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



         REAUTHORIZATION OF THE PRESCRIPTION DRUG USER FEE ACT

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

                                HEARING

                               before the

                         SUBCOMMITTEE ON HEALTH

                                 of the

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 6, 2002

                               __________

                           Serial No. 107-93

                               __________

       Printed for the use of the Committee on Energy and Commerce


 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 house

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                            WASHINGTON : 2002
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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
RICHARD BURR, North Carolina         BART GORDON, Tennessee
ED WHITFIELD, Kentucky               PETER DEUTSCH, Florida
GREG GANSKE, Iowa                    BOBBY L. RUSH, Illinois
CHARLIE NORWOOD, Georgia             ANNA G. ESHOO, California
BARBARA CUBIN, Wyoming               BART STUPAK, Michigan
JOHN SHIMKUS, Illinois               ELIOT L. ENGEL, New York
HEATHER WILSON, New Mexico           TOM SAWYER, Ohio
JOHN B. SHADEGG, Arizona             ALBERT R. WYNN, Maryland
CHARLES ``CHIP'' PICKERING,          GENE GREEN, Texas
Mississippi                          KAREN McCARTHY, Missouri
VITO FOSSELLA, New York              TED STRICKLAND, Ohio
ROY BLUNT, Missouri                  DIANA DeGETTE, Colorado
TOM DAVIS, Virginia                  THOMAS M. BARRETT, Wisconsin
ED BRYANT, Tennessee                 BILL LUTHER, Minnesota
ROBERT L. EHRLICH, Jr., Maryland     LOIS CAPPS, California
STEVE BUYER, Indiana                 MICHAEL F. DOYLE, Pennsylvania
GEORGE RADANOVICH, California        CHRISTOPHER JOHN, Louisiana
CHARLES F. BASS, New Hampshire       JANE HARMAN, California
JOSEPH R. PITTS, Pennsylvania
MARY BONO, California
GREG WALDEN, Oregon
LEE TERRY, Nebraska
-- -- (Vacancy)

                  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:
    Crawford, Hon. Lester M., Deputy Commissioner, Food and Drug 
      Administration; accompanied by Janet Woodcock, Director, 
      Center for Drug Evaluation and Research; and Catherine 
      Zoon, Director, Biologics Evaluation and Research..........    30
    Franson, Timothy R., Vice President of Clinical Research and 
      Regulatory Affairs, U.S. Eli Lilly Research Laboratories...    52
    Pendergast, Mary K., Executive Vice President, Elan 
      Corporation................................................    60
    Wood, Alastair J.J., Assistant Vice Chancellor for Research, 
      Vanderbilt University School of Medicine...................    57
Material submitted for the record by:
    Food and Drug Administration, responses for the record.......    78

                                 (iii)

  

 
         REAUTHORIZATION OF THE PRESCRIPTION DRUG USER FEE ACT

                              ----------                              


                        WEDNESDAY, MARCH 6, 2002

                  House of Representatives,
                  Committee on Energy and Commerce,
                                    Subcommittee on Health,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:09 a.m., in 
room 2322, Rayburn House Office Building, Hon. Michael 
Bilirakis (chairman) presiding.
    Members present: Representatives Bilirakis, Deal, Burr, 
Ganske, Norwood, Bryant, Buyer, Pitts, Tauzin (ex officio), 
Brown, Waxman, Strickland, Barrett, Capps, Towns, Pallone, 
Eshoo, Stupak, Wynn, Green, and Dingell (ex officio).
    Staff present: Brent DelMonte, majority counsel; Steve 
Tilton, health policy coordinator; Eugenia Edwards, legislative 
clerk; John Ford, minority staff counsel; and David Nelson, 
economist.
    Mr. Bilirakis. I call this hearing to order. Good morning. 
I would like to thank all of our witnesses for being here today 
to discuss the reauthorization of the Prescription Drug User 
Fee Act, which we fondly refer to as PDUFA, another one of 
those beautiful acronyms that we come with up here.
    I know that many of you have been working around the clock 
to develop a set of recommendations for the Congress to 
consider in our deliberations. I want you to know that we 
appreciate the work you have put in so far, and would like to 
thank you in advance for your cooperation with the committee 
and Congress as we move forward quickly and cleanly to 
reauthorize this important program.
    PDUFA as we know was first enacted in 1992, and then 
reauthorized in 1997 as part of the Food and Drug 
Administration Modernization Act, FDAMA. It is completely fair 
to say that this program has been a tremendous success.
    In 1992, when the program was created, innovative 
treatments were taking far too long to reach patients. Since 
the creation of PDUFA, patients have been able to access 
breakthrough therapies more quickly and to improve their lives 
immeasurably.
    In fact, many new drugs are available to American patients 
first. PDUFA has been so successful because it is a partnership 
between the agency, the industry, and patients.
    The PDUFA statute allows the agency to collect fees that it 
in-turn uses to ensure timely review of drug products.
    I think it is important to state that this program was not 
created to ensure approvals. I repeat, it was not created to 
ensure approvals. The FDA and Congress strongly believed that 
products should only be approved by the agency when they proved 
to be safe and effective.
    The payment of user fees in no way guarantees approval of a 
product. The fees are merely used to help the agency facilitate 
timely reviews. Today the FDA can use the fees to hire more 
reviewers, build its information technology capacity, and for 
other administrative issues that facilitate the drug and 
biologic review process.
    The fees are not intended to replace the FDA's 
appropriations and therefore do not constitute a tax. Our 
subcommittee would like to reauthorize PDUFA cleanly, and 
quickly, and I might add clearly.
    This hearing will help us gain more insight into an 
important component of PDUFA, which is the performance goals 
letter. The performance goals letter represents agreements 
between the FDA, industry, and Congress, and the letter 
outlines goals that the agency must meet, which help frame the 
basis to judge the user fee program success.
    Congressional review of the goals letter is critical 
because we must be certain that these extra PDUFA funds are 
used in the most appropriate fashion. Some have asked why is it 
so important to reauthorize PDUFA.
    One reason that we need to move quickly and cleanly is that 
the agency by law cannot collect user fees unless Congress 
reauthorizes PDUFA. In effect, this means that the FDA would be 
forced to eliminate a large portion of its work force.
    This would have devastating consequences for the prospects 
of continuing to ensure timely access to life saving products 
for patients. I know that none of us want to adversely effect 
patients' ability to access new life saving products. I believe 
that it would be more efficient for Congress to quickly enact 
the PDUFA reauthorization, and if we do so in as clean a manner 
as possible.
    There are many issues that impact patient's access to new 
drug products. There is no question about that. Last week, we 
held a hearing on the uninsured, and we are continuing to work 
on solutions for that problem. Obviously, another issue that is 
at the top of my agenda, and this committee's agenda, and the 
President's agenda, is prescription drug coverage for our 
Nation's elderly.
    I know that our committee will be working diligently to 
address many of these issues. I assure you that we will. We 
already are.
    However, I would argue that PDUFA reauthorization is 
separate and apart from these issues. I think it is incumbent 
upon our committee to examine each of these issues thoroughly, 
and I am committed to doing so as soon as possible, and I have 
made a commitment to Mr. Brown in some of these areas.
    I know that many members of other areas have concern with 
the FDA, and again I believe that our committee will examine 
these issues as needed. Reauthorizing PDUFA is vitally 
important to patients.
    We sometimes fail to reauthorize in a timely fashion up 
here, but they are certain types of programs that are 
appropriated money, and they continue. NIH is in that category, 
and so many others.
    PDUFA obviously as you know is in a different situation. We 
have got to ensure quick, clean, reauthorization of it. Our 
actions will guarantee patient's continued access to innovative 
drugs, and meet our country's gold standards of safety and 
efficacy.
    Again, I thank our witnesses for being here today, and I 
look forward to their testimony, and now I yield to Mr. Brown.
    [The prepared statement of Hon. Michael Bilirakis follows:]

Prepared Statement of Hon. Michael Bilirakis, Chairman, Subcommittee on 
                                 Health

    Good morning, I now call this hearing to order. I would like to 
thank all of our witnesses for being here today to discuss 
reauthorization of the Prescription Drug User Fee Act (PDUFA). I know 
that many of you have been working around the clock to develop a set of 
recommendations for the Congress to consider in our deliberations. I 
appreciate the work you all have put in so far, and I would like to 
thank you in advance for your cooperation with the Committee and 
Congress as we move forward to quickly and cleanly reauthorize this 
important program.
    PDUFA was first enacted in 1992 and then reauthorized in 1997 as 
part of the Food and Drug Administration Modernization Act (FDAMA). It 
is completely fair to say that this program has been a tremendous 
success. In 1992, when the program was created innovative treatments 
were taking far too long to reach patients. Since the creation of 
PDUFA, patients have been able to access breakthrough therapies more 
quickly and improve their lives immeasurably. In fact, many new drugs 
are available to American patients first.
    PDUFA has been so successful because it is a partnership between 
the agency, the industry and patients. The PDUFA statute allows the 
agency to collect fees that it in turn uses to ensure timely review of 
drug products. I think it is important to state that this program was 
not created to ensure approvals. The FDA and Congress strongly believe 
that products should only be approved by the agency when they prove to 
be safe and effective. The payment of user fees in no way guarantees 
approval of a product. The fees are merely used to help the agency 
facilitate timely reviews. Today, FDA can use the fees to hire more 
reviewers, build its information technology capacity, and for other 
administrative issues that facilitate the drug and biologic review 
process. The fees are not intended to replace the FDA's appropriations, 
and therefore do not constitute a tax.
    Our Subcommittee would like to reauthorize PDUFA cleanly and 
quickly. This hearing will help us gain more insight into an important 
component of PDUFA, the performance goals letter. The performance goals 
letter represents agreements between the FDA, industry and Congress. 
The letter outlines goals that the agency must meet, which help frame 
the basis to judge the user fee programs success. Congressional review 
of the goals letter is critical because we must be certain that these 
extra PDUFA funds are used in the most appropriate fashion.
    Some have asked why is it so important to reauthorize PDUFA? One 
reason that we need to move quickly and cleanly is that the agency by 
law cannot collect user fees unless Congress reauthorizes PDUFA. In 
effect, this means that the FDA would be forced to eliminate a large 
portion of its workforce. This would have devastating consequences for 
the prospects of continuing to ensure timely access to life saving 
products for patients. I know that none of us want to adversely affect 
patients'' ability to access new life saving products. I believe that 
it will be more efficient for Congress to quickly enact PDUFA 
reauthorization if we do so in as clean a manner as possible.
    There are many issues that impact patients' access to new drug 
products. Last week, we held a hearing on the uninsured and we are 
continuing to work on solutions to that problem. Obviously, another 
issue that is at the top of my agenda, the Committee's and the 
President's is prescription drug coverage for our Nation's elderly. I 
know that our Committee will be working diligently to address many of 
these issues. However, I would argue that PDUFA reauthorization is 
separate and apart from these issues. I think that it is incumbent upon 
our Committee to examine each of these issues thoroughly, and I am 
committed to doing so as soon as possible. I know that many Members 
have other areas of concern with the FDA. Again, I believe our 
Committee will examine these issues as needed.
    Reauthorizing PDUFA is vitally important to patients. It is 
incumbent upon us in Congress to ensure a quick, clean reauthorization 
of this legislation. Our actions will guarantee patients continued 
access to innovative drugs that meet our country's gold standards of 
safety and efficacy. Again, I thank our witnesses for being here today 
and look forward to their testimony.

    Mr. Brown. Thank you, Mr. Chairman. I want to raise two 
sets of issues this morning, and I would be remiss if I did not 
raise both sets of these issues. One set is specific to PDUFA.
    We need to make sure that the legislation and related 
agreements strike the proper balance between speedier drug 
approvals and drug safety, the main charge of the Food and Drug 
Administration safety.
    We need to evaluate whether FDA is overreaching in its 
performance goals, and ensure that the agency is devoting 
sufficient resources to pre-and-post market safety activities. 
We also need to make sure that this law strikes the proper 
balance between speedier drug approvals and drug efficacy.
    We need to be sure that the drug companies are completing 
all the clinical studies they commit to. Absent complete data 
and proper drug labeling, faster drug approvals could simply 
hasten improper use, or inappropriate substitution of new drugs 
for existing ones. No one here wants that.
    We need to make sure that the trigger mechanism in the bill 
isn't doing more harm than good. FDA's Center for Drug 
Evaluation should not have to starve critical functions, like 
the review of generic drug applications, and the review of 
direct to consumer advertising, and ongoing drug surveillance 
in order to meet the PDUFA spending trigger.
    The fact that the President' budget happens to increase 
funding for some of these functions is no guarantee that future 
budgets will do the same. The other set of issues that I want 
to raise this morning is right before our eyes, yet we look 
past these issues when it is time to hold hearings, and time to 
write legislation.
    There are pressing concerns for consumers for businesses, 
for other third-party payers in both the public and the private 
sector. Yet, we never seem to get around to addressing them.
    I am referring to prescription drug pricing and 
prescription drug advertising, to prescription drug inflation. 
The three are related with the peculiar synergism to them, and 
they are a lethal combination for a U.S. health care system.
    Mr. Chairman, I don't doubt the benefits of PDUFA. You and 
I have always worked well together and I don't doubt your 
interest in seeing patients continuing to have timely access to 
new medications.
    But what I can't overlook are the drug issues that this 
Congress and this committee do not address, the ones we appear 
to be afraid to take on. With all due respect to this committee 
and this Congress, and especially its Republican leadership, 
jump when the drug industry says jump, and whether it is 
pediatric exclusivity, whether it is PDUFA, whether it is a 
whole host of issues.
    It rushes to past registration when the drug industry wants 
us to pass legislation. We don't challenge drug industry 
pricing prices, even though these companies charge Americans 2, 
and 3, and 4, and in a few cases 10 times what they charge 
people in other wealthy industrialized countries for the same 
prescription drugs even though our taxes pay nearly half of the 
drug industry's R&D costs.
    And even though the industry itself gets more tax breaks 
than any other major industry. Yet, we on this committee, and 
we in this Congress, Republican leadership, refuses to address 
the issue of pricing.
    The drug industry knows that not only do U.S. consumers pay 
more than consumers in other countries for the same medicines, 
we are also the only industrialized country that doesn't 
guarantee access to health care.
    This industry knows that 70 million Americans, many of them 
seniors, have no coverage for drugs. The uninsured have the 
distinction of paying the highest prices in the world with no 
insurance for their medicines.
    We don't take the pricing issue seriously, even though I 
bet that every member on this committee, Republican and 
Democrat alike, has spoken to seniors living on a social 
security check that increased 3.5 percent last year, but are 
paying for drugs that jumped 10 percent during that period, 
drugs that cost hundreds of dollars per prescription.
    I sponsor regular bus trips to Canada, and the seniors on 
those trips are literally--save literally thousands of dollars 
in some cases on their prescription medicines, money that can 
buy food, money that can pay for heat, and other necessities.
    We don't talk about that in this institution. When the drug 
industry wants us to move quickly to ensure that FDA doesn't 
hold their products up from getting to the market, we move with 
lighting speed to do their bidding.
    Spiraling prescription drug costs are what is preventing 
Congress from adding a drug benefit to Medicare. We had better 
not talk about drug pricing or the impact of direct to consumer 
advertising on the Health Care Utilization Bill. Those topics 
seem to be taboo.
    The European Union doesn't permit direct to consumer 
advertising, and Japan, Canada, Israel, don't permit direct to 
consumer advertising. Only one other country in the world, New 
Zealand, besides us, does allow it.
    That is because direct to consumer advertising skews health 
care costs toward the newest, the most expensive drugs, 
regardless of whether these drugs are actually the best 
alternative for patients, regardless of the impact on 
American's health care bill.
    The drug industry claims that it is doing consumers a 
favor. The DTC advertising is a breakthrough in consumer 
education. In 2000, last year, or 2 years ago, the drug 
industry advertised 1 percent of the newly 10,000 prescription 
drugs available to consumers.
    And 95 percent of all DTC advertising was spent on 50 
drugs, .5 percent of the 10,000 drugs on the market. The drug 
industry claims that its advertising is highly educational. DTC 
advertising is more highly profitable than it is highly 
educational. But we don't talk about that here.
    Mr. Chairman, I will continue to work with you on a 
bipartisan basis on the Prescription Drug User Fee Act. I will 
work with you to ensure that we bring the best possible bill to 
the floor.
    But I hope that this committee and this Congress will not 
continue to limit our focus to those issues that the drug 
industry wants us to consider. Our complacency already is 
taking far too great a toll on our constituents. Thank you.
    Mr. Bilirakis. I thank the gentleman. With all due respect, 
I would suggest that probably the patients out there also would 
like to see us streamline this process, and the Chair now would 
yield to the chairman of the full committee, Mr. Tauzin.
    Chairman Tauzin. Thank you, Mr. Chairman. Let me commend 
you for holding this hearing, and I look forward to working 
with you and the rest of the subcommittee in ensuring that the 
Prescription Drug User Fee Act or PDUFA is reauthorized cleanly 
and quickly.
    I would further like to congratulate the FDA and the 
industry for completing their negotiations on the performance 
side agreements which must accompany this legislation. As you 
know that was a predicate to our moving and I want to thank all 
of you for moving as quickly as you did.
    I look forward now to learning more about the substance of 
those agreements. I think it is import to start by noting 
certain facts which will guide the committee's consideration of 
PDUFA.
    The first is that the Act has worked extraordinarily well. 
Since the Act was first passed in 1992, drug review times have 
decreased dramatically, and the rate of drug withdrawal has 
remained constant.
    Now, you can only conclude one thing from that. That means 
that necessary drugs are reaching patients who need them much 
more quickly without drugs being approved that have to be 
withdrawn at any greater rate than before.
    That is a great success story. Not for drug companies, but 
for patients in America, who need these drugs to sustain their 
lives, and prevent illness, or to protect against damaging 
ravages of those illnesses.
    Now, half of all new drugs are first made available in the 
United States; and 80 percent of all of the new drugs are 
available to American patients within a year of the first 
approval.
    In short, PDUFA is working, and it must be renewed, and if 
we fail to renew it, we will have failed American patients 
across this country.
    Second, if the Act is not authorized by the end of this 
fiscal year, there are no carryover balances which would allow 
the FDA to continue to pay the reviewers that are funded by 
PDUFA.
    This means that these reviewers will have to be laid off if 
we do not reauthorize this bill, and the layoffs could come in 
the middle of this year. We know it. If we don't complete our 
work on this bill prior to August the FDA will begin the 
process of notifying employees that their positions may be 
eliminated.
    I think this should not be allowed to occur as it would be 
harmful not only to the employees and their morale, and the 
work that they do in reviewing drugs, but again to the patients 
of America that would depend upon these reviews.
    Last, the committee and Congress have a very aggressive 
health agenda this year. We have promised the House leadership, 
and the House, working together with Ways and Means, that we 
are going to produce a Medicare Reform and Drug Benefit Act by 
late April to early June.
    If we are going to get that work done, we have to complete 
this work on PDUFA very quickly. And because of these factors, 
I believe it is essential that the committee produced a clean 
reauthorization this year.
    I do not deny that there are other FDA reforms that frankly 
I would like to see enacted this year. For example, I am very 
interested in the Greenwood-Eshoo Device Reform Bill, as well 
as some of the other reforms.
    Mr. Burr has one of them, in that I am very interested, and 
some of which may not sit very well with my friends on the 
Democratic side of our committee. And I know that there are FDA 
reforms that some on the other side may wish to add to this 
bill that may not sit well with members of this side.
    But if we weigh this bill down with those kinds of debates, 
if we continue to fight old battles over issues in which 
everybody had a fair chance to debate them and offer amendments 
on the floor, and if we continue to fight those old battles and 
add new battles to this issue, we just won't get our job done, 
and this committee will have failed America's patients.
    My message is that this is not the vehicle for 
consideration of all of these matters. We can't allow this 
reauthorization to be turned into some kind of a Christmas 
tree.
    If we do this, we increase the likelihood that the 
hardworking FDA employees, critical to American patients, will 
be presented with RIF notices later this summer, and we can't 
let that happen.
    So let's deal with PDUFA now, and then turn our attention 
to the other FDA reforms. It is my every intent to see the 
committee consider these other FDA matters later in this 
session, if the members will continue to cooperate as they have 
done so willingly in a bipartisan fashion to keep on our 
schedule.
    And I intend to work with the chairman of this committee, 
and you, Mr. Brown, to see to it that those issues are 
addressed in good order, and I yield back the balance of my 
time.
    [The prepared statement of Hon. W.J. ``Billy'' Tauzin 
follows:]

