[House Hearing, 107 Congress]
[From the U.S. Government Printing Office]



   EVALUATING THE EFFECTIVENESS OF THE FOOD AND DRUG ADMINISTRATION 
                           MODERNIZATION ACT

=======================================================================

                                HEARING

                               before the

                         SUBCOMMITTEE ON HEALTH

                                 of the

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 3, 2001

                               __________

                           Serial No. 107-51

                               __________

       Printed for the use of the Committee on Energy and Commerce


 Available via the World Wide Web: http://www.access.gpo.gov/congress/
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                    COMMITTEE ON ENERGY AND COMMERCE

               W.J. ``BILLY'' TAUZIN, Louisiana, Chairman

MICHAEL BILIRAKIS, Florida           JOHN D. DINGELL, Michigan
JOE BARTON, Texas                    HENRY A. WAXMAN, California
FRED UPTON, Michigan                 EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida               RALPH M. HALL, Texas
PAUL E. GILLMOR, Ohio                RICK BOUCHER, Virginia
JAMES C. GREENWOOD, Pennsylvania     EDOLPHUS TOWNS, New York
CHRISTOPHER COX, California          FRANK PALLONE, Jr., New Jersey
NATHAN DEAL, Georgia                 SHERROD BROWN, Ohio
STEVE LARGENT, Oklahoma              BART GORDON, Tennessee
RICHARD BURR, North Carolina         PETER DEUTSCH, Florida
ED WHITFIELD, Kentucky               BOBBY L. RUSH, Illinois
GREG GANSKE, Iowa                    ANNA G. ESHOO, California
CHARLIE NORWOOD, Georgia             BART STUPAK, Michigan
BARBARA CUBIN, Wyoming               ELIOT L. ENGEL, New York
JOHN SHIMKUS, Illinois               TOM SAWYER, Ohio
HEATHER WILSON, New Mexico           ALBERT R. WYNN, Maryland
JOHN B. SHADEGG, Arizona             GENE GREEN, Texas
CHARLES ``CHIP'' PICKERING,          KAREN McCARTHY, Missouri
Mississippi                          TED STRICKLAND, Ohio
VITO FOSSELLA, New York              DIANA DeGETTE, Colorado
ROY BLUNT, Missouri                  THOMAS M. BARRETT, Wisconsin
TOM DAVIS, Virginia                  BILL LUTHER, Minnesota
ED BRYANT, Tennessee                 LOIS CAPPS, California
ROBERT L. EHRLICH, Jr., Maryland     MICHAEL F. DOYLE, Pennsylvania
STEVE BUYER, Indiana                 CHRISTOPHER JOHN, Louisiana
GEORGE RADANOVICH, California        JANE HARMAN, California
CHARLES F. BASS, New Hampshire
JOSEPH R. PITTS, Pennsylvania
MARY BONO, California
GREG WALDEN, Oregon
LEE TERRY, Nebraska

                  David V. Marventano, Staff Director

                   James D. Barnette, General Counsel

      Reid P.F. Stuntz, Minority Staff Director and Chief Counsel

                                 ______

                         Subcommittee on Health

                  MICHAEL BILIRAKIS, Florida, Chairman

JOE BARTON, Texas                    SHERROD BROWN, Ohio
FRED UPTON, Michigan                 HENRY A. WAXMAN, California
JAMES C. GREENWOOD, Pennsylvania     TED STRICKLAND, Ohio
NATHAN DEAL, Georgia                 THOMAS M. BARRETT, Wisconsin
RICHARD BURR, North Carolina         LOIS CAPPS, California
ED WHITFIELD, Kentucky               RALPH M. HALL, Texas
GREG GANSKE, Iowa                    EDOLPHUS TOWNS, New York
CHARLIE NORWOOD, Georgia             FRANK PALLONE, Jr., New Jersey
  Vice Chairman                      PETER DEUTSCH, Florida
BARBARA CUBIN, Wyoming               ANNA G. ESHOO, California
HEATHER WILSON, New Mexico           BART STUPAK, Michigan
JOHN B. SHADEGG, Arizona             ELIOT L. ENGEL, New York
CHARLES ``CHIP'' PICKERING,          ALBERT R. WYNN, Maryland
Mississippi                          GENE GREEN, Texas
ED BRYANT, Tennessee                 JOHN D. DINGELL, Michigan,
ROBERT L. EHRLICH, Jr., Maryland       (Ex Officio)
STEVE BUYER, Indiana
JOSEPH R. PITTS, Pennsylvania
W.J. ``BILLY'' TAUZIN, Louisiana
  (Ex Officio)

                                  (ii)


                            C O N T E N T S

                               __________
                                                                   Page

Testimony of:
    Applebaum, Rhona S., Executive Vice President, Scientific and 
      Regulatory Affairs, National Food Processors Association...    38
    Ben-Maimon, Carole, President and CEO, Proprietary Research 
      and Development, Barr Laboratories.........................    71
    Franson, Timothy R., Vice President, Clinical Research and 
      Regulatory Affairs, U.S., Lilly Research Laboratories, 
      accompanied by Stephen Spielberg, Vice President, Drug 
      Development, Janssen Research Foundation...................    94
    Gorman, Richard, Incoming Chair, American Academy of 
      Pediatrics Committee on Drugs, American Academy of 
      Pediatrics.................................................    75
    Kearns, Gregory L., Professor and Chief, Division of Clinical 
      Pharmacology and Medical Toxicology, Children's Mercy 
      Hospital and Clinics.......................................    65
    Meyers, Abbey S., President, National Organization for Rare 
      Disorders..................................................    81
    Northrup, Stephen J., Executive Director, Medical Device 
      Manufacturers Association..................................    30
    Plunkett, Travis B., Legislative Director, Consumer 
      Federation of America......................................    88
    Suydam, Linda A., Senior Associate Commissioner, Food and 
      Drug Administration........................................    20
Material submitted for the record by:
    Advanced Medical Technology Association, prepared statement 
      of.........................................................   131
    Applebaum, Rhona S., Executive Vice President, Scientific and 
      Regulatory Affairs, National Food Processors Association, 
      letter dated June 12, 2001, enclosing response for the 
      record.....................................................   142
    Clemente, Frank, Director, Public Citizen's Congress Watch, 
      prepared statement of......................................   135
    Collins, Arthur, Chief Executive Officer, Medtronic, prepared 
      statement of...............................................   139
    Franson, Timothy R., Vice President, Clinical Research and 
      Regulatory Affairs, U.S., Lilly Research Laboratories, 
      letter dated June 7, 2001, enclosing response for the 
      record.....................................................   153
    Giuli, Steve, Director of Government Affairs, Generic 
      Pharmaceutical Association, letter dated June 13, 2001, 
      enclosing response for the record..........................   144
    Kearns, Gregory L., Professor and Chief, Division of Clinical 
      Pharmacology and Medical Toxicology, Children's Mercy 
      Hospital and Clinics, letter dated June 7, 2001, enclosing 
      response for the record....................................   151
    Meyers, Abbey S., President, National Organization for Rare 
      Disorders, letter dated June 11, 2001, enclosing response 
      for the record.............................................   165
    Northrup, Stephen J., Executive Director, Medical Device 
      Manufacturers Association, letter dated June 7, 2001, 
      enclosing response for the record..........................   146
    Plaisier, Melinda K., Associate Commissioner for Legislation, 
      Department of Health and Human Services, letter dated June 
      29, 2001, to Hon. Michael Bilirakis, enclosing response for 
      the record.................................................   154

                                 (iii)

  

 
   EVALUATING THE EFFECTIVENESS OF THE FOOD AND DRUG ADMINISTRATION 
                           MODERNIZATION ACT

                              ----------                              


                         THURSDAY, MAY 3, 2001

                  House of Representatives,
                  Committee on Energy and Commerce,
                                    Subcommittee on Health,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10 a.m., in 
room 2322, Rayburn House Office Building, Hon. Michael 
Bilirakis (chairman) presiding.
    Members present: Representatives Bilirakis, Upton, 
Greenwood, Deal, Burr, Whitfield, Ganske, Norwood, Bryant, 
Buyer, Brown, Waxman, Strickland, Barrett, Capps, Pallone, 
Deutsch, Eshoo, Stupak, Engel, Wynn, and Green.
    Also present: Representatives Harman and McCarthy.
    Staff present: Brent DelMonte, majority counsel; Marc 
Wheat, majority counsel; Kristi Gillis, legislative clerk; and 
John Ford, minority counsel.
    Mr. Bilirakis. Let's get started, please. I am advised that 
we will have votes constantly today. Apparently there will be 
an awful lot of procedural votes called. I'll ask all the 
witnesses to forgive us in advance, but that is the way it is.
    In the interests of time too, I would hope that the opening 
statements can be kept very brief so that we can do as much as 
possible before that first vote is called.
    Today we are here to consider whether the Food and Drug 
Administration Modernization Act, which we fondly refer to as 
FDAMA, has revitalized the FDA for the benefit of patients, 
consumers, and industry. The purposes of the law were clear: 
Congress wanted the FDA and industry to work collaboratively in 
the consideration of applications for safe, effective drugs and 
devices. We wanted to ensure that food consumers would have 
access to legitimate health and nutrition content claims.
    Clearly, however, no one advocated that the FDA sacrifice 
its safety and efficacy requirements to achieve these goals. To 
the contrary, our intent was to create a consistent process and 
enable all stakeholders to know precisely what is expected of 
them.
    Today we will learn more about whether the hope represented 
in the FDA Modernization Act has been realized. Of particular 
interest to me is the pediatric exclusivity section of the act 
and the authorization for these provisions, the fact that the 
authorizations for these provisions expires this year.
    Because so few drugs taken by children are labeled for 
pediatric uses, Congress created an incentive for drug makers 
to conduct tests which could increase pediatric labelling.
    In exchange for conducting pediatric studies at the request 
of the FDA, drug makers received 6 months of additional patent 
exclusivity. The response to this provision has been 
overwhelmingly positive. The FDA has issued 188 written 
requests for the industry to conduct 411 pediatric studies. 
There have been 18 label changes for the benefit of children, 
with more to come.
    This is not a partisan concern, I like to think. In fact, 
the Clinton Administration noted just this past January, ``The 
pediatric exclusivity provision has been highly effective in 
generating pediatric studies on many drugs and in providing 
useful new information in product labeling.''
    While the pediatric research incentives have clearly worked 
well, some have argued for changes in the law. For example, to 
promote testing on drugs with no patent protection or 
exclusivity remaining. I believe that this is a legitimate 
problem which we should consider in our discussions of a 
reauthorization measure. At the same time, we must avoid 
changing the incentives in a way which results in fewer 
pediatric studies.
    I am also interested in learning more about how FDAMA has 
worked to improve the availability of medical devices for 
patients. What is it, a vote?
    Mr. Pallone. Adjournment.
    Mr. Bilirakis. Adjournment?
    How would you handle that, Mr. Waxman?
    Mr. Waxman. Keep going.
    Mr. Bilirakis. Keep going. Under the law, FDA was directed 
to work with industry in creating a least burdensome standard 
to demonstrate the effectiveness of devices. On Tuesday, more 
than 3 years after the act's passage, this standard was finally 
issued. We need to understand why the FDA took so long to 
accomplish its task, whether the result will be beneficial for 
patients, and how the FDA plans to ensure that the standard is 
properly articulated to device reviewers.
    I again want to thank all of our witnesses for taking their 
valuable time to join us and share their expertise. I know we 
all look forward to their testimony and their continued input 
and guidance as the subcommittee works to advance the 
reauthorization measure.
    I will now recognize Mr. Pallone.
    Mr. Pallone. I was going to ask Mr. Waxman to go first.
    Mr. Bilirakis. Mr. Waxman. I think I should always start 
with Mr. Waxman, because you all seem to want to yield to him, 
which is okay with me.
    Mr. Waxman?
    Mr. Waxman. Thank you very much, Mr. Chairman, and Mr. 
Pallone. There is a meeting of another subcommittee on the 
California energy problems, so I asked if I could go first in 
making my opening statement.
    This is an issue I care a great deal about. At the end of 
this calendar year, the pediatric exclusivity authorities of 
the FDA expire. With my colleague from Pennsylvania, Mr. 
Greenwood, I was the original author of this legislation. We 
proposed it because we were convinced that the regular drug 
development marketplace was not working in the best interests 
of children. At that time, 80 percent of all drugs on the 
market had not been tested for safety in children. Many of the 
most important drugs for childhood diseases had never been 
studied in children, and children were often left waiting years 
to be able to take advantage of research progress.
    For almost 30 years, child health advocates, pediatricians, 
and the FDA had appealed to the pharmaceutical manufacturers 
for health, but nothing happened. The industry said nice things 
about child health, but they were uninterested in using their 
research powers and their financial clout to do anything real. 
So finally we developed a market incentive to pay manufacturers 
to do what many of us thought they should be doing as a matter 
of course. That is, produce results.
    Pediatric research on some pharmaceuticals is happening 
now. I am pleased that industry has turned its attention to 
children's health. But it is still not clear to me that we are 
getting what we bargained for. Most obviously, it is not clear 
that the drugs that most need study are being studied. Many of 
the most important drugs for serious and life-threatening 
pediatric diseases are still not under review. Many of the 
drugs that are under review are not the most important ones for 
children.
    Also, obviously we are often paying vastly more than we 
should for the research. Studies that cost hundreds of 
thousands of dollars are resulting in hundreds of millions in 
windfall profits. These windfalls total billions of dollars. 
These windfalls come out of Americans' pockets because of this 
legislation as surely as they would if we had increased taxes 
and paid billions for pediatric trials directly. One of five 
pharmaceutical dollars is paid directly through government 
programs. The rest by private insurance companies and by 
patients themselves.
    Each time we extend patents or exclusivity, however 
laudable the purpose, we spend the public's money. I stand 
ready and willing to do whatever we must to improve pediatric 
research on pharmaceuticals. It is a good and important goal. I 
expect that we will ultimately reauthorize the pediatric 
exclusivity, but as we consider reauthorizing this legislation, 
I want to know if we are getting the research we need and if we 
are purchasing this research prudently.
    Thank you very much, Mr. Chairman.
    Mr. Bilirakis. I thank you, Mr. Waxman.
    Dr. Norwood?
    Mr. Norwood. Thank you very much, Mr. Chairman. I do 
appreciate this hearing very much. In consideration of the 
witnesses, I will simply ask you to put my opening statement in 
the record and move us on.
    [The prepared statement of Hon. Charlie Norwood follows:]

    Prepared Statement of Hon. Charlie Norwood, a Representative in 
                   Congress from the State of Georgia

    Thank you Mr. Chairman. I thank you for calling this hearing, and 
applaud your efforts to further the review of the Food and Drug 
Administration Modernization Act. I am particularly interested in the 
pediatric exclusivity provision, included under Title I of the Act.
    In January of last year, the FDA report on pediatric exclusivity 
reported that between the years of 1991-1996, prior to pediatric 
exclusivity, only 11 requests for studies were honored by the 
pharmaceutical industry. Since 1998, when the pediatric provision was 
implemented, the pharmaceutical industry has agreed to perform 411 drug 
studies. The report went further to suggest that the absence of 
appropriate labeling poses significant risks to the children of 
America; and, that the Secretary projected that the additional costs to 
the nation's pharmaceutical bill due to pediatric exclusivity amounts 
to only one-half of one percent.
    While there are some out there that feel that the costs to sponsor 
study requests by the FDA are unacceptable, I am far from convinced 
those costs are unacceptably high where the health of our children is 
concerned. To make pediatric exclusivity contingent only on a positive 
label change will deter the pharmaceutical industry from further 
studies. If exclusivity is not to be granted, or revoked, based on a 
negative label change; then, what incentives have we presented the 
industry to further research?
    I thank all of the witnesses for attending the hearing this morning 
and I look forward to hearing from each of the witnesses. Again, Mr. 
Chairman, I commend you for calling these hearings and leading the 
efforts to insure the safety of America's children, and I yield back 
the balance of my time.

    Mr. Bilirakis. Mr. Pallone, an opening statement?
    I thank the gentleman from Georgia.
    Mr. Pallone. Thank you, Mr. Chairman, for holding this 
hearing on the evaluation of the effectiveness of the FDA 
Modernization Act. There are several FDA issues that concern 
me, including the need to promote generic drugs as a method to 
hold down prescription drug prices, the lack of progress on 
dietary supplement regulations, and the current 
administration's inadequate attention to food safety.
    I want to mention several things Congress can do to 
increase access to low-cost generic alternatives to name-brand 
products. The first is to stop a practice being used by some in 
the brand industry to prevent generics from reaching the 
consumer. These restrictive laws are being advanced despite a 
scientific finding by the FDA that the generic drug is 
equivalent and substitutable to the brand name product.
    Congress needs to pass legislation prohibiting keeping 
generics off the market once the FDA has determined they are 
therapeutically equivalent to a brand name product. I have 
introduced legislation titled the Generic Drugs Access Act of 
2001, which would accomplish just that. I hope, in light of the 
well-documented price discrimination that seniors face today, 
this committee would consider this legislation.
    The second issue I wanted to mention concerns the lack of 
generic competition in the biotechnology industry. In my view, 
the lack of a clear regulatory framework for approving generic 
biotech products promises to become yet another obstacle 
blocking consumer access to lower cost alternatives. Indeed, 
the patents on a number of giant biotech products have already 
expired, and many more will expire in the next few years.
    Mr. Chairman, there is no scientific reason why biologics 
should be exempt from the Hatch Waxman Act. Actually, I told 
Mr. Waxman I was going to say Waxman Hatch Act. We will save 
enormous sums of money if an explicit framework for approving 
generic biologics can be established through statutory 
language. Generic competition in the pharmaceutical industry 
has been an incentive for innovation at the same time it has 
lowered prices. I expect the same would happen in the 
biotechnology industry if Waxman Hatch is expanded to include 
biologics.
    Mr. Chairman, I am also concerned about the manner in which 
the FDA is implementing the pediatric exclusivity provisions of 
FDAMA. The intent of the law was to create an incentive for 
companies to discover new uses in pediatrics for their products 
in exchange for 6 months of exclusivity for the work done. The 
FDA's interpretation of the law, however, has in essence been 
granting companies patent extensions without receiving the 
pediatric benefits it was intended to generate.
    Two areas I am particularly concerned about are the ability 
of companies to use old studies to obtain patent extensions and 
the granting of exclusivity based on active moiety rather than 
on product-by-product basis. The pediatric exclusivity 
provision of FDAMA should be prospective, and needs to be 
strengthened.
    Mr. Chairman, the issue of dietary supplement regulations 
is not progressing, in my opinion, in a timely manner. The 
industry and the public have been asking for the proposed final 
regulations for good manufacturing practices and the 
publication is still pending at the FDA. The discussion today 
examines modernization of the FDA, yet it takes more than 6 
years to get quality standard regulations for dietary 
supplements.
    In addition, we are awaiting publication of the Department 
of Health and Human Services Inspector General's report seeking 
tighter regulations on dietary supplements. The final draft of 
the report allegedly requires mandatory reporting of 
supplements and their ingredients. Not only does the draft 
report unfairly paint a biased picture of the industry, it also 
understates the benefits of supplements.
    Last, Mr. Chairman, the country is facing a crisis in food 
safety. The FDA is in need of food safety modernization in 
terms of better inspections and better labeling. I am 
introducing two bills to address these issues, but I want to 
highlight the fact that the Bush Administration's food safety 
record in its first 100 days is dismal. I am interested in 
hearing from Dr. Applebaum of the National Food Processors 
Association on this urgent issue.
    Thank you, Mr. Chairman.
    Mr. Bilirakis. I thank the gentleman. I will advise the 
gentleman that I have talked to the committee staff over the 
last few days. We are going to devote an entire hearing to the 
generic drug issue.
    Mr. Pallone. Thank you, Mr. Chairman.
    Mr. Bilirakis. I think in order for all of us to be able to 
make this very important vote, I am going to have to break, 
unfortunately. So forgive us. I'll run right on back. As soon 
as I get back, we'll get started.
    [Brief recess.]
    Mr. Bilirakis. Mr. Whitfield, for an opening statement?
    Mr. Whitfield. Mr. Chairman, thank you very much. I've been 
looking forward to this hearing today. I commend you for 
initiating the holding of this hearing.
    I would initially, Mr. Chairman, with unanimous consent ask 
that I submit for the record a copy of a statement of the 
Grocery Manufacturers of America. This is an issue of 
particular importance to them. Even though they are not 
testifying, they would simply like to get their views reflected 
in the record.
    Mr. Bilirakis. By all means, without objection, that will 
be the case.
    [The statement follows:]

         Prepared Statement of Grocery Manufacturers of America

    GMA is the world's largest association of food, beverage, and 
consumer brand companies. GMA member companies sell more than $460 
billion in consumer food and other products each year and employ more 
than 2.5 million workers in all fifty states. GMA speaks for food and 
consumer brand manufacturers at the state, federal, and international 
levels on legislative and regulatory issues.
    GMA and its members were deeply involved in the consideration and 
enactment of both the Nutrition Labeling and Education Act (NLEA) of 
1990 and the Food and Drug Administration Modernization Act (FDAMA) of 
1997. We have appeared at FDA hearings to discuss implementation of 
these two statutes and have submitted comments to the agency on 
proposed regulations intended to implement them. We welcome this 
opportunity to present our views on these important matters to the 
Subcommittee at this time.
    GMA's comments will cover five different areas: (1) FDA's highly 
restrictive regulation of disease/health claims under the NLEA of 1990 
and the FDAMA of 1997, (2) the failure of FDA to implement the January 
1999 decision of the United States Court of Appeals in the Pearson 
case, that applied the free speech provisions of the First Amendment to 
food labeling, (3) the expansive regulation by FDA of structure/
function claims as implied drug claims rather than as food claims, (4) 
the successful implementation by FDA of the new approach to regulation 
of indirect food additives under FDAMA, and (5) the continuing need for 
national uniformity in all aspects of food regulation.

1. FDA's Highly Restrictive Regulation of Disease/Health Claims for 
        Food.
    Initially in the NLEA of 1990, and subsequently in the FDAMA of 
1997, Congress sought to expand the availability in food labeling of 
helpful information for consumers about the relationship between diet 
and disease. By its narrow and constricted implementation of these 
provisions, however, current FDA policy prevents important health 
information from reaching the American public. This is detrimental to 
both personal and public health. There are five ways in which FDA has 
failed to implement NLEA and FDAMA in the way intended by Congress.
    First, NLEA requires FDA to approve any claim relating to the 
relationship between a nutrient and disease if it is truthful, 
nonmisleading, and is supported by significant scientific agreement. On 
its face, this statutory provision authorizes claims about a diet/
disease relationship based upon preliminary research or emerging 
science, where the evidence is not yet definitive, as long as the state 
of scientific development is accurately described. Nonetheless, FDA has 
chosen to interpret and apply this provision only where there is 
overwhelming science to support a diet/disease relationship, thus 
preventing the public from learning about new scientific developments 
until they have matured into hard science. This was not the intent of 
Congress and it is not in the public interest.
    GMA strongly believes that this provision of the law is being 
improperly implemented and that the FDA approach prevents consumers 
from obtaining important health information. We urge the new 
Administration to reverse the FDA approach and to implement the law as 
it was written.
    Second, FDA has interpreted the statutory standard of ``significant 
scientific agreement'' so narrowly and stringently that very few diet/
disease relationships can stand up to the FDA requirements. As a 
result, FDA has approved only a handful of disease/health claims under 
the NLEA and the FDAMA, in spite of strong scientific evidence 
supporting a number of other diet/disease relationships. As a practical 
matter, the FDA interpretation of this provision approximates the 
requirement of a full scientific consensus. This was never the intent 
of Congress.
    GMA urges the new Administration to return the standard of 
``significant scientific agreement'' to its original intent. A 
reasonable scientific basis, rather than overwhelming scientific proof, 
should be sufficient to support claims as long as the basis for those 
claims is adequately characterized.
    Third, FDA has insisted upon ``model'' disease claims that are 
lengthy, detailed, and complex, and thus poorly suited for consumer 
understanding and communication. The food industry has decades of 
knowledge and experience in consumer communication. FDA has little or 
no expertise in this area. FDA should approve the basic diet/disease 
relationship and allow the industry to determine how best to 
communicate that relationship to the consuming public, as long as the 
claims remain truthful, accurate, and nonmisleading.
    Fourth, FDA has narrowed the statute to permit only disease 
prevention claims and to exclude disease treatment claims. Nothing in 
the statute authorizes such a limitation.
    It is readily apparent that food can treat as well as prevent 
disease. Numerous foods are used as part of a therapeutic regimen. 
People with some types of heart disease or hypertension are placed on 
strict diets designed to treat their existing condition. There is no 
statutory or public health basis for the FDA limitation on disease/
health claims and as a result, people who should be told about the 
dietary means of treating disease are denied this important 
information.
    Fifth, frustrated with FDA's continuing restrictions on disease/
health claims in food labeling, in 1997 Congress included in FDAMA a 
specific provision to expand disease/ health claims by authorizing 
their use based upon authoritative statements by other federal science 
agencies and the National Academy of Sciences. Once again, however, FDA 
has severely blunted the intent of Congress by interpreting this 
provision to allow FDA to veto any claim authorized by another agency 
if FDA disagrees with that other agency. This policy has effectively 
eviscerated the FDAMA provision.
    GMA urges the new Administration to adhere to the intent of 
Congress and to respect the published position of the federal science 
agencies as Congress intended.

2. FDA's Failure to Implement the Pearson Decision
    In the landmark case of Pearson v. Shalala, 164 F.3d 650 (D.C. Cir 
1999), the United States Court of Appeals determined that the 
restrictive implementation by FDA of disease/health claims for food 
labeling under the NLEA represents an unconstitutional limitation on 
free speech. FDA was ordered by the court to approve disease/health 
claims in food labeling that, when considered with accompanying 
explanatory information or disclaimers, are accurate, truthful, and not 
misleading.
    This particular court case arose in the context of four claims that 
had been petitioned for use in connection with dietary supplement 
products. As a result, FDA has limited the Pearson decision to dietary 
supplement claims and has refused to apply the same principles to 
conventional food claims.
    There is no basis either in the NLEA or in the Constitution itself 
for distinguishing between disease/health claims in dietary supplements 
and in conventional food. If a disease claim is supported for one, it 
is supported for the other (absent some clear scientific basis for a 
distinction).
    GMA initially petitioned FDA to abandon its policy on this matter. 
In response, FDA wrote a member of Congress saying that it would not 
apply the Pearson decision unless and until ordered by a court. GMA has 
therefore petitioned FDA explicitly to adopt the same claims for 
conventional food that it has now approved for dietary supplements 
under the Pearson decision. If FDA fails to respond, or denies this 
petition, GMA is prepared to resort to the courts in order to preserve 
the First Amendment rights of those firms that manufacture and market 
conventional foods.
    We would very much prefer not to have to go to court to settle this 
matter. GMA urges the new Administration to reverse the current FDA 
policy and to recognize that Pearson applies to conventional food, and 
indeed to all products regulated by FDA.

3. FDA's Expansive Regulation of Structure/Function Claims As Implied 
        Drug Claims.
    Since 1938, the Federal Food, Drug, and Cosmetic Act has recognized 
that claims relating to the effect of food on the structure or function 
of the human body may appropriately be made in food labeling without 
the product being classified as a drug. Under the Dietary Supplement 
Health and Education Act of 1994, structure/function claims are 
explicitly permitted for dietary supplement products as a ``safe 
harbor'' from drug regulation. In establishing regulations to 
distinguish between structure/function claims that are permitted for 
food (including dietary supplements), and disease/health claims that 
are only permitted for drugs, FDA has announced a policy that many 
structure/function claims would be regarded as implied disease claims 
and therefore would not be permitted for food. Once again, this 
exceeded the intent of Congress.
    It is clear that any claim relating to the effect of a food or 
nutrient on the structure or function of the human body will inherently 
imply some utility for the prevention or treatment of disease. It would 
be virtually impossible to formulate a structure/function claim that 
did not have this potential implication, whether directly or 
indirectly. Thus, FDA has denied to the food industry, by its new 
regulations, numerous important structure/function claims that provide 
important health information to consumers.
    For example, FDA states that an appropriate structure/function 
claim is limited to ``helps maintain healthy cholesterol levels'' and 
does not include ``helps reduce cholesterol levels to a healthy 
level.'' This policy cannot possibly be defended on public health 
grounds.
    GMA urges the new Administration to reverse this policy. Structure/
function claims that only indirectly imply utility in preventing or 
treating disease should be regarded as appropriate for food products in 
order to educate the public about important health aspects of the daily 
diet.

FDA's Successful Implementation of the new Indirect Food Additive 
        Provisions.
    Under FDAMA, Congress authorized a new approach of premarket 
notification for the regulation of indirect food additives, i.e., food 
additives that are used in packaging food or for other food-contact 
purposes but that are not directly added to food. This provision has 
been implemented by FDA in a direct, efficient, and effective way. FDA 
is to be commended on formulating and following a policy that has 
replaced an inefficient and ineffective premarket approval approach 
with the new streamlined premarket notification system. GMA believes 
that this model could appropriately be used in other areas of food 
regulation as well, as a substitute for lengthy, costly, and ultimately 
unworkable premarket approval.

5. The Continuing Need for National Uniformity in Food Regulation.
    The NLEA advanced toward the important goal of national uniformity 
in food regulation. NLEA provided national uniformity for most aspects 
of food labeling. It failed, however, to include national uniformity 
for food warnings or for food safety. GMA believes that, in order to 
have a comprehensive and integrated national system of food protection, 
enactment of national uniformity legislation is essential.
    Our nation-wide economy cannot support fifty differing state laws 
and regulations governing the food supply. Interstate commerce 
throughout the wide reaches of our country requires a consistent, 
uniform, and predictable system of laws and regulations that permit 
transport of food under a single set of regulatory standards. GMA has 
actively sought both administrative and statutory adoption of national 
uniformity in food labeling for the past several years, and will 
continue to seek this objective until it is ultimately achieved.

    Mr. Whitfield. In addition to that, Mr. Chairman, I would 
just simply say that the aspects of this hearing today, we 
cover a number of different areas. Labelling is one of those 
areas that I was quite involved in when we passed this 
legislation back in 1996 or 1997. While generally I have been 
pleased with the progress that has been made in that area, I do 
think that there has been some real disappointment in the way 
that FDA has proceeded on this particular aspect of it.
    Rather than getting into it with my statement, I will be 
asking some questions as we go through the hearing. With that, 
I yield back the balance of my time.
    Mr. Bilirakis. I appreciate that. It looks like we may be 
going into recess where they are going to try to get things 
worked out. So we may have a little bit of relief here.
    Without objection too, the opening statements of all 
members of the subcommittee will be made a part of the record. 
The Chair now recognizes Mr. Brown, the ranking member.
    Mr. Brown. Rationality is winning out on the House floor.
    Thank you, Mr. Chairman. I would like to thank Dr. Suydam 
and other distinguished witnesses for joining us this morning. 
The title of this hearing is evaluating the effectiveness of 
the Food and Drug Administration Modernization Act.
    If you consider the major goals behind the legislation, 
that enactment, you have to say that FDAMA has been quite 
effective. With the exception of the pediatric provisions, the 
overriding purpose of FDAMA was to streamline the approval of 
drugs and devices, and relax what the food industry perceived 
as overly stringent restrictions on health and nutrient claims.
    Are new drugs and devices approved more rapidly now? 
Absolutely. Are drug manufacturers conducting more pediatric 
clinical trials? Absolutely. Are the health claims and other 
food-related provision in FDAMA the right ones to meet the 
concerns of the food industry? Based on their written 
testimony, the National Food Processors Association still feels 
the FDAMA provisions are on target. It's the implementation of 
those provisions that needs some fine-tuning.
    If effectiveness is your standard, FDAMA is a success. My 
concerns regarding FDAMA do not have to do with effectiveness. 
They have to do with cost effectiveness.
    As we work on reauthorizing the pediatric exclusivity 
provisions of FDAMA this year and the PDUFA provisions of FDAMA 
next year, we need to look both at the benefits and the costs 
of the new FDA. The maintenance of effort provisions in FDAMA 
require FDA to spend up to pre-specified levels on new drug 
approvals before user fees kick in. The authorized spending 
threshold stands regardless of FDA's annual appropriation.
    As a result, FDA has been forced to channel very finite 
resources from other FDA functions into new drug approvals. 
That means several things. There are huge costs associated with 
starving other FDA activities, like generic drug approvals, 
like market surveillance, like food safety initiatives to 
accommodate new drug approvals.
    It takes 12 months on average to review a new drug 
application or NDA, as we call it. Six months, if it's a so-
called fast-track drug. It takes 18 months on average, however, 
to approve a generic drug application, a so-called ANDA.
    There are about 300 scientists on staff to review generic 
drug applications. There are 2,100 scientists on staff to 
review: 300 for generic applications, while 2,100 on staff to 
review new drug applications. Delayed access to generic drugs 
costs taxpayers literally billions of dollars each year.
    To get a sense of these costs, the excess consumer spending 
associated with the pediatric exclusivity provisions are 
informative. HHS estimated that delayed access to the limited 
number of generics held up by the pediatric exclusivity 
provisions costs consumers and the Federal Government close to 
$700 million each year. Seven hundred million dollars per year 
for a 6 month delay in access to a handful of generics.
    If you inflate that number to account for the fact that 
every generic drug currently faces an average 6 month delay in 
approval, it's clear that it's starving, as we really are 
doing, the Office of Generic Drugs. It's costing consumers 
billions of dollars a year in lost savings.
    Let's consider the costs of under-funding food safety 
initiatives. Five thousand Americans it's believed die each 
year from food-borne illnesses. Hundreds of thousands of 
Americans are hospitalized each year from food-borne illnesses. 
Millions of Americans otherwise become ill from food.
    In addition to the well-known and well-documented cases of 
food-borne illness, Americans need to be concerned about the 
emergence of antibiotic resistant bacteria in food, genetically 
modified organisms of unknown risk, and lethal contaminants 
such as mad cow disease and others for which no detection test 
is currently available.
    Yet we inspect--again, look at how this agency is starved 
when we shift resources--we inspect only seven-tenths of 1 
percent of food imports. If anything, the enactment of FDAMA 
has intensified the need for post-market surveillance. Yet 
enactment of that legislation limits the resource available for 
that activity. We speed up the approval process. We spend more 
money on approval. We spend less money on post-market 
surveillance as drugs get in the marketplace more quickly. We 
spend more money--drug companies spend more money advertising 
those drugs. The use of those drugs begins much more quickly 
than it did in the past.
    Because of FDAMA, there is immense pressure on FDA to 
approve new drugs and devices as quickly as possible. That, as 
I said, coupled with aggressive direct to consumer advertising, 
means that more people are exposed to new products more 
quickly. If something is wrong with one of these products, more 
lives are affected. We absolutely need to improve post-market 
surveillance of these new drugs and new devices. That requires 
resources.
    None of these concerns means that we're spending too much 
on new drug approval. Not at all. It means we are spending too 
much on new drug approval relative to other priorities. We 
either need to increase spending on these other priorities or 
rethink the maintenance of effort requirements in FDAMA.
    As we evaluate the cost-effectiveness of FDAMA, one of the 
most difficult calculations relates to the pediatric 
exclusivity provisions of the act. Pediatric testing and 
labelling are invaluable. The question is not whether the 
Federal Government should encourage, some would argue require 
drug companies to do this type of testing. The question is are 
we paying more than is necessary for pediatric testing.
    Let's go back to the HHS estimates. The exclusivity 
provisions cost American consumers $65 million per drug. While 
the drug industry won't disclose the kind of information we 
need to estimate the cost of pediatric clinical trials, drug 
makers have to disclose information on the costs of orphan 
drugs, clinical trials to receive their tax credit. Based on 
that information, it costs about $3 million on average to 
conduct a clinical trial.
    Still, just for argument's sake, take the industry's 
estimates for the cost of pediatric testing. They stated a cost 
from $5 to $35 million for a clinical trial. If we split the 
difference, we could hand the drug industry a check for twice 
their investment and still save money on pediatric testing 
relative to the exclusivity provisions. Even if you don't split 
the difference and assume that each and every clinical trial 
costs $35 million, and that's probably not true, we could 
promise the drug industry a 50 to 75 percent return on their 
investment and still save money. Even the most profitable 
industry in the world, which coincidently is the prescription 
drug industry, doesn't enjoy returns like that today.
    The drug industry is fiercely protective of the pediatric 
exclusivity provisions. Hard to blame them. The Federal 
Government should be fiercely protective of the Nation's 
children. We should make sure that prescription drugs are 
thoroughly tested and correctly labeled for pediatric use. That 
doesn't mean we should actively contribute to grossly inflated 
drug prices. That is simply not necessary.
    I thank the Chairman, and look forward to hearing from the 
witnesses.
    Mr. Bilirakis. Mr. Greenwood, for an opening statement.
    Mr. Greenwood. Thank you, Mr. Chairman. I also thank you 
for holding these hearings.
    I remember, Mr. Chairman, probably 6 years ago when then 
Chairman Bliley called me up and asked if I would chair a task 
force to reform FDA. I remember saying at the time that what I 
knew about FDA I could squeeze onto a three-by-five card, but I 
would be happy to do it. We put together a group. Mr. Burr 
headed up the pharmaceutical piece, Mr. Barton the medical 
device piece, Mr. Klug, former Member Klug, the food safety 
piece, and we engaged in a process that was agonizingly long 
and complex, where we interfaced with the industries, 
interfaced with the patient groups. We interfaced with the 
agencies. Spent days at a time with Dr. Kessler in my office, 
worked in I think a bipartisan fashion. It was difficult. It 
was controversial, but unlike a lot of effort that occurs 
around here, it produced a result of which I think we all can 
be proud.
    By every measurement that I have been able to take since 
then, this is an act that has been successful. The fundamental 
problem that we were faced with is that the Food and Drug 
Administration understood that its role was to make sure that 
we maintained the gold standard in this country, that nothing, 
no drug, no device, no food product passed muster unless it was 
proved to be safe. The problem was that they didn't seem to 
have as a mandate the notion that they needed to nonetheless 
get these products to the patients expeditiously, and that 
someone was just as harmed and just as dead if they died 
waiting for a promising drug as they were if they took a drug 
that wasn't safe. I think that has changed. I think it has all 
been to the good.
    I think the pediatric exclusivity, as I think we'll hear 
today in testimony, has been an extraordinary success. It 
solved the problem that was unresolved for decades. We have 
learned in the interim. We can refine this statute. I think all 
of the issues that members on both sides of the aisle have 
raised ought to be on the table. But I think we ought to be 
prudent because we don't want to go backwards. I think our 
first order of business should be to do no harm, and make sure 
that nothing that we do in any way undermines any of the 
success that we have had.
    I think we ought to also make sure that we don't stall out 
on this behavior on this process over controversies. There is a 
very long list of very controversial areas we can get into that 
will probably be unresolvable, and could have the effect of 
causing us to fail to get these statutes reauthorized.
    I look forward to working with members on both sides of the 
aisle, and am pretty confident that we can get that done. I 
yield back the balance of my time.
    Mr. Bilirakis. I thank the gentleman.
    Mr. Deutsch, for an opening statement?
    Mr. Deutsch. Thank you, Mr. Chairman. I would like to thank 
the chairman and the ranking member for calling this hearing.
    Obviously the issues that we will hear about today are of 
great importance. All of our constituents rely heavily upon the 
drugs and medical devices that the FDA regulates. My district, 
as many of you know, is comprised of a large number of senior 
citizens. My constituents and actually obviously constituents 
throughout the country have been able to live longer and 
healthier lives because of the advances in pharmaceutical and 
medical devices in the last few years. Seniors can now take 
drugs that lower cholesterol and high blood pressure as well as 
take advantage of amazing medical devices such as stents to 
treat artery blockages.
    I am going to mention just a couple of statistics and facts 
that I brought out. We just came back from a break period, had 
about 25 town meetings during that period, a number of them in 
senior communities. One of the things that is just a striking 
statistic to talk about what the FDA has been part of in the 
last 36 years since Medicare was created.
    When Medicare was created in 1965, the average life 
expectancy of an American was 65 years old. That's an 
incredible statistic because today that life expectancy in the 
36 years has increased by more than 10 years.
    On the other side of this sort of statistics which I think 
sometimes statistics can in fact give us real insights, in 1965 
before Medicare was created, the average out-of-pocket expenses 
for seniors for health care was 11 percent. Thirty-six years 
later, with Medicare paying most hospitalization and most 
physician fees as well as other fees, the average percentage of 
a senior in America's out-of-pocket costs for health care is 
now close to 19 percent of their income with Medicare existing.
    I think those two statistics in many ways talk about the 
medical science and what has happened in the last 36 years. It 
is a different world. That is why so many people on this panel 
have been committed to providing prescription drug coverage as 
a benefit of Medicare. But it also is literally there are tens 
of millions of people who are alive today because of advances 
in medical science. So there is probably nothing more 
important, if you look at it in this global way, that the 
government has done than exactly what the FDA has done within 
its jurisdiction.
    I think it is imperative that we take a look at 
reauthorizing FDAMA and PDUFA and we ensure that there is a 
proper balance between safety, economics, and timeliness. The 
FDA obviously has an important job in making sure that our 
constituents, have access to safe and effective products in a 
timely manner. I hope that we can hear from our witnesses today 
about how the current process functions and what, if anything, 
we can do to improve that.
    I yield back the balance of my time.
    Mr. Bilirakis. I thank the gentleman.
    Mr. Buyer, for an opening statement?
    Mr. Buyer. Thank you, Mr. Chairman. I appreciate you 
holding the hearing and providing us to focus on the attention 
of the progress of the FDA Modernization Act of 1997.
    As I understand it, one of the goals of the act was to 
shorten the review times of the FDA for new drugs and medical 
devices. As we're all aware, patient health is not protected if 
they are denied the access to medical treatment due to the 
bureaucratic delay.
    I am looking forward to hearing the testimony from the FDA 
and drug and device industries on the success in meeting the 
goals. One out of eight jobs in Indiana is in the health care 
industry. Medical technology is a significant and growing part 
of Indiana's economy, and it is important that government not 
impede the breakthroughs in pharmaceutical and medical 
technology that can improve the quality of life, not only of 
Hoosiers, but citizens in our country and around the world.
    The United States is the global leader in the health care 
field. We certainly do not want to see our cutting-edge 
forfeited to overseas competition. To maintain the edge, 
government must be a partner in the approval process without 
sacrificing safety and efficacy. I know this is not an easy 
thing to do. I look forward to the hearing.
    I yield back the balance of my time.
    Mr. Bilirakis. I thank the gentleman.
    Ms. Capps?
    Ms. Capps. Thank you. Thank you, Mr. Chairman, for holding 
this hearing. It is a very important topic for our committee to 
entertain and discuss and the Congress as a whole to review its 
past actions from time-to-time. This is an appropriate way to 
spend our time, to measure our success and determine the need 
for future action.
    I am particularly pleased that today we are focusing on the 
Food and Drug Agency Modernization Act and its implementation. 
The FDA is vitally important to the health and safety of the 
American people. Its review of new and existing drugs, devices, 
and food is an essential protection for our constituents. But 
it is also extremely important that efforts to protect people 
do not inadvertently cause them harm because they cannot get 
access to state-of-the-art care.
    The state of medicine is dramatically changing every day. 
New technologies are being developed rapidly, and old 
technologies are in constant need of upgrades. There are always 
new ideas right around the corner, which is wonderful and one 
of the best things about our country. It means that many 
patients will be able to try out new treatments and improve 
their care. Many who have lost hope may have it restored. 
Others will see their quality of life improved by these new 
treatments.
    But it creates a two-sided challenge, I believe, for the 
FDA. On the one hand, all the new technologies and ideas need 
to be vetted so that doctors, patients, and everyone else can 
have confidence that there is no unnecessary risk. New ideas 
mean much more work for the FDA. On the other hand, we have to 
make sure that we don't discourage innovation and that we make 
it easier for patients to get the benefits that have been 
discovered in a timely fashion.
    If a new technology becomes bogged down in a review and is 
slow to help our constituents, then we have not achieved the 
potential of these innovations. It's a fine line to walk. We 
need to help you, we need to help the Food and Drug 
Administration to find the right path.
    FDAMA was an excellent start. I want to applaud the FDA for 
the tremendous progress that it has made on this issue. But 
there are components of FDAMA which we need to review. It has 
already been mentioned, but I also believe that the development 
of pediatric exclusivity is one such change. Its implementation 
has meant that more and more drugs are being evaluated for use 
on children. This has meant a higher quality of care for our 
Nation's young people. But it has come at such a high cost, I 
mean literally. The extension of exclusivity has slowed the 
development of generic drugs and meant higher costs for 
consumers for a longer period of time. This may be a cost that 
we have to bear in order to improve children's health care. But 
we need to examine all of our options and really question 
whether we in this case do in fact have the right balance.
    There may be a way to give companies an incentive to 
conduct these studies and still bring down the cost of 
prescription drugs. It is our responsibility to find this way 
or these ways if they do in fact exist. It means working 
together. I look forward to that opportunity to work with you 
to build on the changes that you have already introduced in 
FDAMA. More will always need to be done. So I conclude by 
saying that we can't afford to rest on our laurels. I know you 
don't want to either. We must continue to examine ways to 
improve the Food and Drug Administration and its processes. 
Thank you.
    Mr. Bilirakis. I thank the gentlelady.
    Mr. Burr, for an opening statement.
    Mr. Burr. Thank you, Mr. Chairman, for holding this 
hearing. Let me thank all the witnesses who have volunteered to 
come.
    When we were asked to start on FDAMA in 1995, there were 
many people within this institution that said this is a big 
thing, don't do it. Washington and Congress don't do things 
this big. It's because of the bipartisan approach that was 
taken, the partnership that was established not only across the 
aisle, but from Washington, from the Capitol and downtown, but 
more importantly, from the Capitol and across the country. As I 
read some of the testimonies, I am amazed to see the revisions 
of history as it relates to the process not including the 
American people.
    Years were spent with patients groups, making sure that 
every anticipated result of FDAMA had a positive impact on 
people who were sick and dying. The only way that you could 
ever get legislation of this magnitude through this institution 
was for members to concentrate on patient health, to 
concentrate on a vision of the future, to concentrate on what 
it takes to unleash the capital that's needed privately and 
publicly for research and development, for better understanding 
of drug treatment and drug interactions.
    We were able to find that balance. I will agree with some 
of my colleagues, it's not perfect. Don't judge Congress on 
whether we get it perfect or not. Judge us on whether we fix 
it, because we learn as the years go on. We are at a point that 
we have learned.
    We have learned that through pediatric exclusivity, that 
companies are now going through the clinical process of some 
very valuable data that pediatricians across this country need 
to treat kids. I don't think anybody wants to take that away. 
Is the right length of exclusivity 6 months, 4 months or 12 
months? We don't know, but hopefully before we take the 
legislation up, we'll turn to experts that are in the field, 
not just in the pharmaceutical field. We'll turn to generics, 
but more importantly, we'll turn to pediatricians, the ones 
that actually treat our children, and ask them how does it 
work? What do we need to do? How long should the 
reauthorization be for?
    Let me suggest to you that FDAMA was done for one reason 
and one reason only. It was to open the line of communication 
between companies and the approving agency. It was to make sure 
that there was no lack of communication because there was no 
desire to approve.
    We spent 2\1/2\ years for one reason, because it was very 
difficult to protect the gold standard that was established at 
FDA, that we felt that was so important that anything that we 
did could not lower that standard. We had our critics, I will 
assure you. We met with every one of them. I think in the end, 
we got as close to maintaining that gold standard as any 
legislative process could do.
    I would encourage our witnesses today to be honest. I would 
encourage my colleagues to be inquisitive. I would encourage 
the chairman to move quickly. Let's make sure that we 
reauthorize pediatric exclusivity. If we can this year, and 
it's the will of my colleagues, I hope we reauthorize PDUFA 
this year, not next year when it's up. Let's do it this year 
while there is political will and not an election that's 
looming.
    To do big things in health care requires one to set aside 
politics and concentrate on patients. I am convinced, Mr. 
Chairman, that the atmosphere is such on both sides of the 
aisle that we're focused on patients. Let's move as quickly and 
as inclusively as we can toward the reauthorization.
    I thank the chairman. I yield back.
    Mr. Bilirakis. I thank the gentleman.
    Mr. Stupak?
    Mr. Stupak. I'll waive my opening statement, Mr. Chairman.
    Mr. Bilirakis. The Chair appreciates that.
    Mr. Bryant?
    Mr. Bryant. Thank you, Mr. Chairman. I also will waive my 
opening statement.
    Mr. Bilirakis. I thank you.
    Dr. Ganske?
    Mr. Ganske. I think it's time to move on, Mr. Chairman. 
I'll waive mine.
    Mr. Bilirakis. Thank you, Dr. Ganske.
    I will note that a gentlelady who is a member of the full 
Committee of Energy and Commerce but not a member of the 
subcommittee has asked to introduce a panelist from the next 
panel.
    Please proceed.
    Ms. McCarthy. I thank you, Mr. Chairman, for that courtesy. 
I thank the first panel for indulging me in this moment. But 
because of the importance of what this subcommittee is doing 
and the importance of what the full committee will eventually 
take up, I wanted the opportunity to introduce Dr. Greg Kearns 
to you.
    Although the veterans on this committee will recall his 
testimony before the full Energy and Commerce Committee when we 
were initially approving FDAMA, he has now had the experience 
as a champion of pediatric health care in my region at 
Children's Mercy Hospital, and certainly in the Nation, to come 
before you today and to reflect on how it's working and what 
further reforms might be needed, and certainly for the need to 
reauthorize pediatric exclusivity in the law.
    He is a doctor of pharmacology and a professor of 
pediatrics and pharmacology at the University of Missouri, 
Kansas City. He is also the chief of the Division of Pediatric 
Pharmacology and Medical Toxicology and the program director of 
Pediatric Pharmacology Research Unit at Children's Mercy, and 
the clinics.
    It's to me a very great effort that this subcommittee is 
making to take this up ahead of time and to try to reauthorize 
it because from everything that I have read in the testimonies 
that I have looked at, it is working for the benefit of our 
children. Dr. Greg Kearns is here today to reflect with you on 
how to it improve for the future.
    Thank you very much, Mr. Chairman, for allowing me this 
opportunity.
    Mr. Bilirakis. By all means, you are welcome.
    [Additional statements submitted for the record follow:]

 Prepared Statement of Hon. W.J. ``Billy'' Tauzin, Chairman, Committee 
                          on Energy & Commerce

    Mr. Chairman, I commend you for holding this timely hearing which 
will consider whether the reforms contained within FDAMA have 
successfully lessened regulatory burdens at the FDA.
    FDAMA represents the first comprehensive re-write of our nation's 
food and drug laws in more than thirty years. It contains provisions 
intended to speed the approval of safe and effective drugs and devices, 
and provisions which help provide consumers with more health 
information about the food they eat. Today we are here to determine 
whether or not these reforms are working.
    While all of the provisions contained within FDAMA are very 
important, a good portion of this hearing will focus on the drug title 
of the bill. This makes sense, as the pediatric exclusivity provision 
within FDAMA is up for reauthorization this year, and the Prescription 
Drug User Fee Act must be reauthorized before the end of next year. 
Allow me to explain the importance of these provisions.
    According to the American Academy of Pediatrics, which will testify 
today, most drugs used to treat illnesses in children have never been 
formally tested or approved for pediatric use and lack even basic 
dosage recommendations for children in their labeling. To encourage the 
research-based pharmaceutical industry to develop specific information 
about uses and doses of prescription medicines for children, the 
pediatric exclusivity provision provides an incentive of six months 
marketing exclusivity which attaches to any existing patent protection.
    The results of this provision have been extremely positive. And 
don't just take my word for it. According to the Clinton FDA ``the 
pediatric exclusivity provision has done more to generate clinical 
studies and useful prescribing information for the pediatric population 
than any other regulatory or legislative process to date.'' Between 
1991 and 1996, only 11 pediatric studies were completed by the 
pharmaceutical industry at the request of FDA. After passage of the 
pediatric exclusivity provision, in three short years the 
pharmaceutical industry has agreed to conduct 411 pediatric studies in 
the hope of obtaining the additional six months of exclusivity. 
Already, there have been 18 label changes for the benefit of children, 
all at the cost of only one-half of one percent to the nation's 
pharmaceutical bill.
    But we can do better. Because the exclusivity only attaches to 
drugs with remaining patent protection or exclusivity, many drugs used 
in children will not be tested because there's no economic incentive to 
do so. We must ensure that when this provision is reauthorized, we 
include language which results in these drugs being studied for 
pediatric uses.
    PDUFA represents another success for the American consumer. PDUFA 
authorized the FDA to collect fees from companies that produce drugs 
and biologics to hire more reviewers and support staff and upgrade 
information technology. In 1992, there were 1,277 drug reviewers within 
FDA, and today that figure has nearly doubled. And the result? Approval 
times have been cut in half, and the percentage of new drugs introduced 
in the United States before being introduced in other countries has 
nearly doubled.
    But FDAMA is more than pediatric exclusivity and PDUFA. It 
represents an effort to have industry and government work more 
collaboratively in order to speed the decision-making process, and it 
represents an effort to get better information in the hands of 
patients, doctors and consumers. I look forward to hearing from the 
various stakeholders who will testify today to determine whether these 
reforms are working, and I yield back the balance of my time.
                                 ______
                                 
Prepared Statement of Anna Eshoo, a Representative in Congress from the 
                          State of California

    Thank you, Mr. Chairman, for holding this hearing today. It's hard 
to believe FDAMA is up for reauthorization already.
    I feel like it was just yesterday that we tackled this issue, 
working night and day to write legislation that would streamline the 
agency and speed live-saving products to our constituents without 
sacrificing safety or effectiveness.
    As one of the leaders of that effort, I'm proud to see the 
successes that have resulted.
    Medical device and pharmaceutical companies throughout my 
congressional district consistently applaud the dramatic improvements 
FDAMA made to the approval process.
    Product approval times have been cut in half, bringing cutting-
edge, life-saving therapies to patients sooner than ever.
    However, I'm concerned that there still may be a few snags.We'll 
hear from industry representatives today that pre-market approval times 
are still twice the statutory mandate at 360 days instead of 180.
    Agency interpretation of ``least burdensome'' means to proving 
safety and effectiveness has been too broadly interpreted and is 
delaying approval of important patient products.
    The Agency has dragged its feet in implementing third party reviews 
and dispute resolutions--two key provisions of FDAMA.
    I look forward to hearing from Ms. Suydam on these issues. However, 
I must also say that I'm disappointed that President Bush has not yet 
appointed a FDA Commissioner.
    I find it quite disconcerting that the agency entrusted to protect 
the public health from unsafe food, drugs and devices is still 
functioning without leadership.
    But there's another issue that I'm interested in and look forward 
to hearing from the witnesses on--reuse of single-use medical devices.
    In 1999, after reading several media reports of delicate single-use 
devices, such as balloon catheters and biopsy forceps, being reused on 
patients and causing infection and injuries, I contacted the FDA to ask 
why they weren't regulating this potentially dangerous practice.
    The response was less than satisfactory. I was told that the FDA 
just simply didn't have the resources to regulate this practice and, 
therefore, was nowhere near developing a policy on reuse.
    Faced with an Agency that was failing to act, I introduced 
legislation to require reprocessed devices to undergo approval for 
safety and effectiveness. Within a week, FDA issued a proposed 
regulation, which was finalized last year.
    I'm pleased that the Agency finally took action on this important 
public health issue. Profits should not be put ahead of patients.
    I'll be interested to hear from the witnesses how implementation of 
the regulation is progressing.
    Thank you, Mr. Chairman.
                                 ______
                                 
Prepared Statement of Eliot L. Engel, a Representative in Congress from 
                         the State of New York

    Mr. Chairman, I want to thank you for calling this hearing today, 
and I want to thank all of the witnesses for their time and their 
testimony. We will be discussing one of the most important issues we in 
Congress face--ensuring the health and welfare of the people of this 
country as they eat their meals, take their medicine, and use numerous 
products and devices that they think are safe. But it is not only 
safety that is at issue today, it is also efficiency and whether or not 
the Food and Drug Administration (FDA) is reviewing and approving or 
disapproving submissions in a timely manner, thus ensuring that the 
best technologies are available to the public.
    In 1997 Congress enacted the Food and Drug Administration 
Modernization Act (FDAMA) to streamline the administrative process in 
order to get new technologies to the public in a safe and timely 
fashion. Despite those efforts, we have heard testimony in this 
committee time and again stressing the need for further reform because 
there are life-saving medications and devices sitting in storage 
awaiting FDA action. We are here today to examine the successes and 
failures in FDAMA to determine what action, if any, is necessary at 
this time. We will hear testimony praising the success of the 
Prescription Drug User Fee Act (PDUFA) for cutting review times in 
half.
    We will also hear criticism that PDUFA may compromise safety 
because of what has been dubbed--a ``sweat shop'' mentality at FDA to 
get drugs approved quickly and the possible bias PDUFA has created due 
to the FDA's reliance on the additional funding it generates. We can 
also use the knowledge acquired from PDUFA to implement changes in the 
medical device approval process. That is, would user fees, or some 
other form of revenue generating provision, enhance the medical device 
review process. I will inquire about this later when I have the 
opportunity to question members of our panel.
    Pediatric exclusivity is also at issue. There is strong criticism 
by some suggesting that 6 months of exclusivity is too big a trade-off 
for testing drugs and dosing them for children. However, we will also 
hear praise by some for the enormous benefits it has created in 
pediatric medicine. In fact, we will hear from Dr. Richard Gorman in 
his testimony about the tremendous gains in pediatric medicine in only 
3 years since the exclusivity provision was enacted. Congress must 
examine these issues closely as certain provisions are set to expire in 
the coming years. While there may be some fine-tuning needed to some of 
the FDAMA provisions, we must not undue the gains we have made.
    Mr. Chairman, new and innovative technologies are emerging everyday 
that have the potential to save lives or greatly enhance the quality of 
life for so many. We in Congress must work with industry and the FDA to 
enhance current practices to bring products to the public in a safe and 
efficient manner. While safety must not be compromised, if there are 
ways to speed-up the administrative process we must consider doing so. 
We must not let bureaucracy stifle innovation. I look forward to the 
hearing the testimony from our witnesses and hope to work with you Mr. 
Chairman and Ranking Member Brown, and the rest of the Members on the 
Committee to bolster FDA's efforts to safely and effectively carry out 
its mission.
                                 ______
                                 
  Prepared Statement of Hon. Gene Green, a Representative in Congress 
                        from the State of Texas

    Thank you Mr. Chairman, and thank for holding a hearing today on 
the effectiveness of the Food and Drug Administration Modernization Act 
(FDAMA).
    Over the past few years, we've heard a lot about the cost of 
prescription drugs, but very little about the agency that ensures their 
safety and quality.
    But just as important to seniors as a Medicare prescription drug 
benefit, is ensuring that important, life-saving drugs can are 
available when seniors need them.
    I supported this legislation when it was first introduced in the 
105th Congress because I believed it was necessary to improve the 
process by which the FDA approved pharmaceuticals and biologics.
    And by many standards, the legislation has been successful.
    But as we begin consideration for reauthorization of FDAMA, I think 
it is important that we hear from the different parties about what they 
perceive are the successes and failures of this bill.
    There are a number of concerns about the implementation of FDAMA, 
including the impact of the Prescription Drug User Fee Act (PDUFA).
    By many standards, PDUFA has been successful in ensuring that life-
saving medications make it to the marketplace as quickly as possible.
    The user fees collected through PDUFA have enabled the FDA to speed 
up the application review process for pharmaceutical and biological 
products.
    In the three years since we last authorized PDUFA, the agency has 
met almost all of its performance goals. The average approval time for 
FY 00 was only 11.9 months, down from almost 21 months just five years 
ago.
    But there are some concerns about the effect of PDUFA on product 
safety
    Ensuring that the integrity of FDA's approval process is not 
compromised is of paramount importance to all Americans, and I am very 
interested to hear from the FDA regarding measures they have in place 
to ensure that quality is not compromised in the name of expedience.
    I also have some concerns regarding the impact of the performance 
goals in PDUFA on the culture at the FDA.
    A common complaint from both consumer groups and FDA alike, is that 
``sweat shop'' conditions have impacted employees at FDA, prohibiting 
them from attending continuing education classes, raising their stress 
levels, and resulting in high turnover.
    This environment is not only bad for employees, but it's bad for 
the process.
    Training scientists takes a tremendous amount of time and 
resources.
    The loss of those human resources impacts the ability of the FDA to 
do its job.
    There is also a real shortage of financial resources at FDA.
    In a recent Congressional briefing on PDUFA, FDA has expressed 
concern that PDUFA is crowding out other non-PDUFA programs, such as 
post market surveillance, approval for generic pharmaceuticals, and 
oversight of direct-to-consumer marketing.
    It is important that the activities at FDA be balanced and that 
adequate resources are provided to ensure that FDA can meet its 
mission.
    In addition to PDUFA, I am interested to hear from our witnesses 
regarding other elements of FDAMA, such as the issues surrounding 
pediatric exclusivity, and the effects it has on the ability of 
generics to compete.
    Studies by HHS have revealed that, while providing exclusivity has 
improved labeling for children in some areas, it has not gone far 
enough.
    According to HHS, the incentive is not adequate for drugs with low 
sales volume, off patent products, and the entirety of biologic 
products.
    The incentive has also not been effective for neonatal populations.
    Now is a good time to exchange ideas on ways to improve this 
situation to ensure that all important drugs and biologics are 
available to children.
    Mr. Chairman, thank you again for holding this hearing.
    I look forward to hearing the testimony of our witnesses today, and 
yield back the balance of my time.
                                 ______
                                 
    Prepared Statement of Hon. John D. Dingell, a Representative in 
                  Congress from the State of Michigan

    Mr. Chairman, thank you for scheduling this hearing to evaluate the 
effectiveness of the Food and Drug Modernization Act (FDAMA). As you 
know, this law was the bipartisan product of a lot of hard work by our 
colleagues, our staff, the Senate, the Food and Drug Administration 
(FDA), and stakeholders.
    I agree with those who generally consider FDAMA to be a success. 
That said, experience shows that every law and program needs periodic 
review and revision. Though this is our first hearing to review FDAMA, 
I hope it will not be the last. There are many issues under the 
auspices of FDA that I would like for us to examine, whether formally 
styled as oversight of FDAMA, or not. Let me list a few.
    For a number of years I have introduced legislation, and soon I 
will again, to enhance the safety of the nation's imported food supply. 
We face ever more important challenges in the form of microbial and 
other food-borne contaminants that strike hardest at the most 
vulnerable among us. FDA estimates that fully one fourth of America's 
population is considered to be especially vulnerable to food pathogens 
due to age (children and the elderly) or health status (weakened immune 
systems from cancer, organ transplant, HIV infection, and the like). I 
happen to believe that FDA needs enhanced authority and resources to 
deal with these challenges.
    Then there is tobacco. The Supreme Court threw out FDA's regulation 
aimed at teen smoking. It is our job to provide FDA with the authority 
it needs to do its job in this area. Secretary Thompson and even the 
largest tobacco company, Philip Morris, agree that FDA should have 
jurisdiction to regulate this product. The issue deserves our time and 
attention.
    Dietary supplements are virtually unregulated, notwithstanding the 
fact that many of them contain pharmacologically powerful active 
ingredients. This industry has no good manufacturing practices (GMPs), 
no mandatory adverse event reporting system, and FDA lacks adequate 
authority and resources to protect the public from hazardous, even 
lethal, supplements.
    Imported drugs are an increasingly important source of concern. The 
so-called personal use policy is a sham and millions of Americans are 
subjecting themselves to great risk in the form of drugs from unknown 
foreign sources. Congress passed a law last year that could have made 
things worse. This committee did not report that legislation, nor has 
it held a hearing on the subject. I think we could perform a valuable 
service for our colleagues holding hearings about the perils of which I 
speak.
    Also, over the past several years, we have seen several new drugs 
withdrawn from the market because of the harm they caused. Was it the 
company's fault? Was FDA lax or overburdened? Are these problems the 
result of too-quick approval? The Congress would benefit from reviewing 
these problem drugs more closely.
    I look forward to hearing about how the specific provisions of 
FDAMA are working. Because the pediatric exclusivity provision of 
section 111 expires at the end of this year, I will be particularly 
interested in the testimony regarding that aspect of FDAMA. There is 
apparent consensus that testing and labeling of drugs that are used on 
children is an important objective. My questions concern the means of 
achieving that objective.
    In examining the six month period of exclusivity provided by 
current law, or any alternatives to it, I have three questions. First, 
is the provision effective? Second, is the provision efficient? Third, 
is the provision equitable? I have concerns with the six month 
exclusivity incentive on all three counts. So did the Secretary of 
Health and Human Services in her January 2001 report to Congress, ``The 
Pediatric Exclusivity Provision.''
    It is clear that exclusivity is not an effective incentive to 
promote pediatric testing in important pharmaceutical areas. It is not 
effective for off patent products, it is not effective for small market 
products, and biologics are not even eligible for the incentive.
    The incentive is not efficient in so far as its ``one size fits 
all'' aspect conveys a windfall on blockbusters like Claratin that get 
the same six months as products with vastly smaller sales volume.
    Finally, the incentive is inequitable because it is paid for by 
consumers who use the drug being studied by delaying generic 
competition for six months. The benefits of pediatric testing are 
societal, and society, not a relative handful of consumers, should pay 
its costs.
    Given these facts, we should be open to discussing and developing 
alternatives that meet the agreed upon objective in a better way. I 
look forward to working with my colleagues and interested parties on 
this matter.
    Finally, I want to say just a general word about the FDA. FDA 
cannot simply ``do the best it can with what it has'' in the form of 
authority and resources. The magnitude and nature of the challenges 
facing FDA are different today than they were at any time in our 
history. Resistant microbes, undetectable pathogens, and genetic 
modifications are but a few of the new challenges to old problems. As 
one of today's witnesses aptly put it, FDA modernization is a 
continuous process. We need to be sure we provide the oversight and, 
where needed, the resources and authority for FDA to be responsive and 
responsible to the consuming public now and in the future. So again, I 
express my hope that this will be the first of many hearings that focus 
on FDA's programs and responsibilities.

    Mr. Bilirakis. All right. We'll move onto the first panel 
now. We have Linda Suydam, Dr. Suydam, who is a Senior 
Associate Commissioner of the Food and Drug Administration. Mr. 
Steve Northrup, Executive Director of the Medical Device 
Manufacturers Association, and Dr. Rhona Applebaum, Executive 
Vice President of Scientific and Regulatory Affairs for the 
National Food Processors Association.
    Ms. Suydam, since you are the Administration witness, we 
will set the clock to 10 minutes. By all means, please proceed. 
You all know that your written statement is already a part of 
the record. We would hope that you would complement it. You are 
recognized.

 STATEMENTS OF LINDA A. SUYDAM, SENIOR ASSOCIATE COMMISSIONER, 
 FOOD AND DRUG ADMINISTRATION; STEPHEN J. NORTHRUP, EXECUTIVE 
 DIRECTOR, MEDICAL DEVICE MANUFACTURERS ASSOCIATION; AND RHONA 
    S. APPLEBAUM, EXECUTIVE VICE PRESIDENT, SCIENTIFIC AND 
    REGULATORY AFFAIRS, NATIONAL FOOD PROCESSORS ASSOCIATION

    Ms. Suydam. Thank you. Good morning, Mr. Chairman and 
members of the committee. I am Linda Suydam, Senior Associate 
Commissioner of the Food and Drug Administration. I am pleased 
to be here today to discuss the agency's progress and success 
in implementing the Food and Drug Administration Modernization 
Act of 1997.
    FDA has made a strong commitment and given high priority to 
implementing the Modernization Act in a manner that is 
consistent with both the letter and the spirit of the law. We 
are well aware that FDAMA, as we call it, is landmark 
legislation of exceptional significance for the future of the 
FDA and for the future of the public health in our country. We 
wish to thank the committee for their thorough, comprehensive 
work performed in drafting FDAMA. We are particularly 
appreciative that you based this historic act on the principle 
that underscores its benefits, that FDAMA made improvements 
without changing the high public health standards FDA is 
charged with upholding.
    Over the past 3\1/2\ years, FDA has worked hard to 
implement this new law. We have met nearly every statutory 
deadline. We have issued dozens of regulations, guidance 
documents, Federal Register notices, and reports to carry out 
the goal of this wide-reaching law. I ask that my written 
testimony and supplementary material that expand on the 
agency's activities to implement the act be included in the 
record.
    Mr. Bilirakis. Without objection.
    Ms. Suydam. Overall, FDAMA has been a success. While the 
broad statute covers many issues, I would like to focus the 
committee's attention on two key provisions of FDAMA that will 
sunset next year and require Congressional action: the 
reauthorization of the Prescription Drug User Fee Act, PDUFA, 
and the pediatric exclusivity provision. The pediatric 
exclusivity provision expires on January 1, 2002, and PDUFA on 
September 30, 2002.
    During the 8\1/2\ years of PDUFA, the Agency's performance 
has met the highest expectations. While adhering to rigorous 
standards for safety and effectiveness, FDA has met virtually 
all of the program's review goals. PDUFA I was directed at 
reducing drug review times. During PDUFA I, FDA exceeded all of 
its performance goals, and significantly reduced those review 
times.
    PDUFA II included some performance goals to further reduce 
review times, but many of the performance goals were also 
directed toward reducing clinical drug development time. These 
goals included accelerated consultations on critical drug 
development issues, timely resolution of major disputes, and 
rapid handling of other clinical drug development issues such 
as clinical holds.
    PDUFA has created significant benefits for the public, 
industry, and for FDA. Not only has FDA significantly reduced 
review times and clinical drug development times as a result of 
the PDUFA programs, but we have also significantly reduced 
approval times, and therefore, the overall time it takes to get 
new drugs to the market.
    For industry, one measure of PDUFA's advantage is that now 
nearly 80 percent of new drugs worldwide are first launched in 
the United States due to the favorable regulatory climate that 
exists here as opposed to 40 percent prior to the enactment of 
PDUFA.
    FDAMA's pediatric exclusivity provision is also helping to 
ensure access to and safe use of therapies for children whose 
treatment has historically been hampered by inadequate 
information about the safe and effective use of drugs in the 
pediatric population. Providing adequate pediatric use 
information for drugs and biologics has long been a high 
priority for the Agency. We are pleased to report that the 
industry's response to the incentives offered by this provision 
have been enthusiastic.
    As you know, in June 1998, we issued written guidance to 
communicate to the industry our plans for implementation of the 
pediatric program, and updated this document in October 1999, 
to provide additional information. The results speak for 
themselves. Between June 1998, when the guidance document was 
published, and April of this year, FDA has received over 218 
proposed pediatric study requests. Through our ongoing work 
using mechanisms such as our Pediatric Advisory Subcommittee, 
we continued to move toward our goal of having adequate 
pediatric use labeling information for all drugs used in all 
children. Experience with this provision has also revealed 
several categories of products and age groups for which this 
approach has not worked particularly well.
    FDA looks forward to working with the committee to 
reauthorize PDUFA and the pediatric exclusivity provision. We 
believe that in drafting new authorizing language the following 
principles should be taken into account. First, FDA's high 
public health standards must be maintained and enhanced. 
Second, the integrity of FDA's decisionmaking must be 
preserved. Finally, FDA must possess an adequate science base 
for the programs it implements.
    I am pleased to report that President Bush's fiscal year 
2002 budget for FDA provides for the first time in 7 years, 
full cost of living increases for FDA employees, and an overall 
increase of almost 10 percent for the FDA budget. This will 
enable us to continue to positively meet the challenges of 
PDUFA.
    Thank you for FDAMA. Thank you for the opportunity to be 
here today. I will be happy to answer any questions you may 
have. I look forward to working with the committee in the 
future.
    [The prepared statement of Linda A. Suydam follows:]

 Prepared Statement of Linda A. Suydam, Senior Associate Commissioner, 
                      Food and Drug Administration

                              INTRODUCTION

    Mr. Chairman, Members of the Committee, I am Linda Suydam, Senior 
Associate Commissioner at the Food and Drug Administration (FDA or the 
Agency). I am very pleased to be here today to discuss the Agency's 
progress and success in implementing the Food and Drug Administration 
Modernization Act of 1997 (FDAMA or Modernization Act). FDA has made a 
strong commitment and given high priority to implementing the 
Modernization Act in a manner consistent with the letter and spirit of 
the law.
    FDAMA is an important addition to FDA's legislative framework. As 
you know, it was passed after a thorough congressional examination of 
the Agency's policies and programs; it addressed virtually all of them 
comprehensively; and it settled a debate about FDA's role by 
reaffirming the Agency's vital importance for public health protection. 
This is a law we can all be proud of.
    FDA thanks the Committee for the diligent, comprehensive work it 
performed in drafting FDAMA, and, in particular, for adhering to the 
principle that underscores the benefits of this legislation; that FDAMA 
made improvements without changing the high public health standards FDA 
is charged with upholding. Only by maintaining these high standards and 
ensuring regulatory decision-making based on sound science can future 
legislation, such as the reauthorization of the Prescription Drug User 
Fee Act and the pediatric exclusivity provision, serve to effectively 
promote and protect the public health consistent with FDA's historic 
mission.
    FDAMA added new mission objectives that call on the Agency to carry 
out all of its operations--domestic and foreign--in cooperation with 
its stakeholders. This emphasis on FDA's need to extend its regulatory 
cooperation is so essential for our operations that these objectives 
are included among the five fundamental principles that offer the best 
strategy for meeting FDA's formidable challenges in the future. These 
principles are:

 Base all FDA operations and programs on strong science, as the 
        principal guarantee of the high quality of FDA's public health 
        protection.
 Make regulatory decisions in the context of each product's 
        total life cycle, to ensure its safety and effectiveness when 
        it is in wide use.
 Consider our decisions also from a global perspective, to take 
        into account the numerous international developments and 
        factors that affect public health in the United States (U.S.).
 Use leveraging as the primary means for maximizing the effects 
        of FDA's actions.
 Maintain FDA's traditionally high public health standards, 
        because they always will be critical for ensuring effective 
        health care delivery, consumer confidence, and a level playing 
        field for the competitiveness of U.S. industry.
    Over the past three and one-half years, FDA has worked diligently 
to implement this new law, which, as we stated, touches nearly every 
aspect of the Agency's mission.
    We have met nearly every statutory deadline, issued dozens of 
regulations, guidance documents, Federal Register notices, and reports 
to carry out the goals of this wide-reaching law (see Attachment).
    I would like to begin with two key provisions of FDAMA--
reauthorization of the Prescription Drug User Fee Act and the pediatric 
exclusivity provision. The pediatric exclusivity provision will expire 
on January 1, 2002, and the fee authority of the Prescription Drug User 
Fee Act will expire on September 30, 2002. Maintaining these 
authorities is important to the Agency, and we look forward to working 
with the Committee during the reauthorization process.

