lot of the pension obligations. do you fct factor that in when you look at -- >> question here is when we think about was the right premiums ought to be for pbgc, should we take longevity, the fact people are living longer into account? and the answer is, of course we should. the -- our role of the role of pbgc which is how the law created it is that it is intended to be a safety net without using taxpayer dollars. that means the premiums we charge have to cover the benefits we pay. historically are set by law and frankly have lagged what they need to be, and so from time to time the congress of the united states has recognized this and

acted and raised those premiums. we've gone to the congress and said rather than waiting until you do pension legislation and rather than doing it in a way that everybody pays the same, why don't we do it on a more business-like base and let us figure out which rates apply to which people, because the way our system works right now is that there's a fundamental unfairness in it. think about, put aside pension insurance. talk about auto insurance. you're ryed to have auto insurance and you get a rate based on what your record and your situation is. suppose you get a note because

your neighbor had three accidents last month your rates are going up. you'd be ticked. that's the way our premiums are set. right now know that their rates are changed. we started to discuss that with congress and we hope when there is pension legislation in the future they will take that into account, because we think the result will be a better, fairer system. >> i want to take the chair and ask a question myself. you've been in headlines a lot for a very aggressive stance that you have taken. is this typical of what you do with companies, or is america a special case? they certain reacted like they were a special case, when you put liens on their foreign

properties and took other actions. could you explain how american fits into the picture of, i guess, enforcement or actions you take against companies? >> the fact is what pbgc did at american is what pbgc has done for decades. when a company is in bankruptcy, the job of the pbgc is to engage. it has done so for decades as a creditor. one of the things i like about the agency and i admire about the agency is that the people in it are, the financial analyst, the lawyers, the actuaries are terrific and professional and they are experienced, and so what happened when american filed is that pbgc used the talented staff it has. it used the tools that the law gave it 37 years ago to protect

pensions, and that's why we're there. we are there to make sure obviously, that company survives, and that also that if at all possible, the pension can as well. as i mentioned, there are plenty of other cases where we do that, and we conclude that companies can't afford their plans. if we were in different economic times, perhaps, and certainly when there were different economic times, we came to a different conclusion, and in that case we took the plan. but my view of this is that we are doing the process of protecting pensions. we hope providing peace of mind to 130,000 people in a way that preserves the jobs of the 80,000. and that is something which pbgc

has done, perhaps unnoticed, but done, for decades. >> yes. please? >> good morning, mr. gotbaum. thank you so much for being so optimistic. i wish i could say the same. back in 1985, there were more than 125,000 plans. today there are fewer than 20,000, and companies have been freezing them, shutting them down, you know, like fleas, and been saying that in recent years a very low interest rate are the culprit for the death of these pension plans, and now we've seen attacks on public pension plans. california, new york, in about 20 states, i think, there are

legislation either actively or under consideration to convert the db plans into some kind of defined contribution plans. so what does the pbgc see doing in its role to encourage traditional pension plans to look beyond the insured corporate and private pension plans to create some kind of a public private partnership that will encourage more retirement security for the vast majority of americans? >> i'm sorry. i didn't catch your name? >> [ inaudible ]. >> yes. what we are doing is trying first to preserve the plans we have, and i'll talk about that in a second. but, also, to try to encourage

options so that employers and employees can work out plans that work for them. let me first talk about preserving the plans we have, because i've been at the pbgc for a year and a half, and i'm always reminded of mark twain's remarks, the rumors of my death have been exaggerated. it is absolutely true that the number of plans offered of the traditional defined benefit kind have declined in the last 30 years. it is also true that the number of people covered by those plans has increased, not decreased. there are more people covered by defined benefit plans today than there were 30 years ago. now, does that mean that a lot of folks aren't choosing other ways to provide retirement security? no. it doesn't. but from my perspective, it is

important to preserve the plans we have. we think that traditional pension plans serve people better, and we are doing that. but, and this is where i think it is important to recognize the realities. it is also important to offer alternatives so that as circumstances change, as companies change, as lifestyles change, we still have those kinds of plans, and i mentioned that before, but i'll say it again, because i think it is really quite important. most people know that there is the traditional pension model and there is the what has now become the traditional 401(k) plan. and the traditional pension model is the employer does everything, takes care of everything, and pays for everything. the traditional 401(k) model is

