III
Innovations and Alternatives in Regulation



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Blood Banking and Regulation: Procedures, Problems, and Alternatives III Innovations and Alternatives in Regulation

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Blood Banking and Regulation: Procedures, Problems, and Alternatives Regulatory Alternatives Sidney Shapiro In 1982, U.S. Supreme Court Justice Stephen Breyer, who was then a professor of law at the Harvard Law School, suggested a metaphor to describe regulatory reform. He proposed that regulatory failure should be understood as an issue of match and mismatch. According to Breyer, a regulatory failure occurs when government fails to match correctly the problem and the regulatory tool. A mismatch can occur for either of two reasons. First, government can misdiagnose the problem that it is attempting to solve and therefore apply the wrong regulatory approach. For example, it is now widely recognized that government regulation of transportation markets was based on the erroneous perception that unrestrained competition would result in monopolization. Second, even if the problem is correctly identified, regulatory tools vary in their effectiveness and cost. A partial mismatch occurs when government relies on a regulatory tool that is less effective or more expensive than another option would have been. REGULATORY DIAGNOSIS AND MISMATCH Critics of regulation argue that the failure to balance the costs and benefits of health and safety regulation has burdened economic development and wasted scarce resources. The Delaney Clause is the most prominent example of this criticism. It requires Food and Drug Administration (FDA) to ban the use of any food additive that causes cancer in laboratory animals, even if there is only a de minimis risk to humans. A related problem is the government's attempt to remove what Breyer calls "the last 10 percent of a risk." Breyer notes that it is often so expensive to buy this extra margin of safety that the cost of doing so is likely to exceed the benefits to be gained. In such cases the country might be better off with more modest attempts at reducing health and safety risks: because of the high cost of excess risk reduction, critics point out that less money is available to

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Blood Banking and Regulation: Procedures, Problems, and Alternatives address more significant risks. For example, it would be far less expensive, and perhaps no less safe, to fence off some Superfund sites instead of cleaning them up to the point where someone can eat the dirt with little or no risk. In summary, the reformers are critical of policy choices that cannot be reconciled with cost-benefit analysis. They object to spending more money to reduce a risk than the economic benefits that are gained from reducing it. However, other policy analysts respond that citizens may use a non-economic yardstick when they decide what level of risk is appropriate. We need not presume or deny that consumer attitudes are "irrational" or "unscientific" or that individual citizens necessarily misperceive the actual probabilities of risk. This is a different point. Assume that consumers adequately understand the probabilities of risk, but that they object to quantifying or comparing the costs and benefits of those risks. Citizens may choose certain risk policies, for example, because they promote such values as individual autonomy or fairness rather than a balancing of risks and benefits. As the philosopher Carl Cranor notes, citizens may decide that some things are more important than producing net community benefits. If risk policies are to serve both economic and non-economic goals, regulators face difficult questions concerning the trade-offs. Mark Sagoff, also a philosopher, has written concerning environmental law: "The role of the policy maker and of the legislature may be to balance what we believe in and stand for as a community with what we want and need as a functioning economy. The future of environmental policy rests on facilitating the balance of interests with morality and one morality with another morality." This is no easy job. Thus, the choice of the appropriate regulatory goal is confounded by the definition of the regulatory problem. The definition of risk as an economic problem produces one diagnosis, whereas the definition of risk as a problem of other social values produces another. MAXIMIZING EFFECTIVENESS AND EFFICIENCY Even after the problem is defined, there remains the question of which regulatory option is the most appropriate. As Justice Breyer has indicated, a partial mismatch occurs when the government relies on a regulatory tool that is less effective and more expensive than an alternative. According to many critics, a significant source of regulatory failure is the use of rigid, highly bureaucratic command-and-control regulations. In command and control regulation, government specifies the method of compliance that a regulated entity is to use. For example, the regulation of air, water and workplace conditions relies on the use of the "best available technology"; that is, all firms are required to act to the level of the best