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

    Mr. Chairman: I commend you for holding this hearing, and look 
forward to working with you and the rest of the Subcommittee in 
ensuring that the Prescription Drug User Fee Act, or PDUFA, is 
reauthorized cleanly and quickly. Further, I'd like to congratulate 
both the FDA and industry for completing their negotiations on the side 
agreements which will accompany the legislation, and I look forward to 
learning more about the substance of the agreement.
    I think it's important to start by noting certain facts which will 
guide the Committee's consideration of PDUFA. One, PDUFA has worked 
very well. Since the Act was first passed in 1992, drug review times 
have decreased markedly, and the rate of drug withdrawal has remained 
constant. Roughly half of all new drugs are first made available in the 
United States, and 80% of all new drugs are available to American 
patients within a year of first approval. In short, PDUFA is working 
and must be renewed.
    Second, if the Act is not reauthorized by the end of this Fiscal 
Year, there are no carry-over balances which will allow the FDA to 
continue to pay the reviewers funded by PDUFA. This means that these 
reviewers will have to be laid off if we do not reauthorize the bill 
this year. Further, if we do not complete work on this bill prior to 
August, the FDA will begin the process of notifying employees that 
their positions may be eliminated. I think this should not be allowed 
to occur as it would be so harmful to employee morale.
    Last, the Committee and the Congress have a very aggressive health 
care agenda this year. Because this Committee is going to dedicate so 
much time to creating a Medicare prescription drug benefit and enacting 
structural Medicare reforms, it is absolutely essential that the 
Committee address PDUFA reauthorization now.
    Because of these factors, I believe it is essential that the 
Committee produce a clean reauthorization this year. I do not deny that 
there are other FDA reforms I would like to see enacted this year. For 
example, I am very interested in the Greenwood/Eshoo device reform 
bill, as well some other reforms which may not sit well with those on 
the Democrat side. And I know that there are FDA reforms that some on 
the other side may have which would not sit well with me.
    My message to all is that this is not the vehicle for consideration 
of those matters. We cannot allow reauthorization of PDUFA to be turned 
into a Christmas tree. If we do this, we increase the likelihood that 
hard-working FDA employees will be presented with RIF notices later 
this summer. We cannot allow this to happen. Let's deal with PDUFA now, 
and then turn our attention to other FDA reforms. It is my every intent 
to see the Committee consider other FDA matters later in this Session, 
so let's produce a clean PDUFA reauthorization now.

    Mr. Bilirakis. Thank you. The Chair yields to Mr. Dingell.
    Mr. Dingell. Mr. Chairman, I thank you, and I commend you 
for scheduling this hearing today. We will soon be considering 
for the third time legislation to provide user fees for 
prescription drug approvals.
    I have supported these user fees from the beginning, and 
will continue to do so. I would like to tell a little bit about 
the history of this. The Subcommittee on Oversight and 
Investigations of this committee conducted a series of 
investigations on behavior at Food and Drug with regard to a 
major part of the pharmaceutical industry, namely the generic 
drug industry.
    We found massive scandal there. We found serious 
misbehavior in the Agency, picking and choosing, and making 
judgments on who would be considered. Because the docket of the 
Agency was clogged, and because there were not enough people, 
and the people were not properly paid to do the kind of work 
that was necessary to see to it that the business of the agency 
was conducted speedily and that the concerns of persons and 
corporations interested in new drug applications was handled 
speedily, well efficiently, and honestly. The result of these 
investigations were several things.
    First, there were a lot of people who went to jail as they 
very well should. Second of all, there were a number of changes 
in the administrative procedures at the agency. Third of all, 
the agency found as everybody knew that it needed to beef up 
its business, because it was proceeding far too slowly in terms 
of making the necessary clearance.
    The industry was waiting 7 to 10 years and more for a new 
application to be cleared. There is only one way that we can 
address the root of these problems, and that was to see that a 
sufficient number of properly paid and adequate in number 
employees at Food and Drug would address these problems.
    The industry understood it, and the committee understood 
it, and the Congress understood it, and we passed PDUFA as a 
result thereof.
    The result of this was that we got good people to do the 
work that needed to be done. The Food and Drug Administration 
cleaned up its act, and as I said a number of deserving people 
did go to jail.
    The result was that industry, because of the user fees that 
were imposed, and to which they agreed, and to which they 
supported, made it possible for FDA to hire enough people from 
essentially a dedicated fund to provide the services that the 
industry needed.
    The result was that the consumer benefited. The industry 
has been happy, and the industry has honored its commitments, 
and the Food and Drug has provided excellent service in these 
matters. The review time has speeded up, and industry is able 
to get its new drug applications more speedily processed.
    The result has been everybody has profited. The result has 
been that this committee has defended these user fees, and has 
not allowed the budgeteers who in their enthusiasm of run 
around and grab any loose nickel in the government till to 
apply to some purpose that they happen to believe is in the 
public interest, has not been able to prevail.
    It is time for this legislation to be extended because to 
go back to the situation that it was before would be 
intolerable from the standpoint of everybody; the industry, the 
committee, the Congress, FDA, the consuming public, which is 
dependent upon getting these drugs speedily and thoroughly, and 
carefully, and honestly processed.
    And of course the business and the economic activity, and 
not just of the pharmaceutical houses, but of the United 
States. This is a good piece of legislation and it should move 
rapidly, and I hope that my colleagues are keeping in mind the 
history of this and will understand why it is necessary for us 
to proceed speedily.
    I ask therefore that the entirely of my statement be 
inserted in the record, and I urge the speedy, favorable, and 
friendly consideration to an important piece of legislation 
upon which everyone has agreed, and I thank you for your 
courtesy to me, Mr. Chairman.
    [The prepared statement of Hon. John D. Dingell follows:]

    Prepared Statement of Hon. John D. Dingell, a Representative in 
                  Congress from the State of Michigan

    Mr. Chairman, thank you for scheduling today's hearing. Soon we 
will consider for the third time legislation to provide user fees for 
prescription drug approvals. I have supported user fees from the 
beginning, and continue to do so. I will repeat here what I said on the 
floor of the House in November 1997 when we passed the current user 
fee: ``These user fees, and FDA's own commitment to excellence, help 
make this agency the finest of its kind in the world.''
    But this program can be improved. I join my colleagues, 
Representatives Stupak and Brown, in their desire to improve the 
current program's post market safety features. More drugs than ever are 
first launched in the United States. Modern marketing and advertising 
practices result in more consumers using more drugs in a shorter period 
of time after FDA approval than ever before. Our population is more 
diverse than ever. Diseases and drug therapies to treat them present 
new challenges. These factors argue in favor of an enhanced post market 
surveillance system that tracks drugs after they have been approved so 
that we know drugs are safe and effective in the real world and not 
just at the moment they leave FDA's door after clinical trials. I know 
that we will hear encouraging testimony about improvement in this area. 
The legislative text, plus any related side agreements, will need to 
implement safety improvements.
    Also, concerns have been raised about PDUFA's role in the drug 
review process, so I look forward to today's testimony on these as 
well. Mr. Chairman, I ask unanimous consent to have included in the 
record the Patient and Consumer Coalition's PDUFA paper, which outlines 
many of these concerns. This coalition includes many consumer 
advocates, patient groups, including the International Union, UAW. I 
further request that Dr. Crawford review this paper and provide us with 
a response or comment to the points and concerns raised in that 
document.
    Finally, I want to echo the request of our Ranking Member, Mr. 
Brown, that this Subcommittee consider drug price and access issues 
this year. While I support the effort to produce a bipartisan PDUFA 
bill, we all know that there is a great deal of interest in these other 
issues, and we must begin to address them.

    Mr. Bilirakis. We are going to try to continue on here, and 
I am not sure that we will be able to do it. Dr. Ganske, the 
Chair exercises its preoperative under the rules to limit 
additional opening statements to 3 minutes. Dr. Ganske.
    Mr. Ganske. Thank you, Mr. Chairman, and I will be much 
briefer than that. I share the concerns of you and Chairman 
Tauzin. There come sometimes in Congress where you need to 
agree on what you can agree on, and move on with contentious 
issues in other forums.
    This is a very important bill, and you can see from the 
data that has been gathered that the approval times have been 
reduced by more than half in many instances. I think that is a 
testimony that, as Chairman Tauzin has pointed out, we have not 
seen an increase in drug withdrawals we were dealing with when 
PDUFA was first passed. There was a general consensus, a 
bipartisan consensus, that it was just taking too long, and we 
needed to streamline the process, and maintain safety 
standards, but try to help to get this process moving because 
lives were at stake.
    Patients needed their drugs, and it has been making a 
difference in their health and maybe even in staying alive. And 
delays were causing people their health and their lives.
    So let's move to a resolution on this in an expeditious 
manner. I look forward to reviewing the testimony by the people 
on the panels today, and thank you for coming.
    Mr. Bilirakis. Thank you, Dr. Ganske.
    Mr. Waxman.
    Mr. Waxman. Thank you very much, Mr. Chairman. The 
Prescription Drug User Fee Act has achieved its primary goal to 
speed the review of new drugs in the U.S. New drugs are now 
available in the U.S. faster than anywhere else in the world.
    This is an important achievement, and we should make every 
effort to ensure that people have access to safe and effective 
new medicines as quickly as possible. This achievement, 
however, has come at a cost. That cost is an under-funded drug 
review staff working on too many drugs, and too little time.
    Even the FDA has called the working environment there a 
sweat shop; hours are long, and salaries and training 
opportunities are poor, and turnover is high.
    Speeding drug approvals has had another cost as well. It 
has siphoned off essential funds for post-market safety 
programs, for review of direct to consumer ads, and for generic 
drug approvals.
    All of these FDA programs are critical to ensuring that 
drugs are safe, and affordable, and all are severely under-
funded. Most importantly, the cost of faster approvals has been 
a loss of public confidence in the safety of new drugs.
    And as this has been happening, we have witnessed a large 
increase in direct to consumer advertising of prescription 
drugs, ads that were not permitted at the time that PDUFA was 
first enacted.
    It has been demonstrated that these ads are extremely 
successful at fueling both demand by consumers and prescribing 
by physicians. What is so troubling is that many of these ads 
are often misleading and unbalanced.
    We should have a system that ensures that direct to 
consumer drug ads are adequate and fair. The FDA has only 13 
staff to review over 37,000 pieces of prescription drug 
advertising each year.
    Speeding the review of new drugs is important, but ensuring 
the public that drugs are safe and effective demands more, and 
we cannot sacrifice safety for speed. User fees paid by the 
pharmaceutical companies have provided the means to turn a slow 
approval process into one of the fastest in the world.
    It could provide the means to build a program that provides 
assurance to the public that new drugs are safe and effective, 
and that the advertising is truthful. Until now the 
pharmaceutical industry has resisted paying user fees for any 
purpose other than speeding approvals.
    I understand that this agreement that has been worked out 
with the FDA would have some of the user fees go to a post-
market, as well as a premarket review of drugs. I applaud this 
beginning, but much more is needed. In closing, let me note 
that today's hearing covers only one of the prescription drug 
issues confronting us.
    The most critical of these is the high price of 
prescription drugs causing hardship to the poor, and to our 
seniors, and to driving up the cost of health care for all of 
us. And adding to the crisis in affordability, we know that 
there have been serious abuses of the Hatch-Waxman law by 
brand-name manufacturers trying to keep generic drugs off the 
market. We owe it to the public that this committee address 
these issues as well, and I look forward to working with my 
colleagues on the committee to solve thee pressing problems.
    And I hope that we can do so in a fair and bipartisan 
manner, and be sure that we consider all of these issues as 
carefully as possible. Thank you.
    [The prepared statement of Hon. Henry A. Waxman follows:]

    Prepared Statement of Hon. Henry A. Waxman, a Representative in 
                 Congress from the State of California

