Background Phases of Technological Innovation In our prior work, we have found that technological innovation involves not only creating new ideas but also translating those ideas into a new product or service. Innovation, and the research driving it, is inherently risky because the likelihood that research can be translated into a product or service and the ultimate value of that product or service are unknown. The Department of Commerce’s National Institute of Standards and Technology describes the path from innovation to commercialization as comprised of three overarching stages: inventing, transitioning to making, and selling. (See fig. 1 for a description of the path from innovation to commercialization.) Federal Agencies’ Oversight of the Food Supply FDA and USDA have responsibility for overseeing the safety of the food supply. In general, FDA is responsible for ensuring the safety of virtually all domestic and imported food products except those regulated by USDA. USDA is responsible for ensuring the safety of meat, poultry, processed egg products, and catfish. FDA and USDA cooperate with states, tribes, and local food safety and public health agencies to carry out their federal responsibilities. FDA and USDA carry out their responsibilities in part through inspections of facilities where food is produced. The frequency of inspections the agencies conduct varies, as follows: FDA. FDA’s authority requires a risk-based approach, in which inspection rates vary depending on the level of risk associated with a food product. FDA conducts risk-based inspections of high-risk and non-high-risk food facilities. For example, the FDA Food Safety Modernization Act, signed into law in 2011, specified that FDA had to inspect all high-risk domestic facilities at least every 3 years. USDA. Depending on the type of facility, USDA conducts inspections at least once per operating shift or maintains a constant presence. Specifically, USDA conducts carcass-by-carcass inspection at all federally inspected meat and poultry slaughter facilities and verifies that these establishments follow all food safety and humane handling requirements. At facilities that process meat and poultry products, USDA conducts inspections at least once per production shift, following the agency’s longstanding interpretation of its statutes requiring it to do so. Among other things, the Federal Food, Drug, and Cosmetic Act requires that food additives be approved by FDA before they can be lawfully used in foods. Substances added to food are considered unsafe unless the agency establishes that the use of the food additive, under specific conditions for use, will be safe, or unless the substance is generally recognized as safe (GRAS) under the conditions of its intended use among qualified experts. As we reported in 2010, the Federal Food, Drug, and Cosmetic Act exempts GRAS substances from the act’s general requirement that companies obtain FDA approval before marketing food containing a new additive. GRAS substances include hundreds of spices and artificial flavors, emulsifiers and binders, vitamins and minerals, and preservatives that manufacturers add to enhance a food’s taste, texture, nutritional content, or shelf life. The GRAS exemption allows companies, without notice to or approval from FDA, to determine whether there is enough support to claim a substance is GRAS. For a company to claim a substance is GRAS, it must conclude that there is common knowledge about the safety of the substance among experts qualified by scientific training and experience to evaluate its safety. In addition, as part of their oversight of the food supply, FDA and USDA oversee food labeling of the products under their respective jurisdictions. USDA, by statute, is charged with assuring that products under its jurisdiction, including meat, poultry, and catfish, in interstate or foreign commerce are properly marked, labeled, and packaged. USDA develops and applies the labeling requirements for these products, and food manufacturers are responsible for complying with the USDA labeling rules and adhering to the process maintained by USDA for the evaluation and approval of these product labels. Consistent with its statutes, USDA requires preapproval of all labels before manufacturers can market their products. The Federal Food, Drug, and Cosmetic Act prohibits the misbranding of food, which includes food labeling that is false or misleading. Consistent with its statutes, FDA ensures that foods within its jurisdiction are not misbranded by focusing on the labels of products already in the market. FDA establishes regulations for the enforcement of these provisions and issues guidance. Food manufacturers are responsible for compliance with misbranding provisions in the Federal Food, Drug, and Cosmetic Act and its implementing regulations. Regulation of New Food Technologies From time to time, new technologies, such as those used to make cell- cultured meat, generate challenges for FDA’s and USDA’s regulatory structure. Other examples of new food technologies to which federal agencies have needed to adapt include the genetic modification of plants and irradiation of foods. In the case of genetically modified plants, there are no specific regulations addressing products resulting from the manipulation of the genetic material of living seeds. However, under FDA policy, new genetically engineered crop varieties are treated like other foods (including their conventional counterparts) under the Federal Food Drug and Cosmetic Act and may not contain either unapproved food additives or contaminants that would adulterate the food. In 1995, FDA established a voluntary pre-market consultation process through which companies are encouraged to notify the agency before marketing a food produced from a genetically modified crop and voluntarily submit a summary of the developer-performed safety assessment. FDA evaluates the safety assessment for any issues that need to be addressed and works with the developer to resolve those issues. In the case of irradiated foods, companies seeking approval for a source of radiation used to treat a food may submit a food additive petition to FDA demonstrating the safety of the proposed use. FDA grants approval only after agency scientists have determined that the proposed use is safe, then the process can be employed commercially. Specific Information about Cell-Cultured Meat Technology, Commercial Production Methods, and Final Product Composition Is Not Yet Known General information about the process of making cell-cultured meat is available, but specific information about the technology being used and the eventual commercial production methods as well as the final products is not yet known. While firms may vary in how they make cell-cultured meat, the general process they use can be described in five phases. However, the technology and methods to commercially produce cell- cultured meat are still in development, and producers, regulators, and consumers do not yet have clarity on what these will entail. The composition of the final product is also not yet known. The General Process for Making Cell-Cultured Meat Contains Five Phases The general process for making cell-cultured meat contains five phases: biopsy, cell banking, growth, harvest, and food processing. (See fig. 2.) The five-phase process is generally as follows: 1. Biopsy. A biopsy is taken by collecting rice-sized tissue samples from an animal, such as livestock, chicken, or fish. During this and subsequent phases, specific laboratory sanitation procedures are followed, and antibiotics may be used in order to avoid or minimize contamination from bacteria. Growth Media According to researchers and representatives from cell-cultured meat firms, the growth media for cell-cultured meat often contains fetal bovine serum, which is obtained from blood drawn from a bovine fetus at slaughter. However, researchers and representatives from cell-culturing firms we spoke with said they are working to develop growth media that do not contain fetal bovine serum. Representatives from some of these firms also told us that the composition of the growth media, including the exact ingredients and their proportions, can vary based on the specific needs of the cells and the variety of serum used. For example, cell-cultured seafood may have different growth media and environmental requirements than cell-cultured livestock and poultry. 2. Cell banking. Biopsied cells with the most desirable traits are selected and either used immediately for cell growth or frozen to create a cell bank for later use. These desirable traits can be obtained by either selecting existing cells or using genetic engineering methods to insert, delete, or edit the DNA to target desired traits in cells. Examples of desirable traits may include cells that divide quickly, cells that divide a greater number of times, cells that result in a reduced cholesterol or fat content or other desirable nutritional traits, or cells that are more resilient to environmental factors, such as temperature, than other cells. According to agency officials and representatives from cell-cultured meat firms, this phase represents an important opportunity to ensure that the source cells used to initiate commercial production are free of pathogens or other contaminants. 3. Growth. During the cell growth phase, cells are placed in a bioreactor and begin to divide and differentiate. A bioreactor is a container that creates an environment that can sustain the growth of cells and includes the ability to control factors such as temperature, pH, and oxygen and carbon dioxide concentrations. Bioreactors can vary in size, including microwave-sized and refrigerator-sized units, but could be as large as 20 to 30 feet tall in commercial production. Bioreactors contain a growth medium, which may include ingredients such as glucose, amino acids, hormones and other growth factors, and other basic nutrients that cells need to consume in order to thrive. In addition to the medium needed for growth, the cells may need to be attached to a structure, referred to as a scaffold, to properly develop into cell-cultured meat. 4. Harvest. Once the cells have divided to form a sufficiently large amount of cell-cultured meat, producers remove—or harvest—it from the growth medium and bioreactor. If a scaffold was used to provide a structure for cells to grow on, then the cell-cultured meat would either be separated from the scaffold during harvesting or left attached to an edible scaffold. 