to contact these agencies during the shutdown.

The APHIS contingency plan also states that programs that are funded by trust funds and user fees are not impacted by the shutdown, and states, for example, that companies will still be able to obtain phytosanitary certificates for plant materials bound for export.

Tax and Trade Bureau
TTB is the agency of the Department of the Treasury with which companies that manufacture nonbeverage products, such as herbal tinctures, interact to submit formulas and gain tax rebates. TTB's contingency plan states that it will retain only 35 of its 483 staff, and that all of its activities with the exception of those "required to ensure that all tax collection remittances are processed, government property is secured and preserved, and criminal enforcement activities continue." The plan specifically states that the agency's activities related to nonbeverage products, including processing of drawback claims, are on hold during the shutdown.

AHPA members that work with TTB should therefore expect delays in formula approvals and drawback receipts throughout the term of the shutdown.