    The Prescription Drug User Fee Act has achieved its primary goal--
to speed the review of new drugs in the US. New drugs are now available 
in the US as fast or faster than anywhere else in the world. This is an 
important achievement. We should make every effort to ensure that 
people have access to safe and effective new medicines as quickly as 
possible.
    This achievement has come at a cost, however.
    That cost is an underfunded drug review staff working on too many 
drugs in too little time. Even FDA has called the working environment 
there a ``sweatshop.'' Hours are long, salaries and training 
opportunities are poor, and turn-over is high. Under those conditions, 
it is difficult to have complete confidence in the approval decisions 
they reach.
    Speeding drug approvals has had another cost as well. It has 
siphoned off essential funds for post-market safety programs, for 
review of direct-to-consumer ads, and for generic drug approvals. All 
of these FDA programs are critical to ensuring that drugs are safe and 
affordable, and all are severely underfunded.
    Most importantly, the cost of faster approvals has been a loss of 
public confidence in the safety of new drugs.
    As this has been happening, we have witnessed a large increase in 
direct-to-consumer advertising of prescription drugs--ads that were not 
permitted at the time PDUFA was first enacted. It has been demonstrated 
that these ads are extremely successful at fueling both demand by 
consumers and prescribing by physicians.
    At the same time, many believe that these ads are often misleading 
and unbalanced. Whatever your view of whether these ads should be 
allowed (and frankly I don't believe they should), most of us would 
agree that we should have a system that ensures that direct-to-consumer 
drug ads are accurate and fair. We do not have such a system. Right 
now, FDA has only 13 staff to review over 37,000 pieces of prescription 
drug advertising each year.
    Speeding the review of new drugs is important. But ensuring the 
public that drugs are safe and effective demands more. We cannot 
sacrifice safety for speed. And we must be vigilant in our oversight of 
prescription drug ads to be sure that misleading ads do not prompt 
unsafe or inappropriate use of drugs.
    User fees paid by the pharmaceutical company have provided the 
means to turn a slow approval process into one of the fastest in the 
world. And they could provide the means to build a program that 
provides assurance to the public that new drugs are safe and effective, 
and that their advertising is truthful.
    Until now, the pharmaceutical industry has resisted paying user 
fees for any purpose other than speeding approvals.
    They have fought proposals to use their fees to ensure that the 
safety and effectiveness of their drugs is monitored and validated 
after approval.
    They have been unwilling to allow their fees to be used to ensure 
that their advertising is fair and truthful.
    I believe that the industry has been short-sighted. It is in the 
interest of manufacturers to support programs that give Americans 
confidence that prescription drugs can be safely used as advertised.
    This week we learned that the industry has agreed to pay increased 
fees to adequately fund the premarket review of drugs and a small 
amount to support a post-market safety program. I applaud this 
beginning. But much more is needed.
    Right now, the pharmaceutical industry spends one tenth of one 
percent of its revenues on user fees. Meanwhile, faster approvals have 
saved the industry billions of dollars per year. I don't think it's too 
much to ask that the industry pay what is necessary to ensure the 
safety and effectiveness of their drugs before and after approval. I 
don't think it's too much to ask that the industry help FDA ensure that 
direct-to-consumer ads are accurate and balanced. Continued public 
confidence in prescription drugs is in the balance.
    While I have concerns about some of the details of this 
reauthorization, I believe that good progress is being made and I look 
forward to working with my colleagues on both sides of the aisle on 
this important legislation.
    In closing, let me note that today's hearing covers only one of the 
prescription drug issues confronting us. The most critical of these is 
the high price of prescription drugs--causing hardship to the poor and 
to our seniors and driving up the cost of health care for all of us. 
Adding to the crisis in affordability, we know that there have been 
serious abuses of the Waxman-Hatch Amendments by brand-name 
manufacturers trying to keep generic drugs off the market. We owe it to 
the public that this Committee address these issues. I look forward to 
working with my colleagues on the Committee to solve these pressing 
problems.

    Mr. Bilirakis. I thank the gentleman. Mr. Bryant.
    Mr. Bryant. I thank the chairman, and I will be brief in 
light of the pending vote, as well as the need to begin to hear 
our outstanding panels of witnesses.
    And I simply will echo and adopt those statements of my 
colleagues on either side of the aisle that are in support of 
moving this bill expeditiously, and in an unencumbered fashion, 
and not getting into these contentious issues that seem to 
always crop up that are legitimate in some ways, because they 
are contentious.
    But there are certainly different sides to the issue that 
need to be fully aired at some point in the future. The issue 
today is this bill, and we need to move it quickly. Second, and 
I will close by recognizing my happiness in having a Tennessee 
doctor here today testifying from Vanderbilt, Dr. Wood, who 
will be on the second panel.
    And I welcome him, especially as I do all the other 
witnesses, and look forward to his testimony. Many of us are in 
other committees, and I have another committee marking up a 
bill which requires votes, and so I will be in and out of this 
hearing.
    But, Mr. Chairman, thank you for having it nonetheless, and 
I yield back my time.
    Mr. Bilirakis. I thank the gentleman, and I think it is 
only fair that we give everyone who wants to make an opening 
statement a fair opportunity to do so. I am afraid in wanting 
to go and vote that you are liable to miss out.
    Dr. Norwood is coming back to sort of take over, but I 
would like to think that we would hold it open, the opening 
statement period. Let's see. Mr. Pallone for an opening 
statement.
    Mr. Pallone. Thank you. Thank you, Mr. Chairman. I will try 
to be brief. I just wanted to say that I think it is sort of a 
no-brainer that we are going to reauthorize PDUFA before its 
sun sets, and I obviously agree with that.
    But I just wanted to reiterate what some of my Democratic 
colleagues have said, is that we know that this is coming up, 
and this is another bill that the brand name pharmaceutical 
industry supports, but we don't get the attention focused on 
some of the other issues that we consider important.
    I have to say that I was at--you know, I went and bought a 
prescription for my cat. I guess it was Monday night. Today is 
Tuesday or Wednesday, as I forget, but when we were back in the 
District and I was waiting in line as the pharmacy in my 
hometown and everybody at the counter was considered about the 
pricing issue.
    You know, how much they were paying, and how the prices 
were going up, and then I bought the prescription for the cat, 
which was probably the lowest prescription that was being sold 
at that counter that evening.
    And it is so amazing to think--you know, because we talk 
about this as sort of a joke, but the fact of the matter was 
that I was paying less for the cat than most of the people at 
the counter were paying for the prescription drugs that they 
had to buy for themselves for human beings.
    And when you talk about the pricing issue, it just seems 
that our Republican colleagues are reluctant to bring it up. 
Even the President, over the week, he rolled out this drug card 
again, and he is talking about the drug card and how that is 
going to do all these wonders.
    And everybody in my district tells me that the drug card--
you know, they already have it, and maybe they will get a 10 or 
15 percent reduction, but they already have it. And so why is 
this Administration promoting that, rather than dealing with 
the pricing issue.
    But of more immediate concern when you talk about PDUFA is 
my concern that PDUFA in fact underscores the need for generic 
drugs to enter the market. As resources within the FDA are 
allocated to approving drugs in accordance to user fees, it has 
been reported that limited FDA resources are taken away from 
other important areas within the agency, particularly an area 
within the FDA that are responsible for evaluating and 
approving generic drugs.
    And I really think that generics in many ways are the keys 
of trying to reduce prices. We need statutory and legislative 
initiatives that allow timely access to availability of generic 
drugs.
    However, today we are preparing to reauthorize legislation 
that guarantees timely approval of brand name drugs, while 
leaving behind necessary generics from potentially entering the 
market.
    So once again it is not just a question of what we roll out 
and what bills we deal with first, which clearly favors the 
brand names and not these other issues. But it is also the fact 
that even this legislation I think short changes generics, 
which I think is a major issue that we want to deal with if we 
are going to deal with the pricing issues.
    So I am concerned, and I know that the time is short, but I 
am not concerned that although this bill needs to be 
reauthorized, and we are here to do it, let's get to some of 
these other issues.
    Let's not shortchange generics and let's deal with the 
pricing issues, and at least have some hearings on it. Thank 
you, Mr. Chairman.
    Mr. Bilirakis. We have 5 minutes before the vote is up. All 
right. When Dr. Norwood returns, he will just have to wait 
until we return. We are in recess.
    [Brief recess.]
    Mr. Bilirakis. Shall we continue?
    Dr. Norwood.
    Mr. Norwood. Thank you, Mr. Chairman, and especially thank 
you for holding this hearing. It is very timely and very 
appropriate for us to consider PDUFA reauthorization.
    And in the interest of getting to our witnesses, I will be 
uncharacteristically brief. Mr. Chairman, PDUFA has worked. 
It's just of that simple. It is a program that is getting new 
drugs to Americans who need them, and it is getting those drugs 
to Americans far faster than before we passed PDUFA in 1992, 
and in a safe manner.
    We are approving drugs much faster, but yet drug safety 
doesn't seem to have been compromised. And I am very heartened 
by the work that the FDA is doing to improve on the original 
model, and I am looking forward to their comments on their 
efforts to date.
    However, Mr. Chairman, I have serious concerns about the 
cost and pricing of drugs, and I have some strong opinions 
about areas that I think we need to give oversight to FDA.
    But I want to point out that I am not going to press any of 
those things as part of a conversation with PDUFA because I 
agree with you and Chairman Tauzin that we need to have a very 
clean reauthorization bill, and do it sooner rather than later.
    It doesn't need to have things tacked on it that are 
controversial, and so I support you 100 percent. But I do hope 
as the chairman said that we will return to the subject of drug 
costs later this year, and give us all an opportunity to 
discuss that and look at that very closely.
    I would like to encourage frankly my colleagues on this 
committee to do the same, and let's get this reauthorized 
because it is the right thing to do for the American patient, 
and then let's have our discussions that we need to have. Thank 
you, Mr. Chairman.
    Mr. Bilirakis. I thank the chairman. Mr. Stupak.
    Mr. Stupak. Thank you, Mr. Chairman, and with 3 minutes, 
let me get right to the gist of my opening statement. We have 
heard a lot about how PDUFA works, but at what cost? What have 
we sacrificed?
    What we have sacrificed under PDUFA is honesty, accuracy, 
and informative labels. These are the duties and 
responsibilities that affect every American consumer. 
Therefore, we must be very careful to make sure that we do not 
compromise safety or effectiveness that the American public has 
come to expect.
    Now, I have heard a lot about this tentative agreement, and 
we don't know what it is because it is not in writing. It is 
verbal. Now we were briefed yesterday by FDA officials, and 
here are some of my concerns from that briefing.
    First of all, the FDA is financially dependent upon an 
industry that it regulates, and because under the new agreement 
user fees are dramatically increased, dependence will grow 
dramatically.
    Instead of using industry funds, Congress should 
appropriate enough money to ensure FDA's regulatory authority 
is completely independent, above approach, and free of undue 
pressure from the drug industry.
    Second, it is more than clear that the approval of the drug 
or device based on a relatively short term information does not 
always give us complete information about a drug.
    The number of drugs pulled off the market in the last 4 
years is 12.
    Now, I agree that three were pre-PDUFA, but nine drugs that 
raced through an accelerated PDUFA approval process with 
incomplete information brings me to my third point, Phase IV 
studies, also known as post-marking surveillance, are 
nightmarishly inadequate, and neglected to a shameful extent by 
both the FDA and drug manufacturers.
    In 1997, we did PDUFA-2, and we ordered a study from the 
FDA that would summarize how well the industry complied over 
the past 5 years with mandates to do Phase IV studies.
    This report, which was due to Congress by October 1, has 
been sitting in the Office of the Secretary of Health and Human 
Services, even though by law we are supposed to receive it 5 
months ago so we can do PDUFA reauthorization. Why the hold-up?
    I believe the results of this study will show the vast 
majority of drug companies do not do their mandated post-
marketing surveillance studies. According to some estimates, 90 
percent of them were never completed. Ninety percent. So how do 
we enforce it?
    I understand that PDUFA-3 as negotiated thus far comes a 
long way to address the major concerns with post-marketing 
surveillance, but without any enforcement, there will be no 
post-marketing surveillance as we see in PDUFA-2.
    So I suggest that we put civil monetary penalties pegged to 
the sales of drugs as one option that we should consider.
    Another area of concern is the ability of the drug 
manufacturers to game the system.
    While waiting for requested and required information from 
the manufacturer, the FDA should be able to stop the clock on 
the time constraints that PDUFA imposes. Due to extremely tight 
deadlines in PDUFA, manufacturers know that they can delay 
their response to FDA's request for information long enough so 
that the FDA is forced to make a decision without being able to 
do a thorough review, and double-check data.
    We had one breast cancer drug, and the FDA got the 
information 1\1/2\ weeks before the PDUFA deadline would run.
    My final concern is subpoena power. The FDA is one of the 
few health and safety regulatory agencies that does not have 
subpoena power.
    Subpoena power would give the FDA the authority it needs to 
inspect manufacturers' documents in a timely fashion. This is 
one issue that we need to explore in this context.
    And last, but not least, safety, adequate labeling, and 
compliance with Federal regulations always seem to fall by the 
wayside when we rush through PDUFA or whatever it might be.
    We did pediatric exclusivity here recently, and we are 
still waiting for studies. While this committee may have 
defeated pediatric exclusivity, it is going to come back under 
PDUFA.
    I recently wrote a letter to Bristol-Myers SQUIB last month 
about a drug called Serzone. Sixteen other members joined me. 
That was a drug that did a pediatric exclusivity in 1994. We 
are still waiting for the results of that study.
    We have young people who have suffered liver damage from 
this drug, and we can't even get anyone to tell us what the 
results of that study was for pediatric exclusivity 6 years 
ago. That's ridiculous, and it has to stop.
    We want to make sure that drugs are safe, and we want to 
make sure that we have adequate labeling, and we want to make 
sure that the FDA has adequate information. Therefore, Mr. 
Chairman, from subpoena power to enforcement power, the 
pediatric labeling under the pediatric exclusivity issue, these 
are all issues that must come up.
    I know that you and the chairman have said don't cloud up 
this bill with other issues. Mr. Chairman, this is the only 
vehicle we will probably see this year. On this side of the 
aisle, some of us are going to work to make safety, accuracy, 
honesty, and labeling, is put back in to the Food and Drug 
Administration and the Cosmetic Act of this country.
    Mr. Bilirakis. Mr. Pitts for an opening statement.
    Mr. Pitts. Thank you, Mr. Chairman, for holding this 
important hearing today on PDUFA reauthorization. I look 
forward to hearing from our witnesses. Since I have got two 
hearings going on at the same time, I may miss some 
questioning.
    I want to up-front mention my concern that the plasma 
industry be represented as the dialog on performance standards 
moves forward. As you may know the plasma industry provides 
unique life saving therapies, and also pays substantial user 
fees.
    I learned just recently that the CBER director has agreed 
to meet with the plasma industry to discuss performance 
standards, and I am hopeful that these discussions are 
productive. Mr. Chairman, the new medicines approved by the FDA 
in recent years include innovative treatments for many life 
threatening diseases, and patients and their families will 
benefit from the industry's innovation and so will the health 
care system.
    As we all know, recent research shows new medicines can 
help keep people out of the hospital and help them avoid costly 
surgery and other treatments.
    Mr. Chairman, while we may have many ineffective programs 
in our Federal Government that some would like to see expire, 
PDUFA is certainly not one of them. Our committee should act as 
quickly as possible to reauthorize this act, and I yield back 
the balance of my time. Thank you.
    [The prepared statement of Hon. Joseph R. Pitts follows:

  Prepared Statement of Joseph R. Pitts, a Representative in Congress 
                     from the State of Pennsylvania

    Thank you, Mr. Chairman for holding this important hearing today on 
the Reauthorization of the Prescription Drug User Fee Act.
    I look forward to hearing from our witnesses today about whether 
the Act has met its purpose of speeding the review of drugs and 
biologics without compromising patient safety.
    From my preliminary reading, it is clear that PDUFA has decreased 
the review time for drugs and biologics.
    It is gratifying to see the positive results of PDUFA that occurred 
almost immediately after passage. The fact that the review time for 
standard drug applications has been reduced from 26.9 months in 1993 to 
less than 12 months in 2001 is great progress.
    Mr. Chairman, since we all share the goal of getting life-saving 
drugs to patients as quickly as possible, I am hopeful that we can 
reauthorize this important Act as soon as possible.
    I hope that this committee can finish our business on this by 
August, 2002, so that the FDA does not have to begin the process of 
notifying PDUFA-funded employees that they may be laid off.
    I am also interested hearing from our witnesses today about the 
recent agreement between FDA and industry on the goals they have 
developed that will pave the way for us to reauthorize PDUFA III.
    Since I have another hearing right now in another committee, I may 
miss my chance to ask questions. Therefore, I want to mention my 
concern that the plasma industry be represented as the dialogue on 
performance standards moves forward. As you may know, the plasma 
industry provides unique life-saving therapies and also pays 
substantial user fees.
    I learned just recently that the CBER Director of FDA has agreed to 
meet with the plasma industry to discuss this issue. I am pleased that 
this has been arranged and hopeful these discussions are productive.
    Mr. Chairman, the new medicines and biologics approved by the FDA 
in recent years include innovative therapies for many life threatening 
diseases. Patients and their families will benefit from the industries' 
innovation, and so will the health care system. As you know, recent 
research shows these new treatments can help keep people out of the 
hospital and help them avoid costly surgery and extensive medical care.
    Mr. Chairman, while we have many ineffective programs in our 
federal government that some of us would like to see expire, PDUFA is 
certainly not one of them. Our committee should act as quickly as 
possible to reauthorize this Act.

