[House Hearing, 105 Congress]
[From the U.S. Government Publishing Office]



 
 FDA REGULATION OF BLOOD SAFETY: NOTIFICATION, RECALL, AND ENFORCEMENT 
                               PRACTICES
=======================================================================

                                HEARING

                               before the

                    SUBCOMMITTEE ON HUMAN RESOURCES

                                 of the

                        COMMITTEE ON GOVERNMENT
                          REFORM AND OVERSIGHT
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED FIFTH CONGRESS

                             FIRST SESSION

                               __________

                              JUNE 5, 1997

                               __________

                           Serial No. 105-59

                               __________

Printed for the use of the Committee on Government Reform and Oversight





                       U. S. GOVERNMENT PRINTING OFFICE
45-251                          WASHINGTON : 1998
___________________________________________________________________________
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              COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT

                     DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York         HENRY A. WAXMAN, California
J. DENNIS HASTERT, Illinois          TOM LANTOS, California
CONSTANCE A. MORELLA, Maryland       ROBERT E. WISE, Jr., West Virginia
CHRISTOPHER SHAYS, Connecticut       MAJOR R. OWENS, New York
STEVEN SCHIFF, New Mexico            EDOLPHUS TOWNS, New York
CHRISTOPHER COX, California          PAUL E. KANJORSKI, Pennsylvania
ILEANA ROS-LEHTINEN, Florida         GARY A. CONDIT, California
JOHN M. McHUGH, New York             CAROLYN B. MALONEY, New York
STEPHEN HORN, California             THOMAS M. BARRETT, Wisconsin
JOHN L. MICA, Florida                ELEANOR HOLMES NORTON, Washington, 
THOMAS M. DAVIS, Virginia                DC
DAVID M. McINTOSH, Indiana           CHAKA FATTAH, Pennsylvania
MARK E. SOUDER, Indiana              ELIJAH E. CUMMINGS, Maryland
JOE SCARBOROUGH, Florida             DENNIS J. KUCINICH, Ohio
JOHN B. SHADEGG, Arizona             ROD R. BLAGOJEVICH, Illinois
STEVEN C. LaTOURETTE, Ohio           DANNY K. DAVIS, Illinois
MARSHALL ``MARK'' SANFORD, South     JOHN F. TIERNEY, Massachusetts
    Carolina                         JIM TURNER, Texas
JOHN E. SUNUNU, New Hampshire        THOMAS H. ALLEN, Maine
PETE SESSIONS, Texas                 HAROLD E. FORD, Jr., Tennessee
MICHAEL PAPPAS, New Jersey                       ------
VINCE SNOWBARGER, Kansas             BERNARD SANDERS, Vermont 
BOB BARR, Georgia                        (Independent)
ROB PORTMAN, Ohio
                      Kevin Binger, Staff Director
                 Daniel R. Moll, Deputy Staff Director
         William Moschella, Deputy Counsel and Parliamentarian
                       Judith McCoy, Chief Clerk
                 Phil Schiliro, Minority Staff Director
                                 ------                                

                    Subcommittee on Human Resources

                CHRISTOPHER SHAYS, Connecticut, Chairman
VINCE SNOWBARGER, Kansas             EDOLPHUS TOWNS, New York
BENJAMIN A. GILMAN, New York         DENNIS J. KUCINICH, Ohio
DAVID M. McINTOSH, Indiana           THOMAS H. ALLEN, Maine
MARK E. SOUDER, Indiana              TOM LANTOS, California
MICHAEL PAPPAS, New Jersey           BERNARD SANDERS, Vermont (Ind.)
STEVEN SCHIFF, New Mexico            THOMAS M. BARRETT, Wisconsin

                               Ex Officio

DAN BURTON, Indiana                  HENRY A. WAXMAN, California
            Lawrence J. Halloran, Staff Director and Counsel
              Anne Marie Finley, Professional Staff Member
                       R. Jared Carpenter, Clerk
                    Cherri Branson, Minority Counsel













                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on June 5, 1997.....................................     1
Statement of:
    Friedman, Michael, lead Deputy Commissioner, Food and Drug 
      Administration, accompanied by Kathryn C. Zoon, Director, 
      Center for Biologics Evaluation and Research; Dr. Jay S. 
      Epstein, Director, Office of Blood Research and Review; and 
      Ronald G. Chesemore, Associate Commissioner for Regulatory 
      Affairs....................................................   221
    Steinhardt, Bernice, Director, Health Services Quality and 
      Public Health Issues, U.S. General Accounting Office, 
      accompanied by Marcia Crosse, Assistant Director, Health 
      Service Quality and Public Health Issues, U.S. General 
      Accounting Office; and Thomas D. Roslewicz, Deputy 
      Inspector General for Audit Services, U.S. Department of 
      Health and Human Services, accompanied by Thomas J. 
      Robertson, Region III Inspector General for Audit Services, 
      U.S. Department of Health and Human Services...............    95
Letters, statements, etc., submitted for the record by:
    Chesemore, Ronald G., Associate Commissioner for Regulatory 
      Affairs, information concerning 2-year statutory inspection 
      coverage...................................................   284
    Friedman, Michael, lead Deputy Commissioner, Food and Drug 
      Administration:
        Information concerning current data......................   269
        Prepared statement of....................................   224
    Roslewicz, Thomas D., Deputy Inspector General for Audit 
      Services, U.S. Department of Health and Human Services, 
      prepared statement of......................................   126
    Shays, Hon. Christopher, a Representative in Congress from 
      the State of Connecticut:
        Additional prepared statements...........................     6
        Prepared statement of....................................     4
    Steinhardt, Bernice, Director, Health Services Quality and 
      Public Health Issues, U.S. General Accounting Office, 
      prepared statement of......................................   100
    Towns, Hon. Edolphus, a Representative in Congress from the 
      State of New York, prepared statement of...................   211













 FDA REGULATION OF BLOOD SAFETY: NOTIFICATION, RECALL, AND ENFORCEMENT 
                               PRACTICES

                              ----------                              


                         THURSDAY, JUNE 5, 1997

                  House of Representatives,
                   Subcommittee on Human Resources,
              Committee on Government Reform and Oversight,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10 a.m., in 
room 2247, Rayburn House Office Building, Hon. Christopher 
Shays (chairman of the subcommittee) presiding.
    Present: Representatives Shays, Pappas, Towns, and 
Kucinich.
    Staff present: Lawrence J. Halloran, staff director and 
counsel; Anne Marie Finley, professional staff member; R. Jared 
Carpenter, clerk; and Cherri Branson, minority counsel.
    Mr. Shays. I'd like to call this hearing to order. On July 
25, 1996, the House Committee on Government Reform and 
Oversight adopted a report offered by this subcommittee 
entitled ``Protecting the Nation's Blood Supply from Infectious 
Agents: The Need for New Standards to Meet New Threats.'' 
Forwarded to the House with broad bipartisan support, the 
report found the U.S. blood supply safer than ever, but 
recommended seven specific steps to maintain and improve the 
safety of the blood and plasma products used by more than 40 
million people each year.
    Two of those recommendations called for improvements in the 
Food and Drug Administration's--FDA's--regulatory approach to 
blood issues. Specifically we called for more rigorous 
inspections of blood banks and plasma facilities by the FDA's 
Center for Biologics Evaluation and Research [CBER] and for the 
development of a more effective system to notify patients when 
unsafe blood products must be recalled.
    Today we ask, what has the FDA done to implement those 
recommendations?
    Blood and plasma products must flow through a five-tier 
safety system before reaching patients: donor screening, donor 
deferral, blood testing, blood quarantine and compliance 
monitoring, which includes inspections and recalls.
    In the inevitable event an infectious agent slips through 
the human and high-tech barriers of the first four layers, all 
that stands between a patient and potentially harmful, even 
fatal, therapy is vigilant, responsive regulatory inspections 
and recall. For some time, that final safety barrier against 
bad blood products has shown signs of leakage. Ten years ago 
FDA's own Office of Regulatory Affairs cited lapses and 
inefficiencies in CBER's inspection practices.
    In 1988, the Presidential Commission on the Human 
Immunodeficiency Virus epidemic called FDA's dependent, 
nonconfrontational relationship with the blood industry an 
obstacle to progress toward improved safety. Before 1990, many 
thousands of people were infected with the hepatitis C virus 
through blood and blood products and never told of their 
exposure.
    While significant blood safety improvements have made since 
the 1980's, some of the same regulatory policies and practices 
that failed to prevent the devastating spread of AIDS to blood 
product users, particularly hemophiliacs, are still in place 
today.
    Then, as now, the lack of aggressive regulatory enforcement 
delays the detection of problems and delays the recall of 
potentially dangerous products, putting patients at risk. The 
number and scope of blood product recalls provides further 
evidence of a fraying regulatory safety net.
    Since January, the FDA has announced 17 recalls, 
withdrawals, or quarantines of fractionated blood products for 
reasons including inadequate viral testing, product impurities 
and the use of plasma from persons with CJD, the human form of 
``Mad Cow Disease.'' Last October the FDA announced the largest 
blood product recall in U.S. history when one manufacturer of 
human products were found to be unsterile.
    The Department of Health and Human Services--HHS--report on 
that recall concluded, ``If FDA had been more aggressive about 
responding to its earlier inspections and if those earlier 
inspections were more encompassing, the incident probably would 
not have occurred.'' Even when a recall is not delayed by 
regulatory inattention, patients and their physicians still 
must rely on informal, voluntary, sometimes haphazard 
communication channels to learn their lifesaving therapies may 
be life threatening.
    The current recall notification system seems more designed 
to pass the buck down the product distribution chain than the 
pass the word about unsafe blood products. The ineffectiveness 
of the recall notification system is especially important to 
hemophiliacs and other patient groups who rely on regular doses 
of blood and plasma products for disease control and to 
maintain their quality of life. In this era of global 
telecommunications, they wait at the end of a fragile network 
manned by nonprofit groups and volunteers. They wait for the 
call or the fax identifying a product lot that may transmit 
hepatitis or some new infectious agent. And they hope, they 
pray, they haven't already used it.
    They are also waiting to hear from us. The subcommittee 
received thousands of letters from individuals and 
organizations representing thousands of blood product users, 
encouraging us to persist in our oversight of blood safety 
improvements. I ask these letters be made part of this hearing 
record. Theirs is compelling testimony on the need for strong 
enforcement and effective recall notification as the central 
parts of the blood safety system.
    In February, the General Accounting Office--GAO--echoed our 
recommendations for strengthening blood and plasma facility 
inspections. At the subcommittee's request, the Department of 
Health and Human Services--HHS--Inspector General--IG--also 
examined aspects of FDA's blood safety product. Their testimony 
and that of the FDA today should tell us and these patients how 
we can keep the U.S. blood supply among the safest in the 
world.
    [Note.--Additional prepared statements can be found in 
subcommittee files.]
    [The prepared statement of Hon. Christopher Shays and the 
information referred to follow:]



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    Mr. Shays. Today we have two panels. The first panel will 
be testimony from Bernice Steinhardt, Director, Health Services 
Quality and Public Health Issues, U.S. General Accounting 
Office, accompanied by Marcia Crosse and Thomas Roslewicz----
    Mr. Roslewicz. Roslewicz.
    Mr. Shays. Roslewicz?
    Mr. Roslewicz. Yes, sir.
    Mr. Shays. Sir, it's nice to have you here.
    Mr. Roslewicz. Thank you.
    Mr. Shays. And accompanied by Thomas Robertson. And as is 
the practice we swear in our witnesses, even Members of 
Congress.
    [Witnesses sworn.]
    Mr. Shays. For the record, all four of our witnesses have 
responded in the affirmative. And we will begin, I guess, with 
the testimony from you, Ms. Steinhardt.
    Ms. Steinhardt. Yes. Thanks very much.

  STATEMENTS OF BERNICE STEINHARDT, DIRECTOR, HEALTH SERVICES 
   QUALITY AND PUBLIC HEALTH ISSUES, U.S. GENERAL ACCOUNTING 
   OFFICE, ACCOMPANIED BY MARCIA CROSSE, ASSISTANT DIRECTOR, 
 HEALTH SERVICE QUALITY AND PUBLIC HEALTH ISSUES, U.S. GENERAL 
 ACCOUNTING OFFICE; AND THOMAS D. ROSLEWICZ, DEPUTY INSPECTOR 
GENERAL FOR AUDIT SERVICES, U.S. DEPARTMENT OF HEALTH AND HUMAN 
   SERVICES, ACCOMPANIED BY THOMAS J. ROBERTSON, REGION III 
INSPECTOR GENERAL FOR AUDIT SERVICES, U.S. DEPARTMENT OF HEALTH 
                       AND HUMAN SERVICES