5. Food processing. The harvested cell-cultured meat is then prepared into a product such as meatballs or chicken nuggets. In the future, products similar to intact cuts of meat such as steak or chicken breast may be produced. The Technology to Commercially Produce Cell-Cultured Meat Is in Development, and the Eventual Commercial Production Methods and Aspects of a Final Product Are Not Yet Known The technology to produce cell-cultured meat at a commercial scale is still in development, and information about the methods to be used for commercial production and the composition of the final product are not yet known. In the continuum of moving a technology from innovation to commercialization, cell-cultured meat firms are in the middle stage of building and testing their prototypes, based on our discussions with representatives from these firms. Consequently, they have not finalized aspects of the technology and eventual commercial production methods to be used or the composition of the final product. As a result, certain information is not yet available to stakeholders—including cell-cultured meat firms themselves, regulators, and the public—about specific aspects of the technology and commercial production methods that will be used, such as the composition of the growth medium and of the final products. In addition to technology development, the scarcity of publicly available research on cell-cultured meat production limits information available to agency officials and the public. Each cell-cultured meat firm is developing detailed information on its own eventual commercial production methods for making cell-cultured meat. However, the firms, similar to other technology start-ups, are reluctant to disclose intellectual property and business-sensitive information due to concerns about competition. For example, one firm told us that they can reverse engineer parts of another company’s commercial production method by seeing pictures of the equipment the other company is using. In addition, cell-cultured meat firms compete with other firms for funding from sources such as venture capitalists, foreign governments, and conventional meat companies. This competition for funding contributes to firms being reluctant to share information they consider important intellectual property, such as parts of their production processes. As a result, agency officials and other stakeholders told us that they must largely rely on whatever information the cell-cultured meat firms are willing to provide to understand details of the companies’ prototype processes and products. This limitation can affect agencies’ ability to make regulatory and other decisions. Specifically, FDA and USDA officials said they have limited information on cell-cultured meat production methods and products and need more in order to regulate this new food. One USDA official explained that the agency cannot establish labeling requirements if the agency does not know the nutritional profile of the final product. For example, if the scaffold on which the cell-cultured meat is grown is not edible, the agencies may require firms to disclose certain aspects of their commercial production methods, such as how they removed the cell- cultured meat from the scaffold. However, if the scaffold is edible, it will affect the final composition of the product, which may require different labeling than a product that was developed without edible scaffolding. This lack of information results in unanswered questions about cell- cultured meat as it relates to the eventual technology and commercial production methods to be used and the composition of the final products. Among other things, this lack of information creates challenges for industry and federal regulatory agencies as cell-cultured meat nears commercialization. The sources we reviewed and stakeholders we talked to identified a number of open questions, including the following: Tissue collection. How often will producers need to collect biopsy samples from animals, and what animals will be used? Some stakeholders have stated concerns about whether, and how, regulators will ensure that biopsies are collected from healthy animals. For example, one cell-cultured meat firm stated that tissue samples would be taken from slaughtered donor animals that met federal standards for conventional processing at the time of slaughter. However, USDA and FDA have not indicated whether they would require cell-cultured meat firms to do so. Additionally, representatives from cell-cultured meat firms stated that they did not yet know how frequently they would need to collect biopsies from animals for commercial-level production. Additionally, according to researchers, there are too many unknowns to accurately estimate how much cell- cultured meat could be produced from a single biopsy of animal tissue. Genetic engineering. Will commercial production methods involve genetic engineering? Some stakeholders expressed concern that the use of genetic engineering in cell-cultured meat production could cause the product to experience a lengthy wait for regulatory approval, similar to that for genetically engineered salmon, which took approximately 20 years. One representative from a cell-cultured meat firm noted that uncertainty about pending government regulations could negatively affect firms’ ability to attract and retain investors. Representatives from some firms said understanding what regulatory requirements will look like might influence which scientific pathways they pursue as they continue to develop their commercial production methods. According to FDA officials and representatives from one cell-cultured meat firm, it is likely that some firms will use genetic engineering in their commercial cell-cultured meat production methods. However, representatives from two other cell-cultured meat firms told us they were undecided as to whether they would use genetic engineering in their commercial production methods. Antibiotics. Will antibiotics be used to make cell-cultured meat, and will residues be present in the final product? According to agency officials, the presence of antibiotics in commercial production and the potential for residues in the resulting product would represent a significant potential concern for food safety and public health. Officials stated that they would not expect antibiotics to be used past the cell- banking phase. Representatives from cell-cultured meat firms we spoke to differed on whether they planned to use antibiotics in their commercial production process, but they had not finalized their decisions. According to one firm, if antibiotics are used, the use would be limited both in quantity and duration. Growth medium. What type of growth medium will producers use, and how might variations in the media affect the final product? According to agency officials and other stakeholders, the ingredients used in the growth medium could affect the end product’s composition and raise potential safety concerns. For example, FDA officials stated that residual growth factors, such as hormones, in the final product would be something they would likely evaluate in premarket consultations. However, representatives from cell-cultured meat firms stated that their firms have not finalized the medium they plan to use. In addition, the formulation of the medium firms use could be an important piece of intellectual property or confidential business information. Scaffold. What type of scaffold will producers use, if any, and will it be edible or inedible? The use of edible or food-grade scaffolds, where they are used, will affect the composition of the product and may need to be evaluated by federal agencies for safety. According to USDA officials, the composition of edible scaffolding may also create labeling and jurisdictional concerns. For example, USDA officials stated that the addition of edible scaffolding may require significant additional aspects of production to be subject to USDA jurisdiction. Additionally, researchers have commented that a chemical separation technique needed to separate some inedible scaffolds may also need to be evaluated for potential safety concerns. Point of harvest. How will FDA and USDA define the point of harvest? The point of harvest is the point at which FDA will transfer oversight responsibilities, including inspections, to USDA. Stakeholders have raised concerns that not having a clear definition of the point of harvest could lead to challenges such as overlapping inspection requirements or a gap in inspection. Representatives from several cell-cultured meat firms we spoke to in the spring of 2019 said it was ambiguous how FDA and USDA intended to define the point of harvest. These representatives also said it is unclear how often each agency plans to conduct inspections during the phases for which it is responsible. Agency officials stated that they are working to develop a detailed process for the transfer of jurisdiction, including defining the point of harvest. Scaling up production. How will firms scale up production to commercial levels? One 2018 study conducted by researchers in the United Kingdom stated that to produce one pound of cell-cultured meat, firms would need bioreactors at least 2 1/2 times larger than what is currently available. Similarly, a senior FDA official stated that the capacity of existing production equipment is a challenge for firms seeking to produce cell-cultured meat products at a commercial scale. As a result, the firms themselves may have to develop the equipment or custom order such equipment. Representatives from one cell- cultured meat firm told us that they are interacting with equipment providers to identify commercial-scale production equipment. Production cost. How will firms sell their product at a price point that is both profitable to the firms and affordable to the consumer? Some studies and stakeholders we interviewed, including representatives from