    Mr. Bilirakis. Ms. Capps for an opening statement. Ms. 
Eshoo for an opening statement.
    Ms. Eshoo. Thank you, Mr. Chairman, along with all of my 
colleagues from the committee for having this important 
hearing. I am very proud of the PDUFA program and how it has 
revolutionized the prescription drug approval process.
    So reauthorizing this legislation is one of the most 
important things that I think our committee can do this year, 
and we must do it this year.
    Prescription drugs and biologics are changing health care 
on a daily basis. I am constantly amazed by the science and 
what products have done to make our lives better. Twenty years 
ago, a patient with chronic diabetes could expect extended 
hospital stays, shorter life span, and higher health care 
costs.
    Today, prescription drugs allow diabetics to manage their 
illness from the comfort of their own home, and they have 
expectations of a much fuller and better life. PDUFA has gone a 
long way toward ensuring the drugs to treat diabetes, and other 
illnesses, reach the patients that so desperately need them in 
a timely and responsive manner.
    Prior to the initial passage of PDUFA, it often took years 
for drugs and biologics to be reviewed by the FDA. The agency 
was strapped for both financial and human resources, and was 
unable to devote enough time and energy to the review process.
    And that's really where the rubber meets the road. It is 
the review process. In the 10 years since it was passed, PDUFA 
funding has revamped and revitalized the review process, and 
allowed the FDA to increase its staff and its expertise, and 
upgrade its IT systems, and better structure the management of 
the review process.
    So clearly this is an example of legislation that has 
worked, and is working very well. So we have to seize this 
opportunity, and we need to reauthorize, and we need to do it 
in an expeditious manner.
    The FDA and the drug biotech industries have been working 
closely to draft what is known as a side agreement that always 
accompanies PDUFA. I am glad that they have come to an initial 
consensus, and I look forward to reviewing the agreement soon.
    I do want to take this opportunity to stress to the 
chairman and my colleagues the importance of reviewing this 
agreement before, and not after, but before we mark up the 
legislation.
    Given that this agreement is not bound by statute, it is 
important that members be given ample time to review and have 
any concerns addressed by the stakeholders. We shouldn't let a 
desire for expeditious action overtake good, sound 
policymaking.
    So, in closing, I would like to once again reiterate my 
support for PDUFA, the user fee program, and in hearing 
Chairman Tauzin make his opening statement, I, too, am proud of 
the work that we did in reauthorizing in 1997.
    But we also have part of PDUFA, and I understand the 
complications of not joining them this time, because that is 
the chairman's view and wish, and I think that he obviously has 
very good reasons for it.
    We are not going to issue with notices, but the 
reauthorization of FDAMA is a very, very important step for 
this committee and the Congress to take this year as well. As 
we talked about he reliance of patients across the country on 
prescription drugs, they are also increasingly reliant on the 
medical devices that not only give them hope, but bring them 
good and improved health day in and day out.
    So I think that it is very important for the committee, and 
Mr. Chairman, for you, to start thinking about that, and that 
we have a hearing on the bill, and you know that I will work 
closely with you in order to accomplish that.
    So thanks again for having this, and I look forward to the 
review of the side agreement and legislation moving so that we 
can get this done. It is good legislation, and it has worked 
well, and it has served the American people well. That's the 
reason that we are all here. Thank you, Mr. Chairman.
    Mr. Bilirakis. Thank you. Mr. Deal for an opening 
statement.
    Mr. Deal. Thank you, Mr. Chairman.
    Just a couple of thoughts. I would like to thank Dr. 
Woodcock for your willingness to meet with me in the past on 
the issues that are related to your agency's functions.
    And to Ms. Pendergast, to say that Elan Pharmaceutical, 
which is headquartered in my district, we are always pleased to 
have representation here. Certainly the issue is an important 
one, and one that many of us have looked forward to this 
hearing, and I thank the chairman for holding it.
    Certainly the issues that will make the availability of 
drugs in a more responsive and quicker fashion is certainly 
something that I think all of our constituents want.
    But at the same time the concerns voiced by many of my 
colleagues about safety are concerns that I think this hearing 
hopefully, and others, will reinforce to assure us that we have 
the best and safest products on the market. And with that, I 
yield back my time, Mr. Chairman.
    Mr. Bilirakis. I thank the gentleman.
    Ms. Capps for an opening statement.
    Ms. Capps. Mr. Chairman, I appreciate the opportunity that 
you are giving the subcommittee to review the Prescription Drug 
User Fee Act. Prescription medications have radically changed 
health care, and improved the lives of millions of Americans.
    They have become an essential component of what is now 
standard medical care, at least for those that can afford it. 
This committee has often struggled with issues relating to 
prescription drugs.
    And whether we are talking about seniors on Medicare or 
pharmaceuticals for children, there are basically three 
questions that we asked when we address prescription drugs. How 
fast can a patient get them, and how safe and effective are 
they, and how much do they cost.
    We want them to be quick to market, save to use, and 
affordable to patients. PDUFA has addressed the first matter by 
significantly improving FDA's ability to review and approve new 
medications.
    These medications that are quicker to market seem to have 
helped many Americans enjoy a higher quality of life. That 
being said, PDUFA raises some questions about the issue of 
safety, and may contribute to some of our problems addressing 
cost.
    In theory, while PDUFA accelerates the approval process for 
new drugs, these drugs still must be safe before they are 
approved, and there is some concern that the performance goals 
of PDUFA may end up putting drugs on the market before they are 
sufficiently tested and reviewed.
    That is what we must examine.
    Post-market surveillance is supposed to catch anything like 
this, but with the resources for these surveys, and FDA's 
authority to insist on them, are limited. This is certainly 
something that we need to correct as we move toward 
reauthorization of PDUFA.
    I am also worried that PDUFA may help keep the cost of 
prescription drugs inflated. The fees themselves, of course, 
add the cost to medications, but more importantly PDUFA also 
forces the FDA resources toward the approval of brand name 
drugs, denying those resources for the review of generic drugs.
    Generics access to the market is given to lower the cost of 
prescription drugs dramatically, but the effect is limited 
because the FDA is so slow to approve them. In 2001, the 
average time it took to review and approve a new brand name 
drug was 12 months.
    The FDA took nearly twice that long, 22 months on average, 
to approve generic drugs. I think this is appalling. And even 
when these generics are approved, it does not necessarily mean 
that they are going to get to the market right away.
    Brand name pharmaceutical companies find various legal ways 
to extend their patent or market exclusivity to block generic 
competition. So as we review PDUFA, it would be beneficial to 
consider these related issues and look for ways in which we 
might adjust PDUFA to address them.
    I understand that we expect two studies from the 
Administration on safety and effectiveness of PDUFA to be 
released later this year, and I think it would be a disservice 
to act on PDUFA for reauthorization without the benefit of 
those studies.
    So I hope, Mr. Chairman, that you will not schedule a mark 
up until we have them in-hand, and to this end, I look forward 
to hearing our witnesses' testimony on this subject, and I look 
forward to working on this with you, Mr. Chairman, and I yield 
back my time.
    [The prepared statement of Hon. Lois Capps follows:]

  Prepared Statement of Hon. Lois Capps, a Representative in Congress 
                      from the State of California

    Mr. Chairman I appreciate the opportunity you are giving the 
subcommittee to review the Prescription Drug User Fee Act.
    Prescription drugs have radically changed health care and improved 
the lives of millions of Americans. They have become an essential 
component of what is now standard medical care, at least for those who 
can afford it.
    This committee has often struggled with issues relating to 
prescription drugs.
    But whether we are talking about seniors on Medicare or 
pharmaceuticals for children there are basically three questions we ask 
as we discuss prescription drugs: How fast can a patient get them, how 
safe and effective are they, and how much do they cost.
    We want them to be quick to market, safe to use, and affordable to 
patients.
    PDUFA has addressed the first matter by significantly improving the 
FDA's ability to review and approve new medications.
    These medications' quicker access to market seems to have helped 
many Americans enjoy a higher quality of life.
    That being said PDUFA raises some questions about the issue of 
safety, and may contribute to some of our problems addressing cost.
    In theory, while PDUFA accelerates the approval process for new 
drugs, these drugs still must be safe before they are approved.
    But there is some concern that the performance goals of PDUFA end 
up putting drugs on the market before they are sufficiently tested and 
reviewed.
    Post market surveillance is supposed to catch anything like this, 
but the resources for these surveys and FDA's authority to insist on 
them are limited.
    This is certainly something we need to correct as we move towards 
reauthorization of PDUFA.
    I am also worried that PDUFA may help keep the costs of 
prescription drugs inflated.
    The fees themselves of course add cost to medications, but more 
importantly PDUFA also forces FDA resources towards the approval of 
brand name drugs, denying those resources for the review of generic 
drugs.
    Generics access to the market is proven to lower the cost of 
prescription drugs dramatically, but the effect is limited because FDA 
is so slow to approve them.
    In 2001, the average time it took to review and approve a new brand 
name drug was 12 months. FDA took nearly twice that long, 22 months on 
average, to approve generic drugs. This is appalling.
    And even when these generics are approved, it does not necessarily 
mean that they get to market right away.
    Brand name pharmaceutical companies find various legal ways to 
extend their patent or market exclusivity to block generic competition.
    As we review PDUFA, it would be beneficial to consider these 
related issues and look for ways we might adjust PDUFA to address them.
    I understand that we expect two studies from the administration on 
the safety and effectiveness of PDUFA to be released later this year.
    I think it would be a disservice for this subcommittee to act on 
PDUFA reauthorization without the benefit of those studies, and I hope, 
Mr. Chairman, that you will not schedule a markup until we have them in 
hand.
    To this end I look forward to hearing our witnesses' testimony on 
this subject and I look forward to working on this with you Mr. 
Chairman.

    Mr. Bilirakis. Mr. Buyer for an opening statement.
    Mr. Buyer. I have just a couple of thoughts, Mr. Chairman. 
I think it is very valuable to America's society that our drug 
companies lead the world in the cutting edge in science and 
biologics.
    I don't think we want to do anything that would dull that 
innovation and creativity of the greatest minds of the world. 
And there are so many countries out there that their 
governments have imposed systems that have had a detrimental 
impact upon those industries.
    And they look to the United States and the great minds of 
the world come here. And we have to be very careful in what we 
do. So, sure, there are the pressures that different members 
receive from their constituencies to gain access to these great 
drugs because of what it can do for the quality of life or 
their loved one who is sick or ailing.
    But Congress, and the industry, and the agency, did 
something right. You know, someone who is critical toward 
government, you also have to compliment when something was done 
right.
    In 1992, something was done right. I think it is thoughtful 
for us to sort of look back now over the last 10 years and say, 
okay, what are some of the lessons learned. I believe that our 
process here in reauthorization should be the maintenance of 
something that works.
    And not trying to change something, and not bring political 
agendas in an election year into something that is very 
critical and is something that we have to do, and that is 
reauthorize a successful program.
    I will accept recommendations from the agency, and the 
industry will have some, and I think that is part of the 
oversight function of Congress to do. But we have to be very 
careful here not to miss something that is so successful. With 
that, I yield back.
    Mr. Bilirakis. I thank the gentleman.
    Mr. Strickland for an opening statement.
    Mr. Strickland. I want to thank you, Mr. Chairman, and 
Ranking member Brown, for this hearing today. I was pleased to 
read in the submitted testimony of the success since 1992 in 
speeding FDA's review times for drug applications.
    The numbers are impressive. Median review times for 
priority drugs have decreased from a median of 20.5 months to 6 
months, and the median review time for standard new drug 
applications fell from 26.9 months to about 12 months. PDUFA 
has meant that more Americans have access to new remedies 
faster, and I am glad that we will reauthorize the program to 
continue these successes. However, I hope that we use the 
opportunity this reauthorization gives us to strengthen PDUFA 
and ensure that the program has not sacrificed safety for 
speed.
    Since drugs are getting to the market and American 
consumers more quickly, we should consider the effects of this 
faster time line on drug safety and dedicate a portion of 
PDUFA's resources for FDA to track post-market outcomes of 
drugs.
    Similarly, I believe we should take this opportunity to 
consider the effect of direct to consumer advertising on 
prescription drug use and cost. If PDUFA's triggers cause the 
FDA to devote less resources to functions like post-market 
tracking, and the review of direct to consumer ads, we should 
we think the way these triggers operate for the limits on the 
use of PDUFA funds.
    This debate would not be complete without a consideration 
of the effects of faster review times on the cost of 
prescription drugs. I hear every day from Medicare 
beneficiaries, in particular, who are struggling to afford the 
cost of their prescription drugs.
    Put in this context, even the shortest possible FDA review 
will not help those Americans who lack drug coverage to access 
the drugs. They need to live healthy and productive lives.
    And that is an issue that this Congress must address and 
should address this year. I want to thank you, Mr. Chairman, 
and I yield back the remainder of my time.
    Mr. Bilirakis. I thank the gentleman. I ask for unanimous 
consent, first of all, that the opening statements of all 
members of the subcommittee be made a part of the record, and 
without objection, that will be the case.
    [Additional statements submitted for the record follow:]

  Prepared Statement of Hon. Fred Upton, a Representative in Congress 
                       from the State of Michigan

    Mr. Chairman, thank you for holding today's hearing on the 
reauthorization of the Prescription Drug User Fee Act. I am sure that 
we will hear a lot of statistics this morning about the impact that 
this important law has had on improving both the quality and the 
timeliness of the review and approval of new drugs and biologics. But I 
want to focus on the difference that this law has made in the lives of 
individuals--of friends and family members who have greatly benefited 
by the FDA's ability to give timely review and approval to potentially 
life-saving drugs and biologics.
    Just about a year ago, a call came into my district office from a 
constituent asking if we could do anything to speed the FDA's review of 
a very promising new drug--Gleevec--for the treatment of the rare form 
of leukemia with which her husband was suffering. Like very many in the 
Kalamazoo community, my staff and I have known and valued the 
friendship of this couple for many years. As was typical, her husband 
``didn't want to bother us'' with their problems, our constituent 
reported, but she was very worried. We knew he had been suffering from 
leukemia, but until that call, we didn't know that the medication he 
was taking was no longer effective in controlling it and that his 
condition was deteriorating. This drug may well have been his last 
hope.
    We checked with the manufacturer and learned that the FDA appeared 
to be very close to approving the drug. That proved to be the case. 
Within a week or so of the call, the FDA approved Gleevec, and we 
worked with Novartis to get the drug to our constituent's hospital 
pharmacy. It has proved to be the miracle we were all praying for. He 
is back on his feet enjoying life, and my life and the lives of so many 
in our community who know them and treasure their kindness and 
friendship are the richer for his recovery, too.
    In all likelihood, this would not have happened before we enacted 
user fees and the FDA Modernization Act, which together give the FDA 
the flexibility and resources it needs to review and approve Gleevec 
and similar, breakthrough drugs. Recognizing the promise of this drug, 
the FDA reviewed the marketing application in less than three months 
under its accelerated approval regulations. That is a record--the 
fastest ever approval for an oncology drug.
    I know we will hear today from those who are concerned that perhaps 
the agency is moving too fast on new drug approvals. But had the agency 
not acted with the speed and expertise it did on Gleevec, my friend and 
constituent would probably not be with us today. There is a human 
cost--a great cost--in delaying this reauthorization.
                                 ______
                                 
Prepared Statement of Hon. Barbara Cubin, a Representative in Congress 
                       from the State of Wyoming

    The Prescription Drug User Fee Act (PDUFA) is, in large part, what 
separates the United States from the rest of the world when it comes to 
consumer access to innovator drugs.
    No one rivals this country in the manufacturing, approval, and 
distribution of innovator pharmaceutical products and devices--thanks 
to PDUFA. I would like to see that continue.
    The issue we face at this point is how do we do it even better?, 
especially since funds needed for the drug approval process at FDA 
outweigh the revenue coming in through drug application fees.
    The last thing any of us wants is to see drug safety and approval 
time slip because FDA does not have what it needs to get the job done.
    PDUFA must be reauthorized this year, not only for the sake of 
patients everywhere but for the continued high standard of innovation 
set by this country.
    My interest today is to better understand the recent agreement 
reached between the FDA and industry on application fees and 
performance standards.
    Since this agreement is paramount in any PDUFA reauthorization we 
attempt, it is important we give our full attention to our witnesses 
today.
    With that, Mr. Chairman, I yield back my time.
                                 ______
                                 
Prepared Statement of Hon. Robert L. Ehrlich, Jr., a Representative in 
                  Congress from the State of Maryland