    Ms. Steinhardt. Before I begin I'd like also to introduce 
some other members of the team who contributed substantially to 
our blood study. I have Kurt Kroemer and Jacqui D'Alessio and 
Dr. Kwai-Cheung Chan also with me.
    Mr. Shays. Let me ask. Is it likely that any of those who 
are accompanying you might respond to testimony?
    Ms. Steinhardt. It's possible. Yes.
    Mr. Shays. OK. I would just ask--even it's possible you 
won't, but if it's possible you might, I'd like you to stand 
now and swear in anyone who is accompanying. Do you have anyone 
that would be accompanying?
    Mr. Roslewicz. Yes, sir, I have.
    Mr. Shays. If you would invite them to stand, as well.
    Mr. Roslewicz. I will. It's Carol Lessans, Steve 
Virbitskby, Joe Green, and Frank Zuraf.
    Mr. Shays. All right. Thank you. For the sake of our 
transcriber, if they do come and testify, we'll make sure you 
have their full name. But if you'd raise your right hands.
    [Witnesses sworn.]
    Mr. Shays. For the record, all seven have responded in the 
affirmative. Sorry. Thank you.
    Ms. Steinhardt. OK. Thanks very much. We appreciate the 
opportunity to be here today to talk about our two recent 
reports on the safety of the blood supply. Let me begin by 
saying, as the subcommittee did in its report last year, that 
the blood supply in the United States is safer than it has ever 
been. Since HIV was introduced into the blood supply in the 
early 1980's we've taken important steps to improve the way 
blood is collected, processed----
    Mr. Shays. I'm just going to stop you a second. I'm sorry, 
Ms. Steinhardt. We've getting a little bit of an echo. And this 
is one of the fascinations that I have, is figuring out why. If 
you could just turn your mic away a bit and if you'd lower your 
mic and just put it a little away from you. Let's see if that 
makes a difference.
    Ms. Steinhardt. OK.
    Mr. Shays. OK. All right.
    Ms. Steinhardt. We'll try this.
    Mr. Shays. No, it's not good.
    Ms. Steinhardt. No. That's worse. Let me see if----
    Mr. Shays. OK. Yes. Why don't we do that?
    Ms. Steinhardt. Putting it over to the side.
    Mr. Shays. Do you have a way of turning it down a little 
bit or is it just one level? Yes. OK. Why don't we try again 
here?
    Ms. Steinhardt. OK. I simply wanted to turn to the graphic 
that we've provided which shows the five layers of safety that 
FDA and the blood industry now have in place as a quality 
assurance system to help ensure the safety of the blood supply. 
I want to emphasize that even if this quality assurance system 
were working perfectly there would still be risks associated 
with transfusion. Blood is a biological product--it comes from 
humans--not a synthetic process.
    In one of the reports we did we set out to calculate the 
risks associated with transfusion. And we estimate that for 
people receiving the average transfusion of five units of 
blood, the risk of receiving a contaminated unit of blood is 1 
in 250, or 4 out of every 1,000 patients. Ultimately, roughly 
1,500 of the 4 million patients who receive transfusions each 
year are likely to die or develop a chronic disease as a direct 
result of a blood transfusion.
    On the other hand, as many as half of the patients 
receiving transfusions--that's about 2 million of the 4 
million--would be at serious risk of dying if they didn't 
receive transfusions. Many of them, in fact, do die even after 
transfusion. So the risks from contaminated blood are 
considerably smaller than the risks of dying as a result of 
surgery or the risk of developing an infection from a stay in 
intensive care.
    Having said this, let me reiterate my earlier point. These 
are the risks that we calculate from transfusion if the quality 
assurance system--the five layers of safety--are working 
perfectly. The second major part of our work revealed that, in 
fact, the system is not working perfectly. I'd like to spend 
the remainder of my testimony focusing on some of the more 
significant problems that we found and the actions we think FDA 
can take so that it can better vouch for the safety of the 
blood supply.
    The first area I want to talk about this morning has to do 
with notification. Blood facilities have an opportunity to 
notify both donors and recipients of indications of infection. 
But these are not standard nor required practices. Let me speak 
first about donors. While some facilities may notify donors 
that they've tested positive on a viral screening test and that 
they are deferred from donating again, not all do.
    FDA recommends that facilities notify donors who test 
positive for HIV, but it doesn't require facilities to do so 
nor does it even recommend this practice for other types of 
viral infection, like hepatitis. Although the blood in those 
cases wouldn't be used for transfusion, donors can still 
attempt to donate at another site. And, of course, they don't 
have the information that might prompt them to seek treatment 
or change their behavior.
    Facilities also vary in how they handle notifying 
recipients of infected blood. FDA now requires that patients be 
notified if they've been transfused with blood that came from a 
donor who has since been confirmed as HIV-infected, but the 
agency doesn't require that patients be notified if they've 
received blood from donors who were later found to be infected 
with other viruses. We think this kind of notification is 
important both from an ethical as well as from a public health 
perspective.
    Hepatitis C, for example, can be treated, even if medical 
therapies aren't yet 100 percent effective. And while the 
mechanisms of transmission are not well established, CDC has 
issued guidance on measures that people infected with hepatitis 
C can take to avoid transmitting it to others.
    I'd like to turn now to the issue of recalls and the 
problems we found in the last layer of safety. If an error or 
accident occurs that results in a potentially contaminated unit 
of blood being made available for distribution, licensed 
facilities have to report the incident to FDA. A reportable 
error or accident could involve the release of blood that was 
repeatedly reactive to tests or blood where mistakes were made 
in testing or that came from donors that should have been 
deferred or a number of other conditions.
    If a facility hasn't already taken steps to recall the 
blood products, FDA may recommend that it be recalled. This 
system of required error and accident reports is by and large 
the basis for recalls. About two-thirds of recalls in 1994 were 
preceded by error and accident reports. Yet these reports are 
only required of licensed blood facilities. Those facilities 
that are not licensed are only asked to submit error and 
accident reports.
    Let me try and put this into some sort of perspective. Of 
the roughly 3,000 blood facilities in the United States, about 
770 engage in interstate commerce and are therefore required to 
obtain licenses from FDA. The remaining 2,300 or so, many of 
them hospital-based blood banks, for example, are intrastate 
facilities, and therefore don't require licenses to operate, 
although they are required to register with FDA and they are 
subject to many of the same regulations.
    In this case FDA requires that both licensed and unlicensed 
facilities maintain records of errors and accidents, but only 
licensed facilities are required to notify FDA when blood 
safety is affected. Unlicensed facilities are asked to do this 
on a voluntary basis. The resulting differences in reporting 
rates is quite striking. I have a graphic here that I would 
like to refer to. Looking at this in terms of how much blood 
they are collecting, the licensed facilities, which make up the 
large bar on the left, are submitting 82 error and accident 
reports for every 100,000 units of blood they collect. For 
unlicensed facilities, the comparable number is 12.
    Thus, even though unlicensed facilities account for 10 
percent of the blood supply, they are submitting only 1 percent 
of the reports.
    Mr. Shays. So, 2,300 out of the 3,000 are 10 percent?
    Ms. Steinhardt. They make up 10 percent of the blood 
supply. They make up far more in terms of the total number of 
facilities. But in terms of the volume of blood they collect 
they account for 10 percent.
    Mr. Shays. Ten percent of the patients?
    Ms. Steinhardt. Ten percent of the blood, of the actual 
volume of blood collected.
    Mr. Shays. Right. But I just wanted to have an idea of the 
number of patients that would be affected in either case. Can I 
draw a parallel that if it's 10 percent of the blood supply 
it's potentially approximately 10 percent of the patients, give 
or take?
    Ms. Steinhardt. Probably. Sure.
    Mr. Shays. Nodding of heads behind you. Does that give 
you----
    Ms. Steinhardt. As long as we're all moving in the same 
direction.
    Mr. Shays. And they're under oath. So, my gosh, even 
nodding of heads has got to be acknowledged as--OK.
    Ms. Steinhardt. In addition to these overall error and 
accident reports, unlicensed facilities also underreport errors 
that end in product recalls. Out of the hundreds of error and 
accident reports that preceded a recall in 1994, only six came 
from unlicensed facilities. And while more than 70 percent of 
licensed facilities submitted a report before recall, only 17 
percent of the unlicensed facilities did this.
    Given that these reports are one way of alerting FDA of the 
need for an immediate recall, we feel that the underreporting 
by unlicensed facilities is a serious problem. We're also 
concerned about the amount of time that's taken in responding 
to error and accident reports leading up to a recall. The 
longer it takes to initiate a recall, the more likely it is 
that all the product will have already been transfused.
    But as you can see from the pie chart--and I'll refer you 
to the sum of the green and blue wedges--we found that in 70 
percent of the approximately 300 recall cases in 1994, FDA took 
more than 7 months to confirm a recall from the time it got the 
error and accident report to review. The total time ranged from 
a little over a month to 2\1/2\ years, with an average of 
nearly 9\1/2\ months. And we couldn't find any significant 
difficulties in these times based on the severity of the cases. 
That is, more serious cases were not processed any faster than 
less serious ones.
    Now, typically, a facility will initiate a recall without 
waiting for FDA to give the go-ahead. But 25 percent of recalls 
are not undertaken until the agency recommends it. So the 
agency's timeliness can have very important safety 
implications.
    Finally, I want to highlight some concerns that we have 
about FDA's standard setting and inspection processes--in point 
of fact, the underpinning of the entire safety system. FDA now 
communicates the requirements of this system through a complex 
of regulations, manuals, guidance documents and recommendations 
that is often confusing and ambiguous to those facilities who 
are supposed to implement the system.
    Many of the blood facilities we surveyed didn't know which 
of FDA's various statements were recommended and which were 
required. With regard to inspections, we found problems in 
several areas. FDA policy calls for inspecting facilities every 
2 years, unless there have been problems, in which case they 
could be inspected annually. At the end of the inspection the 
inspector prepares a report and lists his or her observations. 
One of the problems we found is that the agency is not 
performing any sort of systematic statistical analysis of these 
reports or these observations to try to understand more about 
problem areas within and among facilities and to make sure that 
the inspection process itself is working well, that inspections 
have a certain consistency and rigor.
    Second, we found that inspections are not always timely. 
Twelve percent of the blood facilities nation-wide, according 
to our projections, may not have been inspected in the past 2 
years, as FDA regulations require. And when inspections are 
conducted, it's not clear that they're complete. In looking 
through a sample of reports, we could find no indication that 
about a third of the areas that should have been covered in the 
inspection--like screening, deferral and testing--had, in fact, 
been covered at all by the inspector.
    FDA's current policy is for inspectors to list on the 
reports only those areas that were not covered during the 
inspection. We think this policy is not reliable.
    Let me sum up and review what actions we think FDA ought to 
take in light of our findings. As I indicated at the outset, we 
think the blood supply is safe, but that it can be safer still.
    To start with, we believe that FDA ought to require blood 
facilities to notify all donors who are permanently deferred, 
not just those who test positive for HIV, that they have been 
deferred, and the medical reasons for their deferral. These 
people should not be attempting to continue donating blood. And 
they should be given the opportunity to seek further medical 
care if they choose.
    Next, we require that FDA ought to require blood facilities 
to notify patients when they have been transfused with blood 
from a donor whose subsequent donations were found to be 
positive, here too, not just for HIV, but for all viruses for 
which a confirmatory test is available. Likewise in these 
cases, we believe facilities ought to be conducting a look 
back, to identify and remove from their inventories any 
implicated blood units.
    FDA should also be requiring unlicensed as well as licensed 
facilities to report all errors and accidents. To improve its 
own enforcement efforts, we believe that FDA ought to clarify 
what facilities have to do to remain in compliance by 
determining which guidelines or recommendations are essential 
for ensuring blood safety, and publishing these in the form of 
regulations.
    And finally, FDA should improve its inspection processes by 
doing statistical analyses of its reports, making sure that its 
inspections are more timely, and having inspectors indicate in 
reports the activities they've actually observed. With that, 
I'll conclude my remarks and look forward to your questions.
    [The prepared statement of Ms. Steinhardt follows:]
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    Mr. Shays. Thank you. Mr. Roslewicz, I forgot to introduce 
your title. You're Deputy Inspector General for Audit Services, 
Office of the Inspector General, U.S. Department of Health and 
Human Services. And it's nice to have you here. It's very 
helpful to our committee to have both the GAO and the Inspector 
General participate in these hearings. You do a lot of the work 
for our committee, and we appreciate it. You may begin.
    Mr. Roslewicz. Thank you, Mr. Chairman. I also have with me 
Mr. Tom Robertson, who is the Regional Inspector General for 
Audit in our Philadelphia regional office. It was his staff 
that did the review of the audit. I'm pleased to discuss the 
results of our work which you requested concerning the Food and 
Drug Administration's inspection process for the plasma 
fractionator industry.
    The Center for Biologics Evaluation and Research [CBER] is 
the FDA component responsible for regulating blood products, 
vaccines, serums and toxins. The Office of Regulatory Affairs 
[ORA] directs the agency's field staff which performs 
inspections of FDA-regulated establishments. Our work focused 
on FDA's role of regulating the industry that fractionates, or 
chemically breaks down, blood plasma into other useful 
components.
    Products made from plasma are essential in treating serious 
health conditions such as hemophilia, shock, trauma, and burns. 
The FDA has licensed 26 sites worldwide to fractionate plasma 
and manufacture plasma derivatives that are used in the United 
States. The Food and Drug Administration is responsible for 
inspecting licensed plasma fractionators to ensure that the 
products are safe, effective, properly labelled and contain the 
quality and purity that they purport to possess.
    Inspections where problems are identified can result in FDA 
issuing regulatory actions. Prior to 1992, CBER staff performed 
inspections of plasma fractionators and initiated regulatory 
action stemming from such inspections. From 1992 through 1996 
ORA was phased into the inspections of fractionators, with CBER 
retaining the lead role in the inspections. That CBER performed 
these inspections was unique because ORA's field staff 
conducted inspections of all other FDA regulated firms 
including manufacturers of drugs, devices and foods.
    Prompted by a variety of factors including the 
subcommittee's concern about this unique inspection situation, 
FDA has begun to change how it inspects plasma fractionators. 
Beginning in fiscal year 1997, except for prelicensing 
inspections, ORA assumed lead responsibility for inspecting 
plasma fractionators.
    Mr. Chairman, the FDA is moving in the right direction to 
ensure that plasma fractionators and other biologics 
manufacturers are properly inspected and held accountable for 
regulatory violations. However, we do believe that the agency 
can do more to improve the inspection process.
    We reviewed 63 plasma fractionator inspections conducted 
between 1992 and 1997 which accounted for 25 of the 25 
fractionators. Of the 63 inspections, 33 were conducted by CBER 
staff only and 30 were conducted jointly by CBER and ORA staff. 
Our review revealed two key areas where ORA's involvement 
appeared to bolster the plasma fractionator inspection and the 
enforcement processes.
    By comparing the inspections conducted solely by CBER, the 
joint inspections resulted in, first of all, more reported 
problems being identified and, second, more enforcement 
actions. If I may call everybody's attention to the chart on 
the wall here, the blue represents the joint inspections by ORA 
and CBER, the red represents the inspections that were done by 
CBER only. As you can see, the CBER only----
    Mr. Shays. Do you have fun using that little thing?
    Mr. Roslewicz. Oh, I love it.
    Mr. Shays. My staff moved back, thinking it was going to 
kill him here.
    Mr. Roslewicz. I love it. It helps me to focus on the 
chart.
    Mr. Shays. OK. The FDA--do you regulate this? OK. It's a 
safe product. And effective.
    Mr. Roslewicz. As long as I don't point it in somebody's 
eyes it's safe.
    Mr. Shays. I would like to be able to use that, and I could 
just point to each one as I wanted them to speak. OK. Sorry.
    Mr. Roslewicz. What we're showing on this chart is that the 
average problem reported where CBER only did the review was 
six. However, when they did joint review, the average problems 
reported on the inspection were 26. Now, of course, the more 
observations or problems that are reported result in more 
advisory actions and more other regulatory actions being taken. 
As you can see, again, the red bar shows that with CBER only, 
there were two regulatory actions taken. When the joint review 
started, it increased to 11, adding the 9 here plus the 2 over 
there.
    So, while CBER brings scientific expertise to the 
inspection process, ORA offers the following. The ORA staff are 
full-time inspectors, compared to the CBER staff, who are part-
time inspectors. Further, the ORA staff have expertise in 
conducting good manufacturing practices. We also noted that 
when ORA was involved, the joint ORA/CBER inspections had more 
staff and lasted longer than the CBER only inspections.
    Our work also revealed continuing problems in two other 
areas: prenotification and documentation. Although CBER's 
policy is not to prenotify plasma fractionators of upcoming 
inspections, we have found that CBER has not followed its own 
procedures on requiring production schedules. The subcommittee 
expressed concern that CBER's practice of required production 
schedules resulted in de facto prenotification, which could 
permit out of compliance firms to clean up their facilities 
prior to FDA's appearance.
    In November 1996, CBER developed new procedures designed to 
ensure that prenotification would not occur. The procedures 
state that CBER is to simultaneously request, by letter, every 
6 months, production schedules from all licensed manufacturers 
of biological products, which number about 150. However, 
instead of sending these letters, CBER opted in making 
telephone calls, resulting in only 23 firms submitting their 
production information.
    Contacting all manufacturers ensures that those to be 
inspected are not tipped off to FDA's appearance onsite. As a 
result of not following its procedures, CBER cannot provide 
definitive assurance that all manufacturers were contacted and 
that all manufacturers were contacted at the same time. A 
second continuing problem we noted with plasma fractionator 
inspections is the absence of documentation in the files to 
show the inspection was classified.
    The classification occurs when CBER reviews the inspection 
report. It indicates the seriousness of the problems observed, 
and determines whether some form of corrective action or 
sanction is appropriate. Of the 63 inspection files we 
reviewed, 15 did not contain documentation to show that the 
inspection was classified. CBER informed us that six of these 
inspections were never classified.
    Without a timely classification, any appropriate corrective 
action or sanction is unlikely. We were encouraged to learn 
that FDA has plans for ORA to take the lead for all biological 
inspections now being conducted by CBER. An April 1997 draft 
plan proposed a core team of ORA and CBER investigators, and 
allows the agency to focus highly skilled resources on 
violative situations and to expedite their correction.
    We recommend that FDA implement this plan and ensure that 
appropriate milestones are included for transferring all 
biological inspections to ORA.
    Finally, at the subcommittee's request, we reviewed FDA's 
handling of two plasma problem cases. In the first case, 
involving a fractionator called Centeon, a plasma product 
recall was effectively communicated to the affected parties. 
However, FDA ineffectively handled the initial report of the 
problem related to the Centeon product and had not previously 
inspected the production of the plasma product, albumin.
    The second case study involved an industry-wide saline 
contamination problem associated with the collection of plasma. 
Such contamination could result in a viral test showing false 
negatives. We found that FDA's involvement with an industry-
sponsored work group formed to solve the problem was neither 
illegal or unethical. We noted, however, that FDA did not 
provide equal regulatory oversight to the two device 
manufacturers involved. They did not inspect the viral 
inactivation procedures at a manufacturers plant and were not 
aware of saline contamination problem for 5 years because they 
had not required the industry to report it.
    With regard to the inspection, we subsequently learned that 
the manufacturer initiated a class 3--the least serious--recall 
of a plasma product on May 24, 1997, due to the firm not 
maintaining the specified temperature for the viral 
inactivation process.
    Mr. Chairman, we believe that FDA's actions to increase 
ORA's role in the inspection and enforcement of plasma 
fractionators have improved the process, as evidenced by the 