cell-cultured meat firms, said that the high production cost of cell- cultured meat is a key industry challenge. For example, in the last two years, one firm reported that it cost $600 to make a cell-cultured meat hamburger patty and reported that it cost about $1,200 to produce a single cell-cultured meatball. One of the biggest cost drivers in the production of cell-cultured meat is the growth medium, according to some studies and some cell-cultured meat firms. To address issues of cost and scale, some firms may develop their own, less expensive growth media. Safety considerations. Are potential safety hazards in commercial production methods for cell-cultured meat different from those for conventional meat, and how will eventual commercial production methods affect the overall safety of the product? According to agency officials, cell-cultured meat may present different safety challenges compared to conventional meat. For example, according to agency officials, residues and constituents in harvested cell-cultured meat would be expected to be different from those in conventional meat, depending on the details of the production process. Representatives from one cell-cultured meat firm told us that they likely will use food processing techniques similar to those used for conventional meat, abide by similar health and safety standards, and possibly share food processing facilities. However, because specific information about commercial production methods and final products is not yet known, it is unclear whether cell-cultured meat produced on a commercial scale will pose any hazards not present in conventional meat. Product composition. What will be the composition of any eventual products? Agency officials told us that without knowing the composition of a cell-cultured meat product, it is impossible to predict how food safety and labeling requirements will apply. According to representatives from some cell-cultured meat firms, initial cell-cultured meat products most likely will not be composed entirely of cell- cultured meat but, rather, a mixture of cell-cultured meat and other ingredients such as binding, flavoring ingredients, and plant-based materials used in conventional food products. Some firms have developed prototypes of cell-cultured meat products as part of their research and development. In April 2019, representatives from one firm told us that their prototype included about 90 percent plant-based ingredients and 10 percent cell-cultured meat. However, representatives from cell-cultured meat firms stated that they aim to produce products that contain more cell-cultured meat than other ingredients. For example, some cell-cultured meat firms have stated that a long-term goal is to commercially produce cell-cultured meat products that are similar to intact cuts of meat, such as steaks. As of December 2019, these firms had not provided regulators with specific information detailing the composition of their cell-cultured meat prototypes, according to FDA and USDA officials. Environmental, animal welfare, and health impacts. How will cell- cultured meat impact the environment, animal welfare, or human health, if at all? Cell-cultured meat firms and researchers have made various claims about the potential environmental, animal welfare, and health advantages of cell-cultured meat over conventionally produced meat. For example, some cell-cultured meat firms have claimed that cell-cultured meat production would use less water and emit less greenhouse gases than conventional meat production. Some cell- cultured meat firms have also claimed that cell-cultured meat will improve animal welfare because slaughter will be unnecessary. Additionally, some stakeholders stated that because there is less opportunity for contamination from animal feces—a potential source of contamination for conventional meat—cell-cultured meat would be less likely than conventional meat to contain foodborne pathogens. However, there are disagreements regarding the accuracy of these claims. Stakeholders told us that until commercial production methods and final products are established, these claims about impacts on the environment, animal welfare, and human health will remain unsubstantiated. Timeline to market. When will cell-cultured meat products reach consumers? As of December 2019, no cell-cultured meat products were available for retail sale in the United States. Stakeholders give varying estimates for when cell-cultured meat may be commercially available. Some estimates suggest that firms may be able to commercially produce some form of cell-cultured meat product as soon as 2020, while others estimate that such products may not be available for 2 to 4 years. Labeling. How will cell-cultured meat be labeled? Labeling was an area of concern for representatives from both conventional and cell- cultured meat firms who explained that the specific terminology, such as “clean meat” or “lab-grown meat,” can sometimes reflect bias for, or against, certain products, potentially affecting consumer acceptance of these products. Additionally, stakeholders, as well as agency officials, have emphasized the importance of labeling to ensure consumers have accurate information about what they are buying. For example, in February 2018 the United States Cattlemen’s Association submitted a petition to USDA requesting that the agency limit the term “beef” to products “born, raised, and harvested in a traditional manner” and “meat” to mean the “tissue or flesh of animals that have been harvested in the traditional manner.” USDA received over 6,000 comments on the petition, and the agency had not responded to the petition as of December 2019. However, according to agency officials, USDA has committed to a public process, likely rulemaking, for the development of labeling requirements for cell- cultured meat and poultry. In addition, in recent years, a number of states have passed laws that could affect the labeling of cell-cultured meat when it comes to market. For example, in 2018, Missouri enacted a law to prohibit plant-based products and cell-cultured meat from being labeled as “meat.” Consumer Acceptance How will consumers respond to cell-cultured meat? It remains unclear whether consumers will embrace and purchase cell-cultured meat products. Stakeholders we interviewed and studies we reviewed cited consumer acceptance as a challenge for commercializing cell-cultured meat. One study noted that consumers have both positive and negative views toward cell-cultured meat, which could impact their willingness to purchase and consume such products. FDA and USDA Have Begun to Collaborate on Oversight of Most Cell-Cultured Meat but Could More Fully Incorporate Leading Collaboration Practices FDA and USDA have established multiple mechanisms to collaborate on regulatory oversight of cell-cultured meat. Specifically, the agencies have collaborated through a joint public meeting, an interagency agreement, and three working groups. However, the interagency agreement and working groups, which are ongoing mechanisms, do not fully incorporate leading practices for interagency collaboration. In addition, FDA and USDA have not documented which agency will oversee cell-cultured seafood not covered by the interagency agreement. FDA and USDA Have Taken Initial Steps to Collaborate on Their Oversight of Cell-Cultured Meat through Several Mechanisms In 2018, FDA and USDA began taking steps to collaborate on the regulatory oversight of cell-cultured meat through several mechanisms: a joint public meeting, an interagency agreement, and three working groups. The agencies held the joint meeting in October 2018 to discuss the use of cell-culture technology to develop products derived from livestock and poultry, and topics included potential hazards, oversight considerations, and labeling. As part of this meeting, FDA and USDA held an open public comment period from September through December 2018, gathered 315 written comments, and offered interested parties the opportunity to offer comments in person. The agencies received public comments from members of the public, as well as from representatives from cell-cultured meat and conventional meat industries, food and consumer safety groups, animal welfare groups, and environmental organizations, among others. The written comments the agencies received focused on such topics as environmental considerations, labeling, potential health and safety implications, and potential regulatory and inspection processes. Stakeholders also presented multiple perspectives on these issues at the meeting. For example, stakeholders expressed different views as to whether cell-cultured meat should be regulated as a food additive, considered a GRAS substance, or whether new regulations were needed. In March 2019, FDA and USDA issued a formal interagency agreement that describes the intended roles and responsibilities of each agency in overseeing cell-cultured meat. The agreement establishes the following: Oversight. FDA will oversee the early phases of growing cell-cultured meat through the point of harvest. During harvest, FDA will work with USDA to transfer regulatory oversight to USDA. USDA will then assume oversight of cell-cultured meat through the food processing phase, including labeling, as shown in figure 3. Types of meat covered. The agreement covers cell-cultured meat derived from species overseen by USDA, such as livestock, poultry, and catfish. Future actions. The agreement also details future actions the agencies plan to take, such as developing a more detailed regulatory framework or standard operating procedures and developing joint principles for product labeling. Reviewing and updating the agreement. The agreement states that the agencies have the ability to modify it as needed and will review the agreement every 3 years to determine whether they should modify or terminate it. In June 2019, FDA and USDA created three working groups to carry out the terms of the interagency agreement. The working groups are comprised of FDA and USDA officials and operate independently, though some individuals are members of multiple groups. The groups are as follows: Pre-market assessment working group. Led by FDA, this group was created to clarify