the employer writes a check and then you're on your own. not just government. not just employees, but employers recognize that that's not satisfy, and so there have been efforts, efforts that government has tried to facilitate, to do, to modify and offer it options on both models that serve people better. so, for example, my colleagues within the administration have worked very hard to make it possible within the, what i used to call the traditional defined contribution model, to offer people a chance to have real lifetime income. so that the employer make as contribution, but the employee can with that contribution get something that offers lifetime income. that's happening now.

i think it's very important. i think it will by offering new possibilities it will give people new possibilities for retirement. i also will mention one more. a lot of employers, when they first began to worry about the fact that they were taking responsibility for everything, tried to within a traditional framework pass the risk to the employees in the form of what are called hybrid plans. and there were lots of difficulties. there were questions about whether they were fair. there were questions about whether they were lawful, et cetera, but what has happened s is, we're now realizing, and congress pass add law five years ago, six years ago, saying, hybrids ought to be allowed so what is happening now is within the government we are, within

the administration, we are working to set up a set of rules that are clear enough so that businesses can decide whether or not they want to use these options. this is a long-winded answer, but i do think it is important. we are not going to enhance retirement security by just sticking to the old models. what we need to do is provide options so that case by case, employer and employee, by employer and employee, they have choices. that's what we are doing, and i think that actually is an important part of the future. >> well, that might be a good note to end on. i'm sorry that our -- all the reporters we have on the phone were too shy to speak up. but before we go, i just want to give applaud for a couple other

events the club has going on. our luncheon speaker later today is tea ptea pak chopra and another newsmaker this friday at 10:00, a panel discussion on nuclear security and preventing nuclear terrorism. but for today i want to thank you for joining us and thank all of you for coming and for those of you watching, thank you as well. >> thanks very much. tonight here on c-span3, americans hadtry tv looks at the battle of hampton rhodes roads, the first combat between ironclad warships from the mariners museum in newport, west virginia, 8:00 eastern here on c-span3.

republican presidential candidates mitt romney and newt gingrich will speak at the national rifle association's annual meeting tomorrow. also addressing the nra, former presidential candidate rick santorum, house majority leader eric cantor, texas governor rick perry and wisconsin governor scott walker. that's live on c-span tomorrow starting at 2:00 p.m. eastern. the institute of medicine last week issued a report saying that food and drug imports have tripled over the past decade, and inspections at food and drug facilities abroad are often inadequate according to the study. the institute of medicine released the report last week at the national press club here in washington. are we about ready? okay. so good afternoon, everyone, and thank you very much for coming. my name is jillian buckley and

i'm the institute of medicine study director for this report ensuring safe food and medical products through stronger regulatory systems abroad. and i'm very happy to be with you today to share with a wider audience, the committee's work for the last year on building capacity for food and drug regulation in developing countries. and it's a pleasure to introduce to you professor jim riviera. the welcome fund distinguished professor of pharmacologist at north carolina state university. he was elected to the iom in 2003 for his contributions to the mathematic modeling of farm coe kinetics and toxicology as well as work in risk assessment and food safety. he directs the center for chemical toxicology research at the n.c. state college of

veterinary medicine and will review with you the conclusions and recommendations the committee made in this report. so thank you very much, and here's jim. >> thank you, jillian, and thank you for coming out to listen to what we've done over the last year, year and a half. what i would like to do is to briefly review this report which is a relatively complex report, but why were we tanked to do it? essentially fda realized that the world has changed relative to the types of products it must regulate. often quoted statistic, 80% of active ingredients of pharmaceutical agents are not produced in the united states. 40% of finished drugs come from abroad. 85% of seafood, 39% of fruit and nuts. if you look at medical devices,