    Mr. Chairman, thank you for holding this important hearing to 
discuss the reauthorization of the Prescription Drug User Fee Act 
(PDUFA).
    PDUFA, which was first enacted in 1992, authorizes FDA to charge 
pharmaceutical companies user fees to expedite the review process for 
human drug and biologic applications. There are three types of fees: 1) 
application fees are paid when human drug applications or supplements 
are submitted; 2) product fees are due annually for each marketed 
prescription drug product; and 3) establishment fees are also due 
annually for each establishment manufacturing prescription drugs.
    Mr. Chairman, reauthorization of this legislation is critical. The 
federal government must have in place at the FDA an effective procedure 
with sufficient resources, personnel, and expertise to review new drugs 
to ensure that the American population receives speedy access to the 
cutting-edge drugs available to treat so many health conditions today. 
PDUFA has worked to significantly reduce approval times.
    For their part, the biotechnology and pharmaceutical companies 
should have the guarantee of an expedited, streamlined administrative 
review process to ensure that their innovations are reviewed thoroughly 
and sent to market as soon as possible for safe consumption. To ensure 
speedy review, companies must pay the costs of the application, 
product, and manufacturing fees so FDA has the resources to do its job 
right.
    Mr. Chairman, as Co-Chair of the Congressional Biotechnology 
Caucus, and recognizing the over 270 biotechnology companies in 
Maryland, I know that it is critical that new drug treatments receive 
expeditious, thorough scrutiny of their latest products.
    Ultimately, this legislation is about patients, and as we work with 
all groups to ensure an effective review process, we must keep patient 
safety and speedy access to medical innovations in mind.
    I look forward to the testimony today as we consider reauthorizing 
this important legislation.
    Thank you, Mr. Chairman.
                                 ______
                                 
Prepared Statement of Hon. Ed Towns, a Representative in Congress from 
                         the State of New York

    Today's hearing gives us another opportunity to promote a unique 
relationship between government and industry: the reauthorization of 
the Prescription Drug User Fee Act (PDUFA). PDUFA is a successful 
partnership that allow the F.D.A. to collect user fees from the 
pharmaceutical industry in order to hire additional drug reviewers and 
accelerate the drug review process.
    By all accounts, the program has been extremely successful in 
bringing new drugs to market in a more reasonable timeframe. For 
example, before this legislation was enacted by this committee in 1992, 
review times for new drug entities averaged about 2.5 years. By 1999, 
the average review time had been reduced to 12.6 months. I am aware 
that some have criticized this legislation as compromising F.D.A.'s 
independent review authority. It is important to ensure that the 
enhanced efficiency of the drug review process has not compromised drug 
safety. Therefore, I am anxious and eager to learn whether drug 
withdrawals can, in fact, be traced to faster approval times.
    Finally, Mr. Chairman, we should remember that the reauthorization 
of PDUFA will not only determine whether 1,000 drug reviewers will keep 
their jobs past July of this year but it could also well determine how 
quickly we approve a new treatment for diabetes, lupus or cystic 
fibrosis or many other diseases. Certainly, we should examine proposals 
to strengthen ``post-market surveillance.'' The F.D.A. has designed a 
new proposal which allows the drug sponsor to design the appropriate 
studies to monitor and assess potential risks. This approach process 
allow quality to be built in from the beginning of the review process. 
We should also remember that this law, in its current form, has been 
remarkably effective in bringing additional resources to the F.D.A. as 
well as reducing the market approval time for drugs. I am hopeful that 
this committee can continue to provide the kind of policy leadership 
which has resulted in new, faster drug approvals with the safety and 
efficacy standards which has previously characterized F.D.A. reviews. I 
look forward to hearing from today's witnesses.
                                 ______
                                 
  Prepared Statement of Hon. Gene Green, a Representative in Congress 
                        from the State of Texas

    Thank you Mr. Chairman for holding this hearing today on the 
Prescription Drug User Fee Act.
    When the PDUFA program was first authorized in 1992, there were 
many critics who worried that it would be a conflict of interests for 
the FDA to accept user fees in order to expedite the review of 
pharmaceuticals and biologics.
    And while there are still critics of the PDUFA program, the 
evidence indicates that the FDA and the industry can work together in a 
fashion that gets life-saving medicines to the public in an efficient 
and safe manner.
    In 1993, the median review time for a standard new drug application 
was almost 26 months.
    For an individual dying of a serious illness, this was far too long 
of a wait.
    Since PDUFA's implementation, however, there has been a dramatic 
decrease in the length of time it takes to have a new drug approved. 
Today, the median has dropped to just twelve months.
    More importantly, for priority new drug applications--which are the 
life-saving therapies that often represent the last hope for people 
with serious terminal illnesses--the median approval time was six 
months in 2001.
    As Dr. Crawford points out, the life-saving breast cancer 
treatment, Herceptin, was approved by FDA in less than five months.
    This is exactly the kind of result that the Congress intended when 
it passed this law a decade ago.
    PDUFA is not without its problems, however, and that is what we are 
here today to discuss.
    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.
    Many have 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.
    Mr. Chairman, these are important issues and I am glad that we are 
holding a hearing to learn more about them.
    It is certainly of importance to all of my constituents that the 
FDA has the resources it needs to review pharmaceuticals to ensure 
their safety and efficacy.
    But I would be remiss if I did not raise other concerns about 
prescription drugs--the costs of these vital medications, the affects 
of direct-to-consumer advertising, and the absence of a Medicare 
prescription drug benefit.
    Last year, the National Institute for Health Care Management 
Foundation stated that spending on retail outpatient prescription drugs 
rose by almost 19% in 2000, from $111.1 billion to $131.9 billion.
    Approximately half of that spending increase can be attributed to 
just 23 drugs.
    Among those drugs are blockbuster drugs like Vioxx, Lipitor, 
Celebrex, and Glucophage the very drugs that seniors rely on every day 
to treat chronic, long-term illnesses like diabetes, arthritis, and 
high cholesterol.
    It is no coincidence that these are the same drugs that are so 
heavily advertised in direct-to-consumer marketing.
    We must ensure that patients understand what these drugs do--and 
don't do--and the risks associated with taking them.
    But most importantly, after decades of rhetoric, the Congress must 
act to provide a meaningful, comprehensive prescription drug benefit 
under Medicare.
    A full one-third of Medicare beneficiaries--more than 14 million 
seniors--have no prescription drug coverage at all.
    We need a prescription drug benefit that makes sure that seniors, 
who have worked hard and paid taxes their whole lives, have access to 
these life-saving medications.
    The Congress has been slow to act on this issue, and it is 
inexcusable.
    But I have to give credit where credit is due. Recently, various 
companies in the pharmaceutical industry have announced discount cards 
and programs for low-income seniors who do not have access to a 
prescription drug benefit.
    Just yesterday, Eli Lilly joined the ranks of Pfizer, Novartis and 
GlaxoSmithKline and announced the creation of their prescription drug 
discount program.
    These programs are by no means a solution to the Medicare 
prescription drug problem but these companies have made an effort to 
help the poorest seniors get access to the drugs they need.
    I thank them for their efforts in this regard, and hope that they 
will prompt Congress to do the same.
    With that, Mr. Chairman, I yield back the balance of my time.

    Mr. Bilirakis. I also ask for the unanimous consent that a 
couple of documents here, one entitled, ``Patient and Consumer 
Coalition, Background of Prescription Drug User Fee Act,`` and 
also a letter to the four chairmen and ranking members from a 
group of organizations, and it doesn't have a date on it, but 
these have been shared with the minority, that they be made a 
part of the record. That being the case, and without objection, 
they are so made a part of the record.
    [The information referred to follows:]

The Honorable W.J. Billy Tauzin
Chairman
Energy and Commerce Committee

The Honorable John Dingell
Ranking Member
Energy and Commerce Committee

The Honorable Mike Bilirakis
Chairmnan
Health Subcommittee

The Honorable Sherrod Brown
Ranking Member
Health Subcommittee

    Dear Chairmen and Ranking Members: We, the undersigned patient 
advocacy organizations implore you to consider a swift and clean 
reauthorization of the Prescription Drug User Fee Act (PDUFA) that has 
been of enormous benefit to patients with all types of diseases in all 
parts of our country.
    The user-fee law has been an unqualified success--a poster child 
for Congressional achievement. Before the law was first enacted ten 
years ago, review of new drugs took about 2\1/2\ years and the 
timeliness of drug review was a big concern to patients who were not so 
patiently waiting for their life-saving medicine.
    Countless thousands of patients have benefited from Congress' 
leadership in enacting the first PDUFA law in 1992, and supporting its 
reauthorization in 1997. Since that time, life-saving drugs have been 
made available to patients sooner, and without in any way compromising 
the gold standard of drug approval upon which patients rely. According 
to the FDA, the rate of drug withdrawal has remained constant at 2.7 
percent before 1992 and 2.7 percent today.
    The result: the average review time for new drugs has been cut 
almost in half from 30 months to less than 18 months--for some 
patients, that's a lifetime. And today, about half of all new drugs are 
approved first in the U.S.
    The law is working. Patients are not waiting as long for their new 
medicines--and Congress must act without delay to ensure that patients 
continue to receive new cures and treatments as expeditiously as 
possible. Moreover, it is vital that PDUFA, which is set to sunset on 
September 30, be reauthorized by July so FDA does not have to begin 
laying off reviewers and the drug approval process is not disrupted in 
other ways.
    Our organizations represent literally millions of American patients 
and their families. We are all depending on your leadership to 
reauthorize PDUFA cleanly and quickly.

                The ALS Association; Leukemia and Lymphoma Society;
             Parkinsons Disease Foundation; American Association of
       Clinical Endocrinologists; Pancreatic Cancer Action Network;
              Kidney Cancer Association; Cancer Research Institute;
   Association of Clinicians for the Underserved; National Alliance
     for Hispanic Health; National AIDS Treatment Advocacy Project;
  Cancer Research Foundation of America; American Liver Foundation;
            Pulmonary Hypertension Association; American Foundation
                  for Urologic Disease; Cystic Fibrosis Foundation;
                and National Coalition for Women with Heart Disease
                                 ______
                                 
                     Patient and Consumer Coalition

            BACKGROUND ON THE PRESCRIPTION DRUG USER FEE ACT

    The Prescription Drug User Fee Act was enacted in 1992 to address 
concerns about the length of time it took for new drugs treating life-
threatening and disabling conditions--especially AIDS--to be reviewed 
and approved by the FDA. The authors of PDUFA recognize that Congress 
was not going to provide enough in new appropriations to support the 
increased staff that a shorter approval process would require. PDUFA 
mandated that drug manufacturers pay user fees when they filed a New 
Drug Application for review and approval of a product.
    PDUFA was reauthorized in 1997 as part of the Food and Drug 
Administration Modernization Act. However, this iteration included more 
stringent ``performance goals'' requiring that the FDA meet very tight 
review deadlines. These faster deadlines were insisted upon by the 
pharmaceutical industry, which argued that these ``measurables'' were 
necessary to ensure that the user fees they paid were not dispersed to 
fund other agency activities. For the first time, PDUFA II also 
included stipulated time frames for the scheduling of meetings and 
response to industry requests (``management goals'').
    As a result of PDUFA I and II, the FDA has both dramatically 
increased the amount of resources it devotes to new drug and biologics 
review and decreased the review time. But this has come at a price. 
PDUFA requires that the agency increase funding from non-user fee 
revenues for drug reviews by an inflation-adjusted amount every year. 
But, Congressional appropriations for the FDA have not kept pace with 
inflation and with the increased mandates on and responsibilities of 
the agency. As a result, the only way the FDA can comply with PDUFA's 
requirements to increase non-user fee funding for the drug review 
process is to take resources away from other essential activities, such 
as post-market research and surveillance, on-site inspections, and 
regulation of medical devices. Moreover, the agency has said that user 
fees generate less than the total expenditures the agency must make to 
satisfy PDUFA performance and management goals. As Former Commissioner 
Jane Henney said, ``. . . 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.'' \1\
---------------------------------------------------------------------------
    \1\ FDA Consumer Magazine, ``User Fees for Faster Drug Review: Are 
They Helping or Hurting the Public Health?,'' September-October 2000.
---------------------------------------------------------------------------
    The short review times mandated under PDUFA II have had other 
negative effects. The director of FDA's Center for Drug Evaluation and 
Research, Dr. Janet Woodcock, has expressed a great deal of concern 
about the high rate of turnover among review staff, which means that 
the agency has had difficulty retaining experienced, competent 
reviewers. Dr. Woodcock has said that the intense timelines under PDUFA 
have created a ``sweatshop environment that's causing high staffing 
turnover.'' \2\
---------------------------------------------------------------------------
    \2\ Ibid.
---------------------------------------------------------------------------
    There have also been concerns about a series of high-profile drug 
withdrawals over the last few years. According to the Pulitzer Prize-
winning investigation by David Willman of the Los Angeles Times, seven 
of these drugs--Lotronex, Propulsid, Rezulin, Raxar, Posicor, Duract 
and Redux--are suspected in 1,002 deaths.\3\ While FDA officials claim 
that these safety problems were not necessarily linked to PDUFA, the 
withdrawals raise troubling questions about whether the agency 
performance goals mandated by the Act may be overriding its public 
health responsibilities.
---------------------------------------------------------------------------
    \3\ David Willman, ``How a New Policy Led to Seven Deadly Drugs,'' 
Los Angeles Times, December 20, 2000.
---------------------------------------------------------------------------
    In fact, several former FDA employees told the Los Angeles Times 
that they were under a great deal of pressure to approve drugs quickly. 
Bill Schultz, former deputy commissioner at the FDA said, ``You can 
meet the [performance] 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.'' \4\
---------------------------------------------------------------------------
    \4\ Ibid.
---------------------------------------------------------------------------
         reauthorization of the prescription drug user fee act
    The undersigned members of the Patient and Consumer Coalition 
believe that the upcoming re-authorization of PDUFA offers an important 
opportunity to increase the safety of prescription drugs and devices in 
this country and to insure that the protection of the public's health 
is the FDA's top priority under the Act. We urge Congress to:

 Hold balanced hearings on PDUFA reauthorization and drug 
        safety concerns. The hearings should include testimony from 
        patients who have been harmed by problem drugs--or their 
        representatives--and consumer advocates who are knowledgeable 
        about PDUFA. Such hearings would send a vital signal to FDA 
        from Congress that what the public wants and deserves is a 
        thorough review and oversight process for drugs and biologics, 
        not just speedy approval of new products.
 Adequately fund the entire range of FDA's approval and safety 
        oversight activities from general revenues. There is an urgent 
        need for increased funding for post-marketing surveillance and 
        other safety-related activities not covered by current user 
        fees. User fees are not a substitute for adequate federal 
        funding of these vital and growing public health functions. 
        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.
 Give the FDA total control over all review and surveillance 
        activities. If an unwillingness to appropriate adequate funds 
        leads Congress to consider the expansion of user fees, it is 
        absolutely essential that the FDA alone determine their usage, 
        without the kind of inappropriate control over the use of these 
        fees (through mandated decision-making deadlines) that the 
        industry has exercised with new drug approvals.
 Address drug safety concerns created by PDUFA's excessive and 
        inappropriate focus on swift approval over public health. PDUFA 
        III should include new safety protections that, to the greatest 
        extent possible, protect the public from potential harm caused 
        by adverse reactions, side effects and adverse events related 
        to pharmaceutical products and biologics. Decision-making 
        deadlines for drug review should be redefined to focus on the 
        FDA's responsibility to guarantee safe drugs, not only on the 
        speed with which reviews are conducted. The agency's antiquated 
        and under-funded adverse event reporting system (for drugs, 
        biologics and devices) should also be modernized.

1. Restructure User Fees
 Eliminate the linkage between appropriated and user fee funds. 
        The current law results in disproportionate funding for the 
        drug approval process compared to most other research, 
        regulatory, and public education functions. At a minimum, the 
        program must be re-designed in such a way as to prevent the 
        draining of funds from vital FDA functions.
 Require that user fees support the life cycle of the review 
        process. Presently, FDA staff hold numerous pre-New Drug 
        Application meetings with manufacturers before the agency 
        receives any PDUFA fees for the intended application. While 
        these meetings benefit sponsors greatly by improving their 
        understanding of FDA expectations and the quality of their 
        applications, they also divert FDA staff time from other review 
        functions and increase the cost and difficulty of meeting PDUFA 
        goals. In other words, the required meetings are an un-funded 
        mandate on the agency.