                     PRESCRIPTION DRUG USER FEE ACT

    The most concrete expression of the leveraging principle in FDAMA 
was the reauthorization for five more years of the Prescription Drug 
User Fee Act of 1992 (PDUFA). As you know, PDUFA authorizes FDA to 
receive manufacturers' user fees in return for achieving performance 
goals agreed to by Congress, the pharmaceutical industry and our 
Agency. The result is expedited access to a greater number of important 
new therapies. PDUFA is nearing the end of its second five-year term 
and, therefore, I will examine in greater depth our experience with 
PDUFA I and II.
    During the eight-and-a-half years of PDUFA, the Agency's 
performance has met the highest expectations. While adhering to 
rigorous standards for safety and effectiveness, FDA has met virtually 
all of the program's review goals. PDUFA I was directed at reducing 
drug review times. During PDUFA I, FDA exceeded all of its performance 
goals and significantly reduced review times. PDUFA II included some 
performance goals to further reduce review times, but most of the 
performance goals were directed towards reducing clinical drug 
development time. These goals included accelerated consultations on 
critical drug development issues, timely resolution of major disputes, 
and rapid handling of other clinical drug development issues such as 
clinical holds.
    Under PDUFA II, FDA has exceeded almost all of its performance 
goals resulting in a continued reduction in review times. In addition, 
drug development times also have decreased significantly. According to 
the Tufts Center for the Study of Drug Development, the clinical 
development time for new molecular entities declined by 22 percent from 
the early to the late 1990s.
    Not only has FDA significantly reduced review times as a result of 
the PDUFA programs, but it has also significantly reduced approval 
times, and, therefore, the time it takes to get new drugs to market. 
Total approval time is the time from the initial submission of a 
marketing application to the issuance of an approval letter for that 
application. It includes both FDA's review time and the time the 
sponsor spends answering deficiencies noted by FDA and can encompass 
several review ``cycles.''
    The median total approval time for new drug and biologic 
applications submitted in Fiscal Year (FY) 1999 dropped to 11.6 months 
from 20.1 months in FY 1994. Given the progression of PDUFA II review 
goals, median total approval times could drop to 10 months in FY 2001 
or FY 2002 if the current rate of first review cycle approvals is 
sustained.
    Median total approval time for priority applications submitted in 
FY 1999 was six months, less than half the median total approval time 
for priority applications submitted in the early PDUFA years. Priority 
applications, a subset of all applications, have a PDUFA review 
performance goal of six months.
    Drugs are now reviewed in the U.S. as fast or faster than anywhere 
in the world, without compromising the very stringent standards that 
Americans have come to expect. This is remarkable, particularly in 
light of the fact that over the past seven years, pharmaceutical firms 
have introduced 234 new molecular entities into the market--a sizable 
increase over prior decades. Although European pharmaceutical companies 
dominated the industry ten years ago, U.S. companies now have an 
overwhelming lead in world markets.
    Let me take a moment to mention the products themselves. Drug and 
biologic approvals in 2000 included a large number of products that 
represent significant advances over the products that were previously 
available. Important new therapies brought to market in the past year 
include: three new drugs to treat cancer; the first protease inhibitor 
approved to treat HIV infection in children as young as six months; 
four drugs to treat heart disease and circulatory disorders of the 
nervous system; a malaria treatment effective in areas where the 
disease is resistant to other anti-malarial drugs; the first anti-
inflammatory corticosteroid that can be used in a nebulizer by very 
young children; the first in a new class of antibiotics; a treatment of 
cancer-in-situ in the absence of associated invasive cancer of the 
bladder; the first multivalent conjugate pneumococcal vaccine for 
infants and toddlers under the age of two; the first drug to reduce the 
severity of neck and shoulder muscle contractions and the resulting 
abnormal head position and neck pain associated with cervical dystonia; 
the first thyroid replacement drug to undergo a stringent FDA review; 
three new drugs and five new uses of existing drugs for ``orphan'' 
patient populations of 200,000 or fewer; and 13 new pediatric uses for 
already approved adult drugs.
    In the biotech area, 2000 saw the approval of products that delay 
the time to disease progression in malignant osteopetrosis; reduce the 
signs and symptoms of rheumatoid arthritis in patients with inadequate 
response to methotrexate; and delay structural damage in patients with 
moderately to severely active rheumatoid arthritis. These are only a 
few exciting examples of products that are being made available to the 
patients who need them.
    For the industry, PDUFA provides huge benefits:

 Drug companies' products are able to take fuller advantage of 
        granted patent terms, which yields additional revenues, because 
        they come on the market more quickly due to shorter development 
        and review times.
 The development of guidance documents, earlier meetings and 
        increased FDA reviewing staff have made the processing of 
        submissions more understandable and predictable, and therefore 
        provide a more consistent and dependable basis for companies to 
        develop plans for production and other activities.
 In addition, FDA's guidance and consultation received by drug 
        sponsors under PDUFA help them improve the quality of their 
        product applications, which reduces the cost of drug 
        development.
    One measure of these advantages to the industry is that between 
1996 and 1998, nearly 80 percent of new drugs world-wide were first 
launched in the U.S. due to the favorable regulatory climate.
    For FDA, PDUFA has also brought significant benefits:

 The performance goals have helped streamline the management of 
        drug and biological product reviews.
 The program's requirement for comprehensive product reviews 
        and responses has resulted in improved quality of the 
        application process.
 Most important of all, the fees have enabled the Agency to 
        hire additional medical and other specialists, and to upgrade 
        the technology that is essential for the success of the 
        program.
    PDUFA has provided the Agency with some challenges. Between 1994 
and last year, the number of review goals to be met by FDA has tripled. 
The number of PDUFA submissions has grown by 64 percent, from not quite 
1,500 in FY 1993 to almost 2,500 in FY 2000. In addition, there are 
other industry meeting and procedure goals in PDUFA that add up to more 
than 3,500 FDA actions a year, most of which occur before an 
application submission (and fee collection). These actions are 
connected with the preparation, scheduling, conduct, follow-up and 
tracking of formal meetings requested by industry that may involve as 
many as 10-20 FDA staff and 15-30 industry representatives. Another 
notable trend has been the upsurge in drug advertising directed to 
consumers (DTC) and physicians.

                         PEDIATRIC EXCLUSIVITY

    FDAMA's pediatric exclusivity provision in section 111 (section 
505A of the Federal Food, Drug, and Cosmetic Act), like PDUFA, is also 
scheduled to sunset in 2002. FDAMA's pediatric exclusivity provision is 
helping to ensure access to, and safe use of therapies for children 
whose treatment has historically been hampered by inadequate 
information about the safe and effective use of drugs in the pediatric 
population. Providing adequate pediatric use information for drugs and 
biologics has long been a high priority for the Agency. We are pleased 
to report that the industry's response to the incentives offered by 
this provision has been enthusiastic. As you know, in June 1998, we 
issued written guidance to communicate to industry our plans for 
implementation of the pediatric program, and updated this document in 
October 1999, to provide additional information to industry.
    The results speak for themselves. Between June 1998, when the 
guidance document was published, and April 1, 2001, FDA has received 
over 218 proposed pediatric study requests. Through our ongoing work 
using mechanisms such as our Pediatric Advisory Subcommittee, we will 
continue to move toward our goal of having adequate pediatric use 
labeling information for all drugs used in children.
    The purpose of encouraging pediatric studies is to provide needed 
pediatric efficacy, safety and dosing information to physicians in 
product labeling. Of the 28 drugs granted pediatric exclusivity, 18 
drugs have newly approved labeling for pediatric use. Labeling changes 
are expected approximately 6-12 months after the studies have been 
submitted. Of the 18 drugs whose labels have already been changed, four 
were new molecular entities for which pediatric labeling was available 
at the time of initial approval. The 14 remaining marketed products now 
have complete labeling in the relevant pediatric population.
    Studies of six of these products resulted in identification of 
significant changes in dosing or adverse events either specific to or 
newly defined in the pediatric population.
    Two examples of these clinical findings are:

 Midazolam (Versed)--higher risk of serious life threatening 
        situations in children with congenital heart disease and 
        pulmonary hypertension who need lower doses than predicted to 
        prevent respiratory compromise;
 Gabapentin (Neurontin)--need to use higher doses in children 
        less than five years of age in order to control seizures and 
        new adverse events such as hostility and aggression identified 
        in children less than 12 years old.
    As required by the pediatric exclusivity provision, the Department 
issued a report to Congress in January 2001, on the experiences under 
the new law. The Report stated that the pediatric exclusivity provision 
has done more to generate clinical studies and useful prescribing 
information for the pediatric population than any other regulatory or 
legislative process to date. Experience with the provision has also 
revealed several categories of products and age groups for which this 
approach has not worked. For example, the exclusivity provision does 
not address the drugs that have no patent protection and sponsors have 
no economic incentive to study these products.
    FDA looks forward to working with the Committee to reauthorize 
PDUFA and the pediatric exclusivity provision. FDA believes that when 
drafting new authorizing language, the following principles should be 
taken into account:

 FDA's high public health standards must be maintained and 
        enhanced.
 The integrity of FDA's decision-making must be preserved.
 FDA must possess an adequate science base for the programs it 
        implements.

                IMPLEMENTATION OF OTHER FDAMA PROVISIONS

    With the tools provided by FDAMA, FDA is becoming a stronger, 
better Agency, one whose actions remain firmly based in science to 
promote and protect the public health.
    The value of a strong, science-based FDA cannot be overstated--it 
reaps public health benefits for both individual citizens and the 
nation as a whole. An FDA that sets and meets high scientific standards 
provides a high level of assurance to our citizens; (1) assurance that 
product risks are minimized; (2) assurance that consumers receive 
reliable information to assess and manage the remaining risks in 
concert with a health professional, or on their own; and (3) assurance 
that reviews for new products are conducted in a predictable and timely 
manner, giving patients early access to new safe and effective 
products.
    FDA's procedures should provide consumers with confidence in the 
decisions it makes about the products that they take and give to their 
families, and provide industry with the confidence that the Agency's 
decisions are fair and based in science.
    From an economic standpoint, a strong, high-performance FDA 
stimulates innovation, enhances U.S. competitiveness in global markets, 
provides a level playing field for industry, and strengthens the 
domestic economy as a whole by inviting increased foreign investment 
and contributing to reduced health care costs.
    I would like to focus today on how FDA's implementation of the 
Modernization Act is helping to enhance the public health by producing 
the following outcomes: (1)increase access to new medical products; (2) 
provide more effective management of FDA's limited resources; (3) make 
our regulatory processes more effective and efficient; and (4) increase 
consumer and industry confidence through collaboration.

                       ACCESS TO MEDICAL PRODUCTS

    There are a number of FDAMA provisions, in addition to PDUFA and 
pediatric exclusivity, that help ensure greater patient access to 
medical products.

Fast Track
    The first of these is the fast track provision in section 112. In 
the fast track provision, Congress codified FDA's accelerated approval 
regulations and thus codified our approach to expedited drug 
development. Fast track is meant to facilitate the development, and 
expedite the review, of drugs that are intended to treat a serious or 
life-threatening condition and that demonstrate the potential to 
address a serious unmet medical need.
    Since the passage of the Modernization Act, we have granted fast 
track designation to a wide range of therapies--not just for AIDS and 
cancer drugs, as some believe, but for drugs to treat atherosclerotic 
vascular disease, acute stroke, diabetes, adult respiratory distress 
syndrome and pancreatitis, and genetic abnormalities of infants. As of 
March 2001, FDA's Center for Drug Evaluation and Research (CDER) had 
received 108 requests for fast track designation--69 were granted, 25 
denied, and 14 are still pending. As of March 31, 2001, FDA's Center 
for Biologics Evaluation and Research (CBER) had received 62 requests 
for fast track designation--38 were granted, 23 denied, and one is 
still pending.
    Since we began implementing this provision, CDER and CBER have 
approved nine novel products, including Herceptin, a monoclonal 
antibody for metastatic breast cancer (in 4.7 months), Enbrel for 
rheumatoid arthritis (in 5.8 months), Ziagen for HIV (in 5 months), and 
Pneumococcal Conjugate Vaccine for the prevention of streptococcus 
pneumoniae in infants and children (in 7.5 months). In addition, three 
marketed products were approved for new indications under the fast 
track program: Remicade for rheumatoid arthritis, Gamma interferon for 
osteopetrosis, and Taxotere for non-small cell lung cancer. As 
implemented by FDA, this program is plainly helping to ensure that 
important therapies for serious and life-threatening illnesses are 
being brought as quickly as possible to the patients who need them.
    To provide clear information to industry regarding participation in 
the fast track process, last fall we issued a guidance document that 
defines the criteria for qualification for the fast track drug product 
development program, sets out the process for designation as a fast 
track drug product, and describes programs for expediting development 
and review of fast track products. The Agency has received feedback 
that commends this document as an excellent resource for sponsors who 
are interested in receiving fast track designation for their products.

Supplemental Applications
    Just as it is important to get the most complete information about 
all patient populations on a drug's label, it is also important to get 
all of the information about a drug's uses on the label. This is why 
Congress directed FDA to take steps to encourage the submission of 
supplemental applications for new uses for approved medical products, 
and steps to ensure that such applications are acted upon 
expeditiously. Since enactment, the Agency has made programmatic 
changes in CDER, CBER, the Center for Devices and Radiological Health 
(CDRH), and the Center for Veterinary Medicine (CVM) to encourage 
supplemental applications for new uses, and ensure that the Agency acts 
on the applications that it receives in a timely manner. The Agency has 
also issued guidance that clarifies what is needed to demonstrate 
effectiveness for a new use.

Expanded Access to Investigational Therapies
    Congress and FDA realized that there are times when a patient's 
interest is best served by getting an investigational medical product 
as quickly as feasible, sometimes before a complete evaluation and 
review can be finished. The expanded access provision (section 402) of 
the Modernization Act was included in the legislation to facilitate 
access by patients with serious or life-threatening illnesses to 
promising, yet unapproved new products. By codifying and expanding this 
program, the statute ensures that this program will continue to provide 
expanded access to patients in the future.

Humanitarian Use
    Congress also recognized that there are limited circumstances when 
there are too few subjects to justify a full-scale evaluation of a 
medical device. The humanitarian use device provision (section 203) 
provides an easier path to market for devices used to treat rare 
conditions or diseases. Under this provision, a manufacturer is not 
required to meet the effectiveness requirements in the statute, but 
rather must show that the device does not pose an unreasonable or 
significant risk of illness or injury, and that the probable benefit to 
health outweighs the risk from its use. Since implementation of the 
Modernization Act, CDRH has approved 21 humanitarian use devices, 
including: a fetal bladder stent, to treat urinary tract obstruction in 
unborn babies; an electrical bladder stimulator for urinary 
incontinence for use in children for the treatment of neurogenic 
bladder disease secondary to spina bifida; a pulmonary valve for 
children under age four with absent or diseased valves; and an 
extracorporeal immunoabsorption system for treatment of patients with 
hemophilia A and B who have inhibitors to Factor VIII and IX 
coagulation factors.

Postmarketing Studies
    On April 30, 2001, FDA's regulations implementing section 130 of 
FDAMA which requires sponsors of approved drugs and biologics to report 
annually on the status of postmarketing commitments became effective. 
These regulations modified existing reporting requirements for new drug 
application (NDA) drug studies and created a new reporting requirement 
for biologic products.
    FDA may request postmarketing studies to provide additional 
important information on how a drug works in expanded patient 
populations or to identify safety issues that occur at very low 
frequency or in special patient populations. In the case of drugs and 
biologics approved under accelerated approval regulations, 
postmarketing studies are performed to confirm a drug or biologic's 
long-term clinical benefit when approval was granted based on studies 
using surrogate endpoints.
    These new regulations were of special interest to patient and 
consumer advocates who were concerned about timeliness of applicants in 
completing postmarketing commitments and of FDA in reviewing study 
results and modifying drug labeling. The regulations will provide FDA 
with a mechanism to monitor study progress through the annual 
submission of study status reports. FDA will post the status of 
postmarketing studies on its public website and publish in the Federal 
Register an annual summary of industry progress in fulfilling 
postmarketing commitments. FDA has committed to timely review and 
evaluation of completed studies and to requiring timely modification of 
drug and biologic labeling where appropriate.

                 EFFECTIVE MANAGEMENT OF FDA RESOURCES

    Part of meeting the Agency's mission to protect and promote the 
public health involves effective management of FDA's resources. There 
are several FDAMA provisions that reduce the Agency's workload in some 
areas so that those resources can be provided to areas with the 
greatest public health risk.

Third Party Review
    One such provision is the device third party review program 
(section 210), which provides an alternative review mechanism for low-
to-moderate risk devices, thereby allowing FDA to target its scientific 
review resources on higher-risk devices. There are currently more than 
670 types of devices eligible for review by third parties, and 12 
accredited third party organizations. CDRH recently expanded the 
program to include all devices eligible for review by third parties 
under the statute and has been working with industry representatives to 
encourage greater use of this new approach.

User Reporting
    Another provision that allows the Agency to focus its resources is 
section 213, device user reporting. Prior to passage of FDAMA, all 
device user facilities were required to report serious adverse events 
to FDA. Under FDAMA, FDA now has authority to establish a sentinel 
system for user reporting, which would have a representative sample of 
hospitals and other user facilities reporting serious adverse events to 
FDA. The Agency has already conducted a pilot sentinel system, which 
was very successful. FDA is working to put an expanded sentinel system 
in place. This initiative could ultimately ease the reporting 
requirements for user facilities and enhance the value of reports the 
Agency receives.

           MORE EFFICIENT AND EFFECTIVE REGULATORY PROCESSES

    FDAMA includes a number of provisions that streamline and expedite 
FDA's product review processes by ensuring that sponsors know what is 
required, and by eliminating unnecessary requirements. Clearly, PDUFA 
helps the Agency make decisions in a more timely manner. At the same 
time, PDUFA and other aspects of the statute ensure that FDA's 
decisions are consistent and predictable. FDA's regulatory requirements 
are clarified, providing industry with information on how to most 
effectively comply with the applicable laws.

Meetings with Sponsors
    Both as part of the PDUFA agreement formalized as part of the PDUFA 
performance goals and as part of a separate FDAMA requirement (section 
119), the Agency is committed to meeting with drug sponsors to discuss 
and reach agreement on the design and size of clinical trials. Any 
agreements reached can only be changed under limited circumstances. 
Similarly, the device provisions provide for early meetings with 
potential sponsors to focus on the type of valid scientific evidence 
needed for device approval and to reach agreement on a study plan. 
These provisions are ensuring that industry knows up front what is 
required and does not waste time conducting unnecessary studies.
    In addition, many provisions of the Modernization Act are premised 
on the principle that regulatory requirements should not exceed what is 
required to promote and protect the public health.

Premarket Notification
    An example of matching regulatory requirements to meet public 
health risk is the premarket notification provision in section 206. 
More than 75 Class II types of medical devices have been exempted from 
premarket notification requirements, enabling manufacturers to get 
their products to market and the patients who need them more rapidly. 
The types of devices exempted include: clinical laboratory equipment 
and test kits, kidney stone dislodgers, clinical thermometers, 
biofeedback devices and physical rehabilitation devices. In addition, 
pursuant to this section, all but a limited number of reserved Class I 
devices are also exempt from 510(k) premarket notification.

Manufacturing Changes
    FDAMA also streamlines the process for drug and device sponsors to 
make changes to certain manufacturing processes. For example, the 
provision on scope of review in section 205 permits device 
manufacturers to notify FDA 30 days before instituting certain types of 
manufacturing changes instead of submitting a premarket approval (PMA) 
supplement. This means that the device manufacturer can often start 
marketing a device made under this new process at least five months 
sooner than usually would have occurred before FDAMA. The device 
industry has already used this provision 215 times. The drug provision 
permits drug manufacturers to make minor and moderate manufacturing 
changes without prior approval of a supplemental application. The 
biologics industry has submitted 2623 notifications of changes 
requiring a supplement submission 30 days prior to distribution of the 
product made using the change. In addition, industry has submitted 482 
notifications of changes requiring a submission that may be implemented 
as soon as the submission is made.

Least Burdensome Means
    Section 205 of FDAMA is similarly premised on the principle that 
regulatory requirements should not exceed what is required to promote 
and protect the public health. This provision requires FDA, in 
consultation with the applicant, to consider the ``least burdensome'' 
appropriate means of evaluating device effectiveness that would have a 
reasonable likelihood of resulting in approval. The requirement to 
consider the least burdensome means applies to both existing statutory 
paths to market: premarket notifications (510(k)s) and premarket 
approval applications (PMAs and Product Development Protocols). While 
FDAMA does not change the standards for premarket review, it clarifies 
that the Agency's review is to support the substantial equivalence or 
safety and effectiveness of medical devices.
    To foster a collaborative approach to the implementation of section 
205 of FDAMA, CDRH hosted a meeting with stakeholders on January 4, 
1999, to solicit comments and suggestions regarding the least 
burdensome approach to medical device development and evaluation. CDRH 
heard formal presentations at that meeting and also received written 
comments. As a result of communication with our stakeholders, FDA 
determined that the issue of highest concern is when clinical data 
would be required for devices.
    In January of 2000, CDRH formed a Least Burdensome Steering 
Committee consisting of senior managers within the Center. In addition, 
representatives of FDA participated in a Least Burdensome Industry Task 
Force aimed at addressing the least burdensome provisions. The Agency 
has been reporting the results of this collaborative effort on FDA's 
website so that interested parties can contribute their ideas and track 
FDA's progress in this area. While the main focus of the group has been 
in developing and articulating the concept and principles that underlie 
the least burdensome requirement, several guidances have been developed 
to help reduce unnecessary burdens in bringing new devices to market. 
All of these guidances are on our least burdensome website. Most 
recently, the Center completed a draft guidance entitled, ``The Least 
Burdensome Provisions of FDA Modernization Act of 1997: Concept and 
Principles.'' This document, which contains the Agency's interpretation 
of the least burdensome provisions, will be posted shortly on FDA's 
website.
    While developing the guidance, FDA has been working to implement 
these provisions. Training sessions for CDRH staff and advisory 
committee members have been conducted and will be expanded once the new 
guidance is final. Even without a final guidance, however, FDA has many 
examples of successful use of the least burdensome approach. For 
example, FDA reviewers approved a pediatric indication for a marketed 
cardiac ablation catheter without requiring a prospective clinical 
study because reviewers determined that existing literature supported 
the device's safety and effectiveness in children. Patient registries 
and literature were also used to support the approval of a bone cement 
for fixation of a hip prosthesis.

Abbreviated Study Reports
    Another example of process improvements is the provision on data 
requirements in section 118, which directs FDA to issue guidance on 
when abbreviated study reports may be submitted in NDAs and biologics 
license applications (BLAs), in lieu of full reports. On September 13, 
1999, FDA published a final guidance that describes when abbreviated 
reports and synopses can be used to submit effectiveness data. This 
guidance not only provides clarity, it should also ensure that industry 
is not submitting more information than is required by the Agency.

Device Standards
    Congress and FDA also recognized that industry's ability to rely on 
standards will help to streamline the approval or clearance of medical 
devices. Under the provision on device standards in section 204, CDRH 
recognized more than 567 consensus standards that manufacturers may use 
to satisfy portions of device review requirements, thus simplifying and 
expediting product review. Of these 567 recognized standards, over 100 
were proposed by industry for recognition as a result of active 
solicitation by CDRH. A few examples of consensus standards nominated 
by industry and recognized by CDRH include: standards that can be used 
to describe and select the necessary biocompatibility testing; most 
American Dental Association specifications for dental materials and 
devices; and certain standards for safety requirements for 
electromedical equipment, covering over 30 individual standards on 
mechanical limits electrical safety considerations for electrically 
powered devices.
    At the same time, CDRH is trying to broaden the impact of the 
standards recognition program mandated by FDAMA. CDRH is enlisting its 
stakeholders in setting priorities for developing standards that can be 
recognized in the future and encouraging manufacturers to incorporate 
recognized standards as part of their product specifications, which 
allows extremely brief product descriptions, and thus, less lengthy 
510(k)s.

Single Biologics License
    In addition, FDAMA has helped to streamline the processes for 
submissions from industry by codifying the modernization of certain 
biologics regulations. In October 1999, FDA issued a final rule to 
implement the modernization of regulations provision in section 123, 
which requires manufacturers to make a single submission for a 
biologics license, instead of separate applications for the 
establishment license and the product license. When FDA first proposed 
to streamline the biologics application process for specified products, 
industry representatives indicated that the change would result in 
considerable savings of time and money. Since the implementation of the 
single application/single license approach, industry representatives 
have confirmed this to be the case.

Dispute Resolution
    While many of the provisions in the Modernization Act are designed 
to facilitate agreement between FDA and industry on regulatory 
requirements, inevitably, there will be disputes that remain. Section 
404, the provision on dispute resolution, requires the Agency to 
clarify the processes for resolving scientific disagreements, including 
requests for advisory panel review. While our existing regulations and 
procedures have worked well to resolve many disagreements, the Agency 
is taking steps to enhance its dispute resolution processes.
    First, the Agency revised Title 21, Code of Federal Regulations 
section 10.75 to clarify the availability of review of scientific 
disputes by an advisory panel. CDRH created a medical devices dispute 
resolution panel, and issued a draft guidance that describes how that 
panel will be used to resolve scientific disputes. CDRH also issued a 
general guidance document that provides an overview of all of the 
Center's dispute resolution processes and has appointed a CDRH 
ombudsman. CDER and CBER have developed guidance to explain their 
processes as well.

                    CONSULTATION WITH CONSTITUENCIES

    We have worked to ensure that everyone affected by the Agency's 
actions has a voice, and that each voice is heard. While all of these 
voices may not share the same viewpoint, we have found that this open 
discourse can engender confidence.
    FDAMA has contributed significantly to the Agency's effort to 
collaborate in a credible and reliable way with our constituencies. For 
example, section 406(b) of the Modernization Act directs the Agency to 
consult with our constituencies to ensure that we fulfill our statutory 
mandates and that we communicate clearly with our stakeholders. We have 
held a series of meetings, during which we have listened to those 
outside the Agency. We hosted a national interactive videoconference 
that was simulcast to interested parties in eight different cities. 
During our national broadcast, we had senior staff at each of the 
locations to hold a more focused communication with members of consumer 
groups and the regulated industry in these areas of the country. During 
these meetings, we received useful feedback on the Agency's 
performance, as well as constructive suggestions as to how the Agency 
can continue to improve.

Public Meetings
    Finally, FDA has held many public meetings to discuss 
implementation of specific provisions. For example, CDER and CBER have 
held several public meetings on implementation of certain provisions. 
These include four public meetings on the implementation of the 
positron emission tomography (PET) provisions, three public meetings on 
the radiopharmaceuticals provisions, and advisory committee meetings on 
pharmacy compounding.

                               CONCLUSION

    FDA has been fully committed to implementation of FDAMA. However, 
while devoting time, energy, and resources to this effort, we also have 
worked to meet our other responsibilities. They include: protecting the 
safety of the nation's food supply and blood supply, reviewing new food 
additives to ensure their safety, speeding our reviews of new generic 
drugs and medical devices and developing a comprehensive regulatory 
strategy for dietary supplements--which involves the implementation of 
another complex statute.
    I am proud of the work that the Agency has done in fulfilling our 
FDAMA commitment to Congress and to the American people, and I hope 
that you share this sentiment. Thank you for the opportunity to be here 
today.

    Mr. Bilirakis. Thank you very much, Doctor.
    Mr. Northrup?
    Mr. Northrup. Thank you.
    Mr. Bilirakis. Five minutes, sir, or in that category.

                STATEMENT OF STEPHEN J. NORTHRUP

    Mr. Northrup. Chairman Bilirakis, and members of the 
subcommittee, I thank you for the opportunity to speak with you 
today. My name is Steven Northrup. I am the Executive Director 
of the Medical Device Manufacturers Association based here in 
Washington, DC.
    MDMA is the national voice for the entrepreneurial sector 
of our industry. The association was founded in 1992 by a group 
of entrepreneurs who needed a forceful and independent voice in 
the Nation's capital. Two-thirds of the 6,000 companies in our 
industry employ fewer than 50 people. But these entrepreneurs 
are widely acknowledged as the source of most of the 
breakthroughs in medical technology. Our role in MDMA is to 
work with the Congress and with our regulators to ensure that 
medical device entrepreneurs have a commonsense and equitable 
regulatory environment in which to innovate.
    We are pleased the subcommittee is holding this hearing. I 
am sure most of you recall the difficulties our industry was 
experiencing with the FDA in the early 1990's. To your credit, 
you took decisive action by passing FDAMA, which established or 
expanded a number of new initiatives designed to improve the 
regulatory climate for medical products. For your efforts, I 
extend our members' deepest appreciation.
    I am pleased to inform you today that from our perspective, 
the FDA generally has done a commendable job of implementing 
FDAMA. Average product review times are down significantly 
since the mid-1990's, though the FDA still has some work to do 
to meet its statutory deadlines. The industry's relationship 
with the FDA also has become less contentious. Most 
importantly, we have made these improvements without 
compromising patient safety. Much of this is due to the 
leadership of people like Dr. Suydam and of Dr. Feigal, who 
directs the FDA's Device Center.
    Despite our general satisfaction, there remain a few areas 
where continued effort is needed. In our written statement, I 
have described our concerns about the FDA's implementation of 
some of these key provisions on third party review of marketing 
applications, on the resolution of scientific disputes, and on 
determining the least burdensome pathway to market.
    Frankly, the Agency's implementation of these provisions 
has been slow and remains incomplete. While the specific 
circumstances of each of these situations are different, the 
instances collectively call into question the Agency's 
commitment to implementing all of FDAMA. In our mind, there 
were no insignificant aspects of that law.
    Now to be fair, the FDA has taken positive steps recently 
on each of the issues I raised in our testimony. As an 
industry, we are willing to leave the past behind and to move 
forward with the Agency on these important initiatives. 
Nevertheless, the problems highlight the need for the 
subcommittee to continue its careful evaluation of FDAMA, and 
to hold the FDA accountable for its proper implementation.
    Our experience also has taught us that the modernization of 
the Agency cannot be achieved fully through just one piece of 
legislation. The modernization of the FDA should be a 
continuous process directed toward ensuring that the FDA has 
the tools, the structure, the talent, and the culture to deal 
with a world in which the pace of innovation is ever 
increasing.
    For example, there are a number of products on the horizon 
that blur the traditional lines between devices, 
pharmaceuticals, and biologics. The development of stents 
coated with drugs that inhibit the tissue growth that causes 
arteries to re-narrow after angioplasty, a condition called 
restinosis, suffered recently by Vice President Cheney, is one 
rather high profile example of a combination product upon which 
scientists, engineers, and physicians are currently working.
    We believe combination products like this don't fit neatly 
into the FDA's traditional regulatory structure, which reflects 
the different laws and standards that govern the review of 
drugs, of devices, and of biologics. To avoid regulatory 
delays, we need to prevent jurisdictional disputes or 
inefficient review processes that result from disagreements on 
how to regulate these hybrids.
    One way that Congress could address this issue is by 
directing the FDA to establish an Office of Combination 
Products. Such an office should have the authority to manage 
the review of a combination product and to coordinate all 
necessary involvement by the various FDA centers. We believe 
this would improve the process and reduce the likelihood that 
clashing regulatory structures within the FDA will delay the 
review of future combination products.
    Drug-coated stents are but one example of the wave of 
innovation for which the FDA must prepare itself. To help 
prepare the Agency for the challenges it will face in this new 
century, MDMA and the other national device industry 
associations are working together to develop a series of 
legislative proposals for your consideration. The ideas we are 
developing, such as the one I have outlined, all are aimed at 
enabling the FDA to use its resources more efficiently, at 
augmenting the expertise of the Agency's staff, and at assuring 
the FDA's accountability for its actions.
    We look forward to sharing our ideas with you soon, and to 
working with you on the continued modernization or more 
appropriately futurization of the FDA. Thank you for this 
opportunity to speak with you. I look forward to your 
questions.
    [The prepared statement of Stephen J. Northrup follows:]

Prepared Statement of Stephen J. Northrup, Executive Director, Medical 
                    Device Manufacturers Association

    Chairman Bilirakis and members of the subcommittee, I thank you for 
the opportunity to speak with you today about the implementation of the 
Food and Drug Administration Modernization Act of 1997 (FDAMA), as well 
as some issues the subcommittee should consider as it evaluates the 
future challenges faced by this agency. My name is Stephen Northrup, 
and I am the executive director of the Medical Device Manufacturers 
Association (MDMA), based here in Washington, DC.
    MDMA is the national voice for the entrepreneurial sector of the 
medical device industry. The association was created in 1992 by a group 
of business executives who believed that the innovative and 
entrepreneurial sector of the industry--an industry in which most 
companies employ fewer than 50 people--needed a forceful and 
independent voice in the nation's capital.
    To support these entrepreneurs, our 150 member companies work 
together with us to ensure that the federal government does not burden 
innovators with unnecessary or unwise laws or regulations. While we 
recognize and support the federal government's role in protecting the 
public health, we also believe government regulation should not prevent 
or hinder the development of truly beneficial new therapies nor deprive 
patients of the latest advances in medical care.
    As you know, the medical device industry is an integral component 
of the good health of the American public. The technological 
innovations and breakthroughs developed by medical device manufacturers 
have produced the wonders of modern medicine and surgery. Simply put, 
medical technology enables millions of Americans to live longer, more 
comfortable, and more productive lives.
    Entrepreneurs play an important role in the development of these 
medical innovations. As I mentioned earlier, two-thirds of the 6,000 
companies in our industry employ fewer than 50 people. Nevertheless, 
these enterpreneurial firms are widely acknowledged as the source of 
most of the major breakthroughs in medical technology.
    The entrepreneurs in our industry have different needs than do the 
large companies. Fair, predictable, and consistent regulatory actions 
provide the necessary environment in which entrepreneurs can make best 
use of the natural advantages they have over their larger competitors--
their focus, creativity, and adaptability. The large companies possess 
two things, however, that these entrepreneurs do not have--time and 
resources.
    Therefore, when the regulatory system is unclear, unpredictable, or 
unfair, this negates the natural advantages of entrepreneurs. As in 
most industries, when the regulatory process becomes more of a ``game'' 
than a system, the winners will be those companies that have the time 
and resources to ``play the game.'' MDMA's role in all of this is to 
work with the Congress and with our regulators to ensure that medical 
device entrepreneurs have a common-sense and equitable regulatory 
environment in which to bring their innovations to market.
    We are pleased that the subcommittee is holding this hearing to 
evaluate the effectiveness of FDAMA. The development and passage of 
FDAMA is largely responsible for stimulating an era of responsiveness 
and cooperation on the part of our industry's main regulator, the Food 
and Drug Administration (FDA). For the new members and staff on this 
subcommittee, I will walk back in time several years to highlight the 
importance of the legislation we are discussing today.
    In the early 1990s, the outlook for medical device innovators and 
entrepreneurs was grim. New and improved products languished in long 
review queues and backlogs at the FDA. The relationship between the 
industry and the agency was adversarial, and communications were poor 
at every level. Companies were moving their research and development 
overseas and conducting their clinical studies in countries where 
regulatory approval was more timely. The FDA simply did not seem to 
recognize the negative effect that its policies were having on the 
health of the American public, who watched as patients in Europe and 
elsewhere reaped the benefits of American ingenuity first, if not 
exclusively. The hearings this subcommittee held during those dark days 
are rife with examples of important medical products developed by 
American companies but unavailable then to American patients.
    Fortunately, many members of Congress saw the impact of the FDA's 
actions (or lack thereof) on the medical technology industry and the 
patients we aim to serve. In response, Congress passed FDAMA, which 
established or expanded a number of new initiatives designed to improve 
the regulatory process for medical products. In addition, Congress 
recognized that the FDA should be charged not only with protecting the 
public health, but also with promoting it by facilitating access to new 
therapies. FDAMA was the vehicle for updating the agency's mission to 
reflect the new role Congress expected the agency to take. For your 
efforts, I extend our members' deepest appreciation.

           MDMA'S GENERAL PERSPECTIVE ON FDAMA IMPLEMENTATION

    I am pleased to inform you that, in general, the FDA's Center for 
Devices and Radiological Health (CDRH) has done a commendable job of 
implementing the medical device provisions of FDAMA. From the most 
critical and bottom-line perspective-how long does it take the FDA to 
determine a reasonable assurance of the safety and effectiveness of a 
new product?--the numbers tell a story of great improvement.
    According to CDRH's most recent annual report, the center reviewed 
4,397 premarket notifications (also known as 510(k) submissions) in 
fiscal year 2000, slightly less than the 4,593 reviews completed during 
the previous year. The center's average review time was 77 days, the 
shortest average time in more than a decade, and well within the 
statutory 90-day requirement.
    Average total elapsed time to premarket approval (PMA), which is 
required for more complex or higher-risk devices, was 362 days in 
fiscal year 2000, a 54 percent reduction from the ``peak'' time of 788 
days in fiscal year 1996. While this is an improvement, we are still 
far from the statutory requirement of 180 days for PMA applications.
    The working relationship between the medical device industry and 
the FDA also has improved since the passage of FDAMA. A survey 
conducted in 1999 by PricewaterhouseCoopers LLP and CONNECT, the 
University of California at San Diego's Technology and Enterpreneurship 
Program, found that communications in general between life sciences 
companies and the FDA have improved significantly since 1995, when the 
organizations first began their bi-annual survey. For instance, the 
1999 survey found that the percentage of respondents who believed their 
company's communications with the FDA were ``excellent'' increased from 
34 percent in 1995 to 47 percent in 1999, and the percentage of 
respondents who indicated that contacts with FDA reviewers were 
``easy'' or ``very easy'' rose to 64 percent in 1999 from 52 percent in 
1995.
    At this point, I should note that there is no evidence to suggest 
that faster reviews of medical devices and a more collaborative 
relationship between industry and the FDA have come at the expense of 
patient safety. It's important to remember that increasing regulatory 
efficiency, not lowering standards, was the goal of FDAMA.

              SPECIFIC PROBLEMS WITH FDAMA IMPLEMENTATION

    Despite our general satisfaction with the implementation of FDAMA, 
there are still a few areas where continued effort is needed. These 
areas include provisions that we consider to be cornerstones of FDAMA, 
and for which the FDA has not implemented the letter or the spirit of 
the law as fully as we believe the Congress intended. Three of these 
are the provisions on third-party review of marketing applications, on 
dispute resolution, and on arriving at the ``least burdensome'' pathway 
to market.

Third-party review (Section 210)
    To begin with, the subcommittee should know that the FDA took more 
than three years to implement fully the third-party review provisions 
of FDAMA, which directed the FDA to accredit third parties in the 
private sector to conduct the initial review of 510(k) submissions for 
low-risk (Class I) and moderate-risk (Class II) devices.
    You may have heard that manufacturers have been slow to utilize the 
third-party review program, and that is true. During the first 17 
months of the FDAMA third-party review program, third parties reviewed 
only 54 submissions. However, during those first 17 months, the FDA 
permitted third parties to review only a fraction of the types of 
devices that are eligible under FDAMA.
    The FDA's internal policy, as described in October 1998 and 
November 1998 guidance documents, permitted third-party review of class 
II devices only if device-specific guidance or recognized consensus 
standards existed. According to the FDA, this was to ensure 
``consistency among different third party reviewers'' and to ``enhance 
the timeliness of the agency's review process'' once a third party 
submitted a recommendation.
    However, we argued to the FDA that products for which no guidance 
documents or consensus standards exist--a long list that even includes 
such products as electronic stethoscopes, medical support stockings, 
and infrared lamps--are exactly the types of products for which third-
party review would be most attractive to manufacturers and most 
beneficial to the FDA.
    As you may know, the FDA publishes guidance documents for use by 
industry and by the agency's own staff. These guidance documents 
describe preferred approaches for the processing, content, and 
evaluation of regulatory submissions and the design, production, 
manufacturing, and testing of regulated products.
    Generally, if the FDA has published a guidance document on a 
particular product, this means that industry professionals and FDA 
reviewers already have a good understanding of what it takes to 
determine a reasonable assurance of the safety or effectiveness of that 
product. Appropriate premarket submissions for these products 
theoretically should be simpler for manufacturers to assemble and for 
FDA staff to review.
    However, third-party review holds the greatest value for those 
products for which the FDA has yet to publish a preferred approach to 
determining safety or effectiveness. In these cases, organizations in 
the private sector may have particular scientific expertise that does 
not reside within the FDA and may be able to make sound recommendations 
to the FDA much more quickly. The FDA, in turn, could then make more 
timely decisions on whether to clear or approve the products.
    After MDMA made these arguments to the agency, the FDA updated the 
list of devices eligible for third party review in June of 2000, 
immediately adding 57 devices for a total of 211. In January 2001, the 
FDA then published a guidance document to initiate a pilot program that 
will allow third-party review of any device regulated by CDRH that is 
not prohibited from such review under FDAMA. This two-year pilot adds 
another 460 devices to the program, which, combined with the June 2000 
expansion, represents more than a 300 percent increase in eligible 
product types from the program as first ``implemented'' in 1998.
    The latest statistics show that manufacturers are already beginning 
to take greater advantage of the third-party program. Through the first 
five months of fiscal year 2001, third parties have reviewed 41 
submissions, compared to 47 submissions reviewed by third parties 
during the entire fiscal year 2000. We suspect that this increase in 
usage is related to the expansion of the program.
    While we appreciate the FDA's eventual expansion of the third-party 
review program to the limits set forth under FDAMA, we wonder why it 
took so long, particularly since FDA officials constantly lament an 
agency-wide lack of resources. From our perspective, if resource 
constraints are indeed a problem at the FDA, then the agency should 
have fully implemented the third-party program from the beginning and 
should be promoting to manufacturers the program's potential for 
shortening product review times and for alleviating the agency's 
shortage of resources.

Dispute resolution (Section 404)
    Another provision of FDAMA for which the actual implementation is 
incomplete is Section 404, commonly known as the ``dispute resolution'' 
provision. Section 404 of FDAMA directed the FDA to establish ``a 
procedure under which [a sponsor] may request a review'' of a 
``scientific controversy'' between the agency and the sponsor of a 
product if no other appropriate legal or regulatory mechanism exists 
for resolving the dispute.
    The FDA's first response was to publish a direct final rule on June 
16, 1998 in response to Section 404 of FDAMA. Under this rule, the FDA 
would have permitted drug and device manufacturers to request review of 
scientific controversies by an appropriate advisory committee. However, 
the FDA ended up withdrawing this rule after our industry and others 
complained that the rule was not consistent with the intent of FDAMA. 
As the FDA eventually acknowledged, the rule did not contain critical 
information, such as the process for selecting members of an advisory 
committee convened to resolve a dispute, the timeframes for conducting 
the reviews, the standards for granting or denying a review, and the 
weight to be given to advisory committee recommendations.
    In the end, the FDA chose to allow each of its centers to develop a 
center-specific approach to implementing dispute resolution. For its 
part, the Center for Devices and Radiological Health has published a 
draft guidance document outlining how its dispute resolution process 
will work and has hired an ombudsman to oversee the workings of a 
Medical Devices Dispute Resolution Panel, which held its first 
organizational meeting in October 2000.
    We are pleased that CDRH has set up a separate advisory panel and 
has hired an ombudsman to deal with dispute resolution, and we hope 
that CDRH and FDA officials will give the panel's decisions due 
deference. However, the panel has yet to hear its first dispute, though 
we are aware of companies that have petitioned for a hearing. As a 
result, it is difficult for us to assess this provision of FDAMA. Once 
we have had a chance to observe the workings and actions of the Medical 
Devices Dispute Resolution Panel, we will report back to the 
subcommittee with our impressions.

``Least burdensome'' pathway to market (Section 205)
    Implementation of the ``least burdensome'' provisions of FDAMA is 
another area of the law for which we would give the FDA an 
``incomplete'' mark. As a result of the FDA's initial unwillingness to 
work collaboratively with industry on this issue, the agency only two 
days ago released in draft form its long-awaited guidance document to 
explain its comprehensive approach to implementing the ``least 
burdensome'' provisions. This delay of more than three years since the 
passage of FDAMA is a critical shortcoming of the agency's 
implementation efforts, as these provisions capture best the true 
spirit of FDAMA--ensuring that unnecessary regulatory requirements do 
not delay patients' access to new technologies.
    As you know, FDAMA added the following two provisions, commonly 
referred to as the ``least burdensome'' provisions, to the Federal 
Food, Drug, and Cosmetic Act:

Section 513(a)(3)(D)(ii)
        ``Any clinical data, including one or more well-controlled 
        investigations, specified in writing by the Secretary for 
        demonstrating a reasonable assurance of device effectiveness 
        shall be specified as a result of a determination by the 
        Secretary that such data are necessary to establish device 
        effectiveness. The Secretary shall consider, in consultation 
        with the applicant, the least burdensome appropriate means of 
        evaluating device effectiveness that would have a reasonable 
        likelihood of resulting in approval.''
Section 513(i)(1)(D)
        ``Whenever the Secretary requests information to demonstrate 
        that devices with differing technological characteristics are 
        substantially equivalent, the Secretary shall only request 
        information that is necessary to making substantial equivalence 
        determinations. In making such requests, the Secretary shall 
        consider the least burdensome means of demonstrating 
        substantial equivalence and request information accordingly.''
    Industry sought these provisions to remedy one of the major 
problems we perceive at the FDA: the inconsistent application of law, 
regulation, and guidance by FDA officials in the review of marketing 
applications. This inconsistency has contributed to excessive review 
times that have delayed the introduction of new or improved products. 
These delays, in turn, have a disproportionate impact on entrepreneurs 
who are trying to bring their first devices to market, not to mention 
the patients who are waiting for these innovations.
    The FDA held its first public meeting to discuss the ``least 
burdensome'' provisions on January 4, 1999, more than a year after 
President Clinton signed FDAMA into law. At that meeting, industry 
representatives offered to work together with the FDA in a joint 
agency-industry-consumer working group to develop guidance on 
implementing the ``least burdensome'' provisions. The FDA verbally 
rejected our offer during the January 4, 1999 meeting, and the 
rejection was reiterated in a February 18, 1999 letter to participants 
at that meeting. Despite the willingness often voiced by FDA officials 
to work collaboratively with industry on the development of guidance 
documents, the letter informed us that the FDA had ``determined that 
the time and resource commitment necessary to proceed via that 
mechanism at this time will be less efficient than building upon the 
extensive information and varied opinions that have already been 
expressed on this issue.''
    Over the course of the ensuing two years, and thanks to the 
interest and involvement of this subcommittee's members and staff, the 
FDA relented on its original unwillingness to work with industry on the 
implementation of the ``least burdensome'' provisions. To their credit, 
CDRH officials did accept another offer extended by industry in 
November 1999 to work collaboratively on developing guidance. Over the 
next five months, CDRH held a series of meetings with the Least 
Burdensome Industry Task Force, a working group comprised of 
representatives from the various national and regional industry 
associations. The meetings culminated in the agency's March 2000 
release of a paper that reflected the spirit of this joint effort, 
which was to capture the intent of the ``least burdensome'' provisions 
and to aid in their incorporation into the device development process.
    On May 1, 2001, the FDA finally released a draft guidance document 
based on the agency-industry paper. This draft guidance correctly notes 
that FDAMA did not change the standard for premarket clearance or 
approval of medical devices, and defines ``least burdensome'' to mean 
an approach to addressing a premarket issue ``that involves the most 
appropriate investment of time, effort, and resources on the part of 
industry and FDA.'' The guidance document also identifies the following 
basic principles that flow from the ``least burdensome'' provisions:

 the spirit and the letter of the law should be the basis for 
        all regulatory decisions;
 information unrelated to the regulatory decision should not be 
        part of the decision-making process;
 alternative approaches to all regulatory issues should be 
        considered to optimize the time, effort, and cost of reaching 
        proper resolution of the issue; and
 all reasonable mechanisms to lessen review times and render 
        regulatory decisions within statutory timeframes should be 
        used.
    The draft guidance document describes how the ``least burdensome'' 
principles should apply to 510(k) submissions and premarket approval 
applications, and outlines some general applications of the principles.
    We are pleased that the FDA published this draft guidance on the 
``least burdensome'' provisions in time for today's hearing, and we 
trust that the agency will continue to train its reviewers and its 
advisory panels in the application of these concepts and principles to 
their responsibilities. While the wording of the recent guidance on the 
``least burdensome'' principles is important, these training activities 
are just as crucial to promoting the greater consistency we seek in the 
FDA's review process.
    In addition, we hope the FDA is developing metrics with which to 
gauge whether the ``least burdensome'' principles are being employed 
consistently. On this point, we would like to commend CDRH for taking 
what looks like a step in this direction.
    As part of its February 28 final guidance on the ``early 
collaboration meetings'' required under Sections 201 and 205 of FDAMA, 
CDRH published a set of checklists that it will collect from meeting 
participants. The FDA intends these checklists for use by both the 
applicant and the agency's review team leader in assessing the FDA's 
incorporation of the ``least burdensome'' approach in determining the 
type of valid scientific evidence needed for marketing approval.
    We believe that the FDA should use such checklists or other 
appropriate tools as part of an ongoing process of measuring the 
application of the ``least burdensome'' principles in the day-to-day 
work of the agency. Without such evaluation, it will be impossible to 
determine whether the ``least burdensome'' provisions of FDAMA are 
being implemented successfully or whether controversies that arise 
between the agency and manufacturers are isolated difficulties or 
represent more systemic problems.

              NEED FOR CONTINUED MODERNIZATION OF THE FDA

    MDMA commends the subcommittee for holding this hearing to see 
whether the law you wrote is being implemented as you intended, and we 
encourage you to continue this evaluation. We believe, however, that 
the modernization of the FDA cannot be achieved fully through just one 
piece of legislation. The ``modernization'' of the FDA should be a 
continuous process that ensures that the organization and its culture 
keeps up with and adapts to its environment. The milieu in which the 
FDA operates is one of constant change and continual advances in 
medical technology, and we need to ensure that the FDA has the tools 
and the talent to deal with a world in which the pace of innovation 
undoubtedly will increase.
    I will offer an example to illustrate this point. On the horizon, 
we see a number of products in development today that blur the 
traditional lines between devices, pharmaceuticals, and biologics. 
Stents coated with drugs to fight restenosis and other conditions; 
implanted drug-delivery pumps; artificial livers, kidneys, and 
pancreases; nerve regenerators; and devices that deliver genetic 
therapies are but a few of the ``combination products'' upon which 
physicians, engineers, and researchers are working currently. MDMA 
believes that the regulation of these drug-device and biologic-device 
combinations presents a variety of challenges for the FDA and, by 
extension, for the companies that will develop these products.
    Congress acknowledged the challenges inherent in regulating 
combination products in the Safe Medical Devices Act of 1990 (SMDA). 
Section 16 of SMDA emphasized that the FDA must regulate a combination 
product based on the product's primary mode of action. In other words, 
if the FDA determines that a product's primary mode of action is 
pharmaceutical, then the task of regulating that product falls to the 
FDA's Center for Drug Evaluation and Research (CDER).
    Although a product's primary mode of action determines which FDA 
center is responsible for its regulation, the designated center often 
needs additional expertise regarding components of the product that are 
outside its jurisdiction. In recognition of this, CDRH entered into 
intercenter agreements in 1991 with CDER and with the FDA's Center for 
Biologics Evaluation and Research (CBER). The agreements outline how 
the center with jurisdiction over a combination product may or must 
consult with the other centers.
    When the primary mode of action of a combination product is 
obvious, the FDA can assign jurisdiction quickly and the review process 
usually runs smoothly. However, we anticipate that many of the 
combination products in development today, such as those I mentioned 
earlier, will be more difficult to categorize and will not fit neatly 
into the 1991 intercenter agreements. To avoid unnecessary delays in 
reviewing these products, we need to prevent jurisdictional disputes or 
inefficient review processes that result from disagreements within the 
FDA or between the FDA and a manufacturer. The longer the FDA takes 
debating jurisdiction and regulation, the higher the costs to 
manufacturers and to patients, since the process of clearing or 
approving a product for marketing cannot begin until the FDA decides 
which of its centers has the power to grant the clearance or approval.
    The FDA already has begun to recognize these difficulties. To 
promote consistency in the regulation of cellular and tissue-based 
products, for example, CBER and CDRH established in 1998 a Tissue 
Reference Group (TRG) comprised of three representatives from each 
center. The TRG provides manufacturers of these products with a single 
reference point for answers to questions regarding jurisdiction, 
policy, and regulations. The TRG, which meets twice per month, also 
participates in developing guidance documents in the areas of tissues 
and cellular therapies.
    Congress could build upon such ideas for solving these problems by 
directing the FDA to establish an Office of Combination Products. Such 
an office should have the authority to determine how a combination 
product will be reviewed and to coordinate all involvement by and 
interaction between the various FDA centers in the review of specific 
marketing applications. We believe such an office could operate with a 
very small but multi-disciplinary staff, augmented on an ad hoc 
application- or technology-specific basis by experts on detail from the 
various FDA centers. Such an office would improve upon the current 
process of managing the review of combination products, and would also 
reduce the likelihood that disagreements between centers, which 
manufacturers cannot control, will delay the review process.
    The hybrid products I mentioned earlier are but a few examples of 
the wave of innovation for which the FDA must prepare itself. As we 
speak, scientists are investigating how to provide physicians and 
patients with greater therapeutic feedback by integrating information 
technologies and wireless communication capabilities into medical 
devices, engineers are exploring how to use nanotechnological concepts 
to create tiny medical tools to advance the science of minimally 
invasive medicine, and researchers are studying how to develop 
customized therapies based on an individual patient's own genetic or 
cellular characteristics. These areas of inquiry, as you might imagine, 
are just the tip of the proverbial iceberg.
    Some of these explorations will prove fruitful, and some will not, 
but all of them will present the FDA with complicated regulatory 
dilemmas. To help prepare the FDA for the challenges it will face in 
the new century, the national device industry associations--MDMA, the 
Advanced Medical Technology Association (AdvaMed), and the National 
Electrical Manufacturers Association (NEMA)--are working together to 
develop a series of legislative proposals for the subcommittee's 
consideration. The ideas we are developing, such as the one I have 
outlined, are aimed at enabling the FDA to use its resources more 
efficiently, augmenting the expertise of the agency's staff, and 
assuring the FDA's accountability for its actions. We look forward to 
sharing these ideas with the subcommittee in the near future and to the 
vigorous debate that we hope to engender about the continued 
modernization--or, more appropriately, the ``futurization''--of the 
FDA.

    Mr. Bilirakis. Thank you very much, Mr. Northrup.
    Dr. Applebaum?

                 STATEMENT OF RHONA S. APPLEBAUM

    Ms. Applebaum. Thank you, Mr. Chairman, for the opportunity 
to represent the food industry and give you our perspective on 
the implementation of FDAMA. The National Food Processors 
Association is the Nation's largest food trade association and 
the industry's leader on scientific, technical, and regulatory 
issues involving food science and food safety. We operate three 
laboratory centers, including one here in Washington.
    NFPA believes that the passage of FDAMA represented a 
significant advance in the statutory environment to provide 
responsible information to the public relative to conventional 
foods. We appreciate this committee's work to address many of 
the problems in the foods area that our member companies 
experienced prior to FDAMA, and in particular, we appreciate 
the efforts of Congressmen Ed Whitfield and Ed Towns, who 
authored the bulk of the FDAMA food provisions.
    In the regulation of foods, FDAMA resulted in: one, the 
approval of irradiation for use on red meats; two, a 
streamlined process for approving food contact substances which 
are primarily used in food packaging; and three, a reduction in 
label clutter through the elimination of the requirement of a 
statement referring consumers to nutrition label on food 
products.
    Despite these successes, the Agency's implementation of 
food labeling reforms for health claims, which provide 
consumers with important health information about food products 
as well as irradiation labelling, has been a disappointment. 
FDA remains reluctant to permit certain types of food labelling 
that would give consumers important health and safety-related 
information.
    The food labelling provisions of FDAMA were reaction to 
decades of overly restrictive policies that inhibited truthful 
and non-misleading label statements. Unfortunately, FDA has 
taken great pains in its implementation of these provisions to 
exclude as many claims as possible. FDA turned down the first 
nine health claims submitted under new FDAMA provisions. Two 
FDAMA claims were authorized for whole grain foods and heart 
disease and cancer, and for potassium and reduced risk of 
hypertension. But these small achievements are not adequate 
proof that FDA has abandoned its restrictive policies on health 
claims.
    FDA's overly restrictive labeling policies have not 
withstood judicial scrutiny since FDAMA was enacted. In the key 
case on health claims, Pearson v. Shalala, the court held that 
FDA must consider whether appropriate disclosures could render 
a health claim on dietary supplements truthful and non-
misleading even if it was based on preliminary scientific 
findings. The court also held that FDA's failure to consider 
authorizing health claims accompanied by a disclaimer violated 
the First Amendment.
    The holding in the Pearson decision required that FDA 
revisit its decision on the four contested dietary supplement 
health claim petitions that were the basis for the complaint. 
But the case has implications that reach far beyond its facts. 
Indeed, the Pearson decision called into question the overall 
regulatory policies used by FDA for authorizing health claims.
    On December 1, 1999, FDA announced its plan to implement 
the Pearson holding. The implementation plan is referred to by 
the Agency as the 10-year plan because of its estimated decade-
long timetable for implementation. With all due respect, NFPA 
maintains that it is unacceptable for conventional foods to 
wait until 2010 for relief from restrictive health claims 
policies.
    FDA's labelling policy also discourages important food 
safety technologies, such as irradiation, from coming to 
market. In report language accompanying FDAMA, Congress called 
for amendment of the existing irradiation disclosure 
regulation, and instructed FDA to explore alternative labeling 
for irradiated food, noting any required disclosure should not 
be perceived as a warning or give rise to inappropriate 
consumer anxiety. Despite this Congressional directive, FDA has 
been slow to act, only publishing an advanced notice of 
proposed rulemaking regarding alternative labeling for 
irradiated products in 1999, with no further action to date. 
Nevertheless, NFPA is encouraged, but we wonder why this 
important reform of food safety information is taking so long.
    In conclusion, the Pearson decision and FDA's response to 
it, as well as its reluctance to review its labeling policy for 
irradiated foods, highlights the facts that FDA historically 
has approached food labeling restrictively. FDA has been slow 
to move away from this approach, and generally has done so at 
the direction of Congress or the judiciary.
    Again, we appreciate very much the important reforms this 
committee made in FDAMA. We stand ready to provide this 
committee with whatever assistance it may need as it considers 
the successes and disappointments of FDA's implementation of 
this important public health law. Thank you very much.
    [The prepared statement of Rhona S. Applebaum follows:]

  Prepared Statement of Rhona S. Applebaum, Executive Vice President, 
  Scientific Affairs and Regulatory Affairs, National Food Processors 
                              Association

    Mr. Chairman, my name is Rhona Applebaum, Executive Vice President 
for Scientific Affairs of the National Food Processors Association 
(NFPA). NFPA is the voice of the $460 billion food processing industry 
on scientific and public policy issues involving food safety, 
nutrition, technical and regulatory matters and consumer affairs. 
NFPA's three scientific centers, its scientists and professional staff 
represent food industry interests on government and regulatory affairs 
and provide research, technical assistance and consultation, education, 
communications and crisis management support for the association's U.S. 
and international members. NFPA members produce processed and packaged 
fruit, vegetable, and grain products, meat, poultry, and seafood 
products, snacks, drinks and juices, or provide supplies and services 
to food manufacturers.
    NFPA believes that the passage of the Food and Drug Modernization 
Act of 1997 (FDAMA) represented a significant advance in the statutory 
environment to provide responsible information to the public relative 
to foods. NFPA and its member companies appreciate this Committee's 
work to address many of the problems in the foods area that our member 
companies experienced prior to FDAMA. In particular, we appreciate the 
efforts of Messrs. Whitfield and Towns, who authored the bulk of the 
FDAMA food provisions. In the regulation of foods, FDAMA resulted in: 
(1) the approval of irradiation for use on red meats; (2) a streamlined 
process for approving food contact substances, which are primarily used 
in food packaging; and (3) a reduction in label clutter through the 
elimination of the requirement of a statement referring consumers to 
the nutrition label on food products (the referral statement).
    Despite these successes, the agency's implementation of food 
labeling reforms for health claims which provide consumers with 
important health information about food products, as well as 
irradiation labeling, has been a disappointment. In the hearings that 
culminated in FDAMA, many Members of this Committee expressed the hope 
that statutory reforms would, among other things, help change the 
culture at FDA. Unfortunately, with regard to food labeling, these 
culture changes have not been realized--FDA remains reluctant to permit 
certain types of food labeling that would give consumers important 
health and safety related information. Thus, FDA, though well-
intentioned, prevents consumers from receiving truthful, non-misleading 
information about their foods.

                    HEALTH & NUTRIET CONTENT CLAIMS

    The food labeling provisions of FDAMA were a reaction to decades of 
overly restrictive policies that were inhibiting truthful and 
nonmisleading label statements. Despite Congressional attempts to 
create a workable food labeling policy through the Nutrition Labeling 
and Education Act of 1990 (NLEA), FDA implemented the NLEA, especially 
the health and nutrient content claim provisions, in an overly 
restrictive manner. As a result, Congress, through FDAMA, established 
alternative pre-market notification procedures for health claims and 
nutrient content claims which are based on, and consistent with, the 
published statement of an authoritative U.S. scientific body 
responsible for public health protection.1 But FDA has taken 
great pains in its implementation of these provisions to exclude as 
many claims as possible. FDA turned down the first nine health claims 
submitted under this provision.2 With regard to eight of the 
nine claims, FDA asserted that they were not based on sufficiently 
``authoritative'' statements.3 Two FDAMA health claims have 
been authorized--for whole grain foods and heat disease and cancer, and 
for potassium and reduced risk of hypertension--but these small 
achievements do not illustrate that FDA has abandoned its restrictive 
policies on health claims.
---------------------------------------------------------------------------
    \1\ 21 U.S.C. Sec. 343(r)(3)(C). (This alternative is in addition 
to the existing mechanism for approval of such claims, found at 21 
U.S.C. Sec. 343 (r)(4), which allows persons to petition FDA to issue 
regulations authorizing the use of a health claim. In order for a 
health claim to be authorized, FDA must find ``significant scientific 
agreement'' that the claim is appropriate).
    \2\ See 63 Fed. Reg. 34,084 (June 22, 1998).
    \3\ Id.
---------------------------------------------------------------------------
    FDA's overly restrictive labeling policies have not withstood 
judicial scrutiny since FDAMA was enacted. Specifically, in Pearson v. 
Shalala,4 dietary supplement manufacturers, distributors, 
and consumer organizations brought suit against FDA, alleging that the 
agency's regulation of health claims in supplement labeling was an 
unconstitutional restriction of their First Amendment rights. The court 
held that FDA's failure to consider authorizing health claims 
accompanied by a disclaimer violated the First Amendment.5 
The court termed the justification of FDA's restrictions, ``almost 
frivolous.''
---------------------------------------------------------------------------
    \4\ 164 F.3d 650 (D.C.Cir. 1999).
    \5\ Id. at 658.
---------------------------------------------------------------------------
    The supplement manufacturers had unsuccessfully petitioned FDA to 
approve proposed health claims accompanied by qualifying statements 
that would disclose any shortcoming regarding the sufficiency of the 
scientific evidence supporting the claims.6 Using the First 
Amendment analysis for commercial speech, which was first articulated 
in Central Hudson v. Public Service Com'n of N.Y., 7 the 
court found that, while the FDA had a substantial governmental interest 
and the challenged regulation directly advanced that interest, there 
were less restrictive means available to achieve the ends 
sought.8 In particular, the court held that--FDA was 
required to consider whether inclusion of appropriate disclosures would 
negate the otherwise misleading nature of a health claim such that the 
claim accompanied by a disclosure could be authorized.9
---------------------------------------------------------------------------
    \6\ Id. at 653-54.
    \7\ 447 U.S. 557 (1980)
    \8\ Pearson, at 657.
    \9\ Id. at 658. (``It is clear, then, that when the government 
chooses a policy of suppression over disclosure--at least where there 
is no showing that disclosure would not suffice to cure 
misleadingness--government disregards a `far less restrictive' 
means.'').
---------------------------------------------------------------------------
    In finding that disclosures are preferable to complete suppression 
of commercial speech, the court did not conclude that all health claims 
may be made truthful with the use of a disclosure, and deferred to FDA 
to determine whether a claim is so misleading that it could not be 
rendered nonmisleading by a disclosure.10
---------------------------------------------------------------------------
    \10\ Id. at 659.
---------------------------------------------------------------------------
    The holding in the Pearson decision required that the FDA revisit 
its decision on the four contested dietary supplement health claim 
petitions that were the basis for the complaint, but the case has 
implications that reach far beyond its facts. Indeed, the Pearson 
decision called into question the overall regulatory policies used by 
FDA for authorizing health claims.
    On December 1, 1999, FDA announced its plan to implement the 
Pearson holding. The implementation plan is referred to by the agency 
as the ``Ten Year Plan'' because of its estimated decade-long timetable 
for implementation.11 The plan is narrowly structured to 
address health claims for dietary supplements exclusively, reserving 
for later resolution any possible applicability of the Pearson decision 
to conventional foods, despite the fact that the regulations at issue 
in Pearson apply to both dietary supplements and conventional foods. 
With respect, NFPA maintains that it is not acceptable for conventional 
foods to wait until 2010 for relief from restrictive health claim 
policies.
---------------------------------------------------------------------------
    \11\ See Dietary Supplement Strategy (Ten Year Plan) (Jan. 2000).
---------------------------------------------------------------------------

                          IRRADIATION LABELING

    In addition to preventing consumer access to important health 
information about their food products, FDA's labeling policy 
discourages important food safety technologies from coming to market. 
In the Statement of Managers, which accompanied FDAMA, Congress called 
for amendment of the existing, highly prescriptive irradiation 
disclosure regulation. As previously mentioned, irradiation was finally 
approved for use on red meats after the petition was pending for nearly 
three and a half years. In addition, irradiation has been approved for 
use on poultry, shelled eggs, flour, produce including, potatoes and 
other fruits and vegetables. Yet, we rarely see irradiated foods in our 
local grocery stores. Why is that? The answer can be found on the food 
label.
    FDA currently requires irradiated products to state that they are 
``Treated with Radiation'' or ``Treated by Irradiation'' and bear the 
international symbol for irradiation, known as the radura logo. With 
the passage of FDAMA Congress required textual disclosure be no more 
prominent than the ingredient statement on the food product. Although 
FDA has implemented that FDAMA requirement, it has taken little action 
to address Congress' directive that the agency conduct a substantive 
review of its irradiation labeling policy.
    As part of the Statement of Managers accompanying FDAMA, the 
conferees instructed FDA to engage in notice and comment rulemaking to 
explore alternative labeling for irradiated food products. In their 
instruction to FDA, they noted, ``The conferees intend for any required 
disclosure to be of a type and character that it would not be perceived 
to be a warning or give rise to inappropriate consumer anxiety.'' 
Despite this Congressional directive and aggressive follow up by the 
Appropriations Committee, FDA only published an advanced notice of 
proposed rulemaking regarding alternative labeling for irradiated 
products in 1999.
    If a consumer sees a product containing labeling that looks like a 
warning they won't buy it. In the case of irradiated foods this is a 
real problem. Many believe that the radura logo resembles an upside 
down mushroom cloud. The words ``irradiation'' and ``radiation'' are 
discomforting to consumers--research shows this. By engaging in a 
notice and comment rulemaking, FDA can use its expertise to create a 
science-based labeling policy for irradiated foods that makes sense. 
Although this nation has one of the safest food supplies in the world, 
incidents of foodborne illness do occur. An important food safety 
technology like irradiation can go a long way in eliminating the 
incidence of foodborne illness. FDA's current labeling requirements for 
irradiated foods do not address statements on food safety benefits and 
discourage marketing of these foods. In the interest of food safety, 
FDA must act on irradiation labeling now. NFPA is encouraged that FDA 
is seeking to undertake consumer research on irradiation labeling, but 
we wonder why this important reform of food safety information is 
taking so long.
    The Pearson decision, and FDA's response to it, as well as its 
reluctance to review its labeling policy for irradiated foods, bring 
into sharp focus FDA's disregard of commercial speech protection. FDA 
historically has approached food labeling restrictively, chilling 
dissemination of truthful and nonmisleading information and 
prescriptively compelling label disclosures. FDA has moved away from 
this approach only grudgingly, generally at the direction of Congress 
or the judiciary. The agency's food labeling regulation today remains 
constitutionally infirm and suspect in a number of areas.