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Blood Banking and Regulation: Procedures, Problems, and Alternatives available technology to reduce a particular risk. Another example is FDA requiring drug manufacturers to adopt a particular method to ensure the sterility of a product. Critics have made three general criticisms of command-and-control regulation. The first is an efficiency-based criticism, that is, that command-and-control approaches are inefficient in terms of society's resources. They are also expensive because uniform standards ignore diversity among firms' abatement costs and because they may not permit the regulated entities to adopt new technologies that are equally effective and less costly. A second criticism relates to innovation. Command-and-control regulations discourage research and innovation concerning new regulatory technology if they do not permit the adoption of such technology. Finally, command-and-control regulations encourage strong political opposition because they are inefficient and discourage innovation. By comparison, the critics assert, less stringent—that is, more reasonable—regulation would be easier to adapt and adopt because there would be less opposition. Thus, critics of command-and-control contend that it is inefficient, that it discourages innovation, and that it encourages regulatory opposition. These charges are true, no doubt, to some extent but they also overstate for several reasons the failure of the existing systems. First, the implementation of command-and-control schemes tends to take into account intraindustry and other differences that affect efficiency. Agencies typically use variances and other devices to account for these differences. Secondly, agencies more often tend to use efficient systems of command-and-control than inefficient systems. Finally, some research has indicated that regulatory entities tend to oppose less stringent regulatory initiatives with the same vigor as they oppose stricter proposals. The reason is simple: delay typically saves regulated entities money, and given enough time, the political environment could change in favor of the regulatory entity. Nonetheless, reformers urge three kinds of reforms of command-and-control: more flexible regulations, market-based incentives, and voluntary approaches. It is important, first, to note that command-and-control regulations also come in three flavors. A command-and-control regulation can be a specification standard, a design standard, or a performance standard. A specification standard is one that specifies a particular technology to be used. For example, the U.S. Congress has directed that new hazardous waste landfills and surface impoundments install two or more plastic liners, and specifies the exact nature of the plastic to be used and the width to be used. That is a specification standard. A design standard is one that specifies the use of a model technology that meets a legislatively articulated requirement, but design standards also permit individuals the freedom to achieve the same outcome by any other means. As

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Blood Banking and Regulation: Procedures, Problems, and Alternatives noted, air and water pollution goals are usually stated in terms of a best available technology. The Environmental Protection Agency (EPA), for example, chooses a pollution limitation based on the amount of abatement that can be achieved by the current best available technology. A regulated entity, however, may use any abatement method as long as it will reduce pollution to the level of the model best available technology. A performance standard is stated in terms of some regulatory goal. It does not specify the method that must be used to achieve that goal. For example, the Occupational Safety and Health Administration (OSHA) has set a limit on the amount of accumulated grain dust in grain elevators to reduce the risk of explosion. An elevator may choose any method it wishes to reduce dust to the specified level, as long as it meets that regulatory goal. PROPOSED ALTERNATIVES TO COMMAND-AND-CONTROL Some of the suggested alternatives are based on market incentives. Regulations can be written to take advantage of market-based or financial incentives to direct behavior toward a regulatory goal. This approach includes the following options: Taxes or charges. Under this strategy, the regulator imposes a tax or a charge on the behavior to be regulated. For example, the government might tax each pound of a particular pollutant at a flat or even an escalating rate. Other examples include bottle deposits, increased gasoline taxes, or even higher taxes on old cars that pollute more. Liability provisions. This approach requires a regulated entity or person to pay damages attributed to the harm that the entity or person has caused. Although liability regimes have notorious problems, modified approaches, such as no-fault compensation, might be used. For example, the focus of malpractice litigation might be shifted from individual physicians to the health organizations under whose auspices they practice. Information reporting. This approach requires regulated entities to. report certain kinds of information to the public, which in turn can create political and legal pressure via liability provisions to reduce risks. OSHA, for example, requires employers to distribute a Material Safety Data Sheet concerning each chemical or toxic substance to which a worker is exposed. Under the Clean Water Act, companies must file monthly Discharge Monitoring Reports that are public, and indicate the extent to which that firm is polluting. Subsidies, grants, and tax breaks. These provide various forms of financial assistance from the government.