the process FDA will use for pre-market reviews of cell-cultured meat. Labeling working group. Led by USDA, this group will focus on developing joint principles for product labeling and claims. Transfer of jurisdiction working group. Co-led by FDA and USDA, this group will develop procedures for the transfer of inspection at harvest, among other things. According to agency officials, the working groups are still in the initial phases of development, though some have progressed further than others. For example, as of December 2019, the pre-market assessment and labeling groups had met and begun to address various areas, while the transfer of jurisdiction working group was still in discussions to outline the roles, responsibilities, and outcomes for the group and had not held a formal meeting. The Interagency Agreement and Working Groups on Cell-Cultured Meat Could More Fully Incorporate Leading Collaboration Practices FDA and USDA could more fully incorporate leading practices for collaboration in their interagency agreement and working groups. We have previously reported that interagency mechanisms or strategies to coordinate programs that address crosscutting issues may reduce potentially duplicative, overlapping, and fragmented efforts. In addition, while collaborative mechanisms may differ in complexity and scope, they all benefit from certain leading practices, which raise issues to consider when implementing these mechanisms. We compared the agencies’ interagency agreement and working groups with the seven leading practices to enhance and sustain interagency collaboration that we previously identified. These leading practices, and examples of the associated issues to consider, are as follows: Defining outcomes and monitoring accountability. Is there a way to track and monitor progress toward short-term and long-term outcomes? Do participating agencies have collaboration-related competencies or performance standards against which individual performance can be evaluated? Bridging organizational cultures. What are the commonalities between the participating agencies’ missions and cultures, and what are some potential challenges? Have participating agencies developed ways for operating across agency boundaries? Have participating agencies agreed on common terminology and definitions? Identifying and sustaining leadership. How will leadership be sustained over the long term? If leadership is shared, have roles and responsibilities been clearly identified and agreed upon? Clarifying roles and responsibilities. Have participating agencies clarified roles and responsibilities? Have participating agencies articulated and agreed to a process for making and enforcing decisions? Including relevant participants. Have all relevant participants been included? Do participants have appropriate knowledge, skills, and abilities to contribute? Identifying and leveraging resources. How will the collaborative mechanism be funded and staffed? Developing and updating written guidance and agreements. If appropriate, have the participating agencies documented their agreement regarding how they will collaborate? (A written document can incorporate agreements reached in any or all of the following areas: leadership, accountability, roles and responsibilities, and resources.) Have participating agencies developed ways to continually update or monitor written agreements? See appendix II for a full list of the associated issues to consider for each leading practice. Interagency Agreement Partially Incorporates All Seven Leading Practices We found that the interagency agreement for oversight of cell-cultured meat partially incorporates all seven leading practices for collaboration. For example: Defining outcomes and monitoring accountability. The interagency agreement partially incorporates the leading practice of defining outcomes and monitoring progress toward these outcomes. Specifically, the agreement identifies broad outcomes such as the development of labeling principles. However, the agreement does not describe how the agencies will track and monitor progress toward outcomes. Identifying and sustaining leadership. The agreement partially incorporates the leading practice of clarifying leadership structures. For example, it assigns each agency as the lead, or designates shared leadership, for different phases of the cell-cultured meat production process. However, the interagency agreement does not identify how the agencies will sustain leadership over the long term, including through succession planning. We have previously reported that given the importance of leadership to any collaborative effort, transitions and inconsistent leadership can weaken the effectiveness of any collaborative mechanism. Developing and updating written guidance and agreements. The agreement partially incorporates the leading practice of documenting how the agencies will collaborate. For example, the agreement includes a method for updating the document by including a provision that requires a review of the document every 3 years. This is consistent with our leading collaboration practice to continually update or monitor written agreements. However, the interagency agreement does not document how the agencies will track and monitor progress toward short-term and long-term outcomes. Table 1 provides more detail about the agencies’ incorporation of these leading collaboration practices in their interagency agreement. FDA and USDA officials told us that the interagency agreement was intended to be an initial, general outline for their collaboration. They also said that as the technology to produce cell-cultured meat develops and they implement the agreement, including developing the content of a regulatory program, they will consider incorporating leading practices for interagency collaboration. For example: Clarifying roles and responsibilities. FDA and USDA officials said in December 2019 that through the working groups the agencies would continue to explore and define the specific details of how they will manage their shared oversight responsibility. Including relevant participants. FDA officials said in December 2019 that the agency would like to engage many more stakeholders as it continues to develop its oversight of cell-cultured meat. Identifying and leveraging resources. As of December 2019, the pre-market assessment working group and the labeling working group were working to identify any human resources, physical, or financial resources they might need, according to FDA and USDA officials. The federal food safety system is on our High Risk List due to concerns about fragmentation, which we have reported has caused inconsistent oversight, ineffective coordination, and inefficient use of resources. As the agencies continue to collaborate on their shared oversight of cell- cultured meat, by more fully incorporating all seven leading practices for collaboration into their interagency agreement, they will be better positioned to address potential fragmentation in their efforts to ensure the safety of the food supply as cell-cultured meat products near commercialization and entry into the marketplace. Working Groups Partially Incorporate or Do Not Incorporate Leading Practices We found that the pre-market assessment, labeling, and transfer of jurisdiction working groups that FDA and USDA created to carry out the terms of the interagency agreement either partially incorporate or do not incorporate the seven leading practices for interagency collaboration. Specifically, all three working groups have partially incorporated three of the seven leading practices for collaboration, but none of the working groups have incorporated the four remaining leading practices. For example: Defining outcomes and monitoring accountability. The working groups have all defined and agreed upon their general purposes. However, FDA and USDA have not established methods, such as milestones and metrics, to evaluate the progress of any of the working groups. For example, FDA officials said in December 2019 that their next steps are to conduct a general and qualitative risk assessment of animal cell culture food technology to systematically identify particular areas of interest from a food safety perspective and prepare detailed procedural guidelines for cell-cultured meat firms to follow. However, the officials did not have time frames or a method to evaluate progress towards completing these actions. Including relevant participants. While the working groups have included relevant FDA and USDA officials, none of the groups have included state or tribal officials in initial discussions and planning. According to the state officials we spoke with, being excluded from these federal-level discussions may hinder their ability to align their safety and labeling requirements, among other things, with federal standards. Developing and updating written guidance and agreements. None of the working groups have documented how they will collaborate. For example, the working groups have not documented leadership, accountability, roles and responsibilities, or resources needed for working groups. Table 2 provides more detail about FDA and USDA’s incorporation of leading collaboration practices in the three working groups. In December 2019, FDA and USDA officials said that as they continued to stand up these working groups, they were considering leading practices for collaboration. For example: Defining outcomes and monitoring accountability. FDA and USDA officials said they were considering means to monitor, evaluate, or report on the results of the pre-market assessment working group. Including relevant participants. FDA and USDA officials said that they were working to determine what knowledge participants in the pre-market assessment working group and the labeling working group needed to perform the work of the working group. Developing and updating written guidance and agreements. FDA and USDA officials said they were considering documenting how they will collaborate in the pre-market assessment working group, including potentially creating a charter for the working group. We have previously reported that fragmentation has caused inconsistent oversight and inefficient use of resources