                               CONCLUSION

    NFPA appreciates the important food reforms this Committee made in 
FDAMA. We stand ready to provide this Committee whatever assistance it 
may need as it considers the successes and disappointments of FDA's 
implementation of this important public health law.
    Thank you.

    Mr. Bilirakis. Thank you very much, Doctor.
    The Chair will start the inquiries.
    Dr. Suydam, nothing in PDUFA requires FDA to approve a drug 
application. Correct?
    Ms. Suydam. That is correct.
    Mr. Bilirakis. Then the performance goals, as I understand 
them, merely require the FDA to review and act upon 
applications. In the written testimony of witnesses in the 
second panel, and from discussions with the staff too, there 
have been claims made that PDUFA has lead to the public health 
and safety being compromised due to increased drug recalls.
    Is there any truth to such an assertion? Does the FDA 
sacrifice the safety and effectiveness requirements because of 
PDUFA? I assume your answer to that of course would be no, it 
does not.
    But take the time to explain.
    Ms. Suydam. Thank you, Mr. Chairman. The FDA believes that 
our standards have been maintained, and that we continue to 
review and approve or disapprove pharmaceutical products based 
on the quality of the data submitted to us, and the fact that 
the data support the product being approved.
    I might point out that the rate of withdrawals from the 
market, which is in fact one way to measure whether in fact 
safety has been in any way inhibited, is the same as it has 
been for the last 20 years. The rate is somewhere around 2.9 
percent. That has been the case for 20 years. Now the number 
might be higher because we are approving more things. More 
things are on the market than were on previously. But the rate 
of withdrawals has remained steady for approximately the last 
20 years.
    Mr. Bilirakis. This is a very significant claim on their 
part. I think that all parties would agree that the 
modernization act has worked well, that PDUFA has done what it 
was intended to do in general. But, there are groups that find 
fault with it.
    Why would they make this claim? There has to be some 
substance to it, I would think, rather than just all 
supposition or speculation.
    Ms. Suydam. There have been some, and my speculation is 
that there have been some very high profile drug withdrawals in 
the last few years that have received a lot of public scrutiny 
and public press. We understand the current concerns of groups 
about products coming on the market.
    I think one thing I pointed out in my testimony that I'd 
like to reiterate is the fact that the United States is now the 
country of first introduction for new drugs in 80 percent of 
the cases. That's very different than it was in the early 
1990's prior to PDUFA. So you are more likely or you may be 
more likely to have a withdrawal early in the process because 
of the fact that it's been introduced into a larger population 
of patients as opposed to the numbers. As a result, you will 
see the very rare side effects that you might not see during 
the clinical trials.
    Mr. Bilirakis. A frequent criticism of PDUFA is that the 
appropriations thresholds in the statute effectively force 
scarce dollars into drug reviews at the expense of other 
important FDA initiatives. Can you respond to that?
    Ms. Suydam. The FDA budget is obviously restricted, as all 
Federal budgets are to some extent. I believe that the benefits 
of PDUFA have really out-weighed the potential costs of moving 
money from one program to another.
    Mr. Bilirakis. Has PDUFA been an unanticipated burden on 
FDA? In other words, from the accountability standpoint?
    Ms. Suydam. I believe that in my written testimony you will 
see that the performance goals that have been established under 
the PDUFA II program, have given us an added burden that I'm 
not sure warrant the cost of tracking them. For example, we are 
tracking every meeting with industry. We are tracking the time 
between when the meeting is set up and when the meeting is 
held. There are more than 3,500 different entities that have 
been tracked in PDUFA II.
    I think since we have virtually met every performance goal, 
perhaps now is the time to think about those goals and think 
about whether we need to have that level of tracking.
    Mr. Bilirakis. All right. When we finish up here, I would 
ask you all not only to respond to written questions, but to 
submit any suggestions to us. Mr. Burr is still here. It's 
important in the process of reauthorizing PDUFA whenever we do 
it, that we kind of hear your inputs in terms of suggested 
changes, legislative changes that we could make which would not 
hurt the effort but basically benefit, and your help. Thank 
you.
    Mr. Brown?
    Mr. Brown. Mr. Chairman.
    First, Mr. Northrup, I want to compliment you on your 
testimony. I agree with you that obviously FDA modernization is 
a continuous process. It seems to me that the variety of 
products in the device field surpasses that of any other area 
of FDA oversight and regulation. That invites new challenges 
for keeping FDA both responsive and responsible. I was 
intrigued by your proposal for a new Office of Combination 
Products and look forward to learning more about the details as 
that unfolds from you.
    Dr. Suydam, I was intrigued by your comments on page 10, 
that 80 percent of new drugs worldwide first launched in the 
U.S. was 40 percent before this legislation. You used the 
words, ``due to the favorable regulatory climate.'' I would 
like to know on what information you base that. Also, could the 
reason be, I mean I understand that the numbers are easily 
provable, but whether it's due to the regulatory climate, I 
would also think it might be in part due to the fact that when 
products are launched in the United States, the economic gain 
is potentially greater because this Congress has done little--
some think it shouldn't and some think it should--this Congress 
has done little of any kind of changing the price structure. No 
other country allows prescription drug prices so freely to 
move, if you will, that prices are higher here than in other 
countries in the world.
    Is that also a major reason that this huge increase in the 
number of drugs launched in this country has occurred?
    Ms. Suydam. Mr. Brown, it could very well be that that's 
part of the reason. But what I was focusing on was the fact 
that under FDAMA with the increased resources provided for us 
under PDUFA, we have reduced the median review times from 20 
months down to 12 months for normal product applications, and 
from 12 months to 6 months for priority applications. I think 
that in itself speaks to one of the major reasons why we are 
the country of first introduction for new pharmaceuticals.
    Mr. Brown. You would say that's, in your mind, that's 
clearly the primary reason for the increase, not the fact that 
prices are significantly higher here and the reward 
significantly higher here economically for the launch of those 
new products?
    Ms. Suydam. I think that's probably one of the other 
reasons, but FDA's purview is not necessarily to look at the 
economics of the industry in that sense.
    Mr. Brown. Except you made a statement here, ``due to the 
favorable regulatory climate,'' so I would hope that FDA's 
purview is to come here and if you make an assertion to be able 
to defend it.
    Ms. Suydam. Yes. I do believe that we have improved the 
climate. I think I was making the cause and effect between the 
times of approval and all of the things that we have done 
through the implementation of PDUFA, and the change that we've 
seen in the regulatory review time, and in fact, the whole 
clinical drug development time in general is down.
    Mr. Brown. I applaud what you have done that way. Does that 
then beg the issue of responsibility of our government, a 
responsibility to our citizens and a responsibility perhaps for 
the introduction of these new drugs that make their way around 
the rest of the world, that we should put significantly more 
resources into post-market surveillance? I mean we have seen, 
if in fact twice as many, percentage-wise, I don't know the raw 
numbers, but twice as many percentage-wise numbers of drugs 
have been approved by FDA, meaning there are many more of them 
on the market, more quickly with a shorter period of time of 
approval, not less efficient or less safe perhaps, but there 
are more on the market, more quickly, coupled with direct to 
consumer advertising, which really had not kicked in with any 
appreciable degree at the time of FDAMA's enactment, let alone 
PDUFA's, but FDAMA's enactment. Does that mean that the drug 
industry and this Congress and the FDA have a significantly 
greater responsibility in post-market surveillance with the 
onslaught of new drugs, with the faster approval process, with 
the direct to consumer advertising, with the more and more 
people using these drugs much more quickly in much higher 
numbers than they were ever used before when there weren't 
these TV ads and the accelerated numbers of visits by people to 
the doctors, drug reps to the doctors and all that. Doesn't 
that give us a greater responsibility on post-market 
surveillance?
    Ms. Suydam. I believe that it does. In fact, the Agency's 
budget last year included some additional money for adverse 
event reporting systems and also this year's proposed budget, 
the 2002 budget, includes dollars to enhance those efforts 
across all of our product areas, because we do believe that we 
really need to focus on post-market as well as the pre-approval 
side of our whole regulatory responsibility.
    Mr. Brown. Have we come close to, not in terms of 
equalizing in dollars for sure or even employees, but have we 
come close to meeting our responsibilities in the post-market 
surveillance in comparison to meeting our responsibilities on 
the clearance, on the drug approval?
    Ms. Suydam. Well, I think our budget proposals would lead 
one to the conclusion that we need additional resources to 
enhance our post-market study of products.
    Mr. Bilirakis. The gentleman's time has expired.
    Mr. Brown. Can I ask for a more specific answer? I'm sorry, 
Mr. Chairman.
    Mr. Bilirakis. Very brief.
    Mr. Brown. Have we done as well with our responsibility in 
post-market surveillance as we have in this Congress and the 
FDA in carrying out its responsibility to accelerate the 
approval process?
    Ms. Suydam. I think, Mr. Brown, that the PDUFA program 
itself has focused on pre-market, and therefore, the resources 
have been added to that program.
    Mr. Brown. I'm not talking about that. I am talking about 
the responsibility to the public. Have we done as well in post-
market surveillance as we have on speeding the approval of 
drugs to the market?
    Ms. Suydam. I think it is hard to make the judgment that we 
have done as well. I think we have done the very best possible 
job we could do with the resources we have available to do it.
    Mr. Brown. That really isn't my question, but I am not 
going to get the answers.
    Mr. Bilirakis. Mr. Greenwood, to inquire?
    Mr. Greenwood. Thank you, Mr. Chairman.
    I am going to address my questions to you, Dr. Suydam, and 
on pediatric exclusivity. As I alluded to in my opening 
comments, I don't think there is any question about the fact 
that this provision has been an enormous success. Some of the 
numbers, 11 pediatric studies done between 1991 and 1996, 411 
studies done since 1998. Estimates of lower hospitalization 
costs due to better pediatric dosing information can save up to 
$228 million per year for five diseases alone.
    President Clinton's FDA report said that ``pediatric 
exclusivity provision has done more to generate clinical 
studies and useful prescribing information for the pediatric 
population than any other regulatory or legislative process to 
date.'' I could go on with all of this. This estimate that if 
we could reduce even one-one-hundredth of the annual economic 
impacts from these leading causes of death and disability by 
providing more effective treatments to children, making for 
healthier adults in the process, the $7 billion saved each year 
would be 10 times more than the nearly $700 million that FDA 
has estimated is the yearly cost to society from the pediatric 
exclusivity awards. That's from the Tufts study. So that it has 
been a success is not a question.
    What the question obviously is is, is the 6 months the 
right number? Does it lead to what some have called windfall 
profits and so forth? The only ways I can think of to change 
that is to change if people think that some drug companies make 
too much money is to reduce the 6 months for everybody or have 
some sliding scale negotiated, additional exclusivity that 
would be negotiated between the companies and the FDA. I worry 
about that because it puts a whole lot of uncertainty into the 
process. At least what we have now is certainty.
    I am interested in your thoughts about this. Do you have 
concerns about the 6 month exclusivity? Do you think we should 
tamper with it?
    Ms. Suydam. Mr. Greenwood, the Administration really has 
not had an opportunity to fully discuss the entire pediatric 
exclusivity provisions. We really have not come to any 
positions on the 6 month exclusivity at this time. But we will 
be happy to work with the committee in the future on both the 
pros and cons of the 6 months.
    Mr. Greenwood. Let me ask this. The FDA has requested--can 
you tell me how many studies have been initiated by the FDA?
    Ms. Suydam. We have issued 188 written requests for 
pediatric studies.
    Mr. Greenwood. Okay. Has it been your experience that 
companies have declined studies because of lack of financial 
incentive?
    Ms. Suydam. I don't believe that that has been the case.
    Mr. Greenwood. Did FDA have any expectations prior to the 
passage of the pediatric exclusivity provisions about what to 
expect, the number of requests that it would generate? If so, 
have the number of requests exceeded your expectations?
    Ms. Suydam. Obviously the response from the pharmaceutical 
industry has been incredibly vigorous. We have wanted to have 
this kind of activity for many years, and have not been 
successful prior to the passage of this particular provision in 
getting the pediatric studies done that we thought were 
necessary.
    Mr. Greenwood. Let's turn to the issue of whether you need 
more resources on the generic side of the house. Are you able 
to comment about that?
    Ms. Suydam. Our generic program is a program that I think 
has a tremendous workload. We have approximately 300 FTEs--
people--in that program in general. We are not meeting the 
statutory review times that have been laid out for us in the 
law.
    Mr. Greenwood. Do you have estimates of what it would take 
to get up to the statutory review time?
    Ms. Suydam. I do not. But we would be glad to explore that 
and get back to you.
    Mr. Greenwood. Would it be fair to say it's on the order of 
magnitude of something like 10, 15 to 20 pediatricians? I'm 
sorry, not pediatricians, excuse me, additional staff members. 
Is that the ballpark?
    Ms. Suydam. I really have not looked at the issue of how 
much it would take to meet the deadline. So I think I would 
prefer not to answer in specifics.
    Mr. Greenwood. Thank you. My time has expired.
    Mr. Bilirakis. Mr. Pallone, to inquire?
    Mr. Pallone. Thank you, Mr. Chairman.
    I wanted to ask Dr. Suydam, I mentioned in my opening 
statement about with regard to pediatric exclusivity, that the 
FDA's interpretation of the law has in my opinion in essence 
has been granting companies patent extensions without receiving 
the pediatric benefits it was intended to generate. That was my 
concern.
    Two areas I mentioned was the ability of companies to use 
old studies to obtain patent extensions, and the granting of 
exclusivity based on active--I guess that's moiety--I don't 
know if I'm pronouncing it right.
    Ms. Suydam. Moiety, yes.
    Mr. Pallone. Rather than on a product-by-product basis. So 
what I hear is that they are using old studies, and they are 
not necessarily relevant product-by-product. What do you think 
about that? Should we be prospective in the way we look at 
this? Should the law be changed in that respect? I just wanted 
your comment on it.
    Ms. Suydam. Mr. Pallone, I think the most important thing 
about the pediatric exclusivity provision is that studies are 
being done. Studies are being done for the first time. We are 
getting products labelled, which is the actual outcome you 
want, so that physicians everywhere know how to use a product 
and how to use a product correctly. So I think in general it 
has been a very positive program. I don't think that there has 
been a lot of the things that you have mentioned.
    Mr. Pallone. You're not concerned that it goes against the 
intent or somehow it's not in accordance with the intent?
    Ms. Suydam. I believe the intent of the act was to have 
products labelled so that physicians everywhere in the United 
States can understand the effect of that particular product for 
their patients of all ages. I think that intent is being met.
    Mr. Pallone. I mentioned also dietary supplements. I wanted 
to ask you a question about that. The industry and the public 
have been asking for these proposed final regulations for good 
manufacturing practices. They haven't been published yet. I was 
wondering if you could tell us when they are likely to be 
published? It seems like it has taken them more than 6 years to 
get these quality standard regulations for dietary supplements. 
I would just like to know what we can do in Congress to assist 
the Agency to do a better job in this, because I think it is a 
major problem that these haven't come out.
    Ms. Suydam. We agree with you, Mr. Pallone, that good 
manufacturing practice regulations for dietary supplements are 
essential. They are a high priority for the Agency. The 
regulation is now under review by the Administration. We hope 
that it--the proposal, will--it's a very complex regulation--
not something that is easy to review--be available shortly.
    Mr. Pallone. You don't have an idea of the date though, 
this summer, fall?
    Ms. Suydam. No. I'm sorry, I don't think I can.
    Mr. Pallone. All right. Let me ask one more thing. That is, 
this is with regard to medical devices. I know you have the 
510(k) reviews, devices that already exist like a pacemaker, 
and you have the PMA reviews for new devices. The 510(k) 
reviews are close to meeting the statutory requirements of 
FDAMA, but the PMA review has taken a lot longer. Of course the 
whole purpose of FDAMA primarily I think was to address these 
breakthrough products. These are the ones that can bring 
tremendous improvements to the lives of patients.
    So I was wondering what combination of resources, whether 
it be appropriations, legislation or whatever, would be 
necessary to achieve statutory compliance for the PMA reviews 
as well as the 510? But there's obviously a big difference now 
in terms of the time.
    Ms. Suydam. Mr. Pallone, the timeframe for 510(k)s has been 
90 days that is the statutory deadline. Surprisingly a large 
number of products come through the 510(k) process. Even some 
relatively new or what might be considered somewhat novel 
products, more than 4,000 were approved last year through the 
510(k) process. So it is a significant workload. I think 
companies are particularly pleased that our performance there 
is good.
    I agree that we need to work on enhancing our pre-market 
approval in the area of medical devices for those complex 
devices. But I would point out that these are far more complex 
products. You have far more information to review. We do need 
additional time to look at those products. So it could be a 
combination of additional resources, and also making 
improvements in the process itself. The times have come down 
significantly since where they were in 1995.
    Mr. Bilirakis. The gentleman's time has expired.
    I didn't mean to interrupt your response.
    Mr. Whitfield?
    Mr. Whitfield. Thank you, Mr. Chairman.
    Dr. Suydam, the food labelling provisions that we included 
in FDAMA were adopted specifically in reaction to what we 
considered decades of overly restrictive policies inhibiting 
truthful and non-misleading label statements. As you are aware, 
we specifically provided for pre-market notification procedure 
for health claims, content claims which were based on, 
consistent with, published authoritative, scientific bodies on 
that issue.
    So after FDAMA was enacted, the first nine claims, health 
claims were turned down, denied by FDA. A lawsuit was brought, 
in Pearson v. Shalala case. The court ruled that FDA's 
restrictions were unconstitutional basically or a violation of 
free speech. They specifically said that the restrictions were 
almost frivolous, and remanded it back to FDA. It is my 
understanding that now FDA has adopted a 10-year plan to review 
this as it applies to dietary supplements. Even though the 
regulations at issue in Pearson v. Shalala included not only 
dietary supplements but also the conventional food plan. You 
all even wrote a letter to a Member of Congress saying we're 
not going to apply this food plan unless the court specifically 
orders it.
    Now it appears to me as a member that was involved in that 
part, that you all almost defied the intent of Congress in 
making it easier to get these claims labels out there on not 
only health supplements, dietary supplements, but also food, 
conventional food.
    Ms. Suydam. Mr. Whitfield, clearly it is not the Agency's 
position to willfully ignore the intent of Congress on this 
particular provision. I would like to point out that after our 
guidance was issued on health claims, the two claims that have 
been submitted since then were approved. We think that the 
guidance document in itself will provide the kinds of 
information that people need to do in order to have a health 
claim approved.
    We agree with you that valid information needs to be on the 
label, and the label is an incredibly important document. We 
need to assure that it is accurate and not misleading. I mean 
that's clearly important, incredibly important to us.
    I want to point out that the 10 year plan is an overall 
plan, a strategic plan for dietary supplements in general. I 
would not construe it to be that we aren't going to move on 
health claims for conventional foods until after we have 
finished all of the 10 year activity on dietary supplements. I 
think it was designed to look at the entire category of dietary 
supplement products and determine all of the activities that 
needed to be done, and then to put a framework on it, on how 
can we do this work given the resources we have to implement 
this program.
    Mr. Whitfield. Well, the fact that you all wrote this 
letter to a Member of Congress stating that you did not intend 
to apply it except if the court specifically ordered it seems a 
little bit at variance with what you are saying.
    I would simply say to you that I don't know who the new 
head of FDA is going to be. I don't know if you are going to be 
there or not, but many members of this committee are going to 
be writing a letter to whoever the new head is, and telling 
that person that we are going to be looking at this issue 
closely because as I said in the beginning, I feel like the 
intent of Congress has not been complied with, and even the 
court said that they thought the restrictions were frivolous. 
So I wanted to raise that issue.
    Ms. Suydam. Thank you, Mr. Whitfield. We will go back and 
look at that issue.
    Mr. Bilirakis. I thank the gentleman.
    Mr. Deutsch?
    Mr. Deutsch. Thank you, Mr. Chairman.
    Dr. Suydam, I think that--your staff has hopefully briefed 
you of some questions that I am going to ask regarding the 
issues regarding Andrex Pharmaceutics and Bioville and the 
patent issues related to that. I bring them up in this setting 
for a couple of reasons. One of which is I think all of us 
understand that the incentives to extend the exclusivity is 
incredible. I mean the dollar amounts are not in the millions, 
but in the billions. Very creative, very well-paid attorneys, 
consultants have come up with just about every possible thing 
that we can't possibly think of beforehand to try to extend 
these patents in ways that I think is obviously contrary to the 
intent of Congress in terms of public policy issues.
    As I am sure you are aware at this point, I think this is 
an issue of first impression, the case of Andrx and Biovail 
with Tiazac, where there was an exclusivity based on a patent 
that is almost 17 years old, where a company comes in and 
basically puts another patent based on the formulary of that 
drug in a non-approved drug. So it's a drug that hasn't gone 
through any trials at all. In that case, the FDA listed that 
patent, so effectively has now extended the exclusivity for 17 
additional years. Really almost gaming, I mean the system has 
been gamed to the detriment of Congressional intent, to the 
detriment of consumers, to the detriment of basically the 
entire system.
    I know it's a box that you are in. But I guess my question 
to you is can you get out of the box or do you need 
Congressional legislation to get out of the box?
    Ms. Suydam. Mr. Deutsch, I don't have the specifics of 
those two cases that you cite. I would suggest that we discuss 
that with you at some other time when we have the specifics.
    I would say that I believe the chairman had said he was 
interested in having a hearing about generics at sometime in 
the future. I am not prepared to talk about the generic program 
in that sense today.
    Mr. Deutsch. Again, I heard the chairman as well. Again, I 
know my staff has spoken to your staff so I just assumed that 
you would be prepared maybe more extensively than your last 
response. This has been going on now for several months.
    What I would hope is that I can get a specific response 
within a relatively short timeframe. This has been going on now 
literally for several months, so hopefully within a week or so. 
And that in the response, I don't get--again, I understand the 
FDA is in a difficult situation, but we are where we are. Do we 
expect that--I mean what my fear is clearly on the policy side, 
you know, is once the system has been gamed this way one time 
successfully, what is to stop every one from gaming the system 
this way tomorrow, the next day, the next day, the next day? I 
mean and again, it has been game. I don't think there's 
anything about that.
    So I mean what I'm asking for you is again, the chairman, I 
am well aware of the hearings that he's talking about. He 
doesn't have dates for those hearings at this point in time, so 
let me just ask you point blank. Can I expect a response within 
a week's period of time?
    Ms. Suydam. I understand your concerns about the program in 
general. We will attempt to get you the response you ask for as 
quickly as possible.
    Mr. Deutsch. I mean I'm really asking you to commit 
yourself to a time period, not as quickly as possible. What is 
the timeframe that you believe you can get back to me on it?
    Ms. Suydam. Within the next 2 weeks.
    Mr. Deutsch. Okay. I appreciate that.
    Let me also, let me just jump because I see my time is 
running out. The FDA estimates the 6 month extension for 
pediatric exclusivity costs the American taxpayer $695 million 
a year. Could FDA or NIH provide grants to pay for additional 
pediatric studies? This would seem to be a big savings in 
comparison to the current system where the NDA holder requests 
to study and reapplies a significant--you know, reaps a 
significant reward. The government should focus on the drugs 
they find important to study and save the taxpayers a 
significant amount of money.
    What criteria is the FDA using to determine if a drug is 
eligible for pediatric exclusivity at this point?
    Ms. Suydam. I believe we are following the intent of the 
statute to determine if there is a use of the product in 
children, if the product is a legitimate product for use in 
children.
    Mr. Deutsch. Is that the extent of the criteria that you 
are using at this point?
    Ms. Suydam. I would like to ask Ms. Axelrod to look it up 
for me in the statute.
    Mr. Deutsch. I appreciate that.
    Mr. Bilirakis. The gentleman's time has expired, but I 
think we should allow a response.
    Ms. Suydam. We can provide that.
    Mr. Bilirakis. Maybe a quick response now, then possibly 
maybe follow it up.
    Ms. Suydam. Follow it up.
    Mr. Bilirakis. With something more detailed in writing to 
Mr. Deutsch and to the committee.
    Mr. Deutsch. Thank you.
    Mr. Bilirakis. Can we get a quick response?
    Mr. Deutsch. If she can't do it now, we can get it back in 
writing.
    Ms. Suydam. Okay. I prefer to do that.
    Mr. Bilirakis. All right. Why don't you do that. If you 
would please, I would appreciate it.
    Let's see, Mr. Upton?
    Mr. Upton. I'm actually not quite ready.
    Mr. Bilirakis. Not quite ready? That's the first time I 
have heard that one.
    Mr. Upton. I didn't think I was next in the queue.
    Mr. Bilirakis. Mr. Burr?
    Mr. Burr. Thank you, Mr. Chairman.
    Mr. Bilirakis. I'm trying to go according to the committee 
rules, but you guys won't let me.
    Mr. Burr. Dr. Suydam, won't you be glad when there is a 
permanent commissioner?
    Ms. Suydam. Yes, I will.
    Mr. Burr. Let me clarify something for Mr. Deutsch. If it's 
a drug for breast cancer, are we going to conduct trials on it 
for pediatric exclusivity?
    Ms. Suydam. No, I don't believe.
    Mr. Burr. How about prostate cancer?
    Ms. Suydam. I don't believe we would.
    Mr. Burr. The majority of the drugs that are coming through 
applications today actually are targeted for an elderly 
population. Isn't it true that just a small percentage of those 
may have some hope to be used in pediatrics? Therefore, a 
majority of what applications are in the system today would 
never be considered by the FDA, who ultimately decides each 
drug that may go through a pediatric exclusivity trial. Right?
    Ms. Suydam. Yes, that's correct.
    Mr. Burr. So in fact, we can look at the FDA not at the 
industry and say the industry is gaming the system. If there is 
any mistake that's made, it is where we have evaluated 
something that we thought would be beneficial to children, and 
then maybe in the end we found out it wasn't.
    Ms. Suydam. Right. Or maybe detrimental to children.
    Mr. Burr. Yes. We're not going to be perfect, are we?
    Ms. Suydam. That's right.
    Mr. Burr. Isn't the majority of the emphasis behind 
pediatric exclusivity to make sure that drugs that we were 
currently giving children that may have potentially done 
damage? Because we didn't know as much about dosages. We didn't 
know as much about reactions. Isn't it in fact the 
pediatricians who have said we have learned some valuable 
information in the short time that this exclusivity has been 
offered?
    Ms. Suydam. Yes. I think you will be hearing later in the 
second panel from the pediatricians. They will be saying those 
same things.
    Mr. Burr. Let me ask you, should we reauthorize PDUFA now, 
the user fees?
    Ms. Suydam. Yes, I believe PDUFA should be reauthorized.
    Mr. Burr. No hesitancy on the part of the FDA to do that?
    Ms. Suydam. No. No, there's no hesitancy on my part.
    Mr. Burr. Let me ask you, I'm going to try to clear up a 
few things that were asked earlier. Is it reasonable for 
everybody to expect that when you move from a controlled trial 
of 1,000 people and you have a drug that's approved and it goes 
to a population of 100,000 people, that we expect we will see 
some reactions that we didn't pick up in the thousand person 
controlled trial?
    Ms. Suydam. Yes. Very reasonable.
    Mr. Burr. So what we have gone through since the passage of 
FDAMA, where all of a sudden people have highlighted new 
reactions to specific drugs, is not significantly different 
from what we saw before. Whether the process took 3 years 
longer if your trial was 1,000 people and it was controlled and 
it took 3 years longer, we would have never seen those 
unanticipated reactions until we got to a larger sampling, 
which in that case would be the patient population.
    Ms. Suydam. That is correct.
    Mr. Burr. Is the FDA concerned about post-approval review?
    Ms. Suydam. We are concerned about post-approval review, 
which is one of the reasons we focused our budget in budget 
requests for the last 2 years, additional resources for us to 
look at adverse events that are occurring with all products 
that we regulate.
    Mr. Burr. Can I volunteer this subcommittee or certain 
members on both sides of the aisle to work with the FDA to come 
up with what all of us can agree is a successful post-approval 
process?
    I think what we currently have at the FDA is deficient. I 
think that opinion is shared by a number of members on this 
subcommittee. I believe that with what we have learned and what 
we know today, we can come up with a mechanism that has the 
highest degree of confidence that not only that we're watching 
after we have approved it. In fact we catch things. I don't 
think the system in fact is that reliant today.
    Let me move to Mr. Northrup. The numbers that I have on the 
510(k)s is that the average reviewing time is 77 days. Let me 
just ask you for a clarification. If the FDA is reviewing a 
510(k) and they ask for additional information once, twice, 15 
times, don't they actually stop the clock, wait until the 
information is received, and once the information is received, 
disseminate it, start the clock back up until the next time 
they need information, stop the clock? Is that the correct 
procedure?
    Mr. Northrup. That I correct, I believe. I welcome a 
correction from the FDA if I'm wrong, but I believe that is 
correct.
    Mr. Burr. A 77 day average is in fact a correct time 
relative to the clock running, but it's not necessarily 
indicative of the entire length of time that it takes to 
review.
    Mr. Northrup. No, that's true. That time does not include 
the time that the company is taking in between the time the 
clock stops and starts to collect the information, submit that 
to the FDA.
    Mr. Burr. How successful have we been, in your opinion, on 
third party review?
    Mr. Northrup. I don't think we have been as successful as 
we could have been. I think it's true that manufacturers have 
not taken advantage of third party review, but a large part of 
that is because the third party review program, until very 
recently, had not been expanded by the Agency to include all 
those products that were eligible under FDAMA.
    In January of this year, the FDA did in fact release 
guidance that expanded the program to include all those 
products that are eligible under FDAMA. So again, I would give 
them a grade of incomplete. I think it is too early to tell the 
ultimate success of third party, but we're certainly seeing the 
numbers start to increase now that more products have been made 
eligible for the program. We think it will be a success. We 
hope it will be a success.
    Mr. Chairman, I thank you for the time. I yield back.
    Mr. Bilirakis. Ms. Capps?
    Ms. Capps. Thank you. I was not a Member of Congress when 
FDAMA was enacted, but I have heard nothing but praise about 
the process. I want to commend this committee--because FDAMA 
came out of this committee and also the FDA--for the landmark 
progress that you have made in this regard.
    But, Mr. Chairman, I am struck by the remarkable nature of 
this hearing. It may suggest, at least it does enter my mind, 
that we have in place a regulating agency which, because of 
tremendous advances in different kinds of advances in 
technology, the mechanism for regulation is--I guess the word 
would be archaic. The principles are there, but the changes 
have been perhaps too dramatic that the regulatory mechanisms 
don't fit the mold.
    I wanted to talk about, I think we had examples from both 
Dr. Applebaum and Mr. Northrup, areas that are pushing at the 
limits of what the FDA is capable really of doing. Again, I 
think it is our responsibility to take this seriously, which is 
why I think this is so important.
    Mr. Northrup suggested that, and my question is to you, Dr. 
Suydam, that the combination, Office of Combination Products 
might be established. He listed the example of the stent where 
it is a device and also a medication. I wanted to know what 
your reaction is to this suggestion. But I also wanted to 
explore what the previous questioner sort of just generally 
brought up in the area of third party review or basically peer 
review, because I think that's what this is leading toward.
    Ms. Suydam. Let me answer the last part of the question 
first.
    Ms. Capps. The last part wasn't a question yet.
    Ms. Suydam. Oh okay. All right.
    Ms. Capps. I'd like you to answer the first part first.
    Ms. Suydam. I don't think we have had time to evaluate the 
idea of an Office of Combination Products, although I think it 
is a very intriguing suggestion. I do know that we have been 
dealing with combination products for quite some time.
    Ms. Capps. Yes.
    Ms. Suydam. We have a mechanism in place where we work with 
the two parts of FDA to assure that there is a lead center, and 
that lead center then has responsibility for the overall 
application, and then works with the other center to make sure 
that the issues related to the particulars of their product 
regulations are being met.
    I think right now I would not say that that has failed us. 
I think it has in fact been fairly successful. I think we will 
have to look at it as we deal with more and more of these 
products. I, for one, just from a bureaucratic philosophy, 
don't like the idea of creating new offices because sometimes I 
think we can use the structure we have in a creative way. That 
is what I would prefer to do.
    Ms. Capps. I guess I would suggest that it is so time 
consuming to make old patterns fit new techniques. Perhaps we 
could be able to help you. I would like to offer that this is a 
topic for this committee to really address, whether there needs 
to be a sense of urgency about it. I know some of these devices 
are approved for use in other countries. I have a feeling that 
there are places in this world where lives are enhanced and 
maybe saved. We're really not where we should be.
    That leads me to ask you, I understand Mr. Northrup 
answered the previous question about third party reviews by 
saying there has not been time to evaluate it. Well, they 
didn't get put into place very quickly either. Again, this is 
kind of breaking the mold of the traditional way of dealing 
with it. I want to know what again, we can do to assist? 
Certainly if these techniques and technologies are so 
innovative, it would be a challenge for FDA to stay in the 
position of being able to review them. That, I would imagine, 
is why the idea comes up.
    What can we do to legitimize that, to help that to work 
more efficiently?
    Ms. Suydam. FDA is very open to the idea of third party 
review. We believe that the provision is working well and is an 
idea that is working well.
    We were reluctant to start out with a huge number of 
products in the process initially. I think that is certainly an 
approach where we chose to be a little conservative and to try 
to get some experience with the third parties. We did not know 
what kind of reviews we would be getting from the third 
parties, how much work it would require on our part once they 
were finished. Now we have had that experience. We know that 
there are third parties that are very reputable, that do a good 
job, that we can use. I think therefore our philosophy was to 
extend it to the full range of products that were eligible in 
January, which we did. We will continue to hope that the 
industry uses it at a greater rate than they have in the past.
    I do want to point out that our track record in devices for 
novel therapies is a good one. Eighty-five percent of the pre-
market approval applications are reviewed in our statutory 
time. So the outliers are just in that 15 percent.
    Ms. Capps. I guess I would respond and in closing, I know I 
have used too much time, by saying that we should get over the 
fact these are novel. I think this is the future of medicine. 
Somehow FDA--this is a stretch, but we also need to be able to 
embrace that this is medical practice today. These areas of 
combinations of what----
    Ms. Suydam. Absolutely, we agree with you. We are well 
aware that that is the case.
    Ms. Capps. Thank you.
    Mr. Greenwood [presiding]. Is the gentleman, Mr. Upton, 
ready?
    Mr. Upton. I'm ready.
    Mr. Greenwood. The gentleman is recognized for 5 minutes.
    Mr. Upton. Although I'm late for the lunch that you are 
chairing.
    Ms. Suydam, as you know, I introduced legislation that was 
incorporated into FDAMA back in 1997. It allowed the food 
manufacturers to put health claims on their labels when the 
claims are based on authoritative statements by NIH, CDC, and 
other Federal scientific organizations provided that you all 
are given 120 day notice.
    What I'm interested in today is to take a little snapshot 
in terms of how that has worked. I think in your testimony, I 
regret that I was in an Education markup, I think along the 
lines of about nine notifications have come your way, but I 
would be interested to know of those, how many have you 
received? Of those, how many have you turned down, and the 
reasons for such. How long does it take on average for the FDA 
to act on those petitions once they are submitted under the 
pre-approval process? Perhaps what constructive ideas might you 
offer in terms of how we can even better streamline this 
process as we look to the days ahead?
    Ms. Suydam. The record on our health claim notifications is 
one that I spoke to in that we have received 11.
    Mr. Upton. Denied two?
    Ms. Suydam. We approved two and denied nine. The two 
approved had been approved after our guidance was issued, which 
we believe has helped the process, and will encourage more 
claims to be approved.
    We have been on time for the most part. The 120 day 
statutory deadline has been exceeded, but I believe we had 
authority to negotiate with the submitter on an extension which 
was done, and we met those deadlines at that time.
    Mr. Upton. Do you have any suggestions in terms of what we 
might do in the future? Or do you think the process is working 
fairly well?
    Ms. Suydam. My suggestion is that the guidance document has 
helped the process. I would like to go back and talk with our 
people in the Center for Food Safety to ask them to look at the 
process and see what kind of suggestions we can make to you.
    Mr. Upton. Great. Thank you.
    I yield back my time.
    Mr. Greenwood. The Chair thanks the gentleman, and 
recognizes the gentleman Mr. Stupak for 5 minutes.
    Mr. Stupak. Thank you.
    Doctor, before PDUFA and before you had the drug user fees, 
how long did it take to approve a drug?
    Ms. Suydam. For standard applications it took about 30 
months.
    Mr. Stupak. Thirty months? Okay, and now under FDAMA, in 
1994 according to your testimony, it's down to 20 months, in 
1999, about 11.6 months, and you anticipate it could be less 
than 10 months soon.
    Ms. Suydam. Yes.
    Mr. Stupak. Okay. So if a drug was approved before FDAMA, 
less than a year, that was unusual?
    Ms. Suydam. Yes.
    Mr. Stupak. In the testimony, you indicate that the drug 
review time has decreased significantly by 22 percent, and 
under FDAMA II, further review time by the Agency has been 
reduced. So in some of the answers to the Chair's questions 
about recent recalls, you said that the FDA has not compromised 
safety or effectiveness of the drugs, but the percentage of 
recall is basically the same prior to FDAMA. That is because we 
have more drugs out on the market. More drugs, we have 
decreased drug development time, and less review time.
    The mistakes and the errors, if you will, or the recalls, 
we have had what, 11 in the last 3\1/2\ years, recalled drugs, 
that resulted in about 1,000 deaths?
    Ms. Suydam. I do not know the number exactly. But I am 
assuming you have the correct figures.
    Mr. Stupak. Sure. Those recalls of at least 11 over the 
last 3\1/2\ years resulting in about 1,000 deaths, and GAO 
estimates, because it's a voluntary reporting process, your 
errors, the adverse event reporting system, it's probably 1 to 
10 percent, somewhere there, of the actual number. Correct?
    Ms. Suydam. In overall adverse event reporting, yes. I 
think probably if you are talking specifically about deaths, it 
is more likely that we would have those reported.
    Mr. Stupak. Really? Okay. It's still voluntary, right?
    Ms. Suydam. Yes.
    Mr. Stupak. And a doctor has to make a connection or the 
manufacturer has to make a connection between the drug and the 
death before they are required to make the report on the 
errors?
    Ms. Suydam. Yes. That is correct.
    Mr. Stupak. Well, see under FDAMA and all these other, the 
Modernization Act, if it's better, why do we have more deaths 
than before? I mean take a look at this. Before we went in, in 
26 years before FDAMA, you had eight recalls. In 26 years you 
had eight recalls. In the last 3\1/2\ years, you have had 11 
recalls. If this is supposed to be better, why do we have more 
recalls and more deaths than you did in the 26 previous years?
    Ms. Suydam. Mr. Stupak, I do not have the numbers in front 
of me to debate your numbers. They don't seem right to me. What 
I would say is that there have been thousands, in fact probably 
hundreds of thousands of patients who have been helped because 
they have had greater access to therapies. They have had that 
access to therapies much faster. Therefore, perhaps there are 
thousands of people who did not die because they had the 
therapy that they needed.
    Mr. Stupak. That's because we have more drugs out there. 
Right?
    Ms. Suydam. Because we have products that provide the 
benefits that are needed for the patients who have these life-
threatening diseases.
    Mr. Stupak. To some of us, that's like saying you know 
before FDAMA, we had ten airlines and one out of ten would 
crash. Now with FDAMA, we have 100 airlines, and now we have 
ten crashes. It's better because we have more legroom, we have 
better food, ticket price is lower.
    You see, some of us feel that if it's supposed to be an 
improvement, but your percentage of error is the same and the 
percentage of deaths over people who take prescriptions are 
about the same, where is the improvement? Where is the 
increased safety and efficiency for the American public?
    Ms. Suydam. Any time a drug is approved, it is a benefit-
risk ratio. That benefit-risk ratio has always to be taken into 
consideration.
    Mr. Stupak. But the benefit-risk ratio, according to your 
testimony and some previous answers, is about the same. So 
where is the improvement?
    Ms. Suydam. The benefit is that the product is available to 
patients sooner. That's not being included in your 
calculations.
    Mr. Stupak. So we die sooner?
    Ms. Suydam. No. So that people are treated and live longer.
    Mr. Brown. Will the gentleman yield?
    Mr. Stupak. Sure.
    Mr. Brown. To follow up on that point, Dr. Suydam, you 
still would not say that we have fallen short in any way on 
post-market surveillance. Sure you want to move things through 
the process faster, but we're simply not bulking up, if you 
will, or making more efficient or effective post-market 
surveillance.
    Ms. Suydam. Right.
    Mr. Brown. I yield my time back.
    Mr. Stupak. The point I would add, you keep saying that 
these are life-saving drugs. Of the 11 that have been recalled, 
only one has really been sort of considered a life-saving drug. 
These were drugs that were approved for other things and people 
were dying from them. So they really wouldn't be, all 11 were 
not considered life-saving drugs. Correct?
    Ms. Suydam. I think each of them had benefits, and some of 
them were life saving and some of them were not.
    From 1981 to 2000, we had 543 new molecular entities 
approved. Fourteen were withdrawn. That is in that time period. 
So the numbers that you were citing I think are slightly 
different.
    I would suggest that perhaps for the record we could submit 
a new report that we put out from our Center for Drugs on our 
2000----
    Mr. Bilirakis. Why don't you identify it, and then we can 
accept it.
    Ms. Suydam. It's the Center for Drug Evaluation Research 
Report to the Nation 2000, Improving Public Health Through 
Human Drugs.
    Mr. Bilirakis. Okay. Without objection, that will be made a 
part of the record.
    [The report referred to is available at:]

PDF: http://www.fda.govcder/reports/rtn2000/rtn2000.pdf
HTML: http://www.fda.govcder/reports/rtn2000/rtn2000.htm
Slides: http://www.fda.govcder/reports/rtn2000/rtn2000.ppt

    Mr. Bilirakis. Your time has expired, Bart. If you have 
another few seconds.
    Mr. Stupak. Sure. Let me ask this question. In late 1998, a 
consumer group found 27 instances in which a drug was approved 
over FDA staff objections, and 14 instances in which staff were 
told not to present data at advisory committee meetings which 
might adversely affect the chance of a drug being approved. 
Would you care to comment on that?
    Ms. Suydam. The process of drug review and approval is one 
that includes many layers of review. It has the medical 
officer, the individual medical officer, the individual 
statistician. Then it moves through to the supervisor, 
supervisory medical officer, to the division director. Drugs 
are often looked at from different perspectives in terms of 
each of these specialties. I do not know if those statistics 
are correct or not, but I do know that our process is thorough 
and that yes, sometimes that scientists come to different 
conclusions about products, and that all of our scientists may 
not agree on any one product. It is the judgment of the Agency 
that has to be made in the end.
    Mr. Bilirakis. The gentleman's time has expired.
    Mr. Stupak. Mr. Chairman, if I may, the statistics I have 
used have come from testimony from some people who will testify 
in the second panel. Also, as far as the only eight 
prescriptions were pulled for safety reasons in the previous 26 
years, I would submit for the record Sunday Gazette Mail.
    Mr. Bilirakis. Without objection.
    Mr. Stupak. January 7, 2001.
    Mr. Bilirakis. Without objection, that will be the case.
    [The information referred to follows:]

             [Sunday, January 7, 2001--Sunday Gazette-Mail]

              Spate of drug recalls raises safety concerns
                            By Knight-Ridder

    In the last four years, 10 prescription drugs and a vaccine have 
been taken off the market after killing and injuring thousands of 
people.
    The drugs had noble purposes, including checking diabetes, 
relieving pain, and fighting high blood pressure. The vaccine immunized 
babies against a potentially deadly infection.
    For the vast majority of the 32 million Americans who took these 
medications, they worked--or at least caused no harm.
    But for tens of thousands of patients, the withdrawn drugs were a 
disaster, causing temporary or permanent heart, liver, bowel or other 
injuries. Some injuries were so severe that the patients required organ 
transplants or other surgery. Thousands were fatal.
    Safety withdrawals of 11 pharmaceuticals in four years appear to be 
unprecedented. eight prescription drugs were pulled for safety reasons 
in the previous 26 years.
    ``We are seeing the breakdown of a system that was far from perfect 
to begin with,'' said Daniel A. Hussar, professor of pharmacy at the 
Philadelphia College of Pharmacy. ``I have a great concern that there 
will be even more serious problems before society says, `Enough is 
enough, we need the system fixed.' ''
    Consumer and patient advocates, academic physicians and 
pharmacologists, and health-policy analysts say no step of the 
pharmaceutical process, from development lab to patient bloodstream, is 
free of blame.
    They fault drug companies and the federal Food and Drug 
Administration for the approvals of drugs they say are questionable, 
and they chastise Congress for underfunding the FDA and pressuring the 
agency to play ball with drug companies.
    But what the critics find most inexcusable is that the nation has 
no reliable way to track and investigate problems with drugs.
    The monitoring system for drug safety is so weak and underfunded 
that Americans do not know for sure which drugs are causing the most or 
most serious problems, why they are causing problems, or what measures 
would help reduce the future toll, the critics say.
    ``When an airplane crashes and kills 200 or 300 people, it's pretty 
hard to hide,'' said Larry Sasich, a pharmacist and research analyst at 
Public Citizen's Health Research Group, a Ralph Nader-affiliated 
organization in Washington, D.C.
    ``But we could lose 200 or 300 people a month to deaths from 
adverse drug reactions in this country and not even notice it, because 
we have no system of adequately capturing all the serious drug 
reactions.''
    In fact, it seems likely that the monthly death toll from drugs is 
well above 300. Although there is no accurate count of U.S. drug 
fatalities, the most frequently cited estimate pegs them at 100,000 a 
year. That is more than twice the number of deaths from traffic 
accidents.
    The toll is so uncertain because doctors are not required to report 
bad drug reactions; if they choose to do so, they inform either the FDA 
or the manufacturer. Manufacturers must forward any such reports to the 
FDA.
    FDA officials, who agree that the system of post-market drug 
monitoring is no match for the problems, have begun to plead with 
Congress for more funds to beef it up.
    The state of the bare-bones U.S. drug-safety monitoring system is 
this:

 The FDA learns of only I percent to 10 percent of serious 
        adverse drug reactions those leading to injury, hospitalization 
        or death--studies have estimated.
 Information about drug outcomes that could be gleaned from 
        insurers' databases is going virtually untapped.
 A Drug problems are investigated by the FDA, and potential 
        conflicts are created because examiners who have recommended 
        drug approvals are also involved in withdrawal decisions.
 The FDA's annual budget for safety reviews of drugs on the 
        market is $17 million--roughly equal to what Americans spend on 
        prescription drugs every 90 minutes.
    The questions about drug safety arise after a successful decade-
long push by Congress and the pharmaceutical industry to get the FDA to 
approve drugs more quickly. With nearly $900 million in drug-industry 
funding since 1992, the FDA has increased its staff for drug and 
vaccine reviews by about 60 percent and has cut the time for routine 
drug approvals from two years to one year.
    At the same time, the rise of direct-to-consumer advertising has 
helped spur the much more rapid use of new drugs, so that millions of 
people may be exposed to a drug before its risks are fully identified.
    And the speedier FDA approvals mean that the European market no 
longer serves as an early-warning system, as it did in the late 1950s, 
when thalidomide use in Europe resulted in devastating birth defects; 
the drug was never approved here.
    Given all these holes in the system, the worry is not that so many 
drugs--but that too few--are withdrawn, said Brian L. Strom, a 
physician, pharmacologist and medical-statistics expert at the 
University of Pennsylvania School of Medicine.
    ``The drugs that have been withdrawn from the market are the 
successes,'' he says. ``I worry about the others that are out there, 
because drugs that are on the market aren't adequately monitored.''
    FDA and drug-industry officials dispute such grim assessments. They 
say the drug approval and safety monitoring systems work better than 
the critics acknowledge.
    Janet Woodcock, director of the FDA's Center for Drug Evaluation 
and Research, said: ``One reason more drugs are being taken off the 
market is that we are being more aggressive in pulling them off.''
    Bert Spilker, senior vice president at the Pharmaceutical Research 
and Manufacturers of America in Washington, D.C., agrees that the 
recent withdrawals are a positive sign. ``They demonstrate that the 
system works well to protect the American public,'' he said.
    Nevertheless, in briefing material for a hearing in September, the 
FDA acknowledged that safety monitoring has suffered.
    ``Our workforce and real resources for most programs other than 
``drug approvals'' have contracted each year since 1992,'' the agency 
wrote. ``An area we have not been able to fund adequately is responding 
to reports of adverse events related to the use of prescription 
drugs.''
    In an interview, Woodcock said she would be happy with the $50 
million budget for post-market monitoring that has been tentatively 
suggested by Sen. Edward F. Kennedy, D., Mass. She disagreed with calls 
to channel funds into mandatory reporting by physicians of severe drug 
reactions, and said additional money would be better spent in analyzing 
drug data available from insurance companies.
    Post-market monitoring is a critical function because often it is 
not until a drug goes into widespread use that problems emerge. This 
fact is not a failure in either drug development or drug approval, said 
Alastair J.J. Wood, professor of medicine and pharmacology at 
Vanderbilt University.
    Rather, it is a consequence of human diversity and the fact that 
rare events may not be ,detected in the few hundred or thousand 
patients in premarket trials, he says.
    In the three phases of premarket testing, conditions are kept 
simple: the subjects are commonly people whose only medical problem is 
the one addressed by the drug under study, and who aren't taking any 
other medications.
    In the real world, though, people often have more than one ailment 
and take more than one drug.
    Because of the tremendous number of possible combinations, it would 
be prohibitively expensive and time-consuming to broaden the premarket 
tests to mimic the real world, Strom says.
    So the first real-life test of a drug comes after it has been 
approved, and its first few years on the market are often called a 
Phase IV trial.
    Also in Phase IV, doctors begin--quite legally--to prescribe the 
drugs for longer periods or in larger doses than recommended, or use 
them to treat conditions for which they were never tested. These 
experiments may reveal new ways to use a drug, but they may also 
precipitate new problems.
    ``When a drug comes on the market, that's really a controlled 
experiment,'' Wood says. ``You don't know everything about the drug at 
that point, so you should be monitoring it carefully. And we don't have 
the proper system for doing that.''
    Moreover, the lack of information means it takes longer to discover 
the mechanism, such as liver damage or cardiac arrhythmia, by which a 
given drug causes harm--information that could help pinpoint other 
drugs that might cause the same problem, Wood wrote two years ago in 
the New England Journal of Medicine.
    The prescription medications pulled from the market for safety 
reasons in the last four years were:

--Lotronex, which quelled the pain and diarrhea of irritable bowel 
        syndrome. It was taken off the market in late November.
--Pondimin and Redux, either of which served as the ``fen'' half of the 
        ``fen-phen'' diet-drug combination. Fen-phen was linked to 
        pulmonary hypertension and heart-valve problems.
--Seldane, an antihistamine that could cause heart problems when taken 
        together with certain antibiotic or antifungal medications.
--Posicor, for hypertension and angina, which had harmful interactions 
        with 25 other drugs.
--Duract, a pain medication, which was implicated in liver failure, 
        primarily in patients who took it for more than 10 days.
--Hismanal, an antihistamine, whose interactions with some other drugs, 
        including Prozac, could cause fatal irregular heartbeats.
--Raxar, an antibiotic, which was associated with heart problems.
--Rotashield, an infant vaccine against rotavirus, which was implicated 
        in bowel obstructions.
--Rezulin, a diabetes drug linked with at least 63 deaths among 400 
        reported cases of liver failure.
--Propulsid, a treatment for severe nighttime heartburn, which was 
        associated with heart problems that killed at least 80 people 
        and injured nearly 350 others.
    Even many who are calling for more-stringent safety monitoring 
defend the FDA's speeded-up approval process. Strom, for example, says 
faster drug reviews are not less thorough but are simply compressed 
into fewer months.
    The main concern is that safety monitoring has been squeezed by the 
congressionally mandated focus on faster drug approvals. Under the 
legislation that authorizes industry funding for the approval process, 
the FDA is also required to chip in additional money each year. But 
Congress has not increased the agency's budget enough for it to keep up 
with other needs at the same time, the agency said in its September 
briefing paper.
    And while the drug industry has been eager to fund a quicker 
approval process, it has steadfastly refused to provide any money for 
post-market safety monitoring. That refusal was understood when the 
1992 law was passed and was written into the 1997 law.
    The industry refuses because post-market drug surveillance is a 
public service and should be funded by Congress, said Jeff Trewhitt, a 
spokesman for the Pharmaceutical Research and Manufacturers of America.
    Besides analyzing HMO databases, other suggestions for improving 
post-market monitoring include establishing a safety review board 
separate from the FDA's drug approval staff, limiting direct-to-
consumer advertising of new drugs, and finding innovative ways to 
gather data on drug outcomes.Interestingly, many critics reject the 
suggestion that mandatory reporting by physicians is needed. It has 
been tried in various states and countries, but has not worked because 
doctors do not comply, said Raymond Woosley, dean for clinical research 
at Georgetown University Medical Center in Washington.
    The FDA and some in the outgoing Congress had begun to suggest that 
drug safety monitoring should get a closer look in 2002, when the law 
authorizing industry funding of FDA activities will be up for renewal.
    This time, the drug industry may be willing to talk about providing 
some funding.
    ``We would be willing to discuss this with the FDA, because we'd 
like to see what performance goals they would agree to in exchange for 
user fees, and what benefits industry would see,'' Spilker of the 
pharmaceutical industry group said. ``We are open to listening to what 
they propose.''

    Mr. Stupak. That you, Mr. Chairman.
    Mr. Bilirakis. Mr. Deal, to inquire?
    Mr. Deal. Thank you, Mr. Chairman.
    Mr. Northrup, under the section 210, third party review 
process that you say has now been expanded by FDA, has it been 
expanded to include the 510(k)s?
    Mr. Northrup. It has been expanded to include all the 
products now that are eligible under FDAMA. That is correct. We 
would certainly like to see it expanded further, Mr. Deal. If I 
might say, the concept of third party review is not new. It is 
new to the FDA, but it is not new. The entire European system 
of regulating medical products is based on third parties, not 
just for review of the devices initially, but for inspection of 
the manufacturing facilities. We haven't seen that that system 
has compromised the safety of European patients.
    So I think that perhaps some of the FDA's reluctance to 
expand the program at first was more related to the FDA's 
uncomfortableness with this being new to the FDA, not that this 
is a totally new concept that we have not seen anywhere else in 
the world.
    Mr. Deal. The clinical data that's associated with 510(k)s, 
does it allow the third party review of those? Or is it 
restricted under the language of FDAMA?
    Mr. Northrup. No. Currently FDAMA restricts review of 
applications to only those class 2 devices for which clinical 
data is not going to be required by the FDA.
    Mr. Deal. So it would require statutory change in order to 
expand it to the 510(k) reviews?
    Mr. Northrup. Yes, sir. You are correct on that.
    Mr. Deal. Would you advocate that change?
    Mr. Northrup. We would, and we will.
    Mr. Deal. Dr. Suydam, what is your position on that?
    Ms. Suydam. I think that's something we would like to have 
more experience with the current program. We'll take that into 
consideration as we are considering changes in the future.
    Mr. Deal. Overall, have your third party reviews been 
successful and of a calibre that you find acceptable?
    Ms. Suydam. Overall, we have found the program to be 
successful, and have found the calibre of reviews to be quite 
high.
    Mr. Deal. Does this third party review process facilitate 
and speed up your overall review process?
    Ms. Suydam. Well, it certainly does take some of the 
workload away from the FDA, which would then leave time for 
people to do other things.
    Mr. Deal. I don't believe anyone gave you an opportunity to 
respond to one of the suggestions of Mr. Northrup, made about 
creating a division to deal with the hybrid type devices. Do 
you have any thoughts on that?
    Ms. Suydam. I think I did mention I think having an Office 
of Combination Products is an idea that we will consider. I 
think we have a process in place right now that has been 
working for some time. We have been dealing with combination 
products for a long time. It is not necessarily a new concept 
to us.
    Mr. Deal. Without understanding all the intricacies of your 
agency, when you have a hybrid type device or product, does it 
require a separate review by two different groups within your 
agency or do they work collaboratively in that process?
    Ms. Suydam. There is a lead center designated, and then 
there is a collaborative process.
    Mr. Deal. Thank you, Mr. Chairman.
    Mr. Bilirakis. I thank the gentleman.
    Does the gentlelady from California wish to inquire of this 
panel?
    Ms. Eshoo. I do. Thank you, Mr. Chairman.
    First off, I want to apologize for not being here earlier 
from the beginning of today's hearing, which is a very 
important one. There is a hearing downstairs on energy. Of 
course as a Californian, I have a vital interest in that issue. 
So I ask both the chairman, the ranking member, people that are 
part of the panel, and the audience to accept my apology.
    I have both a special interest in the issue that we are 
reviewing today and a special sense of pride in terms of the 
work that we accomplished, Mr. Chairman, on the medical device 
reform bill that was then folded into FDAMA.
    I think in terms of the work that we have done and the 
effectiveness of it, not only finally partnering with the FDA, 
but also with people that manufacture the devices, that we 
really did a darn good job. Whatever we do in the 
reauthorization bill I think is really going to be more 
tweaking of the issue than having to completely reform and 
really do a massive reform on this. So I want to thank everyone 
involved, and of course, Mr. Chairman, you were a steady and 
important leader in this. I am proud to have been the 
Democratic sponsor of the bill along with Joe Barton.
    The first question that I would like to ask is of Mr. 
Northrup. Then I would like to go to another question. I am 
going to state them both first, and then give you the time to 
answer, okay?
    You testified to the importance of fair, predictable, and 
consistent regulatory actions during the FDA approval process. 
When we wrote FDAMA, we included a provision mandating that the 
evidence required for FDA approval to be ``the least 
burdensome'' needed to meet safety and effectiveness standards. 
In your opinion--and if this question has been asked before, 
just say it's been asked and I'll go to the record and read 
it--has the FDA implemented this least burdensome requirement 
in a timely manner?
    Then I have another question and it deals with the area of 
reuse. Despite extensive scientific evidence demonstrating 
serious risks associated with reprocessing of single use 
devices, including several studies conducted by the Agency 
itself, FDA in my view has failed to meaningfully enforce key 
patient safety provisions of the Food, Drug and Cosmetic Act. 
It took substantial Congressional and public pressure to force 
FDA to finally publish enforcement guidelines on regulation of 
this potentially dangerous practice. I still remain concerned 
that this guidance, while a step in the right direction, and 
I'm always willing to give credit where credit is due. I think 
it's important to. I think this still continues to permit the 
use of many unsafe, reprocessed devices on American patients.
    I would like to know about what the FDA has been actively 
involved in working with to develop a strategy to regulate the 
reprocessing of single use medical devices. Would you comment 
on the FDA's progress in implementing its strategy relative to 
the practice? Can you give me a specific example of a product 
where you feel that the FDA has failed to take appropriate 
steps to ensure the patient's safety? You may not want to 
answer that. You may want to answer it in writing or call me, 
but I think it's important for the Agency to recognize this.
    What do you think can the FDA do to really address this 
head on? I think we are failing people in the country.
    Mr. Bilirakis. The gentlelady has less than a minute left.
    Ms. Eshoo. So I'll stop.
    Mr. Bilirakis. Why don't we have maybe a brief response, 
and then follow it up, if it's all right with her, with more 
detailed answers in writing.
    Ms. Suydam. There are two questions. The first is related 
to least burdensome. I would suggest that perhaps we were 
slower to act than we should have. We have had the least 
burdensome guidance, the most recent version just went up on 
our website this week, but we did have a least burdensome 
guidance 2 years prior to that, and have been working with 
industry task forces to come to some agreement about how the 
program should be implemented.
    Ms. Eshoo. So what's on your website?
    Ms. Suydam. The new least burdensome guidance.
    Ms. Eshoo. I see.
    Ms. Suydam. We do believe it is one that we all feel 
comfortable with. I think it serves the purpose and the intent 
of the statute.
    The second thing you should know is that despite it just 
going up on the Web this week, it has been in effect. We have 
used----
    Ms. Eshoo. Was that in anticipation of this hearing, do you 
think?
    Ms. Suydam. No. I think the timing unfortunately or 
fortunately happened as it did.
    I think we are already using least burdensome principles in 
the review of products. I have some examples that I could give 
you.
    On the re-use, if the chairman would like, I think Dr. 
Feigal might be able to answer that question.
    Mr. Bilirakis. Well, it's the gentlelady's question, but 
can we get it done in writing?
    Ms. Suydam. We could do that in writing.
    Mr. Bilirakis. In a short period of time so that it's----
    Ms. Eshoo. I think it is something that obviously it's not 
just my interest, but I think an important interest of the full 
subcommittee.
    Ms. Suydam. Yes. We understand that.
    Ms. Eshoo. So I look forward to hearing from you soon on 
it.
    Mr. Bilirakis. Thank you. Well, I think that with 
gratitude, we can excuse this panel.
    Mr. Brown. I have some questions for the record for Mr. 
Waxman I would like to ask.
    Ms. Eshoo. Could I just yield for a moment and I could make 
a request on the following?
    Mr. Bilirakis. We are going to submit. That's what I was 
just getting to. Questions will be submitted in writing, and 
we're requesting that those be responded to in a timely 
fashion.
    Ms. Eshoo. As well as Mr. Northrup, to give him an 
opportunity to respond?
    Mr. Bilirakis. Oh all of them, the entire panel, the entire 
panel, right.
    Ms. Eshoo. Thank you, Mr. Chairman.
    Mr. Bilirakis. I know you are always willing to do that. 
Additionally, as I invited you all earlier, you know there are 
some things can be taken care of by the departments and the 
agencies and what not, and some things require legislation. I 
was going to say litigation unfortunately, but legislation. By 
all means please feel free. We're in the process here of taking 
a good look at these things. Feel free to let us know how we 
can be of some help.
    Thank you very much.
    The next panel, if they would come forward, please. Dr. 
Gregory L. Kearns has already been introduced by Ms. McCarthy. 
He is a Professor and Chief of Division of Clinical 
Pharmacology and Medical Toxicology with the Children's Mercy 
Hospital in Kansas City, Missouri.
    Can we have some order, please?
    Ms. Carole Ben-Maimon, have I messed that up? Maimon? 
President and CEO of Proprietary Research and Development for 
Barr Laboratories. She is here on behalf of the Generic 
Pharmaceutical Association. Dr. Richard Gorman, incoming chair 
of the American Academy of Pediatrics, Committee on Drugs, with 
the American Academy of Pediatrics. Ms. Abbey Meyers, President 
of the National Organization for Rare Disorders. Mr. Travis 
Plunkett, Legislative Director of Consumer Federation of 
America on behalf of Patient and Consumer Coalition. Dr. 
Timothy R. Franson, Vice President, Clinical Research for 
Regulatory Affairs in the United States, Lilly Research 
Laboratories, and Dr. David Flockert was invited but apparently 
was not able to make it.
    That being the case, again, your written statements are a 
part of the record. We would hope that you would complement 
them, if you would, supplement them, complement them. The clock 
is at 5 minutes for each one of you.
    Dr. Kearns?

STATEMENTS OF GREGORY L. KEARNS, PROFESSOR AND CHIEF, DIVISION 
  OF CLINICAL PHARMACOLOGY AND MEDICAL TOXICOLOGY, CHILDREN'S 
 MERCY HOSPITAL AND CLINICS; CAROLE BEN-MAIMON, PRESIDENT AND 
 CEO, PROPRIETARY RESEARCH AND DEVELOPMENT, BARR LABORATORIES; 
RICHARD GORMAN, INCOMING CHAIR, AMERICAN ACADEMY OF PEDIATRICS 
 COMMITTEE ON DRUGS, AMERICAN ACADEMY OF PEDIATRICS; ABBEY S. 
 MEYERS, PRESIDENT, NATIONAL ORGANIZATION FOR RARE DISORDERS; 
 TRAVIS B. PLUNKETT, LEGISLATIVE DIRECTOR, CONSUMER FEDERATION 
   OF AMERICA; TIMOTHY R. FRANSON, VICE PRESIDENT, CLINICAL 
     RESEARCH AND REGULATORY AFFAIRS, U.S., LILLY RESEARCH 
LABORATORIES, ACCOMPANIED BY STEPHEN SPIELBERG, VICE PRESIDENT, 
         DRUG DEVELOPMENT, JANSSEN RESEARCH FOUNDATION

    Mr. Kearns. Thank you, Mr. Chairman, and members of the 
committee. I am pleased to be here today to testify on behalf 
of the pediatric provisions of FDAMA, and to come to you as a 
person in the trench, clinical pharmacologist who is privileged 
to care for children, to advocate for them, and to conduct the 
clinical trials that we have been talking about this morning.
    Before I begin, I would like to thank specifically 
Representatives Greenwood and Waxman for being the champions of 
this, and Congresswoman Karen McCarthy, a truly great citizen 
of my home State.
    Without question, the efficacy and safety of any drug is 
provided for by its study and effective labeling. This goal is 
not age specific. Labelling benefits adults as it does 
children. You have heard before that for many, many years about 
75 to 80 percent of all drugs marketed in our country have not 
been adequately labelled for children, meaning neonates all the 
way up through the teenagers. FDAMA was the first thing to come 
along in the history of our Nation to change that.
    We now have a new horizon to look to with respect to caring 
for our children. FDAMA was the catalyst to remove children 
from the status of being therapeutic orphans. This is critical 
because we know that our kids do not vote. They do not possess 
a financial or political portfolio sufficient to have them 
heard. This one act, FDAMA and the pediatric provisions, have 
made all the difference.
    You have heard some about the statistics of this. I'll not 
talk about all of them because they are in my statement, but I 
want to point out that of the studies conducted to date in 
pediatric patients, there are 409 carefully controlled trials, 
all of which done with oversight of the FDA involving more than 
50,000 children and having them participate in a safe manner. 
The information that is gleaned from this has affected every 
age group, all the way from children at the time of birth, as 
I've said before, through adolescence. The fact that 18 drugs 
have been labelled for children, not for trivial things but for 
common pediatric diseases such as allergies and fever and 
gastrointestinal disease, and then some critically important 
things such as AIDS, obsessive compulsive disorder. We're not 
talking about the odd things. We're talking about things for 
kids that are common.
    As you have heard before, the activity with regard to 
labelling in the short 4 years of FDAMA has so outstripped 
anything in any other period of time, it's purely an amazing 
accomplishment.
    Now there are folks who have been critical of these efforts 
and quick to identify profits. But I would like to point out 
some benefits, things that are hard to measure, things that are 
difficult to put a dollar amount to. Specific benefits that go 
with drugs, just a few examples, Midazolam, a commonly used 
sedative drug studied under FDAMA. We found through the course 
of those studies that there were specific adverse effects that 
occurred in children with certain diseases that weren't seen 
before.
    Etodolac, an anti-rheumatic drug, used to treat the 
inflammation in the joints of children with arthritis. Had 
pediatric studies been done, we wouldn't have realized that the 
dose required to treat a child is twofold higher than an adult, 
which means children would have gotten this drug and it would 
have failed.
    Gabapentin, a drug used to treat seizures, a very serious 
condition, we also found by virtue of doing studies in young 
children, that the dose of Gabapentin was much higher for this 
drug to work.
    Last, Propofol, a drug used to cause anesthesia. We found 
serious adverse effects in the course of studying this drug in 
children, so much so that these have been incorporated into 
labelling and will in an appropriate way restrict the use in 
certain children. Now this is going to save tragedy. This is 
going to save adversity. I can't put dollar figures to it. But 
I can tell you with over 20 years of experience, it will make a 
difference.
    Now proof of benefit of FDAMA in my mind has been 
demonstrated beyond question with respect to its impact to 
children. But there are some collateral benefits that we 
forget. The growth of infrastructures, to focus on pediatric 
science, the utilization of this new knowledge to improve our 
trials that we do, the creation of training opportunities for 
young people, and yes, even the generic industry is going to 
reap some benefits from FDAMA.
    Each one of these drugs that are labelled for children at 
the expense of the innovator company, that pediatric labelling 
will carry through when that drug is a generic. Kids depend on 
generic drugs just the same as seniors do. That labelling will 
improve their utilization and their safety, and will protect 
the generic industry from the harm associated with poorly or 
unlabelled drugs.
    Now it is one thing to have accolades, but the future is 
bright. We have to look to the future. We have to improve what 
we do. We have to put more money in the infrastructure. It's 
not just about who is getting money, but how do we spend it. 
There needs to be an Office of Pediatric Therapeutics within 
the FDA. There needs to be more emphasis through NIH, as we've 
heard earlier, to study drugs in children, and to create and 
capitalize on the advancements.
    The provisions of future legislation that are aimed at this 
process are critical. It has been said before that children are 
the greatest resource, and that he who helps a child helps 
humanity. There is no question in my mind and the minds of my 
colleagues in clinical pharmacology throughout the country, 
that humanity has been helped by this wonderful act. I strongly 
urge Congress to reapprove FDAMA and all of its pediatric 
provisions in tact. Thank you very much.
    [The prepared statement of Gregory L. Kearns follows:]

Prepared Statement of Gregory L. Kearns, Professor of Pharmacology and 
Pediatrics, University of Missouri--Kansas City, and Chief, Division of 
    Pediatric Pharmacology and Medical Toxicology, Children's Mercy 
              Hospitals and Clinics, Kansas City, Missouri

    Mr. Chairman, members of the Committee, I am Dr. Gregory L. Kearns, 
a Professor of Pharmacology and Pediatrics at the University of 
Missouri--Kansas City and the Chief of the Division of Pediatric 
Pharmacology and Medical Toxicology at the Children's Mercy Hospitals 
and Clinics in Kansas City, Missouri. As a Pediatric Clinical 
Pharmacologist, I have been actively involved in the design, conduct, 
interpretation and reporting of over 120 pediatric clinical trials 
involving both old (i.e., approved) and new drugs for over two decades. 
I am here today not representing a given professional organization or 
corporate concern but rather, am honored to represent the small but 
extremely active academic community of pediatric clinical 
pharmacologists: health care professionals who are privileged to not 
only advocate for children by direct involvement in their medical care 
but most importantly, as the individuals tasked to create new knowledge 
that is required to insure that pediatric patients are accorded the 
same benefits of safe and effective drug therapy as are adults. It is 
truly a privilege and distinct honor for me to address this Congress by 
voicing support for re-authorization of the FDA Modernization and 
Accountability Act of 1997 (known by the acronym, FDAMA) and in 
particular, Section 111 of this act which provides a successful, 
complete mechanism for the responsible and careful evaluation of 
therapeutic drugs critical for the treatment and prevention of disease 
in infants, children and adolescents.