increased number of problems identified and enforcement actions 
taken. Our report, which we submit today for the record, 
contains recommendations that should further strengthen FDA's 
role in preventing, detecting and handling plasma related 
problems.
    As indicated in the report, FDA generally agrees with our 
recommendations and is taking action to correct them.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Roslewicz follows:]
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    Mr. Shays. Thank you very much. I'd like to just get a 
sense, to start, the impact of, Ms. Steinhardt, this last 
chart. I don't really grasp the implications of it. So I want 
you to just walk me through it a little more in depth.
    Ms. Steinhardt. OK. The chart graphs the amount of time 
that it takes FDA to review a report that is submitted by a 
facility. The facility is required to submit a report of any 
errors and accidents, including anything that may warrant a 
recall.
    Mr. Shays. Right.
    Ms. Steinhardt. And once it gets this, this chart outlines 
the amount of time that it takes FDA to review that report, 
from the time it's submitted to FDA until it determines whether 
to recall.
    Mr. Shays. A course of action.
    Ms. Steinhardt. Right. And it says that in about 70 percent 
of the time it takes the agency more than 7 months to confirm a 
recall. That is from the time it gets the report.
    Mr. Shays. But the company, itself, can recall an item?
    Ms. Steinhardt. Yes. That's right.
    Mr. Shays. And, in most cases, if the company has 
determined that they have contaminated blood, an infected 
supply, wouldn't they just intuitively and for their own, for 
the protection of the patients and the users and for the 
company's protection, recall it?
    Ms. Steinhardt. In three out of four cases they do.
    Mr. Shays. How many?
    Ms. Steinhardt. Three out of four cases. It's the company, 
themselves, that initiate the recall, 75 percent of the time.
    Mr. Shays. Right.
    Ms. Steinhardt. And, in fact, it's the companies, 
themselves, the facilities, themselves, that are responsible 
for carrying out a recall.
    Mr. Shays. Now, have you provided us statistics that tell 
us when FDA review with a particular delay how often it decides 
then to take action and have a recall?
    Ms. Steinhardt. This chart is only for those cases where 
there was a recommendation for a recall.
    Mr. Shays. OK.
    Ms. Steinhardt. This is in the subset of cases that 
proceeded to have a recall recommendation from FDA. In 70 
percent of those cases, it took 7 months or longer.
    Mr. Shays. So what I'm seeing is, in 1 to 6 months it took 
27 percent of the cases--1 to 6 months--7 to 12, 25 percent----
    Ms. Steinhardt. Correct.
    Mr. Shays. And----
    Ms. Steinhardt. Close to half the time--47 percent--it took 
more than a year.
    Mr. Shays. And after a year they then decided to have a 
recall?
    Ms. Steinhardt. Correct.
    Mr. Shays. That's--yes, ma'am?
    Ms. Crosse. This is to confirm the recall. This is not for 
the first step of recommendation of recall. This is to confirm 
the recall, to confirm that this recall has occurred.
    Mr. Shays. OK. This is the bottom line to what I want to 
know. I want to know how many cases would it have taken more 
than 6 months before the FDA ordered a recall?
    Ms. Steinhardt. 150 cases out of 300.
    Mr. Shays. 150 cases out of 300, the FDA would have made a 
determination----
    Ms. Steinhardt. Confirm.
    Mr. Shays. Now, confirm--I need to understand what you mean 
by confirm.
    Ms. Steinhardt. When it's published. When the decision is 
made final and it's published.
    Mr. Shays. But is it possible that it had been recalled 
already?
    Ms. Steinhardt. It's possible that it could have been 
recalled, that the product actually could have been recalled 
before then.
    Mr. Shays. Well--but I think you know where I'm going. I 
want to know when did the FDA require a recall that wasn't 
taking place before then, and how often would we have seen a 
case that would have been more than 6 months or more than a 
year.
    Ms. Steinhardt. Do we know that?
    Mr. Shays. Do you understand what I meant?
    Ms. Steinhardt. Yes, I do. In 25 percent of the cases where 
there was a recall, it was FDA who initiated it.
    Mr. Shays. OK.
    Ms. Steinhardt. So, three out of four cases the 
manufacturer or the facility had already taken an action.
    Mr. Shays. And that's the ones I'm--now, of the 25 percent 
of the recalls that FDA initiated, how many of those took more 
than a year before they were----
    Ms. Steinhardt. Presumably 70 percent. Oh, more than a 
year. I'm sorry; 47 percent.
    Mr. Shays. So, more than 50 percent of the cases that the 
FDA decided to have a recall were not ordered until a year 
after the fact.
    Ms. Steinhardt. Close to 50 percent. Right.
    Mr. Shays. Now, I make an assumption that the FDA made a 
recall because the blood supply was not safe, the product was 
not safe.
    Ms. Steinhardt. Right. They made a determination. Now, let 
me be clear, it's not FDA that makes the recall.
    Mr. Shays. OK. Let me just say--and someone else who wants 
to respond to this part, if someone else is more closely 
related to it, I'd just as soon--yes. Please identify yourself. 
And would you also leave a card afterwards to our--OK.
    Ms. D'Alessio. I'm Jacqueline D'Alessio.
    Mr. Shays. You can just pick it up, so you don't have to 
bend over if you'd like.
    Ms. D'Alessio. That would help.
    Mr. Shays. Yes.
    Ms. D'Alessio. If in 25 percent of the cases FDA is 
prompting a facility, and there are 300 of the cases 
altogether, that means that there's about 75 percent of the 
cases that FDA needs to prompt the facility. If you assume that 
in 50 percent of those cases it takes more than a year, that's 
about 40 or so cases.
    Mr. Shays. Now, in those 40 or so cases then--and that may 
be a year after they've been notified, correct?
    Ms. D'Alessio. Notified? Yes, that there was an error and 
accident.
    Mr. Shays. And how much time would it have been on the 
market before they were notified? What would the range be?
    Ms. D'Alessio. About 6 months, I think. We have a pie 
chart.
    Ms. Crosse. On average it took 4 months from the time that 
the facility detected the error and accident until they filed 
the report with FDA.
    Mr. Shays. OK.
    Ms. D'Alessio. But we don't know how long it was between 
the detection and the actual occurrence.
    Mr. Shays. OK. What I want to know from FDA when it comes 
before us is, one, why that would happen, and what is the 
solution. If I were using any of these products, I would be 
pretty outraged--if I had been using them--and it took a year 
before FDA came to a conclusion.
    Ms. Steinhardt. There is one other point that I think is 
important to add here.
    Mr. Shays. Sure.
    Ms. Steinhardt. Which is that some blood products can be 
stored for a time before they're actually transfused, but a lot 
of whole blood products have to be used within a matter of 
days. And in my mind it raises some questions about--at least 
for some portion--the value of a system that takes this long to 
carry out.
    Ms. D'Alessio. May I add one more thing?
    Mr. Shays. Sure.
    Ms. D'Alessio. In the vast majority of the cases, the blood 
facilities are amply capable of recognizing a very serious 
error and accident and they will recall the blood even before 
they've notified FDA. It's the cases where the blood facility 
does not recognize the seriousness of the even that we're 
talking about here. And, as far as we know, FDA has no 
requirement. When they recognize the potential seriousness and 
are evaluating it, there is no requirement that they contact 
the facility and ask them to quarantine the blood until they're 
done with their review.
    Mr. Shays. OK. Do you have any comment about this here?
    Mr. Roslewicz. We did look at this issue about 2 years ago, 
for the committee, with regards to the licensed and the 
unlicensed facilities. We found similar results as GAO is 
talking about in terms of the length of time it takes to issue 
the recall. And maybe Tom has some of the specifics with him.
    Mr. Shays. Tom.
    Mr. Robertson. Yes. I think when we looked at it we took a 
sample of the error and accident reports that were coming in, 
and found that, for the most part, the action was taken by the 
blood establishment before they even sent the error and 
accident report in. When you're talking about a delay of over 1 
year for a recall, you're not talking about a delay in the 
actual recall, you're talking about a delay in the recall 
classification. That's where FDA classifies the recall as a 
class 1, class 2, or class 3.
    Long before that happens, we found that corrective action 
was taken. And we found certain problems with the process, but 
that wasn't one of them. We didn't find, I believe, one case 
where there was a risk to the health because of that delay. 
Corrective action was taken. And you'll find that in most 
cases--in almost every case--and they put it right on the error 
and accident report--when the blood establishment prepares that 
they put their corrective action right on the report.
    Mr. Shays. But was the corrective action recall?
    Mr. Robertson. Yes, sir. They don't call it a recall. They 
destroy the blood. They get the blood if they can--and certain 
times they identify the problem after the blood has already 
been shipped and infused in a patient. Now, when we looked at 
it, we found problems with the timeliness of submitting the 
error and accident reports. They were delayed quite a bit.
    And, as a matter of fact, FDA didn't have any specific 
criteria as to when they should be turned in. I think the term 
they used was promptly. But promptly was never defined. But we 
didn't find any problem with the health hazard.
    Mr. Shays. Let me just get to other issue----
    Ms. Steinhardt. Can I just add on this point, though, that 
the information about this came--what we got came from FDA, 
that 25 percent of those cases were ones where they had to take 
the actions as opposed to those facilities.
    Mr. Shays. Right. And I think we just need to understand 
the significance of it. But I'm just trying to put myself in 
the position of someone who uses these products. And the 
letters--I was tempted to take these letters and read some of 
them. It's people who literally stay by the phones, have fax 
equipment, have children who are highly dependent on blood 
supply products and, obviously, would die or their health would 
seriously deteriorate if they didn't have it. So, we're all on 
the same wavelength. They need this product. But they need it 
safe.
    And you read through some of this and you realize, what a 
way to exist. And the focus that I have--and my interest is, we 
do have a tiered system. We do donor screening. We do donor 
deferral. We do blood testing. We do blood quarantining. And 
the compliance monitoring, which includes the inspections and 
recalls. And that's kind of a big focus of what I'm at least 
interested in today.
    And on the surface this looks quite alarming. And before 
this hearing is over today we're going to really need to get 
into it. Why don't I let Mr. Towns have the floor. And just 
beforehand, if I could--given that we have our Members on both 
sides of the aisle here, I'd like to do a little housekeeping 
here.
    I ask unanimous consent that all members of the 
subcommittee be permitted to place any opening statement in the 
record and the record remain open for 3 days for that purpose. 
And without objection, so ordered.
    And I ask further unanimous consent that all witnesses be 
permitted to include their written statements in the record. 
And without objection, so ordered. Mr. Towns, you have the 
floor.
    Mr. Towns. Thank you very much, Mr. Chairman. Let me also 
thank you again for holding this hearing. I know we've had 
three hearings on this issue. And this is the fourth. And I 
think it's a very important issue. And we cannot have enough 
hearings on it. Because as long as people are concerned, we 
need to see what we can do to address those concerns.
    Just recently I was on an airplane flight and a gentleman 
recognized me and he came over and took a seat. And, according 
to him--he said it's possible to reduce the risk to the blood 
supply. However, such measures would cost additional money, he 
says, and we'd probably have to change procedures to a degree 
if we did that. Are there any estimates or have any studies 
been done to assess how much that cost will increase and 
whether the patient or customer will be willing to pay the high 
price if this is true?
    Ms. Steinhardt. Well, I can say we didn't do--at least of 
the actions we recommended we think should be taken, we didn't 
do any specific cost estimates. So we don't know how much some 
costs would increase. But I think it's important to point out 
that some of the things that we're talking about--donor 
notification, recipient notification--are practices that many 
blood facilities in the country are already undertaking. And 
what we're talking about would just extend that to all blood 
facilities and it would extend the notification to some kinds 
of viral infections that are not covered under current 
practices.
    Ms. Crosse. Could I just add?
    Mr. Towns. Sure.
    Ms. Crosse. Also, we think that some of these actions would 
be offset by savings at later stages in the process. For 
example, if you notified donors that they were permanently 
deferred and the medical reasons for that deferral, you could 
eliminate them returning at a later date to donate blood. So 
you would save the costs of screening and possibly, if they 
went to a different center, the possibility of having to test 
that blood at a later time. So, while some of the actions would 
have costs, they might have some offsetting savings in terms of 
not having to go through as many steps of the process, 
particularly the testing of blood products, which is quite 
expensive.
    Mr. Roslewicz. While we have not done any specific cost-
benefit studies in the Inspector General's office, there 
certainly on some of the recommendations could involve 
additional costs. Sometimes it can be just a matter of changing 
a regulation which doesn't necessarily increase the cost too 
much. But on the other hand, for example, in the plasma 
fractionator industry, as ORA shifts over to taking the lead on 
doing some of those reviews, the Food and Drug Administration 
certainly has to give consideration as to whether there are 
sufficient resources to do that or do they need to reallocate 
the resources differently.
    But we in the Inspector General's office have not at this 
point done any such cost-benefit analyses of these kinds of 
things.
    Ms. Steinhardt. If I could just add one important point to 
note, which is, not just the costs, but the benefits. If you 
look at the benefits to the American people since a lot of 
these measures have been put into place--this quality assurance 
system--in 1984 there were over 700 cases of transfusion 
related AIDS. In the 12 years since then, in that whole period, 
there have only been 38. And I think that's a considerable 
benefit to offset looking at the costs that we're already 
incurring.
    Mr. Towns. Let me add one other point that was raised that 
this gentleman felt that to be able to do a lot to correct the 
problem when it exists, that many of the blood banks were 
unlicensed--but actually the facilities that were involved in 
collection and processing and distribution of blood were 
unlicensed. And he said, therefore, it makes it difficult to do 
a lot to them. Could you respond to that?
    Mr. Roslewicz. The blood banks that are unlicensed--it is 
generally because they are intrastate only. They don't transmit 
their products between States. And that's why they're 
unlicensed and they're not required to submit error and 
accident reports. But they have been asked to volunteer to 
submit their error and accident reports.
    In a report that we did several years ago, one of our 
recommendations was that the policy be changed there to make it 
mandatory that they submit the error and accident reports just 
as the licensed facilities do. I believe that GAO supports that 
recommendation and FDA has a proposed regulation I think in 
April of this year, where they're proposing to make that a 
regulatory change.
    Mr. Towns. I think that when you look at that, that within 
itself makes people feel uncomfortable. I think when you can 
think about being over 2,000 unlicensed facilities, about a lot 
of reasons, people would feel uncomfortable for the fact that 
they're not licensed, even though we know that there's 
regulations and all that, in terms of Federal regulations. And, 
also, I think that the key here is the confidence.
    And if people don't have confidence this could be a real 
problem. Do you want to react? Yes?
    Ms. Steinhardt. Well, I think the fact that they're not 
licensed by FDA doesn't mean that they're operating without any 
oversight. Because they don't engage in interstate commerce 
they aren't subject to licensure by a Federal agency. But they 
may be, and in fact usually are, licensed by the State in which 
they are operating. So there is oversight there. And they are, 
as we indicated, subject to FDA requirements--to many FDA 
requirements, particularly for blood safety. Ultimately they 
are responsible for blood safety.
    The point that we're making here is that one of the key 
features of this quality assurance system is error and accident 
reporting. This is a way of keeping track of what's happening, 
to take any corrective actions as quickly as possible to 
prevent errors and accidents in the future. And this part of 
the system--this key piece of the system--is that these 
facilities, because FDA doesn't require it of them, it's only 
voluntary. And it can be fixed. It can be readily fixed. And 
FDA has indicated that it intends to do that. We think it's 
important to the integrity of the system.
    Mr. Towns. Right. And it should be fixed. It is my 
understanding that there is some controversy regarding whether 
FDA inspectors should use a check list approach or a more 
narrative approach in the inspection of facilities. Can each of 
you tell me which approach you would prefer and why?
    Ms. Steinhardt. Well, if I can start. The issue we have 
with FDA's inspection reports is that they simply--and we 
really don't care whether they use a checklist approach or a 
narrative approach. What we care about is that they indicate on 
their inspection reports what they've actually done. The policy 
that they have now with regards to inspection reports is that 
the reports will presume that the inspectors will have covered 
everything that they're supposed to cover unless they indicate 
otherwise. And we think it's just not a very reliable system. 
We found some of the inspection reports are quite complete. 
Others only say, this facility was in compliance. They never 
indicated what they looked at, what areas they covered. And we 
found some examples where clearly the inspections couldn't have 
covered some areas. But there's no documentation.
    Ms. Crosse. Right. We don't think it's necessarily a 
problem that they do not cover all areas at every inspection. 
They may need to focus their attention to certain areas. We 
don't expect that they would stay there for weeks to try to do 
an in depth examination of absolutely every aspect, 
particularly for a facility that engages in a full range of 
activities and has a large number of donors.
    However, we think that they need to indicate for the next 
inspector, and for the people back in the district offices and 
at CBER who have to review the reports, exactly what was done 
on that inspection so that they can have a clearer 
understanding of what type of examination was conducted during 
that inspection.
    Mr. Towns. Yes.
    Mr. Roslewicz. I believe the checklist approach is 
certainly useful in terms of making sure that you cover all the 
different areas that you're required to inspect. But I believe 
that there's also a need for some narrative for some of the 
reasons that GAO pointed out in terms of future inspectors 
coming along the previous year to try to understand what was 
looked at in the past year. Simply a check mark sometimes won't 
tell you what problem you found or what recommendations you 
might make to fix it. So I think a combination of both would 
certainly be beneficial.
    Mr. Robertson. Yes, I agree with that. As auditors, for 
every audit that we start, we have an audit program. We don't 
necessarily put everything in the audit report itself. But in 
our working papers, you can tell exactly what we did do. I 
think this would be a good idea for FDA. Now, they're coming up 
with a guide. And I think when they're coming up with the 
guide, as they're drafting it, this might be something they 
will want to take a look at.
    Mr. Towns. Right. Thank you. I guess this is probably for 
GAO. In fact, it is. You noted in your report that better donor 
screening has refined the volunteer blood donor pool. However, 
as you know, there is a commercial pool as well. What kinds of 
actions or guidelines do you believe would be effective in 
reducing the risk from people who are paid for their blood.
    Ms. Steinhardt. Yes. That's a very good question. Not a lot 
is known about this pool of donors. But what is known I think 
raises some questions and suggests the need for some more 
information. As you pointed out, the commercial industry--the 
plasma products industry--relies mostly on paid donors. And 
from some data that are available we know--and I'll point--the 
red bars are voluntary blood banks, and the blue bars are 
plasma centers. And this is data tracking HIV prevalence rates 
among donations in California from 1989 to 1994.
    And you can see that among plasma centers--those blue 
bars--the prevalence of HIV in the donor pool was considerably 
higher. Now, the good news here is that in both the blood banks 
and the plasma centers the prevalence rates began to decline. 
But they're still a lot higher among plasma donors. And this 
obviously has implications for HIV prevalence, but it also 
links to other kinds of high risk behaviors and the possibility 
of other kinds of infectious diseases within this population.
    In the plasma industry--plasma products, themselves--
there's very good techniques, very effective techniques for 
viral inactivation of HIV. And I think there is not a lot of 
concern there. But there is some concern about other types of 
viruses that may be prevalent in this donor pool. And we just 
don't know much about it. And they may not be caught in these 
same inactivation techniques. So, it's some newly emerging 
kinds of infectious agents that we're concerned about.
    There have also been other studies that have been done that 
indicate that there is higher risk among paid donors than 
volunteer donors. And, in fact, FDA a number of years ago 
required facilities to indicate whether a blood was coming from 
those paid donors. But these are--the data are sort of spotty 
about this. And we think that there are enough indications to 
suggest that it's worth looking at in greater depth.
    Mr. Towns. All right. Thank you very much, Mr. Chairman. 
Thank you. I yield back.
    [The prepared statement of Hon. Edolphus Towns follows:]
    [GRAPHIC] [TIFF OMITTED] 45251.192
    