in the federal food safety oversight system. The agencies’ 2019 agreement to share oversight of cell-cultured meat creates a new relationship between FDA and USDA, since the agencies will oversee different stages of the production of the same food and hand off oversight at a certain point in that production. These factors contribute to an already complicated system in which the two agencies must coordinate on food safety oversight. In this context, some industry representatives and other stakeholders have expressed concerns about potential fragmentation or overlap in oversight of cell-cultured meat, such as could occur during the harvest phase of cell-cultured meat production when FDA hands off its oversight to USDA. Additionally, representatives from one cell-cultured meat firm stated that avoiding overlap in federal oversight whenever possible was important to them. For example, representatives from one firm pointed to inspection, record-keeping requirements, and regulations as potential areas at risk of overlap. They stated that potential overlap would add unnecessary, burdensome requirements and create an uneven playing field with the conventional meat industry. By more fully incorporating all seven leading practices for interagency collaboration early in the development of the three working groups, FDA and USDA could proactively minimize potential fragmentation and overlap in their oversight of cell-cultured meat, ensure consistency and efficient use of resources, and provide clarity to key stakeholders. FDA and USDA Have Not Documented Which Agency Will Oversee Cell-Cultured Seafood While FDA and USDA officials told us they have decided who will oversee cell-cultured seafood, they have not formally announced or documented this decision, and some stakeholders have reported confusion or ambiguity about which agency will oversee cell-cultured seafood other than catfish. Specifically, FDA and USDA’s interagency agreement regarding cell-cultured meat states that it covers all cell-cultured meat derived from USDA-amenable species required to bear a USDA mark of inspection, which in the agreement includes livestock, poultry, and catfish. However, the agreement does not mention cell-cultured meat made from the cells of other fish, such as tuna and shellfish. FDA and USDA officials told us that FDA will have sole oversight responsibility for cell-cultured seafood other than catfish. According to FDA officials, they have verbally communicated this decision in various meetings with stakeholders. However, FDA and USDA officials told us that formally documenting FDA’s sole oversight of most cell- cultured seafood in their interagency agreement was unnecessary because FDA currently oversees most conventional seafood. According to cell-cultured meat firms, some firms are working on developing cell- cultured versions of seafood, such as bluefin tuna. However, stakeholders from two cell-cultured meat firms, including representatives of a cell- cultured seafood firm we spoke with in April 2019, stated that they did not know who in the federal government would oversee cell-cultured seafood. Representatives from one cell-cultured seafood firm said that not being able to rule out oversight by USDA prevented them from making key decisions regarding what direction to pursue in developing their commercial production method. While FDA and USDA officials told us they had agreed that FDA would oversee cell-cultured seafood other than catfish, as of December 2019, the agencies had not formally announced or documented this agreement. Developing and updating written guidance and agreements is a leading practice for collaboration, as we have previously reported. In addition, standards for internal control in the federal government state that agency management should externally communicate the necessary quality information to achieve its objectives and should select appropriate methods of communication, such as a written document or a face-to-face meeting. Management should also periodically evaluate the entity’s methods of communication so that the organization has the appropriate tools to communicate quality information throughout and outside of the entity on a timely basis. While FDA and USDA officials have informally communicated to some stakeholders that FDA will have sole oversight of most cell-cultured seafood, FDA has not communicated this information formally or in a method readily available to all relevant stakeholders, such as in their interagency agreement or other publicly available written document. FDA and USDA officials told us that they wanted to communicate this information through outreach to individual firms, but FDA or USDA officials said they did not think that revising their interagency agreement was necessary. By taking steps to document which agency will oversee cell-cultured seafood other than catfish, FDA and USDA will better ensure the public, including key stakeholders such as cell-cultured meat firms, have clarity about the agencies’ oversight responsibilities in this area. Conclusions Cell-cultured meat is a new food product that raises many questions. FDA and USDA’s shared oversight of cell-cultured meat poses various challenges for these agencies, as well as stakeholders such as industry. Compounding this challenge is that specific information about key aspects of cell-cultured meat, such as the technology and production methods to be used as well as the composition of the products, is not yet known. FDA and USDA have taken steps to collaborate on their shared regulatory oversight of cell-cultured meat, including establishing an interagency agreement and three working groups. However, the interagency agreement only partially incorporates the seven leading collaboration practices that can enhance and sustain agencies’ collaborative efforts, and the working groups either partially incorporate or do not incorporate these leading practices, which has raised concerns about potential fragmentation or overlap in oversight. By more fully incorporating all seven leading practices for collaboration into their interagency agreement, FDA and USDA could build on their existing efforts and be better positioned to sustain and enhance their collaborative efforts. Moreover, by more fully incorporating all seven leading practices for interagency collaboration early in the development of the working groups, FDA and USDA could proactively minimize potential fragmentation and overlap in their oversight of cell-cultured meat and ensure they are utilizing resources efficiently or effectively. Furthermore, the interagency agreement states that it covers USDA- amenable species required to bear a USDA mark of inspection, which in the agreement includes livestock, poultry, and catfish but does not include cell-cultured seafood other than catfish. FDA and USDA officials told us they have decided FDA will oversee most cell-cultured seafood, but the agencies have not formally documented this decision. By taking steps to document in their interagency agreement, or other publicly available document, which agency will oversee cell-cultured seafood other than catfish, FDA and USDA could better ensure that members of the public and other key stakeholders such as cell-cultured meat firms have clarity about the agencies’ oversight responsibilities in this area. Recommendations for Executive Action We are making a total of six recommendations, three to FDA and three to USDA: The Commissioner of the Food and Drug Administration, in coordination with the Secretary of Agriculture, should more fully incorporate the seven leading practices for effective collaboration in the agencies’ interagency agreement for the joint oversight of cell-cultured meat. (Recommendation 1) The Secretary of Agriculture, in coordination with the Commissioner of the Food and Drug Administration, should more fully incorporate the seven leading practices for effective collaboration in the agencies’ interagency agreement for the joint oversight of cell-cultured meat. (Recommendation 2) As the three cell-cultured meat working groups move forward, the Commissioner of the Food and Drug Administration, in coordination with the Secretary of Agriculture, should more fully incorporate the seven leading practices for effective collaboration, such as identifying specific outcomes and a way to monitor and evaluate progress toward outcomes. (Recommendation 3) As the three cell-cultured meat working groups move forward, the Secretary of Agriculture, in coordination with the Commissioner of the Food and Drug Administration, should more fully incorporate the seven leading practices for effective collaboration, such as identifying specific outcomes and a way to monitor and evaluate progress toward outcomes. (Recommendation 4) The Commissioner of the Food and Drug Administration, in coordination with the Secretary of Agriculture, should clearly document in their interagency agreement, or other publicly available document, which agency will oversee cell-cultured seafood other than catfish. (Recommendation 5) The Secretary of Agriculture, in coordination with the Commissioner of the Food and Drug Administration, should clearly document in their interagency agreement, or other publicly available document, which agency will oversee cell-cultured seafood other than catfish. (Recommendation 6) Agency Comments and Our Evaluation We provided a draft of this report to the Department of Health and Human Services’ (HHS) Food and Drug Administration (FDA) and the U.S. Department of Agriculture (USDA) for review and comment. In FDA’s comments, reproduced in appendix III, the agency stated that it values GAO’s recognition of the importance of collaborative mechanisms that facilitate coordination and affirmed its commitment to coordinate closely with USDA to ensure the regulatory framework for cell-cultured meat is clear and transparent to stakeholders. In USDA’s comments, reproduced in appendix IV, the department stated that the report put too much focus on best practices for interagency collaboration and not enough emphasis on industry’s role in providing the agencies with the information they need to move their processes forward to effectively regulate cell-cultured meat. USDA stated that it is