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Blood Banking and Regulation: Procedures, Problems, and Alternatives Technical assistance. These programs provide government advice and technical help to induce targeted entities to prevent or reduce pollution. The final set of reforms that appear in the literature deal with voluntary approaches, of which two should be mentioned here: So-called "challenge regulations." Under this approach the government identifies a goal and gives targeted entities time to select and implement effective means of achieving that goal. In back of this challenge lies the implicit threat that, "If you do not do something, we will regulate." For example, in the early 1980s OSHA adopted several enforcement programs that promised reduced inspections for voluntarily achieving below-average workplace injury rates. In the late 1980s, as another example, EPA established the 35-50 Program, in which companies that emitted 17 targeted toxic chemicals were challenged to reduce their emissions by 50 percent by 1995. "Consensus standards." This approach has an agency using industry-generated standards as the basis for regulation. For example, the regulation of many toxic substances under OSHA's jurisdiction is based on permissible exposure limitations recommended by the American Council of Governmental Industrial Hygienists. Serious consideration should be given to these regulatory alternatives. Yet, at the same time, it can be argued that the status quo has not performed as badly as many of its critics contend. Moreover, the alternatives that reformers have proposed are hardly perfect themselves. Critics have succeeded in exposing the maladies of current approaches to regulation for all to see, and from a distance, their alternative approaches look better by comparison. A closer look at the alternatives, however, reveals that they also pose implementation problems. The correct public policy question, therefore, remains "Which method of regulation produces the fewest problems in reaching the intended regulatory goal?" As Neal Komisar has aptly concluded, "In a society of millions of persons with ever-changing technology, selecting the best means of preventing injury means carefully considering and comparing highly imperfect alternatives."

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Blood Banking and Regulation: Procedures, Problems, and Alternatives Specific Techniques David Pritzker The Administrative Conference of the United States (ACUS) is a federal agency, although a tiny one. It has been in existence for more than 25 years, for the purpose of studying administrative procedures and for advising the U.S. Congress, federal agencies, and the President on improving those procedures.1 ACUS STUDY AND RECOMMENDATIONS ACUS has been studying various problems of administrative procedure. Some of these are quite narrowly focused and some are very broad based. In the late 1970s ACUS studied governmental use of voluntary consensus standards. That investigation disclosed a substantial private-sector engine that had been generating standards for many decades. There was a time, for example, when fire companies' hoses might not hook up to different sources of water because they were not all the same size. A standards development industry thus arose. Through the 20th Century the industry has grown to encompass a variety of standards such as technical, safety, health, library, data and handling standards, among others. Many of these came into being by bringing together a committee of experts (or of purported experts), sometimes with a balance of manufacturers or producers and those who were buyers or users. This is the model that ACUS had in mind in the early 1980s when it promulgated its recommendations to Congress and federal agencies on regulatory negotiation (sometimes called negotiated rule-making or ''reg-neg''). The model was, in appropriate circumstances, to bring together a committee of representatives who could speak not necessarily by authority of particular 1   Subsequent to this presentation Congress provided no FY96 funding for ACUS, which halted all operations 30 September 1995. David Pritzker is now with the Regulatory Information Service Center, and continues to provide information on regulatory alternatives for federal agencies.

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Blood Banking and Regulation: Procedures, Problems, and Alternatives interest groups but who could represent the points of view of the different interests affected. THE ADMINISTRATIVE PROCEDURE ACT Understanding of how this model evolved requires knowledge of some historical facts. In the 1940s Congress passed the Administrative Procedure Act, a recognition that Congress and the courts could not do everything that the people wanted the federal government to do. Numerous agencies were in existence by then, and many more were established in the succeeding decades, particularly in the areas of health, safety, and the environment. The Act passed by Congress in the 1940s established the ground rules for how these agencies were to work. Agencies have a quasijudicial function (so-called adjudication), and they have a quasilegislative function (so-called rule-making). The Administrative Procedure Act requires the agencies, when they are considering the adoption of a rule, to let the public know through an announcement in the Federal Register that the agency has identified the problem, to give some indication (which might be quite brief or it might be quite extensive and detailed) as to what the agency is thinking about doing about the problem, and then to give the public an opportunity to submit its comments, generally in writing. This is called a Notice of Proposed Rule-making. The Act does not specify how much time the agency must give the public to respond. In some instances, either through other legislation or through subsequent court decisions, agencies were required to give the public an opportunity for an oral hearing, particularly if the public asked for it. Essentially all the agency must do, however, is to say what it has in mind, give the public an opportunity to respond, and then publish a notice of a final rule-making containing the text of the rule and an explanation of how it responded to the comments that had been received. Often, that is not the end of it, because those who do not like the regulations can go to the federal courthouse and try to do something about it. This is largely what has been tying the process up. THE ALTERNATIVE: NEGOTIATION To address this problem ACUS had in mind creating, in some instances, a committee that could try to "negotiate" a rule. This is not simply a process of turning regulation over to a committee that would largely comprise private citizens, and thus an abdication of agency responsibility. It is a procedure that