    [GRAPHIC] [TIFF OMITTED] 45251.193
    
    Mr. Shays. Thank you very much. What aspects of GAO's 
report did the FDA oppose? Where do you have your most lines of 
contention?
    Ms. Steinhardt. I would say in the area of inspections and 
reporting. I think by and large the agency agreed with most of 
our recommendations. But the one area that we seem still to 
have some difference is with inspection reports, and, in 
particular, on the way in which the reports are documented. I 
talked about this a little earlier in the response to Mr. 
Towns' question. FDA continues to believe that the system they 
now have for requiring inspectors to indicate only those areas 
that they don't cover in an inspection is sufficient, and we 
simply disagree.
    We think that whatever an inspector observes ought to be 
documented for the record. And I would just note here the fact 
that FDA, itself, in its inspection of facilities, requires 
facilities to keep documentation of their quality assurance, 
quality control procedures. And they would cite a facility for 
the absence of documentation of what they've done. And they 
ought to follow the same kinds of standards and principles in 
their inspection and procedures.
    Mr. Shays. I know that Mr. Towns got into this a bit. But 
I'd like you again to tell us what you think the solution is 
between licensed and unlicensed. And it all involves the issue 
of interstate.
    Ms. Steinhardt. Right.
    Mr. Shays. We license those that are interstate and don't 
those that are intrastate. But what is the solution to that?
    Ms. Steinhardt. FDA can simply require the unlicensed 
facilities to report error and accident reports. They have the 
authority, we believe. And, in fact, I know that they're 
proposing--they've announced that they're going to propose such 
a regulation.
    Mr. Shays. Yes. There's no logical reason not to have them 
report.
    Ms. Steinhardt. And the data suggest that there's a good 
reason to have such a requirement.
    Mr. Shays. Right. OK. I'm treading back into your chart 
again on the delay of time. Because it sounds like we have a 
disagreement between you, Mr. Robertson--the GAO and the 
Inspector General--in terms of the significance of the chart. 
The chart seems to be valid, and yet, Mr. Robertson, your point 
to me is, don't worry, because it doesn't say anything.
    Mr. Robertson. No, sir, I'm not saying that. I guess what 
I'm saying is, the ones that we looked at--we looked at the 
error and accident reports. I think we looked at about 150 of 
them. They came in from the establishments and all had 
instances of what they did in response to the error or 
accident.
    The problem that I see is that when you have that delay in 
the classification, you really have to rely on what the 
establishment said. Now, when we're adding what they said it 
looks like everything is perfect. But if you classify it as a 
recall, then the FDA is required to do some monitoring. So that 
would be the effect. And I think we mentioned that in our 
report that we issued back in 1995 or so.
    But without the classification the action was taken. But 
there is not assurance that what the establishment said they 
did, they actually did--No. 1--and, No. 2, that it was 
effective. So, one of the purposes of making the recall 
classification is to do--I think FDA calls them audits. They go 
out there and they verify that the problem that was reported is 
now corrected.
    Mr. Shays. OK.
    Mr. Robertson. So, it doesn't necessarily mean that the 
product remains out on the market.
    Mr. Shays. Have you made a recommendation to FDA that there 
not be such a time lapse between notification and a decision?
    Mr. Robertson. I think our report dealt mainly with the 
error and accident reports. And one thing we did look at--of 
the 100 or more that we looked at, there were 17 that FDA took 
a good look at and decided that there was a potential for a 
recall. We looked at those 17 in detail. We found that 5 of 
their 17 were not processed properly, and we made 
recommendations.
    Mr. Shays. I don't really think you were responsive to my 
question. You had a point that you wanted to make. I'm happy to 
have you make that. But the question is, did the Inspector 
General's office weigh in on whether or not there should be 
corrective action in shortening the time in which the FDA is 
notified and then makes an order?
    Mr. Robertson. We made a recommendation to them within the 
timeframe of when they're notified.
    Mr. Shays. Yes.
    Mr. Robertson. That was the extent of our recommendation 
with regard to the timeframe.
    Mr. Shays. What happened? What about the timeframe?
    Mr. Robertson. We recommended that they have a 45-day 
timeframe.
    Mr. Shays. OK.
    Mr. Robertson. That when the error and accident is 
identified they have to be notified within 45 days. I don't 
believe that it has been implemented yet.
    Mr. Roslewicz. The way the regulations were written 
indicates that the error and accident report should be 
submitted promptly. But there was no definition of what is 
prompt. So, our recommendation was to set something to the 
effect like 45 days.
    Mr. Shays. Yes. OK. If we have some more recalls, larger 
recalls, what implication do I make from that? That the 
screening process before was bad or that we have a better 
process now to do recalls and we should have had more recalls 
in the past? I'd like both of you to respond to that. Do you 
understand what I'm asking? Do I make an inference that if we 
have a lot more recalls now, that things are more serious or 
better, better in the sense that we now can identify that we 
should have recall and we're taking action whereas, in the 
past, we should have had a recall and didn't? I'm just trying 
to understand how I interpret significant numbers of recall and 
know if that's a good thing or a bad thing.
    Ms. Steinhardt. I think it's really hard to tell. You know, 
you can increase the number of cases, of problems that you 
detect because the system is working better. And you can take 
that as a sign that the system is working better, or you can 
take it as a sign that overall the problems are actually 
increasing. I don't know that there's any way to definitively 
tell. I think----
    Mr. Shays. OK. Yes. I'm trying to find that out.
    Ms. Steinhardt. How you can tell. I think this is an area--
--
    Mr. Shays. Let me just preface my comment again and say, 
there can be almost a temptation to say, this is terrible, we 
have another recall, the whole system is falling apart. Or we 
can say, at least this last line, we're more on top of it. And 
then I'd want the time span to be real quick. But I'd say maybe 
that's good.
    So I'd like to know--and you have no opinion--I don't want 
you to have an opinion if you don't. You don't know how to read 
that yet?
    Ms. Steinhardt. No. And the other thing I don't know is 
whether the right approach here is to try and figure out how to 
make this system more efficient just by cutting down the number 
of days or if maybe there's a whole other way to go about this.
    Mr. Shays. Well, one thing I know we're going to do, we're 
going to make the system more efficient. Even if the Inspector 
General makes the conclusion that action had already been 
taken, it shouldn't take more than a year if people's lives are 
threatened. And then we just need to find out what the FDA 
needs to do to make sure that doesn't happen. I'd like you to 
take a pass at this. If we hear more recalls, larger blocks of 
recalls, should I view that as proof that the system is 
breaking down or that, at least in that final stage, we're 
doing a better job of catching things we should have caught in 
the past?
    Mr. Roslewicz. OK. Our audits certainly didn't move in that 
direction. That was not one of our objectives.
    Mr. Shays. OK.
    Mr. Roslewicz. But it seems to me that if you're having 
more recalls, for example, the plasma fractionator--the chart 
I'm showing here. As ORA became involved we started to see more 
regulatory actions being taken as a result of more in depth 
inspections being conducted.
    Mr. Shays. Right.
    Mr. Roslewicz. They've increased tremendously. When CBER 
was doing the inspections, there was an average of six 
observations per inspection. As they began to include ORA in 
these inspections, the number rose to 22 on the average. Now 
that ORA is doing them themselves, the number of observations 
being filed on an inspection is up to 49 on an average. So what 
you see is there's more potential there for identifying 
problems as you do more in depth inspections. I don't know if 
that's exactly getting to your point.
    Mr. Shays. OK. Do you want to make another pass?
    Ms. Steinhardt. Yes. I think we're getting to something 
very important here. There needs to be--and it's an issue that 
we did raise in the report. There needs to be some way of 
analyzing the information. Obviously, if it's reached a stage 
where a recall is indicated, it means that something wasn't 
working earlier in the screening process. There's several 
layers of this quality assurance system that the blood had to 
go through to get to this point. And it didn't get screened out 
before this point. So, something wasn't working before then.
    There should be a kind of feedback mechanism here. FDA 
should be looking--and the facility, itself--should be looking 
at what's going on beforehand in the earlier layers to make 
sure that it doesn't reach that point. And that's one of the 
concerns we have--that there isn't necessarily that kind of 
rigorous analysis of data coming out of the system that would 
allow us to tell.
    Mr. Shays. Can you outline, again, when you analyze the 
recalls, what was the primary reasons we're having recalls? Was 
there any one area?
    Ms. Steinhardt. Excuse me while I check.
    Mr. Shays. No. Why don't you just step right up and get in 
that seat. And if you just identify yourself.
    Ms. D'Alessio. Thank you. Jacqueline D'Alessio. I must say 
a lot of them were post-donation information, so the blood 
center did not know the information from the donor at the time 
of the donation. It may be that the donor came back 
subsequently and made an admission regarding some risk 
behavior. Or perhaps called on the telephone to say that they 
had come down with some other disease, something like that.
    We can tell you about the proportions for error and 
accidents, but I don't believe we have the information 
regarding the types of problems for the recalls necessarily. 
But they really ran the gamut, from bacterial contamination to 
releasing units that were repeat reactive for various diseases 
to more minor problems.
    Mr. Shays. Say the last thing again. It was muffled a bit.
    Ms. D'Alessio. To more minor problems. Oh, to releasing 
units that were repeatedly reactive on their screening test and 
should have been discarded instead of distributed.
    Mr. Shays. Is that bad management?
    Ms. D'Alessio. That particular case is. But if I could make 
a comment about your original question regarding whether this 
means the process is working better or worse. One point that's 
very important to remember is that we now have a large number 
of new tests that we never had before. And we were unknowingly 
releasing a large amount of blood that was positive for 
hepatitis and other diseases. So, in that sense, the recall 
process is really working very well if we can get the blood 
back before it's been transfused.
    Mr. Shays. OK. With the Inspector General, is the bottom 
line of the chart----
    Mr. Towns. Would the gentleman yield?
    Mr. Shays. Yes, sir.
    Mr. Towns. Could we get her title.
    Mr. Shays. Your title? Everybody has a title. You can even 
make it up.
    Ms. D'Alessio. Senior analyst, Ph.D.
    Mr. Shays. Thank you. Does the IG believe that the FDA's 
enforcement policies for the blood industry are better 
implemented by the Office of Regulatory Affairs, which is 
really a field force, rather than the Center for Biologics? Is 
that the bottom line--determination--I should make from you in 
that chart?
    Mr. Roslewicz. The bottom line in that chart--what we're 
showing is that as ORA became more involved with CBER doing 
joint inspections, it was a transition between 1992 and----
    Mr. Shays. You're giving me the long answer. I want the 
short answer. Do you agree with the statement I made that this 
chart would lead us to believe that enforcement policies for 
the blood industry are better implemented by the Office of 
Regulatory Affairs than by the Center of Biologics?
    Mr. Roslewicz. Yes.
    Mr. Shays. OK.
    Mr. Roslewicz. Also, on the other issue we were talking 
about, the MedWatch system that FDA asked----
    Mr. Shays. On the what?
    Mr. Roslewicz. The MedWatch system, which reports adverse 
events, like a hospital if they have a problem with their 
produce they can just call that system and put in the data. One 
of the recommendations that we made to FDA was to try to better 
use that system, to take advantage of the information that is 
put into that system in terms of coming up with quicker 
recalls.
    Mr. Shays. I have one last question that Anne Marie is 
insistent that I ask. What percentage of the current 
inspections of plasma fractionators are resulting in regulatory 
actions?
    Mr. Roslewicz. What percentage?
    Mr. Shays. Yes. What percentage of the current inspections 
of plasma fractionators are resulting in regulatory actions? 
Fifty percent of the plasma inspections scheduled by the FDA in 
an accelerated timeframe following the Centeon incident in the 
fall of 1996 have resulted in regulatory actions. Is that 
right?
    Mr. Roslewicz. That is correct. The inspections that are 
being conducted with ORA as the lead--I believe there are 19 of 
them in 1997 that we have data on so far--50 percent of those 
have resulted in regulatory action. That's what we were told 
by----
    Mr. Shays. Why don't you followup on this question?
    Ms. Finley. Thank you, Mr. Chairman. In the IG's testimony, 
you state that there are 19 ORA lead inspections of plasma 
fractionators and that 10 of them have resulted in enforcement 
actions, including one injunction. Is it also true that there 
has been one notice of intent to revoke, one consent decree and 
seven warning letters as a result of those inspections?
    Mr. Roslewicz. Those figures are correct, I believe. But 
Tom, you wanted to say something?
    Mr. Robertson. Yes. Our audit was basically the 63 
inspections. And of the 30 where ORA was involved, there were 
11 enforcement actions--11 out of 30--and there was one more 
that they were working on. So let's say 12 out of 30. We ended 
our review as of the end of March 1997. Since then we were told 
by FDA that additional inspections took place, and that's where 
they're getting the 50 percent.
    Mr. Shays. Now what's the significance of the question and 
the answer?
    Mr. Robertson. We didn't audit the 50 percent. We were 
recently told that 50 percent of the inspections that were 
performed with ORA now taking the lead are resulting in 
enforcement actions.
    Ms. Finley. If 50 percent of the inspections are resulting 
in enforcement actions, is it fair to assume that 50 percent of 
plasma fractionators are not in compliance with FDA's GMPs--
good manufacturing practices?
    Mr. Robertson. Yes.
    Ms. Finley. Thank you.
    Mr. Shays. That's the significance. OK. Ed.
    Mr. Towns. Thank you very much, Mr. Chairman. There seems 
to be some confusion or a controversy about the FDA's 
presentation of inspection findings to directors or owners of 
facilities. What does FDA do with the inspection results and 
what does it require or expect of the facility directors in 
response to adverse findings? Would you help clear that up?
    Mr. Roslewicz. When the inspection is done there is a form 
483 where they document all the findings that they're coming up 
with. These are certainly shared with the facility. And it is 
turned over to CBER for classification as to what one of the 
three classifications should be applied based on the results of 
that inspection. CBER then makes a determination as to whether 
there is no action indicated, whether there should be a 
regulatory action taken, injunction or license suspension or 
warning letters or whatever the situation would be in that 
particular inspection. So, the process is there. It's shared 
with the facility. And it's also CBER's responsibility to make 
that determination.
    Ms. Steinhardt. We surveyed 45 blood facilities. And this 
was a real problem that they perceive. It's really not clear 
what actually is required of them. Many of them feel that 
they're not kept well-informed about what's expected of them by 
the inspections. This is not true across the board. But it was 
true for a significant number. And I don't know if you want to 
elaborate.
    Ms. Crosse. Well, we found that many of the facilities felt 
that they were not getting good explanations in all cases of 
what the problems were that the inspections were identifying. 
However, it is FDA's policy that the facility be presented only 
at the close of the inspection with the form 483 observations 
of any conditions that might warrant correction if the 
inspector has identified such conditions. At the time period 
that we reviewed in our study, they were not being presented 
with a full copy of the inspection report that was written up 
after the inspectors returned to their office.
    And, in fact, they were having to file a Freedom of 
Information request to receive a copy of the inspection report 
that was performed on their facility. And we understand from 
FDA that that policy has been changed, that they are now being 
sent copies of the full inspection reports. But at the time in 
which we surveyed the facilities, they didn't feel that they 
were getting the full information about what the inspectors 
were discovering when they came and did the inspection in their 
facility.
    Mr. Towns. Shouldn't they routinely get a report?
    Ms. Crosse. Well, that was not the case at the time, but we 
understand that that policy has been changed by FDA subsequent 
to the time in which we did our work. To us it made sense that 
they be able to get that information without having to go 
through a Freedom of Information request.
    Ms. Steinhardt. And it certainly explained why--at the time 
we did our survey--it explained why a number of companies felt 
sort of baffled or uninformed about how they were being 
inspected.
    Mr. Towns. That's the reason why, Mr. Chairman, I think the 
checklist really plays a very important role. Because at least 
there's some indication as to what the person actually saw or 
looked for. I think that becomes even more important to have 
it. So, thank you very, very much, Mr. Chairman. And I also 
hope that we can continue to push in this direction, because 
there still seems to be some real problems out there.
    And I think we need to sort of keep working to make certain 
that our blood supply is really safe. And inasmuch as you hear 
of maybe one incident--and I know we say that it is the safest. 
But the point is that there is some problems. And I think that 
we all have to acknowledge that fact and continue to work 
toward it. And in some instances it might require some 
resources. In other instances it might just require some 
changing of policy. So thank you very much, Mr. Chairman.
    Mr. Shays. Thank you very much. I just want to, 
unfortunately, open one door again. And that is the whole issue 
of the unlicensed. Because I'm really wrestling with this. We 
basically have 3,000 facilities give or take?
    Ms. Steinhardt. Right.
    Mr. Shays. You say that 700 are licensed, but they 
represent 90 percent of the blood supply activity.
    Ms. Steinhardt. Right.
    Mr. Shays. You have 2,300 that have about 10 percent of the 
blood supply. Am I to infer that because they are not licensed, 
they may--and we know that the unlicensed facilities don't have 
as many recalls. It would be logical to me that they should 
have it proportionately the same. That would seem logical to 
me. And so I have the sense that they should have some recalls 
from the unlicensed intrastate facilities that aren't taking 
place. And I'm going to be asking FDA to deal with that. But I 
want to know, are there other way that these unlicensed 
facilities may simply not be up to the standard that we would 
want or does FDA, in other ways, ensure that these facilities 
are up to standard?
    Ms. Steinhardt. Well, the key here is the error and 
accident report. That's the information on what's going on 
other than the inspection itself. It's the information 
mechanism that FDA relies on to let them know what's going on 
within the facilities. And that's why--the statistic here is 
that they account for 10 percent of the blood supply but only 1 
percent of the error and accident reports. That's a significant 
difference.
    And that's why we think it's a really good starting point 
that at least if you can require them to submit the error and 
accident reports, then at least you can keep better track of 
whether there are other kinds of problems going on within those 
facilities that FDA ought to know about.
    Mr. Shays. So, bottom line: it's an area for a good look. 
Now, is the GAO or IG looking at the unlicensed facilities? Are 
you taking a special look at these facilities? Do you have 
anything planned to do?
    Ms. Steinhardt. Well, we looked at them as we did all the 
other facilities in this. And that's, I think, of all the area 
that we observed, that's the one that we think is the most 
important--just getting them.
    Mr. Shays. No. I've asked another question. I've asked the 
question of whether--you said the reporting--they only report 1 
percent. They're 10 percent of the blood supply, but they're 
only 1 percent of the accident reports or recall. And I'm 
asking, does that lead us to believe there may be other 
problems as well with the unlicensed facilities in terms of 
other practices?
    Ms. Crosse. Could I respond to that?
    Mr. Shays. Yes.
    Ms. Crosse. There's a distinction here between the filing 
of the error and accident reports, where there is a great 
disparity in terms of the percentage of the reports that are 
coming from the facilities that are underreporting.
    Mr. Shays. Right.
    Ms. Crosse. However, of those reports that are filed, 
almost equivalent proportions go on to have an investigation of 
potential recall by FDA. About 5 percent of reports filed by 
licensed whole blood facilities are investigated as potential 
recalls. About 7 percent of those error and accident reports 
that are filed by the unlicensed facilities are investigated as 
potential recall situations. So that's very close.
    The plasma facilities. Of the reports that they've filed, 
about 39 percent are investigated as potential recalls. So 
we're not seeing a great disparity in terms of the reports that 
are filed.
    Mr. Shays. Let me ask you this. What is the significance of 
being licensed or unlicensed?
    Ms. Crosse. In terms of the primary safeguards in the 
system, they are required to comply with the same--donor 
screening requirements, testing requirements, deferral register 
requirements.
    Mr. Shays. OK.
    Ms. Crosse. So----
    Mr. Shays. What aren't they required to do?
    Ms. Crosse. They aren't required to report to FDA.
    Mr. Shays. That's the only thing?
    Ms. Crosse. If they have errors and accidents.
    Mr. Shays. Is that the only difference?
    Ms. Steinhardt. But that's significant because that's the 
system.
    Mr. Shays. No. First off. It is significant. So I don't 
want to belittle it. But I just want it to be clear. Is that 
the only difference?
    Ms. Crosse. No. There are some other differences in terms 
of the requirements they have to comply with if they're making 
modifications in their own facility, if they're moving 
equipment around. Licensed facilities have greater requirements 
placed upon them in dealing with FDA for that. An unlicensed 
facility does not have the same requirements in those regards. 
But the primary safeguards that are in place for the collection 
and processing of blood products are the same.
    Mr. Shays. OK. Would you like to respond. And let me just 
conclude this panel by saying--first off, would you like to 
respond to anything that----
    Mr. Robertson. No, sir.
    Mr. Shays. OK.
    Mr. Roslewicz. The only other thing I would add to that--I 
think your question, if I understand it originally was, have we 
actually perhaps gone to an unlicensed facility to determine if 
there are any error and accident reports that they haven't----
    Mr. Shays. Right.
    Mr. Roslewicz [continuing]. Or even if how many or what the 
extent is at these facilities.
    Mr. Shays. Or just looked at these facilities and said, are 
there differences between licensed and unlicensed that Congress 
needs to be aware of?
    Mr. Roslewicz. We have not done that as part of our audits 
that we've done so far.
    Mr. Shays. OK. Is there any question that you wish that we 
had asked you that you feel needs to be part of the public 
record? This is really my out so later you don't say, if you'd 
asked this we would have told you and it was significant. I am 
asking you to tell me--to ask yourself any question I should 
have asked that you would later on say I should have asked.
    Ms. Steinhardt. I think almost everything--well, I would 
say everything we want to say we included in our testimony and 
our reports.
    Mr. Shays. OK.
    Ms. Steinhardt. And ask that they be part of the record.
    Mr. Shays. They will be part of the record.
    Mr. Roslewicz. Yes. I think our audit report is very 
detailed. It's quite lengthy, as a matter of fact, with facts 
and figures. And the written testimony, itself, also carries 
our key points that we wanted to make.
    Mr. Shays. Any question that you wish we had asked? Any 
area that you wish we would have gotten into?
    Mr. Robertson. No, sir.
    Mr. Shays. OK. We're done. Thank you very much. We 
appreciate both the GAO and Inspector General being here.
    Mr. Roslewicz. Thank you.
    Mr. Shays. Our final panel is Dr. Michael Friedman, Deputy 
Commissioner of Food and Drug Administration. I call him the 
Acting Commissioner. Accompanying him are Kathryn Zoon, 
Director, Center for Biologics Evaluation and Research; Jay 
Epstein, Director, Office of Blood Research and Review; and, 
Ronald Chesemore, Associate Commissioner for Regulatory 
Affairs. I'm going to ask you to stay standing. We're going to 
swear you in, and we're really happy you're here. Do we have 
anyone else who might be responding?
    [Witnesses sworn.]
    Mr. Shays. And everyone has responded in the affirmative. 
Dr. Friedman, great to have you here and good to have your 
staff. And I'm looking forward to your testimony and asking 
questions. Thank you.