                            I. INTRODUCTION

    I would like to take this opportunity to express my genuine 
appreciation to Congress and especially, to Representatives Henry 
Waxman (D-CA) and Jim Greenwood (R-PA) for being the champions of one 
of the most significant and beneficial federal initiatives aimed at 
improving the health of our nation's children. I also want to sincerely 
thank Representative Karen McCarthy (D- MO), a truly great citizen of 
my home state of Missouri, for her continuing, ardent support of 
children wrought through words and actions.
    Without question, the safety and efficacy of any form of drug 
therapy intended for a human of any age is enhanced through the process 
of careful and critical investigation that results not simply in the 
approval of a drug for marketing but rather, through its effective 
labeling. Labeling insures that prescribers and other health care 
professionals charged with monitoring and/or evaluating the outcome of 
drug therapy have complete and accurate information upon which to base 
decisions and execute their responsibility to patients. This general 
goal is not ``age specific'' and in the case of adult therapeutics, has 
been unequivocally proven to create individual (i.e., to a given 
patient) and societal benefit. This tangible evidence of good is, to a 
great degree, attributable to an evolution of therapeutic and 
regulatory science, much of which has been wrought by innovation within 
the Food and Drug Administration, the National Institutes of Health and 
fueled by prudent and purposeful actions of Government. Despite these 
important advancements for adult patients, approximately 75 percent of 
all prescription drugs marketed in the United States have not been 
adequately labeled for use in infants, children and/or adolescents; 
many of which are routinely used by physicians in attempts to improve 
the health of their patients. The dearth of pediatric-specific 
information contained in approved product labeling is not trivial when 
one recognizes that for the majority of these drugs, complete 
information to enable the most basic therapeutic requirement, the 
provision of age-specific/appropriate dosing guidelines, is not 
present. A related problem is that many medications not approved for 
use by children are not manufactured in dosage forms that can be 
readily and/or safely administered to infants and young children. For 
example, many medications are provided in capsule or tablet forms that 
cannot be swallowed by small children and/or are not available in small 
enough dosage increments to permit accurate, safe drug administration. 
These ``deficiencies'' can only serve in a collective manner to 
increase the risk of adversity in the course of providing drug therapy 
in pediatric patients.
    It is important to note that this particular situation has not 
changed appreciably in the 30 years preceding enactment of FDAMA. It is 
for these reasons that pediatric patients were relegated to the status 
of therapeutic orphans, thereby placing the most vulnerable portion of 
our population at increased therapeutic risk as compared to adults. 
This therapeutic travesty was not perpetuated by scientific ignorance 
but rather, through inaction fueled by unfounded fears of harm, risk 
and the relative absence of a credible political and financial 
portfolio possessed by our Nation's children. Fortunately, FDAMA 
conjoined with the 1998 Pediatric Final Rule, provides a most effective 
``weapon'' to bring pediatric therapeutic injustice to an end.

                       II. BENEFITS FOR CHILDREN

    On November 21, 1997, former President William Jefferson Clinton 
signed FDAMA into law; an action that had tremendous bipartisan support 
given its focus on our nation's children. Included in the bill is a 
provision (i.e., Section 111) that encourages pharmaceutical companies 
to conduct specific pediatric clinical trials of drugs with 
demonstrated substantial therapeutic use in pediatric patients and 
hence, are deemed important for pediatric therapeutics. These trials 
are to be conducted in complete accordance with the highest ethical and 
scientific standards guaranteed through FDA oversight of the drug 
development process. This particular provision of FDAMA also allows 
for, but does not promise, the granting of up to six months of 
additional market exclusivity to new and already marketed drugs for 
which the Secretary of Health and Human Services (HHS) issues a written 
request for pediatric studies. Hence, the process associated with 
Section 111 is well organized, orderly and squarely focused on the 
responsible pursuit of information requisite for improving pediatric 
therapeutics. We must not lose sight that Section 111 of FDAMA was 
developed for children to specifically serve them and those in our 
society who are charged with their medical care. By doing so, it 
provides for the first time in the history of the United States a 
mechanism to insure that pediatric patients are accorded the same 
``therapeutic rights and privileges'' that we have so carefully 
provided for adults.

              III. FDAMA ACCOMPLISHMENTS--PROOF OF CONCEPT

    The statistics associated with FDAMA are indeed both impressive and 
staggering. As of April 1, 2001, pharmaceutical companies have proposed 
to FDA the study of a total of 218 drugs which in turn, has resulted in 
the issuance of 188 formal written requests for the conduct of 
pediatric clinical trials involving a total of 154 active drug 
moieties. Collectively, these trials represent 409 carefully controlled 
clinical investigations conducted in well over 50,000 pediatric 
patients, with approximately 20% involving neonates and young infants 
and 30% involving children from adolescence down through 2 years of 
age. Hence, the data support involvement of the entire pediatric 
spectrum in a large number of clinical trials that address unmet 
therapeutics needs in children with markedly diverse medical 
conditions.
    To date, FDA has granted extended marketing exclusivity to 33 drug 
moieties--only 21% of the total amount subject to formal written 
requests. Of these 33 drugs, 17 (i.e., 52%) have had major revisions of 
the approved product labeling; a process that may take 8-18 months 
after extended marking exclusivity has been granted. Of further note is 
that 12 of these 17 drugs (i.e. 71%) have extensive, routine 
therapeutic use in pediatric patients and are used to treat a wide 
variety of conditions that afflict infants and children including 
fever, allergies, AIDS, gastrointestinal reflux, obsessive-compulsive 
disorder, hypertension and pain. Finally, contrary to the many 
assertions that have appeared in the lay press over the recent past 
that only ``blockbuster'' drugs (i.e., those with greater than $1 
billion in annual sales) are the subject of the pediatric exclusivity 
provisions of FDAMA, only 2 of the 17 drugs labeled for children meet 
this criteria. Without question, the degree of productivity that has 
occurred over 4 short years as a direct result of the provisions 
contained in Section 111 is remarkable and unparalleled given that in 
the 10 years preceding enactment of this legislation, only 11 drugs 
were formally (i.e., under the aegis of the FDA) studied in pediatric 
patients out of the 70 ``promised'' by the pharmaceutical industry. 
Thus, FDAMA works for children and works extraordinarily well.
    Those individuals, groups and corporate concerns who are critical 
of the aforementioned success story have been quick to identify the 
apparent ``profits'' that accrue to the pharmaceutical industry as a 
result of the provisions of Section 111 and to estimate the ``costs'' 
to the adult segment of our society produced by delayed entry of 
generic pharmaceutical products to the market place. Relatively 
speaking, these particular ``figures'' are easy to generate despite 
their not being totally supported by fact and their dependence upon 
assumptions. What is more difficult to quantitate are the potential 
beneficial health implications (and their associated financial impact) 
to infants, children and their families that result from the new 
information obtained from clinical trials conducted under Section 111 
and now contained in the approved product labeling for 17 marketed 
drugs, all of which have a history of substantial pediatric use. 
Several specific examples are as follows:

 Midazolam (a sedative agent commonly used in medicine and 
        dentistry): Determination of age- specific doses of a new oral 
        liquid formulation in infants and children. Also, 
        identification of specific adverse events associated with 
        concomitant medicines given to pediatric patients and in 
        infants and children with specific disease states (e.g., 
        congenital heart disease, pulmonary hypertension).
 Etodolac (an anti-inflammatory drug used to treat children 
        with debilitating rheumatoid arthritis): Demonstration of the 
        need for a markedly increased dose in young children (i.e. 
        approximately 2-fold higher than adults on a weight-adjusted 
        basis) as compared to adults in order to prevent lack of 
        efficacy from ``under-dosing'' in pediatric patients.
 Fluvoxamine (an antidepressant used to treat children and 
        adolescents): Demonstration of a higher dose requirement only 
        for female patients 8 to 11 years of age, thereby demonstrating 
        both age- and sex-specific determinants of drug efficacy.
 Gabapentin (an oral medication used to treat a variety of 
        seizure and other central nervous system disorders in both 
        adults and children): Demonstration of a requirement for a 
        marked increase in weight-adjusted dose for children less than 
        5 years of age as compared to older children in order to 
        attain/maintain effective blood levels of the drug.
 Propofol (an intravenous agent used in adults and children to 
        induce/produce anesthesia and for protracted sedation in adult 
        and pediatric patients in the intensive care unit): 
        Demonstration of potentially serious cardiac dysrhythmias in 
        patients concomitantly treated with fentanyl (a narcotic 
        analgesic) and also, production of central nervous system 
        symptoms (e.g., flushing, agitation, tremulousness and 
        hyperirritability) seen after abrupt discontinuation of the 
        drug following prolonged infusion. These adverse events in 
        association with possible differences in mortality in patients 
        in the intensive care unit treated with propofol resulted in 
        recommendation against its use (i.e., not indicated) for 
        sedation of patients in the pediatric intensive care unit.
 Sevoflurane (a widely used inhaled anesthetic agent): 
        Information added to the label warning of the potential for 
        drug-associated seizures in children.
    These illustrations provide tangible evidence of how the risk 
profile for many potentially useful drugs will be improved through the 
revelation of new pediatric-specific knowledge translated into approved 
product labeling--all of which was enabled by their careful, controlled 
study in pediatric patients resulting directly from the pediatric 
exclusivity provisions of FDAMA. Thus, the evidence is clear. Children, 
the intended ``target'' of Section 111 of FDAMA have been the direct 
beneficiaries of this legislation. Proof of concept has been 
demonstrated beyond question.

                    IV. COLLATERAL BENEFITS OF FDAMA

    Those who question either the wisdom or importance of renewing 
FDAMA and maintaining the integrity of its provisions completely ignore 
the indirect benefits that have resulted from this legislation. 
Important collateral benefits have accrued to society as a direct 
result of the marked expansion in pediatric clinical pharmacology 
research wrought by the opportunities and requirements afforded by the 
provisions of Section 111 of FDAMA. Examples of several of these are 
briefly summarized as follows:

 The growth and creation of federally funded infrastructures 
        (e.g., the National Institute of Child Health and Human 
        Development network of Pediatric Pharmacology Research Units, 
        the AHRQ-funded Centers for Education and Research in 
        Therapeutics) dedicated to the conduct of not only pivotal 
        clinical research in pediatric pharmacology (which includes 
        phase I and II clinical trials) but also, basic and 
        translational research in the area of developmental 
        pharmacology and therapeutics.
 Creation of a pediatric infrastructure within the Food and 
        Drug Administration (e.g., the ``Pediatric Team'') and many 
        major pharmaceutical companies to not only implement the 
        provisions of FDAMA but most importantly, to provide an 
        experienced ``platform'' capable of working cooperatively to 
        develop pediatric clinical investigations of sufficient rigor 
        to answer critical questions pertaining to pediatric labeling 
        and to augment the activities of the Review Divisions within 
        FDA to insure that the welfare of children is served throughout 
        the entire drug development process.
 Scientific enrichment of pediatric clinical drug trials by the 
        inclusion of new technology and utilization of the ``new 
        biology'' (e.g., molecular biology, pharmacogenetics, 
        pharmacogenomics) in an attempt to glean the most information 
        possible from a given pediatric investigation and to create new 
        knowledge regarding the impact of development on drug 
        disposition and action.
 Direct and dynamic utilization of new knowledge in 
        developmental pharmacology (e.g., the impact of age on the 
        activity of drug metabolizing enzymes and renal function, the 
        impact of growth and development on drug action--both intended 
        and adverse) to continually improve the design and scientific 
        rigor of clinical trials conducted in infants and children 
        without increasing the risk to subjects participating in these 
        critically important studies.
 Development of a new ``model system/approach'' for the design 
        and conduct of pediatric clinical trials that is setting the 
        standard for this activity throughout the world (e.g., the ICH 
        E-11 guidance, new initiatives being undertaken by Health 
        Canada and the Canadian Paediatric Society and the European 
        Society of Developmental Pharmacology).
 Creation of both a need and opportunity to attract young 
        Pediatricians and other biomedical scientists to the discipline 
        of Pediatric Clinical Pharmacology to receive the education and 
        training necessary to fill the profound ``gaps'' that currently 
        exist for properly trained individuals within academic 
        programs, the pharmaceutical industry and government (e.g., FDA 
        and NIH). This is critical to insure that the progress made on 
        behalf of children during the last four years will continue and 
        most importantly, continue to evolve during the years to come.
 Expansion of pediatric labeling to generic drug products 
        afforded by FDAMA. It is critical for all to understand that 
        both adult and pediatric patients benefit from the availability 
        of high quality generic drug products. As is the case for 
        ``branded'' (i.e. non-generic) drug products, a critical 
        safeguard to insure the safety and efficacy of generic drugs in 
        pediatric patients is the inclusion of age-specific labeling 
        information to guide prescribers in their use. The provisions 
        of Section 111 provide the avenue for the inclusion of 
        pediatric information in product labeling that will be 
        maintained when a product makes the ``switch'' from proprietary 
        to generic status; the direct costs for which are 100% borne by 
        the innovator company. Hence, the generic drug industry stands 
        to receive considerable direct (e.g., evidence-based 
        advertising/promotion) and indirect (e.g., reduction of risk 
        from litigation regarding adverse drug effects in pediatric 
        patients through inclusion of accurate pediatric data in the 
        approved product labeling) benefits from FDAMA.

      V. RECOMMENDATIONS TO INSURE CONTINUED BENEFIT FOR CHILDREN

    My comments regarding the importance of FDAMA and its provisions 
pertaining to the health and welfare of children echo those made by 
several individuals on the panel with me this day and many thousands of 
other pediatric health care professionals who, on a daily basis, serve 
as advocates for children. The success of FDAMA and our collective 
efforts to improve the lives of children demand not only the 
administration of accolades but most importantly, that we all 
critically examine the future of this legislation so as to guarantee 
the successes brought about by its provisions. For FDAMA to evolve in a 
manner characterized by continuous quality improvement, our government 
will need to nurture this program to insure its effective growth and 
development. To accomplish this goal, I offer the following 
recommendations for consideration by Congress:

 Creation of a mechanism whereby drugs that are off-patent and 
        are commonly used in pediatric patients (e.g., the list of the 
        top 100 drugs used in pediatric practice) can be studied in 
        children with appropriate FDA oversight so as to enable 
        critical information pertaining to pediatric use to be included 
        in the approved product labeling.
 The development of provisions to both shorten the time between 
        approval of a Supplemental New Drug Application and when new 
        pediatric information is inserted into the approved product 
        labeling to six months. Coupled with this provision should be a 
        mechanism to rapidly disseminate pediatric use information to 
        both the professional and lay public.
 While FDA has implemented FDAMA to certain measures of 
        success, it has done so without sufficient financial or 
        personnel resources to completely accomplish these important 
        objectives in a truly exemplary manner. As a result, challenges 
        currently exist that range from inordinate delays in the timely 
        review of study proposals involving pediatric clinical trials 
        to recommendations for protocol design and conduct that may not 
        best serve the true clinical objectives of product labeling for 
        pediatric patients. A solution to these challenges would be the 
        establishment of a new Office of Pediatric Therapeutics within 
        FDA. This new Office should be staffed with pediatricians and 
        other biomedical scientists skilled in pediatric/developmental 
        pharmacology and accordingly, who would be fully capable of 
        insuring that a critical and age-appropriate approach is taken 
        to the design of pediatric clinical trials and the 
        interpretation of the data from them. The Office of Pediatric 
        Therapeutics would drive the process of pediatric drug 
        development across the FDA and through a collaborative working 
        relationship with pharmaceutical companies, would be in a 
        position to markedly improve the quality and quantity of all 
        pediatric efforts within the Agency.
 Establish a provision whereby pharmaceutical companies who are 
        conducting pediatric clinical trials pursuant to a formal 
        written request issued by FDA would pay a ``user fee'' 
        designated to specifically support the Office of Pediatric 
        Therapeutics. The consequences of these directed user fees 
        would provide support for the establishment of the 
        aforementioned Office within FDA and also, would increase the 
        number of pediatric studies requested, insure more timely 
        review of these studies and as a result, achieve the expansion 
        of pediatric labeling in a more expeditious fashion.
 Provision of substantial and sustaining line item support 
        within the general NIH and FDA budget for efforts that are 
        squarely targeted at research and education in pediatric 
        clinical pharmacology and therapeutics. Such efforts should 
        include marked expansion of the core funding for the NICHD 
        Pediatric Pharmacology Research Unit Network, the provision of 
        additional funds to NICHD to support up to 15 postdoctoral 
        fellowship positions in pediatric clinical pharmacology on an 
        annual basis, the creation of a standing Scientific Review 
        Group (i.e. study section) within NIH dedicated to pediatric/
        developmental pharmacology and therapeutics and the allocation 
        of additional funding within NIH (e.g., to AHRQ) to support the 
        creation of up to seven pediatric Centers for Education and 
        Research in Therapeutics (i.e., CERTs) within the U.S. 
        Collectively, these actions would insure continued evolution of 
        the scientific infrastructure necessary to insure that the 
        science of pediatric pharmacology and therapeutics will be 
        sufficient to service the remarkable opportunity created for 
        our nation's children provided through the pediatric provisions 
        of FDAMA.
    Based upon all the objective evidence, it is clear that the 
provisions of any future legislation aimed at the drug development 
process must contain provisions sufficient to insure and sustain 
benefit for infants, children and adolescents. In four short years, 
Section 111 of FDAMA has done more to improve the health and welfare of 
children in the U.S. and abroad than any other pediatric therapeutic 
initiative in the history of our country. To terminate the provisions 
of this initiative or substantially alter them in any way would once 
again relegate infants and children to the status of therapeutic 
orphans and thereby, disadvantage them to the point of harm. It has 
been said, ``he who helps a child, helps humanity'' and ``how a society 
is viewed is in large sense determined by how a society cares for its 
children''. Thus, I emphatically urge this Congress to act prudently 
and decisively in support of our country's most valuable asset, our 
children, by renewing FDAMA and also, further increasing the level of 
support provided to the scientific initiatives in pediatric clinical 
pharmacology and therapeutics fueled by this landmark legislation.
    I would like to thank the committee for affording me the 
opportunity to share with you my comments and recommendations. It would 
be my pleasure to respond to any questions that you may have.

    Mr. Bilirakis. Thank you very much, Dr. Kearns.
    Ms. Ben-Maimon?

                 STATEMENT OF CAROLE BEN-MAIMON

    Ms. Ben-Maimon. Good afternoon, and thank you for inviting 
me to testify on behalf of the Generic Pharmaceutical 
Association.
    GPHA represents manufacturers, suppliers, distributors, and 
marketers of generic drugs. My prepared testimony this morning 
will focus on the pediatric provisions of FDAMA, provisions 
that I would like to comment on not only as a physician and 
chair of GPHA, but also as the mother of three children.
    Let me begin by making it clear that GPHA supports the goal 
of encouraging meaningful clinical research aimed at expanding 
the safe and effective use of drugs in children. We all want 
the best for our kids, and we all need to make sacrifices in 
order to ensure that their health is improved.
    However, while GPHA supports the goal of encouraging 
clinical research to benefit the pediatric population, we 
believe the incentive must be balanced with competing health 
concerns, and must be designed to ensure that real medical 
advances are achieved. This type of program must ensure that 
children are exposed to clinical research only when the 
research is designed to provide meaningful results, that 
outcomes are proportional to the sacrifices being made by lower 
income, elderly patients when entry of quality, affordable, 
generic drugs are delayed, and that appropriate tools are used 
to evaluate the quality of information being obtained and the 
true cost and benefits.
    GPHA recognizes that Congress did not pass the pediatric 
exclusivity law with the intention of increasing the already 
robust profits of major drug companies by involving children in 
frivolous medical experimentation. Congress' intention was 
clearly to provide 6 months of additional exclusivity for brand 
companies in exchange for serious, rigorous, original clinical 
studies that have the clear potential to provide needed 
therapeutic information. Unfortunately, we are concerned that 
this has not always been the outcome.
    In many cases, the investment in pediatric testing and the 
information obtained from such testing pale in comparison to 
the financial windfall given to brand pharmaceutical companies 
and to the enormous financial burden inflicted on the consumer. 
We are concerned that pediatric exclusivity provisions have 
been in place for 4 years, and there is still no well-defined 
system for measuring its success, its benefits to our pediatric 
population, and its costs to those who need more affordable 
pharmaceuticals.
    According to the Wall Street Journal, and I'm quoting, 
``The studies required to gain 6 more months of marketing 
exclusivity are relatively small and inexpensive, costing 
anywhere from $200,000 to $3 million. But the extended 
exclusivity that results can be very valuable. It will boost 
drug company sales by more than $4 billion. That $4 billion is 
only for the first 26 drugs tested under the program.'' 
According to the Journal, another 200 proposals to test drugs 
on children, worth $6 billion, are pending at FDA. Over the 
next 20 years, estimates are that brand name drug companies 
will benefit from an additional $30 billion if the exclusivity 
provision is reauthorized in its current form.
    Congress would be well-advised to ascertain the true costs 
of pediatric studies conducted by brand companies so that it 
can make objective evaluation of the cost to society of the 
additional 6 months of monopoly time brand industry 
pharmaceuticals are awarded in exchange for these studies.
    You know, Mr. Chairman, it just may be that Congress could 
do this for much less cost doing it through research grants to 
the NIH. Likewise, we need to consider the detrimental impact 
on the consumer when pediatric exclusivity undermines 
predictability in the marketplace. The generic industry has for 
some time been begging for predictability. Under the current 
law, generic companies cannot predict the time of launch for 
their products because pediatric exclusivity can be awarded for 
up to 60 days after patent expiration.
    As Congress considers ways to reauthorize an incentive 
system for pediatric research, we ask that you be extremely 
careful to reauthorize a system in a way that does not 
perpetuate the ability of the brand industry to use it as one 
more tool to delay generic competition. One particular area 
where Congress must be particularly cautious during the 
reauthorization process is in the area of creating incentives 
for the pharmaceutical industry to conduct research on off-
patent products. The goal is a worthy one. But if the system to 
conduct such research is going to be implemented, Congress must 
be sure the system does not allow the brand industry and its 
surrogates to delay generic competition through manipulations 
of labelling requirements and campaigns that question the 
therapeutic equivalency of generic medicines. In addition, 
generic companies should also be eligible for the same rewards 
as their brand counterparts if they should elect to perform the 
necessary research.
    Mr. Chairman, as important as these issues are for 
consumers, Congress, and the pharmaceutical industry, I want to 
emphasize again that above all else in this debate, we support 
children. As a mother, I can think of nothing more important 
than providing incentives for meaningful clinical research that 
will benefit my children and the children of others. Congress 
should ensure that children enrolled in such studies are 
protected and benefit from the risks they are taking, and that 
corporate incentives, money and gifts given to children and 
their parents, do not create perverse incentives in the 
process.
    Congress should look objectively and critically at the true 
value of the data being generated, and also consider the impact 
of sponsor grants and financial rewards to those experts 
endorsing and conducting such studies.
    Finally, Congress should try to ensure predictability in 
the marketplace so that the price of pharmaceuticals can come 
down for consumers, and explore incentives for needed research 
that do not threaten market competition.
    The GPHA supports your objective.
    Mr. Bilirakis. Please summarize.
    Ms. Ben-Maimon. One more sentence. Our primary objective is 
to provide quality and affordable medicine to patients, 
including children. We truly believe there are ways to improve 
the system and we would like to work with you to determine 
that.
    [The prepared statement of Carole Ben-Maimon follows:]

Prepared Statement of Carole Ben-Maimon, Chair, Generic Pharmaceutical 
                              Association

    Good morning, and thank you for inviting me to testify on behalf of 
the Generic Pharmaceutical Association. GPhA represents the 
manufacturers, suppliers, distributors, and marketers of generic drugs 
throughout America. My prepared testimony this morning will focus on 
the pediatric exclusivity provisions of the FDA Modernization Act of 
1997, provisions that I would like to comment on not only as a 
physician and chair of GPhA, but also as the mother of three children.
    Let me begin by making it clear that GPhA supports the goal of 
encouraging meaningful clinical research aimed at expanding the safe 
and effective use of drugs in children. We all want what is best for 
our kids and are willing to make the sacrifices necessary to improve 
their health.
    However, while GPhA supports the goal of encouraging clinical 
research to benefit the pediatric population, we believe the incentive 
must be balanced with competing health concerns and must be designed to 
ensure that real medical advances are achieved. This type of program 
must ensure that children are exposed to clinical research only when 
the research is designed to provide meaningful results, that outcomes 
are proportional to the sacrifices being made by lower-income elderly 
patients when entry of quality and affordable generic drugs is delayed, 
and that appropriate tools are used to evaluate the quality of 
information being obtained to determine the true costs and benefits.
    GPhA recognizes that Congress did not pass the pediatric 
exclusivity law with the intention of increasing the already robust 
profits of major drug companies by involving children in frivolous 
medical experimentation. Congress' intention, rather, was to provide 
six months of additional exclusivity for brand companies in exchange 
for serious, rigorous, original clinical studies that have the clear 
potential to provide needed therapeutic information.
    Unfortunately, we are concerned that this has not always been the 
outcome. We are concerned that in many cases the investment in 
pediatric testing--and the information obtained from such testing--pale 
in comparison to the financial windfall given to brand pharmaceutical 
companies and to the enormous financial burden inflicted on the 
consumer. For instance, pediatric clinical testing that does nothing 
more than assess children's reactions to the fifth or sixth ``me-too'' 
drug in a particular therapeutic class makes no meaningful contribution 
to doctors' ability to treat the relevant disease. We are concerned 
that pediatric exclusivity provisions have been in place for four years 
and there is still no well-defined system for measuring its success--
its benefits to our pediatric population and its costs to those who 
need more affordable pharmaceuticals.
    According to the Wall Street Journal, ``The studies required to 
gain six more months of marketing exclusivity are relatively small and 
inexpensive, costing anywhere from $200,000 to $3 million. But the 
extended exclusivity that results can be very valuable. It will boost 
drug-company sales by more than $4 billion.'' And that $4 billion is 
only for the first 26 drugs tested under the program. According to the 
Journal, another 200 proposals to test drugs on children, worth $6 
billion, are pending at FDA. Over the next 20 years, estimates are that 
brand-name drug companies will benefit from an additional $30 billion 
if the exclusivity provision is reauthorized in its current form.
    We know that the impact on the American public is significant. The 
FDA has estimated that a six month exclusivity reward for pediatric 
research raises the costs of prescription drugs $695 million a year. 
These are considerations that need to be heard. Congress would be well-
advised to ascertain the true costs of pediatric studies conducted by 
brand companies so it can make an objective evaluation of the cost to 
society of the additional six months of monopoly time brand industry 
pharmaceuticals are awarded in exchange for these studies. You know, 
Mr. Chairman, it just may be that Congress could achieve the results it 
desires in a far less costly way--doing the research on its own through 
organizations like NIH.
    Likewise, we need to consider the detrimental impact on the 
consumer when pediatric exclusivity undermines predictability in the 
marketplace. The generic industry has--for some time--been begging for 
predictability. Under the current law, generic companies cannot predict 
the time of launch for their products because pediatric exclusivity can 
be awarded up to 60 days after a patent expires.
    As Congress considers ways to reauthorize an incentive system for 
pediatric research, we ask that you be extremely careful to reauthorize 
the system in a way that does not perpetuate the ability of the brand 
industry to use it as one more tool to delay generic competition. 
History has taught us that if there are flaws in the law that allow for 
exploitation, this exploitation will occur.
    One particular area where Congress must be particularly cautious 
during the reauthorization process is in the area of creating 
incentives for the pharmaceutical industry to conduct research on off-
patent products. The goal is a worthy one. But if a system to conduct 
such research is going to be implemented, Congress must be sure the 
system does not allow the brand industry and its surrogates to delay 
generic competition through manipulations of labeling requirements and 
campaigns that question the therapeutic equivalency of generic 
medicines. In addition, generic companies should also be eligible for 
the same rewards as their brand counterparts, if they should elect to 
perform the necessary studies.
    Mr. Chairman, as important as these issues are for consumers, 
Congress, and the generic pharmaceutical industry, I want to emphasize 
again that above all else in this debate, we support children. As a 
mother, I can think of nothing more important than providing incentives 
for meaningful clinical research that will benefit my children and the 
children of others. Congress should ensure that children enrolled in 
such studies are protected and benefit from the risks they are taking, 
and that corporate incentives, money, and gifts given to children and 
their parents do not create perverse incentives in the process. 
Congress should look objectively and critically at the true value of 
the data being generated and also consider the impact of sponsor grants 
and financial rewards to those experts endorsing and conducting such 
studies. And finally, Congress should try to ensure predictability in 
the marketplace so that the price of pharmaceuticals can come down for 
consumers and explore incentives for needed research that do not 
threaten market competition at a time when the public is clamoring for 
relief from the high price of prescription drugs.
    The Generic Pharmaceutical Association supports your objective. Our 
primary objective is to provide quality and affordable medicine to 
patients--patients that include the pediatric population. We truly 
believe there are ways to improve the current system. And we would 
welcome the opportunity to work with you on a matter that is so 
important to all of us.
    Thank you.

    Mr. Bilirakis. Thank you very much.
    Dr. Gorman?

                   STATEMENT OF RICHARD GORMAN

    Mr. Gorman. Mr. Chairman, and members of the committee, as 
a practicing pediatrician for 23 years, I am beginning to see 
first hand in my office on a daily basis the benefits of this 
FDAMA and the PDUFA provisions. I am pleased to be here today 
to represent the 55,000 pediatricians of the American Academy 
of Pediatrics. The pediatric academic research community that 
includes the Ambulatory Pediatric Association, the American 
Pediatric Society, and the Society for Pediatric Research, also 
support and endorse the Academy's testimony.
    The Academy of Pediatrics is here today to extend our 
sincerest thanks to Congress, and especially to Representatives 
Jim Greenwood and Henry Waxman, for championing one of the most 
extraordinarily successful Federal initiatives that have ever 
been accomplished for children.
    As a pediatrician and health professionals, we cannot 
overstate how critical the passage of the pediatrics studies 
market exclusivity provision within the FDAMA has been toward 
achieving medical therapeutic advances for children. For the 
sake of children and infants both in the United States and 
internationally, we strongly believe that this legislation must 
be reauthorized before it expires on January 1, 2002.
    To fully understand the positive impact this law has had 
for children, I think you are pretty well aware of what has 
happened for the 40 years before FDAMA was approved. Despite 
several aggressive efforts by the Food and Drug Administration 
over the past 40 years to secure more studies to support more 
complete usage for children, there continue to be a continuing 
and alarming lack of pediatric drug labelling and information.
    For the decades prior to FDAMA, children were the canaries 
in the mine shafts that acted as the catalyst for change to 
improve the safety and effectiveness of medications for all the 
people in the United States. It would have been reasonable to 
assume that since children's suffering enabled these safety and 
efficacy changes to be made, that children would have benefited 
from these changes. But remarkably, that was not the case. 
Children suffer from the vast majority of diseases and 
conditions that occur in adults. Just like for adults, 
medications help heal conditions or ease childs' discomforts.
    In a little more than 3 years, the pediatric information 
available through FDAMA has been dramatic. Over 188 written 
requests have been made for 400 pediatric studies. Passage of 
the pediatric studies provision has begun a tidal wave of 
momentum in building the structures that will be needed to 
continue to get more pediatric studies and more pediatric 
information available and in the hands of the health care 
providers.
    The Food and Drug Administration must be commended for the 
extraordinary work they have done we think in fairly and safely 
implementing the pediatric studies law. The benefit of these 
pediatric study provisions for children have been considerable. 
Child-friendly formulations will soon be available. It's 
wonderful to have a wonder drug, but if your child won't take 
it, it is not of much use. The pediatric formulations will be 
coming down through FDAMA.
    Better labeling will reduce medical errors and adverse 
effects. Pediatric labelling can achieve considerable cost 
saving to the healthcare system. The FDA has calculated that if 
better labeling eliminated just 25 percent of the 
hospitalization differential to the five most common diseases 
that children come into the hospital for, this effect would 
lead to the direct medical cost savings of $228 million 
annually.
    The success of the pediatrics studies provision must be 
preserved and enhanced. The AAP believes there are several 
proposals that will further improve therapeutics for children. 
We support the inclusion of off-patent drugs. The AAP strong 
urges Congress to include a provision for off-patent drug 
studies in the reauthorization legislation.
    Label changes. The AAP urges Congress to explore ways to 
expedite the translation of the new information onto the label. 
We also urge the dissemination of pediatric use information. 
The AAP urges Congress to explore ways to disseminate 
information generated from the pediatric studies.
    For neonates, the AAP would urge Congress to acknowledge 
the need to study this pediatric population if appropriate, and 
at the appropriate point in pediatric studies.
    We support the establishment of an Office of Pediatric 
Therapeutics within the FDA. The AAP urges Congress to provide 
appropriate funding and other needed resources for a newly 
created Office of Pediatric Therapeutics within the FDA.
    We wish to support the application of prescription drug 
user fees to pediatric studies. AAP urges Congress to instate 
prescription drug user fees for companies seeking pediatric 
exclusivity.
    I would like to thank the committee for allowing me the 
opportunity to share with you the thoughts of the American 
Academy. Once again, I restate our strong support for the 
reauthorization of the pediatric studies provision within 
FDAMA. Thank you.
    [The prepared statement of Richard Gorman follows:]

   Prepared Statement of Richard Gorman, on Behalf of the Ambulatory 
   Pediatric Association, American Pediatric Society, Association of 
    Medical School Pediatric Department Chairs, and the Society for 
                           Pediatric Research

    Mr. Chairman, members of the Committee, I am Richard Gorman, MD, 
FAAP, a practicing pediatrician who has taken care of infants, children 
and adolescents for over 23 years. Though I am a Clinical Associate 
Professor of Pediatric at the University of Maryland School of 
Medicine, it is through my practice Pediatric Partners in Ellicott 
City, Maryland where I see first-hand the pediatric therapeutic 
benefits of which we talk today. With over 80,000 pediatric visits 
annually in the five clinical sites in four counties in Maryland, I and 
my partners can attest to the importance of this pediatric provision.
    The pediatric academic research community that includes the 
Ambulatory Pediatric Association, American Pediatric Society, 
Association of Medical School Pediatric Department Chairs and the 
Society for Pediatric Research also supports and endorses the Academy's 
testimony. These societies comprise academic generalist pediatricians, 
pediatric researchers, and full time academic and clinical faculty 
responsible for the delivery of health care services to children, the 
education and training of pediatricians, and the leadership of medical 
school pediatric departments.

                            I. INTRODUCTION

    The American Academy of Pediatrics is here today to extend our 
sincerest thanks to Congress, and especially to Representative Jim 
Greenwood (R-PA) and Henry Waxman (D-CA), for championing one of the 
most extraordinarily successful federal initiatives that has ever been 
accomplished for children. As pediatricians and health professionals we 
can not overstate how critical the passage of the pediatric studies 
market exclusivity provision within the within the Food and Drug 
Administration Modernization Act (FDAMA--P.L. 105-115) has been toward 
advancing medical therapies for infants, children and adolescents. For 
the sake of infants and children throughout the United States and 
internationally, we strongly believe that this legislation must be 
reauthorized before it expires on January 1, 2002.
    The American Academy of Pediatrics (AAP) believes that the 
pediatric studies provision in FDAMA has advanced therapeutics for 
infants, children and adolescents in a way that has not been possible 
in several decades prior to passage of this law. Despite several 
efforts by the Food and Drug Administration (FDA) over the past 30 
years to secure more studies to support more complete usage information 
for children, the alarming lack of pediatric drug labeling and 
information available to pediatricians and other health professionals 
continued. Statistics as recent as 1998 highlight the need for 
pediatric drug studies. As recently as 1998 only 20 percent of the new 
drugs approved by the JFDA had been studied and labeled for pediatric 
use.
    For decades prior to FDAMA children were the catalysts for changes 
to improve the safety and effectiveness of medications in the United 
States but rarely reaped the benefits of those therapeutic advances. 
Children acted as the canaries in the mineshafts, dying more quickly 
and in greater numbers from therapeutic mishaps. The Food and Drug 
Cosmetic Act came into being in 1938 as a result of the death of 107 
children from sulfanilamide elixir. Then in 1962 another pediatric 
tragedy--fetal malformation from maternal ingestion of thalidomide--led 
to an amendment to the FDCA that stated that drugs not only had to be 
safe but also effective in the population for which they were marketed.
    It would be reasonable to assume that since children's suffering 
enabled these safety and efficacy changes to the law to occur, that 
children would have benefited from those changes. But remarkably, that 
was not the case.
    Despite repeated efforts by the Food and Drug Administration to 
include the pediatric population in therapeutic advances, it was not 
until passage of the pediatric studies provision within FDAMA that we 
have begun to realize that goal.
    Now, in just a little over 3 years, the pediatric information 
available through FDAMA is dramatic. We have over 188 written requests 
issued for companies to study drugs in children, representing over 400 
pediatric studies. By comparison, in the seven years prior to FDAMA 
eleven studies of marketed drugs were completed, though 70 studies were 
promised. To complete the picture: FDA has granted 28 products 
exclusivity and 18 products include new labeling that provides dosage, 
safety and adverse event information that assist pediatricians in 
treating children with the correct dose and in avoiding potential 
toxicities when medicating children. (NOTE: The process of labeling 
begins after the exclusivity has been granted. The labeling process can 
take between 8-18 months)

                       II. BENEFITS FOR CHILDREN

    To fully understand the positive impact that this law has had for 
children's therapeutics, you must first understand the pediatric 
situation prior to FDAMA.
    Children suffer from the vast majority of diseases and conditions 
that occur in adults. Whether it is hypertension, diabetes, heart 
arrythmia, kidney infections, HIV/AIDS, pneumonia, gastrointestinal 
disorders, asthma or cancer--children develop these very same diseases. 
And so, just like for adults, medications to heal a condition or ease 
the child's discomfort from those disorders are needed.
    But for pediatricians, there is a feeling of ``Water water 
everywhere, but little to drink''. Of all the thousands of medications 
found to be safe and effective for adult disorders, only 25 percent are 
labeled for pediatric use. That leaves pediatricians with two difficult 
choices: 1) not use a medication that could provide relief and help to 
the child because it is not labeled for use in pediatrics or 2) use the 
medication off-label based on limited studies and/or the personal 
experiences of health professionals.
    This is an untenable position which pediatricians and other health 
professionals are placed in: to either prescribe a drug without 
sufficient information or withhold treatment that may provide the best 
treatment for a child who is more vulnerable than adult. While off-
label use of medications is a legal and acceptable part of medical 
practice by physicians, it should not be the standard. Unfortunately 
for children, off-label use is the rule, not the exception, because of 
the paucity of prescribing information for this population.
    Passage of the pediatric studies provision has begun a tidal wave 
of momentum toward getting more and better therapeutic information for 
the pediatric population.
    The Food and Drug Administration (FDA) must be commended for the 
extraordinary work they have done in fairly and swiftly implementing 
the pediatric studies law. They are working with limited staff and 
financial resources to carry out this unfunded mandate in which they 
have to accomplish an unprecedented number of pediatric research 
protocols, new formulations, data review, and label changes.
    The benefits of this pediatric studies provision for children are 
considerable:
    Better labeling will reduce medical errors and adverse effects. 
Lack of proper information for pediatric patients related to dosing, 
toxicity, adverse effects, drug interactions, etc. can lead to medical 
errors and potential injury. Medication errors produce a variety of 
problems, ranging from minor discomfort to substantial morbidity that 
may prolong hospitalization or lead to death.
    Pediatric labeling can achieve considerable cost savings to the 
health care system. The FDA's January 2001 Report to Congress assessed, 
in very broad terms, potential cost savings to the health care industry 
that could follow the availability of expanded pediatric clinical 
information. The FDA examined the hospitalization rates for five 
serious illnesses (asthma, HIV/AIDS, cancer, pneumonia, and kidney 
infections) and found significantly higher rates for children than for 
middle-aged adults. FDA hypothesized that a substantial fraction of the 
difference between these pediatric and adult hospitalization rates for 
like disease conditions may be attributable to the greater range of 
informed drug therapies and better data on drug dosage for adults. The 
FDA calculated that eliminating just 25 percent of the differentials 
for these five illnesses would lead to direct medical cost savings of 
$228 million annually.
    Pediatric labeling can achieve considerable savings for federal and 
state public and private programs. Dollars and cents arguments can not 
adequately provide the evidence of the effectiveness and importance of 
this program for children. Data are difficult, if not impossible, to 
find that provides evidence of the cost to a state or the federal 
government if a child is temporarily or permanently injured because of 
an adverse effect of a medication used without benefit of proper study 
and labeling for their age. Equally as impossible to determine is the 
cost society has already assumed for less than optimal care for 
children because medicines were not available for them. In addition, 
the expense of lawsuits related to such occurrences are a financial 
consideration.
    Child-friendly formulations will be available. Even the most 
effective ``wonder-drug'' can not improve a child's health if the drug 
is unavailable in a formulation that a child can take (e.g., pills vs. 
liquid) or if the taste is unpalatable to an infant or child. 
Compliance with a prescription relies on the formulation. If a parent 
has to struggle with the child every time a dose is needed, the 
likelihood of completing the full prescription to obtain maximum 
benefit is greatly reduced.
    In addition, it should be noted that new pediatric formulations can 
benefit the geriatric population who may also need liquid or 
dissolvable formulations for medications.

                     III. SUCCESS BEGETS CRITICISM

    It is disappointing to the AAP that something that is as 
extraordinarily success for children has been met with unreasonable, 
and in some cases unfounded, criticism that is risking the 
reauthorization of this important program. This issue has become the 
``darling of the press'' but the stories published do little-to-nothing 
to acknowledge the public health benefits that have been and will 
continue to be the result of the pediatric studies provision.
    Criticism focuses on two main issues: 1) what is perceived as a 
windfall profit to the pharmaceutical industry on drugs receiving 
market exclusivity under the pediatric studies provision and 2) the 
perceived increased risk of including children in pediatric trials 
underway through FDAMA.
    ``Windfall Profits'' to Industry--When talking about ``windfalls'' 
from this legislation, it is essential to note that the greatest 
windfall has been in the area of pediatric research and information now 
available for pediatricians. And while it is necessary to assess the 
economic impact of this pediatric exclusivity program on the taxpayer, 
without a doubt, the greatest impact of this program will be on non-
taxpayers--the infants and children of this nation.
    Dollars and cents arguments can not adequately provide the evidence 
of the effectiveness and importance of this program for children. When 
considering the cost to the public for keeping higher-cost drugs on the 
market longer, it is reasonable to also consider the four decades when 
children where therapeutic orphans--with very few drugs available for 
their proper use. It is appropriate for the public to participate in a 
program that affords our nation's children with the long-overdue 
therapeutic information that has been granted to the adult population.
    The AAP does not take lightly adding costs to the health care of 
individuals, but we strongly believe that a parent or grandparent would 
be agreeable to spending a few dollars more for 6 months in order to 
ensure that the drug their child or grandchild was taking had the 
appropriate dosing, safety and effectiveness information and that 
adverse events were know at the time the drug was being prescribed.
    AAP acknowledges that the 6-month period of exclusivity can provide 
a limited number of drugs with a windfall profit from this incentive. 
There may be ways to explore a better balance that gets both pediatric 
studies done and limits the amount of profits that some of the 
blockbuster drugs are receiving. In seeking that possible solution, one 
tenet must apply--we must not lose the momentum and number of pediatric 
studies that are currently underway. AAP urges caution in crafting a 
solution that may satisfy the desire to limit industry profits but may 
also limit the number of pediatric studies achieved under the pediatric 
studies provision.
    Children in clinical trials--As pediatricians our key focus is on 
protecting children from harm. That is why we are pushing so hard for 
reauthorization of the pediatric studies provision. And that is why we 
work to ensure that pediatric clinical trials adhere to the highest 
standards of scientific and ethical review. The AAP's Guidelines for 
the Ethical Conduct of Pediatric Studies is used as a foundation for 
conducting pediatric clinical trials.
    AAP is very please with the increased number children in clinical 
trials and the prospect of more children participating in trials. It is 
a testimony to the success of this legislation. Through these important 
clinical trials, information is generated and then disseminated for use 
by pediatricians and other health professionals. What is the 
alternative to including children in these well-controlled, 
scientifically-valid pediatric studies? Having hundreds of thousands of 
children taking medications in office settings or at home that have not 
been properly studied. Subjecting children to daily uncontrolled, 
unregulated, and unreported studies versus including a significantly 
smaller number of children (thousands vs. hundreds of thousands) in 
controlled clinical trials is a much-preferred alternative.
    In addition, there are multiple levels of scientific and ethical 
protections in place throughout the process of developing, conducting 
and reviewing pediatric studies. Through the Children's Health Act 
(P.L. 106-310) all research involving children that is conducted, 
supported, or regulated by the Department of Health and Human Services 
must be in compliance with subpart D of part 45 of title 46, Code of 
Federal Regulations. That means that all the studies conducted as part 
of the pediatric studies provision of FDAMA must adhere to those same 
rigorous standards. In addition, each study site has an Institutional 
Review Board (IRB) that oversees the quality and conduct of the 
studies. And lastly, there is a review of the subpart D regulations 
underway to ensure the adequate and appropriate protection of children 
participating in research.
    AAP believes we must be ever diligent to ensure that children are 
protected in clinical trials. There is certainly room to improve the 
protections that exist but as we move to strengthen protections, we can 
be confident that children in clinical trials are being cared for in 
optimal clinical settings.

             III. NEED TO ENHANCE THE THERAPEUTIC BENEFITS

    The success of the pediatric studies provision must be preserved 
and enhanced. The AAP believes there are several proposals that will 
further improve therapeutics for children.
    INCLUSION OF OFF-PATENT DRUGS: In order to continue this successful 
therapeutic march forward for children, Congress must consider 
including a mechanism to study OFF-patent drugs--those drugs for which 
the market incentives of the pediatric studies provision do not apply.
    It was the intent of Congress in 1997 to address pediatric studies 
for on-patent drugs--those drugs for which market exclusivity was still 
running. As I have stated in my testimony, the AAP believes that the 
progress made in studies of on-paten drugs has been successful and must 
continue. But we still have a significant population of OFF-patent 
drugs that are regularly used in children but do not fall within the 
parameters of the pediatric studies provision of FDAMA.
    The AAP strongly urges Congress to include a provision for OFF-
patent drug studies in the reauthorization legislation. AAP has been in 
discussion with staff of several members of Congress to help develop a 
reasonable and appropriate way of achieving the goal of getting 
priority OFF-patent drugs studied in pediatric populations. We offer 
our expertise and assistance as Congress moves forward on this issue.
    LABEL CHANGES: The timeliness and thoroughness of label changes are 
essential components to the success of helping children get the best 
medications for their disease or condition. Getting more and faster 
pediatric use information to the pediatricians and other physicians and 
health professionals that prescribe medications to children is a 
critical goal of the pediatric studies legislation. The AAP urges 
Congress to explore ways to expedite label changes.
    DISSEMINATION OF PEDIATRIC USE INFORMATION: Dissemination of 
information is a critical component to the success of the pediatric 
studies provision. While label information provides a critical piece of 
information to pediatricians, due to space limitations on package 
inserts often prevent important information from being published. There 
are significant clinical findings that are necessary for pediatricians 
and physicians to review (e.g., a dose change many not be statistically 
significant to make it into the label but would be clinically important 
information for a physician to review).
    AAP urges Congress to explore ways to disseminate information 
generated by pediatric studies.
    NEONATES--The neonate population (0-1 month olds) is an extremely 
important and difficult pediatric group to capture in pediatric 
studies. While this population has not benefited significantly from the 
pediatric studies provision, there is no easy fix. Prior to conducting 
studies in 0-1 month olds, it is usually necessary to establish study 
information in older pediatric populations. Given the vulnerability of 
neonates, it is critical, both from a scientific and an ethical 
standpoint, to be extremely cautious in designing neonates studies. 
However, caution should not lead to lack of studies. Neonates also 
develop hypertension, lung disease, infections, and congestive heart 
failure. They deserve informed drug therapy for their disorders, also.
    AAP would urge Congress to acknowledge the need to study this 
pediatric population if appropriate and at the appropriate point in 
pediatric studies.
    ESTABLISH AN OFFICE OF PEDIATRIC THERAPEUTICS WITHIN FDA--In 
assessing the effectiveness of the pediatric studies provision, it is 
important to note that designing study protocols, overseeing studies, 
reviewing scientific data, negotiating labels, staffing pediatric 
advisory committees, and other related activities requires significant 
FDA staff resources. To date, FDA personnel assigned to these tasks 
have been detailed from other divisions and offices around FDA. The 
Food and Drug Administration has made tremendous strides, with limited 
resources, to implement this provision fairly and in a timely manner.
    AAP is eager to increase the momentum that has been built over the 
last three years, and believes that in order to do that, Congress must 
establish an Office of Pediatric Therapeutics and provide the office 
with sufficient resources in order to continue and expand pediatric 
efforts. The Office should be charged with coordinating activities 
among and between review divisions and provide oversight for all 
pediatric activities undertaken by the FDA and coordinated with other 
federal agencies.
    The AAP urges Congress to provide appropriate funding and other 
needed resources for a newly created Office of Pediatric Therapeutics 
within the FDA.
    APPLY PRESCRIPTION DRUG USER FEES TO PEDIATRIC STUDIES--Applying 
prescription drug user fees to pediatric studies will assist FDA with 
the resources to increase the number of pediatric studies requested, 
conduct more timely reviews of pediatric studies and achieving labeling 
faster.
    AAP urges Congress to instate prescription drug user fees for 
companies seeking pediatric exclusivity.
    I would like to thank the committee for allowing me the opportunity 
to share with you the strong support of the American Academy of 
Pediatrics for reauthorization of the pediatric studies provision 
within FDAMA.
    I would be happy to take any questions you may have.

    Mr. Bilirakis. Thank you, Dr. Gorman. I was busy here 
listening to staff, but honestly it had directly to do with 
your testimony. So I know it seemed a little rude. I apologize 
for that.
    Ms. Meyers?

                  STATEMENT OF ABBEY S. MEYERS

    Ms. Meyers. Yes, sir. Thank you, Mr. Chairman.
    I would like to focus on pediatric exclusivity and user 
fees, but I want to mention two things that weren't in our 
written testimony. That is, there were two important provisions 
of FDAMA that have been very successful. First, the notice of 
discontinuance, which requires companies to tell the FDA 6 
months before they intend to discontinue manufacture of a drug. 
Originally we had asked for 1 year for this notice, but the 
industry negotiated it back to 6 months.
    In the last year, you have probably been reading a lot 
about old drugs that companies are dropping and patients are 
actually desperate when they go to the pharmacy to pick up 
their next prescription, and find out nobody is making the drug 
any more. So this is a very important provision. FDA is putting 
these drugs on the Internet. Pharmacists and doctors and 
patients can look at that area on the Internet and find out 
which drugs are going to be in short supply and which have been 
discontinued.
    In FDAMA reauthorization, we would like to see that 
expanded to 1 year. This will give other companies a chance to 
perhaps license the drug so it won't just stop being available.
    Also, the clinical trials data base was in FDAMA. That is 
another very successful program. FDA put it on the Internet 
about a year ago. People from all over the world are using it 
to find out if there are any clinical trials on their disease. 
The problem there is that it only requires government-funded 
clinical trials. The industry doesn't put studies on unless 
they agree to. We really would like to see privately funded 
clinical trials on that data base too.
    Now as for the pediatric exclusivity, it is critically 
important for children. Physicians need to know how to 
prescribe these drugs. It has been successful in enticing 
companies to study the drugs, but at a very high price to 
society.
    You have to make it better. You have to fix the problems. 
Out of the hundreds of studies that have been done, I think 
somebody mentioned over 400 studies, only 18 drugs have been 
relabeled for pediatricians. What use are those studies if the 
pediatricians can't learn from them?
    One of the problems is that the companies negotiate 
labeling with the FDA. The FDA can't tell them to change their 
label. Those negotiations are dragged out, 1 year, 1\1/2\ 
years, 2 years. Meanwhile, the pediatricians don't know how to 
prescribe the drug. A lot of the problem is sometimes the 
relabeling is bad news. It says that the drug shouldn't be used 
on children. The companies are generally afraid that that bad 
news on the label might scare doctors off. But for the sake of 
safety in children, Congress must mandate the relabeling. There 
should not be any negotiations.
    The research also is being focused primarily not on the 
drugs that children need the most, but on the most profitable 
drugs. This is a real problem. Of course drugs for asthma, for 
example, are not being studied. Yet millions of children are 
taking them, along with antibiotics and other types of drugs. 
Six months of exclusivity for an antihistamine or an 
antidepressant can mean $1 billion in sales. That is a lot of 
money for a drug company to make from a study that cost very, 
very little money. They don't have to really prove the basis of 
the drug. We already know it's effective. They are just looking 
for dosage.
    Drugs with small annual sales are not being studied. 
Generic drugs are not being studied. So the law is costing 
American consumers and particularly elderly Medicare patients 
billions of dollars.
    FDA awards exclusivity on all forms of the drug. If they 
study an intervenous form the drug, why should the tablets and 
the capsules get the exclusivity? Why should the over-the-
counter drug get the exclusivity? They should only really get 
the exclusivity on the drug that was studied, the form of the 
drug.
    Most important, the exclusivity should not be awarded until 
the label is changed. The law also has to contain human subject 
protections. FDA doesn't have one bioethicist on staff. It is 
critically important that you give enough money to the FDA to 
hire bioethicists. It has taken 22 years for the FDA to issue 
human protection rules for pediatrics. They first proposed it 
in 1979. It was just published, 22 years.
    In a way, the drug is taxing the elderly for the sake of 
the young. I think that that is something that has to be looked 
at. We have given you some suggestions in our written 
testimony, to look at the possibility of tax credits to cover 
the cost of pediatric trials, maybe 125 or 150 percent of the 
cost of the pediatric trials so the companies can make some 
money on it, and also to award the length of exclusivity 
according to the annual sales of the drugs. Antihistamines 
should get a smaller amount than an orphan drug for a rare 
disease, for example.
    Thank you, Mr. Chairman.
    [The prepared statement of Abbey S. Meyers follows:]

    Prepared Statement of Abbey S. Meyers, President, The National 
                    Organization for Rare Disorders

    Mr. Chairman and members of the Committee, thank you for this 
opportunity to speak with you today about the reauthorization of the 
FDA Modernization Act (FDAMA). I am Abbey Meyers, President of the 
National Organization for Rare Disorders (NORD). NORD is a non-profit 
voluntary health agency dedicated to the identification, treatment and 
cure of rare ``orphan diseases.'' NORD is the primary patient 
organization that advocated for the Orphan Drug Act of 1983, which is 
one of the most successful and important health statutes that Congress 
ever passed.
    One of NORD's primary goals is to promote the development of new 
treatments and cures for rare diseases and to make these therapies 
accessible to patients. Under the Orphan Drug Act, a rare disease is 
defined as a health condition that affects fewer than 200,000 
Americans. Keep in mind that there are more than 6,000 of these 
disorders, cumulatively affecting an estimated 25 million Americans. 
NORD's mission, therefore, is enormous and very much reliant on the 
successes achieved by academic scientists, pharmaceutical and 
biotechnology companies, medical device manufacturers, and most of all, 
the Food & Drug Administration (FDA), which regulates these entities.
    The FDA's mission is to ``protect the public health by ensuring 
that human drugs are safe and effective.'' 1 But since 1992, 
when ``user fees'' were first implemented, the public's trust in the 
agency has eroded. FDAMA reauthorized user fees and authorized 
``pediatric exclusivity,'' but its primary purpose was to speed the 
approval of more new drugs and devices, even if those drugs and devices 
were relatively unimportant to the public health. Just look at the 
seven drugs that were approved after 1993 and then removed from the 
market due to severe adverse reactions and deaths. Not one of these 
pharmaceuticals was a life-saving drug. They were drugs for heartburn, 
diabetes, and irritable bowel syndrome (chronic diarrhea), a 
painkiller, a blood pressure medicine, an antibiotic, and a diet pill. 
There was absolutely no reason to rush them to market. Given enough 
time to study the data, the FDA might have more adequately identified 
their risks and kept them off the market.
---------------------------------------------------------------------------
    \1\ Report to the Nation, Improving Public Health Through Human 
Drugs, US HHS/FDA/CDER, 2000.
---------------------------------------------------------------------------
    Consumers nationwide have begun to question FDA's true mission. Is 
the FDA a government agency established to protect the American public, 
or is it merely an extension of the pharmaceutical industry? Can we, as 
``stakeholders,'' trust the scientific judgment of the regulators when 
the FDA refers to the pharmaceutical industry as the agency's 
``customers''? I would also remind the Committee that the public is not 
merely a ``stakeholder.'' We are the ones who may live or die based on 
the FDA's decisions.
    The Prescription Drug User Fee Act, or PDUFA, was enacted to 
provide sufficient funding for the agency to hire the additional staff 
needed to review new drug applications at a quicker pace. In exchange 
for user fees, the FDA was given the responsibility ( of meeting very 
specific ``performance goals.'' These performance goals, often referred 
to as ``deadlines,'' have resulted in what some FDA officials refer to 
as a ``sweat shop atmosphere.'' For example, for each new drug 
application submitted to the FDA, reviewers must master volumes of data 
in less than six months or a year, while juggling many other 
tasks.2 They quickly burn out from the intense pressure to 
perform, and often leave the agency in less than two years and go to 
industry to earn higher salaries.3 Performance goals create 
another unintended consequence--companies have an incentive to delay 
submission of voluminous data, putting the agency under tremendous 
pressure to meet user fee deadlines without adequately analyzing the 
data. It appears the industry has the best of both worlds--they get 
their quick approvals AND they hire the scientists trained by the FDA.
---------------------------------------------------------------------------
    \2\ How a New Policy Led to Seven Deadly Drugs, Los Angeles Times, 
April 17, 2001, by David Willman.
    \3\ FDA/Industry Face-Off in Preliminary PDUFA III Discussions, FDA 
Week, April 20, 2001, p. 13.
---------------------------------------------------------------------------
    Given the fact that pharmaceutical firms considers PDUFA ``their'' 
program (and I quote, ``The time to approval in the review process has 
been coming down markedly since WE instituted the program in 1992''), 
it is probably a political reality that PDUFA will, in fact, be 
reauthorized because it is seen as a way to get products to market 
quicker with minimal erosion of patents.4
---------------------------------------------------------------------------
    \4\ User Fees for Faster Drug Reviews--Are They Helping or Hurting 
the Public Health, FDA Consumer, September-October 2000, p. 26.
---------------------------------------------------------------------------
    But before PDUFA is reauthorized, we feel that consumers and 
patients must have assurances that the primary mission of the FDA is to 
protect and serve the American public--not to improve the financial 
picture of the pharmaceutical industry. As you consider reauthorization 
of FDAMA, therefore, we ask that you consider the following 
suggestions:

                         THE POLITICS OF FDAMA

    FDAMA was enacted during the Clinton administration, and some 
suspect it fell victim to the ``reinventing government'' initiative. 
Congress wanted to cut back federal spending, so ``user fees'' were 
implemented under PDUFA in 1993. FDAMA incorporated and reauthorized 
user fees in 1997 and, at the same time, was supposed to make the
    FDA more ``user friendly'' to the drug and device industries. 
Government regulatory agencies were told to be more cooperative with 
the industries that they regulate, and President Clinton specifically 
asked FDA administrators to trust industry as ``partners, not 
adversaries.''
    Many consumer groups opposed FDAMA because they felt it would lower 
the safety and efficacy standards for new drugs, inflate FDA's 
resources for new drug reviews, and in turn deflate resources in other 
areas of the agency that are critical to the public's health. FDA would 
no longer be the ``gold standard'' for the world's health authorities, 
and nothing in FDAMA indicated that American consumers would be the 
agency's real ``customers.'' Thus, the agency would not become more 
``user friendly'' to the public. In fact, Congress, FDA and the 
regulated industries negotiated the law, and consumers were 
specifically omitted from the debate.
    The changes that FDAMA brought about were NOT intended to enhance 
or protect the public's health. In fact, the agency had implemented 
critically important rules in the 1980s under Commissioner Frank Young 
during the Reagan administration for giving ``priority reviews'' to 
breakthrough drugs for serious and life-threatening diseases. But the 
pharmaceutical industry lobbied Congress for FDAMA on the basis that 
the FDA was taking too long to get ``life-saving'' medicines to the 
public. The truth was that life-saving medicines were already being 
speeded through the process, but the standard ``me-too'' drugs were 
taking more time than the industry wanted. Undoubtedly, FDAMA would not 
have been enacted if the arguments had been framed in terms of 
``speeding new diet pills to the market.''
    In 1988, only four percent of new drugs were approved first in the 
United States. By 1998, 66 percent of all new drugs were approved first 
in the USA.5 But, being first out of the gate does not 
necessarily mean you will win the race. When faulty drugs are rushed to 
approval, the ``prize'' for being first may be unnecessary exposure to 
negative side effects or death.
---------------------------------------------------------------------------
    \5\ Quickened pace of drug approvals by FDA taking toll, by David 
Willman, Los Angeles Times, December 28, 2000.
---------------------------------------------------------------------------

                         REVIEW TIME VS. SAFETY

    The approval time for New Drug Applications (NDA) has decreased 
dramatically since PDUFA was first enacted. Back in 1993, the medial 
approval time was 24.1 months. In 2000, that figure plummeted to 11.2 
months, or about 54 percent.6 If you look just at those 
statistics, I suppose you could say that PDUFA has been a resounding 
success.
---------------------------------------------------------------------------
    \6\ Approval Times (in months) for NDAs and NMEs Approved, Calendar 
Years 1986-2000, FDA, CDER/ORM.
---------------------------------------------------------------------------
    However, there have been far too many withdrawals of marketed drugs 
after they have killed and disabled people, casting a serious shadow 
over the agency's credibility and competency. The publicity fueled by 
these withdrawals has further cast doubt on whether the user fee 
program is in the public's best interest. Based on those withdrawals, 
it is quite apparent to many that the FDA should not be subjected to 
the pressure cooker atmosphere created by PDUFA. Products are being 
rushed through the review process and, as a result, consumers are being 
exposed unnecessarily to sometimes dangerous and life-threatening 
drugs. Human beings are not guinea pigs, gentlemen. When FDA determines 
that a drug is both safe and effective, we take them at their word.
    NORD believes the agency's success must NOT be measured by the 
speed of its work, but rather the completeness and scientific soundness 
of its work. In fact, some of the drugs that have been removed from the 
market in recent years might have been approved with more adequate 
labeling if FDA had enough time initially to recognize adverse effects, 
and to require appropriate labeling when the drugs were first approved. 
FDA reviewers must be given the latitude to review new drug 
applications at a decelerated rate if it is deemed scientifically and/
or ethically necessary, especially when a drug is not a life-saving 
therapy. Let the reviewers do what they have trained years to do. Of 
course, everyone wants to see life-saving drugs come to market quickly, 
but only if they have been determined to be safe and effective. 
Remember the first law of medicine--First do no harm.
    The agency should not be forced to take a ``one size fits all'' 
approach to drug approval; it is wrong to require FDA to spend the same 
amount of time to review all standard or priority drugs and biologics. 
Some will need more time. Some will need less. Safety and efficacy 
should be the only true measure of whether a drug is approved or not.

                             DRUG LABELING

    It is my understanding that eleven or more drugs have been removed 
from the market since 1993, but seven of them were first approved for 
marketing after 1993. In many of these cases, FDA ``negotiated'' 
labeling changes with the manufacturer, and left the drug on the 
market, hoping that doctors would notice the new warnings and prescribe 
the drug properly. Of course, health care providers usually don't 
reread labeling once a drug has been on the market, so after more 
deaths and serious adverse events, the FDA finally banned the drugs.
    The fact is the FDA seldom orders a company to change its label. 
Rather, they ``negotiate'' with companies over wording, and these 
negotiations can last for many months while manufacturers try to get 
wording that will have the most positive spin to enhance their 
marketing plan. We believe that FDA should be given the authority to 
order immediate labeling changes without negotiations. FDA's role is to 
protect the public's health. Manufacturers should not be telling the 
regulators how to regulate the regulators!

                        ADVERSE EVENT REPORTING

    The United States has a voluntary system of adverse event reporting 
(AER). It relies on doctors, hospitals, consumers and manufacturers to 
report adverse events, but the FDA doesn't have sufficient resources to 
analyze the data and try to identify red flags that may point to public 
health disasters (e.g., heart problems caused by diet pills). Even with 
the incompetencies of the current AER system, voluntary reports of 
adverse events from pharmaceuticals rose 89 percent between 1993 and 
2000.7 This alone should signal that too many new drugs are 
reaching the market before they are adequately studied. The rush to 
market is NOT for the sake of the public; it is solely for the sake of 
the industry.
---------------------------------------------------------------------------
    \7\ Los Angeles Times, April 27, 2001.
---------------------------------------------------------------------------
    Reauthorization of PDUFA must change this mindset and focus the law 
on public health protection and enhancement, including stronger FDA 
authority to analyze adverse events and to protect human subjects in 
research. To date, the FDA has no bioethicists on staff, no authority 
to stop a clinical trial if an informed consent document is inaccurate 
or misleading, or even if the study is unethical. Most clinical 
research today is funded by the industry, not by the government, and 
privately funded research does not have to obey the Common Rule. FDA 
should have the authority to enforce patient protections for privately 
funded research, and it must be given the funds to do this. Moreover, 
Congress should mandate adverse event reporting so that severe 
reactions to drugs can be tracked.

                      POST-MARKETING SURVEILLANCE

    Under FDAMA the FDA can ask manufacturers to perform post-marketing 
studies, but such studies are not mandatory. Even if the manufacturer 
agrees to such studies, the FDA does not have the authority to penalize 
the company if the studies are not conducted, and the FDA is the first 
to admit they don't even know if companies are doing them. FDA usually 
asks for post-marketing studies when they have rushed a priority drug 
through the approval process, but there are still unanswered questions. 
Often, once these drugs are used in the real world where people take 
other medicines, or have other illnesses, adverse events will occur.
    At a recent Food and Drug Law Institute educational conference, 
industry argued that the FDA ``has no jurisdiction in the area of risk 
management''. We happen to agree with the FDA that the industry's 
position is ``disingenuous.'' At the same conference, Jane Axelrad, 
Associate Policy Director for the FDA, said, ``Drug companies have task 
forces out there bombarding doctors with details about drugs and this--
along with direct-to-consumer advertising--is clearly influencing 
prescriber practice.'' 8
---------------------------------------------------------------------------
    \8\ ibid.
---------------------------------------------------------------------------
    We ask that you make these post-marketing studies mandatory, and 
give the FDA the authority to assess penalties when companies do not do 
what they have promised to do. Post-marketing surveillance does not 
``step on the toes of the practice of medicine.'' Rather, it goes to 
the very heart of the mission of the FDA--to protect American 
consumers.

                               USER FEES

    As prescribed by law, user fees can be employed for very specific 
purposes ONLY. They cannot be used for critically important public 
health functions such as adverse event monitoring or advertising and 
marketing enforcement. Nor are they assessed for generic drugs, medical 
devices, food importation or cosmetics. So, for almost a decade, the 
FDA has been forced to beg, borrow and steal staff and resources, 
robbing Peter to pay Paul, to the detriment of other vital agency 
operations. With the dangers of Mad Cow disease, bioterrorism, and 
bioengineered foods looming in our future, the agency cannot possibly 
meet its mandate with insufficient resources! Our nation is poised for 
a public health disaster because the FDA simply cannot do its job. 
Congress must adequately fund the FDA or institute user fees for all 
other areas of FDA's public health responsibilities.
    User fees have enabled the FDA to cut new drug approval times in 
half, but they have also created a financial dependence by the agency 
on the industry it regulates. Understandably, the pharmaceutical 
industry wants to continue the user fee program. Every day that the 
industry can save on the new drug approval process is one more day they 
can sell their drug before their patents expire. However, the FDA's 
dependence on the user fees that companies pay creates a perceived 
conflict of interest that may compromise the health of the American 
public.
    The integrity of the US drug approval process is at risk, and the 
implications of the loss of public trust here and around the world are 
immense. The FDA should not have a direct fiscal interest in optimizing 
user fees, because this practice has led to public distrust. Speaking 
for myself, I would think twice before being one of the first patients 
to take a newly marketed drug. I cannot trust that FDA reviewers in a 
``sweat shop atmosphere'' adequately reviewed the product.
    The only drugs given priority review at the agency should be 
treatments for life-threatening and untreatable diseases, drugs for 
patients who are not helped by existing treatments, or drugs for 
serious diseases that are safer or more effective than current 
therapies. In fact, we would recommend that you examine the FDA's 
definition of ``clinical superiority'' in the Orphan Drug Act 
regulations. Priority reviews should be given only to drugs that are 
substantially ``different'' from the drugs currently on the market and 
ones that have been clearly shown to be safer, or more effective, or to 
offer a significant contribution to patient care (e.g., an oral version 
of an injectable drug).
    FDA's annual measure of success or failure should NOT be the number 
of drugs it approves during a given year, but rather the medical and 
public health advancements that each drug represents. The speedy 
approval of drugs for diagnoses that don't exist in medical texts, more 
cosmetic, ``me-too,'' or lifestyle drugs, does not represent a major 
improvement in public health.
    Some drugs should take more time, and some should take less, 
depending on the quality of scientific data. Since the Reagan 
administration in the 1980s, the agency has had adequate tools to make 
investigational drugs available to patients who need them (e.g., 
compassionate use, treatment IND's, early access programs, etc.).
    In summary, FDA needs more flexibility on spending user fees (they 
should not be confined to new drug reviews), and the onus is on 
Congress to either institute user fees for other industries, or 
appropriate sufficient funds for all of the other critically important 
public health responsibilities of the agency.

                         PEDIATRIC EXCLUSIVITY

    For rare diseases, the pediatric use of drugs that were developed 
for adult health conditions is an absolute necessity. Most children are 
healthy and may require the normal cough and cold remedies, 
antibiotics, and perhaps asthma drugs. Serious health conditions in 
children are rare, and medicines to treat their ailments are very 
rarely labeled with information about pediatric dosage.
    NORD agrees that the pediatric exclusivity provision ``has been 
highly effective in generating pediatric studies on many drugs and in 
providing useful new information in product labeling.'' 9 We 
also agree with the proponents of the provision that it should be 
reauthorized by Congress in order to ensure that all children have 
access to medications needed to protect and preserve their health. But 
we feel that other types of incentives should be examined in the 
congressional debate, and careful fine-tuning of the law is needed.
---------------------------------------------------------------------------
    \9\ The Pediatric Exclusivity Provision, January 2001, Status 
Report to Congress, Department of Health and Human Services, U.S. Food 
and Drug Administration.
---------------------------------------------------------------------------
    We are delighted that the FDA has ``drawn a line in the sand'' 
against the industry's practice of enrolling healthy children in 
clinical trials, and it will no longer grant pediatric exclusivity if 
there is no potential benefit for children who participate in such 
studies.10 We say bravo to the FDA! The prohibition against 
including healthy children in clinical trials has been in effect since 
the 1970s (The Belmont Report), and it is part of the Common Rule and 
the Declaration of Helsinki. However, privately funded medical research 
does not have to obey the Common Rule, so for the past decade American 
children have been exposed to risks that are unacceptable in other 
industrialized nations of the world.
---------------------------------------------------------------------------
    \10\ FDA Week, April 25, 2001, p.3.
---------------------------------------------------------------------------
    We believe there have been other unintended negative aspects of the 
pediatric exclusivity provision that should be addressed by this 
Congress.

