Puerto Rico Oversight, Management, and Economic Stability Act

Floor Speech

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Mr. SALMON. Mr. Chair, I rise today to speak to an action taken by the Puerto Rican Secretary of Health who issued Administrative Order No. 346 on February 9, 2016. This Order is noteworthy in that it was issued without the benefit of review by Puerto Rico's legislature, and without any prior notice or comment period afforded to impacted parties that typically accompanies the publication of such Orders.

Order No. 346 imposes an unprecedented set of regulatory requirements and fees on the nutritional dietary supplement industry that will invariably increase the cost to consumers who rely upon nutritional supplements as an adjunct to their normal diet.

This Order creates significant economic barriers to acquiring nutritional supplements that have been widely accepted by consumers as a way of maintaining healthy lifestyles and preventing adverse health events in their lives.

The Congress has recognized the importance of encouraging American adults to maintain minimum average daily intake of a variety of nutrients that are essential to maintaining health and well-being. The U.S. government has encouraged and funded a broad range of consumer education initiatives across the spectrum of public health agencies in the federal government with the goal of providing consumers with valuable information about the importance of the minimum daily nutritional intake standards required to maintain good health.

Nutrition experts at the Harvard School of Public Health have emphasized the importance of a food pyramid that recommends a ``daily multivitamin plus extra vitamin D (for most people).''

Researchers at Tufts University have designed a specific food guide for the elderly that features the benefits of daily supplements of calcium, vitamin D, and vitamin B-12 that are needed for optimal health.

The American Academy of Nutrition and Dietetics has issued a policy statement that emphasizes the importance of good food choices, and it also recognizes that nutritional supplements can help some people meet their daily nutritional needs.

Supplements should be seen as one component of the search for a healthier lifestyle, including improvements in overall food habits and engaging in physical exercise. Much of the current research on nutrition and health focuses on prevention of chronic disease, but the primary reason most people use multivitamins and other nutritional supplements is to support overall wellness.

I was astounding to me to find out about Order No. 346 issued by the Puerto Rican Secretary of Health that imposes a set of onerous market access fees in Puerto Rico for nutritional supplements, including a $25 fee on retailers and distributors for every variation of the supplement by size, flavor, and stock keeping unit (``SKU'').

But the ``money grab'' did not stop there.

Manufacturers must file an application and pay an additional $500 fee every 2 years for products that they intend to sell in Puerto Rico.

Wholesale and Retail distributors must also register and pay an additional $100 fee every 2 years.

Facilities are subject to inspection, and must pay a $50 fee every 2 years.

In addition, Order No. 346 also imposes an additional significant administrative burden by requiring quality control data, Certificates of Analysis, the process used to obtain the product, label samples, promotional materials, Advertisements, Laboratory Certificates, and any and all warning statements which the FDA does not require of retailers of any regulated goods, which includes foods, drugs, and devices.

These requirements are transparently only justifications for the imposition of this new regimen of fees.

This onerous new fee structure may have the unintended consequence of usurping the role of the FDA in regulating the introduction of nutritional supplements into commerce as this Congress has determined by statute to be sufficient.

There has not been any significant incident in Puerto Rico where a nutritional supplement manufacturer has introduced a tainted product to consumers. Nor is there any record of any significant number of adverse events attributable to the sale of nutritional supplements to Puerto Rican consumers. Furthermore, there are no reports of abusive commercial activities by nutritional supplement retailers in Puerto Rico.

Finally, there are no unique public health concerns or issues attributable to nutritional supplement manufacturing or sales to consumers in Puerto Rico that have not been fully and adequately addressed by the FDA.

Federal public health agencies, research organizations, and non- government organizations widely encourage the use of nutritional supplements to maintain minimum dietary intake, particularly for at- risk populations like the elderly and low-income families.

Intuitively, one would think that the Public Health Agency responsible for the promotion of health and well-being of the people of Puerto Rico would be tearing down any barrier that exists for its people to access nutritional foods and supplements that promote the health and well-being of families.

But the reality is, and it is a conundrum that is well known to this body, is that Puerto Rico is in the midst of a serious financial crisis for which it is seeking relief.

As I understand it, Order No. 346 is a transparent and perverse way for the Puerto Rican government to generate revenue. I cannot help but remember the lyrics of a favorite song of mine sung by country music star Waylon Jennings, ``Looking for Love in All the Wrong Places.''

Is it not wrong to be looking for new revenue by increasing the costs to Puerto Rican families for nutritional supplements that assist them in maintaining a healthy lifestyle and thereby help them avoid adverse and costly health events that would incur potentially avoidable costs both to patients and government health care programs?

Is it not wrong for the Secretary of Health to impose a back-door tax on nutritional supplements without the benefit of a statute authorizing these fees enacted by the Puerto Rican legislature?

Is it not wrong to single out one industry, particularly an industry whose products support a public policy to promote the health and well- being of its citizens--particularly the elderly and children?

How can the Puerto Rican government come to this Congress and expect to be taken seriously in their request for fiscal relief from their current debt burden when they are continuing to enact policies like Order No. 346 that are so grossly counterintuitive to good government policy?

My colleague, Mr. Zinke, has authored a legislative remedy that will nullify Puerto Rico Administrative Order No. 346.

I fully support this legislative effort that will protect the people of Puerto Rico from arbitrary and onerous restrictions on their access to nutritional supplement products, and threatens to damage the economic growth of the economy in Puerto Rico.

If Administrative Order No. 346 is allowed to stand, the cumulative effect of a new layer of bureaucratic ``red tape'' and the unjustified imposition of regulatory fees will make Puerto Rico the costliest place to do business by natural products retailers anywhere in the United States or its territories.

Low income consumers will likely be forced away from legitimate retailers on the Island and seek access to reasonably priced products on the Internet. The problem with that strategy is that the Internet is well known as a haven for counterfeit products and fly-by-night suppliers who regularly avoid the scrutiny of the FDA and failed to maintain good manufacturing practices for the production of its products.

The perverse outcome of Administrative Order No. 346 is that it will actually increase the threat to public health among the citizens of Puerto Rico.

An equally perverse outcome of Administrative Order No. 346 is that many Puerto Rican families will be unable to afford the increase in prices on nutritional supplements that they rely upon, and they will likely forgo those expenditures. Low income families will be hit the hardest as they are less likely to get nutrition they need from food alone, and nutritional supplements our key part of their maintaining the health and well-being.

And I would ask my colleagues to consider this: Administrative Order No. 346, if it is allowed to stand, sets a dangerous precedent for every legitimate business operating in Puerto Rico today. If the Congress fails to nullify this order, nothing will stand in the way of the Government of Puerto Rico from imposing similar regulatory regimens on every other industry on the Island, without any notice or debate, and it will become the incubator for this terrible policy to migrate to other states and territories who are looking to enhance revenues.

Much of what we do here in the Congress is to establish public policies to protect consumers from exploitive and predatory actions of unscrupulous manufacturers of products that economically harm our citizens.

We are confronted today by a desperate Puerto Rican Government who appears to have set aside its duty to responsibly enact public policies that are consistent with the regular order of commerce, particularly as it relates to nutritional supplements, and has embarked on a clearly exploitive and predatory path to fleece nutritional supplement manufacturers and penalize its own consumers in the process.

The Congress is now required to act to defend its own authority and regulatory framework for nutritional supplement products as administered by the FDA, the Federal Trade Commission, and the Department of Justice. We must act in order to prevent this exploitive and predatory action by the Puerto Rican Government that will have the inevitable consequence of harming its own citizens.

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