difficult to review a developing technology and its future regulatory oversight when so little detailed information about the technology is known. We agree that the technology to produce cell-cultured meat is still in development and that information about the commercial production methods and composition of the final product are not yet known, as we state in our report. We also acknowledge in our report that having limited information can affect the agencies’ ability to make regulatory and other decisions. We recognize that cell-cultured meat is a new food product that raises many new questions and that specific information about key aspects of cell-cultured meat is not yet known. In light of this challenging context, it is all the more important that FDA and USDA more fully incorporate leading practices for collaboration into their joint efforts in order to ensure they are in the best possible position to oversee this new food product. FDA concurred with two recommendations and partially concurred with one. USDA also concurred with two recommendations and partially concurred with one. Specifically, both agencies agreed with our recommendations regarding (1) more fully incorporating the seven leading practices for effective collaboration in the three cell-cultured meat working groups as they move forward and (2) clearly documenting which agency will oversee cell-cultured seafood other than catfish. FDA and USDA partially concurred with our recommendation, directed to each agency, to more fully incorporate the seven leading practices for effective collaboration into the agencies’ interagency agreement for the joint oversight of cell-cultured meat. FDA stated that it concurred with the intent of incorporating the seven leading practices into the interagency agreement, and both agencies said that they are open to incorporating the practices into their development of the structure for joint oversight of cell-cultured meat. However, the agencies stated that they did not agree to revise the agreement at this time. FDA and USDA stated that the agreement is a general framework and that incorporating the leading practices would constitute an inappropriate level of detail. Instead, the agencies stated that they believe it would be most valuable to incorporate the leading practices into a more detailed joint framework or standard operating procedure they plan to issue. We appreciate the agencies’ willingness to incorporate the leading practices for effective collaboration into their efforts. The March 2019 interagency agreement states that the agencies have the ability to modify it as needed and will review the agreement every 3 years to determine whether they should modify or terminate it. Therefore, the agencies are due to revisit the agreement in March 2022, if not sooner. Regarding the agencies’ concern that incorporating the leading practices in the interagency agreement would add an inappropriate level of detail, we note that, as we state in our report, the existing agreement already partially incorporates each of the seven leading practices. We continue to believe that FDA and USDA should more fully incorporate the seven leading practices for effective collaboration into their interagency agreement for the joint oversight of cell-cultured meat. Developing a more detailed joint framework or standard operating procedure in accordance with the existing interagency agreement that incorporates those leading practices would meet the intent of our recommendation to improve the effectiveness of the agencies’ collaboration. FDA and USDA also provided technical comments, which we incorporated as appropriate. As agreed with your office, unless you publicly announce its contents earlier, we plan no further distribution of this report until 30 days from its issue date. At that time, we will send copies of this report to the appropriate congressional committees, the Secretary of Health and Human Services, the Secretary of Agriculture, and other interested parties. In addition, the report is available at no charge on the GAO website at http://www.gao.gov. If you or your staff members have any questions regarding this report, please contact me at (202) 512-3841 or morriss@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix V. Appendix I: Objectives, Scope, and Methodology Our report (1) describes what is known about methods for commercially producing cell-cultured meat and (2) examines the extent to which the Food and Drug Administration (FDA) and U.S. Department of Agriculture (USDA) are collaborating to provide regulatory oversight of cell-cultured meat. For both objectives, we conducted a literature review of journal and media articles from 2016 through 2019 to inform our understanding of cell- cultured meat, as well as regulatory activity related to cell-cultured meat in the United States and in other countries. Specifically, we conducted a review of scholarly and trade news from 2016 through July 2019 for specific terms related to cell-cultured meat and regulatory approaches. We conducted searches in more than 30 different academic and trade databases—such as SCOPUS, Foodline, and ProQuest’s Environmental Science Collection—and identified studies relevant to our research objectives. In addition to these formal literature searches, we also asked agency officials and stakeholders to refer us to research articles and publications on cell-cultured meat. We also reviewed documentation from FDA and USDA, including the 2019 interagency agreement, existing memoranda of understanding between the two agencies, Federal Register notices about relevant public meetings, and press releases. We also reviewed documentation such as letters to regulators, presentation slides, and information on organizations’ websites from the cell-cultured meat industry, conventional meat industry, and consumer safety groups, among others. We also interviewed officials from FDA and USDA and representatives of stakeholders from the cell-cultured meat industry and industry associations, conventional meat firms and industry associations, academia, food and consumer safety groups, and state and tribal public health associations, among others. We identified stakeholders to interview through consultation with agency officials and nonfederal stakeholders and through our review of literature. We conducted 17 interviews with representatives or researchers from: six cell-cultured meat firms or industry associations, four conventional meat firms or industry associations, two food and consumer safety groups, one state and tribal public health association, and one food law policy firm. Because this is a nongeneralizable sample, the results of these interviews do not represent the views of all stakeholders involved in or with an interest in the cell-cultured or conventional meat industries or federal regulation of cell-cultured meat. However, they illustrate the range of perspectives on these topics. We also attended public meetings and conferences and conducted site visits to several locations. Specifically, we attended FDA and USDA’s public meeting in October 2018 and four conferences in 2019 that included content pertaining to food safety or cell-cultured meat. We conducted site visits to two conventional meat-processing facilities in Georgia, three cell-cultured meat firms in California, an academic cell- culturing laboratory in California, and a medical cell-culturing facility in Maryland. We identified facilities and laboratories to visit through our literature review, online research, and the assistance of agency officials and stakeholders, such as representatives from the cell-cultured meat and conventional meat industry. To describe what is known about the process for producing cell-cultured meat and potential commercial production methods, we also reviewed two sets of public comments submitted to FDA and USDA in association with the two 2018 public meetings pertaining to cell-cultured meat. These meetings were “Foods Produced Using Animal Cell Culture Technology” in July 2018 and “Use of Cell Culture Technology to Develop Products Derived from Livestock and Poultry” in October 2018. Public comments were submitted by members of the public; representatives from cell- cultured meat firms and industry associations, conventional meat companies and industry associations, food and consumer safety groups, and animal welfare groups; and environmental organizations, among others. We reviewed and analyzed all comments submitted to (1) FDA related to the July 2018 meeting and (2) FDA and USDA related to the October 2018 meeting. We also attended the October 2018 meeting and listened to agency officials’ presentations and oral remarks made by stakeholders and members of the public. We shared our description of the process for making cell-cultured meat, and associated questions, with representatives from three cell-cultured meat firms and academic researchers at two universities for their technical review and incorporated revisions as appropriate. To examine the extent to which FDA and USDA are coordinating to provide regulatory oversight of cell-cultured meat, we identified actions they took to coordinate from July 2018 through April 2020. To identify these actions, we interviewed agency officials, emailed agency officials written questions, reviewed agency documentation and public announcements, and attended public events such as the October 2018 public meeting. We compared the agencies’ interagency agreement and working groups with seven leading practices to enhance and sustain interagency collaboration. Specifically, two independent GAO reviewers assessed the degree to which agencies’ actions incorporated these leading practices. A description of these leading practices and the associated issues to consider is in appendix II. We also assessed the agencies’ actions against standards for internal control in the federal government, including standards related to communicating quality information. In this report, and in our past work, we define collaboration as any joint activity that is intended to produce more public value than could be produced when organizations act alone. We use the terms “coordination” and “collaboration” interchangeably in this report. For the