STATEMENTS OF MICHAEL FRIEDMAN, LEAD DEPUTY COMMISSIONER, FOOD 
   AND DRUG ADMINISTRATION, ACCOMPANIED BY KATHRYN C. ZOON, 
DIRECTOR, CENTER FOR BIOLOGICS EVALUATION AND RESEARCH; DR. JAY 
S. EPSTEIN, DIRECTOR, OFFICE OF BLOOD RESEARCH AND REVIEW; AND 
  RONALD G. CHESEMORE, ASSOCIATE COMMISSIONER FOR REGULATORY 
                            AFFAIRS

    Dr. Friedman. Thank you very much.
    Mr. Shays. And I just note that we are joined by a former 
mayor of Cleveland, Mr. Kucinich. Thank you.
    Dr. Friedman. Thank you, sir. Mr. Chairman and members of 
the subcommittee, I'm Michael Friedman and I serve as the lead 
Deputy Commissioner of the Food and Drug Administration. With 
me today, as you've mentioned, Mr. Chairman, are Mr. Chesemore, 
the Associate Commissioner of Regulatory Affairs, Dr. Zoon, 
Director of the Center for Biologics Evaluation and Research--
the center primarily responsible within the agency for the 
scientific and regulatory activities for blood and blood 
products--and Dr. Jay Epstein, Director of the Office of Blood 
Research and Review.
    This committee has demonstrated a keen interest in blood 
issues in the past. And so I appreciate this opportunity to 
discuss FDA's role in regulating and protecting the Nation's 
blood supply. Each year in this country about 14 million units 
of whole blood are drawn from about 8 million donors. The 
products made from this blood are transfused into 3.5 million 
Americans. Some of this blood--an additional 12 million units 
of source plasma--are further processed into products such as 
clotting factors and immuno-globulin.
    Blood and blood products are vitally important to our 
health care system and are often used to keep the most ill and 
the most severely injured of our citizens alive. Let me begin, 
sir, by reiterating clearly that blood products have never been 
safer and that the American blood supply is among the safest in 
the world. But having said this, because of the biologic nature 
of blood itself, there exists risks to anyone who receives a 
blood product.
    Nonetheless, we are absolutely committed to taking 
appropriate steps to making these products as safe as we 
possibly can. We must acknowledge that there have been 
weaknesses and inconsistencies in our regulatory oversight of 
blood and blood products in the past. Based on constructive 
criticism and advice received from this committee, from GAO, 
from OIG and IOM, and, of course, based on our own on-going 
commitment to improve what we do, we have implemented a number 
of substantial improvements in our blood program.
    And if I may, I'd like to highlight some of the recent 
changes we have made. As you know, sir, since 1993 the Office 
of Regulatory Affairs has been primarily responsible for blood 
bank inspections. And as you've just heard, as of the fall of 
1996, the Office of Regulatory Affairs has taken the lead 
responsibility for the inspection of plasma fractionators. 
CBER's staff cooperate in this endeavor. Their scientific input 
is valuable and useful. But ORA has the lead.
    Second, since this time--since the fall of 1996--we've 
conducted a thorough reinspection of all plasma manufacturers 
producing products for citizens in the United States. As you 
have seen, we found significantly more violations than had been 
noted in the past. And these observations are being acted upon 
in a much more timely manner.
    These efforts are aimed at preventing problems. 
Nonetheless, we know that there is more that needs to be done. 
The Center for Biologics Evaluation and Research is in the 
process of restructuring exactly how it handles reports of 
blood and blood products emergencies, and is now reacting much 
more appropriately and much more promptly. We also have changed 
how we communicate with the public, patient groups and others 
affected by recalls and withdrawals of blood products. And, 
moreover, we are reaching out to include more consumers and 
patient representatives whose valuable input helps increase the 
quality of our decisionmaking. This is especially true for the 
hemophilia community who participate in this way.
    We also are restructuring how blood issues are managed 
within the Center for Biologics Evaluation and Research. We've 
recently named a new medical deputy director for this center. 
And this individual will be in charge of all the CBER 
components dealing with blood and blood products. And he will 
continue to increase the pace of our efforts to markedly 
improve how we manage this very important portfolio.
    These are just some brief comments, an overview, if you 
will, of the steps that we are taking. We are not satisfied. We 
clearly recognize that a good deal more needs to be done. We 
are committed to reviewing and revising as necessary all 
regulations and guidance that we provide to industry to assure 
that they are complete, that they are current, that they are 
appropriate and that they are clear, so that industry 
understands its responsibilities.
    We also are committed to identifying areas where new advice 
may be needed. And we're addressing new scientific problems as 
they are identified. Among the areas that still require 
additional consideration, we know that one of great interest to 
this committee has been the issuance of look back notification 
involving individuals who may have been infected with hepatitis 
C through blood products.
    The Public Health Service Advisory Committee established by 
Secretary Shalala, as was promised to you, Mr. Chairman, has 
taken several notification options under consideration. We 
expect much more precise guidance on these options at their 
next meeting coming up later this summer.
    FDA has worked with its sister agencies, especially CDC, to 
address the public health concerns of the approximately 4 
million individuals thought to be infected with hepatitis C 
virus, some of whom may well have been infected through blood 
transfusion.
    I am personally committed to blood safety. Shortly after 
coming to the Food and Drug Administration in the fall of 1995, 
I began holding meetings on a regular basis with senior FDA 
managers, especially those from the Center for Biologics 
Evaluation and Research, to begin to discuss aspects of our 
blood safety program. These meetings continue. And we will get 
the job done. I am holding specific FDA staff responsible for 
the success of this effort, just as I expect you, Mr. Chairman, 
to hold me publicly and personally accountable for this.
    America's blood safety program must provide the finest 
public health protection that is possible. FDA must be vigilant 
in ensuring that the blood supply is as safe as it can be. We 
appreciate the chance to be here to answer questions raised by 
the previous panel and other issues that you'd like us to 
address. Thank you, sir.
    [The prepared statement of Dr. Friedman follows:]
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    Mr. Shays. Thank you. Why don't you start by just 
responding to some of the dialog that took place earlier with 
the charts and so on.
    Dr. Friedman. I'd be happy to.
    Mr. Shays. Well, the charts disappeared on us.
    Dr. Friedman. That's OK.
    Mr. Shays. You've got them in front of you.
    Dr. Friedman. And you have them as well.
    Mr. Shays. Right.
    Dr. Friedman. It would help, sir--focus me on----
    Mr. Shays. Why don't we take on license first?
    Dr. Friedman. All right, sir.
    Mr. Shays. Tell me what that chart says to you. We've 
accepted the assumption that 10 percent of the blood supply is 
done by unlicensed organizations and that only 1 percent of the 
recalls.
    Dr. Friedman. We can't give you better estimates of what 
actually may be occurring in those unlicensed facilities in 
terms of numbers of error and accident reports. Our commitment 
is to bring these unlicensed centers under the same reporting 
requirements as the licensed facilities, because we think that 
that inconsistency is neither sensible nor appropriate. And so, 
regulations are in the process of being finalized for 
issuance--a proposal for those regulations is being prepared 
for issuance, because it's my intention to have those centers 
treated the same way as the licensed centers.
    Mr. Shays. And how long will that process take? You're 
smiling.
    Dr. Friedman. Well, Mr. Chairman, that's the one question 
that I know you always ask, and it's the one if I can give the 
very best answer on that I can. These proposals are in a near 
final form now. We hope within the next few weeks to have them 
out of the agency to the department and OMB. I am really asking 
for this because I believe our recommendations that have been 
made now for, I believe, more than a year, perhaps closer to 2 
years. I very much want to get these out and done. And it's my 
intention to focus on these very intently.
    Mr. Shays. You didn't design the process of which 
regulations go through FDA, OMB and so on. But I just need to 
know--the bottom line would be at best, when would the 
earliest?
    Dr. Friedman. If OMB were to take a full 90 days, which is 
their prerogative----
    Mr. Shays. Right.
    Dr. Friedman [continuing]. Then it's my intention to have 
them to OMB and to the department by the first of next month, 
which would be July.
    Mr. Shays. Right.
    Dr. Friedman. That would be--it could be as late as 
October----
    Mr. Shays. OK. That what?
    Dr. Friedman [continuing]. That those proposals would be 
issued. There then would be a comment period.
    Mr. Shays. Right. Of how many days?
    Dr. Friedman. I always ask for the shortest possible 
comment period consistent with getting good comments.
    Mr. Shays. Does OMB decide that?
    Dr. Friedman. No. There's some flexibility in that. 
Typically there's a 2-month comment period--60 days.
    Mr. Shays. All right.
    Dr. Friedman. But I commit to you, sir, that we're going to 
try and speed that process along at every point.
    Mr. Shays. Right. Well, what we'd like to do is followup 
and encourage that process to move along.
    Dr. Friedman. And we do have a history of interacting with 
your staff on these things as they go through. And we'd be 
happy to continue that.
    Mr. Shays. But we'll also try to encourage OMB to try to 
move forward as well.
    Dr. Friedman. Thank you, sir.
    Mr. Shays. Can I infer that there are other differences 
between a licensed and an unlicensed facility that are 
significant?
    Dr. Friedman. There are--that's what I was going to say. 
I'm not sure that many of these distinctions are important from 
this committee's point of view. I'll ask those with me to 
please elaborate on this. The agency has some additional 
leverage in terms of dealing with licensed facilities. We have 
certain powers over those facilities that others do not. The 
reporting requirements you already know. I would ask those with 
me to please offer other information.
    Mr. Shays. Sure.
    Dr. Friedman. Please, Dr. Zoon.
    Ms. Zoon. I'd be happy to start and perhaps others might 
add. With unlicensed blood banks there are a number of controls 
and points of oversight that we do have.
    Mr. Shays. Now, you get the ability to do that not through 
interstate commerce. How do you get the ability to regulate 
them?
    Ms. Zoon. Well, they have to comply with the regulations 
that the FDA issues.
    Mr. Shays. I guess the issue is----
    Ms. Zoon. What authorities?
    Mr. Shays. No. Why is the recall the one area that you 
don't seem to regulate? And maybe that's meaningless history. 
It's logical to me that an unlicensed facility is unlicensed 
given that it's intrastate. But yet you're allowed to have 
tremendous impact over these facilities in other ways. You have 
oversight over them except in this one area. And I was just 
curious how you get your oversight over an intrastate facility?
    Ms. Zoon. We have oversight by the Food, Drug and Cosmetic 
Act.
    Mr. Shays. OK.
    Ms. Zoon. And we also have control under the Public Health 
Service Act as it applies to communicable diseases.
    Mr. Shays. OK. But you do have the authority to require 
these unlicensed facilities to provide reports and recall and 
so on?
    Ms. Zoon. Through regulations, yes.
    Mr. Shays. But you don't have the ability to license them?
    Ms. Zoon. That is correct.
    Mr. Shays. OK. All right. Did you have anything else that 
you wanted to say? Any other comment?
    Ms. Zoon. Well, you had asked me what types of controls we 
have, and I was just going to say that they needed to comply 
with regulations. They needed to be inspected. There are also 
State controls independent of Federal controls. And the last 
two were that they're subject to the FD&C Act and the Public 
Health Service Act under the communicable diseases provision.
    Mr. Shays. OK. Any other comment? Now, the Inspector 
General, through this chart, responded to my question by 
saying, yes. And I said, does the IG believe that the FDA's 
enforcement policies are better implemented by the Office of 
Regulatory Affairs where you have field offices, rather than 
the Center for Biologics? And we had both represented here. And 
I'm not looking for an internal battle, but I would like a 
candid response to what you think about that.
    Dr. Friedman. Let me say that if one accepts the model that 
there needs to be participation by both centers--and that will 
be my thesis here--having the Office of Regulatory Affairs take 
the lead for that activity brings this component of the 
products that we regulate into coherence with all the other 
things that we do. There are real economies of scale. There are 
real organizational values in having more uniform procedures 
for how certain kinds of inspections are made.
    I absolutely underscore the value of having CBER's 
scientists involved in these inspectional activities. But I 
think that we've demonstrated that there's a great deal to be 
gained by having ORA as the lead organization. Our testimony 
has some of the documentation of that. The number of findings 
that are expressed.
    Mr. Shays. Right.
    Dr. Friedman. The days involved in doing the inspections. 
And the timeliness--an issue that you were focusing on 
earlier--how quickly--what is the interval between the 
completion of the inspection and the generation of written 
documents and so forth. In all three of those areas there has 
been an improvement since the involvement of ORA as the lead in 
these inspections.
    Mr. Shays. So, it's the policy that ORA should be taking 
the lead?
    Dr. Friedman. They are taking the lead, sir. Since roughly 
November 1996 they have been the lead for the plasma 
fractionators. For whole blood they have been the lead--it's 
varied depending on the different facilities----
    Mr. Shays. Right.
    Dr. Friedman [continuing]. For a longer period of time. We 
are moving to having ORA be the primary lead for all biologics. 
That's vaccines, allergenics, so on and so forth. But for the 
purposes of our discussion here today, ORA is in the lead for 
plasma fractionators, for whole blood, components and so forth.
    Mr. Shays. OK. Let me go to this chart here and have you 
respond to that.
    Dr. Friedman. Yes.
    Mr. Shays. The time for errors and accident reports 
submission to recall confirmation. I first need to know what 
this tells you and then I want to know the implications.
    Dr. Friedman. Let me begin by saying I'm not sure what this 
tells me. And the reason is--and I don't mean this to be 
critical. I was a little confused by the presentation.
    Mr. Shays. No. I understand.
    Dr. Friedman. And after our discussions here today, we will 
be touching base with them to go through this in more detail. 
What I would first point out to you, sir----
    Mr. Shays. Let me just ask you this.
    Dr. Friedman. Yes.
    Mr. Shays. One, confused in what it's saying or the 
implications? In other words, whether this is----
    Dr. Friedman. Confused in what it's saying.
    Mr. Shays. Whether it's factually correct or whether, even 
though it's factually correct, whether it's significant.
    Dr. Friedman. In all of those areas.
    Mr. Shays. So you question whether it's factually correct?
    Dr. Friedman. Well, or relevant.
    Mr. Shays. OK.
    Dr. Friedman. If I interpret this correctly, these data 
come from October 1992 to April 1993. And if that's true then 
we're talking about 4 years ago. And this may be true for then.
    Mr. Shays. OK.
    Dr. Friedman. What's more relevant to me now, and the 
question that I don't have an answer for you today, sir--I'm 
sorry----
    Mr. Shays. That's OK.
    Dr. Friedman [continuing]. Is what are the numbers that we 
have in a more current year. I do not have those. And I would 
find that a great deal more valuable to me. Because, to be 
entirely candid, we have criticisms of the timeliness with 
which we processed things in 1992, 1993----
    Mr. Shays. OK.
    Dr. Friedman. And I'm not trying to say that everything is 
fixed. But that's a long time ago.
    Mr. Shays. But one of the beautiful things is that we can 
followup. And we will followup. And can we make it part of the 
record, as well? And we'll make it part of the record. I would 
like to hold the record open to just see if you can provide us 
some more current data.
    [The information referred to follows:]
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    Dr. Friedman. And I'm interested in that, as well.
    Mr. Shays. OK. But walk me through the process of an 
accident report being submitted and how you respond.
    Dr. Friedman. OK. I will begin with that, and then, again, 
I'll ask others to please----
    Mr. Shays. Someone else can respond. You don't have to if 
you don't want to.
    Dr. Friedman. No. There are a couple of general things that 
I'd like to say and then I'd like others to----
    Mr. Shays. You want to take the easy stuff and have the 
hard stuff done by staff. I can relate to that.
    Dr. Friedman. My staff calls me the warm up band for the 
real----
    Mr. Shays. For the real stuff.
    Dr. Friedman. Yes. That's exactly right.
    Mr. Shays. OK.
    Dr. Friedman. I'm told that there are approximately 12,000 
error and accident reports that we receive each year and that 
these are a variety of different sorts of reports. As you 
recognize, there are the most serious kinds of life threatening 
reports, and then there are others which are technically noted 
but don't have any health significance either for the 
individual or for all people who might receive a product.
    And we have mixtures of those sorts of things here. As I 
understand what is being described in this pie chart, there is 
a period of time that is being counted until we close our file 
or we show that there has been a complete audit of some 
activity. And so there are two important components here that 
I'd like to distinguish. One is: are we recognizing and acting 
in an appropriate and timely way when there is a health concern 
for an individual patient, the sort of individuals that you are 
talking about--a patient who wants to know whether he or she 
can inject yourself from material that's in her refrigerator or 
his refrigerator. Are we acting promptly on that?
    There is a second concern which is--are we acting promptly 
there? And I think that's what the Inspector General was saying 
was their review of things. But there's a second component, 
which is, are we completing all the necessary classifications, 
and audits checks that are appropriate to be done--are we 
completing those in a timely and complete fashion. And I'm 
distinguishing between those two things.
    This chart doesn't tell me either one. I can't be quite 
sure what it means. But what I am told--because we were--as 
this was being presented--furiously whispering questions back 
and forth--that in the most recent year and perhaps longer, 
there have not been class 1--those are the most life 
threatening or potentially life threatening kinds of recalls--
there have been none of those kinds of events that have taken 
the length of time that is portrayed here, that those are being 
handled in a much more rapid timeframe.
    As you pointed out earlier, in the Centeon situation, there 
was an unacceptable delay in a recognition of a problem. That, 
we believe, we've looked very hard at and have fixed. But those 
are the sorts of concerns--that I want to make sure that we 
don't have lapses where we can help an individual patient or 
group of patients. And we will become more efficient in terms 
of dealing with the paperwork that is required afterward.
    Those are my general remarks. I would ask other people to 
please make specific comments, sir.
    Ms. Zoon. Yes. The center does have standard operating 
procedures for handling error and accident reports. And if you 
would like, I could briefly summarize.
    Mr. Shays. I'd like you to just walk me through. When a 
complaint comes in tell me how you deal with it.
    Ms. Zoon. All right. The error and accident reports are 
received by the division of inspections and surveillance in our 
office of compliance. Once the action reports come in, they are 
reviewed and evaluated by a consumer safety officer and the 
error and accident coordinator within the division.
    Mr. Shays. Are these just mailed in? Are they FedExed in? 
Are they sent in weeks and weeks after the event? From the 
moment a facility realizes that they need to send a report, do 
they send it in within 12 hours? Give me a sense of the kind of 
feeling of urgency that they might have?
    Ms. Zoon. Right. May I ask Mr. Jim Simmons, head of the 
Office of Compliance to address that?
    Mr. Shays. Yes. Were you sworn in, sir? Good. You can just 
sit over there. And just identify your name again. I'm assuming 
our transcriber has the names. And if not, you have a card that 
you'll be able to give him?
    Mr. Simmons. I think that my name was provided to the party 
already.
    Mr. Shays. Great. Thank you.
    Mr. Simmons. You were asking about the manner in which they 
were submitted?
    Mr. Shays. Right. I have no sense of how people deal with 
these and the sense of urgency or not. The one thing I do is I 
have people who know what it's like when they're taking the 
blood product and they hear many weeks after the fact that 
maybe what they took will be harmful to them. So they have a 