 The Wall St. Journal reported that six months of pediatric 
        exclusivity for the antihistamine Claritin amounts to $975 
        million dollars in sales to the manufacturer, six months of the 
        antidepressant Prozac sales amounts to $831 million, while 
        highly used generic drugs like the asthma compound Albuterol, 
        and antibiotics like ampicillin, are not being studied in 
        children at all.
 It is estimated that over 20 years of pediatric exclusivity 
        will cost Americans $13.9 billion, while brand name drug makers 
        will earn $29.6 billion, and generics will lose $10.7 billion. 
        Distributors and pharmacies will lose $4.9 billion.
 When FDA awards pediatric exclusivity, the exclusivity is 
        awarded for the active moiety rather than just the pediatric 
        indication. In one case a company studied an intravenous form 
        of an indigestion drug on children, but the exclusivity applied 
        to all liquid and pill forms, and even the over-the-counter 
        version. Thus, the pediatric exclusivity provision is like a 
        tax that Medicare-dependant grandparents have to pay for the 
        sake of their grandchildren, by paying inflated prices for a 
        longer period of time.
 Of the studies that have been done, and the exclusivity 
        awarded, only a tiny proportion of those drugs have been re-
        labeled for pediatric usage. What use is a study when 
        information about dosage adjustments and side effects is not 
        available to pediatricians? We believe that exclusivity should 
        NOT be awarded unless and until the label is actually changed.
 The law is inequitable because it leaves out huge categories 
        of drugs (including biologics) that children need, that will 
        never be studied. This includes generics and even patented 
        drugs with small annual sales. The problem is that pediatric 
        exclusivity encourages companies to study their most profitable 
        drugs, but not the drugs that have the most intense medical 
        need for children.
 Although we applaud the FDA's recent issuance of an interim 
        rule providing additional safeguards for children in clinical 
        trials, the pediatric exclusivity provision, as currently 
        written, contains no human subject protections. Questions 
        continue to be raised about clinical research in the pediatric 
        population, as reports of large cash payments to parents and 
        other questionably ethical inducements are reported in the 
        press.
 The pediatric exclusivity provision actually bribes companies 
        to do what they ought to be doing as decent corporate citizens. 
        Until 1997, companies refused to conduct the studies until they 
        saw a way to increase profits well in excess of what these 
        studies cost. The FDA now says it will require all new drugs to 
        be tested in children and can demand that trials be conducted 
        when the agency feels a treatment will be applicable to 
        children's diseases. However, drug companies are suing the FDA 
        to stop this! The industry says the FDA has no authority to 
        require companies to study their new drugs on children. We ask 
        Congress to give the FDA this authority so the agency can 
        protect the health and welfare of our children. It is 
        regrettable that the government must force the industry to be 
        good corporate citizens--a very sad state of affairs indeed.
 We also suggest that in the congressional debate about 
        reauthorization of the pediatric exclusivity rule, you look at 
        other options that will not tax the elderly with high drug 
        prices, for the sake of the young. For example, instead of 
        preventing lower cost generic drugs from reaching the market 
        when brand name patents expire, why not award a large tax 
        credit to companies that perform the clinical trials necessary 
        for pediatric labeling? Perhaps a tax credit of 125 percent of 
        the costs of the studies would entice companies into supporting 
        the trials, and even reward generic companies who do pediatric 
        investigations on older drugs. In fact, Congress' highest 
        priority should be the development of incentives, or 
        appropriation of funds, to encourage pediatric research on the 
        generic drugs most needed by children.

                                SUMMARY

    In summary, Mr. Chairman, the FDA is losing the public's trust 
because it does not have the resources to do its job. The strict 
deadlines for new drug reviews are forcing drugs out on the market 
before FDA scientists adequately review them. Companies that do not 
feel their drugs are reviewed properly resort to lobbying Congress. 
There ought to be a firewall between industry and the FDA so that 
scientists can make their decisions based solely on scientific grounds. 
Yes, the FDA should be accountable, but so should the pharmaceutical 
industry. Drastically limiting review times while expecting more drugs 
to get approved is not the right way to measure success: It is a 
prescription for disaster.
    We ask Congress to take a very careful look at the law and 
recognize that FDA's primary role is to protect and enhance the 
public's health. A more careful new drug review process will do much to 
avoid public health disasters in the future. FDA has had adequate 
mechanisms to allow very promising new drugs to reach the public before 
they are approved for marketing, but this should only be for life-
threatening and serious diseases with no other treatment alternatives. 
We should not be rushing baldness remedies and indigestion drugs to 
market.
    We also ask Congress to appropriate sufficient funds for other FDA 
initiatives. It has been reported that funding for non-PDUFA programs 
is down 20 percent, while PDUFA-related programs have seen increases of 
27 percent. The exaggerated emphasis on new drug approvals saps 
resources from the agency's other public health functions.
    Mr. Chairman, people with rare diseases desperately need new drugs 
to save their lives and prevent disability, but not at the expense of 
safety and efficacy. When we spend our hard earned money on a 
treatment, we want to know first if it is safe, and second if it is 
effective. Nothing else matters. Those with very serious and deadly 
illnesses are often willing to take higher risks (e.g., cancer 
chemotherapy drugs), but only if our doctors know what the side effects 
are and how to manage them. Our lives depend on the FDA, and if the 
agency cannot do its job, it puts our lives in jeopardy. We trust that 
Congress will use its wisdom to bring credibility back to FDA and 
bolster its public health mandate.
    I thank the committee for its invitation to express the interests 
of people with rare diseases in the debate about reauthorization of 
FDAMA, including PDUFA and pediatric exclusivity.

    Mr. Bilirakis. Thank you, Ms. Meyers. You gave us an awful 
lot of suggestions. I jotted down some of them. The rest of 
them are all in the record. In fact, I have been talking to the 
staff about one of them right now.
    Mr. Plunkett?

                 STATEMENT OF TRAVIS B. PLUNKETT

    Mr. Plunkett. Good afternoon. Mr. Chairman, Mr. Brown, my 
name is Travis Plunkett. I am the Legislative Director of the 
Consumer Federation of America. I am here today on behalf of 
the Patient and Consumer Coalition, an ad hoc coalition 
representing a diverse array of consumer and patient 
organizations. I would like to thank you both for conducting 
this much-needed hearing on the Food and Drug Administration 
Modernization Act and its impact on Americans nationwide.
    I will focus my comments on PDUFA, the Prescription Drug 
User Fee Act. Has PDUFA II, as reauthorized in 1997, been a 
success? Well, if success is only measured by the speed of drug 
approval and the number of drugs getting onto the market, the 
answer is a resounding yes. But the FDA's responsibility under 
the law is to ensure that new drugs and devices are safe and 
effective. By this measure, PDUFA II has some serious problems.
    Now clearly there are very important public health benefits 
to be gained from faster approval of certain new drugs. This 
includes drugs that treat serious and life-threatening 
conditions, drugs that provide relief for patients with 
illnesses or disabilities, that are resistant to existing 
therapies, or drugs that are less toxic than currently 
available therapies.
    Most Americans, however, would agree that a lifestyle drug 
like Viagra or a me-too drug that is just a mere copy of a 
bestseller does not need to be rushed to market as quickly as 
say an important new anti-cancer agent or an enzyme replacement 
therapy for genetic disease. The fact is that as the FDA's 
dependency on fees paid by the regulated industry has grown, so 
have the number of recalls and warnings.
    Mr. Chairman, I don't raise this issue lightly. We can talk 
about in questions why it is much more important to look at the 
number of recalls and warnings, the number of Americans who 
have been affected, as opposed to the rate of withdrawal. That 
is, the percentage of drugs withdrawn compared to the number of 
new drugs on the market. It is a much more effective way of 
evaluating whether PDUFA has increased safety and health.
    Eleven prescription drugs have been pulled from the U.S. 
market in the last 3\1/2\ years for safety reasons. This is by 
far the most such actions taken in any comparable period. Only 
one of these drugs, an antibiotic, had lifesaving potential. 
But it was later deemed to be unnecessary because other safer 
antibiotics were available. More than 22 million Americans took 
these drugs. Just last week an anaesthetic was removed from the 
market after five people were reported to have died.
    Now if we look at these withdrawals a little more closely, 
we find that of those 11 drugs, eight were approved after PDUFA 
took effect, first took effect in 1993. According to the 
Pulitzer prize wining investigation by David Willman at the Los 
Angeles Times, seven of these drugs are suspected in just over 
1,000 deaths. In overall, these adverse events, as they are 
called, have increased in reporting--these are voluntary 
reports, as you heard, to the FDA--by 89 percent from 1993 to 
2000.
    One of the major reasons why these drugs were improperly 
allowed onto the market is because PDUFA has very stringent 
decisionmaking deadlines that we view as inappropriate, 
potentially dangerous, and open to manipulation by the drug 
industry. Now the FDA takes pains to explain that these are 
performance goals, that they are focused on decisionmaking and 
not approving drugs. But there is evidence to suggest that in 
the real world, FDA employees have been under tremendous 
pressure to meet not just decision deadlines, but also to 
approve drugs.
    I will just cite the LA Times story to you again. You may 
want to look at this. It includes quote after quote from 
retired and former FDA employees, that they were under 
tremendous pressure from FDA officials and because of the 
deadlines under the law to approve drugs, not just make 
decisions about them.
    These deadlines forced the agency to take a cookie cutter 
approach to drug approvals. It is just not in the public 
interest to require the FDA to act at the same speed for all 
standard or priority drugs and biologics. Some should get more 
time. Some should receive less.
    Moreover, it's just inappropriate to give a regulated 
industry this kind of dominant voice in determining what will 
be the process for oversight of that industry, as was done in 
crafting PDUFA in 1997. I would like to commend both of you for 
doing it differently this time, for having a spectrum, a 
diverse array of folks offering a variety of opinions on PDUFA.
    The end result is that the regulated industry controls not 
only the funding and the timing for new drug approval, but the 
measurement tools that are used to determine the FDA's success 
or failure in this matter.
    I will close with my remarks there, and answer any 
questions you have later. Thank you once again for having this 
hearing.
    [The prepared statement of Travis B. Plunkett follows:]

    Prepared Statement of Travis B. Plunkett, Legislative Director, 
 Consumer Federation of America, on Behalf of the Patient and Consumer 
                               Coalition

    Good morning. I am Travis Plunkett and I serve as the Legislative 
Director of the Consumer Federation of America. I am here today on 
behalf the Patient and Consumer Coalition, an ad hoc coalition of 
patient and consumer advocacy organizations working to insure greater 
access to safe, effective affordable drugs and medical devices. The 
coalition also focuses on enhancing the ability of the Food and Drug 
Administration to protect public health through effective enforcement 
of the law. (Please see the attached for the coalition's mission 
statement and founding members.) This testimony is endorsed by the 
following members of the coalition: Center for Medical Consumers, 
Consumer Federation of America, Gay Men's Health Crisis, National 
Consumers League, National Organization for Rare Disorders, National 
Women's Health Network, Public Citizen, UAW and the U.S. Public 
Interest Research Group.
    I would like to thank Chairman Bilirakis and Ranking Member Brown 
for the opportunity to offer comments on the impact of the Food and 
Drug Administration Modernization Act (FDAMA) on consumers and patients 
nationwide. We urge the subcommittee and the full committee to have 
several hearings to evaluate both the impact of FDAMA on public health 
and safety, as well as the range of possible changes that could improve 
it. I will focus my comments on a key component of the Act: the 
expansion of the Prescription Drug User Fee Act (PDUFA.) I will also 
comment briefly on the ``pediatric exclusivity'' provision that grants 
additional patent life to drug manufacturers that conduct clinical 
tests on the effect of their drugs on children.

                   THE PRESCRIPTION DRUG USER FEE ACT

    As you know, PDUFA was first enacted in 1992 to address concerns 
about the length of time it took for new drugs to treat life 
threatening and disabling conditions to be reviewed and approved by the 
FDA. While the issue of new drug approval time had been a contentious 
one for several decades, the experience with HIV/AIDS convinced many 
that there was room for improvement. PDUFA recognized the reality that 
the resources of the agency were constrained and that a shorter 
approval process would require considerably more staff devoted to the 
drug review process. User fees were imposed upon industry that would 
fund the additional agency resources needed to speed up the review and 
approval process.
    PDUFA was reauthorized in 1997 as part of the FDAMA. However, this 
iteration introduced increasingly stringent ``performance goals'' 
requiring that the FDA meet tight review deadlines. It even includes 
stipulated time frames for scheduling of meetings and response to 
industry requests. For example, the 1997 PDUFA establishes a 
performance target that requires FDA to review 90 percent of priority 
new drug applications within 180 days and non-priority new drug 
applications with 10 months. These mandates were insisted upon by the 
industry that argued that these ``measurables'' were necessary to 
ensure that the user fees they paid were not dispersed to fund other 
agency activities.
    As a result of the 1992 and 1997 legislation, the FDA has 
dramatically increased the amount of resources it devotes to new drug 
and biologics review and approval from $120 million in 1992 to a 
projected $325 million in FY 2002. In FY 2002, it is estimated that a 
record half of the resources required for new drug approvals will come 
from user fees paid by the regulated industry.\1\
---------------------------------------------------------------------------
    \1\ Food and Drug Administration, ``PDUFA Background Information,'' 
August 2000.
---------------------------------------------------------------------------
    Has PDUFA been a success? Well, if success is only measured by the 
goals mandated in 1997, the answer is a resounding ``yes.'' The time 
for approval has decreased from a median of slightly less than two 
years in 1992 to less than one year at present. A higher percentage of 
applications are now approved; 80 percent compared with only 60 percent 
in 1992.\2\
---------------------------------------------------------------------------
    \2\ Ibid.
---------------------------------------------------------------------------
    But the success of a drug review and approval process should not be 
measured by speed and approval rates alone. The FDA's responsibility 
under law is to ensure that new drugs and devices are safe and 
effective. That is the true public health responsibility of the agency 
by which its success or failure must ultimately be measured. We believe 
that the effect of PDUFA II on public health and safety is a matter for 
grave concern.
    1. PDUFA creates a financial dependence by the FDA on an industry 
it regulates. This is a conflict-of-interest that could compromise drug 
safety. Our organizations recognize that PDUFA has provided the agency 
with the resources to speed up new drug approvals since 1993. Clearly 
there are public health benefits to be gained from faster approval of 
certain new drugs. These include medications that treat serious and 
life-threatening conditions, drugs that provide relief for patients 
with illness or disability refractory to existing therapies, or drugs 
that are less toxic than currently available therapies.
    However, the FDA's direct fiscal interest in optimizing user fee 
income to achieve speedier approval times and get more drugs through 
the approval process in each budget year creates an obvious tension 
with its responsibility to assure the highest degree of safety and 
efficacy of new products. As mentioned above, the FDA's dependency on 
fees paid by the regulated industry has grown dramatically since fees 
were first initiated in 1993. The integrity of the drug approval 
process is what is potentially at risk and, as a result, the safety of 
the millions of Americans who use prescription drugs could be 
compromised.
    The growing number of recalls and warnings related to newly 
approved drugs has reinforced our concerns. The agency has attempted to 
demonstrate that there is no relationship between faster approval times 
and more frequent recalls or additional safety warnings. However, there 
have been too many recent withdrawals of marketed drugs that have 
killed and injured people that have cast a serious shadow over the 
integrity of the approval process. Eleven prescription drugs have been 
pulled from the U.S. market in the last three and one-half years for 
safety reasons, by far the most such actions taken in any comparable 
period. More than 22 million Americans took those drugs. Just last 
week, the anesthetic Raplon was removed from the market, after five 
people were reported to have died from bronchospasm.
    These eleven drugs include three that were approved before PDUFA 
took effect in 1993, but the withdrawn drugs Lotronex, Propulsid, 
Rezulin, Raxar, Posicor, Duract and Redux have all been approved since 
1993. According to the Pulitzer Prize-winning investigation by David 
Willman of the Los Angeles Times, these seven drugs are suspected in 
1,002 deaths.\3\ This is based on the FDA's reporting of ``adverse 
events,'' which doesn't prove that a particular drug caused a death; it 
is merely a ``primary suspect.'' However, adverse events reports are 
also voluntary, so the true number of fatalities caused by these drugs 
could be much higher. Adverse events reported to the FDA increased by 
89 percent from 1993 to 2000.\4\
---------------------------------------------------------------------------
    \3\ David Willman, ``How a New Policy Let to Seven Deadly Drugs,'' 
Los Angeles Times, December 20, 2000.
    \4\ Ibid. Adverse events increased from 136,836 in 1993 to 258,125 
in 1999.
---------------------------------------------------------------------------
    Moreover, we are particularly concerned that, to date, the risks 
posed by these drugs have fallen disproportionately on women. In 
January, the U.S. General Accounting Office (GAO) reported to Congress 
on the subject of drug safety with the significant finding that most 
drugs withdrawn in recent years had greater health risks for women. 
Specifically, the GAO investigation found that, ``Eight of the ten 
prescription drugs [withdrawn from the U.S. market since January 1, 
1997] posed greater health risks for women than for men'' and that four 
of the drugs withdrawn ``had more adverse events in women even though 
they were widely prescribed to both women and men.''
    Only one of the drugs withdrawn from the market since 1993, the 
antibiotic Raxar, had lifesaving potential. It was ultimately 
determined to be unnecessary because other, safer antibiotics were 
available. Willman's investigation also included reports from a number 
of former FDA employees that the need to act quickly--as required by 
PDUFA--and the demands of FDA officials, put them under enormous 
pressure to approve new drug applications, whether they felt the drugs 
were safe or not.
    As if to confirm our fears, the term ``customer'' has crept into 
the FDA's characterization of the prescription drug industry. We are 
very concerned that an agency chartered to safeguard the public's 
health would characterize the industry it regulates as its primary 
customer, and itself as a ``supplier'' of services (namely new drug 
review and approval.) It is the public, not the drug industry, that 
should be the FDA's ``customer.'' The medical and public health 
consequences of faster drug approval are the appropriate measure of 
PDUFA's successes and failures, not the tabulation of the average 
number of months a drug requires for approval.
    2. PDUFA's performance goals are inappropriate, potentially 
dangerous and open to manipulation by the drug industry. Although the 
FDA takes pains to explain that the performance goals mandated under 
PDUFA are for decision-making, not approval, these goals put the FDA 
under tremendous financial pressure to move very quickly on the overall 
approval process. Here's what William B. Schultz, a former deputy 
commissioner at the FDA told the Los Angeles Times about PDUFA 
deadlines: ``You can meet the goal by either approving the drug or 
denying the approval. But there are some who argue that what Congress 
really wanted was not just decisions, but approvals. That is what gets 
dangerous.'' Dr. Solomon Sobel, the former director of the FDA's 
metabolic and endocrine drugs division told the Los Angeles Times that 
deadline pressure under PDUFA was not just to make decisions: ``The 
pressure to meet deadlines is enormous. The basic message is to 
approve.'' \5\
---------------------------------------------------------------------------
    \5\ Ibid.
---------------------------------------------------------------------------
    These goals force the agency to take an unvarying, ``cookie 
cutter'' approach to drug approvals. It is not in the public interest 
to require the FDA to act at the same speed for all standard or 
priority drugs and biologics. Some should get more time, some should 
receive less; time should not be the measurement of the agency's 
success. The agency has adequate tools to enable patients to obtain 
drugs before they are approved for marketing (as with the Treatment 
IND), so that desperately ill patients can have early access to 
potentially important medicines.
    Moreover, it is completely inappropriate to give a regulated 
industry a dominant voice in determining what will be the process 
(``performance goals'') for oversight of that industry. Congress 
established these goals in consultation with the prescription drug 
industry and received absolutely no input from consumers. The end 
result is that the regulated industry controls not only the funding and 
timeline for new drug approval, but the measurement tools that are used 
to determine the FDA's success or failure in this matter.
    PDUFA allows companies to manipulate the FDA into quickly approving 
drugs that the agency has not had adequate time to review. Companies 
can do this simply by dragging their feet in submitting required data 
and test results until the FDA's ``performance'' deadline draws closer. 
If this practice is used on a regular basis, it puts the FDA under 
tremendous time pressure to meet its performance goals without 
adequately reviewing the submitted data. In other words, the FDA's 
performance goals, which are based on the agency's ability to meet many 
decision-making deadlines over the course of time, may actually provide 
companies with an incentive to delay transmitting some data to the FDA 
quickly. If they give the FDA the information ``too early,'' the agency 
might actually have more time to find flaws in the information.
    3. PDUFA is draining resources from other critically important FDA 
public health functions, such as monitoring the safety of drugs once 
they are on the market and approving generic drugs for entry into the 
market. This distorts the overall priorities of the agency. The 
pharmaceutical industry insisted that a large, inflation-adjusted 
portion of drug review costs be funded through appropriations. 
Congressional budget increases to the FDA have not kept up with the 
mandated spending increases in PDUFA. According to the FDA, it has had 
to absorb $284 million in unfunded pay raises and other inflationary 
costs in the last eight years.\6\ To his credit, the President has 
proposed funding in his budget to catch-up on these expenses.
---------------------------------------------------------------------------
    \6\ FDA Talk Paper, April 9, 2001
---------------------------------------------------------------------------
    Here's what the FDA has to say about the impact of PDUFA on the 
rest of their mission: ``We are increasingly concerned that spending 
enough appropriations on the drug review process to meet the statutory 
conditions makes the FDA less able to manage the resources available in 
a way that best protects the public health and merits public 
confidence.'' \7\ Former Commissioner Jane Henney went a step further, 
``. . . the truth is, the program is barely surviving because of the 
way it was designed. We don't have the resources to do the things we 
believe are essential, such as adverse event reporting, because they 
are not supported by PDUFA funds.'' \8\
---------------------------------------------------------------------------
    \7\ Food and Drug Administration, ``PDUFA Background Information,'' 
FDA, August 2000.
    \8\ FDA Consumer Magazine, ``User Fees for Faster Drug Review: Are 
They Helping or Hurting the Public Health?,'' September-October 2000.
---------------------------------------------------------------------------
    Moreover, the director of FDA's Center for Drug Evaluation and 
Research, Janet Woodcock, has expressed a great deal of concern about 
FDA staff turnover, and ultimately, their experience and competency. 
She has said that the intense timelines under PDUFA have created a 
``sweatshop environment that's causing high staffing turnover.'' \9\ 
Many of the FDA's most highly trained scientists and experts are 
leaving within three years, preventing the agency from building an 
institutional memory of previous reviews.
---------------------------------------------------------------------------
    \9\ Ibid.
---------------------------------------------------------------------------
    One of the areas of FDA's work that is suffering from a dramatic 
lack of resources in the post-FDAMA and -PDUFA era is oversight of 
prescription drug advertising to consumers. As the number of drugs 
approved has increased, so has industry spending to promote these 
drugs. Since 1997, pharmaceutical industry spending on direct-to-
consumer advertising has skyrocketed: increasing by 42 percent between 
1996 and 1997, by 23 percent between 1997 and 1998, and by 40 percent 
between 1998 and 1999. In 1999, drug companies spent more than $1.8 
billion on direct-to-consumer advertising.
    The FDA staff responsible for reviewing these promotional materials 
has not increased proportionately. FDA has only 13 people responsible 
for primary review of the 32,000 pieces of promotional material that 
the agency receives in a year. This level of resource commitment is 
clearly insufficient to enable FDA to act promptly on violations of the 
requirement that ads be accurate and include a fair balance of 
information about risks as well as benefits. Slow action on inaccurate 
and incomplete advertisements is a serious problem for consumers. Until 
the agency informs a company that it must withdraw or change an ad, the 
public will continue to be exposed to false information and to ads that 
fail to include important risk information. Delays in this area pose an 
unacceptable threat to the public health.
    4. PDUFA does not prioritize between speedy approval of drugs that 
are truly important and those that represent no therapeutic 
advancement. Unfortunately, the FDA's regulatory process as defined by 
statute and regulation does not provide it the latitude to prioritize 
the new drug approval process based on a ranking of medical and public 
health needs. The FDA has four categories for approval of new drugs: 
(1) Those for serious or life-threatening conditions for which there is 
no adequate treatment; (2) drugs for rare disorders; (3) the majority 
of new drugs that are approved, which are redundant chemical 
modification of drugs already marketed; and (4) drugs that are granted 
priority review because they work in some new way.
    We suggest that drugs that fall into the third category above, such 
as a drug for erectile dysfunction, or the third or fourth cox-2 
inhibitor, do not need to be rushed to market as quickly as an 
important new anti-cancer agent or an enzyme replacement therapy for a 
genetic disease. Many new drugs that have appeared on the market as a 
result of the agency's PDUFA enhanced approval resources, may actually 
turn out to provide little, if any, benefit to patients when compared 
to older, better-understood and often less expensive predecessor drugs.
    5. The best way to insure the timely approval of safe drugs is to 
adequately fund the FDA from general revenues. Adherence to this 
principle would be the surest way to remove the worrisome potential for 
conflict-of-interest that arises when dedicated income streams flow to 
the regulator from the regulated industry. If Congress continues to 
underfund the FDA, it will be essential for Congress and the agency to 
establish better procedures and guidelines to prevent the serious 
conflict-of-interest concerns that our organizations have raised in 
this testimony.

                         PEDIATRIC EXCLUSIVITY

    FDAMA granted drug companies a six-month patent extension if they 
conduct pediatric testing on a particular drug. This provision expires 
in January of next year. The Patient and Consumer Coalition agrees with 
the FDA that the pediatric exclusivity provision ``has been highly 
effective in generating pediatric studies on many drugs and in 
providing useful new information in product labeling.'' \10\ As a 
result, we support renewing this provision.
---------------------------------------------------------------------------
    \10\ Department of Health and Human Services, U.S. Food and Drug 
Administration, ``The Pediatric Exclusivity Provision, January 2001, 
Status Report to Congress.''
---------------------------------------------------------------------------
    However, Congress should enact measures to make pediatric 
exclusivity more targeted and effective. Pediatric exclusivity has 
delayed the introduction of more affordable generic alternatives on 
some very important and widely used drugs and has proven to be very 
lucrative for brand drug companies. But it has not yet resulted in the 
testing and labeling of some of the most widely used pediatric drugs. 
Six of the ten drugs without adequate labeling for children are not 
eligible for pediatric exclusivity because they are off-patent. For 
example, dopamine hydrochloride, which is used to stabilize the blood 
pressure of sick babies, has never been formally tested in children. 
Moreover, the exclusivity applies to every formulation of a drug, even 
if only one formulation is tested.
    We recommend that Congress consider a number of possible measures 
that could make pediatric exclusivity more effective and less costly, 
while still providing an incentive for brand companies to test. Our 
coalition has not formally endorsed any of these proposals yet, but we 
urge Congress, as we are, to seriously consider each of them. These 
measures could include: tax credits to encourage companies to conduct 
studies on drugs that are off-patent; making funds available to the 
Centers for Education and Research on Therapeutics (CERT) sites and the 
Pediatric Pharmacology Research Units to do testing of drugs that are 
off-patent; allowing exclusivity only on the particular formulation of 
a drug that is tested, and not on others in that line that will not be 
offered to children; scaling the length of exclusivity to the sales of 
a drug, so that Americans would not have to pay higher prices on 
blockbuster drugs that recoup the cost of pediatric testing in far less 
than six months; directly linking the granting of exclusivity to a 
company making labeling changes, and codifying the FDA's authority to 
require companies to test new drugs on children. Congress should also 
insist that the FDA retain bioethicists to review all proposed 
pediatric clinical trials in order to ensure that the agency gives 
appropriate consideration to the ethical concerns that come up around 
the possibility of exposing children to unnecessary and sometimes 
dangerous risks in clinical trials.
    In conclusion, let me say that Congress will consider no 
legislation this year that is more important to this nation's safety 
and health. As a result of the serious problems that I have noted with 
the Prescription Drug User Fee Act, what is at stake is nothing less 
than public trust in the nation's drug safety system. Right now, 
Americans have every reason to wonder if the FDA can really protect 
them. We urge this committee to act quickly to eliminate conflicts-of-
interest in PDUFA, prevent the drug industry from dictating the 
timeline and standards for drug approval and properly fund all FDA drug 
monitoring and approval functions--not just new drug approval. It is 
time to refocus the FDA's attention on its real customers: the American 
people.
    Thank you again for the opportunity to offer our comments.

    Mr. Bilirakis. Thank you, Mr. Plunket.
    Dr. Franson?

                 STATEMENT OF TIMOTHY R. FRANSON

    Mr. Franson. Thank you very much. Good day, Mr. Chair and 
members. I am Tim Franson. I am a physician, a pharmacist, and 
Vice President of Clinical Research and Regulatory Affairs at 
Lilly. On behalf of PhRMA I want to thank you in particular, 
Mr. Chair, for the vital role you and this subcommittee played 
in helping to enact the 1997 Food and Drug Modernization Act.
    The bottom line of my testimony today is this. FDAMA is 
working. It is working just as Congress intended, and it is for 
the benefit of patients.
    My written testimony, which I wish to submit for the 
record, sets forth the FDAMA provisions that directly affect 
our industry, and outlines our views on some of these 
provisions. Clearly many parts of FDAMA were expected to be, 
and are, implemented over a period of years. We continue to 
work with FDA to ensure that the full potential of these 
provisions is realized.
    I would like to turn to one of the most significant 
programs established by the 1997 law, the Better 
Pharmaceuticals for Children Act, legislation sponsored by 
Representatives Greenwood, Waxman, and Burr. This act has 
dramatically improved all aspects of pediatric drug 
development. It changed the way FDA manages pediatric drugs, 
prompting the agency to establish a dedicated group of 
individuals who focus on drugs for children. It also changed 
the way our industry approaches pediatric drug development and 
pediatric studies. That law sent a loud and clear message from 
Congress. We want our commitment to children to be reflected in 
the development of more drugs for children.
    The pediatric research incentive has meant that pediatric 
patients are now standing on equal terms with adults in the 
stiff competition for research dollars at our companies. Our 
industry shares the view FDA expressed in its report to 
Congress about the pediatric program. The program, the agency 
said, ``has been highly effective for many drugs.'' The 
response of the pharmaceutical industry ``has been vigorous.''
    Our response has been motivated by commitment to improving 
children's health, not only by focus on products with high 
commercial yield. In fact, when one looks at the list of most 
frequently prescribed drugs, as published by Pharmacy Times, 
over half of the medications being studied for pediatric 
information are outside the top 100 drugs used. The results of 
the program speak for themselves. As you have already heard to 
date, FDA has issued 188 written requests, inclusive of over 
400 pediatric studies, many of which are ongoing.
    We also recognize, as FDA and others have suggested, that 
some changes might make the program even better. In particular, 
we agree with FDA and the American Academy of Pediatrics that a 
different approach is needed to produce pediatric studies and 
revise labeling for older drugs whose patents have expired, and 
for which the pediatric research incentive does not work.
    We also agree with FDA that it is not necessary to continue 
to exempt pediatric supplemental applications from the 
requirement to pay user fees under the prescription drug user 
fee program. Such pediatric supplemental user fees we know will 
help FDA to expand its efforts in this important area. Most 
importantly, will help to ensure that pediatricians and 
children realize the benefits of this important initiative as 
quickly and as efficiently as possible.
    We strongly urge you, Mr. Chairman, to reauthorize the 
Better Pharmaceuticals for Children Act. We also strongly urge 
that you determine about any proposal to change the program 
whether it will help children. We urge you to reject any change 
that will not promote the goal of providing better 
pharmaceuticals for our children.
    Accompanying me today to answer any questions you may have 
on the pediatric research incentive program is Dr. Stephen 
Spielberg, a pediatrician, a pediatric clinical pharmacologist, 
and Vice President of the Drug Development at Janssen Research 
Foundation.
    Finally, Mr. Chairman, I want to talk briefly about the 
other FDAMA program that will expire, the Prescription Drug 
User Fee Act, PDUFA. Let me simply say that PDUFA has provided 
FDA with necessary funds to hire additional reviewers, update 
the agency's information technology infrastructure, and act in 
a more timely and predictable manner on drug applications. It 
has been highly successful for FDA, for our research-based 
industry, and especially for patients.
    PDUFA must be renewed in 2002 to provide continuity for 
FDA, and ensure that patients continue to receive safe and 
effective new medicines as expeditiously as possible.
    Thank you very much for the opportunity to testify. I will 
be pleased to answer any questions you have.
    [The prepared statement of Timothy R. Franson follows:]

  Prepared Statement of Timothy R. Franson, Vice President, Clinical 
 Research & Regulatory Affairs, Lilly Research Laboratories, Eli Lilly 
and Company on Behalf of the Pharmaceutical Research and Manufacturers 
                               of America

    Mr. Chairman and Members of the Subcommittee: I am Dr. Timothy R. 
Franson, Vice President of Clinical Research & Regulatory Affairs at 
Eli Lilly and Company, and I am here today on behalf of the 
Pharmaceutical Research and Manufacturers of America (PhRMA) to present 
the industry's views on the implementation of the Food and Drug 
Administration Modernization Act (FDAMA) of 1997, a landmark law that 
marked significant progress for public health and patients. PhRMA 
represents the nation's leading research-based pharmaceutical and 
biotechnology companies that are devoted to inventing new life-saving, 
cost-effective medicines.
    As the Chairman and other Members of the Subcommittee well know, 
FDAMA was the first substantive modification to the pharmaceutical 
provisions of the Federal Food, Drug and Cosmetic Act in more than 30 
years. It reauthorized the successful provisions of the Prescription 
Drug User Fee Act (PDUFA) of 1992, which provided, through the 
collection of industry user fees, necessary additional resources for 
FDA to use in reviewing new drugs. Next year, this Subcommittee will 
need to look into reauthorizing PDUFA. The user-fee law has produced 
many critical improvements at FDA since it was first enacted in 1992 
and, in particular, has enabled the agency to develop a more efficient 
review process that has given patients more timely access to new 
medicines. PhRMA looks forward to working with the Subcommittee in this 
endeavor.
    Another important provision of FDAMA was the Better Pharmaceuticals 
for Children Act (Section 111), legislation sponsored by 
Representatives Greenwood and Waxman, which provides an incentive to 
industry to develop specific information about pediatric uses of 
prescription drugs. This latter provision should be reauthorized before 
it sunsets at the end of this year--for the health of our children.
    Collectively, the reauthorization of PDUFA and other important 
structural changes made by FDAMA in FDA procedures have shortened the 
FDA review process for New Drug Applications (NDAs) and thus made safe 
and effective new drugs available sooner to patients. FDA review is the 
final and critical step in a drug-development program that begins many 
years before the submission of an NDA or, for a biological product, a 
Biologics License Application (BLA), and includes the human clinical 
trials for which a company has filed an earlier application with FDA.
    The bottom line of my testimony today is this: FDAMA is working 
just as Congress intended for the benefit of patients. The 1997 law has 
promoted increasingly efficient and effective working relationships 
between FDA and patients, doctors, and regulated industries; 
increasingly productive communications between FDA and its many 
constituencies, including our research-based pharmaceutical industry; 
sorely-needed improvements in FDA's information technology; and--most 
significantly and importantly--speedier access for patients both to 
safe and more effective new products and to experimental medicines 
still in clinical testing.
    Clearly, many parts of FDAMA were expected to be--and are being--
implemented over a period of years. We continue to work with FDA to 
ensure that the full potential of these provisions is realized. We also 
recognize that, because the number of applications for new products is 
increasing, FDA's workload is growing, and the agency's priorities must 
be focused on these applications.
    With that as an overview of our overall evaluation of FDAMA 
implementation, I would like to turn to one of the most significant 
programs established by the 1997 law--the Better Pharmaceuticals for 
Children Act.
    For a number of years prior to enactment of FDAMA, FDA and 
pediatricians had attempted several times to spur the development of 
drugs for pediatric patients and to increase the labeling on products 
used for children by encouraging more pediatric studies to be 
conducted. Notwithstanding these efforts, many medicines continued to 
be used for children without adequate labeling information for 
pediatricians and parents. The pediatric provisions of FDAMA have 
dramatically improved that situation. They changed the way FDA manages 
pediatric drugs, prompting the agency to establish a dedicated group of 
individuals who focus on drugs for children. They also changed the way 
our industry approaches pediatric drug development and pediatric 
studies.
    Before enactment of the Better Pharmaceuticals for Children Act, 
pediatric drug development was often slighted in competition with other 
company R&D projects for necessarily limited resources. Because of the 
difficulty of conducting clinical studies with children and the 
substantial additional risks of such clinical programs, R&D directors 
often preferred to focus their limited resources on drug-development 
programs for adults.
    Thanks to you and FDAMA, a company R&D director today can weigh the 
substantial cost of pediatric drug development against the incentive 
you provided in FDAMA. That law sent a loud and clear message from 
Congress--we want our commitment to children to be reflected in the 
development of more drugs for children.
    The FDAMA incentive has meant that kids are now standing on equal 
terms with adults in the stiff competition for research dollars at our 
companies. FDAMA is changing the world for pediatricians who prescribe 
drugs for children, for parents who administer these drugs, and, most 
of all, for the children themselves.
    The statistics speak for themselves. As of April 2001 companies 
have proposed to study 218 medicines. This represents a remarkable 
increase in interest in conducting pediatric studies. With suggestions 
from professional organizations, such as the American Academy of 
Pediatrics, industry, and the public, FDA has issued 188 written 
requests for pediatric studies and 411 such studies have actually been 
initiated. Twenty-eight drugs have received six months of exclusivity 
under the 1997 law, and new pediatric labeling has been provided for 18 
of these products. Additional label changes will be made as FDA 
completes its review of the data from all of the studies.
    So far, the completed and ongoing studies have resulted in the 
development of new formulations to cover additional and younger 
patients and the development of novel clinical trial designs and tools 
to evaluate safety and effectiveness. Requests for studies have been 
made for drugs in a wide range of therapeutic areas, from common 
problems such as treatment of fever, skin infections, and pain to 
cardiac disease, endocrine problems, gastrointestinal disorders, 
serious infections including HIV, seizure, and other neurologic 
disorders. Studies have involved pediatric patients of all ages.
    The range of conditions addressed, the variety of drugs being 
studied, and the nature of the scientific data requested all show that 
FDAMA is successfully addressing unmet therapeutic needs in children. 
No other approach, legislative or regulatory, has ever had such a 
profound impact on the development and evaluation of medicines for 
children.
    Why has this legislation worked so well when other approaches for 
more than 20 years have invariably failed?
    The legislation has been such a success because it addresses the 
fundamental impediments that have hampered the conduct of pediatric 
studies of drugs in the past--principally the small number of pediatric 
patients. Fortunately, most children are healthy. In the adult 
population, there are large numbers of patients with diseases such as 
heart disease and cancer who are available for clinical trials and who 
constitute a large market for medicines to treat those diseases. By 
contrast, with pediatric patients, serious and chronic illness is 
caused by a wide range of diseases, but relatively few children are 
affected by any particular disease. For example, fewer than 0.5 percent 
of patients with arthritis are children, and juvenile rheumatoid 
arthritis is a different disease than adult rheumatoid arthritis or 
osteoarthritis.
    The limited patient population has several consequences. First, 
clinical trials are inherently more difficult to conduct with children 
than with adults. The trials are much smaller because relatively few 
children have a given condition. The children are of different ages. As 
a result, they may need different, age-appropriate formulations of 
medicines for accurate and compliant administration. For example, an 
oral liquid may be needed for young children (sometimes different 
concentrations for newborns), while chewable tablets may be required 
for somewhat older children still unable to swallow pills or capsules.
    Further, the pharmacokinetics of drugs (i.e., the rate at which 
they are absorbed) varies widely with age. In addition, age-specific 
study designs to assess effectiveness and safety may be needed. Studies 
are particularly complex in tiny premature infants who may weigh less 
than a pound. These babies are among the sickest groups of children.
    Added to these complicated technical, scientific, ethical, and 
medical issues are unique regulatory requirements. Sometimes, a 
development program for pediatric drugs must include the duplication of 
an entire clinical program for each of the pediatric age categories for 
which an indication is sought. For example, if the clinical development 
program included adults 16 years of age and older and the sponsor 
wishes to investigate safety and efficacy in children 12 to 16, 
tolerance studies may be required.
    These tests can be followed by bioavailability and finally safety 
and efficacy studies in children with the disease. If the sponsor then 
chooses to seek the indication in children ages 6 to 12, the initial 
studies would again be tolerance studies followed by bioavailabilty 
tests before the safety and efficacy studies could begin. This process 
would continue for the age groups below 6 years of age--i.e., 3 to 6, 1 
to 3, 6 months to 1 year, and less than 6 months.
    It is evident, therefore, that a clinical development program 
necessary to address all age groups for children can be much more 
extensive than a development program needed to address the age group 16 
to 65. And, once formulations are produced and validated, studies are 
performed, regulatory hurdles are met, and labeling ultimately is 
changed, the market for most medications for children is very limited.
    In general, the research-based pharmaceutical industry shares the 
view FDA itself expressed in its January 2001 report to Congress about 
this program. The program, FDA said, ``has been highly effective for 
many drugs'' and the response of the pharmaceutical industry ``has been 
vigorous.'' Our response has been motivated by a commitment to 
improving children's health, not by a focus on products with high 
commercial yield. In fact, when one looks at the list of most 
frequently prescribed drugs published by Pharmacy Times, over half of 
medications being studied for pediatric information are outside the top 
100 drugs used.
    We also recognize, as FDA and others have suggested, that some 
changes might make the program even better. In particular, we agree 
with FDA and the American Academy of Pediatrics that a different 
approach is needed to address the issue of how to achieve pediatric 
studies and revised labeling for older drugs without remaining patent 
life, for which the exclusivity incentive does not apply. We have been 
discussing this matter extensively with the AAP and look forward to 
working with you to ensure that this issue is addressed appropriately.
    We also agree with FDA that in general it is not necessary to 
continue to exempt pediatric supplemental applications from paying user 
fees under the Prescription Drug User Fee program. Such pediatric 
supplement user fees, we know, will help FDA expand its focus on this 
important area and--most importantly--will help ensure that 
pediatricians and FDA resources for children realize the benefits of 
this important initiative as quickly and efficiently as possible.
    Several points should be emphasized in considering the vital need 
to reauthorize the Better Pharmaceuticals for Children Act this year:

(1) Regardless of other aspects of health economics and health-care 
        financing, the small number of pediatric patients with a 
        specific disease available for study, the complexity of the 
        studies, and the ultimate limited market for pediatric drugs 
        will remain. If resources are constrained at any time for any 
        reason, research on the therapeutic needs of children is at 
        risk. It is crucial to keep the medical needs of children 
        competitive with the medical needs of adults in the scramble to 
        obtain company research funds. Section 111 makes that possible.
(2) The Better Pharmaceuticals for Children Act remains a critical 
        stimulus to study unique pediatric diseases and indications. 
        Many pediatric diseases differ significantly from those in 
        adults and FDA's Pediatric Rule thus does not apply. This is 
        particularly the case for diseases in premature neonates. The 
        pediatric program is the best mechanism to ensure that the 
        unique therapeutic needs of children are met.
(3) Section 111 encourages companies to initiate studies in a timely 
        manner. With the incentive in effect, companies are more likely 
        to initiate studies earlier in the drug development process 
        rather than seek to defer the tests. Pediatric studies should 
        not delay the development of important new therapies for 
        adults. As more advanced and novel therapies are developed, the 
        pediatric program can ensure that children fully benefit from 
        these developments.
(4) Because of technical oversights in the drafting of FDAMA, 
        antibiotics are ineligible for the exclusivity provisions of 
        Section 111. Since many of these drugs are likely to have 
        significant clinical benefits for children, Congress should 
        ensure they are covered when the pediatric provisions are 
        reauthorized.
(5) There has been significant variation in interpreting the 
        legislation and implementing written requests among FDA review 
        divisions. Much of this is understandable with a major new 
        initiative. Often, disease definitions, extrapolation of 
        disease similarity, and thus the nature of the requests have 
        been inconsistent. Sometimes, this has been caused by a lack of 
        understanding of pediatric diseases, sometimes by a lack of 
        pediatric expertise in FDA review divisions.
(6) Where inconsistencies have arisen, consensus approaches have been 
        developed through the Pediatric Advisory Subcommittee, together 
        with the American Academy of Pediatrics, the National Institute 
        for Child Health and Human Development (NICHD, and its 
        Pediatric Pharmacology Research Units, the PPRUs), other 
        National Institute of Health (NIH) institutes including the 
        National Cancer Institute (NCI), and parent/patient groups. All 
        parties have learned to focus on the therapeutic needs of 
        children and work to achieve consensus. This has been a major 
        unanticipated benefit of the legislation. The cooperative 
        process also has helped to address several issues in the area 
        of pediatric cancer.
      FDA has formed a new Pediatric Oncology Advisory Subcommittee, 
        and prepared guidelines in the area of pediatric oncology. 
        PhRMA has created a Pediatric Oncology Task Force. These groups 
        are working together with the Children's Oncology Group and 
        NCI. Recognizing that many areas of medical and scientific 
        complexity now being addressed need to be resolved, FDA should 
        act to achieve consistency among review divisions, based on the 
        best pediatric and pharmaceutical science.
      Further, FDA needs increased pediatric resources to deal with 
        these issues. Such resources must include more personnel with 
        detailed knowledge and expertise in pediatric investigation. To 
        the extent that some of these matters can be addressed by 
        increased FDA resources, user fees could be a mechanism. PhRMA 
        supports the elimination of the current pediatric supplement 
        exemption under PDUFA, to help achieve the goals of the 
        pediatric provisions.
(7) While Section 111 is working to meet the needs of children, the 
        incentives may not be able to overcome the barriers to very 
        early initiation of pediatric studies for truly life-
        threatening but very rare conditions, such as certain pediatric 
        cancers. There is substantial risk and difficulty in conducting 
        pediatric studies for new chemical entities under development 
        for large adult populations, given the rarity of some of these 
        conditions in children. As we approach the renewal date for the 
        Better Pharmaceuticals for Children Act, we urge this 
        Subcommittee and Congress to consider how to improve the 
        climate for early initiation of pediatric studies. We would, of 
        course, be pleased to work with you and others who share these 
        concerns.
    Another area that is important, though not directly related to this 
program under FDAMA, is the obvious limitation in clinical 
investigative resources for pediatrics. This deficiency has become 
increasingly apparent. The creation of the NICHD-sponsored PPRUs has 
been a major advance. It is critical that pediatric studies be carried 
out at centers with extensive pediatric expertise. The safety and 
welfare of research participants and the validity of the data generated 
are dependent on the expertise of the centers at which studies are 
conducted.
    PhRMA strongly supports additional new legislation to encourage the 
training of the next generation of pediatric clinical pharmacologists, 
by providing training funds to the PPRUs and debt forgiveness for 
trainees who enter careers in pediatric drug development. Such a 
program would develop a pool of talent available to academic medical 
centers, industry, and FDA to ensure that advances in therapeutics can 
be translated into medicines for children. As the Subcommittee 
considers additional ways to advance the health and well being of 
children, we would be pleased to discuss further how to increase the 
cadre of skilled, trained, and committed pediatric researchers.
    In sum, the success of the Section 111 suggests that the current 
incentive is reasonable. But the value of the program in adding 
clinically meaningful pediatric information to package inserts is still 
in its infancy. Because of the brief amount of time during which 
applications could be submitted to date (the five-year program could 
not really begin until FDA developed a list of relevant drugs (which 
took more than a year), many drug sponsors focused only on the products 
that could be studied during this relatively short implementation 
period. Much more needs to be done.
    PhRMA strongly urges Congress to reauthorize the Better 
Pharmaceuticals for Children Act. The task has just begun of studying 
and labeling currently marketed medications for children. The 
increasing rate of industry study proposals and written requests for 
studies by FDA shows continuing progress, which would be slowed and 
then stopped if Section 111 were allowed to expire.
    I would like to address our second major point--implementation of 
other FDAMA pharmaceutical provisions. As has been stated, the 
overriding goal of Congress, FDA, patients, and industry in working 
cooperatively to enact FDAMA, was to ensure that safe and effective new 
medicines would be made available to patients as quickly as reasonably 
possible. This is occurring without any compromise in FDA's high safety 
standards.
    In fact, nothing in either FDAMA or the original 1992 user-fee law 
lowered the agency's high standards. FDA has long been the worldwide 
gold standard of drug review and approval. That standard is being 
preserved and, indeed, enhanced. But now, thanks to FDAMA and PDUFA, 
many critically important new drugs are being approved in the U.S. 
earlier than in foreign countries--a real reversal from a decade ago.
    To those who argue that FDA is moving too fast in approving new 
drugs, PhRMA suggests that they examine the record. Nothing is more 
valuable to our industry and our companies than the safety of their 
products--primarily for their patients, but also for their long-term 
reputations for trust, integrity, and reliability. Some argue that the 
withdrawal of six drugs from the market over the past five years should 
trigger a sharp change in policy. But consider that a record number of 
184 new molecular entities were approved during this period. As a 
result, the percentage of drug withdrawals compared to new-drug 
approvals is consistent with historical averages. Moreover, the 
reduction in the net drug-approval time by half since the first user-
fee law was enacted means that patients have earlier access to the new 
and better treatments they need.
    There were a number of FDAMA provisions aimed at improving the drug 
review and approval process. Most of the provisions were designed to 
improve FDA processes, but some also were directed at industry. All of 
the provisions were the result of extensive dialogue between the 
Congress, FDA, industry, and the public.
    The progress made by FDA to date in implementing FDAMA has been 
steady. Most of the guidances required by FDAMA have been completed. We 
have provided a list attached to this testimony that notes each FDAMA 
initiative that addresses drug regulation or FDA management that 
relates to our products. It appears that most of the initiates are 
being implemented effectively and efficiently. In some cases, it is 
either too early to make an assessment or sufficient data have not been 
collected to evaluate the situation.
    Mr. Chairman, that concludes my written testimony.

    Mr. Bilirakis. Thank you very much, Dr. Franson. The Chair 
now yields to Mr. Burr to inquire. You can take your full 5 
minutes if you like.
    Mr. Burr. Mr. Chairman, it will not take me 5 minutes. I 
really just have a statement and a question. I appreciate the 
Chair's indulgence, to try to meet a school group.
    I see Mr. Shuren here from the FDA. Let me ask, are you the 
only representative from the FDA still in the audience?
    Mr. Shuren. I believe I am.
    Mr. Burr. And your role at the FDA is what?
    Mr. Shuren. I am a medical officer.
    Mr. Burr. Let me suggest to you, and I will request of the 
Chair and the ranking member, that we send a letter to the FDA 
once again stating that they have missed a great opportunity 
for their policy folks who were here to testify to stay and 
listen to the experts. I think that it is a missed opportunity 
once again. I hope this is an agency that will learn if we push 
it a little bit harder. I hope you will personally carry the 
message back. I know that everybody has a hectic schedule, but 
there is no greater opportunity than to listen to the same 
people that we feel are the experts on these issues who are 
willing to come and testify. It certainly saves you time in the 
long run. I hope you'll carry it back.
    Mr. Bilirakis. Your point is well taken.
    Mr. Burr. My question is to Ms. Ben-Maimon, is that 
correct? Let me ask you. You said that you had three children.
    Ms. Ben-Maimon. I do.
    Mr. Burr. If one of your children were seriously ill, and 
the doctor said to you ``I can provide an ability for your 
child to live for an additional 70 years, but it will cost your 
life,'' what would you do?
    Ms. Ben-Maimon. Obviously I would give my life for my 
child's, without any question.
    Mr. Burr. If the promise were only for 20 years, what would 
you do?
    Ms. Ben-Maimon. Again, there is not any question.
    Mr. Burr. If the promise were for 1 day, what would you do?
    Ms. Ben-Maimon. I would probably make the same decision.
    Mr. Burr. I thank you for answering that question.
    Mr. Chairman, I yield back.
    Ms. Ben-Maimon. Can I respond though as a physician? 
Clearly those are not the kinds of decisions that we need to 
make. We need to make decisions where we measure benefits and 
risks. I have been in the drug industry both in the proprietary 
side and on the generic side for almost 10 years, I guess, and 
I have treated patients.
    Mr. Burr. Ms. Ben-Maimon, let me say this. There are 
doctors to your right. There are doctors to your left. The one 
thing I have learned about doctors is that each one has a 
response. It may be a little bit different. There is not going 
to be consensus. There is a parent in every row. Parents will 
answer that question exactly like you did. If our concentration 
is on children, then let's stay focused on children. If there 
is a remote chance at whatever cost that we can save the lives 
of children, then do we not have a responsibility to do it?
    Ms. Ben-Maimon. Not if that is not our only choice, because 
I think we can save the lives of children while still improving 
the lives of others. We should try and do that before we make a 
sacrifice we may not necessarily need to make.
    Mr. Burr. I'll let the pediatricians battle that one with 
you.
    Thank you, Mr. Chairman.
    Mr. Bilirakis. The Chair yields to Mr. Brown to inquire.
    Mr. Brown. Thanks, Chairman.
    I'm glad to hear that my friend, Mr. Burr, with whom we've 
worked together on a variety of issues, is now going to vote 
against the President's tax cut and put more money into child 
prevention and other programs that will help America's 
children.
    Mr. Burr. The gentleman has to realize that the choice is 
to leave that money here and let us spend it. I would much 
rather get it out of town.
    Mr. Brown. That estate tax break is going to save a lot of 
children's lives.
    Prozac about 6 months ago or some time ago got a 6-month 
exclusivity estimated to be worth around $2 billion to the 
manufacturer. Prilosec, a very important drug, largest selling 
drug in America, estimated sales of $4 billion in the year 
2000. It's an important drug for children. Astra 
Pharmaceuticals recently did pediatric studies on the drug. 
This week they got 6 months of exclusivity for doing so.
    This question will be to all six of you. The 6 months of 
exclusivity without generic competition for Prilosec for Astra 
Pharmaceuticals is estimated to be worth about $1.2 billion in 
additional profit. The President's budget, squeezed by the tax 
cut, I might add, for the entire National Institute of Child 
Health and Human Development for the coming year is $1.1 
billion. So Astra for the 6 month extension will get $1.2 
billion in additional profit. The President's entire budget for 
the NIH Child Health and Human Development is $1.1 billion 
total. To be sure, Prilosec is a good effective important drug. 
Can each of you honestly, or any of you honestly tell me that 
the one pediatric trial that Astra is doing is worth more than 
all the NICHD budget together, combined?
    Mr. Kearns. The simple answer is no. I don't think it is 
worth more than the budget.
    There is an incredibly difficult conundrum for those of us 
who do pediatric research and care for children. That is, we 
have been for so many years without an avenue to include kids, 
that most of the work that was done was done out of people's 
pockets, meaning academics, schools, medical schools, pharmacy 
schools and the like. So now with FDAMA and the pediatric 
provision, the avenue to include kids is there.
    I must say and confess that when it comes to the issue of 
profitability, I really put my head in the sand many times 
because of the zeal to do what's right by kids. I am an NIH-
funded investigator. I would love for part of that money to go 
to NICHD. It could further improve what we do. Unfortunately, I 
don't have a simple solution. The Astra drug is an important 
drug for children. It improves the lives of many kids and many 
families, but is it worth the NICHD budget? In my personal 
estimation, no.
    Mr. Brown. Dr. Ben-Maimon?
    Ms. Ben-Maimon. I would like to keep my remarks brief 
because again, I want to reiterate that we actually do support 
the concept. The concern I have again as a physician, 
primarily, is that sums that large can actually make the 
incentive, turn the incentive into a mechanism to exploit. We 
want to encourage children and the study in children, but we 
want to be sure that we do it and protect them, and make sure 
that we do it when we really need to be doing the research. So 
again, I would challenge Congress and ask them as they 
reauthorize the pediatric exclusivity provision, that they 
consider what is the appropriate incentive to ensure these 
studies continue, yet that we do it in a way that we don't 
encourage companies to exploit our kids.
    Mr. Brown. Dr. Gorman?
    Mr. Gorman. The 6 month's exclusivity is a broad brush 
painted across many drugs. While in the case that you present 
it has become extraordinarily profitable for a single company, 
it has also prompted the development of knowledge in other 
drugs that are not nearly so profitable.
    My favorite example on the list of labelling changes 
already is Lacthydrine, which is not on anybody's top 200 list, 
and is a cream use for ichthyosis, which is a disease I hope no 
one in this room has heard of. It was also incentivized under 
this program.
    The simple answer to your question again is no. I don't 
think that one drug company needs to profit to the extent of 
the increased NICHD budget. On the other hand, the information 
made available to children today from that study will be 
available for the next 100 years. The profitability will be 
gone for 99.5 years after that.
    Mr. Brown. As I might add would direct government--if the 
government did the study directly the same information would be 
there, I would add.
    Ms. Meyers?
    Ms. Meyers. Mr. Brown, I have three children who have a 
rare disease. They are adults now. I have been saved by drugs. 
But all three have participated in clinical trials. Now I have 
six grandchildren. I want pediatric studies to be done for the 
sake of my grandchildren. I am very proud to say that my adult 
children all did participate when they were children. But when 
my 85-year-old mother can't pay for her drugs when she goes to 
the drugstore to pick them up, she calls me and asks me to pay 
for them. So I feel particularly torn by this problem, asking 
my 85-year-old mother who can't afford her drugs, to pay for 
her great-grandchildren. I don't think that it is fair. I think 
it is Congress' responsibility to make it fair.
    Mr. Brown. Mr. Plunket?
    Mr. Plunkett. I will just add that our coalition does 
support the exclusivity, but we think it has to be more 
targeted, more effective and less costly. We shouldn't have to 
make this tradeoff, cost versus testing for kids. In our 
testimony, we have a range of possibilities we would urge the 
committee to explore to make it more targeted and more 
effective because the way that it is written now, it does 
increase costs for consumers. That's not acceptable, especially 
on important drugs like the ones you have mentioned. It 
shouldn't happen.
    I think that this committee has a range of options it can 
consider, from tax cuts to scaling the exclusivity based on the 
sales of the drug, to a number of other ideas that can make 
this provision more targeted and more effective.
    Mr. Franson. In response to your question you had mentioned 
several compounds. I think it is important to note that any 
time we look at drug studies in pediatrics, they have both 
short-term impact and long-term.
    In the case of these for exclusivity, you mentioned both 
Prilosec and I believe Prozac, both of those are used for a 
broad range of problems significant in pediatrics. Both 
required at least some, if not a broad range of studies. In the 
near term, met important clinical needs.
    In the longer term, I think one of the tremendous benefits 
of FDAMA and the pediatric incentives has been that it has 
created or reignited the excitement for an infrastructure for 
doing pediatric clinical studies and research. That was not 
present previously broadly in the United States. This has been 
a wonderful benefit that will serve the public health long-
term.
    Second, it has allowed companies such as ours to reinvest 
some of that that has been gained through exclusivity to 
actually begin new programs and lines of drug research devoted 
exclusively to pediatrics. I think the benefit of that balanced 
against the cost long-term would be difficult to project, but 
it is not inconsequential. I would suggest that those kind of 
benefits need to be weighed in that are very significant.
    Mr. Brown. I would add one sentence if I could, Mr. 
Chairman. The high end estimate of how much it costs a company 
to do pediatric studies is $4 million a day. That is the 
extravagantly high end estimate.
    Mr. Franson. A day?
    Mr. Brown. For the price of Prilosec's exclusivity, we 
could fund NIH to do 300 of the most expensive trials or some 
larger number obviously of less expensive.
    Mr. Bilirakis. The gentleman's time has expired.
    Ms. Meyers, I think you said it all when you made the 
statement, ``I am torn.'' That is really what it comes down to 
here. Everybody has sort of agreed that FDAMA is working. Some 
people have indicated there are weaknesses and there should be 
changes made, but in general it's working. That is where we're 
torn too, because we don't want to take a chance on doing harm, 
as Mr. Greenwood indicated earlier in his opening statement. So 
that's really what we are faced with here. Obviously your 
testimony tears us even that much more.
    I wanted to ask, Dr. Franson, a question on another 
subject, although it's pertinent to prescription drugs. Who 
determines the expiration dates on drugs?
    Mr. Franson. The expiration dates on prescription drugs are 
determined by testing done by the company and then reviewed and 
validated with FDA.
    Mr. Bilirakis. So both FDA and the companies determine the 
expiration dates?
    Mr. Franson. We could not, for example, as an industry 
suggest a date that was not scientifically defensible and 
validated by a regulatory body.
    Mr. Bilirakis. What about input from medical doctors 
regarding the expiration dates on the drugs and their efficacy?
    Mr. Kearns. It is really very difficult to answer that 
question, Mr. Chairman, because the data that was just spoken 
about is not generally available to the practitioner. For 
instance, if we knew that at the end of a 2-year period of 
expiration, for instance, that there was at least 90 percent 
potency there, I think few practitioners would have little 
heartache in using that drug. But if it was far less than that, 
especially for a drug with a narrow margin of safety, are you 
being used to treat a very difficult disease, it could be a 
real clinical issue. But again, it's the information is not 
available.
    What drives the practice of medicine is a risk-benefit 
paradigm. Made in the absence of validated information, that 
becomes so difficult for physicians to do on a day-to-day 
basis.
    Mr. Bilirakis. I appreciate that. If there's an expiration 
date, you as a physician are not going to prescribe that drug 
exceeding that expiration date.
    Dr. Gorman?
    Ms. Ben-Maimon, you are more than welcome to respond to it 
if you'd like.
    Ms. Ben-Maimon. I'll let Dr. Gorman comment first.
    Mr. Gorman. I think to echo that comment, there is very 
limited information on drugs being used past their expiration 
date. The only one that I'm presently aware of is tetracycline 
is really not good to use past its expiration date. Epicac, an 
over-the-counter drug that makes people vomit, works for 18 
years after it is manufactured. After that, I am not aware of 
any information, would be hesitant to prescribe or recommend 
that patients use these drugs after their expiration date.
    Ms. Ben-Maimon. From the standpoint of industry, data is 
generated at room temperature for years out. The requirement is 
90 percent. But of course it's sampled. You know, you are not 
testing every drug that's on the market. It assumes certain 
storage conditions. So drugs clearly are not intended to be 
prescribed after their expiration date. I think the cutoff is 
for most drugs, from a regulatory perspective, 90 percent. The 
problem is what happens in the marketplace and what happens if 
the temperature goes up over what the intended storage 
conditions are. Clearly the pharmacist is the one responsible, 
who should not be dispensing a product that is after its 
expiration date. Those products should be returned. So I don't 
think the pharmaceutical community would endorse administering 
these products at the end of their expiration.
    Mr. Bilirakis. I appreciate that. I have visited a health 
clinic in Clearwater, Florida, that I have tried to help over 
the years, and seen half a dozen volunteers doing nothing but 
pulling drugs off of the shelves that have been donated to them 
by physicians and throwing them into a container. There's all 
sorts of regulations in terms of how they have to dispose of 
these drugs. I see all that valuable time that these people 
volunteer spent pulling these drugs off these shelves. That's 
common place.
    I have a problem with that. I realize of course that many 
of those drugs have exceeded their efficacious date. But I also 
suspect, and I'm not a physician, that in some cases these 
dates could be extended out. What about cases where people need 
drugs and it's either no drugs at all or else a drug which is 
at 90 percent efficacacy and can be available to help? That is 
the big question I have in my mind. I have talked to staff 
about it over the years. We can't seem to get much help or much 
of an answer.
    Ms. Ben-Maimon. I think the only way is to retest. I mean 
what happens is the data really is generated in real time. 
There are products that are retested. You know, if it's past 
its expiration date, drug companies do pull product or use 
other data to support it. So the only way that I think you 
could comfortably prescribe those products and tell patients to 
take it is if you retested them.
    Mr. Bilirakis. My time has expired. But if any of you have 
any comments or thoughts on that subject, I would welcome 
receiving those.
    Mr. Pallone?
    Mr. Pallone. Thank you, Mr. Chairman. During the testimony 
a number of suggestions were made. I guess most notably by Mr. 
Plunket, about possible measures that either as alternatives or 
that would make pediatric exclusivity more effective and less 
costly. I just wanted to look into some of those.
    My question is to Dr. Franson. It occurs to me that a tax 
credit or a direct reimbursement program would be possibly more 
effective, efficient, and an equitable incentive than market 
exclusivity. If you think about direct reimbursements or 
credits, they would cover all products. They would be efficient 
since they would more closely reflect the cost of the test. 
They would be more equitable since the economic costs of the 
testing would be spread across a broader base rather than only 
on consumers of the product being tested.
    I wanted to ask you whether PhRMA would support, for 
example, a three-for-one incentive in lieu of exclusivity. 
Would you be supportive of any of these measures?
    Mr. Franson. I think we would be happy to assess and 
discuss and respond to the committee in whatever fashion to 
explicit proposals so we could understand that. I think the one 
thing that we remain committed to is that prior to FDAMA and 
the pediatric incentive, pediatric research was not being done. 
With the incentive, it is. We would want to carefully assess 
anything that was proposed to assure that we did not fall back 
to the prior state. So I could not commit or refute without 
more specifics, but would commit to you to provide a response.
    Mr. Pallone. Okay. But what about this idea of the three-
for-one incentive? In other words, for every dollar you spend 
on a pediatric test requested by FDA, you would get either $3 
cash or a triple tax credit? That's specific.
    Mr. Franson. I think speaking as a physician and regulator, 
it is something I would be happy to refer back to my colleagues 
more sage in those kind of things and could provide a response.
    Mr. Pallone. That's fair.
    Mr. Spielberg. If I might, I'm Stephen Spielberg. I am 
really speaking here as an advocate for pediatrics within 
industry. I am a pediatric pharmacologist who daily has to 
compete for resources for doing pediatric research.
    The issue of the 6 month exclusivity is not on individual 
compounds. It's on our portfolio of compounds. When we look at 
the number of R&D dollars that I can attribute to pediatrics, 
it comes from exclusivity granted to very small drugs with very 
modest incomes, and to some very large drugs with very large 
incomes.
    My ability to be able to compete for those funds and to 
assign those research dollars to children is dependent on 
indeed having those funds available as a result of the 
legislation.
    Proof of the pudding is that it works. If you look at the 
first 28 drugs that have gone through the process, yes, two are 
in the top 10. Nine are not in the top 200. So that the larger 
items indeed support the lower items.
    Mr. Pallone. I appreciate that. I like the fact that Dr. 
Franson is willing to get back to me and maybe answer some of 
this.
    I want to go one step further, if that's all right. If I 
could just ask one more thing, and then anybody who wants to. 
Let me just ask him one more thing and then if any of you want 
to comment, please.
    This idea of--well, in her testimony, Dr. Ben-Maimon 
mentioned this Wall Street Journal article that estimated the 
cost of pediatric studies for pharmaceutical manufacturers to 
be between $200,000 and $3 million, which in turn the Journal 
says will increase drug sales by an additional $4 billion for 
the first 26 drugs tested. It says over 30 years, if the Wall 
Street Journal is accurate, pharmaceutical companies will make 
an additional $30 billion.
    Now I just wanted to ask Dr. Franson again first, what is 
his view of this Journal estimate about how much pediatric 
studies cost the members of his association, and how much 
additional revenue they have earned. Second, because the 
companies themselves are the best source for providing the 
committee, since you are so willing to provide stuff, it would 
be helpful if you could forward information to us about the 
cost. In other words, the Wall Street Journal is saying 
something. I don't know if you agree with that, but you are 
obviously the best source for providing the committee with 
information as to how much the studies that have been completed 
already cost. If you could give us that kind of information, it 
certainly would be helpful as a follow-up.
    Mr. Franson. Thank you. I would be happy to respond to that 
now. Regarding those figures, I believe those are quoted with 
the assumption that a single pediatric blood level, that is 
dosing study, could provide the basis for pediatric 
exclusivity.
    Our understanding in discussions with FDA is that of all 
the drugs that have been provided a written request, none has 
only that as a facet. Therefore, that is a vast underestimate.
    In many of the studies that have had pediatric requests 
filed, multiple studies of different diseases have been 
required for clinical trials. Therefore, in addition to a 
pharmacokinetic or blood level study, there may be two studies 
required for a single indication or type of disease affliction, 
additional studies for more for that same drug. Therefore, the 
time and expense and skill necessary to complete those studies 
is significant. In the example of some we have had experience 
with, eventuated in over 22,000 pages of documentation 
submitted to FDA for pediatric exclusivity.
    Mr. Pallone. If you could just get back to us with regard 
to the three-for-one possibility or the tax credits, or maybe a 
critique of the Wall Street Journal, I would appreciate that. 
Any information you could provide us about whether it's 
accurate or what the real facts are.
    Mr. Franson. It would be our pleasure. Thank you.
    Mr. Pallone. Thank you.
    Ms. Meyers?
    Ms. Meyers. I would just say that a few months ago, FDA 
issued a statement saying that in the future all new drugs will 
have to be studied for children, so when they reach the market 
they will already be labeled for pediatrics. A number of PhRMA 
companies are suing the FDA to stop that. I would like to know 
why.
    Mr. Buyer [presiding]. If you can answer the question, it's 
an open question. Questions come from the panel, not among the 
members who are sitting at the table.
    The Chair now recognizes himself. To Dr. Tim Franson I will 
ask this question, Ms. Meyers, based on something I have read. 
In testimony you claim that performance goals contained within 
PDUFA created an incentive for drug companies to delay 
submission of data to the last moment, thus putting the FDA 
under tremendous pressure to meet the user fee deadlines. Do 
you see any evidence of this in your industry?
    Mr. Franson. Regarding delays? If a company were to do 
something of that nature, to submit part of an application late 
after an initial application, there is actually a penalty 
imposed. That is called under FDA regulations at the Center for 
Drugs a major amendment. That would require the sponsor, the 
pharmaceutical company, to have a 90-day period of additional 
review granted to the FDA. So there would be no advantage for a 
sponsor to do something of that nature. It would be very 
important to the sponsor and to FDA to have sufficient time to 
review the substance of the information. So no, that is not our 
experience.
    Mr. Buyer. Thank you. Has PDUFA led to higher percentage of 
drug recalls?
    Mr. Franson. In the PDUFA period, I believe that the issues 
cited by FDA are correct. The withdrawal rate of 2 to 3 percent 
is accurate. In fact, I am personally surprised that it is not 
higher, given the vast number of drugs now introduced first in 
the United States as opposed to overseas. Of those 11 drugs 
that were cited, I believe four of those withdrawn drugs were 
actually approved before PDUFA. Therefore, it would be very 
difficult to ascribe a gap in the PDUFA review process when 
those drugs had already been on the market before that act.
    Mr. Buyer. In January, the Clinton FDA report to the 
Congress stated that ``PDUFA has been very successful.'' Do you 
see any reason to dispute that comment?
    Mr. Franson. I would not dispute that.
    Mr. Buyer. Thank you.
    Doctor, how many of the 188 drugs examined under the 
pediatric exclusivity, how many of them were blockbuster drugs, 
are you aware of?
    Mr. Franson. Regarding blockbuster, I'm not sure how 
everyone would define that. By the rankings----
    Mr. Buyer. Over a billion dollars.
    Mr. Franson. I believe I will ask my colleagues. Two of 
them may have been in that category. Is that correct?
    Mr. Spielberg. Of the first group through, yes, that's 
right.
    Mr. Franson. So two.
    Mr. Buyer. Both the FDA pediatric exclusivity and Tufts 
University reports examined tremendous cost savings associated 
with pediatric exclusivity provisions. Do you believe that the 
pediatric exclusivity provisions may in fact save money in the 
long run? Do you believe that?
    Mr. Franson. I would like to ask Dr. Spielberg to answer 
that.
    Mr. Spielberg. Yes. I think in fact if you look at the 
FDA's report, when they deal with five conditions and only five 
conditions, they estimate savings by 25 percent decrease in the 
hospitalization of about $228 million a year. But that is only 
for five conditions. That is a modest estimate of the savings.
    If I may point out two compounds that have been approved, 
Midazolam and Propofol. Both used for sedation in children in 
hospitals with new labellings and precaution. The most 
hazardous thing in pediatric hospitals is anesthesia and 
sedation for procedures, for example, a kidney biopsy or a 
liver biopsy. Getting proper information on dosing and 
precautions for those two medicines not only will decrease 
morbidity to those individual children, it will decrease 
hospital stays because the children will be properly sedated so 
the procedure can be done so you don't have to delay it until 
further medicines are administered. But it is going to decease 
the adverse effects of those medicines dramatically.
    Mr. Buyer. Thank you.
    The FDA tried more than 20 years to get the pharmaceutical 
industry to conduct pediatric testing, but none of their 
efforts succeeded until the pediatric exclusivity was passed. 
FDA reported in January that the pediatric exclusivity 
provision has done more to generate clinical studies and useful 
prescribing information for the pediatric population than any 
other regulatory or legislative process to date. Why has the 
pediatric exclusivity proved so successful when other 
initiatives have failed?
    Mr. Franson. I think Steve is an expert, would be best to--
--
    Mr. Spielberg. I think again from my experience trying to 
encourage pediatric drug development, both on the academic side 
and now in industry, what it does is it fundamentally raises 
the priority of pediatric studies' allocation of R&D dollars, 
knowing that we have a reliable return on a compound, when that 
return can't be justified by pediatric sales and when we have 
very high risk in doing those pediatric studies, we don't know 
if we are going to get exclusivity. We don't know if we are 
going to get negative labelling, which should be in there for 
children if there is a negative effect. That covers those 
issues, and therefore raises the priority of doing pediatric 
studies.
    It is even more important for the new drugs coming down the 
pike because if we are going to invest early on, the needs of 
the pediatricians are early studies of those new drugs that are 
going to cure kids. We have got to get an incentive for those 
studies to be done early. That is why it works.
    Mr. Buyer. Help me here. A drug manufacturer can only get 
the 6 month exclusivity if FDA gives it to you. What about can 
you ask for it? Can manufacturers ask for it?
    Mr. Spielberg. We can propose studies, but one of the key 
issues in this whole issue in the accountability issue is that 
the FDA determines the precise nature of the written request. 
We can propose studies and then they can add on several 
additional studies, or change those studies. The FDA written 
request is the absolute sine qua non for us getting the 
exclusivity, but it also holds them accountable for the public 
health need and it holds us accountable for doing the right 
studies. That is why more than a third of the studies of those 
411 are full efficacy studies. These are not simple PK.
    Mr. Buyer. All right. Thank you.
    In my questions, I refer to the pediatric exclusivity 
provisions of the report, January 2001 staff's report to 
Congress. I ask unanimous consent it be placed in the record. 
Hearing no objections, so ordered.
    [The report is available at:]

 http:///.fda.gov/cder/pediatric/reportcong01.pdf]

    Mr. Buyer. I also refer to the Pediatric Studies Incentive: 
Equal Medicines for All, the white paper. This is what we're 
referring to as the Tufts report. I ask unanimous consent that 
it also be placed in the record.
    Hearing no objection, so ordered.
    [The report follows:]

        The Pediatric Studies Incentive: Equal Medicines For All
White Paper by Christopher-Paul Milne, Assistant Director, Tufts Center 
                   for the Study of Drug Development

                              INTRODUCTION

    In November of 1997, the FDA Modernization Act (FDAMA) was signed 
into law, amending the Food, Drug and Cosmetic Act and the Public 
Health Service Act. The pediatric studies provision (Section 111) of 
FDAMA grants drug companies an additional 6month period of market 
exclusivity for new or marketed drugs in exchange for conducting 
pediatric studies requested by the FDA. FDAMA requires FDA to submit a 
report to Congress examining all issues relevant to the experience 
under the pediatric studies incentive program (hereinafter, the 
``incentive program''). In particular, the FDA is to focus on the 
effectiveness of the program in improving information, the adequacy of 
the incentive, the economic impacts on taxpayers and consumers, and 
suggestions for modifications. This white paper by the Tufts Center for 
the Study of Drug Development (Tufts CSDD) will provide an additional 
viewpoint on these and other relevant issues. This report is based on 
our own research as well as publicly available information, and focuses 
primarily on the present and future impact of the legislation as it 
relates to four areas of concern: effect on public health; building a 
pediatric research infrastructure; unforeseen impact; and, the cost-
benefit ratio.