purposes of our report, we define cell-cultured meat as food derived from animal cells that were grown in a controlled environment outside of the animal. We define cell-cultured seafood as a subcategory of cell-cultured meat. When referencing conventional meat, we are referring to food produced from the traditional method of slaughtering an animal, such as a cow, hog, chicken, or fish. When referencing seafood, we are referring to shellfish, sea fish, and freshwater fish served as food. We conducted this performance audit from October 2018 to April 2020 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. Appendix II: Key Issues to Consider for Implementing Interagency Collaborative Mechanisms Appendix II: Key Issues to Consider for Implementing Interagency Collaborative Mechanisms Issues to consider Have short-term and long-term outcomes been clearly defined? Is there a way to track and monitor progress toward the short-term and long-term outcomes? Do participating agencies have collaboration-related competencies or performance standards against which individual performance can be evaluated? Do participating agencies have the means to recognize and reward accomplishments related to collaboration? What are the missions and organizational cultures of the participating agencies? What are the commonalities between the participating agencies’ missions and cultures and what are some potential challenges? Have participating agencies developed ways for operating across agency boundaries? Have participating agencies agreed on common terminology and definitions? Has a lead agency or individual been identified? If leadership will be shared between one or more agencies, have roles and responsibilities been clearly identified and agreed upon? How will leadership be sustained over the long term? Have participating agencies clarified the roles and responsibilities of the participants? Have participating agencies articulated and agreed to a process for making and enforcing decisions? Have all relevant participants been included? Do the participants have: Full knowledge of the relevant resources in their agency? The ability to commit these resources? The ability to regularly attend activities of the collaborative mechanism? The appropriate knowledge, skills, and abilities to contribute? Developing and updating written guidance and agreements How will the collaborative mechanism be funded? If interagency funding is needed, is it permitted? If interagency funding is needed and permitted, is there a means to track funds in a standardized manner? How will the collaborative mechanism be staffed? Are there incentives available to encourage staff or agencies to participate? If relevant, do agencies have compatible technological systems? Have participating agencies developed online tools or other resources that facilitate joint interactions? If appropriate, have the participating agencies documented their agreement regarding how they will be collaborating? A written document can incorporate agreements reached in any or all of the following areas: Leadership Accountability Roles and responsibilities Resources Have participating agencies developed ways to continually update or monitor written agreements? Appendix III: Comments from the U.S. Department of Health and Human Services Appendix IV: Comments from the U.S. Department of Agriculture Appendix V: GAO Contact and Staff Acknowledgments GAO Contact Staff Acknowledgments Steve D. Morris, (202) 512-3841 or morriss@gao.gov In addition to the contact named above, Nico Sloss (Assistant Director), Angela Miles (Analyst-in-Charge), Sahar Angadjivand, Tim Bober, Kevin Bray, Colleen Candrl, Pin En Annie Chou, Tara Congdon, Heather Dowey, Kim Gianopoulos, Gina Hoover, Hayden Huang, Robert Lepzler, Serena Lo, David Lysy, Marc Meyer, Michael Polak, Danny Royer, Sara Sullivan, and Sarah Veale made key contributions to this report.


Background Physician Shortages According to HRSA, the current demand for physicians in the United States will likely continue, with a projected shortage of 23,640 primary care physicians by 2025. While increasing physician supply is one way to reduce physician shortages, some experts have also suggested increasing the number of non-physician providers. For example, HRSA predicted that, with health care delivery changes that would allow for NPs and PAs to deliver a greater proportion of services than they do now, the projected shortage of 23,640 primary physicians in 2025 could be mitigated. According to the Bureau of Labor Statistics, in 2018, there were 756,800 physicians, over 189,100 NPs, and 118,800 PAs practicing in the United States. Graduate Training for Physicians, NPs, and PAs Physicians. Physician GME, also known as residency, provides the clinical training required for a physician to be eligible for licensure and board certification to practice medicine independently in the United States. Specifically, after completing medical school and receiving a medical degree, physicians enter a multi-year residency training program during which they complete their formal education as a physician, primarily in teaching hospitals. Completion of a residency can take from 3 to 7 years after graduation from medical school, depending on the specialty or subspecialty chosen by the physician. In some cases, physicians may choose to pursue additional training—referred to as fellowships—to become a subspecialist, such as a cardiologist. NPs and PAs. Since the first NP and PA training programs in the United States were founded in 1965, these professions and their educational requirements have evolved to allow them to furnish more care that was traditionally provided by physicians, such as diagnosing patients, prescribing medication, and performing certain procedures. The extent to which they can provide care independently from physician supervision varies by state. There are multiple pathways for students to become NPs. In general, after completion of a bachelor’s degree, a nurse may become an NP once he or she achieves a master’s or doctoral degree in nursing. Full-time master’s programs are generally 18 to 24 months and doctoral programs are generally 3 to 5 years. Both programs include classroom and clinical work. In addition, NP students may have varying amounts of hands-on nursing experience before entering an NP program. NP programs generally include the following focus areas: family practice, women’s health, acute care, adult/geriatric health, child health, neonatal health, and mental health. NPs are trained according to a nursing care model, which emphasizes providing comprehensive care for patients that encompasses their physical and other needs. After completion of a bachelor’s degree, students become PAs once they earn a master’s degree in physician assistant studies. The average full- time PA program takes about 27 months to complete, which includes classroom education followed by clinical work conducted through rotations in internal medicine, family medicine, surgery, pediatrics, obstetrics and gynecology, emergency medicine, and behavioral medicine. In addition, PA students have varying amounts of hands-on work experience in health care before entering a PA program. PAs are trained to approach patient care according to a medical model focused on assessing, diagnosing, and treating disease. Both NP and PA students are required to complete clinical work as part of their graduate programs by providing care to patients under the supervision of a preceptor—an experienced and licensed health care provider who provides instruction and supervision to the student during their clinical rotations. Upon graduation and after passing a national certification exam and obtaining a license in the state in which they choose to work, both NPs and PAs can begin practicing. NPs and PAs may also complete an optional post-graduate residency training program, but unlike physicians, they are not required to do so in order to obtain a state license to practice. Figure 1 shows an example of education and training paths for physicians, NPs, and PAs. Federal Funding for Physician, NP, and PA Training Physicians. The vast majority of federal funding for physician GME training is distributed by HHS through CMS’s Medicare GME program. In our 2018 report on GME funding, we found that Medicare GME payments for physicians totaled more than $10.3 billion in 2015. CMS pays for a hospital’s costs associated with GME training through two mechanisms— direct graduate medical education and indirect medical education payments—both of which are formula-based payments set by statute. Direct payments are for costs that include, for example, residents’ salaries and benefits, compensation for faculty who supervise the residents, and overhead costs. Indirect payments are for costs including higher patient care costs that teaching sites are thought to incur as a result of training residents, such as increased diagnostic testing and procedures performed. Payments to hospitals may also include funds for training in nonhospital settings. Other sources of federal GME funding for physicians include the Medicaid program, which is jointly administered by CMS and the states, programs administered by HRSA, and other federal agencies outside of HHS. NPs and PAs. HHS funding is available to train NPs and PAs, primarily through HRSA grants authorized under titles VII and VIII of the Public Health Service Act. Specifically, according to HRSA officials, funding for programs that included NP and PA training totaled approximately $136.2 million in fiscal year 2019. (See table 2 for a description of these programs.) In recent years, CMS also provided funding for graduate training for advanced practice registered nurses, including NPs, from fiscal years 2012 through 2018 as part of the Graduate Nurse Education Demonstration. The Graduate Nurse Education Demonstration was established by the Patient Protection and Affordable Care Act to determine whether payments for clinical training provided to hospitals would increase the number of advanced practice registered nurses, including NPs, and whether these payments would affect the number of advanced practice registered nurses by specialty. Stakeholders Identified Benefits and Challenges