2. Eliminate or Overhaul Performance Goals
    Although PDUFA's deadlines are for decision-making on drugs and 
biologics, not approval, these goals put the FDA under tremendous 
financial pressure to move very quickly on the overall approval 
process. By requiring that decisions must be made within the same 
timeframes for priority and standard reviews,\5\ these goals force the 
agency to take an unvarying, ``cookie cutter'' approach to approvals. 
Congress should eliminate these required goals. If this does not occur, 
the agency should be given greater flexibility to set its own 
priorities and/or extend the goals, including:
---------------------------------------------------------------------------
    \5\ PDUFA II establishes deadlines that require FDA to review 90 
percent of priority (``fast track'') new drug Applications within 180 
days and 90 of standard applications within ten months.

 Consult All Stakeholders--If performance goals are not 
        eliminated in PDUFA III, consumers and patient representatives 
        should be involved in developing them.
 Grant FDA a ``Scientific Override''--When the FDA requires 
        additional information or clarification from the manufacturer 
        as part of the review process, the FDA should be allowed to 
        ``stop the clock'' on review deadlines while waiting for this 
        information to be provided.
 Eliminate Rigid Management Goals--These goals require the 
        agency to set up meetings with the industry within specific 
        timeframes. They should be replaced by a more flexible system 
        that allows the FDA to prioritize these requests, thus 
        decreasing undue burden on the agency.
 Allow FDA More Flexibility For Standard Reviews--There is no 
        public health justification for requiring the FDA to decide on 
        a ``me too'' drug that duplicates therapies already on the 
        market at the same speed as a drug that might offer therapeutic 
        advantages to some patients. The FDA should be granted greater 
        authority to prioritize the review of standard drug 
        applications.
 Create Safety Goals--FDA should establish performance goals 
        oriented toward protecting the health and welfare of consumers, 
        such as tracking and reviewing Phase IV trials, improving the 
        collection, analysis and response of adverse event reports, and 
        enhancing the speed and quality of review of direct-to-consumer 
        advertisements.

3. Enhance Drug Safety Measures and FDA Enforcement Authority
 Grant FDA Civil Monetary Fine Authority and Subpoena Power--
        When companies fail to complete Phase IV confirmatory trials or 
        when companies repeatedly violate prescriber and direct-to-
        consumer advertising guidelines, the agency should be given the 
        authority to levy significant monetary penalties.\6\ The agency 
        should also have the power to compel companies to produce 
        relevant documents.\7\
---------------------------------------------------------------------------
    \6\ As a condition of approval of a new drug by the agency, drug 
companies often commit to doing post-marketing or Phase IV studies. 
These studies can help to identify previously unknown dangers presented 
by a new drug so that its safety labeling can be updated or if 
necessary the drug can be withdrawn. According to a Public Citizen 
report released in 2000, of the 88 new drugs that were approved between 
1990 and 1994 with the understanding that the sponsor would complete at 
least one post-marketing study, only 13 percent (11 of 88) had 
completed all of the studies they had agreed to as of December 1999.
    \7\ According to a 1990 Congressional Research Service study, 
almost every other U.S. health and safety regulatory agency has 
subpoena power. Without the ability to subpoena company records, the 
FDA's efforts to assure drug safety are hamstrung. The case of the 
FDA's post-approval investigation of the drug Halcion demonstrates the 
problems the agency faces. In that case, the agency could not subpoena 
the company's records even though it had suspicions of criminal 
wrongdoing. At one point in that investigation, the agency even went so 
far as to ask for the intervention of a federal judge to modify a gag 
order in a tort action against the maker of Halcion so that the agency 
could have access to crucial documents.
---------------------------------------------------------------------------
 Launch Independent Drug Withdrawal Investigations--An office 
        or agency independent of the FDA should investigate the 
        circumstances surrounding the withdrawal of medical products 
        from the market, as the National Transportation Safety Board 
        does for plane crashes.
 Increase Monitoring and Review of Phase IV Trials--Require the 
        FDA to track Phase IV trials, strictly monitor and enforce the 
        informed consent and protection of human subjects in those 
        studies, and, in a timely manner, review the quality of the 
        studies and the accuracy of the findings.
 Improve Adverse Event Reporting--Hospitals, HMOs, nursing 
        homes and other healthcare providers should be required to 
        automatically report (the present system is voluntary) serious 
        adverse drug events, adverse reactions and medical errors to 
        the FDA, CDC, and/or other relevant agencies. Appropriations 
        for FDA's oversight of adverse event reporting should be 
        dramatically increased.
 Utilize the Centers for Education and Research on 
        Therapeutics--CERTS should examine the feasibility of: (1) 
        implementing a patient self-monitoring reporting system for 
        signaling possible adverse drug reactions;\8\ and, (2) 
        expanding the use of medical registries to follow patients who 
        may be at risk of serious reactions
---------------------------------------------------------------------------
    \8\ Under this system, suggested by Seymour Fisher and Stephen G. 
Bryant, patients would be given information about how to report adverse 
drug reactions by their pharmacist. This system would make it possible 
to compare the rates of adverse drug reactions to a new drug with drugs 
already on the market for the same indication. (S. Fisher, S.G. Bryant, 
``Postmarketing surveillance of adverse drug reactions: patient self-
monitoring'' Journal of the American Board of Family Practice, 1992; 
5:17-25.)
---------------------------------------------------------------------------
 Broaden Distribution of medication Guides--Consumers should be 
        given power to make informed decisions about drugs and devices 
        and to avoid preventable harm. It is time to mandate that 
        medication guides with scientifically accurate, unbiased and 
        clearly worded information about the risks and benefits of a 
        treatment be included with every dispensed drug (as proposed by 
        the FDA in 1995.) Such medication guides would also, for the 
        first time, provide a mechanism for notifying consumers 
        directly when new safety concerns about a drug emerge that 
        require a change in a drug's approved labeling.
 Provide Consumers with More Post-Market Drug Safety 
        Information--Section 506B of the Food, Drug and Cosmetics Act 
        should be amended to expand the scope of information made 
        available to the public to include information as study 
        protocols, patient accrual rates, reports of unexpected, i.e., 
        unlabeled, suspected adverse reactions, and study results.\9\
---------------------------------------------------------------------------
    \9\ Under its proposed rule of December 1999 implementing FDAMA's 
requirement for the industry to report its progress on completion of 
phase IV tests to the agency this information would have been made 
available to the public. However the industry objected, claiming that 
FDAMA did not give the agency the authority to make this information 
public and this requirement was removed from the final rule, which was 
published in October of 2000. Legislation is needed to clearly give the 
agency the authority it needs to disclose this information.
---------------------------------------------------------------------------
 Scrutinize Single Controlled Clinical Studies--An increasing 
        number of drug manufacturers have indicated that they will 
        begin submitting new drug applications using data from only one 
        controlled clinical study, which is now allowed by law, rather 
        than multiple studies. An independent study should be conducted 
        at an appropriate time to assess the effectiveness of single 
        controlled studies in assessing the safety of drugs and 
        biologics.
 Examine Comparative Safety Data--Manufacturers should be 
        required, as part of their application to the FDA to market a 
        new drug or biologic, to submit the results of tests comparing 
        the safety and efficacy of their product to others already on 
        the market that are used to treat the same indication.
    This position paper is endorsed by the following members of the 
Patient and Consumer Coalition: the Alpha I Foundation; Center for 
Medical Consumers; Consumer Federation of America; Gray Panthers; 
International Union, UAW; the National Consumers League; the National 
Organization for Rare Disorders; the National Center for Policy 
Research for Women & Families; the National Women's Health Network; and 
the Title II Community AIDS National Network.

    Mr. Bilirakis. And having waited very patiently, is Dr. 
Lester M. Crawford, Deputy Commissioner of the Food and Drug 
Administration. Dr. Crawford, thank you very much for being 
here, and proceed, sir.
    We are going to set the clock at 10 minutes, and you do 
what you can, and we won't worry about the clock.

STATEMENT OF HON. LESTER M. CRAWFORD, DEPUTY COMMISSIONER, FOOD 
    AND DRUG ADMINISTRATION; ACCOMPANIED BY JANET WOODCOCK, 
    DIRECTOR, CENTER FOR DRUG EVALUATION AND RESEARCH; AND 
  CATHERINE ZOON, DIRECTOR, BIOLOGICS EVALUATION AND RESEARCH

    Mr. Crawford. Thank you very much, Mr. Chairman, we thank 
you and the other members for scheduling today's hearing. I am 
joined at the table by Dr. Janet Woodcock, who is the Director 
for the Center for Drug Evaluation and Research; and Dr. 
Catherine Zoon, who is the Director of the Center for Biologics 
Evaluation and Research.
    I have a written statement for the record, and I will 
confine my remarks to within the 10 minutes. In my oral 
remarks, I will describe the Agency's success in implementing 
the Prescription Drug User Fee Act, identify priorities for 
PDUFA-3, and emphasize the importance of reauthorizing this law 
in advance of its September 30, 2002 expiration date.
    PDUFA has been a remarkable success. Since PDUFA was 
enacted in 1992, the FDA has met the highest expectations for 
performance, while continuing to adhere to rigorous standards 
for safety and effectiveness.
    We now have 8 years of data on our efforts to achieve PDUFA 
goals. During this period the FDA faced a total of 73 
performance goals. We met or exceeded 71 of those goals.
    If you add procedural goals to that total, the Agency met 
or exceeded 86 out of 92 PDUFA goals. The result has been a 
dramatic reduction in product approval times. 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.
    With the enactment of PDUFA, U.S. companies have overtaken 
their European counterparts, and now have a commanding lead in 
world markets. A July 2001 report found that the European share 
of the world pharmaceutical market fell by 10 percent over the 
past decade, while the U.S. market share rose by more than 10 
percent.
    During the same period U.S. research and development 
increased a remarkable five-fold, and that is why the Tufts 
University Center for the Study of Drug Development declared 
that the U.S. environment for pharmaceutical innovation since 
PDUFA is nothing short of remarkable.
    The membership of this Subcommittee deserves a large share 
of the credit for championing PDUFA and for making this record 
of achievement possible. Your efforts have produced significant 
benefits for public health.
    The public has gained access to 717 new drugs and biologics 
under PDUFA. These include important new products to treat 
cancer, AIDS, cardiovascular disease, and to fight infection.
    Every day the lives of patients are immeasurably improved 
as a result of the great emphasis on priority review that we 
instituted under PDUFA. While our experience under PDUFA-2 has 
generally been good, significant issues have surfaced that 
undermine the program's financial foundation.
    During the final 3 years of PDUFA-2, fee revenue has been 
less than the cost of performing review activities. The FDA has 
been able to sustain its review effort by spending fee revenue 
collected in previous years that has been held in reserve.
    However, unspent revenues from previous years will be 
depleted by September 30. A top priority will be to establish a 
fee structure to ensure that income covers the cost of PDUFA 
enhancements to the drug and biologic review process.
    Funding a program of risk assessment for PDUFA drugs and 
biologics is a second priority. While drugs and biological 
products are under development, clinical testing is usually 
limited to small, carefully selected populations.
    After approval, when the drug reaches a much larger and 
diverse population, adverse events not seen during clinical 
trials may emerge. I want to emphasize that there is no 
evidence that drugs are being withdrawn from the market for 
safety reasons at a greater rate during the PDUFA era.
    In fact, the withdrawal rate for new drugs approved prior 
to PDUFA is identical to the withdrawal rate for drugs approved 
since PDUFA was enacted. However, a more effective program of 
risk management for new drugs that improve patient safety is 
warranted by the reality that more drugs are launched for the 
first time in the U.S.
    Mr. Chairman, PDUFA-2 expires on September 30, 2002. I want 
to emphasize again the importance of achieving a timely 
reauthorization of this law. If we are to sustain our record of 
accomplishment under PDUFA-2, it is critical that 
reauthorization occur without a gap between the expiration of 
the old law and the enactment of PDUFA-3.
    Retaining FDA's skilled employees is essential to the 
success of PDUFA-3. A delay in the reauthorization of this 
program may precipitate an erosion in our work force, 
particularly among senior reviewers, whose skills are in very 
high demand.
    The repercussions of such a loss would be with us for years 
to come, and rebuilding the infrastructure that we would lose 
in such an event would be very difficult indeed. Thank you for 
your commitment to the mission of the FDA, and to the continued 
success of PDUFA.
    Thank you very much.
    [The prepared statement of Hon. Lester M. Crawford 
follows:]

  Prepared Statement of Hon. Lester M. Crawford, Deputy Commissioner, 
                      Food and Drug Administration

                              INTRODUCTION
    Mr. Chairman and Members of the Subcommittee, I am Lester M. 
Crawford, Deputy Commissioner of the Food and Drug Administration (FDA 
or the Agency). I am pleased to be here today to discuss the Agency's 
success in implementing the Prescription Drug User Fee Act and to 
emphasize the importance of reauthorizing this law in advance of its 
September 30, 2002, expiration date.

                               BACKGROUND

    In 1992, Congress enacted the Prescription Drug User Fee Act (PDUFA 
I). This law provided additional resources to hire more medical and 
scientific reviewers to conduct premarket reviews, to hire support 
personnel and field investigators to speed up the application review 
process for human drug and biological products, and to acquire and 
support critical information technology infrastructure.
    In 1997, after the success of PDUFA I, Congress reauthorized the 
program for an additional five years. With this reauthorization (PDUFA 
II), came higher expectations for reviews and additional goals designed 
to reduce clinical drug development times. The President's budget 
request for Fiscal Year (FY) 2003 recommends that PDUFA be reauthorized 
through FY2007, and we have been engaged in discussions with consumers, 
health providers, and industry over the past year to develop proposals 
for PDUFA III. These discussions have been very useful, and we hope to 
complete the consultation process in the very near future and forward 
our PDUFA III recommendations to the Department of Health and Human 
Services.

                           PDUFA ACHIEVEMENTS

    During PDUFA I and PDUFA II, FDA met the highest expectations for 
performance while continuing to adhere to rigorous standards for safety 
and effectiveness. We now have eight years of data on our efforts to 
achieve PDUFA goals, and the Agency's record of achievement is 
impressive. The Agency faced a total of 73 performance goals during 
this period. These goals governed the review of priority and standard 
new product applications, resubmitted applications, and supplements. 
During this eight-year timeframe, FDA met or exceeded 71 of 73 PDUFA 
performance goals.
    In addition to the 73 performance goals, procedural and processing 
standards were instituted under PDUFA II. A total of 19 goals governing 
meetings, clinical holds, dispute resolution, and special protocols 
were established when the law was reauthorized. FDA met or exceeded 15 
of 19 procedural and processing goals. If you combine our performance 
and procedural accomplishments, the Agency met or exceeded 86 out of 92 
PDUFA goals.
    Not only has FDA significantly reduced application review times 
under PDUFA, it also has significantly reduced product approval times, 
and therefore, the time for new drugs to reach the market. Review time 
is the time it takes FDA to review original or resubmitted new product 
applications, efficacy supplements, and manufacturing supplements and 
issue an action letter. Approval time is measured from the date an 
application was initially submitted to the date an approval letter is 
issued. Approval time includes the period of FDA review, as well as the 
time a sponsor may spend responding to deficiencies identified by the 
Agency during application review. Because of these deficiencies, some 
products require more than one review cycle. While PDUFA established 
goals for review times, and faster reviews tend to produce quicker 
approvals, the quality and completeness of an individual application 
and the public health priority of the product significantly affect time 
to approval.
    The result of our efforts has been a dramatic reduction in product 
approval times. The median approval time for priority new drug and 
biologic applications dropped from 13 months in FY1993 to only six 
months in FY2000. We do not have complete data for FY2001, but median 
approval times are projected to remain at six months.
    For standard new drug applications, the median approval time was 22 
months in FY1993. By FY1999, however, median approval times had 
declined to 12 months. For a variety of reasons, such as competing 
PDUFA goals and priorities and unanswered questions that must be 
addressed within some applications, we may experience a slight increase 
in approval time in FY2000 for this category of applications. The data 
for FY2000 are only preliminary, however.

                            THE WORLD LEADER

    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. Between FY1993 and FY 2001, 
pharmaceutical firms have introduced 285 new molecular entities (NMEs) 
and 73 biologics into the market, a dramatic increase compared to any 
other period of time.
    Ten years ago, European pharmaceutical companies were the industry 
leaders. With the enactment of PDUFA, however, U.S. companies have 
overtaken their European counterparts and now have a commanding lead in 
world markets. According to a July 2001 report in the Financial Times, 
the European share of the world pharmaceutical market fell from 32 to 
22 percent over the past ten years while U.S. market share rose from 31 
to 43 percent. During this period, pharmaceutical R&D investment 
doubled in the European Union, while U.S. R&D increased a remarkable 
five-fold.
    This turn-around prompted the Tufts Center for the Study of Drug 
Development to describe the U.S. environment for pharmaceutical 
innovation since PDUFA as ``nothing short of remarkable.''' The members 
of this Subcommittee deserve a large share of the credit for 
championing PDUFA and for making these successes possible.