sense of urgency. I want to know how the urgency is felt within 
the Department.
    Mr. Simmons. The situation is certainly variable from 
company to company. And I think you may recall the 
representative from the General Accounting Office indicate that 
the time lapse in average is in excess--or the time of their 
audit--was in excess of 4 months. And it ranges from a few days 
to longer than a year. And part of that was attributed to our 
regulation that currently says, promptly. And in the proposed 
revisions we will define promptly, and have used the 
recommendation from that audit of 45 days. I think in terms 
of----
    Mr. Shays. Wait. The facility itself realizes that a--maybe 
I don't even have an appreciation of what we're talking about 
in terms of an accident. Maybe I need to have----
    Dr. Friedman. May I just? Because I had the same question 
you do. There are several ways in which information is provided 
to the agency. Through the MedWatch system as you've heard, 
through adverse events, which may be phoned in by a company or 
by a facility where they see something very serious.
    Mr. Shays. Right.
    Dr. Friedman. That's a phone system that has 24-hour a day 
coverage 7 days a week. But there are also error and accident 
reports which can include things from--and I'll give you a 
couple of examples so you'll understand that it's not the sort 
of significance that you're speaking of. If a patient in a 
facility receives a unit of platelates--which is a portion of 
the blood--has an infectious disease--passes away, the question 
comes up whether there was any relationship between that unit 
of material and death.
    Mr. Shays. Yes.
    Dr. Friedman. It turns out that the unit was cultured, that 
the patient's blood was cultured, the urine was cultured and so 
forth. There wasn't a relationship between that unit. But it 
was reported as a perfectly plausible, possible thing that then 
required some followup. But the followup was that you had to 
wait for all those blood cultures and all those cultures to be 
competed, all the information to be assembled and so forth. It 
could be that a patient received the wrong unit in certain 
facilities.
    I'm saying this--because many of these would not be 
reported in this way. But it can be something important for the 
individual patient, but from your point of view, not related to 
a systemic problem with how a product is made or processed or 
drawn. And there's this whole range of things. It could be a 
systems failure in an organization to an individual patient 
problem. And it encompasses a large number of different sorts 
of things, sir.
    Mr. Shays. OK.
    Ms. Zoon. If----
    Dr. Friedman. Go ahead.
    Ms. Zoon. Would you like me to continue to tell you how we 
deal with error and accident reports?
    Mr. Shays. Sure. You can stay there. You need to speak 
clearly, though. Have you completed the point that you wanted 
to make to the committee?
    Mr. Simmons. The point that you had asked I think I did.
    Mr. Shays. Yes.
    Mr. Simmons. I will respond further if you like.
    Mr. Shays. The word ``prompt'' is going to be redefined to 
be 45 days? You are considering that?
    Mr. Simmons. We have defined ``prompt'' in terms of numbers 
of days.
    Mr. Shays. OK. Yes.
    Ms. Zoon. Following the receipt of the error and accident 
report a determination is made--one, in terms of the 
completeness of the report. If there is insufficient 
information, it's followed up and the further information is 
obtained from the filer. And that's generally--can be--
depending on the nature of the situation, direct contact by 
phone, or it could be in other forms of communication.
    The data is entered into an error and accident reporting 
system. And this data can then be accessed by the field offices 
by the CBER's error and accident reporting system that we refer 
to as ``CEARS.'' Those E&As are evaluated to determine if 
additional followup activities or alerts are necessary if not 
already initiated. Additional activities include but are 
limited to determining if a recall has been initiated and 
determining if any investigations were initiated or on-going 
regarding significant adverse event reports were filed.
    Then for error and accidents representing possible recall 
situations a copy of the error and accident report is forwarded 
to the district office as an alert to a possible recall. There 
also are quarterly and annual reports prepared by the division 
director. And these reports and trends are looked at with 
respect to those types of errors that are found.
    Mr. Shays. What I'm going to do is I'm going to have both 
majority and minority staff ask some questions and I'm going to 
just respond to some of your responses.
    Ms. Finley. Thank you, Mr. Chairman. Dr. Friedman, why 
didn't the FDA require patient labeling on the factor 8 product 
manufactured with the transferrin produced from the plasma of a 
CJD patient?
    Mr. Shays. You've got to slow down a little bit. I'm going 
to have you start over again.
    Ms. Finley. OK.
    Mr. Shays. That's why I didn't ask this question.
    Ms. Finley. Could you describe the procedures for biohazard 
labeling of products manufactured from the plasma of CJD 
patients? It's my understanding that you require it for CJD-
derived products intended for research use only and the agency 
didn't require it for patient labeling on the factor 8 product 
manufactured--that was put on hold--I think--of January of this 
year?
    Dr. Friedman. I'll ask Dr. Epstein or others to embellish 
my answer.
    Mr. Shays. OK.
    Dr. Friedman. I guess there are two important things to 
note about CJD which you appreciate. One is how little we 
understand about certain aspects of the biology of the diseases 
and how we don't have a really appropriate test for identifying 
potentially infectious material in either an organ or in a 
plasma or derived component. The second point is that although 
this has been looked for very vigorously--cases in which a 
human may have gotten CJD from a blood or blood product, it's 
been difficult, some say impossible to detect such a thing.
    Nonetheless, we feel that there is reason to be cautious--
because of the first point I made which is how large our 
ignorance is in certain important areas. And the policy, the 
guidance which has gone forward, tries to rank potential risks 
in a logical way so that if one has something that's directly 
derived from a donor who ultimately turns out to have CJD that 
might represent one sort of risk. If you have that unit of 
which one tiny fraction is removed, purified and then is 
further removed, purified, the risk begins as remote and 
progresses to exceedingly remote.
    And that's the sort of general framework of risk that we 
try and utilize. The question you ask is a provocative one, and 
I'd like Dr. Epstein or others to please add more.
    Dr. Epstein. Yes. Thank you, Dr. Friedman. And thank you, 
Ms. Finley and Mr. Shays. In the case that you're describing 
the final product, which was a Factor 8 product, had been 
manufactured using a purification system that depended on a 
synthetic antibody--a monoclonal antibody. That monoclonal 
antibody had been generated from an invitro culture in which 
the medium had been supplemented with a blood product. And it 
was that blood product which had been withdrawn on account of a 
contribution by a donor who later got CJD.
    So we have a fairly indirect situation in which there was 
some exposure during manufacturing many, many steps removed 
from the final product. Now, the issue, of course, was whether 
the policy on withdrawal of plasma derivatives based on 
subsequent knowledge of a contribution by a donor who got CJD, 
or was later learned to even have risk factors for CJD, should 
be applied in this case. But it is distinct in that you're not 
dealing with potential contamination directly of the derivative 
due to the pool, you're dealing with potential contamination 
due to exposure to a reagent many, many steps removed from the 
final product.
    What was done in this case is that first we charged the 
company, which did duly report this as an error or accident. We 
would view it as accident--it's all learned post hoc--to the 
FDA. We charge them with doing a risk analysis. The company 
provided the risk analysis to the FDA. FDA performed its own 
risk analysis and FDA requested that the CDC perform a risk 
analysis.
    The bottom line of the risk analyses was, that the risk for 
any persistence of CJD infectivity in the final product was 
extremely remote based on effective removal of the additive--
so-called transferrin--due to the many purification steps. Now, 
what we did in the face of that was have a dialog with the 
hemophilia community over the risk assessment.
    We requested and the industry voluntarily complied with 
informing the hemophilia community fully of the events 
surrounding the incident and the analysis and the basis for the 
conclusion of a safe product. Therefore, as a result of the 
investigation, a determination was made that there was no 
significant added risk. And I'm sure you understand--and, 
indeed, your question suggests--that there always is some risk. 
And we appreciate that. But the conclusion of the analysis was 
no significant added risk due to the remote exposure to a 
reagent at an early stage of manufacturing. Therefore, the 
product did not require special labeling and it was permitted 
to remain on the market.
    Let me just remark at a more general level that I believe 
you are aware that there has been an initiative since 1995 to 
work with the industry to develop more specific warning labels 
regarding viral risks or risks of unconventional agents in 
plasma derivatives. Let me stop there.
    Ms. Finley. OK. Thank you, Dr. Epstein. Dr. Friedman, the 
blood safety committee report of December 1996 analyzed the 
FDA's management of the Centeon recall in the fall of 1996. 
They determined that the FDA had not inspected the albumin line 
at the Centeon plant in over 50 years since the license was 
approved for. I guess would have then been the Armour Co.--now 
Centeon--in 1947. Could you explain why when the Inspector 
General determined that albumin was listed in the top five of 
plasma products which help professionals report patient adverse 
reactions, why the FDA did not determine in the course of 50 
years that it was necessary to inspect that line?
    Dr. Friedman. Again, I'll ask Dr. Epstein to embellish on 
my answer. The individuals--patients who receive albumin are 
amongst the most ill, most fragile individuals who receive any 
blood product. These are often individuals who have suffered 
important trauma, major infection, and other overwhelmingly 
life threatening episodes. These individuals fall prey to a 
large number of concurrent infections or concurrent other 
physiologic problems. And they're the most fragile individuals. 
So the fact that these people have a great rate of illness, of 
morbidity and a high mortality rate indicates just how ill they 
are in the fact that they need this product.
    I certainly cannot--because I don't know the answer to 
this--construct a coherent explanation for why this product was 
not inspected during that period of time. There has been--the 
number of cases in which this product has been poorly 
manufactured has been historically low. But I won't try and 
construct a defense of that. What I will say is, not only would 
I question the frequency of the inspections, I would question 
the quality of the inspections. And it's exactly concerns about 
that that led us to reinspect all of the plasma derived 
products over the last 6 or 7 or 8 months.
    Because my concern was that we had not looked at those 
products either intensively enough or--in a situation like 
this--with sufficient frequency. Again, I cannot explain to you 
what the thinking was 30 or 40 years ago. I can tell you what 
our current interests and our current expectations are. Let me 
just ask if Dr. Epstein would like to add.
    Ms. Finley. And then I have a followup question.
    Dr. Friedman. Please.
    Dr. Epstein. Yes. Thank you. You really have asked two 
questions, one regarding prior inspections at Centeon for 
albumin. The other: what is our reaction to the fact that 
adverse event reports for albumin are among the top five 
reported for plasma-derived products. On the first question--
FDA, as you know, inspected Centeon in June 1995 prior to the 
recall of albumin, and did examine general GMP including air 
and water handling systems, environmental controls, and related 
matters that would be applicable to all the products and would 
include the albumin as well as clotting factors.
    In that sense--and that's limited--aspects of albumin 
production were inspected. However, there was no focused 
inspection on albumin. The basic reason that there was not an 
in-depth review of processed validation related to albumin was 
because of its extensive record of product safety of 
approximately 50 years.
    I believe that it will be made clear that the new approach 
to plasma fractionator inspections does involve a more 
comprehensive review of process validation. And that is a shift 
of focus. And we acknowledge that had that been in place, there 
might have been a more effective inspection.
    Ms. Finley. May I assume from both of your statements and 
from the report that the blood safety committee produced for 
Dr. Lee that FDA states that its position is to inspect plasma 
fractionators every 2 years? But in this particular case, it 
clearly didn't meet that goal.
    Dr. Friedman. I'm not sure that's exactly accurate. I think 
the question you're asking is: Will each product line be 
individually inspected every 2 years. I don't know the answer 
to that. Will we inspect each facility at no less frequency 
than every 2 years? That is correct. And for cause or as a 
followup, it will be more frequent absolutely.
    Ms. Finley. Bottom line: What assurance can you give the 
American people that you will not let a product line go for 
another 50 years without an inspection? What things have you 
put into place to ensure that you catch that situation?
    Mr. Shays. And I'm going to just add: what kind of 
requirements are on FDA for inspection? Is there an every so 
many years or is there just a----
    Dr. Friedman. May I ask Mr. Chesemore to please deal with 
the----
    Mr. Shays. Sure.
    Mr. Chesemore. The requirements, Mr. Chairman, are that for 
a drug or a biologic manufacturer, that we do a general GMP 
inspection at least once every 2 years. That's what the law 
states.
    Mr. Shays. OK. And it gets around a problem I had with HCFA 
in terms of timeframes on HCFA and just rewriting rules. And 
also with the FDA on your licensing of products and your 
deciding that you were going to do it--you had this backlog and 
you were going to bring this backlog down and you did a 
sensible requirement of how you would get the backlog down, but 
it was not in conformance with the law. So we need to either 
change the law or get you to conform to the law. Let me ask 
this, and then I do want to make sure we--is it feasible for 
you to abide by the law of inspecting every 2 years? Is that a 
wish list on the part of Congress and the White House?
    Mr. Chesemore. It's becoming much more difficult, Mr. 
Chairman. And the situation that Ms. Finely raised is, do we 
have the ability to cover every product that a firm 
manufactures once every 2 years. And the answer to that is 
clearly ``no.''
    Mr. Shays. OK.
    Mr. Chesemore. What we try to do is, at least try to 
inspect the process, whether it's biological or a tablet or an 
injectable. And we try to take a look at the firm's 
inspectional history. And all those things go into 
consideration in determining which firms we do need to inspect.
    Mr. Shays. Now, the law requires you to do it every 2 
years. What is your----
    Dr. Friedman. Sir, it's very important to state--as far as 
I know, we're in conformance with that. We are doing 
inspections that frequently.
    Mr. Chesemore. In the plasma fractionator industry.
    Dr. Friedman. So that there's no misunderstanding about 
that.
    Mr. Shays. No. You weren't doing it in the case of this.
    Dr. Friedman. Yes, sir. That was the point I was trying to 
make, which is, this facility was actually inspected more 
frequently than every 2 years. But this particular product line 
had not been inspected as a particular product line.
    Mr. Shays. Right. OK. Why don't you followup?
    Dr. Friedman. Please.
    Ms. Finley. I still believe the question that I'm asking--
and perhaps I didn't phrase it properly--is what assurance can 
you give us that another Centeon situation will not occur? In 
other words, how do you structure your inspections to ensure 
that you're not letting a product line like that slip by for 50 
years? And the reason I'm concerned about this is that--
according to your staff, Dr. Friedman--that is the largest 
plasma product recall in the history of the United States. For 
that not to have been caught at any point in 50 years is a very 
serious problem, as I'm sure you'll agree.
    Dr. Friedman. I'm sorry. I don't mean to disagree. I think 
that it is a very important observation. I don't minimize it 
for a moment. I do think, though, there are two ways in which 
one would help to ensure the American public that these sorts 
of problems would be caught at the earliest possible time. On 
the one hand, there had been previous inspections at this 
facility that indicated certain kinds of problems that had 
occurred, certain concerns that had been raised, which we do 
not believe were adequately followed up on.
    And had those been adequately followed up on, this problem 
potentially would not have occurred. I'm assuming the best case 
situation. The fact that we are much more rigorous, much more 
consistent and much more timely in how we do our inspections 
and how we followup on those inspections should give the 
American public some additional confidence in the quality of 
the product. The fact that there was a period of time--not when 
this manufacturing site wasn't inspected, but when these 
problems were not followed up on--is what I am concerned about 
and what I think needs further attention. I believe it's 
entirely credible that had we done more careful assessment of 
whether the recommendations that were being made were followed 
up on, that this particular occurrence might not have happened.
    Mr. Shays. Let me do this, let me ask our minority staff, 
Cherri Branson, if she has some questions.
    Dr. Friedman. Please.
    Mr. Shays. But I just want to be clear as someone who is 
not the expert in this group up here--and I want the record to 
be clear--there is inspection of facilities and there's 
examination of product lines, and two separate issues? Am I'm 
mixing the two up? Is that what's happening here?
    Dr. Friedman. Well, think of it this way, sir. If, for 
example, a drug manufacturing facility might make 10 or 20 
products at different times of the year or different parts of 
the factory----
    Mr. Shays. Right.
    Dr. Friedman [continuing]. That factory will be inspected. 
And if it's a new product, before that new product is approved 
for use, that particular line will be inspected. But at 
subsequent visits, the air and the water and the general 
cleanliness--so there will be some general features of the 
facility that will be looked at. And then there will be 
specifics of specific manufacturing areas will be focused on. 
But not every product line in each facility will be looked at.
    Mr. Shays. Now, Mr. Chesemore, I do want to make sure that 
we're clear on this, though, because this is under oath. Is it 
your testimony that every facility is inspected within the law, 
which I believe is a 2-year requirement?
    Mr. Chesemore. Every plasma fractionator facility.
    Mr. Shays. OK. And that's what the legal requirement is?
    Mr. Chesemore. That is the legal requirement.
    Mr. Shays. Now, other facilities, do you still have a 2-
year requirement or do you have another?
    Mr. Chesemore. We have a 2-year requirement on all human 
pharmaceuticals, all veterinary pharmaceuticals, many medical 
device manufacturers. There is a requirement within the Food, 
Drug and Cosmetic Act of a biennial or once every 2 years 
inspection.
    Mr. Shays. OK.
    Mr. Chesemore. There is no requirement, for example, for 
the majority of food firms that we regularly----
    Mr. Shays. OK.
    Mr. Chesemore. And that's where I'm coming from.
    Mr. Shays. I'm frankly surprised that you can keep up with 
that. Are you able to do that every 2 years?
    Mr. Chesemore. In all those product lines the answer is 
``no.''
    Mr. Shays. The answer is ``no,'' not ``yes?''
    Mr. Chesemore. The answer is ``no.'' We are unable to make 
an inspection once every 2 years in all areas that we're 
required to.
    Mr. Shays. OK. If you were to figure out the average. In 
other words, I can relate it to roads. We figured out when we 
were in the State house that we should do a road every 7 
years--repave it--and if we didn't, the roads would 
deteriorate. And the average was, we did every road every 50 
years. What's the average for inspections?
    Mr. Chesemore. It's going to the vary, sir, by commodity.
    Mr. Shays. OK.
    Mr. Chesemore. And I'm not sure that the once every 2 years 
is the most important thing. As a matter of fact, in our 
thinking, we think the risk is much more----
    Mr. Shays. No, I understand that. But now we get into the 
evaluation and then we also get into law.
    Mr. Chesemore. Right.
    Mr. Shays. And the one thing you're not going to get from 
this committee on either side of the aisle, we're not going to 
throw bricks at you because you can't do something and we 
didn't appropriate the money for the people to do the 
inspections. But we are going to have the public record be 
clear. And then we're going to have an open dialog about it.
    Mr. Chesemore. Sure.
    Mr. Shays. And we can get into debate whether it should be 
every 2 years. Well, what is the average?
    Mr. Chesemore. Well, if I could, I'd like to submit that 
for the record.
    Mr. Shays. Yes.
    [The information referred to follows:]
    [GRAPHIC] [TIFF OMITTED] 45251.241
    