of Expanding the Medicare GME Program to Include NP and PA Graduate Training Officials from the stakeholder organizations we interviewed identified the potential benefits and challenges of expanding the Medicare GME program to include NP and PA graduate training. Benefits of Expanding the Medicare GME Program Predictability and stability of Medicare GME program funding. According to officials from five of the nine stakeholder organizations we interviewed—three NP and two PA organizations—a benefit of expanding the Medicare GME program is that it may create more predictability and stability for training funding for NPs and PAs. This would be beneficial by allowing NP and PA programs to do better long-range planning such as planning for the number of NP and PA students that can be admitted. Officials from two of these stakeholder organizations noted that a benefit of the Medicare GME program for physicians is that funding is historically more stable than the funding available to NPs and PAs through HRSA. Specifically, Medicare GME funding is mandatory, while funding for NP and PA training programs administered by HRSA is discretionary. During the annual appropriations process, Congress may choose to appropriate the amount requested by HRSA, to increase or decrease those levels, or to not appropriate any funds. For example, Congress appropriated $28.5 million in fiscal year 2018 for HRSA’s Nurse Faculty Loan Program, but then decreased this appropriation to $13.5 million in fiscal year 2019. Potential opportunity to pay preceptors. Officials from four of the nine stakeholder organizations—two NP and two PA organizations— noted that one benefit of expanding the Medicare GME program to include NP and PA graduate training is that funding could be used to pay preceptors as an incentive to supervise students. CMS and others have also reported that schools of nursing have faced significant challenges increasing enrollments, in part due to difficulty finding preceptors willing to supervise students. Similarly, officials from two PA organizations we interviewed noted that some programs may choose not to fill their available enrollment slots because they are concerned about finding enough preceptors to allow all their students to graduate. Officials from four of the stakeholder organizations we interviewed noted that supervising students can take time away from the preceptor’s productivity in seeing patients, and that some practices and health care systems do not allow their health care providers to serve as preceptors. Specifically, officials from two stakeholder organizations we interviewed said that, historically, these preceptors have volunteered as a way of “giving back” to their profession and have not been paid for their time. However, due to difficulties finding a sufficient number of volunteer preceptors, some graduate programs have begun reimbursing preceptors for their time in order to encourage their participation. CMS’s Graduate Nurse Education Demonstration also included funding for preceptors. Challenges of Expanding the Medicare GME Program Differences in training requirements. Officials from six of the nine stakeholder organizations—two NP, two PA, and two physician organizations—raised concerns about challenges that could occur because NP and PA clinical training requirements do not align with the current structure of the Medicare GME program. For example, officials from some of these organizations noted that the Medicare GME program is structured to fund physician residency training, which is required in order for physicians to practice, but NPs and PAs are not required to complete a residency after completing a graduate program in order to practice. Specifically, CMS makes GME payments to hospitals according to formulas outlined in statute based, in part, on the number of physician residency positions. Therefore, officials from some of these stakeholder organizations said that any change to Medicare GME to include NPs and PAs would need to consider how to allocate GME funding for NP and PA programs in light of these differences in training requirements between physicians, NPs, and PAs. Potential limitations on Medicare funding for physician training. Officials from seven of the nine stakeholder organizations we interviewed—four NP, one PA, and two physician organizations— expressed concern that expanding the Medicare GME program to increase the number of NPs and PAs without increasing overall funding may negatively impact the funding available for physician training. For example, officials from one stakeholder organization said that reallocating available Medicare GME dollars could be problematic and potentially diminish needed resources for others. An official from one of these stakeholder organizations said that there is currently not enough funding to provide residency training for all qualified physicians, and adding NPs and PAs to the existing pool of underfunded residency candidates would worsen the funding shortage. Officials from another stakeholder organization echoed this concern by noting that expanding the Medicare GME program could force NPs to compete with physician residents for patients and space. Available Estimates of NP and PA Training Costs Were Limited and Incomplete Through our review of the literature and our interviews with officials from stakeholder organizations, CMS, and HRSA, we identified two estimates of NP or PA graduate training costs. CMS’s evaluation of its Graduate Nurse Education Demonstration estimated the total cost of graduate clinical NP training to be about $47,000 per student, based on the funds paid to the demonstration sites from fiscal year 2012 through fiscal year 2018, and the Physician Assistant Education Association estimated the total cost of graduate PA training to be about $45,000 per student, based on the results of its 2018 survey. While these two estimates provide some information about the costs of training NPs and PAs, they provide limited and incomplete information on these costs. CMS Graduate Nurse Education Demonstration. CMS estimated NP graduate training costs totaling $47,172 per graduate according to its evaluation of the Graduate Nurse Education Demonstration, in which CMS funded graduate clinical training for advanced practice registered nurses—a category that includes NPs—over 6 years. This estimate represents the cost to CMS (defined as the total funds paid to the demonstration sites during the duration of the demonstration) for the clinical training of each graduating student. Part of the cost covered by the demonstration includes the costs of clinical preceptors. Congress appropriated a total of $200 million for the demonstration, which operated from fiscal years 2012 through 2018. The demonstration funded clinical training at five hospitals, which partnered with 19 schools of nursing, and multiple community- based care settings. The cost estimate underreports the total cost of NP graduate training because, while both clinical and classroom training are required for NP students to graduate, CMS’s demonstration only provided funding for clinical training, as specified by the Patient Protection and Affordable Care Act. Specifically, CMS does not include the costs associated with classroom training, certification, and licensure of advanced practice registered nursing students. In addition, the demonstration targeted advanced practice registered nurses, which is a broader category that includes NPs in addition to other types of specialty nurses such as certified nurse-midwives and certified registered nurse anesthetists. However, according to CMS, the vast majority of advanced practice registered nursing students enroll in NP programs. CMS’s evaluation also noted that the cost estimates are not generalizable because they are only based on information from the schools that participated in the demonstration. (See table 3.) Physician Assistant Education Association survey data. The Physician Assistant Education Association, whose members are graduate PA programs, estimated PA graduate training costs totaling $45,309 per student—an estimate based on the results of a published annual survey of its members in 2018. This represents the average cost to the member PA programs for training a student in a 27-month PA graduate program, based on expense data reported by programs from the 2017-2018 fiscal year. The Physician Assistant Education Association’s data are self- reported by PA graduate programs. In addition, these data likely underreport the total costs of graduate PA training because they exclude in-kind contributions from clinical sites. These contributions, such as the donated time from volunteer preceptors, are necessary for clinical training. Officials estimated that paying for costs supported by these in-kind contributions—which the Physician Assistant Education Association estimated to be about $11,300 per student— would likely add an additional 25 percent to the total estimated cost to train PAs. (See table 4.) Agency Comments and Third-Party Views We provided a draft of this report to HHS for review and comment. The department provided technical comments, which we incorporated as appropriate. We also provided relevant draft portions of this report to the nine professional associations that we interviewed and they provided technical comments, which we incorporated as appropriate. We are sending copies of this report to the appropriate Congressional committees, the Secretary of Health and Human Services, and other interested parties. In addition, the report is available at no charge on the GAO website at http://www.gao.gov. If you or your staff have any questions about this report, please contact me at (202) 512-7114 or cosgrovej@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix I. Appendix I: GAO Contact and Staff Acknowledgments GAO Contact James Cosgrove, (202) 512-7114 or cosgrovej@gao.gov. Staff Acknowledgments In addition to the contact named above, Kelly DeMots (Assistant Director), Teresa Tam and Sarah-Lynn McGrath (Analysts-in-Charge), and Margaret Fisher made key contributions to this report. Also contributing were Leia Dickerson, Diona Martyn, Caitlin Scoville, Ethiene Salgado-Rodriguez, and Jennifer Whitworth.