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Blood Banking and Regulation: Procedures, Problems, and Alternatives gives people with different viewpoints about the problem—and about what the solutions might be—an opportunity to talk with each other in a public session in which the agency participates. The group would have incentives to come to agreement—primarily, that if they did not agree, the agency would make the decision by itself. The objective was to offer to people of goodwill an opportunity to recognize the legitimate needs of the others represented and to see if through a negotiating process, including with the agency, a consensual resolution in the public interest could be achieved. RECENT DEVELOPMENTS AND THE FEDERAL ADVISORY COMMITTEE ACT (FACA) A number of agencies have tried the regulatory negotiation process, with some success. In 1990, to encourage its further use and to answer some of the legal questions that had been raised, Congress passed the Negotiated Rule-Making Act of 1990. Increasing numbers of agencies have been trying it ever since. The National Performance Review under the Clinton Administration has called for greater use of this technique. Figure 1 puts the negotiation process in a broader context of ways to build consensus. Several consultation and consensus building approaches is available to the regulatory agencies, a number of which are in use by the Food and Drug Administration (FDA). Figure 1 notes the significance of the Federal Advisory Committee Act (FACA). FACA was passed about 20 years ago for the purpose of regulating the establishment and behavior of advisory committees created by statute or by the federal agencies to get advice. The problem that FACA was trying to solve was a proliferation of uncontrolled advisory committees that might be acting behind closed doors. Essentially, FACA now guarantees that the proceedings of advisory committees are open to the public, and it regulates other aspects of a committee's work. A committee that is subject to FACA cannot operate confidentially, for example, and must observe certain requisites of form and process. For example, with certain exceptions for matters of national security, a FACA committee must hold open meetings. What that means is that if a committee is dealing with the public's business, there may be some limitations on the ability of the members of the committee to meet privately outside of the publicly announced schedule. That has been a problem that we have had to deal with in the negotiated rule-making context, since these negotiating groups are usually FACA committees. When Congress considered the Negotiated Rule-Making Act, it was urged to make modifications to FACA to facilitate the ability of the committee members to negotiate, but Congress was not enthusiastic about doing so.

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Blood Banking and Regulation: Procedures, Problems, and Alternatives does cover risk benefit assessment, which we commonly discuss in our advisory committee proceedings, but except in the domain of rule-making, FDA is not supposed to engage in the discussion of cost per se. I think that is an important problem, and I think that much good discussion will come out of the proposed legislation, although at this point there is no official FDA response to it. THE FORCES OF CHANGE We are living in a complex world. There are international forces relating to harmonization, and there is the changing tide of congressional oversight, which, whether it is of liberal or conservative persuasion, is still very deterministic toward the activities of the agency. We have the agenda of downsizing. We have the agenda of accountability under performance review. We have the conflicting agendas of using fewer resources, while performing regulatory activities and ensuring safety more effectively. I do not know how we will accomplish that balancing act, but examples of experimentation exist at FDA. FDA has permitted the use of voluntary standards. For example, the question of whether to formally regulate the human tissue industry has been debated for almost 20 years. In the interim voluntary standards were accepted as the basis for self-regulation, and it was only in the wake of certain incidents such as HIV transmission by transplanted organs and tissues that a more formal regulatory approach has been taken. The agency has a history of flexibility. What remains to be examined is the exact issues that are ripe for either negotiated rule-making or an alternative mode of regulation. That is where the thoughtfulness and effort need to be applied. It is not fundamentally an issue of rigidity of the agency. It is more a question of trying to define what our expectations are and to determine the specific areas where it is reasonable to try these novel approaches. THE ROLE OF THE RULE-MAKING PROCESS Question from the Audience: Two questions were put to Jay Epstein concerning the fact that FDA has not often used the "Code of Federal Regulations CFR process"—the formal notice-and-comment procedure for rule-making under the Administrative Procedure Act, but has, rather, relied more on issuing guidelines and recommendations than on promulgating rules. Thus, the following questions were asked. First, given the structure of Reg-Neg, could adopting it have the ironic consequence of causing a shift away from the