which fda is also responsible for regulating, a fourfold increase in medical device importation over the last decade. taken this into consideration, there is 20 million import lines that fda has to keep track of. so just try to, let that number sink in. and i know we've had some issues in the last few days, in the last year, in the last decade, specific aspects, but their task to look at 20 million different imports lines. even if you look at a product as innocent as a nutrition bar, if you actually look at even if that's manufactured in the united states, there could be six or seven different countries in which the ingredients that go into that finished product have been sourced in a different country. so this is a huge task ahead. so what was the committee and what did we do? we were essentially ta ltasked

things by fda. one, define the core elements of food, drug and medical device regulatory systems in developing countries. secondly, after assessing what these core elements would be whacks are the gaps in those systems? and then, once we've identified the gaps, how do we think we could actually address these gaps both in a short term which is three to five year, and ultimately the longer term. what did we do? we visited and went on four trips to brazil, south africa, china and india, and at these meetings which lasted anywhere from two to four days each, we also met with representatives from other regional countries. so we talked to basically people from about a dozen countries. we talked to government regulators, government, other members of government agencies. we talked to the regulated industry, both multi-national drug companies, domestic drug companies, professional

associations, nongovernmental organizations and development organizations, and we met in all kinds of different venues, from very large well-structured meetings to less than well-structured meetings and essentially had open public meetings and discussed what is the core elements and what really are the status of these systems. i want to stress that our task was not to specifically look at a country. our task was not to look at the grand latery of a specific product. our task was to assess what's out there globally, how these systems are structured, how do these system interrelate and how can fda learn from these systems and work with these systems to improve drug and food safety coming into the united states. there's a lot of detail in this report. and, again, i don't want to turn this into a semester lecture. so in two or three minutes what i really want to look at is,

there's four basic core elements of a regulatory system that's important. one is the system has to be responsive. has to be responsive to problems that occur. but it also has to be responsive in terms of being able to adapt to new types of problems and new types of regulated products. so what worked ten years ago may not work today. there has to be adaptation. we believe it has to be outcome oriented so that no matter how the system is set up, we have to realize there's massive cultural and political differences between all of the countries, and so, therefore, systems need to be set up, processes need to be implemented that are actually implementable in those countries in the proper context, but the outcomes must be defined. so that no matter how you get to a specific point, if you reach a point that the product is deemed safe, then the product should be able to be exported. in line with that, i have to be

predictable. so whatever occurs in that line is that if the same type of a process goes through with the same type of a problem, it's actually going to get detected. and importantly, it has to be independent. it has to be independent of overt political control and micromanaging. it has to be independent of economic factors promoting send something companies trade map to be based on a system that really just looks at what is the risk and the safety. going into a little bit more granuarity in this line, one could look at a number of different approaches to what regulatory systems are looking at. one thing we may be talking about is food. food produced, is that food safe? we may also be looking at drug development, which is san entirely different type of an approach, however, there are common elements between these. one is, a government standard testing authority.

it's crucial that when standards are set that they essentially use science-based approaches, and risk-baserisk-based approac come up with these standards. they can't be arbitrary. most of these countries should participate in international cooperative activities and harmonization so that instead of focusing on very small differences within specific areas, these are harmonized and people are working towards the same goal. decisions should be ethical, and when something occurs, that information should be rapidly transmitted to prevent it spreading throughout the system. the food and medical product regulatory system really should look at product safety through good manufacturing processes, good clinical laboratory and agriculture practices. staff development and trading for employees should occur. monitoring evaluation of product

quality laboratories, inspection and surveillance of products, risk assessment analysis and emergency response. we go into a lot of detail in this report on those specifics as what a regulatory system encompasses. when we looked at those, we've identified and grouped together nine main gaps in developing country systems. first falls into a classification of adherence to standards. in order for a system to function, there has to be some standard set which allows export from a country and import into another country. those standards must be met. those standards can range from specific tolerances of chemicals, absence of specific microbial contaminants and relate to actually a drug and a specific concentration in the product. another aspect we found that's significant is controlling supply chain. so the supply chain is when the chemical or the food is initially produced to when it's in the finished product and actually imported.