                             PDUFA RESULTS

    Your efforts have produced significant benefits for public health. 
The public has gained access to 717 new drugs and biologics under 
PDUFA, including 174 that represent significant therapeutic 
advancements. During the PDUFA era, FDA reviewers have approved:

 30 new medicines for cancer;
 37 new medicines for AIDS;
 29 medicines to fight infection; and
 18 medicines for cardiovascular disease.
    Every day, the lives of cancer patients are measurably improved as 
a result of the greater emphasis on priority review that we instituted 
under PDUFA. For example, Herceptin', a biological product 
to treat breast cancer, was approved by FDA in less than five months. 
In Europe, the approval process took 18 months. Because of FDA's 
priority review, 10,000 American women with advanced breast cancer had 
earlier access to this drug. These patients will gain an estimated 
2,300 additional years of life because of early access to this 
important new therapy.
    The pharmaceutical industry also enjoys significant R&D savings as 
a result of shorter review times. Under PDUFA, FDA reduced new drug 
review by 12 months. Each month of reduced review results in an average 
saving of $2.5 million, or $30 million in R&D cost savings over 12 
months. Given that FDA approves an average of 40 NMEs and biologics per 
year, the savings to industry represent $1.2 billion annually. The 
program represents a bargain in light of the $133 million that industry 
paid in user fees in FY2001.
    Finally, PDUFA has also brought significant benefits for FDA:

 Performance goals have helped streamline and harmonize the 
        management of drug and biological product review.
 The program's requirement for comprehensive product reviews 
        and responses has resulted in improvements to the quality of 
        the application review process.
 Most importantly, the fees have enabled the Agency to hire 
        additional medical reviewers and other specialists, and upgrade 
        the technology that is essential for the success of the 
        program.

                        FDA GOALS FOR PDUFA III

1. Sound Financial Footing
    While our experience under PDUFA II has generally been good, a 
number of significant issues have surfaced that undermine the program's 
financial foundation. In PDUFA III, we are working to address these 
issues and ensure that the Agency has a sound financial footing to 
conduct essential review and approval activities.
    During the final three years of PDUFA II, the amount of fees 
collected has been substantially less than the cost of performing 
review activities. FDA has been able to sustain its review effort only 
by spending fee revenue collected in previous years that has been held 
in reserve--an arrangement permitted under the Act. In FY2001 and 
FY2002, spending from fee revenues will exceed fee income by about $30 
million each year. FDA is reducing operations in FY2002 to adjust to 
this revenue shortfall. However, unspent revenues from previous years 
will be depleted by the end of this fiscal year and there will be 
little or no fee balances available after September 30. Establishing a 
fee structure to ensure that income covers the cost of enhancements to 
the drug and biologic review process authorized by PDUFA is an issue 
that we are working to address in PDUFA III.
    Another problem is that PDUFA application fees are only paid on new 
drug and biologic applications and efficacy supplements. Yet the review 
of fee-paying applications represents only a fraction of FDA's actual 
review workload. There are many activities associated with the process 
for the review of human drugs and biological products that are not 
covered by PDUFA fees. These activities continue to grow steadily and 
demand more resources each year, while the number of fee-paying 
applications, and the revenue they generate, fluctuates considerably. 
This dynamic was not taken into account when the fee formula was 
established.
    The uncertainty about fee revenue is further complicated by the 
relationship between application fees and the product and establishment 
fees that also we collect under PDUFA II. The law directs that 
establishment and product fees rise and fall based upon the number of 
fee-paying applications, yet the volume of work associated with these 
activities has little or no relationship to the number of applications. 
The reality of this situation is inconsistent with the expectation that 
product and establishment fees were intended to be a stable element of 
PDUFA revenue in order to insure a consistent and predictable source of 
fees.

2. Risk Management
    While drugs and biological products are under development, clinical 
testing is usually limited to small, carefully selected populations of 
5,000 or less. After approval, however, millions of patients may be 
exposed to the drug. When the drug is exposed to a much larger and 
diverse population, adverse events not seen during clinical trials 
often emerge in the first few years after a new product is on the 
market. PDUFA has fostered a dramatic reduction in product approval 
times, and the U.S. market is increasingly the country where drugs are 
first launched.
    There is no evidence that drugs are being withdrawn from the market 
for safety reasons at a greater rate during the PDUFA era than prior to 
the enactment of this landmark legislation. In fact, the withdrawal 
rate for new drugs approved prior to PDUFA is identical to the rate of 
withdrawal for drugs approved since PDUFA was enacted (2.7 percent). 
However, the need to institute a more effective program of risk 
management for new drugs, and thereby ensure greater patient safety, is 
clearly warranted by the intrinsic limitations of drug development 
programs (particularly the size of clinical trials) and the reality 
that more drugs are launched for the first time in the U.S. Where risks 
can be effectively managed, we avoid the need to withdraw drugs that 
are highly beneficial to many patients, though harmful to some.

                               CONCLUSION

    As you know, PDUFA II expires on September 30, 2002, and I want to 
emphasize again the importance of achieving a timely reauthorizion of 
this law. FDA is ready to work with you to accomplish this.
    I have described the status of FDA's user fee account--Agency 
carryover balances will be exhausted by the end of the current fiscal 
year. If we are to sustain our record of accomplishment under PDUFA II, 
it is critical that the reauthorization occur without a gap between the 
expiration of the old law and the enactment of PDUFA III.
    Timely reauthorization is a priority for the pharmaceutical 
industry, the American public, and the many talented staff at FDA that 
we rely upon to conduct human drug and biologic reviews. Retaining 
FDA's skilled employees is essential to the success of PDUFA III. Any 
hesitation or delay in the reauthorization of this program could 
trigger sudden erosion in our work force, particularly among senior 
reviewers whose skills are in very high demand. The repercussions of 
such a loss would be with us for years to come.
    Thank you for your commitment to the mission of FDA, and to the 
continued success of PDUFA. I am happy to answer questions you may 
have.

    Mr. Bilirakis. Thank you very much, doctor. Dr. Crawford, 
when might we expect to receive in writing the goals 
performance letter, the agreement that was reached?
    Mr. Crawford. The goals performance letter is in draft, and 
I will ask Dr. Woodcock to comment to the extent that she is 
able to do so, when it might be delivered. However, I have seen 
it and have reviewed it, and I would say it is quite far along.
    Mr. Bilirakis. All right. Before Dr. Woodcock speaks, I 
would like to say that I requested that FDA meet with the 
committee staff of minority and majority. They did so a couple 
of days ago.
    Then of course there was a members meeting yesterday and 
Dr. Woodcock was there, with others. Dr. Zoon was there. I 
wanted to express our appreciation for that.
    Dr. Woodcock, please tell us something good. You might also 
address the goals performance study, because as you heard 
members say here, before we go into a mark-up, we need to have 
that documentation to give you further cooperation.
    Mr. Crawford. I can address that. It is correct that it is 
being reviewed in the department. However, it is my 
understanding that both the FDA and the department share in the 
reasons for the delay.
    It is very close to release, and I would say it is a matter 
of days. I communicated personally with the department 
yesterday and I expect that it will be released very soon 
indeed.
    Mr. Bilirakis. Very soon? Can you give us an idea of what 
very soon is?
    Mr. Crawford. Days.
    Mr. Bilirakis. Days? That's good. That is the goals 
performance study. Dr. Woodcock.
    Ms. Woodcock. The letter, as Dr. Crawford said, is 
written--a draft is written and it must be reviewed by the 
original parties who have been negotiating this, as well as up 
the line.
    We understand the need for urgency in getting this letter 
to you, and we will have it in a matter of weeks.
    Mr. Bilirakis. Weeks?
    Ms. Woodcock. Yes. We will make every effort to get it to 
you as soon as possible.
    Mr. Bilirakis. The letter?
    Ms. Woodcock. The letter, in a week or weeks.
    Mr. Bilirakis. Week or weeks?
    Ms. Woodcock. Yes.
    Mr. Bilirakis. That is a little better.
    Mr. Crawford. It is a letter that is more like a novella. 
It is very large, and we want to make sure that it is right. 
But it should be--it is in very good shape now, I think, and it 
just needs to be reviewed by some more people.
    Mr. Bilirakis. Okay. Well, please review. I understand 
sometimes that haste makes waste, but we need to have that 
documentation here as soon as we can so that we can continue.
    We have an awful lot of things on our plate as you know, 
and as you heard, for example, prescription drugs and Medicare. 
We would like to get this thing on course.
    Doctor, you have heard people up here state they are 
concerned that PDUFA may have resulted in a reduction in 
safety. PDUFA-2's trigger, is the requirement that PDUFA funds 
must augment and not replace the amount of reviews paid for by 
appropriated funds. A concern is that money is being diverted 
from other FDA centers, and that has been said here more than 
once.
    Can you tell us what in the FDA-industry agreement, the 
performance goals agreement, will make this situation better? 
Has it in fact been a concern? Has there been a reduction in 
terms of safety, efficiency, et cetera?
    Mr. Crawford. In reviewing the record of PDUFA, going back 
to the first one a number of years ago, over the past few days, 
I have personally been very interested in what the record is, 
and I believe it is safe to say that PDUFA-1 or PDUFA-2 have 
decreased risks.
    The rate of withdrawal of drugs is essentially the same as 
it was before then. The agency is always extremely concerned 
about safety, and we will continue to be. With respect to what 
will be done in the new package to deal with the trigger, I am 
going to ask Dr. Woodcock once again to comment.
    However, I know that that was a priority consideration and 
one that continues, and that I will follow up with that.
    Ms. Woodcock. First, to set the record clear on one thing. 
We have increased our resources over the past 8 years devoted 
to drug safety within the agency. However, perhaps this has 
come at the expense of other programs.
    The PDUFA trigger that you are talking about forces us to 
maybe overspend a little, because if we got down--if we went 
below the trigger, we could not collect user fees, and we would 
have to immediately lay off our staff.
    We have tried in this agreement to build more flexibility 
into that, and that will allow us to be much closer, and not 
overspend in this program. Any time there is a decreasing 
resource environment overall for the FDA, some programs have to 
become smaller.
    Mr. Bilirakis. Are we saying that PDUFA results in other 
programs being hurt?
    Ms. Woodcock. If there is an overall decrease in 
appropriations to FDA, or the cost of living is not given to 
the program, then our number of staff must shrink. Just as if 
you were to give a raise, and you have 10 employees, and you 
gave a raise to all of them, and you didn't have any more 
revenues, you would have nine employees, and that is what has 
happened to the FDA over the last decade.
    Mr. Bilirakis. In other words regardless of PDUFA, the same 
thing would have taken place because the money has not been 
there the way you would have liked to have had it?
    Ms. Woodcock. But the trigger exacerbated that situation 
because we could not have nine employees in the user fee 
program. We had to maintain that program.
    Mr. Bilirakis. My time is expired, but Dr. Crawford, very 
quickly you could compliment that.
    Mr. Crawford. I was just going to say that one of the 
things that Dr. Woodcock refers to is the fact that over the 
last few years that we have gotten raises for the FDA and we 
have had to absorb them from our budget.
    This year, things are different as you well know, and we 
are grateful for that.
    Mr. Bilirakis. All right. Thank you. Mr. Brown.
    Mr. Brown. Thank you, Mr. Chairman. Dr. Crawford, in light 
of what I have heard this morning, and especially what I will 
say as well on what we heard in the briefing yesterday from 
some of your fellow colleagues at the FDA, I am concerned about 
sort of the evolution of the FDA mission.
    I hear some of your people calling industry its customer, 
and I heard yesterday talk and today about the launch of new 
products into the market. You have talked about a term that you 
learn in Marketing 101.
    Industry uses the term launch, but the FDA using that term 
concerns me. Discussing the success of PDUFA, in terms of 
changes in the U.S. drug industry's market share, I guess I 
grew up thinking the FDA was there to protect safety and not to 
play a role in enhancing the U.S. market share.
    And then coming yesterday and bragging about it with great 
enthusiasm, and coming in today and talking about that, and I 
just didn't know that that was the mission of this government 
agency to help U.S. companies' enhance market share.
    Then I hear you quote Tufts, the Tufts' drug center or 
whatever it is called, which is always the group of experts 
that the drug industry both fires and then quotes for their 
drug studies.
    It is mostly funded by them and I am just concerned about 
where the separation is. You are a regulatory body, and you are 
not a subsidiary of the drug industry. I am not accusing you of 
that.
    But I just wondered where the separation is. I understand 
that one of the new agreements in the goals document is does it 
require the FDA to hire an outside consultant if the drug 
industry wants it to as long as criteria are set out in the 
agreement?
    I understand the agreement requires the FDA to review its 
management practices because the industry is unhappy with these 
practices? I mean, I wonder where is the separation, and who is 
in control?
    Is the FDA in control or is the industry that regulates in 
control? Then I hear that the stakeholders, when it comes to 
new drug reviews, and in a goals document, it includes industry 
and consumers.
    But while the FDA held private negotiations with the 
industry, as I understand it the public forums were for patient 
and consumer groups. So the industry met behind closed doors, 
and the public meeting was with patients and consumers.
    Then I read in the Congress Daily today that a landmark 
deal brokered by the prescription drug industry and the FDA, 
and it goes on and on, as if there are no other interested 
parties in this.
    I realize that the industry funds PDUFA, but it is for a 
public purpose is what we were told 5 years ago and 10 years 
ago, and both public dollars and private dollars, fund new drug 
reviews.
    Why were the stakeholders in this case, specifically why 
were they treated differently? Why the private negotiations 
with the industry, and then the public forum with the rest of 
us?
    Mr. Crawford. The FDA treads a tightwire of remaining 
correct, but aloof, in terms of its enforcement and in its 
consideration of the industry. Referring to the industry as a 
client or as a customer is sort of part of the new emphasis on 
stakeholder involvement.
    And in the two public hearings that we held, where patient 
organizations and consumer groups came in, as you may recall, 
we had 28 different groups that came in to discuss their 
positions, and all made testimony.
    And 23 of those were non-industry sources, and so that base 
was in fact covered. But I am sure they were----
    Mr. Brown. That was the public hearing, Dr. Crawford.
    Mr. Crawford. That's right.
    Mr. Brown. The private meetings, any of those 23 groups in 
there?
    Mr. Crawford. No. No. Now one of the----
    Mr. Brown. Then what am I missing here?
    Mr. Crawford. One of the reasons that it was necessary to 
meet with industry is because of a couple of things in my view. 
One is we have to be apprised of what the pipeline is; how many 
drugs are being developed, and what the needs are.
    One of the goals, stated goals in the bill of PDUFA-1 was 
to speed up the drug approvals. And the second one as you know 
better than I was the same thing, plus performance standards 
that we would meet.
    In order to set both of those, we needed a dialog with the 
industry. Many of the things that we discuss in these kinds of 
meetings are or have a lot to do with both the stock market and 
also the future of the industry, and how many things are there.
    We have no way in FDA of knowing that until we have 
communication with industry.
    Mr. Brown. Well, perhaps then, Dr. Crawford, if those were 
public, then you might not be able to trot out that really cool 
chart of increasing and enhancing U.S. market share for the 
drug industry. Is that connected somehow?
    Mr. Crawford. Well, let me address that. Again, it is 
delicate, and I grant you that for sure. But the lesson that we 
have learned over the many years of the FDA Act is that each 
new generation of drugs is safer and more effective.
    If we keep them off the market, or if we are not----
    Mr. Brown. Let me interrupt you there--I'm sorry--because I 
only have 5 minutes, and now I have no minutes. If each new 
generation is safer than a previous generation, why did you 
come in here a minute ago and brag about how you are taking no 
fewer percentage off the market. You are taking no more off the 
market than before.
    In other words, PDUFA has worked well. But if these drugs 
are generally safer anyway, then there ought to be fewer 
recalls with these drugs that you approve. So in that way, 
PDUFA is not--PDUFA is working to get drugs to the market, and 
that is good for our consumers, and our patients, and our 
constituents.
    But its primary object is safety, and it is failing on 
safety then if it is only the same rate as it was back when 
drugs weren't as safe as they were 10 years ago.
    Mr. Crawford. Well, we won't think it is failing on safety. 
There are more of them being approved, that's for sure, and Dr. 
Woodcock would like to make a comment.
    Ms. Woodcock. There is a countervailing force, which is 
that more U.S. patients are the first in the world to be 
exposed to these drugs now. It used to be that Europeans, or 
Australians, or many people around the world, those 
populations, were the first to be exposed.
    Mr. Brown. And I might add in much higher numbers because 
of this extravagant launch in this huge use initially of these 
drugs, in part because of the FDA's assistance with this launch 
in direct to consumer advertising. But go ahead, I'm sorry to 
interrupt.
    Ms. Woodcock. Mr. Chairman, may I finish?
    Mr. Bilirakis. Are you really sure?
    Mr. Brown. I'm sort of sorry, yes. Sorry.
    Mr. Bilirakis. Please do it briefly, Dr. Woodcock.
    Ms. Woodcock. Yes. Back when other populations were 
exposed, in those people the problems were discovered, and the 
drug was pulled off the market, and the application was 
withdrawn from the U.S. approval process before it got on the 
U.S. market.
    Now that situation has totally changed, and that's why we 
feel that we need more of an emphasis on risk management.
    Mr. Brown. Okay. Thank you.
    Mr. Bilirakis. Mr. Deal to inquire.
    Mr. Deal. Thank you, Mr. Chairman. My previously alluded to 
contact with Dr. Woodcock was quite the opposite. It was a 
complaint by a constituent of mine who had a drug pulled off 
the market, and they felt that it was a drug that needed to be 
there, and was considered lifesaving from their standpoint.
    So there are points of view many times that the removal of 
drugs from the market is maybe overly zealous by some people's 
points of view. So I would simply make that point.
    One of the concerns that we have heard expressed is that 
because of the so-called second trigger or the funding 
mechanism that funds are being diverted away from other 
functions within FDA.
    Would you comment on that and is the agreement going to 
resolve that issue?
    Mr. Crawford. Well, of course it is our job to make sure 
that nothing that we are mandated to do gets compromised as a 
result of this or any other legislation. So we believe that 
PDUFA-3 will better address that problem.
    We also as we mentioned a little bit ago, as long as we 
don't have to pay for the pay raise increases and some of these 
other things, we are more able to predict resources and do a 
better job.
    And that issue has been dealt with very effectively in this 
Congress, and we are happy about that.
    Mr. Deal. Thank you. Since we have other members who have 
questions, I will waive the rest of my time, Mr. Chairman.
    Mr. Bilirakis. Well, thank you. You caught me unawares 
here. Mr. Stupak.
    Mr. Stupak. Well, thank you. Dr. Crawford, I want to pick 
up where my friend, Sherrod Brown, left off. We talk about the 
mission statement of the FDA, which is safety and consumer 
protection is it not, or is it speed and more drugs?
    Mr. Crawford. It is not speed and more drugs, no.
    Mr. Stupak. Okay. On page eight of your testimony, you 
compare the withdrawal of pre-PDUFA and during PDUFA, and 
conclude that drug safety has not suffered because the 
withdrawal rates are basically the same 2.7 percent.
    Out of those 12 drugs that have been withdrawn, only one 
was a life threatening drug, and the other 11 were for things 
like upset stomach and other things, correct?
    Mr. Crawford. Yes, I believe that is correct.
    Mr. Stupak. And you have over a thousand deaths, correct, 
with those 12 withdrawals?
    Mr. Crawford. We can----
    Mr. Stupak. To be exact, 1,012.
    Mr. Crawford. Well, we can submit that for the record. I am 
not prepared to say that.
    [The following was received for the record:]