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Blood Banking and Regulation: Procedures, Problems, and Alternatives informal structure of rule-making and back to the formal structure? Second, given the parallel tracks in FDA's regulatory activities, including both CFR rule-making and the recommendations and "points to consider procedures" involving public comment through the Blood Products Advisory Committee, is there not still a need for some alternative process, one that involves more rather than less negotiation, with the end products being decisions that come out not necessarily as rules in the CFR? Jay Epstein: CFR-type rule-making has not been and could never be abandoned. But the agency has learned just how hard it is to get rules out, and so there is a higher threshold for engaging in formal rule-making. The question is, at how many levels can you change the system. Under the current legal structure, agencies must promulgate regulations as the basis for their authorities. They derive their authorities from their governing statutes and then promulgate regulations on the basis of authority and, in the case of FDA, their authority for enforcement. That must remain as the agency's fundamental legal framework. The issue that we have addressed is what is the necessary level of detail in regulations for us to regulate effectively. A lively debate on that question is occurring. One camp contends that we should be more specific with our regulations because that is the only way to resolve the ambiguities that crop up with enforcement. How do you rein in compliance? The answer is, by specifying things more precisely in the regulations, and eliminating the ambiguity. The other argument is that when there are regulations written in that they do not stand up against the test of time. They become outdated; they tend to be too particular; there are too many circumstances not captured in the regulations. What one really wants are general framework regulations that then permit the agency to periodically issue and update interpretations that are enforceable. There is a debate about that, too, about how enforceable interpretations are. I do not have the answer to these things, but I do not see abandoning regulations in CFR as an endpoint that we can reach. I do think, though, that trying to develop flexible ways to use more spare regulations is a realistic end point. Toby Simon: Even in the current political climate, blood bankers have not been opposed to regulation by FDA. There is a general consensus that regulation is an important part of the profession and that it is essential in many ways. To deal with the public it is important for FDA to be there, reassuring the public about the safety of blood by virtue of its activities. In addition to the new regulatory tools already discussed, another one worth mentioning is "error management," looked at from the point of view of both the transfusion service and the blood center. The Federal Aviation Administration (FAA) has used reporting of near misses anonymously to

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Blood Banking and Regulation: Procedures, Problems, and Alternatives encourage full reporting, and the reports are processed under FAA guidance to make sure that everybody knows of and can benefit from them. Negotiated rule-making itself might allow us to move more rapidly in areas that we have been dealing with from a regulatory point of view, particularly in terms of inspection and enforcement. Likewise, self-audit with FDA review is an interesting concept. Today, GMP audit results are ordinarily not shared, theoretically to stimulate a complete investigation. One might take the opposite point of view and share the audit, having FDA determine whether the audit has been adequate and thereby improving the efficiencies of its inspection. If asked to define the characteristics of an appropriate regulatory process for the issues facing us, I would suggest that one characteristic would be involvement. That is, there would be a significant input from different parties who have a potential impact—government, the private sector, patients potentially affected, and specialists in related areas (for example, infectious disease specialists and neurologists). We would have some way to bring that group together to formulate a consensus, and to have the flexibility to keep measuring what we do, to come back and look at it, and to change it again. COMMENTS AND QUESTIONS Question from the Audience: As a practical matter, there is an increased risk of civil liability when FDA issues a recommendation and a blood bank does not abide by it. Thus, in effect, the blood industry complies as fully with recommendations as with regulations. From FDA's point of view, do recommendations and guidelines have a potency or effect different from those of regulations themselves? Jay Epstein: Because FDA does not make recommendations that are not within its authorities under the regulations or, in some fairly rare cases, direct interpretations of statutes, the agency would regard recommendations as enforceable to the degree that they are grounded in a regulation or statute. There are occasional challenges in court, and FDA does not always win. Thomas Zuck: One difficulty with the present system, which a negotiated rule-making process might help to alleviate, is illustrated by the question of stem cells. The agency indicated that it was going to regulate stem cells and somatic cell lines. But then, whether it is by regulation or by guideline, there is a long period during which we do not know whether to file an investigational new drug (IND) application, whether to ship in interstate commerce, or whatever else we are supposed to do. In that kind of situation we have to wait