                               BACKGROUND

    The 1962 amendments to the Food, Drug & Cosmetic Act made children 
therapeutic orphans because it required manufacturers either to test 
drugs in children or discourage their use in children with label 
disclaimer statements. Now, 40 years later, some 75% of marketed drugs 
are not labeled for use in children, despite the fact that many of them 
are therapeutically indicated for children and are used routinely off-
label in the practice of pediatric medicine. This has resulted in a 
kind of ongoing natural experiment. Information on dosing, drug 
interaction, safety, and efficacy is developed, not in controlled 
trials that are carefully observed in a few hundred children, but 
instead in thousands of doctors' offices, homes, and hospitals, where 
hundreds of thousands of children may be exposed unnecessarily to 
adverse consequences before a drug is withdrawn or otherwise limited in 
its use.
    The reason that these circumstances have persisted is that there 
are significant disincentives to studying drugs in children. These were 
noted in the Senate Committee testimony on the pediatric studies 
provision of FDAMA. They include a limited return on investment, 
liability concerns, and the difficulties of enrolling and studying 
pediatric patients (1). Although there were past efforts by FDA to 
encourage industry to study the pediatric uses of drugs developed for 
adults, these had been of a voluntary nature, either by design or 
default. The results were generally considered, even by FDA itself, to 
be ``disappointing.'' In 1997, FDA proposed to make the study of 
pediatric indications mandatory. This crystallized a complementary 
effort by pediatric research advocates to get a pediatric studies 
incentive provision included in the FDA Modernization Act of 1997. The 
exodus of children from forty years in the desert of therapeutic exile 
was now to be driven by the carrot-and-the-stick.

                        EFFECTS ON PUBLIC HEALTH

    The public health consequences of the existing situation are that, 
due to the lack of proper information, especially on correct dosing, 
and the lack of age-appropriate formulations, children are at an 
increased risk for under and overdosing, improper administration of the 
drug, and failure to follow the prescribed dosing regimen (i.e., 
noncompliance). In addition, children may be denied access to 
therapeutic advances because some practitioners might delay using a new 
drug on children off-label until there has been some experience with 
them in adults, or, they may never use what could be the best available 
treatment because it has not been properly formulated for children and 
may lack accurate pediatric use information. This problem of suboptimal 
utilization may be especially widespread in pediatric practice, because 
close to 40% of prescriptions for children are not written by 
pediatricians (2). Practitioners who are not routinely engaged in the 
care of children may be more wary of using medicines off-label in 
children.

Public Health Benefits of Improved Information
    As a result of the incentive program, a great deal of information 
is being generated on pediatric indications for both new and already-
marketed medicines. Of the 12 medicines labeled so far for pediatric 
use through the incentive program, one-third were medicines new to the 
market and two-thirds were already on the market (3). While just these 
few drugs have already made a significant contribution to improving 
therapeutic options and practice for hundreds of thousands of children 
(3), an additional 200 drugs could be labeled over the next few years. 
As of January 1, 2001, FDA reported that they had issued 39 written 
requests soliciting pediatric studies on their own initiative as well 
as 134 written requests in response to 210 proposed pediatric study 
requests (PPSRs) from industry (4).
    There are indications that as many as three times the number of 
pediatric clinical trials may be ongoing now as were being performed in 
1997, before the initiation of the incentive program under FDAMA (5). 
From September 2000 to January 2001, Tufts CSDD conducted a survey of 
drug companies that were the sponsors of the first 40 products 
receiving written requests.\1\ Of the 25 survey responses, 16 
enumerated the number of clinical studies conducted per request. There 
were 44 studies being conducted for 16 written requests. Assuming an 
average of close to three clinical studies per request, one can 
estimate that for the total number of written requests being undertaken 
under the incentive program, over 500 clinical trials in children are 
currently being planned, conducted, or already completed, in comparison 
to less than 150 clinical trials in 1997 (6).
---------------------------------------------------------------------------
    \1\ Sponsors for 25 of the 40 products responded to the survey 
(62.5% response rate). Of these 25 responses, 20 stated that pediatric 
study report submissions were planned or had already been sent to FDA. 
A review by Tufts CSDD indicated that 14 of these 20 products have, in 
fact, received pediatric exclusivity as of February 15, 2001.
---------------------------------------------------------------------------
    Dosing and use information, as well as the availability of 
appropriate formulations for pediatric indications of adult medicines 
will help make these medicines safer and more effective for children. 
At the same time, the upsurge in public attention and interest from the 
general medical community may also help alleviate the problem of 
suboptimal utilization in children of drugs developed for adults.

Public Health Benefits of Increased Pediatric Drug Research
    The public health benefits that will accrue from increased 
pediatric research have already been recognized. In the few therapeutic 
areas in which there was considerable pediatric research already, such 
as AIDS and cancer, there has been a concomitant decrease in the 
adverse impacts of those diseases. For example, reported pediatric AIDS 
cases have declined 70% since 1992 due to the development of drug 
regimens to prevent perinatal transmission (7). Similarly, during the 
last few decades, well over 50% of pediatric cancer patients (the NIH 
reports it may be as high as 70% now) have been enrolled in clinical 
research, and today 75% of pediatric cancers are curable (8, 9).
    Now under the incentive program, intensive research is being 
conducted not just in a few disease areas but on over 70 diseases and 
conditions of children (3). The majority of these diseases and 
conditions are in therapeutic areas in which scant research in children 
had occurred prior to the incentive program. However, these same 
therapeutic areas are the ones in which research is most urgently 
needed.
    Tufts CSDD reviewed nine studies and reports published in 
professional journals or available from FDA, which discussed a variety 
of adverse outcomes in children resulting from interactions with 
therapeutic drugs. This review indicated that therapeutic areas 
historically involving high risk to children are prominently 
represented among the active moieties \2\ (i.e., active ingredient) 
appearing on the original ``FDAMA List'' of active moieties for which 
additional information may produce potential health benefits in the 
pediatric population (10). An updated review by Tufts CSDD of those 
problematic therapeutic areas indicates that the top three (central 
nervous system, cardiovascular, and hormonal) correlate with the 
therapeutic areas covered by the three FDA reviewing divisions 
(neuropharmacological, cardio-renal, and metabolic & endocrine) 
receiving the most PPSRs as of January 2001--83 PPSRs or 40% of the 
total, for which FDA has already issued 59 written requests (4).
---------------------------------------------------------------------------
    \2\ Active moieties are defined by FDA as the molecule or ion 
responsible for the physiological or pharmacological action of the 
drug.
---------------------------------------------------------------------------
    In addition to the number, breadth and public health significance 
of the diseases and conditions being addressed, dosing and use 
information is also being developed for the whole expanse of pediatric 
age groups. Of the responses to the Tufts CSDD drug company survey, 18 
stated the age range for which pediatric studies were being done or had 
been completed. Tufts CSDD categorized the results using FDA age 
classifications.\3\ The indication count by age-group was as follows: 4 
for neonates; 8 for infants; 16 for children; and, 9 for adolescents. 
It is noteworthy that 32% of these studies included neonates and 
infants--age-groups for which little information was previously 
available.
---------------------------------------------------------------------------
    \3\ Neonates--age 0 to 1 month; infants--age 1 month to 2 years; 
child--age 2 years to 12 years; and, adolescent--age 12 years to 16 
years.
---------------------------------------------------------------------------

More Child-Friendly Formulations Become Available
    Besides age-appropriate use information, another key factor in 
making medicines safe and effective for pediatric patients is the 
availability of child-friendly formulations. Children are notoriously 
problematic when it comes to taking medications as prescribed by their 
healthcare practitioners. Children have documented non-compliance rates 
ranging from 50-75%, rates that worsen with chronic diseases such as 
asthma and diabetes (11). Disagreeable taste and difficulty in 
swallowing tablets or capsules, especially for children under six, are 
among the reasons for such high non-compliance in children (12). 
Besides decreasing the effectiveness of medicines, the lack of child-
specific formulations increases the risks of adverse reactions for 
children, since they are exposed to doses and inert ingredients 
intended for use only in adults (13). Similarly, the use of 
extemporaneous formulations, which are pediatric preparations made by 
doctors and pharmacists from medicines only commercially available in 
adult product forms, increases the difficulty of accurate dosing and 
wastes staff time and money. One pediatric researcher noted that his 
children's hospital spent over 11 hours a day compounding 
extemporaneous products, and that as many as 20% of medication errors 
in children may be attributable to such products (14).
    The incentive program is improving this situation for children. The 
Tufts CSDD survey of drug companies shows that out of 20 active 
moieties for which pediatric studies were being done or already 
completed, 4 included the development of new pediatric formulations. 
Again, extending this experience to the rest of the 200 or so studies 
that are under way could mean that dozens of new child-friendly product 
forms could reach the market over the next few years.

Improving Global Public Health
    As important as label information is for pediatric practitioners in 
the U.S., it is even more important to the practice of pediatric 
medicine in other countries. This is especially true in the developing 
world, where other forms of information, such as reference texts, may 
not be readily available and where care may have to be provided by 
individuals who are not professionally trained medical practitioners 
(e.g., government public health workers, humanitarian emergency 
personnel, missionaries, etc.). While the public health of children in 
the U.S. is the main focus of the incentive program, U.S. children will 
not be its only beneficiaries. A review by Tufts CSDD showed that 
approximately 70 active moieties that appeared on the 1998 FDAMA list 
also comprise nearly one-third of the World Health Organization (WHO) 
Essential Drugs List, a list of drugs determined to be critical to 
meeting the health needs of the world's nations (15). Despite the fact 
that many of the medicines on the Essential Drugs List are older, off-
patent drugs used for treating acute conditions or tropical diseases, 
18 active moieties of these drugs have been the subject of written 
requests already issued by the FDA. When these drugs are labeled for 
use in children and become available for distribution worldwide, the 
benefits of the U.S. incentive program will extend to all the world's 
children.
    This, in turn, will help indirectly to further safeguard public 
health and safety here in the U.S. For example, AIDS has been declared 
a national security threat because of the destabilizing influence the 
epidemic is having on areas vital to U.S. interests. Along with AIDS, 
other diseases addressed by medicines eligible for the incentive 
program are transmissible and can cause transnational epidemics (e.g., 
tuberculosis, hepatitis C, and influenza). There are several million 
children residing in the U.S. that are recent immigrants for whom the 
public health toll can be ameliorated if labeled medicines for treating 
and preventing tropical diseases are available for use here as well as 
in their countries of origin (15, 16). Lastly, there is increasing 
recognition that the U.S. has a responsibility to help improve the 
public health of our international trading partners and geopolitical 
neighbors as part and parcel of the reality of globalization.

              BUILDING A PEDIATRIC RESEARCH INFRASTRUCTURE

    As Dr. Ralph Kauffman, a leading pediatric researcher and advocate, 
pointed out in a recent newspaper article: While an infrastructure for 
clinical testing of drugs for adults has evolved over the last few 
decades, that infrastructure never developed for children (17). There 
are very good indications that the infrastructure is now under 
construction as a result of the pediatric studies incentive program.

Effect on the Outsourcing Industry
    Because of the rapidity with which the industry has had to respond 
to the pediatric studies incentive due to the deadlines inherent in the 
process of applying for the exclusivity, the major drug companies have 
had to marshal their resources very rapidly. The Tufts CSDD survey of 
drug companies shows that the initial sponsors responding to the 
incentive program accomplished this by diverting in-house resources and 
relying on outsourcing service providers. In fact, 8 out of 15 
respondents to the question on the use of outsourcing said that 
outsourcing firms were employed to conduct all or part of the studies. 
The outsourcing industry consists of a number of service providers for 
a variety of clinical trial related tasks, ranging from data management 
to actually conducting clinical trials. Thus, the first building blocks 
of the nascent pediatric research infrastructure would appear to be 
found among the contract research organizations (CROs), site management 
organizations (SMOs), and independent clinical investigative sites that 
comprise the outsourcing industry.
    A survey of 120 CROs by CenterWatch, an industry watchgroup 
focusing on the business of clinical trials, indicates that the number 
of CROs with pediatric trial expertise grew from 32% to 45% during 1997 
to 1999 (18). At the same time, among 436 investigative sites, the 
number with pediatric expertise increased from 13% to 22% (18). 
Similarly, a group of non-profit academic SMOs, called the Pediatric 
Pharmacology Research Units (PPRUs), which is a network of academic 
medical centers specializing in pediatric research and organized under 
the aegis of the NIH, doubled its number of participating institutions 
in 1999 from 7 to 13 in reaction to the increased workload from the 
pediatric research initiative (13). The PPRUs themselves may be working 
on as many as 70 industry-sponsored studies (19).
    A Tufts CSDD survey of 35 CROs revealed that of the 21 respondents, 
13 are working on pediatric studies.\4\ These 13 CROs are collectively 
conducting 113 studies involving 7,000 patients. Just this sample of 
CROs and SMOs (representing roughly about 5% of their respective 
outsourcing service sectors) are working on nearly 200 pediatric 
studies themselves, compared to less than 150 pediatric studies 
involving drugs being done by the drug companies and outsourcing 
industry as a whole in 1997 (6). Half of the CRO respondents to the 
Tufts CSDD survey, who noted that pediatric research was responsible 
for most or some of the additional workload they had experienced in the 
last 2 years, said that this was due, in particular, to FDAMA's 
pediatric provision.
---------------------------------------------------------------------------
    \4\ In the fall of 1999 and winter of 2000, Tufts CSDD conducted a 
follow-up survey of 35 CROs who had responded to an earlier survey 
distributed to all CROs with exhibition booths at the 1998 Annual Drug 
Information Association meeting. The response rate was 60% (21/35).
---------------------------------------------------------------------------
    At the same time, the supply of researchers available to conduct 
pediatric drug trials appears to be increasing. There were fewer than 
2,500 investigators with some degree of specialization or certification 
in pediatrics and current experience in pediatric drug research in 1997 
(13). Soon after the incentive program was in full sway, stories in the 
media and trade press reported the creation of specialized pediatric 
research groups within two of the largest CROs--Quintiles and Parexel. 
In addition, two large SMOs have launched pediatric-specific ventures--
Pediatric Clinical Trials International and Kelson Pediatric Partners, 
which collectively can call on the services of 500 doctors with 
pediatric training and nearly 2,000 investigators. This increase in 
personnel dedicated to conducting pediatric clinical trials was also 
evident from our survey of CROs. Of the 13 CROs currently conducting 
pediatric studies, 4 had added staff explicitly for pediatric studies--
on average about 3 staffpersons per CRO. Also, 3 of those 4 CROs had 
created new units within their organizations dedicated specifically to 
pediatric drug clinical trials.

FDA Acknowledges Increase in Pediatric Studies of Drugs
    FDA recognizes the extraordinary growth that has occurred in the 
field. When CDER announced the creation of a new position--science 
director for pediatrics--it stated that the responsibility of the new 
position was to focus on the rapidly expanding field of pediatric 
clinical trials (20). In a recent quote from USA Today, FDA's Associate 
Director for Pediatrics, Diane Murphy, predicted that the number of 
unlabeled medicines on the market for children will decrease from 75% 
to 50% over the next 5 years (21). According to an unpublished Tufts 
CSDD review of efficacy supplements approved from 1995-2000, this 
change may already be taking place. Before FDAMA, from 1995 to 1997, 
there were only 39 efficacy supplement approvals on the basis of new 
research for pediatric indications. Since FDAMA, from 1998 to 2000, 
that number has nearly doubled to 71.

Science of Conducting Pediatric Trials Has Been Advanced
    The science of doing research in children is also evolving as the 
architects of trial protocols must design new approaches for studying 
pediatric patients in clinical trials. The Tufts CSDD survey of drug 
companies indicates that population pharmacokinetic studies have been 
done for 13 of 20 active moieties. Population pharmacokinetic studies 
are a nontraditional approach to studying the effects of the drug on 
the body that requires fewer invasive procedures to be performed on 
each patient. For 2 active moieties, long-term follow-up studies were 
being conducted. This is a time-consuming type of clinical 
investigation recommended by FDA for chronic-use and preventative 
drugs, but which in the past has been done infrequently. In addition, 
sponsors developed 3 new biological sampling techniques and 4 new 
clinical or surrogate endpoints (i.e., measures of benefits derived 
from the treatment). An example of one newly created measure of 
clinical benefit was the development by one sponsor of a novel rating 
scale for anxiety in pediatric patients. The lack of measures for 
clinical benefit from therapeutic agents for pediatric anxiety 
disorders had previously hampered proof of efficacy for such drugs. If 
the advances resulting from just these few pediatric studies are 
representative of the several hundred studies now under way, the 
science of pediatric clinical trials has come a long way in one-tenth 
the time it took to develop the research infrastructure for adult 
medicines.

                           UNFORESEEN IMPACT

    Although there were some predictable outcomes from the pediatric 
studies incentive program such as the vigorous response by the drug 
companies, a host of unforeseen effects have occurred as well--by-and-
large these have all been beneficial.

Other Countries Emulate U.S. Incentive Program
    Due to the example of the U.S. program, which has been applauded in 
the United Kingdom, Canada, and Europe, there has been a dramatic 
upsurge in international activity related to pediatric research. 
Numerous studies and reports have been published over the last several 
years documenting the use of off-label drugs for children in various 
countries throughout the world, such as Australia, Japan, Britain, 
Canada, and the Netherlands. Two international groups that provide 
recommendations on the evaluation of therapeutic drugs, the European 
Medicines Evaluation Agency (EMEA) and the International Conference on 
Harmonization (ICH), have published guidelines on the conduct of 
clinical trials in children, and noted the need for more pediatric 
research as well. The European Union's Council of Health Ministers 
recently adopted a resolution that also recognized this need and 
invited the European Commission to make appropriate proposals for 
incentives, regulatory mandates, and other supporting actions to 
address this urgent problem (22).

Pediatric Provision Complements FDA Modernization Act and Orphan Drug 
        Act
    The pediatric provision has had a synergistic effect with regard to 
other provisions of FDAMA and the Orphan Drug Act (an R&D incentive 
program for medicines addressing rare disorders). A survey by Tufts 
CSDD of companies engaged in the development of fast track products for 
serious and life-threatening illnesses (FDAMA Section 112) demonstrated 
that close to half of them (11/23) were being studied for pediatric 
indications as well as for adult indications (23). Similarly, a Tufts 
CSDD survey of biotechnology and pharmaceutical companies on the use of 
the single controlled trial for proof of efficacy (FDAMA Section 115) 
showed that half of the respondents were doing so for pediatric or 
orphan indications (24).
    Orphan drugs often include indications for pediatric use because 
many rare diseases are genetic or metabolic in origin. In fact, the 
FDA's Office of Orphan Drugs has provided support for some early 
development work on pediatric indications of drugs by non-industry 
sponsors. These sponsors then interest the drug companies in pursuing 
these indications for pediatric exclusivity, as occurred recently with 
the drug propofol (25).

Pediatric Research Benefits Adult R&D
    Another unanticipated outcome from the incentive program is that 
researchers are now looking both ways--up and down the age scale. Not 
only are drugs for adults now being developed with a view towards their 
pediatric uses, but the reverse is happening as well; drugs and drug 
formulations developed for children are being extended to adults. For 
example, TPIO is an investigational drug being studied as a potential 
treatment to improve post-operative outcomes in infants undergoing 
cardiac bypass surgery. The sponsoring company has been buoyed by its 
success with trial results in the targeted population of infants and 
has decided to extend its investigation to adults (26). Similarly, 
results of studies to support the pediatric exclusivity application for 
the AIDS drug abacavir were later extrapolated to adults to support 
approval of the drug for that population (27).
    Pediatric formulations of drugs designed to ease administration of 
medicines in children, and thus increase compliance, can be utilized in 
other difficult-to-treat populations, such as the elderly or adults who 
have difficulty swallowing pills. For example, Ascent Pediatrics' 
Primsol was developed for children as the first liquid formulation with 
trimethoprim (an antibiotic) as the sole active ingredient, for the 
treatment of otitis media in children. However, in addition it has 
recently received approval for a second indication--the treatment of 
urinary infection in adults (28).

Development of Rigorous Ethical Standards for Pediatric Research Gets 
        Increased Attention
    The pediatric studies incentive has focused media, government, and 
industry attention on pediatric research. The Boston Globe recently 
published an article detailing a number of pediatric clinical trials 
investigating drugs and other therapies in which there were ethical 
issues and safety concerns (5). Although few of these trials were 
conducted for the purpose of pursuing pediatric exclusivity, and the 
trials were conducted at various research facilities including state 
and federal government institutions as well as academic medical 
centers, the incentive program was the impetus for bringing them to 
public attention.
    There is now a growing awareness that pediatric clinical trials 
require special considerations in their design, additional safeguards 
in their implementation, as well as specially equipped facilities and 
appropriately trained personnel. There is a consensus now among 
international bodies, which provide guidance on clinical research 
(e.g., the EMEA and the ICH), that it is necessary to address the 
ethical issues inherent in pediatric research, along with the 
scientific, technical, and practical ones. In the U.S., the incentive 
program has been the impetus for FDA's convening a Pediatric Ethics 
Working Group within its Pediatric Advisory Subcommittee to assist FDA 
in addressing ethical issues in pediatric research. The NIH instituted 
a policy coincident with the advent of the pediatric studies program 
stating that children must be included in all human subjects research 
funded by the NIH unless there are scientific or ethical reasons to 
exclude them. The NIH policy also requires research plans to detail the 
capacity of the researchers to provide appropriate pediatric expertise 
and facilities (29). The 106th Congress, as well, just recently enacted 
the Children's Research Protection Act to increase safeguards for 
children involved in research and to provide funding for the study of 
pediatric pharmacology (30).

Public Health Risks of Off-Label Use Viewed as Outweighing Risks of 
        Research
    Without the impetus of the pediatric studies incentive program, it 
is possible that pediatric clinical trials would have remained in the 
backwater of the research mainstream and ethical problems may have 
continued to come in under the radar screen of public scrutiny. 
Moreover, 40 years worth of natural experiments--using drugs in 
children that had been studied only in adults--would have been ignored. 
There is an uneasy balance that must be negotiated when weighing the 
risks from increasing research on children and using drugs off-label. 
This tension was highlighted recently by a prominent pediatric 
practitioner and professor of child health from the United Kingdom, 
Professor Choonara, who was applauding the American pediatric studies 
initiative in an article published in the British Medical Journal (31). 
Choonara pointed out that the alternative to not doing pediatric trials 
is the continuance of using medicines in children without any evidence 
base. Such a situation, Choonara believes, recently lead to the deaths 
of 15 children from the use of a sedative in critically ill children. 
Choonara asserts that if this medicine had been studied as part of a 
clinical trial, one death would have led to an urgent reappraisal of 
the trial and the treatment (31). That child's death would have been a 
tragedy, but one that might have prevented 15 other tragedies.

                           COST-BENEFIT RATIO

    As noted previously, children have been effectively denied access 
to safe and effective medicines, since 75% of marketed drugs are not 
labeled for pediatric use. This leads to underutilization of what may 
be, not only the best treatments available, but the most cost-effective 
ones as well. Studies by managed care organizations have found that 
treatment with medicines may often provide the most cost-effective 
therapeutic option (i.e., as opposed to surgery, lifestyle management, 
no treatment, etc.) and that they can also lower complications from 
disease as well as decrease rehospitalization rates (32). As 
importantly, healthy children become healthy adults; much adult illness 
and distress has its origin in childhood (33). Any investment that we 
make in the short-term now to improve children's health could result in 
tremendous health care cost savings in the long-term. The economic 
value of reducing mortality from just cardiovascular disease alone is a 
staggering $1.5 trillion annually (34). An estimated 13% reduction in 
mortality from such cardiovascular-related events as heart attacks and 
strokes is attributable to new drug therapies that reduce blood 
pressure and cholesterol (34).

Economic Impacts of Leading Causes of Death in Childhood from Disease
    Among the leading causes of death for children in 1997 are a number 
of illnesses that can be mitigated, cured, or prevented by drug and 
biological products currently on the market or in development, and 
whose annual economic impacts for 1998 have been quantified (see Table 
1).

      Table 1. Annual Economic Impact and Rank as Leading Cause of Death (1997) for Diseases Treatable with
                                           Pharmaceuticals in U.S.\5\
                            Rank of Disease Among Top 10 Causes of Death by Age Group
----------------------------------------------------------------------------------------------------------------
                                                                                                      Economic
                                               Infants       Children    Youth  (15-                 Impact (per
                  Disease                       (>1)         (1-14)          24)      Adult  (25+)    year, in
                                                                                                      billions)
----------------------------------------------------------------------------------------------------------------
Heart Disease.............................            5             5             5             1        $286.5
Pneumonia/Resp. Infection.................            6             7             8             4         $12.0
Stroke (Cerebrovascular)..................            8            10             9             3         $45.3
Infectious & Parasitic Disease............            9   ............  ............  ............        $12.0
Cancer....................................  ............            2             4             2        $149.1
HIV.......................................  ............            8             7   ............        $64.1
Bronchitis/Asthma/Emphysema...............  ............            9            10             5         $46.5
Diabetes..................................  ............  ............  ............            6         $98.0
Total.....................................  4 of top 10   6 of top 10   6 of top 10   6 of top 10        $713.5
----------------------------------------------------------------------------------------------------------------
Adapted from ``Kids at Risk,'' Harvard Center for Risk Analysis, April 2000; and, ``Top Ten Disease Categories
  by Cost,'' Pharmaceutical Research and Manufacturers of America, December 1999 (35, 36).
\5\ Other conditions or events not listed in Table 1 which are among the ten leading causes of death for the
  various pediatric age-groups shown are: certain conditions originating in the perinatal period; birth defects;
  ill-defined conditions; unintentional injuries; homicide; certain intestinal infections; and, suicide (35).

    If even one-hundredth of the annual economic impact from these 
leading causes of death and disability (see Table 1) was reduced by 
providing more effective treatments to children, making for healthier 
adults in the process, the $7 billion saved each year would be 10 times 
more than the nearly $700 million that FDA has estimated as the yearly 
cost to society from the pediatric exclusivity awards (3). Currently, 
$45 billion a year, just 56 cents per person/per day, is spent on 
medical and health research by all sources of funding (34). The $700 
million annual costs of the incentive program would add an extra penny 
per person/per day, and be well worth the bargain.

Treatment for Childhood Mental Illness Needs More Therapeutic Options
    Even analyses of diseases that are leading causes of death do not 
begin to tell the story of potential healthcare cost savings from the 
pediatric studies program. One in ten children in the U.S. suffer from 
mental illness severe enough to cause impairment, yet fewer than 1 in 5 
receive treatment (37). Again, these childhood disorders make for 
unhealthy adulthood; 74% of 21-year-olds with mental disorders have a 
history of prior problems (38). Yet, there are few psychotropic drugs 
approved specifically for the treatment of pediatric psychiatric 
disorders (38). The economic consequences of mental illness are 
staggering--$42 billion a year just from anxiety-related disorders such 
as panic attacks and obsessive-compulsive disorder, with 40% of the 
population affected being children (39), and an additional $44 billion 
for serious depression (40). For the nearly 4 million children affected 
with ADD/ADHD (41), median per capita annual health costs are more than 
double that of an unaffected child (42). No wonder that for the year 
2000, the legislative agendas of 19 states included bills related to 
children's behavioral health (43).
    The incentive program is helping to address the need for more 
therapeutic options to treat mental illness in children. The 
therapeutic area for which drug companies have submitted the greatest 
number of study proposals (29 PPSRs as of January 1, 2001) under the 
incentive program is neuropharmacological drugs. Pediatric studies have 
already been completed for 4 of these drugs, and 3 have been labeled 
for pediatric use.

Health and Economic Needs Addressed by the Incentive Proizram Are 
        Unappreciated
    A concern expressed by some critics of the incentive program is 
that awards have been granted for medicines treating diseases and 
conditions with little impact on the pediatric population, but which 
are very lucrative for the sponsors of the drug (44). One such 
condition is high blood cholesterol levels, considered a risk factor 
for heart diseases and stroke. It is worth noting that 36.5% of 
children in the U.S. have high cholesterol levels, according to one 
report (45). Arthritis and hypertension are other illnesses that some 
assert are not pediatric problems, yet the prevalence of rheumatoid 
arthritis in U.S. children is between 71,000 (46) and just under a 
100,000 (17), while that of hypertension is estimated to be 1% of the 
pediatric population, or some 750,000 children (47).
    Other conditions are criticized as being of minor clinical 
significance for children, but of major importance for drug company 
profits (44). One such condition is seasonal allergic rhinitis (SAR). 
Yet at a time when the academic performance of America's children is of 
paramount concern, the impact of this condition is anything but minor. 
SAR affects 10% of school-age children, causing missed school days, 
poor school performance, and impaired function on standardized tests 
(48).
    An unappreciated healthcare cost efficiency potentially realized 
through the auspices of the incentive program is Medicaid cost savings. 
As of 1995, some 17 million children were covered by Medicaid (49). An 
additional 7 million of the nation's 11 million uninsured children are 
now eligible for coverage under state Child Health Insurance Programs 
(CHIPS) or Medicaid expansions (50), so that potentially 25 million 
children will be covered by federal and state programs within a few 
years. In fact, a spokesperson for one children's hospital in Florida 
noted that 60% of their pediatric patients are Medicaid-dependent (14).
    The potential healthcare cost savings that could be realized 
through improvements for therapeutic options in children are difficult 
to overstate. For example, the annual costs for treating Medicaid-
dependent children for just three diseases listed in Table I--AIDS, 
asthma, and diabetes--could be nearly double (~$1.2 billion) FDA's 
estimate of the yearly costs to society from the incentive program (36, 
51-56).\6\
---------------------------------------------------------------------------
    \6\ For AIDS, Medicaid paid out an estimated $3.9 billion in 2000. 
The percentage of all AIDS victims that are children and teenagers is 
about 5-6%, but Medicaid pays for about 90% of those costs as opposed 
to 50% of adult costs. So, the toll for pediatric AIDS comes to about 
$190 million (36, 51, 52). For asthma, the cost to Medicaid and 
Medicare exceeds $1 billion. Given the high mortality rate of asthma in 
the elderly, the eligibility of poor or disabled, elderly asthmatics 
for Medicaid, limited drug benefits in Medicare, and the fact that only 
13% of the population are elderly, it is likely that only about 10% of 
these costs are Medicare. Of the remaining $900 million, pediatric 
asthmatics could account for as much as one-third of those costs (~$300 
million) since they comprise one-third of the asthmatic population 
overall and have higher hospitalization rates (53, 54). For diabetes, 
the CDC estimates that 5-10% of diabetes is type 1, typically diagnosed 
in childhood. The American Diabetes Association reports that diabetes 
cost Medicaid $10 billion in 1997. A conservative estimate (since it 
does not take into account the small but growing population of 
pediatric type 11 diabetics) of pediatric costs for diabetes would be 
$750 million (55, 56). Adding these costs together amounts to ~$1.2 
billion annually.
---------------------------------------------------------------------------

Costs to the Poor and Elderly Are Not Unreasonable
    One concern about the cost-benefit ratio of the pediatric 
exclusivity program that has been voiced is the impact of the 
additional period of market protection on the prices of drugs for the 
poor and elderly. Ironically, sacrificing the affordability of 
medicines to the poor for the sake of availability to children is not 
really an issue. Children are the poor! Close to half of the Medicaid 
population (42%) are children (57). Another large percent of the poor 
are the families of those children. Denying children access to labeled 
drugs, denies poor children access to the best available treatment. It 
also makes poor parents pay more out-of-pocket. Medicaid usually 
provides a drug benefit, but often it may not cover off-label drugs, 
except for cancer and AIDS medicine (13).
    The real question then, is what is the trade-off as far as the 
elderly are concerned. At first glance, this appears to be a genuine 
point of contention, especially as Congress contemplates extending 
Medicare benefits to include prescription drugs. A comparison of the 
top 50 drugs used by the elderly (58) with the February 2001 list of 
drugs issued written requests, reveals that 4 of the top 10 and 22 of 
the top 50 drugs for elder care are the subject of written requests, 
and thus potentially extended market protection. This theoretically 
could delay access to less expensive generic versions of certain 
commonly used drugs in elder care. However, a closer look at the list 
reveals that there would be somewhat of a lesser impact than it would 
first appear. Four of the 22 drugs are different strengths of the same 
drugs, reducing the number on the list to 18. An additional 7 are 
therapeutically similar to other drugs on the list and are in 
therapeutic categories for which there are a number of available 
alternatives on the market besides the ones on the list (i.e., GERD, 
antihypertensives, and lipid-lowering drugs). This reduces the number 
of drugs commonly used by seniors that could be impacted by the 
incentive program to 11. For those 11 drugs, it is unlikely that any 
senior would be using more than two of these drugs at exactly the same 
six-month period that they may be protected from generic competition. 
In addition, many of the elderly, if they are poor or low-to-middle 
income, have some form of prescription coverage through Medicaid and 
state drug assistance programs for seniors (59). So, while a 
statistical analysis could generate high dollar numbers indicating an 
impressive detriment to the public coffers in theory, the actual out-
of-pocket expense for any senior citizen is likely to be minimal and 
temporary.

Costs to Taxpayers and Consumers Are a Matter of Social Equity
    As for the putative cost to taxpayers and consumers in general, 
again at first glance, this could seem like an unfair bargain. Data for 
1999 show that 5 of the top 10 and 22 of the top 50 prescription drugs 
by sales (60) have active moieties, which are the subject of written 
requests, again indicating potential increased costs due to delayed 
availability of lowerpriced generic alternatives. However, another way 
of ranking the top prescription drugs reveals that there is a social 
equity factor to be calculated in the cost-benefit equation. Eight of 
the top 10 and 28 of the top 50 prescription drugs by number of 
prescriptions written (61) also contain active moieties for which FDA 
has issued written requests soliciting needed pediatric studies. Thus, 
many of the most commonly prescribed medicines currently available for 
the general population are not adequately labeled for use in children.
    Yet, making these commonly used drugs available to children is not 
likely to significantly increase costs for the government or other 
third-party payers. Children are something of a bargain when it comes 
to prescription drug costs. The average toll for a month's worth of 
prescription medicines for children and college students is only $10; 
adult prescription needs are 3 times more expensive and seniors are 
over 10 times as costly (62).
    Concern that increased availability of medicines for children will 
lead to overuse is probably not warranted either. In fact, there is 
some evidence to suggest that pediatric practitioners are becoming more 
judicious in their use of medicines in an area formerly thought to be 
rife with overuse. The National Center for Health Statistics has 
determined that the number of antibiotic prescriptions written per 
1,000 children declined by 34% from 1990 to 1998 (63).
    The social equity factor becomes increasingly weighty when one 
considers that society in general has historically overlooked the 
health needs of children. A 1997 survey found that only 4% of the 
public felt strongly enough about issues of children's health to have 
written or spoken to public officials about them within the last year, 
whereas 4 times as many had contacted public officials about Medicare 
and Social Security issues (64). Yet, children are less likely to have 
a regular source of medical care. For example, among the elderly, only 
4.1% did not have regular access to medical care (65), while among 
children, 6.5% do not have regular medical care (66). An estimated 13% 
of U.S. children also lack health insurance, leaving them 3.5 times as 
likely to go without needed medications and mental health care compared 
to insured children (66). Although children comprise 27% of the general 
population in the U.S., they comprise 42% of the poor in this country 
(57), circumstances which, by themselves, contribute to poor health 
outcomes for children later in life, such as stroke and certain cancers 
(67). The incentive program represents one of a series of steps 
necessary to address the fact that children have been overlooked by the 
present-day healthcare system.

Liability Costs Affect Everyone
    A review by Tufts CSDD of tort litigation cases from the late 1960s 
to the mid1990s, which were compiled in a 1998 legal compendium (68), 
indicates that of 147 active moieties listed by FDA as having received 
written requests by February 15, 2001 (4), 19 had been the subject of 
litigation. One active moiety, which as of 1997 was the subject of some 
270 cases, was excluded from the review because settlement or award 
amounts of the few cases resolved in favor of the plaintiffs were not 
known. The other 18 active moieties were the subject of 76 cases: 60 
alleging injury to adults and 16 injury to children. Of these 76 cases, 
settlement or award amounts were reported for 22. The total amount 
awarded to plaintiffs was over $82 million exclusive of court costs, 
legal fees, expert witness fees, and other charges. The average amount 
awarded in adult cases was $671,813, while in cases involving children 
the average award was $898,100 (excluding one case with a 20-year-old 
college student as the plaintiff that resulted in a $67 million award). 
Because of the lag time involved in cases reaching the courts,\7\ it is 
likely that few drugs approved in the 1990s are represented here, and 
some of the cases are 20-30 years old, when awards were generally for 
lower amounts. For example, some of the award amounts sought by 
plaintiffs in more recent cases that are still pending before the 
courts were in the neighborhood of $100 to $155 million. Moreover, 90% 
of actions never reach court, some state cases are unreported, and 
settlement amounts are often undisclosed as part of the settlement 
agreement. Thus, the actual litigation costs from cases involving these 
active moieties could be many fold higher.
---------------------------------------------------------------------------
    \7\ Typical malpractice awards in 1996 were from incidents that 
occurred in 1988 (69), and a similar lag effect is likely in product 
liability cases as well.

Table II. Average Payouts by Type of Defendant from 22* Litigation Cases
    Involving Drugs Receiving Written Requests (*3 cases had multiple
 defendants; for 2 of these, total liability amounts were attributed to
                            both defendants)
------------------------------------------------------------------------
                                            Type of Defendant, Number in
    Average Award or Settlement Amount             Parentheses ()
------------------------------------------------------------------------
$33,632,500..............................             Manufacturers (2)
$1,324,000...............................                 Hospitals (5)
$784,500.................................     Medical Doctors, Dentists
                                                                   (15)
$1,020,000...............................                Government (2)
$67,000..................................            Medical School (1)
------------------------------------------------------------------------

    As seen in Table II, the defendants were not manufacturers by-and-
large, but doctors and hospitals. So, while manufacturers are 
justifiably leery of litigation because of the size of the awards 
against them, liability fears affect all levels of health care, from 
medical students to liability insurers. It is also worth noting that 
prospective litigation costs may be passed along to consumers and 
taxpayers in the form of higher drug prices. A study published in 1997 
found that liability risk is responsible for one-third to one-half of 
the price differential between the United States and Canada where drugs 
are substantially lowerpriced (70). Thus, any liability avoided by 
better labeling for drugs used in children, especially since they 
typically involved more costly awards in this sample of cases, will be 
beneficial across all segments of society.

Costs to Industry
    The FDA report to Congress detailed the ``costs'' to the generic 
and retail pharmacy industry (3). However, these are not really costs 
but ``unrealized profits'' from the lengthening of the period of market 
protection for some brand-name drug products. Yet, generic 
manufacturers are not forced to enter the market for any particular 
drug product, and they are already selective as to where they choose to 
compete. For example, there already exists a portion of the 
pharmaceutical market comprised of drugs unprotected by patents and 
without generic competition that is nearly equal in dollar volume to 
the current portion of the market held by generics (71). So, the 
incentive program is not actually costing the generic industry anything 
in terms of losses of current market share or actual expenditures for 
increased staff, equipment and facilities, but from a delay of future 
profits. Since the ``costs'' to the retail industry are based on the 
higher mark-ups they can command for generic drugs over brand-name 
drugs, their costs also are not actual losses or expenditures, but 
unrealized profits.
    In contrast, the costs to the brand-name drug companies can be 
stated in terms of time, staff, and actual dollars spent. The Tufts 
CSDD survey of drug companies indicates that the costs of the trials 
have not been particularly high, averaging $3.87 million per written 
request, although ranging as high as $20 million. The per-patient costs 
have been somewhat higher than expected, averaging $20,405 per patient 
compared to FDA's estimate range of $5,000 to $9,000 (72). The average 
number of patients, based on 15 responses to the Tufts CSDD survey, was 
203 patients per written request. If these figures are representative 
of all pediatric studies that are under way for the 173 written 
requests issued as of January 1, 2001, then drug sponsors will spend 
approximately $717 million on pediatric studies under the program. 
Taking into account the reported average costs from our survey for 
formulation development of $750,000 per formulation and that one-fifth 
of the written requests in our survey required a formulation to be 
developed, that amounts to an additional $26 million. The total then 
would be close to $750 million.
    However, clinical investigations of as many as 250 active moieties 
(i.e., from 210 industry PPSRs and 39 FDA-initiated written requests) 
may be in process already. Considerable expenditure will accrue to any 
sponsor conducting pediatric clinical trials even if the studies are 
not ultimately completed. In the Tufts CSDD survey of drug companies, 
only I out of 25 respondents did not submit a PPSR and had no plans to 
submit pediatric study reports. This suggests that only 4% of sponsors 
will not undertake at least some work on any active moiety that is the 
subject of either an industry study proposal or FDA-initiated written 
request. It would not be unreasonable then, to estimate that industry 
costs could climb upwards of a $1 billion for the 250 active moieties 
being studied under the current incentive program. This may be a 
conservative figure, as a year still remained in the statutory period 
when this estimate was calculated.
    In actuality, the drug companies never really balked at the actual 
cost in dollars for doing the studies (13), but more so the limited 
return on investment, and hence the opportunity costs of investing 
resources needed elsewhere. The studies do take time, on average almost 
2 years (22.75 months) according to the Tufts CSDD drug company survey, 
and some companies have been at it for as long as 48 months without 
nearing completion. Also, the studies take considerable numbers of 
personnel. From the number and types of studies reported in the Tufts 
CSDD survey and published numbers of staff typically utilized for each 
type of study (13), we estimated that each written request required 21 
full-time staff-persons. For 173 written requests that would entail the 
services of close to 4,000 research personnel (and over 5,000 staff for 
the 250 active moieties that are likely to be studied).
    The reason that opportunity costs and hence dedication of resources 
are so critical is that pharmaceutical companies compete not only among 
themselves, but also with other industries for investment dollars. In 
order to maintain a growth rate of 10% and continue to attract 
investors, pharmaceutical firms must produce 3-5 new chemical entities 
(NCEs) per year, with sales potential of over $350 million per year--
so-called blockbuster drugs (73). These competitive pressures have 
reputedly been one impetus for all the merger activity that has taken 
place over the last few years. The response by the firms to the 
pediatric studies incentive has been robust, but only because it was 
attractive enough to lure some of their attention away from other 
mainstream R&D activities. The pediatric sales market itself is 
insufficient to render the commitment of resources profitable. In fact, 
when the European Union's Council of Health Ministers recently 
discussed possible approaches to encouraging more pediatric research, 
it noted that R&D costs are not amortized because of the small number 
of children affected by each disorder in an age bracket (22).

Reauthorization of the Incentive Program with Modifications Is 
        Necessary to Ensure that Benefits Accrue to All
    As costs of the incentive program do not accrue equally across all 
economic sectors neither have the benefits been spread equally among 
all putative beneficiaries. Neonates, in particular, have been a 
problematic age-group within an already problematic sub-population. 
While the lack of information is an especially critical concern in this 
age-group, the barriers to conducting such studies are especially 
onerous, not the least of which are the difficult risk-benefit 
decisions facing the IRBs that must approve such studies. However, more 
headway has been made with neonatal studies through the incentive 
program than with regulatory approaches.\8\ But much remains to be 
done. The 1998 FDAMA list noted that approximately two-thirds of the 
active moieties listed needed information for the neonatal age-group, 
but the Tufts CSDD survey indicates that only one-quarter of active 
moieties are currently being studied for use in neonates under the 
incentive program.
---------------------------------------------------------------------------
    \8\ For example, 11% of studies done in response to written 
requests included neonates according to the Tufts CSDD survey of drug 
companies, while only 5% of pediatric studies done to comply with the 
1998 pediatric rule were for neonates according to Tufts CSDD annual 
surveys of marketing applications for NCEs from 1997-1999.
---------------------------------------------------------------------------
    Similarly, active moieties for cancer drugs appear to be a 
disincentivized therapeutic area. Although 12 written requests had been 
issued as of January 1, 2000 by FDA's Review Division for oncology 
drugs, 9 of those were issued just since October 1, 2000, and no 
pediatric exclusivities have been granted yet. Also, for most active 
therapeutic areas under the incentive program, there are more PPSRs 
than written requests. For oncology drugs there were only 8 industry 
proposals. This could reflect reputed difficulties in this therapeutic 
area such as demanding clinical trial requirements and scant 
availability of patients. In fact, it is likely to remain problematic 
to sufficiently incentivize the study of older oncology drugs. Efforts 
may be more fruitfully devoted to establishing special incentives for 
oncology drugs in development so that children have access to 
therapeutic advances as soon as possible, if there are no better 
treatment options available.
    As for other therapeutic categories that have not resulted in any 
pediatric exclusivity awards (i.e., medical imaging, reproductive, and 
anti-infective drugs), medical imaging products are used for diagnostic 
purposes and study participants may be difficult to recruit, especially 
as a protocol involving the use of healthy children or patients with an 
illness unbenefited by medical imaging may not pass the risk-benefit 
threshold of IRB review. Reproductive drug needs are limited for this 
age-group. Anti-infectives are problematic because antibiotics approved 
before the passage of FDAMA are not eligible for the incentive. While a 
number of antibiotics are labeled for children, some needed ones are 
not. Again the solution may be to incentivize the development of 
pediatric indications for new antibiotics so that they can replace 
older marketed ones that are unlikely to be studied under the incentive 
program in any case.
    Congressional intent was not to limit the benefits of improved 
information on the pediatric uses of drugs to some children, but rather 
to extend them to all children. The following recommendations for 
modifications to the incentive program should help to address this 
goal:

 Pediatric Studies Provision--first and foremost, the pediatric 
        incentive program under FDAMA should be extended for another 
        five years for all eligible active moieties in order for the 
        pediatric research infrastructure to become selfsustaining and 
        for the other benefits discussed in this white paper to be 
        realized for the long-term.
 Pediatric User Fees--the report by FDA to Congress (3) and the 
        fact that over 65 FDA personnel are currently listed as 
        participating in 12 pediatric oversight activities (12) 
        demonstrate that FDA needs dedicated resources for the 
        incentive program to fulfill its goals. These should be 
        generated by pediatric exclusivity application fees.
 Treatment INDs--drugs in development which are made available 
        to children with serious or life-threatening illness, such as 
        cancer, under an expanded access protocol for a sponsor-
        submitted treatment investigational new drug application should 
        be granted a 6-month transferable exclusivity award upon 
        acceptance of the pediatric study reports for the active moiety 
        by FDA.
 Neonatal Studies--sponsors that develop neonatal indications 
        for already-marketed drugs should be granted a 6-month 
        transferable pediatric exclusivity period.
 Unmet Medical Needs--sponsors that develop pediatric 
        indications for already-marketed drugs that address serious or 
        life-threatening illnesses or diseases/conditions for which 
        insufficient treatment, prevention, or diagnostic options 
        currently exist should be granted a 6-month transferable 
        pediatric exclusivity period.
 Antibiotics--sponsors that develop pediatric indications 
        different from the adult indications for new antibiotic drug 
        applications should be granted a 3-month transferable pediatric 
        exclusivity period.

                              CONCLUSIONS

    The pediatric studies incentive program was added to FDAMA in 
recognition of the special needs and concerns attendant with developing 
medicines in children. It took 40 years for the research based 
pharmaceutical industry to build the current R&D infrastructure. It was 
built for adults. Accommodating it to provide for the needs of children 
will take more than 4 years. It will require significant investment of 
time, money and personnel. Some business sectors will gain, while 
others will not. Yet, the ones gaining are also the ones taking the 
risks and doing the work. In the short-term it will require some trade-
offs, by Americans as taxpayers and consumers for the sake of Americans 
as children, parents, and grandparents. In the long-term, we all stand 
to share in the benefits of equal medicines for all.

                               References

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Labor and Human Resources, 105th Congress, 1st Session.
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guide 1999-2000 15th edition. Philadelphia: Dorland's, 2000:1-606
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to Congress. Washington DC: US Food & Drug Administration, 2001
    4. FDA pediatric medicine website. http://www.fda.gov/cder/
pediatric
    5. Dember A. Dangerous dosage. Boston Globe 2001 Feb 18:A1, 26-7
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at: Pediatric Clinical Trials Regulatory Strategies and Clinical 
Guidance for Pediatric Drug Development, The Four Seasons Hotel, 
Washington D.C., January 28-29, 1999.
    7. NDAs for perinatal HIV prevention may refer to foreign data--
cmte. Pink Sheet 1999 Oct 11;61(41):31
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procedures. New York Times 1999 Oct 3:26
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of FDAMA. Tufts Center for the Study of Drug Development Impact Report 
2000 Apr;2(3)
    11. Merck manual of diagnosis and therapy. Edited by Berkow R 
Fletcher AJ. Rahway NJ: Merck, Sharp & Dohme Research Laboratories, 
1998
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Mathieu M. New drug development: a regulatory overview--revised 5th 
edition. Waltham MA: Parexel, 2000:439-77
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millennium. American Journal of Therapeutics 1999 Sep;6(5):263-82
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FDA's Murphy. Pink Sheet 1999 May 3;61(18):11-12
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`public charge'. National Conference of State Legislatures State Health 
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York Times 2001 Feb 11:2NE
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Jul;6(7):1, 5-7
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niche groups. Pink Sheet 2000 Apr 10;63(15):28
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U.S. RegulatoryReporter 2000 Mar; 16(9):6 Regulatory Review section
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safer. USA Today 2000 Dec 20 http://www.usatonline/200001220/
2930839s.htm
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Food and Drug Modernization Act: the industry experience. Drug 
Information Journal 2001;35(1):71-83
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Well-controlled Efficacy Trial (SCT) to Support Approval. Washington 
Marriott Hotel, Washington DC, January 22-23, 2001.
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patent clock. Pink Sheet 2000 Apr 10;63(15):29-30
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Industry Today 2000 Nov 28
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1998 Jun;7(6):14

    Mr. Buyer. I now yield 5 minutes to Mr. Stupak.
    Mr. Stupak. Thank you, Mr. Chairman.
    Mr. Franson, the FDA briefed this committee that the 
highest end of what a single ped trial costs is $4 million. Do 
you agree with that figure?
    Mr. Franson. I would not agree that a large scale clinical 
trial involving hundreds of thousands of patients would be that 
economical.
    Mr. Stupak. So you are saying it would be more?
    Mr. Franson. I'm saying that depending on the number of 
patients and the complexity of it, the cost would be 
proportionate. I am not sure what assumptions were factored 
into the FDA estimate.
    Mr. Stupak. What would a $4 million study get us? Can you 
give us the size and the type of complexity we are dealing with 
here?
    Mr. Franson. Well there's a lot of factors one would have 
to sort out. In other words, is it a long-term or a short-term 
therapy. Does it require single or multiple comparisons to 
established drugs? Based on all of that, one would have to then 
frame how much.
    Mr. Spielberg. To give you some additional insight, even a 
simple pharmacokinetic study which will be done on adults at a 
single center with 20 normal volunteers, when we do one of 
those pharmacokinetic studies, we usually do it at half a 
dozen, maybe even 10 centers, such as the pediatric 
pharmacology research units. That means two or three patients 
per center. That means vastly increased internal costs as well 
because we have to send out monitors to each of those sites. We 
have to provide drugs to each of those sites. Vastly more 
complicated.
    The pediatric efficacy studies that we do are again, much 
more complicated. We agree completely that the ethics and the 
way in which these studies are done are critically important. 
So we have to monitor more closely. We have much more 
complexity in doing the studies. So that if you look at your 
average adult study and your average pediatric study for a 
comparable number of patients, in fact the costs are greater 
for the pediatrics.
    Mr. Stupak. Dr. Franson, in some testimony back and forth 
there, I just want to make this point. No one is suggesting 
that the PDUFA and its user fees increase withdrawals or 
recalls of drugs. But I think what people are asking is whether 
the tight timeframes that's under FDAMA have increased 
withdrawals by rushing review. That is our concern, is is the 
tight timeframe rushing review. I noticed in your testimony you 
indicated there's been six drugs recalled in 5 years, but 
everything we have seen and heard today, it's really 11 drugs 
in about 4 years. So there is quite a disagreement there.
    I made the analogy earlier of an airplane accident, so you 
have 10 airlines, you have one accident, and now you get to 100 
airlines with 10 accidents. To a lot of us, that's not 
acceptable. Our concern is are we rushing things here with this 
review?
    Mr. Franson. I appreciate that question. My response to the 
pre-PDUFA drugs was of that complement of 11, four of those 
were in the pre-PDUFA era. So there would have been no 
possibility for a compression of review.
    I would also look at the quality of review during the time 
of PDUFA and say in general, exceptionally high. Also, that 
none of these reviews to my knowledge have eventuated in an 
abbreviated review of safety.
    I would almost look at the PDUFA phase and say it actually 
is evidence that new attention to direct review is actually 
helping the overall surveillance process. I would also point to 
the fact that in the last 3 to 4 years, FDA has constituted a 
new Office of Post-marketing Drug Risk Assessment, that they 
have the new Med Watch programs, and in essence, they have 
capacity and also systems to do a better job.
    Mr. Stupak. But even on the Med Watch program, that's 
really directed only to the health care professionals. It is 
not given to the general public. If you are relying on the 
public to tell you an adverse event reaction on a drug by only 
giving notice under Med Watch to the physicians, how is the 
general public going to help you monitor these drugs and do the 
volunteer reporting that you rely upon for the accuracy of the 
drug and make sure you're not having an adverse effect, when 
Med Watch is only within.
    I have read and seen enough articles that say once a drug 
is labelled and out there, doctors don't go back and review the 
labelling. They just don't do that. They rely upon the initial 
labeling of that drug, and that's what they use it for, unless 
someone, with all due respect, hits him or her with a hammer, 
then he'll start to realize that hey, there's been some 
changes. Med Watches don't work. That Med Watch and ``dear 
doctor'' letter goes to the doctors, not to the consuming 
public.
    One more, they have asked me to ask you. What do you 
believe is the mean, median, and mode of the trials done for 
pediatric exclusivity, cost? They forgot cost in there. For 
cost. If you want to just submit that later.
    Mr. Franson. We would be happy to assess that and provide 
written comment. We would ask that we do that with some 
assumptions included so that we're accurate.
    Mr. Stupak. Let me follow up with one more, if I may. We 
were talking about Med Watches and all that. In the PDUFA and 
all that, we tried to do mandatory post-marketing survey while 
having the drug companies pay for it. That has always been 
resisted by the drug companies. Why is that? I mean if you pay 
to have an expedited review to get the drug on the market 
quicker, then why wouldn't the drug companies, pharmaceutical 
companies, be willing then to pay for post-marketing review? 
That's when we really see how a drug works in the real world, 
not under the Phase I, II, or III, which are really sort of set 
clinical trials. So why wouldn't the pharmaceutical companies 
be receptive to it?
    Mr. Franson. I'm not sure I could respond for every 
company. I would say in certain drugs at the present time there 
are actually Phase IV agreements for monitoring, for patient 
registries. I think that depends on the particular compound. So 
there are at least, I'm sorry I can't quote you the number, but 
we would be happy to provide that, where agreements have been 
reached.
    Most companies provide study follow-up in certain settings, 
be they large HMOs which have data bases for follow-up. I am 
sure that given the stipulations of those kinds of studies, we 
would be happy to investigate and assess further.
    Mr. Stupak. Well, when you take a look at it, in 1992, when 
the first PDUFA came out, we couldn't get it in there. In 1997, 
it was actually written in the law that we wouldn't be 
charging, pharmaceutical companies would not have to be charged 
for post-marketing surveys. That really was at the request of 
the pharmaceutical companies.
    I am just trying to figure out why is the strong objection? 
If you are paying for a quick review, why not pay for post-
marketing review?
    Mr. Franson. Well, I think to go back to the understanding 
of PDUFA, it was specifically constituted in order to provide 
FDA additional resources they did not have in order to 
accomplish the review process. If that scope is going to be 
expanded, I am sure we would be more than happy to participate 
in the discussion and construct of that.
    Mr. Stupak. So if we try to change that law in PDUFA III I 
guess we would be going to now, you would be wiling to at least 
entertain that idea?
    Mr. Franson. I think we would be willing to discuss 
whatever all parties would see as being within the interests of 
public health.
    Mr. Stupak. Would you be also interested, would the 
pharmaceutical companies be interested and lend their support 
in forcing of Phase IV agreements?
    Mr. Franson. I believe the enforcement of Phase IV 
agreements is already part of the prior FDAMA, or at least has 
been introduced as tracking.
    Mr. Stupak. Okay. Well, not quite. Okay. Do I still have 
time?
    Mr. Whitfield [presiding]. You are 2 minutes over.
    Mr. Stupak. I have got a lot of questions. I didn't even 
get to labeling yet.
    Mr. Whitfield. Mr. Stupak, you are a couple minutes over.
    Mr. Stupak. I understand. I understand.
    Mr. Whitfield. So it's my turn now.
    Dr. Kearns, FDA claims that proper pediatric labelling can 
save hundreds of millions of dollars a year. Do you agree or 
disagree with that assessment?
    Mr. Kearns. I would basically agree. I am not a 
mathematician in the sense of economics, but if we look at the 
labeling that's happened in the last 4 or 5 years, of those 
drugs that have been studied in kids, and if we look at the 
kinds of the things that are in labelling, imagine that a drug 
company having adverse event information to the tune of saying 
that more patients, pediatric patients in a trial on this drug 
died, now the implications for the medical care provider of 
that information are incredible. Could that save hundreds of 
millions of dollars in health care costs? Could it save 
hundreds of millions of dollars in litigation? I think so. I 
think it really could.
    So the impact of labelling, as I stressed in my comments 
and in my written testimony, it is hard to attach dollar 
figures to, but for those who care for children, I think it is 
a critical issue. We won't see the impact of it early. It is 
going to take 10, 15 years of continued use with new 
information before we really know what happened.
    Mr. Whitfield. Yes, ma'am?
    Ms. Ben-Maimon. I just want to make a few comments, one for 
the record. I think PhRMA actually made a citizens petition 
submission about a year, just over a year ago, requesting that 
the FDA decrease the number of trials being required for 
pediatric exclusivity, and claiming that the requirements were 
too rigorous. I think it is probably worthwhile for the 
committee to take a look at that petition.
    In addition, with regard to labeling issues, which was just 
coming up, that is an issue that has to be dealt with very 
carefully, especially from the standpoint of generic drugs, 
because as the labels are changed, if there are exclusivities 
associated with those labels that even go further than the 6 
months, or if there are patents associated with those labels, 
the generic industry is unable to use the label. Since we are 
required or would like to use, especially when it comes to 
safety data and especially safety data in children, we would 
not want to put out products that had a different label or 
didn't include that data.
    So I think the committee needs to look cautiously when it 
deals with these labeling changes to ensure that it doesn't 
actually extend the exclusivity even further than the 6 months 
that was contemplated by Congress.
    Mr. Whitfield. Thank you for that comment. I appreciate it.
    Would anyone else like to comment on that at all? Thank you 
very much.
    Dr. Kearns, have the 18 pediatric labelling changes 
approved by FDA so far provided a meaningful benefit for the 
pediatric population, in your view?
    Mr. Kearns. I think without question if we just use one 
compound that I mentioned, that Dr. Spielberg mentioned, 
Midazolam, before the innovator company made an oral 
formulation, before that was tested in children, that drug was 
given to kids because it's a very good sedative agent. The way 
it was given, there were all kind of ways that people would go 
and take the injectable drug and mix it in Kool-aid with no 
stability testing, no understanding of the dose. Many times it 
wasn't stable. But with a properly made formulation, testing in 
hundreds of children, defining the dose, as we said before 
defining a safety profile, that drug is probably used 100 times 
every minute in the United States in pediatric practices. Not 
just hospitals, dental offices, in any kind of doctor that you 
can imagine that needs to do a procedure on a child. That is 
just one example. So without question.
    Mr. Whitfield. Well that is a good example too. Thank you.
    The Tufts Center for the Study of Pediatric Development 
found that without this exclusivity provision, that pediatric 
sales market itself was insufficient to render the resources 
needed to study drugs in children. Now could you compare and 
contrast for the committee the interests in pediatric studies 
prior to and after the passage of the exclusivity provision?
    Mr. Kearns. I think in terms of the academic community in 
pediatrics, and in particular pediatric clinical pharmacology, 
the interest has always been there. In fact, the work has been 
there.
    If you look at the published literature, there is 
information. We sometimes forget that pediatricians like Dr. 
Gorman or Dr. Spielberg didn't use these medicines, you know, 
on a whim. There are published information about them. That has 
profiled the use. But it is not generally available. Many times 
that information comes from uncontrolled settings. So making it 
formal, putting it under the aegis of the FDA, giving a 
construct that we know and have known for decades works for 
adults, makes children their therapeutic equals.
    There was a comment or two earlier, and I forget who made 
it, about the issues of money and somehow it all gets down to 
money it seems like, about would it be better if the money was 
given to NIH and NIH studied those drugs or this side or the 
other. Let me tell you as somebody who has been working for a 
couple decades doing this and an NIH-funded investigator, the 
National Institutes of Health is not equipped to do these 
studies of children. They are not equipped. The Food and Drug 
Administration has been very helpful and very innovative. But 
when we look at some of the negotiation and what goes on, there 
is not the kind of talent at the agency that there needs to be 
at the agency, in part, limited by funding.
    So if we want to do some funding things, let's make user 
fees available to support the Office of Pediatric Therapeutics 
at the agency. Let's put some money into the infrastructure to 
create the kind of expertise across all of government that will 
not just make this process work, but make it work better.
    Mr. Whitfield. Yes, sir.
    Mr. Spielberg. I would echo Dr. Kearns comments. Indeed, 
the real necessity for having pediatric expertise on all sides 
within industry, certainly within the FDA, to be able to 
produce the kinds of written requests that act in the public 
health interest.
    I think one of the interesting contrasts before and after, 
you know before the legislation, several of the drugs that were 
labelled now, if you look back at old pediatric handbooks and 
textbooks, the doses were wrong. The new information that we 
now have has provided correct doses, both to produce efficacy 
as well as to decrease side effects. That is exactly the kinds 
of information that we wanted from this act, and it has 
produced it.
    Mr. Whitfield. Good. Good. Thank you very much.
    I recognize Mr. Wynn for 5 minutes.
    Mr. Wynn. Thank you, Mr. Chairman. Unfortunately, the 
Energy Subcommittee was meeting at the same time dealing with 
the California crisis, and I didn't get a chance to hear the 
panel's testimony, so I have got some reviewing to do in the 
meantime. I would like to yield to my colleague, Mr. Stupak, 
the balance of my time.
    Mr. Stupak. Okay. Thanks to the gentleman for yielding 
because I do want to ask some questions on labelling. You both 
made some good points on labelling, especially in pediatrics on 
how, you know, you've got the doses that were wrong. We learned 
from it. There have to be changes. But whether it's adult or 
children, why then does it take so long to get a labelling 
change? I mean if you look at it and you talk to the FDA, they 
say they have to negotiate all these changes. If it is so 
critical that the changes be made, why do they have to 
negotiate with the companies? Why wouldn't we get it out there 
immediately?
    Mr. Franson. If I may respond. Usually labeling is the 
final step in a review process of an application. Therefore, 
the industry and the FDA discuss the scientific attributes of a 
product. Then there is labelling.
    In my experience, the discussion takes days, not months, 
and that it represents the caboose on the train. The delay that 
may be perceived here is that pediatric exclusivity is granted 
at a period as defined by the act much sooner than the end 
point for the review time. So what people see as a lag is 
merely the execution of exclusivity which occurs by legislation 
before the end action letter and labeling. It is not our 
experience that labeling is dragged out.
    Mr. Stupak. Really? I'll be happy to share with you 
examples, some of them even 2\1/2\ years before the label is 
changed. Two-and-a-half years. These are drugs where deaths 
were resulting, and 2\1/2\ years. That is insane.
    Now after you make your label change, okay, let's say you 
make a label change. What responsibility then is it on the 
pharmaceutical company, if there is a label change, to recall 
the drugs that are out there, prescriptions that are out there 
sitting on the shelves? Is there any requirement to withdrawal? 
What is the usual course of business then? Let's say you make 
that label change and the other drugs are out there, 
distributed all over the United States. What requirement or 
responsibility legally, ethically, or morally does a 
pharmaceutical company then have to get the new package out 
there with new labelling or to doctors, to consumers, and 
everyone to see?
    Mr. Franson. That would depend entirely on what the 
contents of the label change are. There are some label changes 
that are a formulation.
    Mr. Stupak. How about one that says that due to experience 
with this drug that death may be associated with it. Now that's 
a pretty serious consequence. So what requirement then is there 
on the pharmaceutical company to recall or reclaim those 
packages that are out in the United States?
    Mr. Franson. I think the responsibility is on the entire 
healthcare system, inclusive of the sponsor, to immediately get 
information on new safety changes to practitioners, 
practitioners being both pharmacists and physicians. In those 
cases where some of us have had experience with making such 
informational blasts, they may take the form of broad 
electronic plus written, and in some cases even direct contact, 
hospital formulary groups, and those which keep compendia of 
medical information are also contacted.
    Mr. Stupak. Does the pharmaceutical company ask for the 
pharmacists or the doctor's office to return and they will 
replace their samples, not samples but their supply?
    Mr. Franson. It would be important to separate the fact 
that if a new adverse event, for example, is observed, that 
does not mean the drug product is in any way flawed. It means 
there is new information associated with it.
    Mr. Stupak. Well significantly enough to negotiate a label 
change and eventually to put all the dear doctor letter and a 
Med Watch and everything else. So I mean I can't say that the 
drug itself is the sole cause, but certainly it is a 
significant contributing factor to the death of this individual 
or whatever it might be, the adverse reaction.
    Mr. Franson. We think it is very important to provide the 
information to those who need to have it, who are doing the 
prescribing. As to your analogy, would we ask everybody to 
drive their car back to the factory to replace an important 
part, I think that would depend on the situation.
    Mr. Stupak. Yes. We usually get recall notices, right? So 
at least then the consumer knows that that product at least is 
being recalled and takes that precaution. Some recall notices 
say you have to get it in right away. Others say come in, we'll 
order the part and we'll take a look at it. At least there is 
some notice given to the consumer, and at least there is a 
chance to rectify the situation. So I was wondering if the same 
analogy would apply to labelling.
    Mr. Franson. I misunderstood earlier. In response to your 
question, actually when situations of this sort occurs, FDA has 
a scaled, if you will, escalation process based on the level of 
severity of a finding. A company would discuss with the FDA 
whether something necessary needed to be done, anywhere from 
correspondence to a recall. So again, depending on the 
situation, that could be one of the possible outcomes, a 
recall.
    Mr. Whitfield. Mr. Stupak, your time is up. We are going to 
be submitting additional written questions, and we would be 
happy to include any that you might have as well.
    Mr. Stupak. Sure. I thank the gentleman for yielding.
    Mr. Wynn. Mr. Chairman, could I just inquire? How many days 
will we have to submit written, because I think I would like to 
submit written questions. About how much time?
    Mr. Whitfield. A couple weeks.
    Mr. Wynn. A couple weeks? Thank you very much.
    Mr. Whitfield. Ms. Ben-Maimon, you were going to make a 
comment but you were not able to. Do you want to?
    Ms. Ben-Maimon. Very quickly. I think from the standpoint 
of labeling, I would like to bring it to the attention of the 
committee that labeling negotiations actually begin during the 
development process. Much of the time spent during development 
is not only to prove safety and efficacy, but to negotiate or 
to ensure that the outcome, the kind of label that will appear 
on the bottle, is what you desire.
    I think that is important when you look at R&D dollars, 
that you realize that much of the money being spent is to be in 
a position to be able to negotiate your labelling, such that 
you have the outcome that you desire.
    Mr. Whitfield. I might make a comment that when I said 2 
weeks, we want the replies back then. We want the questions 
going out by next Wednesday.
    Mr. Wynn. Thank you.
    Mr. Whitfield. Mr. Deal, do you have any questions?
    Mr. Deal. More of an observation. I understand the 
difficulty with which everyone has to deal with this entire 
subject matter. Certainly the questions and comments that we 
have heard indicate some of those concerns. I have had an 
experience recently with a very good friend of mine, a 
constituent, who is on the other side of the issue. That is, 
wanting to know why all of a sudden a drug that she considered 
to be a lifesaving drug was withdrawn from the market, a 
situation in which maybe a discussion between whether it was 
voluntarily withdrawn by the company or perhaps done so at the 
insistence of the FDA.
    But be that as it may, and it's in a negotiation process on 
that particular drug. It appears from all of the information 
that I have been able to gather with regard to this particular 
drug, it involves the bad effects, the results that were not 
favorable--I think maybe a death occurred--were probably 
prescribing the drug for patients who did not really meet the 
criteria for which the drug was intended.
    I know that is a very touchy and sensitive area as to what 
pharmaceutical companies can do to fully educate the medical 
community as to what is an appropriate condition for which the 
drug is to be prescribed to avoid those kind of situations. But 
it is unfortunate on two counts. It is certainly unfortunate on 
the bad experiences that result from the medication having a 
contrary result. But it is likewise disastrous for those who 
have had very good results from it and have no other 
alternative drug on the market, to have that drug suddenly 
withdrawn from them. The most pathetic situation that I have 
seen in a very long time, of a woman who is now down to 71 
pounds, feels that her life is ruined, and the drug is gone.
    So as someone who has seen the other side of the 
constituent concerns about drugs that are perceived to be very 
beneficial, but are suddenly withdrawn, I would just simply add 
my concern and my encouragement that when these kinds of cases 
arise, to try to resolve those as quickly as possible, because 
there are those who are depending on those drugs and have a 
very difficult time understanding why once a salvation had been 
provided, it is now taken away from them. That is the most 
recent constituent concern that I have encountered.
    So there are certainly very many facets to all of the 
things that all of you deal with. I think we all appreciate 
that fact.
    Mr. Bilirakis. Would the gentleman yield?
    Mr. Deal. Yes, I would.
    Mr. Bilirakis. Is there any adequate remedy available for 
that woman? No exceptions? Any comments on that? Should there 
be? Should there be something in the law that would afford that 
person, that type of individual the opportunity to continue to 
use this withdrawn drug?
    Mr. Franson. I would comment that there are very special 
circumstances that go through FDA approval processes that allow 
compassionate use access to drugs, and that there are other 
agreements that may be reached. They are on a case-by-case 
basis.
    Ms. Meyers. Often when that happens, FDA will tell the 
company to put the drug back on an IND, which is an 
investigational new drug. It becomes experimental again. These 
patients, we have known patients for example with epilepsy 
drugs that were withdrawn from the market that have taken them 
for the following 10 years, as long as the company agrees.
    Now barring that, let's say the company does not agree, if 
the drug is approved in Europe the FDA has a regulation for 
individual importation of drugs. If you have a prescription, 
you can get up to 90-day supply and order it from a European 
pharmacy. So if it's in another country, American consumers can 
get it.
    Mr. Bilirakis. Is it conceivable that that drug may be 
available?
    Mr. Deal. Well, I don't mention the names, et cetera, and 
the reason being that I think the negotiations are in the very 
final stages of working out an agreement to get the drug back 
on the market with maybe more restricted labelling. I certainly 
don't want to do anything to jeopardize that or to prejudice 
anyone's opinion in that regard. But I did ask those very same 
questions.
    Those options did not appear to be available simply because 
they thought a broader option was available once the 
negotiations were concluded. Now if the negotiations are not 
successful in a relatively short timeframe, I am going to have 
a constituent who is going to be asking for those kind of 
optional remedies, at least--because I asked the same thing. I 
said well why can't somebody who has had a very good result and 
who wants to proceed with the use of the drug not have the 
ability to do that. So some of you may hear from me again if 
negotiations don't go very satisfactorily.
    Mr. Bilirakis. Yes, Dr. Kearns?
    Mr. Kearns. Thank you. If I could just make a quick 
comment. This has to do with post-marketing data and decisions. 
If during the course of a clinical trial a serious adverse 
event becomes apparent, it is fairly easy to make decisions 
about whether a drug needs to go on or not. But in the post-
marketing period, it is very, very difficult, especially when 
we are left with a reporting system that's voluntary.
    At a recent NIH conference about 3 weeks ago, a 
presentation was given that said physicians report on average 
about one adverse event every 350 years. This was data given by 
a person who is a pharmaco-economics person. I can't verify the 
source of it. But in a spontaneous reporting system, all we 
have many times are numerator data. We don't have the 
denominators. Looking at the descriptions of those adverse 
events sometimes are laughable, but yet they register on the 
radar screen of the agency who with its charge to protect the 
public will often times start the initiative for 
decisionmaking.
    I believe as a professional, that part of our system really 
does need some fixing. We really have to have good data. We 
need good drugs on the market that help people. We don't need 
to throw the baby out with the bath water. But at the same 
time, we need to know when we've got a drug that maybe made it 
to market, and because of an effect that we couldn't see in the 
clinical trials of a couple hundred patients, that we can 
prudently act to protect society.
    Mr. Deal. Thank you, Mr. Chair.
    Mr. Whitfield. I want to thank the panel very much for your 
patience and your time. We all enjoyed your testimony very 
much, and we look forward to working with you as we continue to 
deal with this issue.
    Remember, next Wednesday, questions must be in. We hope in 
2 weeks they will be----
    Mr. Bilirakis. Not only questions in, but just the point 
raised by Mr. Deal. If there are any areas where you feel, you 
know, if you were king, you would change or at least suggest 
changed, you have got the opportunity to do that. Submit all 
that information to us.
    Thank you very much.
    [Whereupon, at 1:59 p.m., the subcommittee was adjourned, 
subject to the call of the Chair.]
    [Additional material submitted for the record follows:]

     Prepared Statement of Advanced Medical Technology Association

                      I. INTRODUCTION AND SUMMARY

    The Advanced Medical Technology Association (AdvaMed) is pleased to 
submit the following testimony on the implementation of the Food and 
Drug Administration Modernization Act of 1997. AdvaMed is the largest 
association of medical technology innovators in the world, representing 
more than 800 manufacturers of medical devices, diagnostic products, 
and medical information systems. Two thirds of AdvaMed's members are 
small businesses, and the vast majority of those firms have 50 or fewer 
employees. Our members manufacture nearly 90 percent of the $62 billion 
in health care technology products purchased annually in the U.S. and 
more than 50 percent of the $147 billion in health care technology 
products purchased worldwide.
    AdvaMed would like to express to the members of this Committee our 
thanks and appreciation for making your vision of modernizing FDA laws 
a reality, and passing the ``Food and Drug Administration Modernization 
Act of 1997'' (FDAMA). Further, AdvaMed is pleased to have the 
opportunity to discuss some important aspects of that legislation for 
the medical device industry, and the triumphs and difficulties in its 
implementation. Also, we would like to share AdvaMed's views on ways to 
develop the central goals of FDAMA including FDA's mission to not only 
protect but to promote the public health, in the way Congress intended.
    This hearing occurs at a critical juncture for FDA. America stands 
on the cusp of a revolution in medical technology. As was highlighted 
by members of FDA's Science Board at a meeting April 13, many emerging 
breakthroughs--such as tissue-engineered technologies and drug/device 
combinations--will not fit easily into FDA's existing regulatory 
framework. The agency faces a significant challenge in effectively 
overseeing development and approval of novel medical technologies in 
the coming years.
    AdvaMed believes it is critically important for FDA, Congress, and 
medical technology companies to work together to prepare the agency for 
the coming revolution in medical technology and promote timely patient 
access to lifesaving and life-improving medical technologies.
    Today's hearing is an important first step towards that goal. To 
prepare FDA for the future, we must first look back to ensure that 
FDAMA's legislative changes have been fully implemented and are 
achieving their goals.