    Mr. Chesemore. But I can give you an approximation.
    Mr. Shays. Approximate will do now.
    Mr. Chesemore. In drugs and devices it's about once every 3 
years.
    Mr. Shays. OK.
    Mr. Chesemore. In foods it's more like once every 5 to 10 
years.
    Mr. Shays. OK.
    Mr. Chesemore. In veterinary products it's a little over 
once every 2 years as well.
    Mr. Shays. Yes. But the once, once every 5 to 10 years, 
which is a big spread----
    Mr. Chesemore. There is no requirement in the act for food 
firms.
    Mr. Shays. There's no legal requirement.
    Mr. Chesemore. So, we're close, but we're over.
    Mr. Shays. OK.
    Mr. Chesemore. With the exception of we have concentrated, 
really, in the last 5 to 7 years, in the biologics area, since 
the mid 1980's to make sure that that's where we at least did 
the biennial if not sooner inspections.
    Mr. Shays. You're going to have to make choices given 
limited resources.
    Mr. Chesemore. That's right.
    Mr. Shays. Now we just have to know what the law requires 
and whether the law needs to be amended.
    Mr. Chesemore. We'd be delighted to provide that 
information for the record.
    Mr. Shays. Yes. Sure.
    Dr. Friedman. That's very----
    Mr. Shays. Ms. Branson?
    Ms. Branson. On the issue of inspections, it's my 
understanding that the FDA has a Memorandum of Understanding 
with HCFA that allows coordination of certain inspections of 
facilities. Can you give me your impression on the advisability 
of that sort of coordination, whether an expansion of 
coordination would assist you with some of the inspection 
problems that have been noted? And basically tell me your 
thoughts on the agreement between FDA and HCFA.
    Dr. Friedman. Mr. Chesemore, please.
    Mr. Chesemore. We've had a Memorandum of Understanding with 
HCFA, I think, since the early 1980's. The HCFA inspections are 
primarily of the laboratory operations or the transfusion part 
of a hospital. It really doesn't go into--if you would--the 
blood and blood products area that the Food and Drug 
Administration does. Some of those inspections are done by HCFA 
employees. And it's my understanding that HCFA might contract 
some of those inspections as well. To the best of my knowledge, 
I'm unaware of any difficulties that we have with our 
coordination with HCFA. If there's others who know 
differently----
    Ms. Branson. I think what I'm trying to ask you is whether 
or not that sort of coordination and MOU agreement would be 
possible with other agencies in order to ease some of the 
burden of the inspections that you just described?
    Mr. Chesemore. What we're talking about here is making sure 
that whomever does the inspection is adequately trained and 
will conduct the same type of inspection the Food and Drug 
Administration does. At the present time I'm not sure that we 
could say that the HFCA inspection that is now currently done 
under the Clinical Laboratory Improvement Act is the same 
inspection that the Food and Drug Administration makes of 
manufacturers of blood and blood products.
    So it's going to be very difficult for us, I think, to 
transition to someone else doing those inspections. And right 
now, I think, too, it continues to be a critical time that we 
make sure the agency continues to do those inspections. And 
we've started this team approach with the Center for Biologics 
Evaluation and Research. Dr. Epstein, you might have something.
    Dr. Epstein. Yes. I just wanted to make one point clear. If 
a blood establishment collects blood or plasma or processes 
blood or plasma, it must register with FDA and FDA inspects it. 
What we are talking about with the HCFA registered and HCFA 
inspected establishments are transfusion services which are 
engaged in storing blood, doing donor cross matching so you 
don't get a mismatched unit, and distribution. But they do not 
collect and they do not process. FDA regulates all collection 
facilities involved at that level.
    Ms. Branson. It's my understanding that FDA has classified 
certain computer software that's used in blood facilities as 
medical devices. Can you tell me how this classification 
assists in the oversight process and whether or not the 
facilities we had talked about earlier as unlicensed facilities 
are required to use that same type of software?
    Dr. Friedman. Please.
    Dr. Epstein. Yes. You are correct that FDA has promulgated 
a policy which requires pre-market approval as a device of 
software systems used in the blood bank. We believe that this 
step became necessary because of findings dating back to the 
early 1990's of failures of performance and failures of design 
validation involving the systems which play a critical role in 
the operation of blood centers. We have reviewed since 
approximately April 1996--approximately 40 or a few more 
applications--these are major systems used throughout the 
country--and have approved 7 of these at this time including 
some of the largest ones.
    The problems that are encountered have mainly to do with 
design issues. Up until very recently there was not a 
regulation requiring validation of software design for software 
as a device, and, therefore, it was felt necessary to do pre-
market approvals rather than review them simply under GMP. The 
policy at the FDA would encompass software used both in 
transfusion services as well as in establishments which collect 
and process.
    However, it was recognized that the original policy was 
unclear regarding the obligations of the transfusion services 
and, therefore, there was a need for a clarification and a 
slightly different timeframe. However, it remains our intention 
to assure that all blood bank software is properly developed, 
properly documented, and meets its functional specifications. 
We continue to do this under pre-market approval. But now that 
new GMPs applicable to software have been promulgated by the 
FDA there is the question whether we can shift some of that 
effort toward review of GMP at the time of inspection as 
opposed to pre-market. But that change has not yet occurred.
    Ms. Branson. Can you just tell me whether the intrastate 
facilities--just ``yes'' or ``no''--whether the intrastate 
facilities are required to use that same software?
    Mr. Chesemore. If they use it, they are required to meet 
the same as the licensed facilities.
    Ms. Branson. But they're not required to use it?
    Ms. Zoon. If they develop their own software and they use 
it within the intrastate blood bank, then they are not subject 
to submitting a 510K. It is for those commercial software or 
those software that are being used in a large cohort of blood 
banks maybe perhaps under a single license but crossing State 
lines, that then would be subject to this filing.
    Ms. Branson. And if they do develop and use their own 
software, is there any review on all of that?
    Ms. Zoon. They would be covered under GMP inspections.
    Mr. Chesemore. Right.
    Ms. Branson. Mr. Chairman, I think that's all we have.
    Mr. Shays. Let me just get to one last question. And I 
don't want to throw a curve ball here, but the Inspector 
General is concerned as well as we are on an issue dealing with 
the plasma industry and the fact that for 5 years the industry 
may have been aware that they were not properly testing saline 
contamination. And they notified FDA. I want to know how FDA 
responded to this.
    Dr. Friedman. Yes. If I could ask Dr. Epstein to please 
deal with that specifically if he would?
    Dr. Epstein. Yes. The FDA became aware through a whistle 
blower complaint of the fact that at a particular 
fractionator--their testing laboratory--which dealt with the 
marker testing of donations intended for further use to make 
fractionated products, that some samples had been identified as 
improperly diluted with saline. In other words, a sample should 
be diluted with anti-coagulant if it's a plasma sample, but it 
should not have further dilution with saline. This implied that 
it would not be a valid sample for testing.
    Mr. Shays. So it would distort all your testing?
    Dr. Epstein. Pardon?
    Mr. Shays. It would distort the testing?
    Dr. Epstein. Yes, it would. If the sample were sufficiently 
diluted, such as more than 50 percent, then testing might 
become false negative.
    Mr. Shays. And when was the FDA notified about this by the 
whistle blower?
    Dr. Epstein. I can get that in one moment.
    Mr. Shays. Take your time.
    Ms. Zoon. 1995.
    Dr. Epstein. Yes. It was February 7, 1995.
    Mr. Shays. And so this whistle blower came forward. And was 
the whistle blower's complaint valid?
    Dr. Epstein. Yes. The FDA did a focused inspection to 
determine whether the allegation had merit, and determined 
that, in fact, there was a documentary record supporting the 
allegation that some small number of samples submitted to the 
testing laboratory for infectious disease and other marker 
testing were saline contaminated and would not be valid.
    Mr. Shays. Was this with one company?
    Dr. Epstein. Yes. The observation was made at only one 
company.
    Mr. Shays. What was that company?
    Dr. Epstein. Am I permitted to disclose this?
    Mr. Shays. Why not?
    Dr. Epstein. Yes. OK. This was Baxter Corp. And the 
laboratory was their Roundlake testing facility.
    Mr. Shays. And then what was the response? Were they fined? 
Or how long did they know that this was taking place? Was this 
a 5-year problem that they weren't dealing with?
    Dr. Epstein. Well, there was evidence in their records that 
management was aware of this issue for a period of as much as 5 
years. However, it was the conclusion of the FDA investigation 
that this was in fact a systemic problem which was due to a 
limitation----
    Mr. Shays. Systemic throughout the industry?
    Dr. Epstein. Yes.
    Mr. Shays. So, the problem didn't just exist there, it 
existed everywhere?
    Dr. Epstein. Yes. Although we have no documentary evidence 
from our own inspections, we do have statements from industry 
to the effect that other fractionators had made similar 
observations. And the underlying causes suggest to us that it 
must be a widespread problem because it has to do with use of 
the equipment by which the source plasma is made in the first 
place and a particular vulnerability related to that use, that 
equipment.
    Mr. Shays. So, you have one company where you had a whistle 
blower come forward. You had other companies that were probably 
aware of the problem and didn't step forward. That invalidates 
some testing.
    Dr. Epstein. Well, let me say that when an improperly 
prepared sample was identified the unit to which it referred 
would not be used. The companies viewed their monitoring of the 
sample quality as an added quality control measure above and 
beyond standard requirements. In cases where they found diluted 
samples, the units were not used. And, therefore, there was no 
sense that final product had been compromised. However, the 
issue was failure to correct the problem at its source.
    Mr. Shays. Let me ask you, what was their legal requirement 
if they knew there was a problem? Were they legally required to 
notify the FDA?
    Dr. Epstein. Well, the error and accident requirement is 
actually written to refer to reporting related to units which 
have issued. There is not obligatory reporting to the agency if 
a unit which was subject to an error and accident was never 
entered into distribution. That's not to say that they lack a 
requirement to investigate and correct error or to maintain a 
record of such an investigation. But they do not actually have 
a requirement to report to the agency in the event that an 
error and accident was for an undistributed unit or product.
    Mr. Shays. So it's your testimony that this company--I'm a 
little confused.
    Dr. Epstein. Well, let me say it another way. We believe 
that they ought to have reported it as a matter of good sense.
    Mr. Shays. Right.
    Dr. Epstein. However, their formal requirement since they 
never used an identified improperly tested unit, would not have 
been there.
    Mr. Shays. Wouldn't it have been exactly helpful for them 
to report it to see if this was an industry-wide problem?
    Dr. Epstein. Yes.
    Dr. Friedman. Yes.
    Dr. Epstein. I think that had we learned about it sooner, 
we would have acted sooner.
    Dr. Friedman. That's right.
    Mr. Shays. I'm unclear as to how FDA responded. How did FDA 
respond? You investigated, and what did you do?
    Dr. Epstein. First, we made a determination that the 
problem really lived at three levels. You had the devices that 
make the plasma. These are called apheresis separation 
machines. The problem that causes the saline dilution is a 
backflow of saline, intended to replenish volume in the patient 
from whom plasma was just withdrawn, instead entering not only 
the patient but the collection container.
    Mr. Shays. Yes.
    Dr. Epstein. Now, that problem arises for two reasons. 
First, a lack of a safeguard in the device design. In other 
words, its software programming, its monitors, its alerts, its 
warning lights, et cetera. Second, it arises because the users 
of that equipment--namely the centers that collect the source 
plasma--may have been deficient in training of the operators so 
that the operators would know to adequately clamp off the 
tubing so that saline could not backwash into the collection.
    Mr. Shays. OK. Did this company not know why the problem 
was being caused or they just didn't care about it?
    Dr. Epstein. They had understanding. They made efforts to 
inform the providers of the source plasma. However, they were 
inconsistent in that effort. They did not notify the providers 
in all cases, nor did they document any corrections. They 
simply continued to make these occasional observations of a 
diluted sample. And that, of course, is the third level 
involved, which is, why didn't the laboratory--which in this 
case was part of the fractionator licensee--but it isn't 
always--but why didn't the laboratory seek effective 
correction. And we see that as the failure at the third level.
    But yes. They did attempt correction. They did notify many 
of their source plasma providers that they were finding this. 
But they did not demand correction or show evidence that 
correction was achieved. They simply continued to monitor and 
occasionally report dilution.
    Mr. Shays. If the whistle blower hadn't stepped forward, 
what would still be happening?
    Dr. Epstein. Well, that's hypothetical, so I can't say. 
Could we have learned through some other route? Yes.
    Mr. Shays. No. That's not what I'm asking. Let me ask you 
this: What was the effect over these 5 years of your not 
knowing about it and their continuing to tolerate this? I don't 
know. What was the impact on the public?
    Dr. Epstein. Well, we believe that there was no health 
impact on the public.
    Mr. Shays. Let me ask you this: is this still happening?
    Dr. Epstein. Measures are in place that should have 
mitigated the problem. I think that perhaps Mr. Simmons would 
like to comment. I think that we have not completed the phase 
of auditing all corrections.
    Mr. Shays. That's too long an answer for me.
    Dr. Epstein. We're not certain that all correction is in 
place. We know that steps have been taken to correct.
    Mr. Shays. OK. Now, what I'm trying to understand is what 
is the impact to the public?
    Dr. Epstein. It has been our assessment that there is not 
health impact to the public because of the adequacy of viral 
inactivation of the plasma derivatives.
    Dr. Friedman. Mr. Chairman, may I try and----
    Mr. Shays. Can I ask you something before you try? I'm 
getting a little uneasy by this dialog.
    Dr. Friedman. Please.
    Mr. Shays. Because I feel there's something more 
significant here. And I----
    Dr. Friedman. Please.
    Mr. Shays. When the FDA finally inspected this Baxter 
plant--and that was on May 12, right? There was a class 3 
recall that resulted in 26 million units of hemophilia 
products. Is that correct?
    Dr. Friedman. Are you talking about just recently, Mr. 
Chairman?
    Mr. Shays. Yes. I just don't know how we can say that 
there's not impact?
    Dr. Friedman. Sir, I'm sorry, let me----
    Mr. Shays. I don't want to blow this out of portion, but--
--
    Dr. Friedman. I know you don't----
    Mr. Shays. I just want to say. I don't want to blow it out 
of proportion, but I don't want to end this dialog until we 
have a full disclosure on the record.
    Dr. Friedman. Right. Let me go through a couple of things, 
if I may, with you, sir?
    Mr. Shays. Yes.
    Dr. Friedman. The first thing that you're talking about has 
to do with how viral tests are performed on plasma samples. And 
Dr. Epstein has just said that it's our assessment that there 
was not a health hazard under those circumstances. Let me 
explain at least three reasons why that's the case. The first 
is that, the best estimates we can make, is that this occurred 
extremely rarely. And so there were relatively few collections 
where this was a problem.
    The second is that even when it was a problem, there are 
those samples where testing was still appropriate and accurate 
because the samples were not sufficiently diluted. The third 
is, that even when there was an inappropriate false negative 
test--that is, there was too much dilution, the test wasn't 
accurate--those units were subjected to the same viral 
inactivation that would have been successful under any 
circumstances.
    So when he says he believes there is not a health hazard, I 
want you to understand what the levels are that document and 
provide confidence from that. The point that you're just 
making, sir, is something which is different, if I may just 
talk about that for a moment.
    We have taken recent class 3 action--and, as you recall, 
class 3 is the lowest health risk class--at this Baxter 
facility because there was inadequate documentation that the 
plasma units or the material that was derived from the plasma 
had been maintained at the proper temperature for the proper 
period of time. And, therefore, there was a recall based upon 
that.
    Now, when we went back and looked at other systems that 
were in place, such as a detergent system for inactivating 
virus--killing virus--those things all seemed to be perfectly 
appropriate. And so there wasn't a health risk to an 
individual. But the point you made earlier, sir, is that if you 
have a multi-layer system, the power in the system comes from 
having all the layers intact.
    If you start to lose some of those layers, you start to 
lose not just the integrity of the system, but the confidence 
in the system. And so even though a particular lapse might not 
be associated with a health risk, I don't think we should 
tolerate that. Because each gap subjects the whole system to 
some risks. Therefore, we took this class 3 action because, 
even though there was not a health risk by any assessment that 
we could identify, we should not have those lapses. I don't 
know if that helps or not, sir.
    Mr. Shays. It does. But let me read the testimony. One of 
the problems when we ask people to summarize their testimony is 
that they don't put it out on the public record verbally. 
``First, the ORA recommendation''--this is the IG's testimony 
to the subcommittee. ``First, the ORA recommendation to conduct 
a followup inspection of viral inactivation procedures at 
Baxter's manufacturing plant was rejected by CBER. A regularly 
scheduled inspection conducted subsequently gave no indication 
that the viral inactivation procedures were reviewed. The FDA 
informed us that as of May 12, 1997, it had underway an 
inspection of Baxter's manufacturing plant and included 
examining the viral inactivation procedures. We subsequently 
learned that Baxter initiated a class 3, the least serious, 
recall of plasma product on May 24, 1997 due to the firm not 
maintaining specific temperature for the viral inactivation 
process.''
    Dr. Friedman. Yes, sir.
    Mr. Shays. OK. Now, what's the significance of the last 
sentence--the temperature for the viral inactivation process?
    Dr. Friedman. As I explained, when these units are treated 
to inactivate the virus, the operating procedures say that they 
should be held in a certain temperature for a certain period of 
time in order to most effectively kill the virus. That standard 
operating procedure can be breached in a couple of ways. Either 
you don't have the temperature documented or you don't have the 
time documented. And we were concerned that there was 
inadequate recordkeeping to assure us that all these systems 
had been done exactly as they should be done.
    You asked a question earlier, sir, that's really important. 
And I know you're going to ask me at the end, what questions 
you wanted to ask us.
    Mr. Shays. Yes.
    Dr. Friedman. The question I want to put a marker down on 
is, the fact that we are seeing more recalls, more product 
withdrawals, is this something that should give us confidence 
or not? I'd like to speak to that later because I think this is 
actually relevant in that regard.
    Mr. Shays. OK.
    Dr. Friedman. I'm sorry. Others may want to add.
    Ms. Zoon. I just wanted to let you know, some of the 
observations on the inspection were actually that the 
temperature range was 1 or 2 degrees below what the range was 
listed in their SOP.
    Dr. Friedman. Standard operating procedure.
    Ms. Zoon. I'm sorry. Standard operating procedure. And that 
was because it was outside of its operating procedures, that 
was a GMP deficiency. And that----
    Dr. Friedman. They were cited and things----
    Ms. Zoon. And an evaluation was made as to the impact of 
that deviation.
    Mr. Shays. But was that related to the flawed testing?
    Ms. Zoon. That was the viral inactivation procedure that 
was done at Baxter.
    Dr. Friedman. Sir, that inspection was going on anyway. The 
Inspector General asked that we make sure that the evaluation 
of the adequacy of viral inactivation be conducted. That had 
been an intention of ours at the time, and we were happy to 