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Blood Banking and Regulation: Procedures, Problems, and Alternatives until somebody is cited for a violation or is brought to court. That is not a very good way to make rules. These alternatives offer a way to get on with it, to convene a process to decide. Unidentified Participant: The present process is one in which FDA receives input and issues a decision. These negotiation alternatives allow all of us, and others who have an interest in the rule, to sit at the table together, communicate, and hammer out those guidelines and "points to consider." James MacPherson: The present system is not serving us well, and we do not believe that it is serving the public well. Most of the current initiatives, about which I agree there has been progress, have largely been internal. It has so far been FDA creating policy entirely internally and then seeking comment. We should now be talking about a true partnership, not a partnership between FDA and the field office or between CBER and the field office, but a true partnership with all of the parties involved and in which there is no risk to anyone. The only risk is that we may fail again. Pinya Cohen: Negotiated alternatives seem difficult but challenging and exciting; they could add substantial value to the regulatory process, particularly given the need for depoliticization. Politics and ideology have little to do with safety, yet the Commissioner's office has a need to respond to the U.S. Congress. There is really no need for a body like that to be active other than to monitor in a general sense what is going on. We can take the reins fully in our own hands if we hold ourselves to some new standards. William Sherwood: We have heard in these Forums several looming issues. We have heard of the deterioration or the erosion of the public trust in our industry. We have heard that the public has a far more dire expectation or understanding of the safety of our blood supply compared with what we think it is. And we have discussed the regulatory environment that we are in and have looked at it as perhaps a problem. That question—dealing with the regulatory environment—is, at least from inside the industry, one of the most important. Is the problem rule-making? As I look at the rules that have been made, I do not have much quibble. Rule-making has been slow: slow in coming and slow in eliminating rules that are there. Maybe that is a problem that can be corrected. Are the issues more that of how the rules are applied? How they are interpreted by the agency? How they are laid out? Is there an unevenness or a lack of consistency in the way in which these rules are looked at, and is our industry kept off balance? These are issues and problems on which we can focus. Maybe now we have some alternatives that we can work with the

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Blood Banking and Regulation: Procedures, Problems, and Alternatives agency to develop. Pinya Cohen: With all due respect to the inspections in the field, there is a growing sense that there is a lack of coordination or a question as to who reports to whom with regard to the inspectors in the field. In the application process, we have certainly had a dialogue with CBER. But once our applications are approved, one gets the impression that the inspectors in the field may feel free to challenge and reopen that dialogue. If these are the ground rules, we should know them in a clear way. We need to pull together and get back to a more centralized sense of where the science is coming from. A science-directed approach rather than a compliance-directed approach might be helpful. Miriam Sparrow: We have heard today about countervailing power, and we have heard about rule-making and the legislative function of FDA. It is the enforcement function of FDA, however, that we also need to work with, specifically, the inspection process, which does have a role to play in improving blood safety. Part of where we should be headed, in terms of trying to work together, is to build not only an FDA that has credibility with the public at large and with the congressional constituency, but also an FDA that has the same credibility with the industry that is being regulated. That objective will help the industry itself to meet some of the concerns about public perception. Henrik Bendixen: How have advances in blood safety come about? Have we done it all ourselves? It is fair to say that we have done a lot ourselves, through the introduction of new concepts, good research, the introduction of more technology, and the writing of guidelines, standards, and the like. All of this has contributed to increased safety in our field. At the same time, we have not been alone. The intervention of professional societies has been very important. Then, of course, there has been attention from the press and the voices of the consumer and special interest groups, and we cannot deny that even lawsuits may have moved us in the right direction. The other participating change agents have been regulations, whether they are those of the federal government or the states. Advances in safety do not logically argue toward deregulation. Nonetheless, as we live in a modern industrial society, a most important thing is the word "predictability." You need to have rules of the game. You do not mind even tough rules of the game as long as you know what the rules are. If McDonald's stops selling hamburgers in the People's Republic of China it will be because they cannot predict from one day to the next who has to be persuaded or bribed. I have never minded regulation, even tough regulation, but it must be predictable.