 For example, FDAMA helped to streamline the premarket review 
        process by permitting FDA to ``recognize'' national and 
        international consensus standards through publication in the 
        Federal Register. Because FDA has recognized a large number of 
        such standards, persons who submit 510(k)s and PMAs often can 
        submit declarations of conformity to applicable standards 
        instead of reams of data demonstrating conformance to a 
        standard. This process shortens the time it takes to 
        effectively review a premarket submission, results in prompter 
        review decisions, and holds persons accountable for their 
        declarations by requiring them to maintain for FDA the data 
        upon which a declaration is made.
 FDAMA embodied the important goal of increased collaboration 
        between industry and the FDA. The law created several meetings 
        to address premarket submission issues and required FDA to 
        include stakeholders in the process of assessing and 
        recommending regulatory improvements. Although the 
        effectiveness of meetings in reaching agreements on data 
        necessary to achieve market approvals needs work, the agency 
        has been willing to listen to our concerns. Additionally, there 
        have been stakeholder meetings, and a continuation of that 
        process to capture the thoughts from scientists, physicians, 
        consumers and industry will surely benefit FDA as it attempts 
        to modernize its regulatory process.
    These provisions are but a few that show how FDAMA changed the law 
to achieve the goals of public health protection, greater 
collaboration, and more efficient regulation. Although significant 
progress has been made, there remain areas for improvement. For 
example, for the last 3 years, the average total elapsed review times 
for PMA submissions remain at about 12 months--nearly twice the 
statutory review time of 6 months--even though many of the FDAMA 
provisions were intended to streamline PMA reviews. AdvaMed recommends 
a few fixes to FDAMA that may be helpful, as well as suggest changes in 
the law to help prepare and support FDA for the continuing challenges 
presented by rapidly developing health care technology.

                         II. FDAMA HIGHLIGHTS.

Expanded Access to Investigational Therapies & Diagnostics
    FDA has implemented a number of FDAMA provisions effectively and 
the public has benefited as a result. Through reliance on FDAMA, the 
agency has achieved benefits for individuals with significant need for 
expanded access to unapproved and life saving technologies. 
Specifically, FDAMA provided persons who need new technologies for 
treatment access to investigational devices when various statutory 
conditions are met. Additionally, FDAMA facilitated the effectiveness 
of the law's humanitarian device provisions to ensure that patients in 
need of these orphan devices have the earliest access to them possible, 
and the agency has done well in implementing this provision. Further, 
FDA has effectively implemented FDAMA's requirement for 30-day notices 
instead of 180-day premarket reviews for certain manufacturing changes. 
Each of these agency efforts has resulted in benefits to the public.
    The expanded access provisions include emergency, compassionate and 
treatment use of devices. This authority complemented authority in 
FDA's regulation to allow deviations from an IDE when necessary to 
treat patients in substantial need. While emergency use does not 
require prior FDA approval, compassionate and treatment use do. 
Compassionate use can accommodate small groups of persons who need 
investigational devices. Treatment use permits the more widespread 
availability of investigational devices. Both of these latter means of 
expanded patient access to investigational products require approved 
IDEs. FDAMA and FDA's regulations describe criteria for such expanded 
access, including that there are no available and satisfactory 
alternative treatments. FDA has been reasonable in administering these 
provisions; indeed, the agency demonstrated enthusiasm in ``getting out 
the message'' about these new means for patients to gain access to new 
and advanced therapies. Within sixty days of FDAMA's passage, FDA 
published a document entitled ``Guidance on IDE Policies and 
Procedures'' that explained the agency's implementation of its 
investigational device authority, including discussions of how the new 
provisions added by FDAMA complemented existing IDE procedures.

Expanding Humanitarian Use of Devices
    Consistent with its endorsement and support of expanded access, FDA 
has been responsive to FDAMA's amendment of the Act's humanitarian 
device provision. Since 1990, FDA has had authority to approve devices 
for uses in treating conditions that affect fewer than 4,000 
individuals, on the basis of safety information alone. In a sense 
Congress created an orphan device provision and modified the 
effectiveness requirement for humanitarian devices. This change reduced 
the substantial cost of developing a device, thus providing an 
incentive for manufacturers to develop devices that otherwise might 
never be brought to market because of small demand. To further ensure 
that humanitarian devices are developed for persons who desperately 
need them, FDAMA reduced the review period from 180 to 75 days. 
Although FDA's annual device reports show that final humanitarian 
device decisions are taking longer than 75 days, clearly the agency is 
being responsive to the FDAMA requirement and has reduced the overall 
time for HDE reviews.

Manufacturing Changes
    FDA's success in the humanitarian device area is also seen in the 
agency's implementation of FDAMA's manufacturing notice provision. This 
provision greatly reduces the regulatory delay that accompanied FDA's 
review of manufacturing change supplements. Now instead of submitting 
such supplements for potential 180-day reviews before a change could be 
implemented, manufacturers can submit 30-day notices for a broad array 
of manufacturing changes. Once thirty days have passed, these proposed 
changes can be put into effect, unless FDA notifies a manufacturer that 
there is a need for a PMA supplement. After FDAMA's enactment, FDA 
promptly issued its guidance document describing how this notice 
provision would work. A large number of notices have been received and 
reviewed by the agency without delays, clearly demonstrating the 
clarity and industry's understanding of FDA's manufacturing notice 
program.
    AdvaMed's members and the public have benefited greatly from the 
agency's successful implementation of the notice provision. FDA is not 
tied up with unnecessary resource intensive reviews that require 
approvals, and manufacturers can keep their manufacturing processes as 
efficient as possible without waiting for lengthy periods of time while 
their manufacturing supplements work their way to the head of a review 
queue.
    The implementation of every provision of FDAMA hasn't been as 
smooth. A number of key FDAMA provisions, which have substantial 
potential to modernize device regulation, have had an uneven 
implementation experience.

Least Burdensome
    Two critical provisions in FDAMA require the agency to only require 
that information necessary to approving a PMA device or clearing a 
510(k) device, and to consider the ``least burdensome'' information in 
determining premarket approval or clearance requirements. Essentially 
what this means is that FDA should not require a randomized, double 
blind prospective clinical study if a partially controlled clinical 
trial would provide the statutorily required reasonable assurance of 
safety or effectiveness.
    The agency hasn't always agreed with this view. Initially after the 
enactment of FDAMA, it was very difficult to engage the agency in a 
discussion of the least burdensome concept. Typically, AdvaMed members 
were confronted with randomized clinical trials as the agency's 
expression of the least burdensome showing to establish device 
effectiveness. Seldom was there even conversation about least 
burdensome in the context of substantial equivalence. This concerned me 
because it suggested a regulatory ``cultural'' bias within the agency 
that was resistant to Congress's direction of avoiding over-regulation. 
In response, AdvaMed and others developed a document to define ``least 
burdensome'' in order to place the issue before FDA to encourage a 
collaborative exchange with an eye toward a regulatory guidance 
document. This document, after some resistance from the agency, 
achieved its purpose. FDA and industry started to talk and made headway 
in describing and defining the least burdensome concept. This effort 
has resulted in some least burdensome principles as a starting point 
for thought and discussion:

 The spirit and the letter of the law should be the basis for 
        all regulatory decisions;
 Information unrelated to the regulatory decision should not be 
        part of the decision-making process;
 Alternative approaches to all regulatory issues should be 
        considered to optimize the time, effort, and cost of reaching 
        proper resolution of the issue; and
 All reasonable mechanisms to lessen review times and render 
        regulatory decisions within statutory timeframes should be 
        used.
    We were very encouraged when, two days ago, the agency issued its 
guidance document on the least burdensome concept and principles and 
that the agency clarified that the least burdensome concept applies to 
all devices including in vitro diagnostics (IVDs). AdvaMed also 
believes that the above collaboratively derived principles already have 
had a positive effect on the agency.
    However, our experience with FDA in trying to implement the least 
burdensome provisions underlines an important fact. To modernize device 
reviewers' approaches to premarket submissions requires a cultural 
change at the agency.
    We have no doubt that Americans will look back on Congress' 
decisions to double the research budget at the National Institutes of 
Health and unravel the human genome as two of the smartest investments 
yet made in this new millennium. We must be equally sure that the FDA 
and other regulatory bodies are prepared to handle the increasing 
number and complexity of resultant innovations--like combination 
products' with an efficient, clear and predictable pathway to approval. 
To accomplish this goal, device reviewers need more opportunities to 
discuss submission issues with industry and to interact with outside 
scientific and medical experts to bring fresh perspectives into the 
device review arena. Consistent with the agency's mission of promoting 
patient access to new technology, requesting the most demanding 
clinical information is not always the best way to demonstrate safety 
and effectiveness of new and complex technologies. This has too often 
been the FDA approach.

Early Collaboration Meetings
    Congress was acutely aware that collaboration between potential 
premarket submitters and FDA would add efficiency to the premarket 
review process. To ensure collaboration, two FDAMA provisions were 
included in the law, both resulting in binding requirements on FDA. 
Effectively, a first meeting (``determination meeting'') required FDA 
to determine the least burdensome type of information--ranging from 
bench testing to clinical studies--necessary to demonstrate device 
effectiveness. The second meeting (``agreement meeting'') permits the 
potential applicant to submit device investigation plans, including 
clinical protocols for FDA's review and possible agreement. Any 
agreement reached at the meeting would be binding.
    Congress summarized the importance of these two types of meetings, 
stating the provisions were intended
        to provide for a predictable structure through which the FDA 
        and sponsors of applications for marketing of new products can 
        communicate effectively regarding requirements that must be met 
        to secure marketing clearance or approval. The Committee 
        believes that meetings between the appropriate FDA experts and 
        their industry counterparts may provide one avenue to 
        successful communication that may result in agreements that can 
        expedite a manufacturer's understanding of what information, 
        data, or investigations may be needed for a particular product.
             (H.R. 307, 105th Congress, First Session, 1997, at 26)

The effect of a successful implementation of these meetings should be 
substantial resource savings for companies and the FDA and the prompter 
delivery of new, safe and effective devices to consumers. Without 
question, a mutual understanding of devices and device requirements 
will ensure the most efficient and effective reviews.
    So far, this goal has not been realized. FDA's actions have shown a 
continued preference for informal meetings that do not result in 
binding outcomes. Although the agency is trying to improve its approach 
to these pre-IDE meetings, the number of binding outcomes still pales 
by comparison to the number of IDE submissions that pass through the 
agency. Active discouragement of these meetings by FDA reviewers has 
affected the willingness of companies to request them. Both industry 
and FDA must constructively address this situation.

Third Party Review
    Another FDAMA provision that's very important to our members calls 
for review of 510(k)s by expert third parties outside the agency. Under 
this provision, accredited third parties review 510(k)s and make 
recommendations to FDA about device clearances. FDA has 30 days to 
consider such recommendations and to issue a 510(k) decision. 
Originally, FDA limited the program to product types having a specific 
guidance document. Typically, these products were the simplest devices 
and were associated with rapid reviews. We are encouraged that FDA has 
recently expanded the list of devices eligible for third party review, 
and believe that this expansion that now includes more complex devices 
was necessary to encourage greater utilization of the program.

Dispute Resolution
    Implementation of FDAMA's scientific dispute resolution provision 
initially began slowly. This part of the law required FDA to promulgate 
a regulation establishing a procedure for requesting review of 
scientific disputes between sponsors, applicants, or manufacturers and 
FDA by a scientific advisory panel. At first, the agency issued a 
complicated guidance document, detailing a dispute resolution procedure 
and explaining all the review mechanisms that already exist in the 
statute and regulations. Since then, however, the Device Center has 
appointed an ombudsman, and the ombudsman has been actively soliciting 
persons to use his office if disputes or other matters surface that 
require an intervenor. This effort to provide industry and others a 
voice within the Center is promising and we appreciate the effort being 
made to create a reasonable dispute resolution process. Nevertheless, a 
cultural change is needed at the agency to ensure that the dispute 
resolution process is fully implemented as Congress intended.

                            III. THE FUTURE

    We have seen significant accomplishments by the agency in its 
efforts to modernize, both by successfully implementing several FDAMA 
provisions, and reengineering a number of its programs. But we know 
that the agency must do more to meet the challenges of unprecedented 
growth and rapid evolution in medical research and technology. In a 
report on the ``Outlook for Medical Technology Innovation'' issued by 
the Lewin Group, medical device manufacturers have doubled their R & D 
spending to bring these innovative technologies to fruition. As this 
trend continues, the agency must be made ready to meet the challenges 
associated with the unprecedented growth in the industry.
    Many provisions of FDAMA equip the agency with the flexibility to 
conserve its valuable resources such as the third party review program. 
Industry's use of this program has been limited because more complex 
devices whose review would benefit most from a third party are 
currently ineligible for the program because of statutory restrictions. 
AdvaMed supports the third party review program and would like to see 
it used by industry to the fullest extent possible. However, with the 
current eligibility criteria, we are concerned that Congress's belief 
that third party review will assist FDA's premarket review program will 
go unfulfilled.
    The intent of FDAMA's expedited review provision was to ensure that 
breakthrough devices reach the market as soon as possible. The public 
health demands this result and we support any effort that would enable 
the agency to ensure that breakthrough devices receive review queue and 
review resources priority.
    Combination products continue to present challenges to the agency's 
standard review mechanisms, resulting in inefficiency and delay. 
Although FDAMA streamlined many of the agency's review processes, the 
legislation did not address the difficult issues that arise when 
devices incorporate drugs or biologics and the efficient review of 
these combination products. Because of the unsatisfactory experience 
many AdvaMed members have had when devices are reviewed by other 
Centers or combination products are assigned to the Device Center with 
consultative reviews from CDER or CBER, we recommend creating an Office 
of Combination Products and Product Jurisdiction. The Office would 
identify a Center with regulatory responsibility for a product based on 
the product's ``primary mode of action.'' Additionally, the Office 
would ensure the product reviews are timely and, if more than one 
Center is involved in a product review, that reviewers assigned to 
conduct the review would be under the authority of the Office Director. 
Only through increased oversight by an independent authority within FDA 
do we believe that combination products, containing devices, will 
receive efficient and timely reviews

                             IV. CONCLUSION

    AdvaMed appreciates the opportunity to provide comments on the 
implementation of FDAMA. FDAMA created the framework to reform and 
modernize FDA's practices and procedures. The record of its 
implementation is somewhat inconsistent, with examples of aggressive 
efforts by the agency to realize most goals of the legislation, and a 
few implementation shortfalls that need attention. On the whole, 
AdvaMed is heartened by FDA's positive approach to discussing issues, 
and we believe that with increased collaboration between the agency and 
industry significant progress is still in the offing.
    At the same time, AdvaMed believes that to avoid increasing delays 
in the FDA review process, it is critically important to consider what 
steps must be taken beyond the FDA Modernization Act to prepare FDA for 
the technologies of the future. AdvaMed looks forward to working 
constructively with FDA and Congress to achieve this goal and ensure 
timely patient access to the emerging breakthroughs in medical 
technology.
                                 ______
                                 
   Prepared Statement of Frank Clemente, Director, Public Citizen's 
                             Congress Watch

    Chairman Bilirakis and Ranking Member Brown, my name is Frank 
Clemente and I am Director of Public Citizen's Congress Watch. Public 
Citizen is a 150,000 member national consumer group, which is active on 
a wide range of issues including health care. For 30 years we have been 
a leading watchdog of the Food and Drug Administration (FDA) and the 
pharmaceutical industry on issues such as drug safety and drug pricing.
    I want to thank you for the opportunity to comment on 
reauthorization of the pediatric exclusivity provision originally 
enacted in 1997 as part of the Food and Drug Administration 
Modernization Act (FDAMA). In order to provide a context for our views 
on reauthorization of pediatric exclusivity, let me first present to 
you the prehistory of this provision as discussed in a recent report by 
the FDA.\1\
---------------------------------------------------------------------------
    \1\ Department of Health and Human Services, Food and Drug 
Administration, The Pediatric Exclusivity Provision: January 2001 
Status Report to Congress.
---------------------------------------------------------------------------
    In these comments I will be using the term ``labeling'' in its 
technical regulatory sense, which refers to the information about the 
uses of a drug that appear on the packaging of a drug. Labeling of 
prescription drugs is strictly controlled by the FDA. Manufacturers may 
only make a claim that a drug can be used for a particular ailment if 
the manufacturer has shown, based on sound science and to the 
satisfaction of the FDA, that a drug is safe and effective for the 
indication in question.
    The problem of a lack of labeling for children has been recognized 
for over two decades. According to the FDA, in 1973, 78% of the drugs 
listed in the PDR lacked sufficient pediatric labeling. In 1991, 81% of 
the drugs in the PDR lacked adequate labeling. As recently as the early 
1990s, drug companies were doing little to assure that drugs are 
adequately labeled for use in children. From 1991-1994, 71% of the new 
molecular entities coming onto the market lacked pediatric labeling. 
According to the FDA, the lack of pediatric labeling information 
``poses significant risks for children.'' In its proposed rule on 
pediatric studies issued in 1997, the FDA cited reports of injuries and 
deaths in children resulting from the use of drugs that had not been 
adequately tested in the pediatric population.
    In 1994, the FDA issued a rule requiring drug companies to do a 
review of the scholarly literature and to submit a supplemental new 
drug application if studies were available to support labeling a drug 
for use in children. In 1994, the FDA also started a voluntary plan 
designed to encourage drug companies to gather data on pediatric use 
both during drug development and after marketing. According to the FDA, 
both these efforts met with only limited success.
    Between 1991 and 1996, drug companies did little to deal with the 
problem of drugs already on the market that lacked adequate labeling 
about use in children. They promised to conduct 71 post-marketing 
pediatric studies, but only 11 (15%) were completed in that period, 
according to the FDA.
    In 1997, the FDA began the process of enacting regulations to 
require drug companies to test drugs in children for the labeled adult 
indication as a condition of a drug's approval by the agency. In 1998 
the pediatric rule was finalized. Under the rule, drug companies are 
allowed to seek a waiver of the requirement to test a new drug in 
children if they believe that it will not be used in children. 
Currently, the rule is tied up in court by legal claims that the FDA 
does not have authority to issue it.
    In 1997, before the pediatric rule was finalized, Congress 
responded to the poor results of previous efforts, by passing the 
pediatric exclusivity provision as part of FDAMA. Pediatric exclusivity 
grants drug companies 6 months of additional patent exclusivity if they 
conduct studies of drugs in children that the FDA determines will 
provide physicians with useful new prescribing information. The result 
was a dramatic increase in the number of pediatric studies being done 
by the brand name drug companies. From the time the FDA issued a 
guidance in 1998 to September, 2000, over 191 proposed study requests 
were submitted to the agency, 58 had been completed, 25 drugs had 
received grants of exclusivity, and the drug companies had made 
labeling changes on 12 drugs, less than half of those that have 
received pediatric exclusivity.

           PROBLEMS WITH THE PEDIATRIC EXCLUSIVITY PROVISION

Mistargeted
    While the incentive offered to drug companies by the pediatric 
exclusivity provision of FDAMA has been successful in increasing the 
number of studies done and has provided valuable information to 
pediatricians about how to use drugs in children, the law as it 
currently stands is poorly targeted. It offers drug companies:

 Substantial incentives to test drugs that have high sales, 
        particularly among adults, not those about which pediatricians 
        most need more information. Currently brand name drug companies 
        are receiving 6 months of exclusivity (effectively a patent 
        extension) for testing a drug on children, even when that 
        testing is of minimal value, because it is for an indication 
        that rarely occurs in children, such as ulcers, hypertension, 
        or type II (adult-onset) diabetes.
 Little incentive to test drugs that are still under patent but 
        not big sellers. Pediatric exclusivity leaves many drugs 
        unstudied in children, because the drug companies believe they 
        will not make enough from 6 months of additional patent 
        protection.
 No incentive to test drugs that are currently off-patent. Six 
        out of ten of the drugs most widely used in children without 
        adequate labeling are not eligible for pediatric exclusivity, 
        because they are off patent. One example of such a drug is 
        ampicillin, which is used to combat infection in children.

Substantial cost to consumers
    As a consequence of the pediatric exclusivity provision, consumers 
are denied access to lower-priced generic drugs for an additional 6 
months. The cost this imposes on consumers is substantial, as is the 
corresponding windfall for brand name drug companies. Over the course 
of the program's first 20 years, the FDA estimates that the cost to 
consumers will be $13.9 billion. The Wall Street Journal recently 
estimated that pediatric exclusivity will add $4 billion to brand name 
drug company revenues, and this is just for the first 26 drugs tested 
under the program.\2\ Who bears the burden of pediatric exclusivity? 
Overwhelmingly it is the elderly, who use more prescription medications 
than the young, and only about half of whom have reliable year-round 
prescription drug insurance. It is the uninsured who pay the highest 
prices for prescription drugs, the full retail price, because they do 
not have access to the lower prices negotiated by large purchasers such 
as HMOs and hospitals.
---------------------------------------------------------------------------
    \2\ Rachel Zimmerman, ``Pharmaceutical Firms Win Big on Plan to 
Test Adult Drugs on Kids'' The Wall Street Journal, February 5, 2001.
---------------------------------------------------------------------------

Windfall to drug companies far exceeds the costs of conducting studies
    The windfall to the drug companies in the form of higher revenues 
as a result of the longer monopoly period provided by pediatric 
exclusivity is almost always significantly greater than the cost of the 
studies that the drug companies must do in order to be eligible for 
exclusivity. The Wall Street Journal estimates that pediatric studies 
cost anywhere from $200,000 to $3 million each. This is much less than 
additional revenues drug companies will earn as a result of 
exclusivity, particularly for blockbuster drugs. If you assume, as The 
Wall Street Journal does, that a brand name drug's sales decline by 75% 
after the introduction of a generic, and you look at the two most 
outrageous examples this is what you find: For testing Prozac in 
children, Eli Lilly received 6 months of additional exclusivity, worth 
$964 million, more than 300 times the cost of doing a study (assuming 
$3 million per pediatric study). Schering Plough received exclusivity 
worth $575 million, more than 150 times the cost of doing a study for 
testing its blockbuster drug Claritin in children.
    While the drug industry is entitled to make a good profit, such 
windfalls from pediatric exclusivity are clearly excessive and 
unnecessary. As a whole the drug industry, consistently the most 
profitable for the past 10 years, can well afford to bear the cost of 
doing pediatric studies without any additional incentives. It had $192 
billion in sales last year; the top 12 companies had combined profits 
of $28 billion--an incredible 19% return on revenue. Merck, the 
industry's highest seller, recorded sales of $40.4 billion and profits 
of $6.8 billion in 2000. Clearly, this is not an industry that needs 
additional corporate welfare to compensate it for the cost of doing a 
few million dollars of testing in children.

                               SOLUTIONS

    Given the problems with the current law, Public Citizen urges the 
Committee to enact the following legislative changes:

For new drugs used for an on-label indication in children: Codify the 
        FDA's pediatric rule to require testing of these drugs and end 
        pediatric exclusivity for this testing.
    By codifying the rule, FDA's authority would be clarified and 
testing of new drugs that will be used by children for a labeled adult 
indication would be assured.
    Once FDA has this authority, there no longer would be a need to 
give drug companies 6 additional months on their patent and force 
consumers to pay higher prices for their drugs as a way of enticing the 
companies to test drugs on children.

For drugs still on patent but used for an off-label indication in 
        children: Pediatric exclusivity should be used as an incentive 
        to encourage the testing of these drugs in children.
    The FDA does not have authority to require companies to test for 
uses in children or adults that companies have not sought FDA approval 
for at the time a drug was originally approved (off-label uses). 
Therefore, it will be necessary to provide incentives to encourage drug 
companies to do such testing. For drugs used off-label we recommend the 
following more targeted and greatly reduced incentives:

 Scale the length of exclusivity to the sales of a drug. As it 
        is currently structured, pediatric exclusivity offers a 
        windfall to drug companies when it is granted to a blockbuster 
        drug with high sales income. Drug companies should receive the 
        same incentive for testing all drugs that qualify for 
        exclusivity. This can be done by granting fewer days of 
        exclusivity to drugs with high sales income and more days of 
        exclusivity to drugs that have lower sales income. Congress 
        should set the value of exclusivity that all qualifying drugs 
        would receive in legislation.\3\ This value should be set at 
        such a level that it is a sufficient but not excessive 
        incentive to the drug companies.
---------------------------------------------------------------------------
    \3\ While there is an incentive in existing law (other than 
pediatric exclusivity) designed to encourage drug companies to do the 
testing required to label drugs for off-label uses, the incentive is 
weak. Under current law, when drug companies do tests on a drug and 
submit a labeling change to the FDA to reflect a new use for a drug, 
they receive three years of exclusivity on the new indication. Assuming 
that a company sought this labeling change at the end of the patent 
life of a drug, this would mean that the company would have the 
exclusive right to promote the drug for the particular indication in 
question for three years after the patent expired on the active 
ingredient in a drug. This grant of exclusivity is not very valuable to 
the drug companies, because during those three years if the patent on 
the underlying active ingredient had expired, generic drug companies 
would be able to produce and sell a competing drug with that active 
ingredient, so long as they did not label it for the protected 
indication. In contrast, under pediatric exclusivity, generic drug 
companies are barred from selling a drug with an active ingredient that 
has been granted pediatric exclusivity--a much more valuable prize. It 
is for these reasons that pediatric exclusivity is needed to give drug 
companies the incentive to do the testing necessary to label drugs for 
off-label uses in children.
---------------------------------------------------------------------------
 Tie the granting of exclusivity to a company making labeling 
        changes. It is critical to pediatricians that new information 
        gathered from drug company testing be reflected in labeling 
        changes so that they can make the best prescribing decisions. 
        Unfortunately, under current law companies are awarded 
        exclusivity simply upon completing tests in children. Some 
        companies do not pursue the necessary labeling changes in good 
        faith with the FDA, because there may not be a marketing 
        advantage to them. Without a requirement that drug companies 
        make labeling changes in order to receive the grant of 
        exclusivity, there is no way to assure that labeling changes 
        will be made in a timely manner.

For older, off patent drugs: Fund independent centers to do testing in 
        children.
    Many drugs that are used in children are older drugs that are off 
patent. The pediatric rule does not extend to these drugs. And since 
these older, off patent drugs are often made by many different generic 
companies, it is not possible to give one company exclusivity in 
exchange for testing and a labeling change. Also, in the case of many 
low-selling drugs still on patent, the pediatric exclusivity provision 
is not an adequate incentive to encourage companies to do studies in 
children. For these older drugs and low-selling drugs still on patent 
we urge that funds be made available to the Pediatric Pharmacology 
Research Units (PPRU) and the Centers for Education and Research on 
Therapeutics (CERT) to test the effectiveness of these drugs in 
children. (The CERT centers were created by a provision in FDAMA.) 
Also, the FDA should require the relevant results of this research to 
be reflected in labeling changes.
    Again, I thank the Committee for the opportunity to testify. Public 
Citizen urges you to end the substantial giveaway to the drug industry 
that occurs under pediatric exclusivity. The same goals of the original 
law--understanding how prescription drugs approved for adults will 
affect children--can be much better achieved by requiring drug 
companies to do such testing as a condition of their original new drug 
application. We can achieve a much better balance between the needs of 
our children and consumers and those of the drug companies than 
currently exists under pediatric exclusivity--at a cost to the drug 
industry that is small in comparison with their overall revenues.
                                 ______
                                 
    Prepared Statement of Arthur Collins, Chief Executive Officer, 
                               Medtronic

    I. INTRODUCTION--MEDTRONIC'S INTEREST IN BREAKTHROUGH THERAPIES

    My name is Art Collins. I appreciate the opportunity to provide 
testimony to the Subcommittee on Health as you assess the effectiveness 
of the Food and Drug Administration Modernization Act (FDAMA).
    I am the Chief Executive Officer of Medtronic. Medtronic is the 
world's leading medical technology company, providing lifelong 
solutions for people with chronic disease. With deep roots in the 
treatment of heart disease, Medtronic now provides a wide range of 
therapies that help physicians solve the most challenging, life-
limiting medical problems and restore health, extend life, and 
alleviate pain. Therapies are organized in four primary groups--Cardiac 
Rhythm Management, Vascular, Cardiac Surgery, and Neurological, Spinal 
and ENT.
    Medtronic's 25,000 employees serve patients in 120 countries. 
Medtronic has scientific, manufacturing, education and sales facilities 
worldwide. Revenues for the year ending April 30, 2000 were $5.01 
billion. Approximately a third of the company's revenue turnover is 
contributed by its business overseas and about 25 percent of its 
employees are outside the U.S.
    As you may know, Medtronic strongly supported the Committee's 
important role in developing this legislation. Further, Medtronic is a 
world leader in developing breakthrough therapies for chronically ill 
patients. Indeed, our Mission Statement directs us to participate in 
areas where we can make a unique contribution to human welfare by 
developing therapies that alleviate pain, restore health, and extend 
life. As a consequence, we are uniquely situated to comment on FDAMA's 
support for breakthrough therapies--and further initiatives that might 
improve this country's ability to bring breakthrough, life-saving 
technologies to critically ill patients.
    As its name states, Congress intended that FDAMA would modernize 
the FDA's regulatory process. Specifically, the goal was to create an 
efficient and effective regulatory process that would bring medical 
products to the patients who need them. FDA has done a good job in 
making FDAMA work and in ensuring that Americans have access to safe 
and effective medical devices and drugs.
    Today we can build upon the momentum of FDAMA and work to guarantee 
patient access to breakthrough technologies. These are the novel 
devices that treat life-threatening diseases or conditions and take 
longer and are more expensive to develop than other devices. If we keep 
the central tenets of FDAMA in mind, namely:

 enhanced collaboration between FDA and industry,
 increased certainty in the review process, and
 avoidance of over-regulation
we can forge a path for breakthrough technologies to move them from a 
biomedical engineer's creative thought to a patient's bedside as 
efficiently and effectively as possible. I highlight breakthrough 
technologies because we all can agree on their importance, but we also 
must recognize the disincentives to their development that currently 
exist. By modernizing the regulatory process for breakthrough devices 
we can continue the success of FDAMA, dampen some of the disincentives 
facing the development of breakthrough technologies, and, most 
importantly, help Americans in getting the medical care they need.

       II. OBSTACLES TO INNOVATION AND BREAKTHROUGH TECHNOLOGIES

    We can define a breakthrough device as one that is novel in design, 
operation, or function, and is intended to treat life-threatening 
diseases or conditions. I contrast breakthrough devices with ``new'' 
devices that are modifications of, or incremental changes to, devices 
with well-established track records. Because breakthrough devices take 
longer and are considerably more expensive to develop than those 
incrementally improved devices, sponsors of breakthrough devices must 
make a large commitment to the long haul.1
    I will provide just one example of such a breakthrough therapy 
recently developed by Medtronic and in various stages of consideration 
by the FDA and global regulatory bodies. Activa' Therapy is 
the umbrella term describing the medical treatment developed by 
Medtronic, in collaboration with physician researchers, that uses brain 
stimulation to suppress the symptoms of movement disorders. The therapy 
uses an implantable medical device to deliver mild electrical 
stimulation to brain structures involved in motor control. It includes 
in particular Activa Parkinson's Control Therapy, which is the most 
significant advance in the treatment of the disease in more than 30 
years. Developed by Medtronic in collaboration with pioneering 
physicians, the therapy can control the primary motor symptoms of 
patients with advanced, levodopa-responsive Parkinson's disease that is 
no longer adequately controlled with medication. It is an adjustable 
and reversible therapy that uses an implanted medical device to deliver 
mild electrical stimulation to either the subthalamic nucleus (STN) or 
the globus pallidus interna (GPi) to counter the brain signals that 
cause the symptoms of Parkinson's disease. There is currently no cure 
for Parkinson's disease and indeed current treatment options have 
disabling and unpredictable side effects.
    Overall, the medical device industry has demonstrated its 
commitment to the research needed to support such innovation. In fact, 
the device industry invests a higher percentage of annual income in 
research and development than other industries.2 This 
investment in R&D has only increased in the last decade. Medical 
technology firms invested 5.4% of revenues in R&D in 1990. By 1998 that 
figure doubled to 12.9%.3 The United States is the largest 
producer of the R&D that leads to new health care technologies and also 
is the largest market for these technologies.4
    Despite this commitment to technology and innovation, companies 
face many barriers in their pursuit of breakthrough devices. Take, for 
example, the FDA regulatory process, which can create uncertainty and 
high costs, often from time delays, for manufacturers. FDA's inability 
today to review efficiently new technologies is understandable; 
reviewing these technologies requires considerable resources and 
expertise, two things that the agency today struggles to maintain. For 
companies with few products, the uncertainty and delays associated with 
the FDA's role in the product development and approval process can be 
especially challenging as these companies cannot absorb the extra costs 
associated with lengthy development processes and untimely reviews. 
Indeed, the pressures on small companies created by the FDA regulatory 
process have long been recognized by both industry and 
government.5
    Payment obstacles also discourage innovation and force companies to 
scale back their research and development or market their products 
abroad first.6 Health insurers, including Medicare, often 
have requirements that are higher than the requirements necessary to 
gain FDA approval.7 Added uncertainty in the reimbursement 
process arises for innovative devices. It is more difficult to secure 
payment for these new (FDA approved) devices, which do not have 
precedents upon which to rely; compared to incrementally changed 
devices, which follow more predictable routes to coverage and 
payment.8 Innovative devices also have greater financial 
pressure from Medicare's coverage of devices studied under an 
investigational device exemption. Medicare may pay for devices that are 
newer generations of proven technologies for which initial questions of 
safety and effectiveness have been resolved, but will not cover novel, 
first-of-a-kind technologies.9 By raising these points, I do 
not argue that the reimbursement system is flawed or debate the 
policies behind the system; instead, my point is specific: obstacles to 
innovation exist and have significant consequences.
    I know that you are aware that small companies suffer the 
consequences of a delayed regulatory review process and payment 
hurdles. Currently, the device industry is primarily comprised of small 
companies, which are often the source of novel devices. Indeed, one 
study found that start-up firms were disproportionately responsible for 
the innovation and early development of novel devices.10 But 
funding for small companies is hard to come by and venture capitalists, 
particularly when money is tight, do not want to invest in small 
companies whose products take a long time to develop, such as medical 
devices, and who are part of a highly regulated industry, such as the 
device industry.11 Indeed, medical devices are not developed 
cheaply; taking a new device from concept to market can cost $20 
million or more.12
    What may surprise you is that small firms are not alone in feeling 
the pressures that deter innovation and development of breakthrough 
technologies. Large firms must respond to their investors who prefer 
products that have a quicker turn-around time. Incrementally changed 
devices fit this bill. As I stated before, there is more certainty in 
their review process, which makes that process shorter. Additionally, 
with incrementally changed devices the marketing commitment is smaller. 
For example, a company does not have to sell a doctor on the benefits 
of a newly modified pacemaker; the doctor is familiar with the 
technology and will understand the new features. Selling a breakthrough 
device to a doctor for a disease that the doctor historically has 
treated with a drug requires much more time and 
commitment.13
    To encourage innovation some firms have undertaken creative 
endeavors, but these endeavors can be risky undertakings and, by far, 
are the exception and not the rule. I offer as an example, Itasca 
Ventures, a ``venture incubator'' formed and operated a few years ago 
by my company, Medtronic, Crescendo Ventures, and Vanguard Venture 
Partners. Itasca focused on early-stage medical technologies that had 
not passed the proof-of-concept and prototype stages and aimed to 
nurture device companies to viability. This incubator allowed us to 
invest in technology while still meeting Wall Street's financial 
expectations that often conflict with a focus on long-term development.

  III. BUILD ON FDAMA TO BRING MORE BREAKTHROUGH THERAPIES TO PATIENTS

    Today we face a golden opportunity to build on FDAMA's success and 
renew our commitment to the innovation and development of breakthrough 
technologies. And by ``we'' I specifically mean FDA and industry 
because through increased collaboration between the agency and 
companies, more breakthrough technologies will be developed and more 
patients will be helped. FDAMA created tools to foster collaboration, 
for example meetings between the agency and industry early in a 
device's development, which can be used to fine-tune the regulatory 
process for breakthrough technologies.
    Indeed, FDAMA aimed to get devices, including breakthrough devices, 
to the public as soon as possible. FDAMA's expedited review provision 
identified four situations that triggered review priority including 
when devices represented breakthrough technologies. Key to FDAMA was 
increasing patient access to new technologies. The goal was to make 
review process more efficient and effective through streamlining and 
through meetings between the agency and premarket submitters that 
emphasized that only the least burdensome data to support an approval 
was required. These changes, although they put into law programs, had a 
smaller impact in providing patients with early access to breakthrough 
technologies.
    Although these collaboration tools have been used to some benefit, 
I believe there are more tools that FDA and industry can use to further 
promote the development of safe and effective breakthrough therapies 
for critically ill patients. Specifically, a breakthrough device 
mechanism could be put into place, which--

 Requires FDA to designate breakthrough device status at an 
        appropriate stage in the product's development--within 30 days 
        of a submission requesting such a designation.
 Supports the development of protocols that include an ``early 
        look'' at data to determine whether information exists to 
        permit a safety and effectiveness determination and, thus, the 
        earlier availability of a breakthrough device.
 Requires FDA to assign a team of reviewers with appropriate 
        expertise to review a designated breakthrough device.
 Grants the device a preferred queue position both before and 
        after submission of a PMA.
 Permits early and ongoing collaboration with the agency by 
        providing for modular review, and requiring the applicant and 
        FDA to communicate regularly after the premarket submission, to 
        ensure the most detailed and efficient review.
 Requires that prior to a 90-day meeting, FDA provide a 
        detailed, written review of any remaining deficiencies.
 States that the time to approval after the filing date is 120 
        days.
    In essence, we would create a breakthrough device review process 
that offers early collaboration, access to expertise, and 
predictability. The process would be implemented by an FDA team that 
brings expertise to the review and has ``ownership'' of the 
breakthrough project. And through the collaboration encouraged by 
FDAMA, the breakthrough device process would result in high quality 
inputs in study design, data management, and review.

                             IV. CONCLUSION

    I am confident that if we structure the review of breakthrough 
technologies, we will improve both the quality and timeliness of these 
premarket reviews and create incentives for breakthrough development. 
However, I remain concerned about the premarket review burdens that the 
FDA faces today. A breakthrough device mechanism can only function 
effectively if we supplement the number of reviewers and the expertise 
available to the agency. Indeed, the adequacy and stability of funding 
are critical. The task for the government and industry is to ensure 
that FDA is appropriately funded to face the challenges of the future. 
We have seen in the CDER experience that user fees have worked well. 
These fees assist the agency in providing the adequate number of 
reviewers with expertise to keep reviews timely. More importantly, they 
ensure the timely development and review of new products that provide a 
disproportionately positive impact on the public health.
    Medtronic continues to fully support FDA's mission to improve the 
development of medical devices and help to ensure that safe and 
effective products are available to the American public. May we all 
continue to support this goal, especially in the area of breakthrough 
technologies.

                               Footnotes

    1 Linda Rochford and William Rudelius, New Product 
Development Process; Stages and Successes in the Medical Products 
Industry, Industrial Marketing Management, Jan. 1997.
    2 David B. Fleming and Thomas J. Sommer, Opinion, 
Medical Devices Can't Keep Waiting, The Boston Globe, Sept. 16, 1997, 
at D4.
    3 The Lewin Group, Inc., Executive Summary, Report One: 
The State of the Industry, March 24, 2000, at 3.
    4 Burton A. Weisbrod and Craig L. LaMay, Mixed Signals: 
Public Policy and the Future of Health Care R&D, Health Affairs, March/
April 1999, at 112.
    5 Todd Nissen, The Future of the Medical Device 
Industry, Business Dateline; Corporate Report Minnesota, Dec. 1993, at 
54 (citing a May 1993 report from the House Subcommittee on Oversight 
and Investigations which ``noted that both industry representatives and 
FDA personnel discussed the possible threat to small medical device 
firms that couldn't afford to wait out the lengthy review process'').
    6 See, e.g., Manuel Schiffres and Jack A. Seamonds, Is 
Red Tape Tying Up High Tech? Keeping the Genie in the Bottle, U.S. News 
& World Report, April 21, 1986, at 50 (citing as an example ``Pfizer's 
medical-devices group [which] screens research projects and focuses on 
new products that generally get hefty medicare reimbursements--the 
company may not develop some promising products `simply because [Pfizer 
is] concerned that [it] won't be able to sell them in a market 
dominated by short-term cost-containment pressures' ''); The Lewin 
Group, Inc., Report One: Payment Issues for Medical Technology.
    7 See Phil Galewitz, Patients' Access to New Technology 
Is Being Increasingly Restricted by Insurers, The Buffalo News, Nov. 2, 
1998, at 3A (``Before providing coverage of new technology, health 
plans want proof that the products are cost-effective, work better than 
other technology, and improve or extend a patient's life.'').
    8 The Lewin Group, Inc., Executive Summary, Report One: 
The State of the Industry, at 4; The Lewin Group, Inc., Medicare 
Patient Access to Technology.
    9 Chester A. Robinson, et al., Encouraging Medical 
Device Innovation: Reimbursement Problems and New Policies, Public 
Health Reports, Sept. 1, 1996, at 468 (noting that at that time 
approximately 94% of the 1200 devices being studied in FDA-approved 
clinical trials fell into the category of newer generations of proven 
technologies).
    10 The Lewin Group, Inc., Executive Summary, Report One: 
The State of the Industry, at 2.
    11 The Lewin Group, Inc., Executive Summary, Report One: 
The State of the Industry, at 4-5.
    12 Tom Abate, Healing That Hurts; New Medical Devices 
Are Saving Lives But Killing Health Care Finances, The San Francisco 
Chronicle, June 11, 1999, at B1.
    13 See Rochford and Rudelius, New Product Development 
Process (explaining that manufacturers of new products are more likely 
to use all the stages in the product development process, including a 
market study and test marketing, than manufacturers of devices which 
are product modifications).
                                 ______
                                 
                       National Food Processors Association
                                                      June 12, 2001
The Honorable Michael Bilirakis
Chairman
Subcommittee on Health
House of Representatives
Committee on Energy and Commerce
Washington, DC 20515
    Dear Chairman Bilirakis: The following are responses to follow-up 
questions with respect to the testimony I presented on behalf of the 
National Food Processors Association (NFPA) on implementation of the 
Food and Drug Administration Modernization Act (FDAMA) before the 
Subcommittee on Health on May 3, 2001.
    NFPA is the voice of the $460 billion food processing industry on 
scientific and public policy issues involving food safety, nutrition, 
technical and regulatory matters and consumer affairs. NFPA's three 
scientific centers, its scientists and professional staff represent 
food industry interests on government and regulatory affairs and 
provide research, technical services, education, communications and 
crisis management support for the association's U.S. and international 
members. NFPA's members produce processed and packaged fruits and 
vegetables, meat and poultry, seafoods, drinks, and juices or provide 
supplies and services to food manufacturers.
    Question 1. In FDAMA, the Congress created an alternative claim 
procedure wherein health and nutrient content claims could be based 
upon ``authoritative statements'' of the government. This is a 
different standard than ``significant scientific agreement,'' which is 
required under the Nutrition Labeling and Education Act. Is it your 
view that the FDA has interpreted ``authoritative statement'' standard 
in such a way that it resembles the ``significant scientific 
agreement'' standard?
    Response. It is NFPA's view that FDA clearly has tried to interpret 
the FDAMA provision in a manner that limits its application to those 
consensus-type statements that would survive the most restrictive 
reading of ``significant scientific agreement.'' NFPA is on record 
challenging FDA's position.
    FDA issued guidance in June 1998 (63 FR 32101, June 11, 1998), and 
interim final regulations banning nine specific FDAMA health claims, 
later that month (63 FR 34084, June 22, 1998), which documented the 
Agency's narrow reading of the ``authoritative statement'' provision of 
FDAMA, putting entirely in jeopardy the FDAMA premarket notification 
procedure. For example, FDA guidance takes the position that a 
statement of a federal agency does not qualify as ``authoritative'' 
unless it constitutes ``the official policy'' of the scientific body. 
Under FDA's interpretation, ``subdivisions'' of federal agencies 
apparently cannot issue ``authoritative'' statements, regardless of the 
scope of responsibility they have been delegated for public health 
matters (63 FR 34084 at 34085). Moreover, FDA makes clear that it does 
not intend to rely on the scope of authority delegated to a scientific 
body to determine whether its statements are authoritative, but rather 
to evaluate on a case-by-case basis the proceedings of scientific 
bodies to determine whether they are sufficiently deliberative to 
measure up to FDA's standards for approval of a health claim petition.
    According to FDA, no statement will qualify as ``authoritative'' if 
it indicates ``a relationship between a nutrient level and a disease or 
health-related condition is preliminary or inconclusive . . . (63 FR 
34084 at 34086).'' The Agency interprets FDAMA ``to prohibit a health 
claim based on an authoritative statement when there is not significant 
scientific agreement that there is a relationship between the nutrient 
and the disease or health-related condition . . . (Id.).'' This 
reflects FDA's basic view that FDAMA is a ``surrogate'' for, rather 
than an alternative to, the health claim petition process authorized by 
the Nutrition Labeling and Education Act of 1990. FDA's confined 
reading of FDAMA not only leaves little room for FDAMA health claims, 
but raises serious First Amendment concerns.
    Question 2. FDAMA gave the FDA 540 days to review filed health 
claim petitions. Are you aware of any petitions which have exceeded 
this 540 day time limit?
    Response. Since the enactment of FDAMA, we are not aware of any 
health claim petitions which have exceeded the 540-day time limit. 
Throughout the history of the health claim petition process, however, 
there are several petitions that have been withdrawn rather than pass 
through the gauntlet of FDA's health claim review time limitations. 
Typically, FDA scrutinizes health claim petitions at the beginning of 
the review process. The few health claim petitions that are filed, and 
survive the initial screening, allow for relatively easy docket 
management in FDA, enabling the Agency to reach closure by 540 days.
    In addition, FDA has promulgated a rule (21 CFR Sec. 101. 700)(4)) 
that requires the Agency to justify any delay in issuing a health claim 
final rule for a health claim petition if that final rule is not 
published within 540 days from the date of receipt of the petition. 
This date is earlier than the statutory deadline. On June 6, 2001 (66 
FR 30311), FDA noted that the issuance of a final rule on the health 
claims, resulting from petitions, on plant stanol and sterol esters and 
coronary heart disease will be delayed until July 25, 2001. In this 
Federal Register document, FDA notes that the final rule will be issued 
within the statutory time frame.
    Question 3. Has the FDA given any indication as to when it will 
revisit its advance notice of proposed rulemaking on irradiated 
products in order to finalize a rule which will provide consumers with 
better information about irradiated foods?
    Response. On February 17, 1999, FDA published an advanced notice of 
proposed rulemaking (ANPR) calling for comments on labeling revisions 
for foods treated with ionizing radiation and suggestions on whether 
labeling requirements should expire. The ANPR highlighted the extensive 
public record FDA has already gathered on the subject and called for 
more information about consumer understanding of the irradiation 
process.
    FDA's preliminary analysis of the comments it received suggests 
there is no consensus on what alternative language would be truthful 
and not misleading for disclosure of irradiation processing. The Agency 
believes that since these comments provide no clear direction for 
rulemaking, it has fulfilled its obligations under FDAMA's conference 
report that it provide an open public comment irradiation labeling 
issues.
    In its recent response to the congressional request on irradiated 
labeling concerns raised in FDA's FY 2001 appropriation legislation FDA 
stated that it expected to receive a contractor's analysis of the 
comments on its ANPR by December 31, 2000. The Agency intends to: 1) 
obtain more information on consumer understanding of the existing 
label; and 2) attempt to develop a properly informative label that 
would not be perceived by consumers as a warning. If these projects are 
successful, FDA plans to develop a proposed rule during FY 2001 and 
publish a final rule by March 1, 2002.
    On March 29, 2001, FDA indicated in a Federal Register notice that 
it plans to conduct six consumer focus groups on food irradiation 
labeling subjects in April and May 2001, and sought comments on its 
request for approval by the Office of Management and Budget (OMB) for 
such research. NFPA understands that OMB has approved the research, and 
FDA now plans to conduct the series of focus groups on June 18, July 9, 
and July 11, 2001.
    NFPA applauds the leadership this Committee has shown in oversight 
of the implementation of FDAMA and we appreciate this opportunity to 
provide the Committee with further information and comments. Please 
contact me if you need any additional information on the responses 
herein.
            Sincerely yours,
                                  Rhona S. Applebaum, Ph.D.
        Executive Vice President, Scientific and Regulatory Affairs
                                 ______
                                 
                         Generic Pharmaceutical Association
                                                      June 13, 2001
The Honorable Michael Bilirakis
Chairman, Subcommittee on Health
Committee on Energy and Commerce
2125 Rayburn House Office Building
Washington, DC 20515
    Dear Chairman Bilirakis: Attached please find responses to the June 
1, 2001 list of follow-up questions from the May 3, 2001 hearing on 
pediatric exclusivity you submitted to Dr. Carole Ben-Maimon, Chair of 
the Generic Pharmaceutical Association's Board of Directors. Please do 
not hesitate to contact me if you have any additional questions.
    Thank you for your continued interest in this important matter.
            Sincerely,
                                                Steve Giuli
                                     Director of Government Affairs
    Question 1: The FDA Report on Pediatric Exclusivity says that for 
children ``the public health benefits have been extensive.'' Do you 
deny that this is the case?
    Response 1. In order to evaluate the public health benefits of 
pediatric exclusivity there must be a clear understanding of what 
exactly the standard of measurement is. If the standard being employed 
is the number of studies that have been conducted prior to the 
pediatric exclusivity provision, compared to the number of studies that 
have been conducted after the provision became law, then there is no 
question that the pediatric exclusivity provision has achieved the 
desired objective. However, I do not believe that Congress intended 
merely to create an incentive for the performance of clinical studies. 
The intent, as I understand it, was to obtain valuable information and 
data that would have an impact on the treatment of childhood illnesses. 
Thus, the number of studies being performed is an inappropriate 
standard for measuring the provision's success. A more appropriate 
gauge would be to measure the quality of the data being generated and 
its value and application to those treating patients in the pediatric 
community. The Food and Drug Administration (FDA) is the only body 
possessing this information and is therefore uniquely suited to render 
a judgment on this basis. However, I have yet to see reports 
quantifying the impact and value of the data being obtained under the 
pediatric exclusivity provision. Only the FDA has access to this data. 
Clearly, without the necessary data it is inappropriate for me to offer 
an opinion on whether or not the public health benefits of the 
pediatric exclusivity provision, have ``been extensive''.
    Question 2: The Tufts Center for the Study of Drug Development has 
found that without the pediatric exclusivity provision, the pediatric 
sales market itself would be insufficient to render the commitment of 
resources necessary to study drugs for use in children. Do you deny 
this?
    Response 2. The short answer is, ``No.'' In my May 3, 2001 
testimony before the Health Subcommittee, I unequivocally expressed 
support on behalf of GPhA for the continued need for some kind of an 
incentive system to spur pharmaceutical research in the pediatric 
population. That view has not changed. GPhA fully supports research on 
therapies that are important for children. The concern I raised at the 
May 3 hearing, and one strongly held by GPhA, is that the magnitude and 
type of the current pediatric incentive cryout for careful 
Congressional review and continued scrutiny. The Generic Pharmaceutical 
Association strongly encourages the Commerce Committee to consider 
alternative incentives and programs that would achieve the desired 
result of pediatric research without harming other vulnerable sectors 
of the population by keeping drug prices high. And GPhA would welcome 
the opportunity to work with the Committee to develop such workable 
alternatives.
    Question 3: The FDA has found that the pediatric exclusivity 
provision has increased the nation's pharmaceutical bill by one-half of 
one percent, while the Tufts Study found that the actual out-of-pocket 
expense for any senior citizen due to pediatric exclusivity is likely 
to be ``minimal and temporary''. Do you believe that a one-half of one 
percent increase is too much to pay for accurate dosing in children?
    Response 3. The answer to this question requires a cost-benefit 
assessment. The answer clearly depends on the value of the information 
and the advances offered by the research. One area of concern about the 
cost of the existing system is that it places the entire burden of 
paying for that one half of one percent increase on the narrow section 
of patients who have to wait an additional six-months before the low-
cost generic alternative for that particular brand drug to become 
available. The average retail price of a brand prescription costs 238% 
more than the average retail price of a generic prescription. For the 
senior citizen on a fixed income without prescription drug insurance, 
the added burden may well be ``temporary'' but it is hardly 
``minimal.'' The one half of one percent increase would, to that senior 
citizen, be a lot more affordable if it was being paid for by all of 
society instead of just a narrow and often vulnerable segment. We 
encourage Congress to look at alternate incentives that have less 
impact on people who are already struggling to pay for the high costs 
of their medications. We believe such alternatives exist, and we would 
welcome the opportunity to share our observations.
    Question 4: In your testimony you note the fact that ``pediatric 
clinical testing that does nothing more than assess children's 
reactions to the fifth or sixth generation `me-too' drug makes no 
meaningful contribution to doctors' ability to treat the relevant 
disease''. The decision about what does and does not make a meaningful 
contribution to pediatric health is up to FDA, not the drug 
manufacturer, however. If the FDA doesn't issue a Written Request, then 
there's no way that a drug can obtain pediatric exclusivity, correct?
    Response 4. My understanding is that the FDA issues the written 
request, but in addition to that manufacturers can request a written 
request from FDA. Regardless of the process, FDA cannot differentiate 
between products within a therapeutic class. What benefit is there to 
society of rewarding, say, a fourth drug from a given therapeutic class 
when three drugs that are equally as effective have already received 
the pediatric exclusivity reward? This is a problem since FDA cannot 
reliably predict which companies marketing a specific drug within a 
class of drugs will perform pediatric studies. In addition, I am not 
aware that FDA has ever removed a product from its list. Thus, if three 
products with the same mechanism of action and for the same disease are 
studied the fourth product in the same category remains eligible for 
exclusivity even though the need may have drastically diminished.
    As the process moves forward, Congress should also pay equal 
attention to the brand industry's campaign to minimize its obligations 
under the pediatric incentive program and convince FDA to narrow the 
scope of the Agency's study requests. Consider just these two examples.
    In a letter to FDA dated April 3, 1998 Steven Spielberg, MD, John 
Siegfried, MD, and Marjorie Powell of PhRMA wrote ``Studies can qualify 
for exclusivity even if they are unsuccessful and do not lead to new 
pediatric indications, dosing information, or formulations . . . [T]he 
study or studies need not lead to the filing of a supplemental drug 
approval application related to pediatric use to allow the applicable 
drug to qualify for the incentive.''
    On March 6 of this year, PhRMA's Alan Goldhammer, PhD, wrote a 
letter to FDA stating, `` [I]f consensus between a sponsor and the 
Agency is reached that the diseases are the same in adults and 
children, then there should not be any requirement to conduct efficacy 
studies in children. Rather, information on pharmacokinetics to 
establish the appropriate dosing regimen, relevant formulations, and 
safety in children should be sufficient.'' If the requirements are so 
limited, why should the incentives be so large?
    Contrary to these positions articulated by PhRMA, GPhA believes 
that the FDA should have the authority to require the timely addition 
of label revisions for pediatric uses and that brand companies should 
be required to conduct serious and original clinical studies in 
children in order to qualify for this large of an incentive. We urge 
Congress to consider these important issues in the reauthorization 
process.
    Question 5: According to an January 2001 FDA report, between 1991 
and 1996 (prior to pediatric exclusivity), only 11 pediatric studies 
were completed by the industry at the request of FDA. Since 1998 (after 
pediatric exclusivity), the industry has agreed to perform 411 
pediatric studies. Don't you agree that significant progress is being 
made on behalf of children due to pediatric exclusivity?
    Response 5. Again, it is GPhA's position that the quality of 
information and its relevance to the pediatric community, and not the 
number of studies, are the appropriate standards to use in determining 
the success of the pediatric exclusivity program. An additional concern 
on this front is that an over-reliance on sheer numbers as an indicator 
of success can cloud the fact that clinical trials are a form of 
experimentation. With experimentation comes considerable risk. The 
deaths that resulted from the diprovan experience tragically 
illustrated just how severe the risk can be.
    Question 6: The January 2001 FDA report estimated that lower 
hospitalization costs due to better pediatric dosing information can 
save up to $228 million per year for five diseases alone. Do you agree 
that by that measure alone the pediatric exclusivity provisions are 
having a positive impact?
    Response 6. Reducing hospitalization costs was surely one of the 
objectives in creating a pediatric research incentive. Generating an 
annual $228 million savings over 5 years would, in turn, be a positive 
aspect of the pediatric incentive program. Allow me to again reiterate 
that GPhA strongly supports the continuation of some kind of incentive 
for pharmaceutical companies to conduct pediatric research. Having said 
that, GPhA believes that it is vitally important to accurately 
determine whether or not the current incentive is disproportionate to 
the cost. This concern is rooted in the belief there may be more cost 
efficient ways to create a pediatric incentive. Regrettably, a 
disproportionate financial incentive could encourage the exploitation 
of children. Combined, these two reasons make a powerful argument for 
considering alternatives to the current system that could better 
protect children with less of a cost to the public.
    Question 7: You claim that pediatric exclusivity has been in place 
for four years, but that there is no well-defined system for measuring 
its success. However, in the five years before the provision was passed 
by the pharmaceutical industry conducted 11 pediatric studies at the 
request of the FDA, and since its passage they have agreed to conduct 
411 pediatric studies. Isn't this proof enough for you that the 
provision is working?
    Response 7. No. As discussed in earlier responses, GPhA believes 
the success of the provision should be measured by the quality and 
impact of the data it is generating and not just by the increase in the 
number of pediatric studies following the passage of the law in 1997.
    Question 8: You mention in your testimony that the FDA claims the 
cost of the provision will amount to $695 million per year in higher 
costs of prescription drugs. That very same report says that better 
pediatric dosing could save $228 million in lower hospitalization and 
utilization costs for five pediatric diseases alone. It's entirely 
possible that this provision may save health care dollars, isn't that 
right?
    Response 8. It is possible that this provision my save health care 
dollars but I would reiterate the points I made in my response to 
question 6.
    Question 9: The generic industry will benefit by being able to 
label their drugs for pediatric indications when the brand name which 
conducted the pediatric studies comes off patent, correct?
    Response 9. That is true if there is no patent and no exclusivity 
other than pediatric exclusivity associated with the drugs in question. 
One of the unintended repercussions of the pediatric exclusivity 
incentive is that as brand companies do pediatric studies, they may be 
seeking patents surrounding and protecting these concepts. The 
existence of a patent(s) that a generic company cannot use in its 
labeling raises an entirely different public health issue. 
Exclusivities may be prolonged beyond six-months as it is conceivable 
that additional patents could be issued.
                                 ______
                                 
                   Medical Device Manufacturers Association
                                                      June 19, 2001
The Honorable Michael Bilirakis
Chairman
Subcommittee on Health
Committee on Energy and Commerce
United States House of Representatives
Washington, District of Columbia 20515-6115
    Dear Chairman Bilirakis: I have enclosed my responses to the 
questions you submitted to me for the record of your subcommittee's May 
3 hearing on the implementation of the Food and Drug Administration 
Modernization Act of 1997.
    Thank you for the opportunity to testify before the subcommittee 
and for your continued interest in the issues that affect the ability 
of the medical device industry to make new and advanced technologies 
available to patients who need them.
            Very sincerely yours,
                                        Stephen J. Northrup
                                                 Executive Director
Attachment

    Question 1. The FDA is on average reviewing 510(k) submissions in 
77 days, and the premarket approval review time has been cut in half, 
though its still roughly twice what is required by law. Are the FDA's 
successes a result of FDAMA, FDA leadership, or both?
    Response. Most of the credit for the reduction in medical device 
review times goes to the U.S. Congress for both their oversight of CDRH 
and their legislative efforts during FDAMA to ensure the necessary 
procedures took place to streamline the review process. The Center for 
Devices and Radiological Health (CDRH) and its own re-engineering 
efforts also deserve special recognition for reducing approval times by 
creating a more efficient and streamlined device review process.
    Question 2. Have the collaboration measures contained within FDAMA 
improved the working relationship between manufacturers and the FDA? 
Has this come at the expense of patient safety?
    Response. Overall the collaboration measures in FDAMA have improved 
the general communications between the medical device industry and the 
FDA. A survey conducted in 1999 by PricewaterhouseCoopers LLP and 
CONNECT, the University of California at San Diego's Technology and 
Entrepreneurship Program, found that communications between life 
sciences companies and the FDA have improved significantly since 1995, 
when the organization first began their bi-annual survey.
    Unfortunately, the ``formal collaborative meetings'' between the 
Agency and industry as proscribed in the FDAMA provisions are 
underutilized, in large part because they are new and the industry has 
not developed a full body of positive experience to which others 
considering the merits of such meetings can refer. We nevertheless 
encourage the FDA to continue to implement these provisions, especially 
the collaborative meetings between the agency and industry to determine 
the type of evidence needed to support a PMA approval. It is beneficial 
for both industry and FDA to determine together the nature of the 
information needed for the industry to include in the device 
submission, as this will reduce the likelihood of arbitrary changes at 
a later date. This type of meeting helps to streamline the review 
process, thus ensuring that unnecessary regulatory requirements do not 
delay patients' access to new technologies.
    There is no evidence to suggest that a more collaborative 
relationship between industry and the FDA has come at the expense of 
patient safety. The goal of FDAMA was to increase the regulatory 
efficiency of the FDA, not lower its standards.
    Question 3. The FDA recently issued a Draft Guidance on the ``least 
burdensome'' provision contained within FDAMA. While I am concerned 
that it took FDA three and one-half years to develop this Guidance, 
could you explain for the Committee industry's general thoughts on this 
Guidance?
    Response. As noted in my testimony, we are pleased that the FDA 
published this draft guidance on the ``least burdensome'' provisions of 
FDAMA in time for the May 3rd hearing. We believe this document 
captures the intent of FDAMA by defining ``least burdensome'' to mean 
an approach to addressing a premarket issue ``that involves the most 
appropriate investment of time, effort, and resources on the part of 
the industry and FDA.'' When finalized, this guidance should have 
beneficial effects on the overall medical device review process.
    Question 4. Even if the ``least burdensome'' Guidance is ideal from 
a public health and industry perspective, isn't it true that there will 
be little improvement in device reviews if the concept isn't thoroughly 
explained to the main line device reviewers?
    Response. Everyone at FDA involved in the medical device approval 
process, from the division directors to branch chiefs to the front-line 
reviewers, must fully understand and adopt ``least burdensome'' 
principles in their day-to-day work to ensure its full implementation. 
We trust the agency will continue to train its reviewers and its 
advisory panels in the application of these concepts and principles. 
Training activities are crucial to promoting the greater consistency we 
seek in the FDA's review process.
    Before the guidance can be put into effect, it must be published in 
final form. Therefore, it is important that CDRH expeditiously review 
and incorporate the appropriate comments and issue the final guidance 
in an accelerated fashion.
    Question 5. Why did industry react so slowly to the third-party 
review process created within FDAMA? I understand that in the first 17 
months after passage industry only used this process 54 times.
    Response. It is true that this program has been used infrequently 
so far by the medical device industry, in large part because the FDA 
has streamlined its own review processes. However, we also believe 
industry underutilization of third-party review can be attributed in 
part to the manner in which FDA has implemented this program.
    The FDA took more than three years to fully implement the third-
party review provisions of FDAMA. The FDA's internal policy, as 
described in October 1998 and November 1998 guidance documents, 
permitted third-party review of class II devices only if device-
specific guidance or recognized consensus standards existed. In our 
opinion, limiting the use of the program through requiring the 
existence of guidance documents for the products in question was too 
restrictive and not in accordance with Congressional intent under 
FDAMA.
    We argued to the FDA that products for which no guidance documents 
or consensus standards exist are exactly the types of products for 
which third-party review would be most attractive to manufacturers and 
most beneficial to the FDA. In January 2001, the FDA expanded this 
program to include any device regulated by CDRH that is not prohibited 
from third party review under FDAMA.
    Question 6. Do you expect utilization of the third-party review to 
increase due to FDA's recent actions to expand the number of devices 
eligible for such review?
    Response. According to the latest statistics released by the 
Agency, FDA has already received more third-party review applications 
in 2001 than were received in all of 2000. We believe this is directly 
related to the expansion of the program, and we look forward to its 
continued growth.
    Question 7. Is there any evidence whatsoever that third-party 
review in any way compromises patient safety?
    Response. According to FDAMA, the FDA accredits the independent 
organizations that are eligible to review the applications, and the FDA 
also has final authority whether to reject or accept the determination 
by the third party before the submission is cleared. The FDA would be 
in a better position to answer this question, but we are not aware of 
any situations in which a third party has recommended to the FDA that 
the agency clear an unsafe product. We also are unaware of any 
widespread compromising of patient safety in Europe, where non-
governmental third parties conduct all premarket reviews of medical 
devices.
    Question 8. Why did it take the FDA Centers so long to establish 
the dispute resolution procedure mandated by FDAMA? Do you have any 
idea when the Device Center's dispute resolution committee will hear 
its first dispute? Are companies willing to use such a procedure?
    Response. As I noted in my written testimony, the FDA's first 
response to this provision of FDAMA was to publish a direct final rule 
on June 16, 1998. Under this rule, the FDA would have permitted drug 
and device manufacturers to request review of scientific controversies 
by an appropriate advisory committee. However, the FDA ended up 
withdrawing this rule after our industry and others complained that the 
rule was not consistent with the intent of FDAMA. As the FDA eventually 
acknowledged, the rule did not contain critical information, such as 
the process for selecting members of an advisory committee convened to 
resolve a dispute, the timeframes for conducting the reviews, the 
standards for granting or denying a review, and the weight to be given 
to advisory committee recommendations.
    In the end, the FDA chose to allow each of its centers to develop a 
center-specific approach to implementing dispute resolution. For its 
part, the Center for Devices and Radiological Health (CDRH) has 
published a draft guidance document outlining how its dispute 
resolution process will work and has hired an ombudsman to oversee the 
workings of a Medical Devices Dispute Resolution Panel, which held its 
first organizational meeting in October 2000.
    On June 4, 2001, the CDRH dispute resolution panel was scheduled to 
hear its first case, but the meeting was indefinitely postponed. As I 
understand it, the meeting was postponed because the FDA and the 
company had major disagreements about materials that were distributed 
to panel members shortly before the meeting.
    I believe that companies are willing to use this procedure if they 
believe they will be guaranteed a fair hearing. With respect to the 
postponed June 4 meeting, the company involved may have been concerned 
that the materials the panel members received from the FDA would have 
biased the panel against the company and its case.
    For the most part, companies usually try to resolve disputes at a 
lower level by going through normal administrative channels or the 
recently established CDRH ombudsman's office. Nevertheless, it is 
important for companies to have a mechanism like this dispute 
resolution panel available, provided that the panel and its decisions 
are independent and free of any agency bias. We will continue to 
monitor the implementation of this FDAMA provisions and will report our 
findings to you.
    Question 9. Is the industry availing itself of the collaborative 
meetings, whether on a pre-IDE or pre-PMA basis, which are provided for 
in FDAMA? Have these meetings proved beneficial?
    Response. Overall, industry has found the collaborative meetings 
mandated by FDAMA to be productive and useful, although as I mentioned 
earlier, they have been underutilized to date in our opinion. Most of 
the meetings in which the FDA and industry have participated have 
resulted in agreements, although some of our members report that the 
FDA for some reason has been reluctant to engage in 180-day meetings on 
major premarket approval application (PMA) amendments.