what is that supply chain? and some of the problems we've dealt with this week again last month, a couple years ago, really la to do with supply chain integrity and how can we monitor that? this is a gap in many systems we looked at. there were infrastructure deficits. in order to implement supply chain control, in order to adhere to standards, there has to be a system in place. there has to be people trained to know that those standards exist. there has to be laboratories in place. and there's infrastructure deficits at various levels in both the food and drug systems. there needs to be a legal foundation for regulating drugs. there needs to be a legal foundation for indicating and imposing safety standards on a product. not just the manufacturing aspect and a manufacturing drive to actually develop these. we've noticed a number of different workforce problems in multiple levels and go into a lot of detail on this within the report.

essentially what this relates to in many cases is that there's just a lack of adequately trained individuals in regulatory science. there's lack of stability within regulatory agencies of those people who are trained. there's turnover and in smaller countries rapid turnover and continuous turnover. so in order for fda or any other regulatory agency to actually communicate with individuals in some of these developing countries, they all need to be talked to and speak in the same language. no surprise to anyone a lot of the reg la story systems are fragmented. fragmented politically, housed in different ministries, housed in health ministries, agriculture ministried and in some cases trade ministries. those organizations have different end points. and so when you look at another regulatory system, you really need to start dissecting out where those components exist. and, again, the report goes into detail on those. many countries suffer from poor

surveillance systems and the surveillance system is not just the finished products being exported but in a lot of the quality control points throughout the production of either the food or drugs. there needs to be a way of measuring what's happening. there needs to be a way of determining whether or not specific standards are being met. another gap we found is communication. the communication gap can be within a ministry or an agency from the top to the bottom of the industry, where the work is actually handled, between different ministries and different regulatory systems. between the regulate around the regulated industry, between a regulator regulated industry and the consumers of that product, between different countries and regional countries and globally. there's just a lot of individuals that just are not talking with one another and sharing specific information. and finally, in developing a system that guarantees safe food and products, there needs to be a political will to actually do

this. so the committee strategy on addressing this, we came up with 13 recommendations which, again, i'm going to briefly overview. but what we're looking for is we realize we cannot inspect our way out of this. we cannot demand that only safe products and foods come into the united states. we need to offer a series of carrots and sticks and we need to look at activities that essentially hit a sweet spot in this diagram, and that is, if we're looking at product safety, we need to build the system that by improving product safety, then the export from these countries can occur, and trade can build up in those countries. as we increase product safety, this should have a direct impact short-term on public health but long-term on public health because we're building up the awareness and the work force, and practices, with those

countries to actually try to produce safe products. and this should also, then, impact on aspects of development. and we're going to address this as some of our specific area, but i guess the best way to look at this is, if you were trying to assess an only safe products come into this country and there's no systems in place to ensure safe products can actually be produced and manufactured in these countries, how much inspection, you're always going to find flawed products. what we really need to work on is a system through cooperation and through hitting mutually reinforceable goals that we can actually build a regulatory system and build product production systems in countries that actually generate safe products. by doing that, they are allowed to increase exports in those areas and by doing that, then the economic activity is in line with what the safety end points are. this is a problem in gaps that essentially if someone is trying

to generate and you're being judged on economic activity, product safety falls to a lower priority. we have to change that. we have common threads as to what we think needs to be done, and i just want to go through these four areas that you will see coming through our specific recommendations. first is a concept of enterprise risk management. we're using this as a -- as a broad-based concept that a regulatory agency and specifically in this case fda needs to look at all of its operations. it needs to assume that with 80% of apis not produced in the u.s., 20 import lines coming in, essentially you can't differentiate between domestic and international and therefore have to think about how you regulate resources, and resources are not just inspectors in a foreign country or the number of inspections, but it also has to do with what budget of specific trading

dollars, where is that trading money bean spent? how is this being spread to the risks occurring? and so one fleeds to realneeds at this agency created and essentially existed for an era when there was domestic consumption, a lot of changes over the last 40, 50 years but now to debt to an adaptable point it has to be responsive to specific problems. another aspect we realizesed concept of professionalism and credentialing. that regulatory science and working and developing regulatory agencies and end points in those agencies are not specifically addressed in trading programs. there are sporadic trading programs around the world. the eu puts on programs. fda puts on programs. they may cover one topic this year, another topic next year. somebody join as regulatory agency, when they miss the first topic. there's no