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Blood Banking and Regulation: Procedures, Problems, and Alternatives Jay Epstein: I would like to say "message received" with respect to the issue of integrating the enforcement side into these discussions. I see that as an area that could be developed as some kind of model for a negotiated resolution. The points made about accountability are also quite perceptive. Ultimately we are a federal agency; we are accountable to our leaders, to the U.S. Department of Health and Human Services, and ultimately to the Congress, and that should never be forgotten. As an example, increased role of the field offices in decision-making and policy generation is a direct result of congressional oversight, which faulted the agency for not responding enough to the role of the field in that process. We cannot have it both ways; the implication is that there is a need for a careful examination of the political environment and figuring out who the constituents are and how they interact. The system must be looked at as a whole, and the players must be recognized. We must not forget that the Congress as the voice of the people is the ultimate master of the agency.

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Blood Banking and Regulation: Procedures, Problems, and Alternatives General Discussion of Issues for Negotiated Rule-Making Editor's Note: A portion of a later meeting of the Forum was set aside for discussion of the topics that could be considered as candidates for a pilot project in negotiated rule-making. David Pritzker offered a checklist of qualifications that a candidate issue should have, day Epstein suggested the problem of new tests, and Celso Blanco presented the particular case of Creutzfeldt-Jakob disease (CJD). Other members of the Forum proposed specific candidate issues, a list of which follows. Consistent with its charter, the Forum as a group took no position on recommending any particular issue or program. CRITERIA FOR SELECTING ISSUES David Pritzker: The following is an amalgam of several of the published checklists describing the features of problems for which Reg-Neg seems most promising: Both parties must be dissatisfied with the current situation. There must be a limited number of interests that are significantly affected. The appropriate individuals who can represent those interests can be identified. The issues must be known, mature, and ripe for discussion. No party should be able to reach the result by themselves—that is, the outcome is genuinely in doubt and no interest should be able to dominate the proceedings. No party can be required to compromise a fundamental value. The problem must involve diverse issues, so there are things to trade off. The agency must be willing to rely on the process and actively participate in it. The parties see it as in their interest to use the process. There should be a deadline for achieving a result.

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Blood Banking and Regulation: Procedures, Problems, and Alternatives CANDIDATES FOR REG-NEG Jay Epstein: One issue that has been pressing and that may be appropriate is development of a framework for dealing with changes in the institution of tests. The effort is to come up with a set of principles that can be used to work through the problems that have faced blood safety. There has been a sense that we have dealt ad hoc or case by case with issues, not always to the benefit of the system as a whole, and that there is a need to focus on the decision-making process—not perhaps to fault or revise the process as a system but to put it on a better foundation. That has been seen as one of our pressing issues. The structure of the regulatory agency-industry relationship is certainly another, but that is a little bit more long term than an effort to develop guiding principles for risk decision making. Celso Bianco: CJD is an interesting problem for these models. At the Blood Products Advisory Committee in December 1994, we presented a model by which certain decisions could be made. The idea was that each blood center would report those diseases to a central place, for example, to the Food and Drug Administration, which would file them and once a year convene a panel of experts, including patients and others, and ask the questions, "Would notification of recipients of these products be beneficial to them? Is there anything known that could help them?" That is one example of a small pilot project that could encompass not only CJD but other diseases that are ill-defined. There are diseases for which there are theoretical possibilities of transmission by transfusion but for which there is no documented evidence of actual transmission. The following are additional "Reg-Neg" topics suggested by members of the Forum: Progenitor cells. The technology is moving very fast. p24 antigen testing for HIV. For detection of HIV during the "window period" after infection but prior to detectable antibody response. Recommendations concerning "lookback." The cost and benefits; how the information is and is not used, whether lookback actually serves the recipient population. Stem cells and gene therapy regulations. Transplantation regulations. Test implementation decision process: implementing new tests and eliminating old ones. It would be desirable to establish a decision-making process outside of the "heat of battle." Specification of steps, timing, and procedures is needed.

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Blood Banking and Regulation: Procedures, Problems, and Alternatives Prevention of Chagas disease transmission. This is linked to the issue of implementing new tests. Organizational alternatives to current U.S. blood banking system: federation (e.g., Scotland) or national blood banking system. Definition and role of ''donor incentives". Donor deferral and reentry. How should the safety of the blood supply be monitored? Regulation of new classes of products such as hemoglobin solutions: safety and efficacy; adequacy of substrate supply. Approval of significant blood-processing techniques: virus inactivation; blood filtration. Recipient screening. Is this a practical solution, or a logistical nightmare? Establishment inspections. Increase uniformity of the inspection process; develop internal audits. Computer validation: computer models and quality systems; integration into the inspection process.

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