                       Questions from Anna Eshoo

    Question 1. Despite extensive scientific evidence demonstrating 
serious risks associated with reprocessing of single-use medical 
devices--including several studies conducted by the Agency itself--FDA 
has failed to meaningfully enforce key patient safety provisions of the 
Food, Drug and Cosmetic Act. It took substantial Congressional and 
public pressure to force FDA to finally publish enforcement guidance on 
regulation of this potentially dangerous practice. Yet, I remain 
concerned that this guidance, while a step in the right direction, 
continues to permit the use of many unsafe reprocessed devices on 
American patients.
    Mr. Northrup, I know your organization has been actively involved 
in working with FDA to develop a strategy to regulate the reprocessing 
of single use medical devices. Would you comment on FDA's progress in 
implementing its strategy to regulate this practice?
    Response. On August 14, 2000, the FDA released a guidance document, 
titled ``Enforcement Priorities for Single Use Devices Reprocessed by 
Third Parties and Hospitals.'' The guidance document, if properly 
implemented, will require reprocessors of some single use devices to 
fulfill substantially the same pre-market submission requirements as 
original manufacturers of single use devices. While the guidance 
document represents a step forward in the enforcement of the Food, 
Drug, and Cosmetic Act (``FDC Act'') on some reprocessors, it also 
presents new risks to patient health and perpetuates the regulatory 
inequity between reprocessors and original manufacturers by exempting 
reprocessors from fulfilling premarket requirements for certain 
devices.
    According to the guidance document, FDA intends to subject 
reprocessed single use devices to pre-market submission requirements 
based on their original device classification (Class I, II, or III). 
Under this classification scheme, FDA and its expert panels have 
``exempted'' certain new devices from 510(k) and PMA requirements 
because these requirements were not deemed necessary to ensure the 
safety of the devices for one use. Instead, the FDA intends to extend 
blindly these pre-market exemptions to reprocessed devices even though 
the original expert panels never considered the reuse of these devices, 
and even though these exemptions will not consider the new questions of 
safety and effectiveness raised by reprocessing devices designed for 
single use only.
    The FDA broadly extends these pre-market exemptions to hundreds of 
reprocessed single use devices while at the same time admitting that 
many of these devices, although exempt (e.g., non-electric biopsy 
forceps), may present a greater risk to patients when reprocessed. The 
FDA's answer to this dilemma is to examine at some point in the future 
``high-risk'' devices such as non-electric biopsy forceps on a case-by-
case basis to determine whether the exemption should still apply. Thus, 
the FDA inappropriately presumes the safety and effectiveness of these 
reprocessed single use devices.
    Moreover, the FDA shifts the burden to original manufacturers who 
design, develop and manufacture these devices to demonstrate the need 
to revoke exemptions on a case-by-case basis rather than requiring 
reprocessors to meet the burden for obtaining an exemption or filing a 
510(k). This position is inconsistent with the FDC Act, the FDA's 
regulations, sound policy, and patient safety. The burden of 
affirmatively demonstrating safety should be placed on the party that 
always has the burden under the FDC Act: the party that wishes to 
market the device. Patient safety and consistent, sound policy, 
therefore, require that reprocessors meet the burden of demonstrating 
safety and effectiveness of a reprocessed single use device in a 510(k) 
or a petition for exemption.
    Question 2. Can you give me a specific example of a product where 
you feel that FDA has failed to take appropriate steps to ensure 
patient safety? What can FDA do in this instance to ensure the reuse of 
this product does not pose a public health risk?
    Response. A specific example of a product for which the FDA has 
failed to take appropriate steps to ensure patient safety is 
reprocessed single-use non-electric biopsy forceps. These devices are 
currently exempt under the new regulatory scheme, and reprocessors are 
not required to demonstrate their safety and effectiveness through the 
510(k) clearance process prior to placing these devices on the market.
    Non-electric biopsy forceps are used to obtain deep patient tissue 
samples in various gastroenterology procedures in order to diagnose the 
presence of such diseases as colon cancer, Crohn's, ulcerative colitis 
or Barrett's esophagus. Single-use biopsy forceps break the mucosal 
barrier and come in contact with the blood stream and are difficult, if 
not impossible, to thoroughly clean or adequately sterilize for safe 
reuse without adversely affecting the structural integrity of the 
device. The very design of non-electric biopsy forceps impedes adequate 
cleaning and sterilization after use. In addition, the harsh conditions 
of reprocessing diminish the performance and structural integrity of 
the device.
    Single-use non-electric biopsy forceps are comprised of two long, 
thin steel wires that are surrounded, at the distal end, by a 
lubricious-coated plastic sheath. The wires and inner sheath are 
located inside a tightly wound metal coil which is then encased in an 
outer polymer sheath up to 240 cm long with an outer diameter as small 
as 2.2 mm. These long, narrow lumens are one of the hallmark features 
that make this device difficult to reprocess. The coil that surrounds 
the inner plastic sheath creates many difficult-to-access interstices 
in which debris accumulates during use.
    The jaw assembly of the device often includes a needle for 
anchoring the biopsy into the mucosa. The needle is also used to stack 
biopsy samples for detainment in the jaw assembly. The needle directly 
penetrates the mucosal layer of the GI tract and should be considered 
in the same manner as all medical device ``sharps'' classification.
    Because biopsy forceps break the mucosal barrier and come in 
contact with the blood stream, sterility is critical. However, the 
results of several studies have consistently demonstrated that a 
significant number of reprocessed single use biopsy forceps contain 
residual debris and fall below the sterility assurance level 
established by the FDA as appropriate for most medical devices. 
Specifically, in Boston Scientific Corporation-sponsored studies 
performed by independent laboratories, more than 64 percent of 
reprocessed devices randomly selected from hospital shelves failed the 
sterility tests and over 94 percent tested positive for the presence of 
residual tissue.\1\ Furthermore, in studies conducted by the FDA's 
Office of Science and Technology using three types of single-use 
gastrointestinal biopsy forceps, researchers found that, in cleaning 
the devices with a sequence of bleach, ultrasonic bath with detergent 
and enzyme, and water rinse, residual water remained in the devices. 
This inability to dry the device lumen decreases the effectiveness of 
sterilization.\2\ Thus, even when debris can be removed from these 
devices, the existence of residual water compromises the ability to 
sterilize them.
---------------------------------------------------------------------------
    \1\ See BSC Citizen Petition, at 6-8 (FDA Docket No. 00P-1535) 
(Sept. 20, 2000).
    \2\ See CDRH, ``Reprocessing Single Use Biopsy Forceps for Reuse,'' 
Abstract for the 2000 FDA Science Forum from OST.
---------------------------------------------------------------------------
    In FDA's initial draft guidance to regulate the practice of 
reprocessing, FDA listed biopsy forceps on its list of products that 
are frequently reprocessed. Interestingly, due to concerns regarding 
the sterility and efficacy of the product after reprocessing, the 
agency classified reprocessed biopsy forceps as a Class III ``high-
risk'' product, a decision which, if implemented, would have subjected 
the reprocessed device to the agency's most stringent pre- and post-
market regulatory controls.
    In short, reprocessing of biopsy forceps designed and labeled for 
single use, with its potential for residual debris, non-sterility, and 
compromised functionality, presents an increased risk to patients. This 
risk necessitates rigorous review by the FDA via 510(k) clearance to 
ensure that these single-use devices are in fact safe and effective for 
reuse after reprocessing. The FDA must require reprocessors to provide 
data demonstrating the efficacy of cleaning and sterilization of biopsy 
forceps and verify their functionality before allowing these devices 
back into the marketplace. The FDA, therefore, must immediately revise 
its regulation that exempts all non-electric biopsy forceps from pre-
market notification procedures and require 510(k) clearance for these 
devices, prior to these reprocessed devices being placed on the market 
and used on a patient.
    Question 3. Mr. Northrup, you testified to the importance of 
``fair, predictable, and consistent regulatory actions'' during the FDA 
approval process. When we wrote FDAMA, we included a provision 
mandating that the evidence required for FDA approval be the ``least 
burdensome'' needed to meet safety and effectiveness standards. In your 
opinion, has the FDA implemented this ``least burdensome'' requirement 
in a timely manner?
    Response. In my opinion, the Agency has not implemented the ``least 
burdensome'' requirement in a timely manner. It took the FDA until May 
1, 2001, to release the draft guidance document on this subject. This 
delay of more than three years since the passage of FDAMA is a critical 
shortcoming of the agency's implementation efforts, as these provisions 
capture best the true spirit of FDAMA--ensuring that unnecessary 
regulatory requirements do not delay patients' access to new 
technologies.
    Upon review of the recent draft guidance document on ``least 
burdensome'', we believe it upholds the basic principles outlined in 
the FDAMA provisions, and we will be recommending to the FDA that they 
accelerate the finalization of this guidance.
                                 ______
                                 
               Children's Mercy Hospitals & Clinics
  Division of Pediatric Pharmacology and Medical Toxicology
                                                        7 June 2001
Hon. Michael Bilirakis
Chairman, Subcommittee on Health
U.S. House of Representatives
Committee on Energy and Commerce
Washington, D.C. 20515-6115
    Dear Congressman Bilirakis: Thank you for your letter of 01 June 
2001 concerning my testimony of May 3, 2001 to the Subcommittee on 
Health regarding the Food and Drug Modernization Act. It was truly a 
distinct honor and privilege for me to have been invited to share my 
perspectives and recommendations with the Congress pertaining to the 
pediatric provisions of this Act. I also sincerely appreciated the 
hospitality that was extended to me by you, the members of the 
Subcommittee on Health and the Committee staff as it made my experience 
both enjoyable and memorable.
    Enclosed with your letter was a list of three questions for me to 
consider and provide responses to. It is with great pleasure that I do 
so at this time. As per the instructions contained in your letter, each 
of the three questions and my responses to them are provided in the 
enclosed document.
    Again, thanks so much for inviting me to participate in the hearing 
on FDAMA and by doing so, affording me an opportunity to serve. If I 
can ever be of assistance to you and/or the other members of the 
Subcommittee on Health, please do not hesitate to call upon me.
            Sincerely,
                           Gregory L. Kearns, Pharm.D., FCP
   Chief, Division of Pediatric Pharmacology and Medical Toxicology
Encl.

    Question 1: In your testimony, you claim that ``in four short 
years, pediatric exclusivity has done more to improve the health and 
welfare of children than any other pediatric therapeutic initiative in 
the history of our country''. Could you explain the hazards of not re-
authorizing this legislation?
    Response: Failure to reauthorize the pediatric provisions of FDAMA 
would dramatically reduce the number and scope of pediatric clinical 
drug trials of marketed prescription drug products and thus, prevent 
the generation of objective, scientifically-based information required 
(and requested by physicians) to insure the safety and efficacy of drug 
treatment in neonates, infants and children. For example, since FDAMA 
was enacted, a total of 154 different therapeutic drug moieties have 
been the subject of 409 carefully controlled clinical investigations 
performed consequent to 189 formal written requests issued by FDA. 
These clinical investigations, all of which were conducted with the 
rigor that accompanies FDA oversight, have involved well over 50,000 
pediatric patients spanning in age from birth through adolescence with 
a variety of common (and potentially serious) medical conditions (e.g., 
asthma, hypertension, diabetes, pain, anxiety, sepsis) seen in 
pediatric and adult patients alike. Thirty three of these drug products 
studied in pediatric patients under the provisions of FDAMA have been 
granted extended marketing exclusivity; 17 of which have produced 
significant changes in product labeling (i.e., the prescribing 
information made available to physicians) that have the potential to 
prove both the safety and efficacy of these drugs in infants, children 
and adolescents. In stark contrast, only 11 drugs were formally (i.e., 
under the aegis of the FDA) studied in pediatric patients in the 10 
year period preceding the enactment of FDAMA. In conclusion, failure to 
renew FDAMA and its pediatric provisions would return infants and 
children to the status of ``therapeutic orphans'' and thus, deny them 
the same rights to drug treatments which are proven to be safe and 
effective as we afford adults through the formal process of drug 
development mandated by the FDA.
    Question 2: Is it your belief that FDA's Written Requests for 
pediatric studies can be overly burdensome and impractical at times, 
resulting in manufacturers deciding not to conduct pediatric studies?
    Response: In some instances, this has indeed been the case; the 
reasons for which are multifactorial. Some of these reasons are as 
follows:

 The process of consultation, collaboration and negotiation 
        between a pharmaceutical sponsor and the FDA that ultimately 
        results in the issuance of a Written Request may take anywhere 
        from 6 to 18 months. For drug products where patent life is 
        limited with respect to when the Written Request is issued, the 
        sponsor may not have sufficient time to conduct the required 
        pediatric studies in a manner that is safe (for the subjects) 
        and ethically defensible.
 The FDA may require the study of a drug in a specific subgroup 
        of pediatric patients (e.g., neonates and infants) despite the 
        fact that the drug product being considered for study under a 
        Written Request may not have substantial therapeutic use in 
        these particular patient groups. This markedly increases the 
        time required to complete a pediatric clinical study program if 
        the FDA mandates that for any drug that is the subject of a 
        Written Requests, the entire pediatric age range (i.e., birth 
        through adolescence) must be included in the clinical trials.
 The decision by the FDA whether or not to include formal 
        studies to prove drug efficacy (e.g., phase III clinical 
        trials) has been liberally interpreted by the Agency in several 
        instances by the Agency despite the fact that a pharmaceutical 
        company may not be seeking an indication-based label claim 
        (i.e., a recommendation for treatment of a specific pediatric 
        disease/condition) as part of a pediatric study program 
        conducted under a formal Written Request. In many instances, 
        ``bridging studies'' to determine age-specific drug dose, 
        provide demonstration of drug effect and provide limited 
        safety/tolerability information are more than sufficient to 
        produce significant improvements in product labeling and 
        thereby, enhance the safe and effective use of drugs by 
        pediatric practitioners. These studies can generally be 
        accomplished without compromise in relatively small numbers of 
        well selected patients and in a reasonable time frame (e.g., 
        12-18 months) as opposed to the 2 to 3 years that generally is 
        required to conduct clinical trials that are sufficiently 
        designed and powered to prove drug efficacy. To insure the 
        treatment benefits of FDAMA for children and that no more 
        pediatric patients than is absolutely necessary are subjected 
        to the risks and rigor associated with any clinical trial, the 
        FDA must only require pharmaceutical companies to obtain 
        information that is required to fill the information gaps 
        necessary to improve pediatric drug use. The Agency must not be 
        in a position to complicate the process of pediatric clinical 
        drug trials by asking pharmaceutical companies and in turn, 
        clinical investigators and the parents/guardians of the 
        research subjects (i.e., patients) to provide data that may 
        well be ``interesting'' but because of study limitations, are 
        inconclusive. Many of the aforementioned problems/challenges 
        during this first chapter of FDAMA can be minimized or 
        prevented by creation of an Office of Pediatric Therapeutics 
        within FDA and insuring that this new Office is appropriately 
        funded and staffed so that it might truly serve as a focal 
        point of expertise and operational capability for all pediatric 
        clinical trials being considered and/or reviewed by the Agency.
    Question 3: In its report to Congress, the FDA noted that the 
pediatric exclusivity provision does not create adequate incentives for 
conducting studies in newborn infants. Why do you believe neonates are 
not being studied as much as other pediatric age groups? What can be 
done to ensure that neonates are studied in the future?
    Responses: Neonates (i.e., infants less than one month of life) 
represent a small segment of the entire pediatric population and 
account for a relatively small proportion of pediatric drug use in 
general. Despite this fact, approximately 20% of all pediatric clinical 
drug trials conducted as part of a Written Request issued by FDA in the 
first four years of FDAMA involved neonates. As well, with the possible 
exception of drugs used to treat infections (e.g., antibiotics, 
antifungal agents, antiviral agents), the 10 most common conditions 
that afflict neonates are managed with fewer than 25 different 
therapeutic drugs. Thus, relative to older infants and children, the 
therapeutic ``need'' for drug products in the neonatal population is 
focused and somewhat limited in scope. Hence, I know of no evidence 
suggesting that neonates are routinely being excluded from 
participation in clinical drug trials
    Clearly, the ``need'' to include neonates in a clinical trial 
should be driven by a demonstrated therapeutic need for a given drug 
product in this particular pediatric sub-population. It should not be 
driven by some mandate to include them simply because they are part of 
the pediatric population when patterns of drug use and/or clinical 
standards of care do not support substantial use of a given drug in 
neonates. When there is a therapeutic need for a drug in the neonatal 
population, it is imperative that these patients be included in 
clinical trials that are appropriately designed for neonates, taking 
into consideration that these subjects will be sick patients that have 
a host of physiologic and disease-associated constraints that influence 
what can and should be done. Appropriate scientific oversight afforded 
by effective collaboration between pharmaceutical companies, FDA and 
academic experts will insure that neonatal studies are done only when 
therapeutically, necessary and in a manner that is safe, effective and 
scientifically rigorous so as to produce the kind of information that 
clinicians who care for sick newborn infants demand and deserve.
                                 ______
                                 
                                      Eli Lilly and Company
                                                       June 7, 2001
Michael Bilirakis
Chairman--Subcommittee on Health
Committee on Commerce and Energy
U.S. House of Representatives
Washington, DC 20515-6115
    Dear Chairman Bilirakis: On behalf of the Pharmaceutical Research 
and Manufacturers Association (PhRMA) of America, I express our 
appreciation for the opportunity to share our perspectives on the Food 
and Drug Modernization Act (FDAMA) at the May 3rd hearing of the 
Subcommittee on Health.
    In response to your correspondence of June 1, 2001, including 
questions from your members, the attached material represents PhRMAs 
position on those matters in the format which you stipulated, and is 
submitted within the June 10, 2001 deadline which you requested.
    Please contact Drs. Bert Spilker or Alan Goldhammer at PhRMA or me 
directly should there be any questions about this or other material, or 
if we can be of any other service.
            Sincerely,
                                 Tinothy R. Franson, MD    
                              Vice President, Clinical Research    
                                        and Regulatory Affairs-U.S.
Enc.

    Question #1: Some today have claimed either in their written or 
oral testimony that by allowing drugs to be introduced in the U.S. 
before the rest of the world,, somehow the American people are being 
used as ``guinea pigs.'' I believe it's better to have drugs introduced 
in the U.S. first. Do you agree?
    Response to #1: PhRMA strongly agrees that American patients 
benefit from first global approvals in the United States. Most of the 
research on new drugs is conducted in the United States and in the 
past, notably pre-PDUFA American patients have had to wait, sometimes 
for significantly long periods of time before they could benefit from 
these new medicines. New drugs provide incremental or breakthrough 
advantages to patients in need, and it is clearly in the interest of 
public health to expedite such access. The volume and quality of 
information provided by NDA (new drug application) sponsors to FDA, and 
the degree/quality of scrutiny provided by FDA for such submissions 
continue to be the global standard. Over the past decade, FDA has 
consistently added new safety and efficacy requirements for drug 
researchers to study during the development process indicating an 
enhancement of the regulatory process rather than any diminution as 
their critics might have you believe. Finally, all newly approved drugs 
have a justification summary (termed ``Integrated Summary of Benefits 
and Risks'') that summarizes the attributes of new products to make 
assessments transparent.
    Question #2: Have the reforms contained within FDAMA led to better 
collaboration between the FDA and the regulated industry?
    Response to #2: FDAMA has remarkably improved multiple aspects of 
drug development processes, including roles and responsibilities for 
sponsors and FDA. As such, the regulated industry and FDA have worked 
toward improved, clear, commonly defined (improved) standards that the 
respective parties execute independently. Therefore while FDA and 
industry representatives collaborated with Congressional staff in 1996-
97 to refine standards, resulting in FDAMA, and while industry and FDA 
may collaboratively plan studies to ensure expectations of all 
stakeholders, actual development work and reviews are pursued 
independently to assure process integrity.
    Question #3: Since FDAMA was enacted, there have been 108 requests 
for designation as a ``fast track'' drug, and 69 of these requests were 
granted. Has this procedure led to quicker approval for drugs intended 
to treat serious or life-threatening diseases?
    Response to #3: While we have observed that there have been some 
rapid approvals of oncology and AIDS medications, PhRMA is not in a 
position to generalize how effective this provision has been. We 
suggest that the Committee may want to contact the FDA to obtain the 
actual approval data.
    Question #4: Part 1--How has the pediatric exclusivity provision 
affected drug companies internal decisions about whether to test new 
molecular entities in pediatric populations?
    Response to #4: Part 1--There is no question that this provision 
has had aprofound positive effect on the pharmaceutical industry. Many 
of the studies required new formulation development to cover younger 
age ranges of patients, as well as the development of novel clinical 
trial designs and tools to evaluate safety and/or efficacy. Requests 
have covered drugs in a wide range of therapeutic areas from common 
problems such as treatment of fever and simple skin infections, to 
cardiac disease, endocrine problems, gastrointestinal disorders, 
serious infections including HIV, seizure and other neurologic 
disorders, and management of pain. Studies have included pediatric 
patients across all ages. The range of conditions addressed, the 
variety of drugs being studied, and the nature of the scientific data 
requested all suggest that FDAMA is successfully addressing unmet 
therapeutic needs in children. No other approach, legislative or 
regulatory, has had such a profound impact on the evaluation of 
medicines in children.
    Question #4: Part 2--Has it elevated pediatric drug development in 
the eyes of Research and Development directors?
    Response to #4: Part 2--Yes it has. It is critically important to 
remember that research resources are finite. Pediatric studies are 
always in competition with studies of important new medicines for large 
numbers of adult patients. By establishing a financial incentive, 
Section 111 of FDAMA raises the priority for pediatric studies. By 
focusing on the needs of children, and recognizing fundamental 
impediments to pediatric drug development, the legislation is 
accomplishing the goals set forth by Congress.

                       Question from Bart Stupak:
    Dr. Franson, in your testimony, you mentioned that post-market 
surveillance is mandatory. It is actually voluntary. Would you support 
mandatory postmarket surveillance?
    Response to Bart Stupak:
    The testimony comment was to illustrate that post-market 
surveillance ``activities'' regarding drug safety are mandatory--that 
is, any sponsor holding an approved NDA is required by FDA regulations 
to capture and report any and all post-approval adverse events to FDA 
in timely fashion. 21 CFR Part 314.80 outlines the specific regulatory 
requirements that pharmaceutical companies are required to follow. 
Companies must report any serious or unexpected adverse event to the 
FDA within 15 days of receiving such information. Companies also follow 
up these reports to better understand what has occurred with the drug. 
There is also a requirement to submit, at quarterly intervals during 
the first three years the product is on the market and annually 
thereafter, any adverse drug experience that doesn't fall into the 
serious or unexpected category. Furthermore, PhRMA companies devote 
extensive professional staff to not only adverse event collection--but 
also event trend analysis and proactive, independent safety labeling 
changes.
    There are also selected circumstances in which various extents of 
post-market surveillance programs (from simple registries to restricted 
access) may be useful, depending on the benefit/risk characteristics of 
a product. It would not be advisable to mandate post-introduction 
surveillance studies for all--or most--new products without a well-
defined plan, expected yield and patient cost-benefit projections 
supportive of such interventions.
                                 ______
                                 
          Department of Health & Human Services    
                                  Public Health Service    
                               Food and Drug Administration
                                                      June 29, 2001
The Honorable Michael Bilirakis
Chairman
Subcommittee on Health
Committee on Energy and Commerce
House of Representatives
Washington, D.C. 20515-6115
    Dear Mr. Chairman: Thank you for your continued interest in the 
Food and Drug Administration's (FDA or Agency) successful 
implementation of the Food and Drug Administration Modernization Act 
(FDAMA). This letter is in response to the Committee's additional 
questions raised in your letter of June 1, 2001. Thank you for making 
this a part of the public record. The response to question 24 contains 
information not releasable to the public and we ask that the Committee 
not make public or publish that information.
    Your questions will be restated, followed by our response.
    Question 1. What impact have user fees had on the information 
technology systems within FDA? Are we closer to a paperless system of 
review?
    Response. As you know, FDA collects user fees for a limited number 
of product review activities primarily drug and biologics review and 
color additive petitions. FDA's Center for Drug Evaluation and Review 
(CDER) has been able to improve its infrastructure to accept more 
electronic applications. Following is a summary of the initiatives that 
CDER has undertaken to be able to move to a paperless system.

 Expanded the Electronic Document Room (EDR) to manage the 
        receipt and handling of full electronic new drug applications. 
        Around 75 percent of original new drug applications received in 
        CDER now include sections that conform to the electronic 
        submission guidance. In Fiscal Year (FY) 2000, CDER received 
        over 500 electronic submissions, including full new drug 
        applications, supplemental new drug applications (NDA), and 
        amendments. There has been a 50 percent decrease in the average 
        number of paper volumes per NDA submission since the start of 
        electronic submissions in 1997.
 Accepting expedited postmarketing adverse event reports 
        without attachments in electronic format. A number of sponsors 
        have successfully sent reports electronically that have been 
        directly transferred to a database. The Agency is also 
        preparing regulations to require all adverse event reports from 
        industry to be submitted electronically.
 Implemented the Division Files System, which provides document 
        management, tracking, archiving, electronic signature, and 
        search capabilities for internally generated review documents.
 Developing guidance for submission of postmarketing expedited 
        safety reports, drug registration and listing information, 
        investigational new drug (IND) applications; NDA annual 
        reports, drug master files (DMF) in electronic format.
 Finalizing a proposed rule that would require NDAs to submit 
        final printed labeling content electronically to the Agency for 
        review. Interested parties will have an opportunity to comment.
    Since 1997 user fees have significantly impacted the Information 
Technology (IT) systems in FDA's Center for Biologics Evaluation and 
Review (CBER). User fee support has made it possible for CBER to have 
the technology infrastructure in place to store, retrieve and review 
electronic documents. Before the IT investments of the second 
reauthorization of the Prescription Drug User Fee Act (PDUFA), CBER's 
ability to receive and use electronic submission material was non-
existent. CBER's electronic mail (e-mail) system did not support 
attachments and staffs found themselves limited by antiquated and 
sometimes obsolete technology. Most CBER computers could not support a 
business software suite, Internet browser, or other common place 
business products.
    The FDAMA and PDUFA reauthorization mandates the creation of a 
paperless submission and review environment within FDA by the year 
2002. In accordance with the Paperwork Reduction Act (PRA), Information 
Technology Management Reform Act (ITMRA), Electronic Freedom of 
Information Act (E-FOIA), and National Performance Review (NPR), FDA 
has created strategic plans and programs to reach the intended goals. 
Following is a summary of the CBER projects initiated to meet the goal 
of a paperless environment in 2002.

 An EDR has been designed and built to support the required 
        performance goals and international standards, enabling a 
        paperless submission and review environment. This electronic 
        repository was constructed using the requirements of CBER's 
        Managed Review process, which defines a systematic approach to 
        submission review. The EDR provides an electronic receipt point 
        for volumes of electronic submission material, the capability 
        to securely view regulatory submissions, the ability to 
        communicate electronically with Industry, and the ability to 
        manage electronic records and archiving of regulatory 
        submissions.
 To meet the electronic submission review timetables and 
        milestones, a network, software and computer infrastructure was 
        constructed. This infrastructure is standardized across the 
        Agency and has increased the data transfer speed from 1.45mbs 
        to 100mbs. In addition, redundancy has been added to the 
        network to ensure reliability.
 CBER issued Biologics License Application (BLA) regulations 
        and guidance to industry through the Federal Register 
        (``Biological Products Regulated Under Section 351 of the 
        Public Health Service Act: Implementation of the Biologics 
        License; Elimination of the Establishment License and Product 
        License,'' 10/20/99) Existing Product License Applications 
        (PLA) and Establishment License Applications (ELA) or their 
        Supplements were merged into a single BLA as a consequence of 
        the final rule since it provided that applicants who already 
        had an approved ELA and PLA for a product would not be required 
        to make additional submissions to comply with the new 
        requirements.
 A new Regulatory Management System to track and report on BLA 
        status was developed. This system was designed to satisfy new 
        business rules and approximately 900 requirements associated 
        with BLAs and to merge pre-licensing and licensing components 
        of an older legacy system. BLAs replace ELAs and PLAs that have 
        been submitted to CBER separately in the past.
    Today, CBER's entire workflow process has changed with the 
technological enhancements made possible by user fees. CBER now uses a 
robust e-mail system as a part of its standard software suite and has 
the computer and network infrastructure to support a host of new 
systems developed specifically to manage submission material and help 
CBER meet its goal of a paperless review environment in 2002. User fees 
made it possible for FDA to develop guidance documents and databases to 
track the status of submission reviews. As a result, the review process 
is well defined, accountable, and scientifically sound. Since 1994, FDA 
has submitted an annual Performance and Financial report to Congress on 
progress in meeting performance goals and the use of fees. (See http://
www.fda.gov/oc/pdufa/reports.html.)
    For FDA's Center for Food Safety and Applied Nutrition (CFSAN), the 
only user fees authorized to be collected involve its Color 
Certification Program. The fees are collected to certify color batches 
and enable CFSAN to keep the IT systems for the Color Certification 
Program current and state-of-the-art. The Color Certification Program 
has developed a database system that allows Agency analysts to enter 
analyses of color batches into the Color Certification Tracking System 
(CCTS) as they are completed. FDA's CCTS provides industry with real-
time information about their color samples as they are being processed. 
The CCTS also provides the industry with timely final certification 
data that allows them to sell a color additive days before they receive 
the hard-copy certificate. CFSAN is working to develop in 2002 an 
automated system that will allow industry to submit electronically its 
requests for certification of color batches.
    The medical device program does not have user fees, however, the 
Agency encourages device manufacturers to provide device submissions 
electronically. The Center for Devices and Radiological Health (CDRH) 
received 113 electronic submissions in FY 2000. Instructions for 
submitting electronic submissions can be found on FDA's home page at 
the address http://www.fda.gov/cdrh/elecsub.html.
    The CDRH does, however, under its radiological health statutory 
charge, collect user fees as part of the Mammography Quality Standards 
Act (MQSA) of 1992. The collection of MQSA user fees has enabled the 
program to develop and maintain specialized databases (Mammography 
Program Reporting Information System [MPRIS]) that track inspections, 
inspection results, and facility billing for the approximately 9,700 
facilities that are inspected annually. Using the MPRIS database, 
findings and trends can be analyzed and used for program management. 
User fees allowed the division to procure the services of an IT 
contractor to assist in the design, development, and support of the 
system. Thus, FDA was able to meet very tight statutory deadlines, 
without utilizing already overburdened CDRH resources. A laptop and 
printer are used on site by each inspector to record inspection data, 
upload to headquarters, and leave a post inspection report with the 
facility.
    Question 2. In January of this year, the FDA issued a glowing 
report in favor of reauthorizing the pediatric exclusivity provision. 
In the report, FDA claimed that ``the pediatric exclusivity provision 
has done more to generate clinical studies and useful prescribing 
information than any other regulatory or legislative process to date.'' 
Why has this provision proved so successful when others have failed?
    Response. We believe this provision has done more to generate 
clinical studies and useful prescribing information for the pediatric 
population than any other regulatory or legislative process to date 
because the legislation provides financial incentives to the sponsors. 
Even though this provision has been successful, there are gaps in the 
success story we would like to bring to your attention as follows:

 Exclusivity is granted for submitting pediatric studies not 
        for label changes incorporating pediatric information. Thus, 
        there have been some delays in getting information in drug 
        labels, particularly adverse information.
 There are drugs with no remaining patent or exclusivity that 
        are not eligible for the financial incentive that makes it more 
        difficult to obtain pediatric studies.
 Studies in some of the youngest children, particularly 
        newborns and young infants, are often delayed due to scientific 
        and ethical reasons. Obtaining these studies is difficult, as 
        there is no sufficient, additional financial incentive.
    Question 3. As of today, 28 drugs have received pediatric 
exclusivity, and 18 of these have had pediatric label changes. Out of 
the ten, which have not had label changes, is it expected that many if 
not all of these will eventually have label changes?
    Response. We believe that eventually most of the drugs that have 
been granted exclusivity will have label changes. Since the grant of 
pediatric exclusivity is not tied to a requirement that label changes 
be made, there may be cases in which information will not make it into 
the label. In FDA's experience, delays in obtaining label changes are 
more likely when the study has produced negative information about the 
drug's use in children. Delays in getting this kind of information into 
the drug label may jeopardize children's health.'
    Question 4. In its January 2001 Report the FDA claimed that the 
pediatric exclusivity provision added one-half of one percent to the 
national pharmaceutical bill. The FDA also found that the provision 
could lead to substantial health care savings due to lower 
hospitalization rates for children. Is it possible that the pediatric 
exclusivity provision may in fact save health care dollars, like the 
Tufts Center for the Study of Drug Development suggested?
    Response. We believe that the benefits of the pediatric provision 
include savings of health care dollars due to lower hospitalization 
rates. The lower hospitalization rates can be predicted from the 
significant dosing and safety information already obtained and 
incorporated in the first 18 products labeled with pediatric use 
information. For example, the information showing proper dosing for 
gabapentin for children three years to 12 years old should result in 
fewer seizures and the need for fewer additional medications. The 
appropriate dosing of fluvoxamine will lead to fewer medication changes 
and potentially the prevention of suicide attempts in adolescents 
because of poorly controlled obsessive compulsive disorder. For 
etodolac, patients with juvenile rheumatoid arthritis will experience 
better relief of their pain and improved mobility now that we know 
children need higher doses than adults do. While we do not have 
sufficient information to quantify these benefits, it is theoretically 
possible that the savings from these benefits are greater than the 
costs to consumers, pharmacists, and generic drug companies.
    Question 5. The 9th Circuit Court of Appeals recently held pharmacy 
compounding provisions of FDAMA unconstitutional due to their 
restrictions on commercial speech. Will the FDA challenge this decision 
all the way to the Supreme Court? If not, will it enforce the FDAMA 
provisions outside of the 9th Circuit?
    Response. As you know, on February 6, 2001, the U.S. Court of 
Appeals for the Ninth Circuit issued a ruling. They affirmed in part 
and reversed in part a decision of the U.S. District Court for the 
District of Nevada involving a challenge to the constitutionality of 
two speech-related restrictions in section 503A of the Federal Food, 
Drug and Cosmetic (FD&C) Act (pharmacy compounding).
    Section 503A, which was enacted as part of FDAMA, exempts 
compounded drugs from the FD&C Act's new drug approval, adequate 
directions for use, and good manufacturing practice requirements if 
specified conditions are met. The provisions at issue provide that in 
order to qualify for the exemption, the compounded drug may not be 
based on a solicited prescription, section 503A(a), and the pharmacy, 
pharmacist, or physician may not advertise or promote the compounding 
of a particular drug, class of drug, or drug type, section 503A(c).
    The enforcement of these two conditions has been enjoined since 
December 18, 1998, although the rest of section 503A remained in 
effect. The appellate court agreed that section 503A's restrictions on 
commercial speech violate the First Amendment. The appellate court, 
however, concluded that the speech restrictions in section 503A(a) and 
section 503A(c) may not be severed from the rest of the provisions in 
section 503A, and held that section 503A is invalid in its entirety. 
The court's mandate issued on May 7, 2001. As a result, section 503A is 
invalid in the States and territories that comprise the Ninth Circuit 
(California, Oregon, Washington, Arizona, Montana, Idaho, Nevada, 
Alaska, Hawaii, Guam, and the Northern Mariana Islands).
    The Solicitor General's Office in the Department of Justice is 
responsible for determining whether petitions for certiorari should be 
filed in cases involving constitutional challenges to Federal statutes. 
The matter is under consideration, and the deadline for filing a 
petition for certiorari in this case is July 26, 2001. Because the 
question of Supreme Court review remains pending, FDA has not yet 
determined how the Ninth Circuit's decision will affect FDA's 
enforcement of section 503A in the States and territories outside the 
Ninth Circuit.
    Question 6. FDAMA allowed for data from one adequate and well-
controlled clinical investigation to serve as substantial evidence of a 
drug's effectiveness. Are you aware of any instance in which only one 
clinical trial was used to prove effectiveness?
    Response. FDAMA allowed for data from one adequate and well-
controlled clinical investigation and confirmatory evidence to serve as 
substantial evidence of a drug's effectiveness. CDER and CBER have 
approved several products based on this provision.
    For example, CDER has approved:

 Lamictal (lamotrigine) was approved on August 24, 1998, for 
        the treatment of Lennox-Gastaut Syndrome based on a single 
        adequate and well-controlled trial and confirmatory evidence.
 Femara (letrozole) was approved on January 10, 2001, as a 
        first line treatment of postmenopausal women with hormone 
        receptor positive or hormone receptor unknown locally advanced 
        or metastatic breast cancer on the basis of a single, adequate 
        and well-controlled trial and confirmatory evidence.
    In order to meet the requirements of FDAMA, FDA issued a Guidance 
for Industry entitled, ``Providing Clinical Evidence of Effectiveness 
for Human Drug and Biological Products.'' This guidance demonstrates 
FDA's willingness to work with sponsors to help them plan drug 
development programs that are sufficient to establish effectiveness 
without being excessive in scope.
    CBER has approved:

 TNKase (Tenecteplase, licensed June 2, 2000) for reduction of 
        mortality associated with acute myocardial infarction.
 Synagis (Palivizumab, licensed June 19, 1998) a monoclonal 
        antibody indicated for preventing serious lower respiratory 
        tract infections caused by respiratory syncytial virus (RSV) in 
        premature infants and those with lung disease.
    Question 7. It seems that the drug manufacturing changes provisions 
of FDAMA have been used extensively by both drug and biologics 
manufacturers. Is it your belief that this will reduce the cost of 
producing drugs without compromising safety and effectiveness?
    Response. Yes, we believe that the manufacturing changes provision 
has allowed the industry to produce products more efficiently thereby 
reducing costs, without compromising the safety of the products.
    Question 8. Has there been much dissemination of off-label 
information pertaining to drugs and devices, or has litigation 
discouraged this?
    Response. We do not have a systematic method to track the trends in 
the dissemination of off-label information and, therefore, do not know 
if dissemination of this information has been discouraged.
    Question 9. Recently the FDA finally came out with its ``least 
burdensome'' Draft Guidance which should lead to more predictability in 
medical device reviews because FDA must demand no more than the ``least 
burdensome'' scientific proof for effectiveness. Why did it take the 
FDA three and one-half years to develop this Draft Guidance when it was 
such an integral part of FDAMA?
    Response. The recent draft guidance that FDA issued is the latest 
of a number of documents the Agency has shared with the public to 
describe its approach to implementing the principles and concepts of 
the least burdensome provisions. Earlier documents were revised and 
modified in response to industry concerns and this latest draft 
guidance is partly the result of Agency participation in an industry-
working group. Although this draft guidance was issued recently, CDRH 
has been working to put least burdensome processes and procedures into 
place every since FDAMA was passed. See response to number 10 below.
    Question 10. What steps will FDA take to ensure that device 
reviewers are consistently implementing the least burdensome concept 
when conducting device reviews?
    Response. The Agency has worked diligently with industry and staff 
toward the goal of obtaining the right information to support 
submissions--no more, no less. Activities have included a CDRH-wide 
working group on least burdensome issues, development of a web page 
containing up-to-date information, http:\\www.fda.gov/cdrh/modact/
leastburdensome.html, a CDRH-wide (the first) web cast was held to 
engage staff and training has been held for all device review staff and 
advisory panel members.
    Furthermore, CDRH internal tracking documents and correspondence 
have been changed and continued to be updated to embrace this concept, 
a working level appeals process has been established and a 
questionnaire for customer feedback has been developed. Finally, as you 
stated, the draft guidance entitled, ``The Least Burdensome Provisions 
of FDA Modernization Act of 1997: Concept and Principles'' has been 
posted on the web.
    Question 11. Since passage of FDAMA, how many medical devices have 
been assigned expedited review? What steps do you take internally to 
ensure that these devices designated for priority review receive the 
resources necessary for a timely review?
    Response. The Agency continues to maintain a high level of 
premarket performance with all of its application types. Of the 
applications reviewed, many involved medical breakthrough devices that 
will provide significant improvements in-patient care. Since passage of 
FDAMA, CDRH has assigned 26 applications for expedited review. FDA 
always places special emphasis on getting these novel products through 
the process as soon as possible without compromising patient safety.
    Question 12. Has the FDA taken advantage of its authority under 
FDAMA to contract out to appropriate experts parts of submission for 
review of devices? If the FDA has not contracted out part of device 
reviews, why not?
    Response. When funding levels and circumstances permit, FDA has 
used its authority to contract with outside technical expertise when 
such expertise was needed. For example, in FY 2000, FDA hired 70 
Special Government Employees to participate on the medical devices 
advisory committees. FDA has also contracted with the Oak Ridge 
Institute for Science and Education fellowship program to recruit 
experts to participate in reviews. The Agency will continue to contract 
with other experts when the need arises.
    Question 13. The FDA just recently expanded the third-party review 
provisions of FDAMA to every class 11 device allowed under the law. Why 
was this decision only recently made? Is it true that since FDA made 
this change the number of companies seeking third-party review has 
increased?
    Response. FDA met all its statutory requirements in implementing 
the third party provisions of FDAMA. This included publishing standards 
for third party review, reviewing applications for third party review, 
accrediting third party reviewers, and publishing guidance about 
devices that were eligible. FDA determined that the initial list of 
devices should be those that met the statutory criteria and had 
guidance or consensus standards that could support review. This was to 
develop experience with the program to ensure that there was 
consistency among third party reviewers and timely review by FDA 
following the third party recommendation. FDA has been working with 
industry trade groups to encourage wider use of this provision. Since 
implementation, devices eligible for third party review has grown to 
674 eligible devices. Preliminary numbers for 2001 indicate that the 
number of third party reviews will increase to about 90.
    Question 14. Could you explain in greater detail how the Sentinel 
System for medical device user facility reporting worked, and whether 
this pilot pro gram proved effective?
    Response. The pilot for the sentinel system was called DeviceNet. 
After recruitment of a purposeful sample of user facilities in the 
Washington D.C. metropolitan area, North Carolina and Boston, eighteen 
hospitals and six nursing homes agreed to participate in the pilot. 
Facilities were trained in the requirements of the Safe Medical Devices 
Act (SMDA) and in participation in the project. Barriers to reporting 
(identified in earlier focus groups) were eliminated or reduced as much 
as possible. For example, all reports went to a third party 
(contractor); the participants were given regular feedback in the form 
of a newsletter, direct contact with FDA as desired, and other FDA 
communications; participants were allowed to report via phone and given 
assistance in completing the form and the coding. Participants were 
asked to report as required under SMDA (mandatory reports) but also to 
report incidents that had the potential for harm (near miss).
    During the year long pilot, CDRE received approximately 300 
reports, but only from the hospitals. This averaged about 16 reports 
per hospital. (Currently, FDA receives, on average, less than one 
report per hospital per year.) About half of the reports were 
``voluntary''--not required under SMDA--and a third of those 
``voluntary'' reports were considered ``urgent'' as rated by FDA nurse 
analysts. This suggested that eliminating or reducing barriers to 
reporting could increase reports and that voluntary reports are 
important for FDA in carrying out our public health mission.
    These results and additional detail and discussion can be found in 
the Agency's report submitted to Congress in August of 1999, 
``Designing a Medical Device Surveillance Network.'' (This report is on 
FDA's website at http://www.fda.gov/cdrh/postsurn/medsun.html). CDRH 
has also done some pilot work to further investigate how to overcome 
the apparent resistance of nursing homes to reporting to FDA.
    In addition, the Medical Device Surveillance Network (MeDSuN) is 
being designed to benefit from what we learned in the DeviceNet. We 
hope to begin data collection on this project in 2002.
    Question 15. Is it FDA's opinion that greater collaboration between 
FDA and industry has in any way compromised patient safety? Do you feel 
that the collaboration embodied within FDAMA has led to better 
decision-making within FDA?
    Response. Greater collaboration between FDA and the industry has 
been very helpful. It ensures that the industry research is 
scientifically sound, relevant to the regulatory issues that must be 
addressed, and is consistent with human subject projection 
requirements. It provides FDA with a better understanding of the 
scientific base used in regulatory decisions. Such collaboration has 
enhanced consumer protection and safety; not compromised it.
    Increased collaboration has resulted in clinical studies that are 
more likely to yield readily interpretable data, thereby limiting the 
number of individuals needed for study. Such collaboration helps assure 
adequate attention to safety issues; for example, because the numbers 
of meetings with manufacturers has increased, the quality of 
submissions has improved.
    Good decision making relies on the best available information and 
on a clear understanding of the issues. To the extent that FDAMA has 
improved communication between industry and the Agency, it has 
facilitated Agency decisions.
    Collaboration also has enhanced patient safety and led to better 
management of risk while still providing benefits to consumers. The 
Agency has collaborated with industry on a case-by-case basis to 
develop systems to manage risk for drugs that have higher risk 
potential but clearly offer benefits to patient groups that have no 
alternative therapies available.
    One example would be Propulsid (cisapride) that was approved in 
1993 for the treatment of nocturnal heartburn due to gastroesophageal 
reflux disease (GERD). The sponsor worked with the Agency to implement 
labeling changes and develop educational programs to help assure the 
safe and appropriate use of Propulsid after receiving reports of 
serious adverse events associated with the use of the drug. After 
seeing no decrease in adverse events after these changes had been 
implemented, in April 2000 the sponsor announced that the product would 
no longer be available through pharmacies after August 2000. This 
provided physicians and patients time to explore other treatment 
options to control the patient's disease. The sponsor and the Agency 
collaborated on structuring a program whereby patients who failed other 
treatment options and who met the criteria would be eligible to receive 
the product through an investigational limited access program.
    Question 16. Are you aware of any petitions for health claims filed 
after passage of FDAMA which were published in the ``Federal Register'' 
but not finalized within 18 months of FDA's receiving the petition?
    Response. To date, all health claim petitions filed after passage 
of FDAMA for which a proposal was published in the Federal Register 
have been finalized within 18 months of FDA's receipt of the petition. 
Two such petitions are currently pending. Both were submitted to FDA in 
February 2000. Because of their similarity of subject matter and 
proximity of submission, they are being handled in a single rulemaking 
action. FDA published an interim final rule for both of these 
petitions, rather than a proposal. Hence, manufacturers are currently 
able to use the claim even though rulemaking has not been completed.
    Question 17. In early 1999 the FDA issued and advanced notice of 
proposed rulemaking to revise regulations regarding the labeling of 
foods treated with ionizing radiation. When will the FDA undertake and 
complete the rulemaking on labeling of irradiated foods?
    Response. FDA received over 5500 comments on the labeling Advance 
Notice of Proposed Rulemaking (ANPR) and is currently in the process of 
evaluating the comments. The Agency intends to conduct focus groups and 
gather information from other contemporary surveys and studies. The 
purpose is to help the Agency better understand how the current label 
is perceived by consumers and what messages would be perceived as 
properly informative but not as a ``warning,'' with the goal of 
developing alternative labeling that can reasonably be proposed. If 
these efforts are successful, FDA's goal is to develop a proposed rule 
on food irradiation labeling.
    Question 18. Do you believe the ``radura'' symbol which is used on 
irradiated foods gives rise to consumer anxiety,
    Response. Based on our preliminary review of comments received to 
the ANPR, the ``radura'' symbol in the absence of accompanying 
irradiation information had no specific meaning to commenters. The 
Agency intends to further explore consumers understanding of the 
``radura'' symbol in its focus group research (noted above).
    Question 19. What action has the FDA taken to assess and evaluate 
the impact on human health from dairy products produced by cattle 
injected with recombinant bovine growth hormone? Please provide a 
detailed explanation of your analyses and conclusions about the safety 
to humans from such dairy products.
    Response. In 1993, following an extensive review of the data to 
support the safety and effectiveness, FDA approved the first animal 
drug containing recombinant bovine growth hormone (rhGH)--Posilac. A 
copy of a report FDA's Center for Veterinary Medicine (CVM) published 
about that approval can be found on the FDA website at 
http:\\www.fda.gov/cvm/index/bst/RBRPTFNL.htm.
    Since that approval, the Agency has no new data to indicate any 
negative impact on human health from using rhGH in dairy cattle. In 
fact, last year, FDA responded to a citizen petition filed, requesting 
that Posilac be removed from the market ``based on new evidence'' that 
the produce poses ``serious health consequences for human consumers.'' 
In our denial of the petition, the Agency affirmed there was no 
evidence that the use of Posilac posed human health concerns. A copy of 
the Agency's response can be found on FDA's website at http:\\www.cvm/
gov/efoi/citpet.pdf.
    In very brief summary, the petitioner charged that:

1) a published study demonstrated that IGF-1 (a normal component of 
        both human and bovine milk) was absorbed from milk and posed a 
        risk of cancer;
2) the sponsor of Posilac altered the manufacturing process for the 
        product after approval, thus invalidating the safety and 
        effectiveness data in the application; and,
3) FDA had failed to review a food safety study or a portion thereof, 
        which demonstrated that rbGH was unsafe.
    In response, the Agency reviewed the study submitted by the 
petitioner and concluded that his interpretation of the study was 
inconsistent with other published and unpublished data, as well as the 
findings of the Joint Expert Committee on Food Additives of the World 
Health Organization which had found rbGH to be safe in two separate 
reports in 1992 and 1998.
    The Agency rereviewed portions of the manufacturing component of 
the rbGH application and collected records from the sponsor related to 
investigational batches of Posilac. The rereview confirmed that the 
manufacturing change did not invalidate the safety and effectiveness 
data because it resulted in inconsequential changes to the formulated 
rbGH product. That is, the product that FDA approved was the same as 
the product on which the safety and effectiveness studies were 
conducted. The purportedly unreviewed portion of the food safety study 
had, in fact, been previously reviewed by the Agency and had been 
determined not to demonstrate any lack of safety of rbGH and the Agency 
reaffirmed that finding in the response to the petition. In addition, 
FDA responded to a second citizen's petition related to rbGH that can 
be found at http:\\www.fda.gov/ohrms/dockets/dailys/00/jun00/062700/pnd
0001.pdf.
Question from Ms. Eshoo:
    Question 20. Despite extensive scientific evidence demonstrating 
serious risks associated with reprocessing of single-use medical 
devices - including several studies conducted by the Agency itself - 
FDA has failed to meaningfully enforce key patient safety provisions of 
the FD&C Act. It took substantial congressional and public pressure to 
force FDA to finally publish enforcement guidance on regulation of this 
potentially dangerous practice. Yet, I remain concerned that this 
guidance, while a step in the right direction, continues to permit the 
use of many unsafe reprocessed devices on American patients. Now that 
FDA has made its intention clear to conduct pre-market reviews of 
reprocessed medical devices, has the Agency received any submissions 
from reprocessors or hospitals?
    Response. On February 15, 2001, CDRH received five premarket 
approval applications (all from third party reprocessors) for cardiac 
ablation catheters. CDRH is currently reviewing and intends to apply 
the same standards to these submissions as it does to all others. To 
date, we have not received submissions from any hospitals.
Question from Mr. Strickland:
    Question 21. This question relates to the inability of clinicians 
to gain FDA approval for the use of thrombolytic therapy for peripheral 
vascular indications. These agents (Urokinase, rt-Pa and Reteplase) 
were each indicated for coronary artery problems (although Urokinase 
has been unavailable and will not be released until 2002). However, 
clinicians have been forced to use thrombolytic agents ``off-label'' 
for peripheral artery problems. The clinical trials 'required by the 
Center for Biologics have relied upon statistical assumptions that 
obligate the study of thousands of patients. Although such trials are 
possible for coronary artery problems, the smaller market and greater 
complexity of the procedures in the peripheral vessels renders such 
trials impossible to execute. Moreover, thrombolytic therapy is 
considered to be a ``standard of care'' for many patients with 
peripheral arterial occlusions. In this regard, it is difficult to 
enter such patients into the randomized trials required by CBER.
    FDA has allowed devices a PMA pathway for device trials that are 
not randomized and based on comparisons to what constitutes little more 
than ``historical controls.'' For example, the approval process for the 
Ancure and AneuRx endovascular grafts. CBER has not been so 
conciliatory for thrombolytic drugs.
    Given that other decisions of the Agency have allowed approval 
based on less rigorous statistics, is it possible to allow the trial 
with relaxed criteria to serve as a foundation for approval of agents 
already in use for other indications?
    Response. While it is true that different trial designs, sample 
sizes, and statistical analyses may be used to satisfy the legal 
standard for approval of a drug, in all cases the data must meet the 
standard of substantial evidence from adequate and well-controlled 
trials that the drug is safe and effective. It undoubtedly is easier to 
meet the legal standard for approval for some products and indications 
than for others. Where meeting the approval standard is particularly 
difficult, careful exploration of proposed approaches to meet the 
standard is warranted, however, the standard remains and the approach 
used must be scientifically valid.
    Differences in approaches to studying different products frequently 
arise due to differences in the indication or the products. Thus, a 
design or analysis that is suitable for one product and indication may 
not be suitable for another. For example, historical control designs 
may be useful where the historical control patients are well 
characterized and well matched to the study patients, concomitant 
therapy has not changed over time, the historical outcomes are highly 
consistent and predictable, and the drug effect is large. However, 
historical control designs may not be useful when these criteria are 
not met.
    The experience with devices, cited in the question, involved very 
different settings. One of two specifically mentioned devices is the 
``Ancure'' device, marketed by Guidant. This Class II device is a 
balloon catheter for use in illiac arteries. It is marketed under a 
510(k)-notification mechanism, as being ``substantially equivalent'' to 
a marketed predicate device, a standard very different from that for 
new drug approval. The other specifically noted device is ``AneuRx,'' 
marketing by Medtronic is a Class III device. The medical indication, 
infrarenal aortic aneurysms, is quite different from the indication 
being sought by thrombolytics, peripheral arterial obstruction (PAO).
    FDA is quite interested in having the use of thrombolytics for PAO 
appropriately assessed and, if appropriate, labeled so that physicians 
and patients can know they are using a safe and effective regimen. CBER 
has worked actively for many years with several manufacturers of 
thrombolytic agents developing clinical research programs for this 
indication. CBER has been open to a variety of approaches to 
demonstrate clinical efficacy in this setting. These approaches include 
randomized, placebo-controlled studies, randomized dose-ranging 
studies; studies which seek to demonstrate a clinical benefit of the 
most major importance (death and/or amputation) and studies which seek 
to demonstrate benefits of a somewhat less compelling nature. While 
CBER has had discussions with manufacturers to consider the use of 
historical controls in this setting, no manufacturer has come forth 
with adequate evidence to date to establish that a trial with a 
historical control comparison would provide valid evidence of efficacy 
in this setting.
    Clinical trials to date have largely had no concurrent controls and 
drawing clear conclusions is difficult or impossible. While there is a 
general impression in the medical community that thrombolytics are 
likely to be useful in this setting, the data on any specific dose-
regimen with any specific agent are rather limited. The published 
literature makes clear those elements of safety, and likely efficacy, 
may be very dependent upon dose and regimen.
Questions from Mr. Waxman:
    Question 22. During FDA rulemaking on pediatric studies and during 
hearings and deliberations on this rulemaking, a number of drugs were 
noted by witnesses, committee members, and the FDA as important drugs 
needing pediatric study. How many of the on-patent drugs have received 
a written request for pediatric studies? IF not all have received such 
a request, please explain why not.
    Response. Enclosed is a copy of the ``10 drugs most widely 
prescribed in pediatric age groups in 1994 for which the label carried 
no directions for use'' (Pediatric Exclusivity Report to Congress, 
Appendix B, Table 7, page 37).

                                                     Table 7
  10 Drugs most widely prescribed in pediatric age groups in 1994 for which the label carried no directions for
                                                       use
----------------------------------------------------------------------------------------------------------------
                                                                                            Study
                                                                                           proposal  Exclusivity
                 Drug                        Treatment Use            Number of uses      submitted   or patent
                                                                                              by         life
                                                                                           sponsor
----------------------------------------------------------------------------------------------------------------
Albuterol Inhalation solution........  asthma..................  1,626,000 times to           No\1\          No
                                                                  pediatric patients
                                                                  under 12.
Phenergan............................  allergic reactions......  663,000 times to                No          No
                                                                  pediatric patients
                                                                  under 2.
Ampicillin Injection.................  infection...............  639,000 times to                No          No
                                                                  pediatric patients
                                                                  under 12.
Auralgan otic solution...............  ear pain................  600,000 times to                No          No
                                                                  pediatric patients
                                                                  under 16.
Lotrisone cream......................  topical infections......  325,000 times to               Yes         Yes
                                                                  pediatric patients
                                                                  under 12.
Prozac...............................  depression and obsessive  349,000 times to               Yes         Yes
                                        compulsive disorder.      pediatric patients
                                                                  under 16.
Intal................................  asthma..................  solution prescribed            Yes         Yes
                                                                  109,000 times to
                                                                  pediatric patients
                                                                  under 2; aerosol
                                                                  prescribed 399,000
                                                                  times to pediatric
                                                                  patients under 5.
Zoloft...............................  depression..............  248,000 times to               Yes         Yes
                                                                  pediatric patients
                                                                  under 16.
Ritalin..............................  attention deficit         226,000 times to                No          No
                                        disorder and narcolepsy.  pediatric patients
                                                                  under 6.
Alupent..............................  asthma..................  84,000 times to                 No          No
                                                                  pediatric patients
                                                                  under 6.
----------------------------------------------------------------------------------------------------------------
\1\ Currently labeled for patients >2.

    Of the top ten drugs, six products had no existing exclusivity or 
patent protection and four products (Prozac [fluoxetine], Intal 
[cromolyn sodium], Lotrisone [betamethasone/clotrimazole] and Zoloft 
[sertraline]), had existing exclusivity or patent protection. The 
Agency has issued Written Requests (Aa) for these latter four products.
    Question 23. Of the most complete list of ``approved drugs for 
which additional pediatric information may produce health benefits in 
the pediatric population'', how many of the on-patent drugs have 
received a written request for pediatric studies? If not all have 
received such a request, please explain why not.
    Response. The most current list of ``approved drugs for which 
additional pediatric information may produce health benefits in the 
pediatric population'' updated in May 2001, identifies 426 drugs on the 
priority section of the list. Of these, 103 have existing patent 
protection or exclusivity and have received a written request. Of the 
remaining products on the list, many have existing patent protection or 
exclusivity. To use our resources in an effective manner, we generally 
issue a written request after a sponsor submits a proposed pediatric 
study request. In some cases, we have issued written requests to an 
entire class of drugs after a template for a request was developed, for 
example, anti-hypertension drugs, drugs for depression/OCD, HIV drugs.
    Question 24. Please provide a list of all approved drugs to which 
FDA has issued a written request for pediatric studies. Please note the 
manufacturer of the product and the date on which the request was 
issued. Please note whether the manufacturer has agreed or disagreed to 
the written request and the date on which the manufacturer responded. 
If the manufacturer has not responded please note that as well.
    Response. As of May 2001, 157 approved active moieties have 
received a written request. We are providing at Tab B a list that 
identifies the active moieties, the manufacturers, and the dates on 
which the written request was issued. Manufacturers are not required to 
alert FDA as to whether or not they plan on pursuing the studies. 
However, based on our informal discussions with the manufacturers, we 
estimate that approximately 80 percent plan on conducting the studies.
    This list contains confidential information not releasable to the 
public, and we ask that the Committee not make public or publish as 
part of this hearing record, the enclosed information.
    Question 25. What is FDA's estimate of the mean, median, and mode 
of the cost of the pediatric trials requested in a written request for 
a company?
    Response. As of May 2001, 191 WRs have been issued. In these WRs, 
421 studies have been requested. The types of studies and number of 
each requested are as follows: efficacy/safety--138; PK/safety--125; 
PK/PD--36; safety--83; and other--39. While we are unable to provide 
you with a mean, median, and mode for the cost of the studies, we can 
estimate that the cost ranges from $500,000 to $4,000,000 per study. 
Efficacy studies would be at the top of the range while the cost of a 
PK study would be at the lower end of the range. In addition, some 
sponsors have to create the necessary infrastructure to do these 
studies, and this adds to the sponsor's costs.
    Question 26. What is the FDA's estimate of the mean, median, and 
mode of the number of trial participants requested in the studies 
requested in a written request for a company?
    Response. Again, while we are unable to provide you with a mean, 
median, and mode of the number of trial participants, we can tell you 
the following. As of May 2001, the Agency has requested 421 studies. Of 
these 421 studies, 233 specified the number of patients to be studied. 
The projected total number of patients for these 233 studies is >23, 
536 patients. The remaining 188 studies requested a sufficient number 
to meet the study's objective, e.g., sufficient number to characterize 
the pharmacokinetics, powered to demonstrate a specified difference. We 
have not projected the total number of patients for these other 
studies.
    Question 27. How much additional funding and how many additional 
personnel would it require for FDA to process SNDA's for pediatric use 
at the same pace as NDAs? How much additional funding and how many 
additional personnel would it require for FDA to process all SNDA's at 
the same pace as NDA's? How much additional funding and how many 
additional personnel would it require for FDA to process all ANDA's at 
the same pace as NDA's?
    Response. All pediatric clinical supplements are currently reviewed 
at the same pace as NDAs (12 months for a standard review or six months 
for a priority review). Any additional resources would allow us to more 
efficiently review the applications we currently receive, including 
pediatric supplements, abbreviated NDAs, and all other supplemental 
applications.
    Question 28. Inasmuch as the approval of ANDA's can greatly reduce 
the cost of prescription drugs to the Nation in general and to 
government programs in particular, why has the Administration not 
requested sufficient funding and personnel to process all ANDA's at the 
pace of NDA's?
    Response. The generic drug program was granted a $1.2 million 
increase in FY 2001. In addition,we continue to refine the review 
process to increase efficiency. The number of new staff hired in the 
last fiscal year are now fully trained and are demonstrating high 
levels of productivity. There are, however, certain factors outside of 
our control that would prevent complete adherence to the 180-day time 
frame. These factors include the need to adhere to the review queue 
review structure, timeliness of inspections of the manufacturing 
plants, and legal issues such as lawsuits and Citizen Petitions. All 
chemistry reviewer vacancies are currently filled. We continue to 
examine every aspect of the review process to try to identify problem 
areas to be addressed. We also plan to revise the current system for 
amendment designation (major versus minor) to improve total review 
times. Other changes are also being explored. While we did not request 
a specific increase for generics in FY 2002, this office will benefit 
from the requested increase for pay raises of approximately $2,000,000.
Question from Mr. Whitfield:
    Question 29. Would FDA be amenable to employing a mandatory 
premarket GRAS notification procedure, modeled on the voluntary GRAS 
notification procedure already being implemented, as a means of 
expanding the permitted use of a food substance affirmed as GRAS with 
specific limitations under 21 CFR sec. 184.1(b)(2)? What would be the 
most expeditious way of effectively implementing such a new procedure?
    Response. The rulemakings that established Sec. 184.1(b)(2) itself, 
as well as the specific regulations promulgated in accord with 
Sec. 184.1(b)(2), were put in place through notice-and-comment 
rulemaking. FDA must follow its own regulations, and must evaluate the 
safety of a new substance currently subject to Sec. 184.1(b)(2) using 
notice-and-comment rulemaking.
    Generally recognized as safe (GRAS) ingredients, unlike food 
additives, are not subject to statutory premarket approval 
requirements. When the Agency affirmed as GRAS the current uses of 
ingredients under Sec. Sec. 184.1(b)(2), it determined that other uses 
outside the scope of the approval would be food additive uses. Thus, 
FDA would need to consider whether the new uses of substances currently 
subject to Sec. 184.1(b)(2) are GRAS and, if so, consider whether it 
would be appropriate to amend Sec. 184.1(b)(2) and/or the current 
approvals under Sec. 184.1(b)(2). The Agency would be open to discuss 
with any interested party the best way to approach a given review.
    Thank you again for making this a part of the public record. If you 
have further questions, please let us know.
                                        Melinda K. Plaisier
                             Associate Commissioner for Legislation
Enclosures

cc: The Honorable Sherrod Brown
   Ranking Minority Member
   Subcommittee on Health
   Committee on Energy and Commerce
                                 ______
                                 
             National Organization for Rare Disorders, Inc.
                                                      June 11, 2001
The Honorable Michael Bilirakis, Chairman
House Energy and Commerce Subcommittee on Health
United States House of Representatives
2369 RHOB
Washington, D.C. 20515

Attn: Brent Del Monte

    Dear Mr. Chairman: Thank you for the opportunity to respond to 
questions arising from my testimony before the House Committee on 
Energy and Commerce Health Subcommittee on May 3, 2001 regarding the 
reauthorization of the Food and Drug Administration Modernization Act 
(FDAMA), as well as the pediatric exclusivity provision, which in 
January 2002.
    Question 1: In your written testimony you lament the fact that more 
new drugs are being introduced in the United States before they're 
introduced in the rest of the world. Is it your belief that individuals 
with rare disorders would benefit from having drugs to treat their 
conditions introduced elsewhere before they're introduced in the United 
States?
    Response: In my May 3rd testimony to the Subcommittee, I pointed 
out that in 1988 only four percent of new drugs were first approved in 
the United States, but by 1998, that figure had risen to 66%. I did not 
``lament'' that fact, but simply pointed out that there are fundamental 
risks associated with being ``first out of the gate." In her defense of 
the many drug withdrawals ordered by the FDA, Dr. Janet Woodcock, FDA's 
Director of CDER, has blamed those withdrawals on the fact that we are 
now the first country to market most new drugs and therefore adverse 
events tend to appear here before in the rest of the world. Inherent in 
this fact, however, is my argument that none of the withdrawn drugs 
were life saving drugs, and they probably should not have been rushed 
to the American without additional FDA review.
    Regarding whether individuals with rare disorders would rather see 
``orphan drugs'' marketed in other countries before the United States, 
obviously the answer is no. However, it is important to note that most 
orphan drugs are lifesaving medicines for largely untreatable diseases 
that have been afforded priority review from the FDA, and they have 
been approved first in the United States (since the Orphan Drug Act was 
enacted in 1983).
    NORD has always advocated for speedy review of lifesaving drugs, 
both orphan and non-orphans. My testimony does, however, lament the 
fact DUFA has expedited review of many nonessential drugs that are not 
important medicines for serious and life threatening diseases. We feel 
strongly that the FDA should take more time to review non-essential 
drugs because they may represent risks to relatively healthy people, or 
to those who have other satisfactory treatment alternatives.
    Question 2: In your testimony, you criticize the fact that the FDA 
negotiates drug labels with manufacturers, and you say the FDA should 
be given authority to order immediate labeling changes. But isn't it 
true that the FDA already has this authority? The FDA already has the 
ability to keep off the market new drugs if the FDA doesn't approve the 
label, and they have the ability to seize any drugs which are 
misbranded, don't they?
    Response: Before responding to this question, I would like to 
reiterate NORD's strong support for the testing of drugs used in the 
pediatric population. NORD will work with members of the Subcommittee 
to ensure reauthorization of the pediatric exclusivity provision, but 
we do have some concerns regarding specific problems that have arisen 
since 1997.
    In response to Question 2, of course the FDA has authority to keep 
drugs off the market if they do not agree with the manufacturer's 
labeling. The agency also has the authority to seize misbranded drugs 
when warranted. But the fact remains that of all the pediatric studies 
submitted, only about 14 actually have been relabeled.
    To solve this problem we suggest that the FDA be given authority to 
require manufacturers to relabel their drugs for pediatric use within a 
very specific timeframe even if the company does not agree with the 
language that the agency believes is scientifically justified. 
Alternatively, the FDA could be given authority to withhold exclusivity 
if a manufacturer refuses to add pediatric information to the drug's 
label. We feel it is critically important for pediatricians to have 
access to pediatric prescribing information, and exclusivity should be 
directly tied to the labeling requirement.
    Question 3.  The Elizabeth Glaser Pediatric AIDS Foundation, in a 
letter signed by Dr. David Kessler, says the pediatric exclusivity 
provision should be reauthorized because a one-half of one percent 
increase pharmaceutical costs ``is a legitimate price to pay to ensure 
our children's well being.'' Do you disagree that a one-half of one 
percent increase in pharmaceutical costs is a legitimate price to pay 
for our children's well being?
    Response. The legitimacy of a one-half of one percent price 
increase depends on the person who is paying. To an insured person, the 
price may not be significant, but to an uninsured person or an elderly 
Medicare recipient who pays cash for prescriptions, any increase would 
be catastrophic. If Medicare paid for prescription drugs, this probably 
would not be an issue, except for insurance companies who blame their 
annual price increases on the escalating costs of prescription drugs.
    The real issue is that some drug companies receiving pediatric 
exclusivity are reaping rewards far greater than their investment in 
pediatric clinical trials. The financial rewards can sometimes be so 
great that they focus on their research on only the most lucrative 
drugs, rather than the drugs children need most. Nevertheless, my 
testimony clearly supports reauthorization of the pediatric exclusivity 
law with some modifications.
    I hope these answers to your questions are satisfactory. I will be 
pleased to answer any further questions you may have.
            Sincerely,
                                                    Abbey S. Meyers
cc: Diane Dorman
   Sherrod Brown, Ranking Member
   John Ford, Minority Counsel