assure the Inspectors General that in fact we were in the 
process of doing that and that we did care about that as well.
    Mr. Shays. Now, what I'm hearing from your testimony--and 
this is the laymen speaking--I'm hearing that this one line of 
defense that broke down, but the other lines of defense caught 
the problem. That's what I'm hearing. But is that an accurate 
first?
    Dr. Friedman. Yes, sir. I just want to make sure I'm not 
misstating that.
    Mr. Shays. But that says to me, OK, public, we think we 
caught the problem. But what it doesn't say to me is, that if I 
had five armies out there and all five were to protect me, and 
one army was asleep--one unit was asleep--then I'd say, not to 
worry, the other four protected me. I expect all five to work. 
And all hell is going to break loose if one of those parts 
breaks down. So I'm willing to have the public record reflect 
the fact that it's the comfort level of the FDA that the public 
was not threatened, but one of our lines of defense was broke 
and had been broke for a long time. And one company knew about 
it.
    When you looked at that one company, because, thank God, a 
whistle blower stepped forward, your response was to look at it 
and realize that this same process was occurring throughout the 
industry, so this line of defense was broken down throughout 
the plasma industry. Where is my logic breaking down so far?
    Dr. Friedman. Your logic is not breaking down. It's the 
association of these two things that isn't as accurate as you 
want it to be. Let me point out.
    Mr. Shays. OK.
    Dr. Friedman. There was a problem with this company.
    Mr. Shays. Right.
    Dr. Friedman. And the dilution and, hence, possible 
inaccuracy of the viral testing.
    Mr. Shays. And the company knew about it for 5 years?
    Dr. Friedman. The company knew about it for a considerable 
period of time and should have taken action and should have 
informed us.
    Mr. Shays. For at least 5 years.
    Dr. Friedman. Should have informed us. Should have taken 
action.
    Mr. Shays. But for at least 5 years that knew about it?
    Dr. Friedman. I don't know that. But that's what others are 
saying. And, yes.
    Mr. Shays. But that's the idea.
    Dr. Epstein. Alleged.
    Mr. Shays. It's alleged. OK. I'll accept that.
    Dr. Friedman. But I want to be accurate about what we say. 
That's one problem. What we're talking about with the 
temperature is a different problem in a different situation.
    Mr. Shays. OK. Let's leave the temperature aside. Let's 
talk about the problem--why the whistle blower contacted and--
--
    Dr. Friedman. That's not so related to this recent 
withdrawal.
    Mr. Shays. OK. I accept that. In the process of being in 
the plant you realized about the temperature problem, and that 
was----
    Dr. Friedman. Yes, sir.
    Mr. Shays. The withdrawal was related to that and not this 
problem?
    Dr. Friedman. That is correct, sir.
    Mr. Shays. OK. And that's important for the record to 
reflect. And so I'm sorry that I brought that up right now. 
Because I don't want to lose--I want to understand this issue.
    Dr. Friedman. Your point is, that if viral testing is one 
of crucial components of our confidence in the safety of the 
blood supply and we identify something that compromises that, 
should it be tolerated.
    Mr. Shays. Right.
    Dr. Friedman. The answer is ``no.''
    Mr. Shays. No. And that's one thing. Well, there we agree. 
But that should have happened. But it is alleged that this 
company knew for many years, whether it's 5 years or----
    Dr. Friedman. That's right, sir.
    Mr. Shays. And didn't choose to tell you. And you have 
stated for the record that, in the process of looking at it, 
you realize that it is an industry-wide problem?
    Dr. Friedman. Yes.
    Mr. Shays. Which raises questions in my mind, which this 
committee will look at, and bring these companies forward. 
Maybe not in a hearing but before--to answer some questions for 
the committee staff at the minimal--that other companies knew 
about this problem, as well. Correct? All the other companies 
did not know? Or did some other companies know they had a 
problem as well?
    Dr. Friedman. I think a more accurate way to say it was 
that it was a kind of a machine and that this was a problem 
with the machine so that any company that used this machine 
might experience that problem.
    Mr. Shays. Would have, not might.
    Dr. Epstein. We did inquire with the industry what it's 
level of knowledge was of problems of this sort. And we did 
receive a letter from the industry trade organization 
documenting awareness of a low frequency of saline 
contamination of samples for testing.
    Mr. Shays. OK. And their point is, low frequency, not a 
serious problem. Low frequency--occurring infrequently or when 
it occurred, not to any major degree.
    Dr. Epstein. No. Occurring infrequently. I forget the exact 
numbers. But it's fractions of a tenth of a percent. You know, 
like 0.003 percent.
    Mr. Shays. I've been here 10 years and I still don't know 
what six lights means. Would you find out? It scares the hell 
out of me. Something serious is happening. I don't want to be 
talking with you while I'm missing a vote, with all due 
respect.
    Dr. Friedman. Nor do we want you to, Mr. Chairman. Thank 
you.
    Mr. Shays. OK. I'm going to just end this, though. But I 
don't think I'm going to like the answer to this last question. 
What did you do about it?
    Dr. Epstein. The FDA did several things. First, we have 
ensured that the apheresis devices have been modified to 
prevent this problem. And there are several corrections that 
have been put in place for the two devices affected by the 
problem. Second, we have worked with the industry--and this was 
subject to the review in the OIG report--to assure that an 
information campaign would be developed to emphasize the 
adequacy of the training of the operators who use this 
equipment and to assure that the industry will be more 
responsive in reporting any further observed instances of 
saline contamination to the agency.
    Mr. Shays. OK. If I had a staff member and a staff member 
didn't tell me that they had made a mistake, and a few weeks 
later I was confronted with that mistake by someone else, and 
the next time I interacted with that staff member I wouldn't 
have the same confidence level. It sounds to me like you just 
turned this over back to the trade association to deal with. Is 
that what you basically did? You just put it back on their 
laps?
    Dr. Friedman. No.
    Dr. Epstein. No. I would say that the effort is to engage 
the assistance of the industry in getting the word out. 
However, FDA does not leave to the industry its monitoring of 
correction. FDA is examining on inspections whether there are 
further incidents of saline contamination, whether there is 
monitoring for it, whether centers that have had it documented 
are making correction, et cetera.
    Mr. Shays. Yes. I would also have said to my staff, how can 
I trust you on something else if I couldn't trust you in 
telling me this. No, I don't think I have staff members that do 
that. In fact, I know I don't. Or if I did, we'd straighten it 
out.
    Dr. Friedman. Mr. Chairman, may I just add one or two other 
things, because I understand the point that you're making?
    Mr. Shays. Yes.
    Dr. Friedman. This was not something that was left entirely 
to that particular industry. I understand your skepticism 
there. Some of the changes that needed to be made had to do 
with the equipment--software changes so that there wouldn't be 
this backup of saline into that part of the system. That's a 
different set of industries. Those are companies who have 
committed to fixing the software changes for that.
    Mr. Shays. I'm really talking about fixing the problem 
which you feel you're addressing.
    Dr. Friedman. You're talking about in general levels of 
confidence.
    Mr. Shays. I'm talking about levels of confidence and I'm 
talking about integrity. I'm talking about a person who 
probably risked his or her job. And sees the FDA responded, it 
appears to me, in a pretty casual way, frankly. And the casual 
way is: any fines? Any penalties? And any riot act? Any letters 
to the individuals? Any public disclosure? You know, all those 
things that I'd like to think would take place. Did any of 
those things happen?
    Dr. Friedman. The question that's been asked is, are there 
fines, are there other sorts of penalties that have been posed?
    Mr. Simmons. Certainly, there have been no fines or no 
penalties. If I could try to address some of your concerns. 
This was deemed to be an industry-wide problem. Assessing fines 
or penalties against one company when you have an industry-wide 
problem while the other problems persisted would have little 
effect on public health. And our assessment of the situation 
was that the public was better served by working with the total 
industry to try to remedy the problem. And that's the approach 
we took to it.
    Mr. Shays. Why would you have been encumbered from dealing 
with this problem? Why are they mutually exclusive? Why 
wouldn't someone have to pay a penalty when they are not honest 
and straightforward and come recognize it? That's what I'm 
missing.
    Dr. Friedman. Sir, two things. One is that, to the best of 
our knowledge, none of these units were released to the public.
    Mr. Shays. That's irrelevant to me.
    Dr. Friedman. I'm sorry?
    Mr. Shays. No. That's not irrelevant.
    Dr. Friedman. No.
    Mr. Shays. Thank God.
    Dr. Friedman. No. I think that's the most important thing.
    Mr. Shays. But it's irrelevant to the issue.
    Dr. Friedman. I think the second thing is, in terms of--and 
I would ask our legal counsel to say what was--not what was the 
violation of trust or good sense, we've already spoken to that, 
and I think we've spoken clearly to that. The question you're 
asking is what's the violation in law.
    Mr. Shays. Well, no. There's law. There's a lot of things 
here. First off, this was a problem that existed for years, not 
a few weeks, not a few months. And so they knew the system 
wasn't working properly. This one company was aware of it. It 
evidently is a problem based on equipment that therefore was an 
industry-wide problem. It meant that one of our lines of 
defense was faulty and unreliable. And yet you had every reason 
to believe that it wasn't faulty or unreliable. But you were 
notified. The FDA was notified by a whistle blower.
    If I was the whistle blower, I would feel that I had done 
my job, but I would say, I could lose my job over this if the 
company knew and yet nothing happened to the individuals 
involved in this. No one seems to have been held personally 
accountable or the company appears to be accountable.
    Dr. Friedman. Well----
    Mr. Shays. And so that just raised the question----
    Dr. Friedman. Well, yes.
    Mr. Shays. And I just want to say, and the fact that that 
wouldn't have helped necessarily solve the problem is another 
issue.
    Dr. Friedman. As you know, sir, this is the subject of on-
going litigation. I think that we've been told that there's 
only a certain amount that we can say publicly about this. 
Obviously, we're prepared in a private venue to answer other 
questions about this. This is an actively litigated matter. If 
I just may----
    Mr. Shays. Does the litigation involve the FDA?
    Ms. Zoon. Justice.
    Mr. Shays. What?
    Ms. Zoon. Government.
    Dr. Friedman. The Department of Justice, I understand, sir.
    Ms. Zoon. Justice is doing the case.
    Mr. Shays. OK. You know what I'm going to say to you, this 
is--I feel like we're getting deeper into a hole and I'm 
getting more uncomfortable with your responses and more 
disheartened by your responses. I'm just going to suggest that 
maybe we'll just have a special hearing on this kind of issue. 
The IG is looking into this issue, correct?
    Ms. Finley. That's the subject of their testimony.
    Mr. Shays. Right. OK. What we're going to do--I am not 
comforted that because it's an industry-wide problem we're not 
holding a particular company accountable. That implies to me 
that because everyone is involved we'll hold no one 
accountable. You know, it does say that to me. And rather than 
make more statements that I may regret, I think we'll just 
leave on unfortunately a negative note.
    Dr. Friedman. If I may, I'd like to change the tenor of 
that note?
    Mr. Shays. Sure. OK.
    Dr. Friedman. I would just point out a couple of things, 
sir. One is that lest you think there is some inherent 
inability or reluctance on the part of the agency to take 
strong action when we identify something that threatens the 
overall integrity of the safeguards. The matter that you were 
just discussing--the recent identification of inadequate 
recordkeeping and temperature control for these products, even 
though there was nobody that we could identify would be harmed 
by it, we imposed a restriction. We imposed a requirement on 
the company that is going to have a substantial financial 
impact on that company.
    And the purpose of that is not to be punitive. The purpose 
of that is to demonstrate----
    Mr. Shays. That was another issue.
    Dr. Friedman. Right. But I'm pointing out--lest you think 
that we aren't interested in doing this or we have some 
reluctance in doing this, that is not a message that I would 
like to----
    Mr. Shays. In the Civil War, if a sentry fell asleep they 
shot him. And they couldn't say, well, no one happened to break 
through out lines that evening. That sentry was there for a 
purpose. And, obviously, we wouldn't shoot someone today, but 
they would be held very strongly accountable.
    Dr. Friedman. Right.
    Mr. Shays. And if someone knew for years that sentry had 
been asleep and we said, well, no harm came because nobody ever 
attacked us. So that's why I'm feeling very uneasy.
    Dr. Friedman. I understand. And what I'm saying is that the 
sentry----
    Mr. Shays. And I don't want to get you deeply in a hole 
here.
    Dr. Friedman. The sentry was dealt with in this latest 
episode in a manner that you've just identified, and that we 
would be very pleased to go over with you----
    Mr. Shays. Can I ask you something? I just don't want to 
back you in a corner. Are you fully versed on this issue? Or is 
this an issue you need to take a look at?
    Dr. Friedman. This is something that I have taken some look 
at, but I am not fully versed.
    Mr. Shays. OK. I would like to leave it on that note.
    Dr. Friedman. OK.
    Mr. Shays. And I would like to hear how the FDA feels it 
should respond to this issue after you have--you may come up 
with the same answer. But I'm not looking to have you take an 
opinion as the person in charge without a full and----
    Dr. Friedman. Thank you.
    Mr. Shays. OK.
    Dr. Friedman. I appreciate that.
    Mr. Shays. OK. And I did hear you ask, had any penalties 
been levied. And, so, since you asked that question, I'm 
assuming you didn't know.
    Dr. Friedman. That is correct.
    Mr. Shays. And I would like you to. Do you have a point you 
want to make here? And just identify yourself.
    Ms. Maloney. My name is Diane Maloney. I'm in the Office of 
the Chief Counsel.
    Mr. Shays. Yes.
    Ms. Maloney. With regard to the company's failure to report 
to the agency the fact that some units--there was this issue of 
saline contamination. If the company found it and did not made 
those products available for release, their system is working. 
That's what quality control is all about--quality assurance.
    Mr. Shays. No. Another system caught it.
    Ms. Maloney. I'm sorry?
    Mr. Shays. Another part of the defense system caught it. 
One part of the defense system broke down. Correct?
    Ms. Maloney. Right.
    Dr. Friedman. No, sir. I'm not sure that's right.
    Mr. Shays. OK. Well, I want to be corrected. That's why I'm 
stating it.
    Dr. Friedman. What she's saying is that the company had 
what they said were other effective systems for identifying 
when a unit had too much saline in it, and that those units 
were put aside and never released. Those units were destroyed.
    Mr. Shays. OK.
    Dr. Friedman. And so she's saying the company had an 
additional built-in mechanism. And because those units weren't 
released the company--well, I don't want to make the point. Go 
ahead.
    Mr. Shays. OK.
    Ms. Maloney. Well, I was just trying to make the point when 
you asked the question of whether or not fines or penalties 
were imposed.
    Mr. Shays. Right.
    Ms. Maloney. There was not a violation to the extent the 
units--regarding the saline contamination--were caught before 
they were made available. I am referring to units not made 
available for distribution.
    Mr. Shays. Right.
    Ms. Maloney. It is not a violation to not report that to 
the agency. So there could be no penalties imposed in that 
situation.
    Mr. Shays. OK. For the record, what I'm hearing you saying 
is that no contaminated plasma blood supply came onto the 
market because they were able to catch it when there was--they 
were able to catch it.
    Ms. Maloney. No. I'm not saying that, because I don't know 
all the facts. And whether they absolutely caught every single 
unit I can't--and I'm not sure anybody could tell you that.
    Mr. Shays. OK. Yes.
    Ms. Maloney. But I'm just saying, with regard to your 
specific question, why were penalties not imposed for failing 
to report this to the agency--what I'm saying, if they catch a 
problem before a unit is made available for release, and they 
do not make that unit available for release, then it is not a 
violation to fail to report it to the agency.
    Mr. Shays. OK. And I would respond--and I feel like I'm 
beating a dead horse--I would respond by saying that one line 
of our defense was not working properly and couldn't be 
trusted. And this company seemed to know about it for a number 
of years. They felt they could catch it through another 
process, and chose not to notify the FDA. In the words of the 
chairman who preceded me in this subcommittee, that boggles my 
mind. And it's something that we'll just take a better look at.
    Ms. Maloney. Yes.
    Mr. Shays. And I will say to you, if I were the FDA, I 
would say, well, what other areas of the plasma industry are 
there circumstances like this where you also haven't come 
forward? How can I trust you? How can I feel confident since 
you've known this for years? And I would also say, isn't it 
dumb that you didn't come forward, because if you'd come 
forward we could have solved this problem years ago. And you 
chose not to.
    And, so, you're making a point, legally you may not be 
empowered to levy a fine. That's your point. Yes?
    Ms. Maloney. If I could just add to something Dr. Epstein 
said earlier. On the other hand, the company does have an 
obligation to investigate problems and come up with fixes. So 
that is something that I think we've been continuing to look 
at, and I'm not sure that the matter is closed at this point.
    Mr. Shays. No. It can't be closed. But one of the things 
that the subcommittee will look at is to see why you can't 
penalize someone. Is there a need to make sure that there are 
requirements for companies to do logical things like notify you 
and to share it with other people in the industry. I have a 
high respect for the FDA. I have high respect for you, Dr. 
Friedman, and the rest of the people on your staff. And I'm 
sure there are some answers that will not make this look as bad 
as it looks. And I'm sure there are some things that will make 
me feel that more action or better action needs to be taken. So 
we'll split the difference and try to end on a medium note.
    Dr. Friedman. And if I may, I beg your indulgence just for 
60 more seconds, sir.
    Mr. Shays. Sure.
    Dr. Friedman. One is that I think that please look again at 
the number of inspectional findings that we are making with 
this more intensive, more aggressive, and, I think, more fine 
system of scrutiny that we're subjecting these individuals to. 
I take your point very seriously. How can one assume that every 
other part of the system is working well? We don't assume that.
    You'll see the documentation. The inspections are longer. 
The number of findings is way up. We're taking action on these. 
So I don't want you to leave this room thinking that we think 
that there's no problem and you perceive a problem.
    Mr. Shays. OK.
    Dr. Friedman. That's No. 1. No. 2 is let me just quickly 
deal with your question to the other panel for this day's 
committee hearing. It's my view that several things have 
happened that contribute to the number of recalls or findings 
that are being made. One is the point that was made earlier. 
Scientifically, we're much more sophisticated. We're able to 
detect problems that were unheard of and unknown previously. I 
take great comfort in that. That's No. 1.
    No. 2 is: the public is simply not tolerant of risks and 
problems. They deserve and they wish to know about these. And, 
therefore, that is making the system scrutinize all aspects of 
this industry much more carefully. I think that's a very 
positive thing. I really do.
    The third is an area of personal responsibility, which we 
have not always given consistent, clear, uniform guidance and 
regulation to industry in this regard. Our expectations have 
not always been articulated as clearly as they should have 
been. And that is a responsibility that we have to the extent 
that we make our inspections and our regulations and our 
requirements and our guidances more clear and more 
comprehensive, we will, at first, have more adverse findings. 
Ultimately, things will get a lot better.
    But I think that we share some of the responsibility there. 
I see that as a very positive thing because it means that we 
are bringing a greater discipline, a greater focus, a greater 
seriousness to how we perform our job. That's my quick answer, 
sir.
    Mr. Shays. That's a nice way to end. The hearing is closed.
    [Whereupon, at 1 p.m., the subcommittee was adjourned.]