    The Adverse Event Reporting System (AERS) maintained by the Center 
for Drug Evaluation and Research contains information on adverse events 
that may be associated with pharmaceutical drugs. AERS is a 
computerized information database designed to support the FDA's post-
marketing safety surveillance program for all approved drug and 
therapeutic biologic products. The reports in AERS are evaluated by FDA 
clinical reviewers to detect safety signals and to monitor drug safety.
    In evaluating AERS data, it is important to keep a number of 
considerations in mind. First, there is no certainty that the drug in 
question caused the reported deaths. A given death may actually have 
been due to an underlying disease process, use of a concomitant drug, 
or other unknown factors. The report rarely provides any basis for 
assessing whether the product caused the death. Second, since more than 
one health professional or other individual may file a report there may 
be duplicate reports filed on a single incident. Third, since many 
factors influence reporting for a particular drug, reliable comparisons 
between drugs cannot be made from this data. Fourth, AERS does not 
provide us with data on actual numbers of patients using the drugs in 
question. Therefore the ratio of deaths to the number of users cannot 
be calculated.
    Finally, the decision to withdraw a product is complex and based on 
the totality of available evidence, including risks of potentially 
life-threatening adverse events, availability of alternative therapies, 
etc. The decision is not driven solely by reports of death, although 
such events are of most concern.
    With these considerations in mind, the following list identifies 
the numbers of U.S. death reports in AERS from the time that a drug is 
marketed to the date of withdrawal, for drugs recently withdrawn from 
the market:

    Pondimin-46
    Redux-19
    Seldane-354
    Posicor-28
    Hismanal-14
    Duract-5
    Raxar-3
    Rezulin-188
    Propulsid-288
    Lotronex-7
    Baycol-93.
    Total number of death reports in AERS associated with these 11 
products is 1,045.

    Mr. Stupak. Well, besides that, can you comment on the drug 
safety that are of concern the FDA that does not include 
product withdrawals?
    By that I mean, provide us with the pre-PDUFA and PDUFA 
comparison of such post-market drug safety matters, such as 
warning letters, dear doctors letters, package inserts, black 
boxes, and other action taken by the FDA?
    Those have dramatically increased under PDUFA, as opposed 
to pre-PDUFA, is that not correct Dr. Crawford. I don't believe 
so. I am going to ask Dr. Zoon to answer your question from the 
standpoint of biologics, and then Dr. Woodcock to add whatever 
she would like, and they will give you a historical response, 
as well as an up-to-date response, and then I will follow 
through.
    Ms. Zoon. Thank you. For biologics----
    Mr. Stupak. Excuse me. I don't want to spend my whole 
minutes talking by biologics. I just want to know about 
prescription drugs; pre-PDUFA and post or during PDUFA. Do you 
have more black boxes, and more warning letters, more dear 
doctors?
    [The following was received for the record:

    A report to the Commissioner of FDA from the Task Force on 
Risk Management entitled, ``Managing the Risks from Medical 
Product Use'' was issued in May 1999. Appendix A of the 
enclosed report provides a comparison of post-approval risks 
for drugs and biological products approved before and after the 
implementation of PDUFA. This report was also provided in its 
entirety in response to questions for the record.

    Ms. Zoon. The withdrawal rate for biologics is actually 
less post-PDUFA than pre-PDUFA. The issue of the warning 
letters and other labeling instances we would be happy to get 
back to you.
    Mr. Stupak. So you don't have an answer? Okay.
    Ms. Zoon. I don't have the numbers right here with me.
    Mr. Stupak. Well, let me ask you this. In the goals and 
performance letter that we are going to get either in a week or 
weeks, whatever it might be, what mechanism is there in the 
performance letter to make sure that these performance and 
goals are actually met by the pharmaceutical industry?
    Or are we going to have a situation like PDUFA-2, where you 
do your post-marketing, and 90 percent of it isn't done, and 
here you want to reauthorize PDUFA-3, and 90 percent of the 
goals were met in PDUFA-2?
    Mr. Crawford. Well, we believe that this goals letter does 
represent the newest science, and we feel that we will do a far 
better job because of that. One of the things that we have come 
to deal with is risk management and also the problems with the 
peri-approval process.
    Just as the product is about to enter the market, as we 
have talked earlier about direct to consumer advertising, the 
label itself, and all these sorts of things, which make a lot 
of difference.
    In other words, the product has been reviewed, and it is 
getting close to labeling and market entry, and we are going to 
emphasize that a great deal more. It helps us, I think, to 
think in terms of pre-market activities, and also to think of 
the approval and review activities, and then the peri-approvals 
time.
    The time was when the agency quite frankly approved the 
drugs, and allowed them on the market, and then unless we got 
adverse event reports, adverse reactions, we didn't do very 
much.
    Mr. Stupak. Doctor, with all due respect, how are you going 
to enforce it? What is the enforcement mechanisms? Why are we 
here? You have no subpoena power, and you can't fine anybody, 
and you can't subpoena anybody.
    For Serzone, we have been waiting for over 6 years for the 
pediatric exclusivity study. Over 6 years. They got a 6 month 
extension, and we are still waiting for that. What power do you 
have to get the pharmaceutical company to give you that study?
    And in another drug, in accutane, you have been waiting 
since 1985 for the raw data from the manufacture. Tell me how 
you are going to enforce that?
    Mr. Crawford. Well, we have certain enforcement activities.
    Mr. Stupak. Tell me one.
    Mr. Crawford. I am going to ask Dr. Woodcock, because I 
don't know what happened in the 1994 thing, if I may be 
permitted to do so, and then I will follow up.
    Ms. Woodcock. Well, first of all, under the new--your first 
question, under this agreement, under a proposal that we have, 
we will be substantially increasing our post-marketing staff 
and our risk management staff. That was your first question. 
Your second question----
    Mr. Stupak. So you have more staff, and that doesn't mean 
enforcement. You have more staff. Go ahead.
    Ms. Woodcock. Currently for many of the--as you know, for 
many of the post-marketing problems that we encounter, our 
major authority and major step that we can take is to pull the 
drug off the market.
    Mr. Stupak. How many have you ever pulled when you didn't 
get a study or report that you have been demanding? Serzone is 
still there, and still pediatric exclusivity, and granted by 
the way, and should not be used for minors, but it is still out 
there.
    Doctors are still prescribing, and they still don't know 
after 6 years what it is safe or not for adolescents. That is 
not pulled. Accutane, 1985, and we are still waiting for the 
raw material, and there have been repeated requests of the 
manufacturer. That has not been pulled.
    Have you ever pulled a drug because they have not complied 
with your request for studies for data, for information, that 
is critical to the safety of a drug? Have you ever done that?
    Ms. Woodcock. I think only when that was coupled with a 
safety problem, a severe safety problem that warranted pulling 
it off.
    Mr. Stupak. So there has to be something more or there is 
no enforcement?
    Mr. Bilirakis. The gentleman's time has expired.
    Mr. Stupak. Thank you, Mr. Chairman.
    Mr. Crawford. Mr. Burr.
    Mr. Burr. Thank you, Mr. Chairman. Dr. Crawford, and Dr. 
Woodcock, and Dr. Zoon, welcome. Thank you for all the work 
that you do. I apologize, Mr. Chairman, that I wasn't here for 
opening statements, but I would like to reinforce something 
that I understand that the chairman said in his opening 
statement.
    I think that the FDA has done an extremely good job of 
meeting with the industry and trying to put together a goals 
letter. I very much would like to see that in a matter of days, 
signed, and a copy delivered, and I think that weeks is not an 
option here. And I hope that you will take that back----
    Mr. Bilirakis. If the gentleman would yield. As significant 
as it is to get this thing reauthorized before the time 
expires, I don't know how I in good conscience can set up a 
mark-up unless we have the goals performance agreement in 
writing, as well as the study. This should be presented to us 
in adequate time.
    Please proceed, Mr. Burr.
    Mr. Burr. I thank the chairman for that. In an effort to 
try to keep our efforts focused, as your efforts are, and that 
is to a very valuable tool in the process of processing 
applications, and bringing new drugs to the market in a timely 
fashion, I hope that as we move through this mark-up period 
that my colleagues on this subcommittee, as well as the full 
committee and the House, understand the importance of this 
reauthorization.
    Sure, we can chicken out and stick it on the appropriations 
bill later this year, and not talk about some of the things 
that are legitimate in this debate, but at the end of the day 
reauthorization of user fees mean that we bring potential new 
products to the marketplace that have a tremendous quality of 
life effect on the individuals that are waiting for these 
drugs.
    And, yes, we potentially bring down long term health care 
costs because we eliminate the in-patient stays. And I think 
that is the real work of this committee as we try to sort out 
the health care marketplace in the future.
    Let me ask you if I could relative to the goal sheet. I 
understand that a risk management program was agreed to by the 
industry and the FDA that will effectively double the number of 
FTEs dedicated to drug and biologic safety. What type of 
advance is this for the American people and does the industry 
support the FDA's risk management plan?
    Mr. Crawford. Yes. We believe that they do and they will. 
This is an extension of what I was talking about, this peri-
approval process. We are going to devote more effort, and more 
resources of other types to that, not the least of which will 
be electronic information technology.
    And as I mentioned earlier, I believe that in FDA's history 
there was a time when we sort of put the drug out there and we 
didn't worry that much about it. And that time is changing, and 
we recognize that this kind of surveillance, once a product is 
on the market, is a very real and sacred trust that we have. 
And we will be working hard on that.
    Mr. Burr. Dr. Crawford, in your testimony, I think you 
alluded to the fact that there was a--I call it a disparity, a 
difference between the review and approval times for drugs, 
versus biologics. Why does that disparity exist between the two 
centers?
    Mr. Crawford. Well, I will give a general response and then 
ask Dr. Zoon if she has comments. Drugs, as you well know, are 
chemical entities, and many of them are similar to drugs that 
have already existed, and that simply have another molecule on 
them or something like that.
    And we are able to have a body of information, and we have 
had even the most advanced drugs like anti-cancer drugs and 
antibiotics now for many, many years. So we have a residue or 
body of understanding about them that enables us to review them 
more carefully.
    With biologics, many of them are bioengineered drugs of one 
sort or another, and they are also--there is gene therapy that 
is covered in biologics, and this is something new for us, and 
we have to do it very, very carefully indeed. And it just takes 
a little more time.
    Ms. Zoon. There are a number of issues, particular speaking 
about biologic supports and solicitation of getting to the 
marketplace for consumers, safe and effective therapies as 
quickly as possible.
    And in fact the Center for Biologics has met all of its 
PDUFA goals. All of them were exceeded, all of its PDUFA goals. 
The issue then comes down to what is the reason why the times 
are longer. And there is multiple reasons, and it is not all 
related to one single issue.
    One deals as Dr. Crawford said with the complexity of 
biological products, and many of these are cutting edge 
technologies, and a lot of the issues with large complex 
molecules need to be dealt with, and things can go wrong with 
them.
    Sometimes in the manufacturing and the ability to be able 
to make these products consistently, and other times they deal 
with manufacturing and facility issues, and being able to 
prepare them in a way to ensure that they meet GMP compliance.
    And then other issues surrounding the clinical efficacy 
data, and safety data with many of these ground breaking 
products. We tried to work very hard with the companies to work 
out these issues.
    I think in the context in the future of PDUFA-3 that there 
will be more support for those interactions, and to try to deal 
with those problems proactively by having additional resources 
to facilitate those issues.
    Mr. Bilirakis. The gentleman's time has expired.
    Mr. Burr. I thank you for that progress and I thank you for 
the time, Mr. Chairman.
    Mr. Bilirakis. Again, that is why we are very anxious to 
see the results of all of your negotiations and your 
discussions. Ms. Eshoo.
    Ms. Eshoo. Thank you, Mr. Chairman, and I want to thank you 
for what you said just a few moments ago, and that is how 
important it is to have the side agreement come to us sooner 
rather than later.
    And I have to tell you that if you want to see this thing 
move, weeks is not good. Weeks means more than a month, and 
what we have to do--this Congress is not going to bump up to 
Christmas. There are elections this year, and so we are going 
to be getting out in October.
    So we have a very limited timeframe here, and so thank you, 
Mr. Chairman, for setting that down as a priority. It is an 
important one. I want to pursue with Dr. Zoon if I might the 
whole issue of outcomes. How do you explain the differences--
well, first of all, to set the stage.
    Most of the companies that we are dealing with relative to 
the special protocol reviews and that are small. And so they 
really need help navigating this process. So in many ways they 
are more agency reliant than others are, than the big guys are. 
How do you explain the differences in special protocol reviews?
    It is 129 for the CDER, which for my colleagues if the 
scrambled letters don't make that much sense to you, that is 
the Center for Drug Evaluation and Research. It is 129 for the 
CDER and one for the Center for Biologic Evaluation, and 
Research.
    And given that these reviews as I said are supposed to help 
the smaller companies negotiate the complicated process, 
wouldn't you expect the reverse? I would expect the reverse to 
be true. Can you enlighten us about this?
    Ms. Zoon. Well, I can say that I don't know all the 
answers. I think there are some explanations at least that I 
can give, and perhaps our colleagues when they have a chance 
can also elaborate on that.
    Many of the issues of concerns to biologic manufacturers 
are generally arranged during our planned meetings that have 
been scheduled under the PDUFA program.
    So one does not actually need to utilize the special 
protocol in order to discuss important clinical trial design 
issues or manufacturing issues, or other items of importance in 
product development.
    So many of those issues are addressed during those meeting, 
and the meeting minutes are generated and agreed to.
    Ms. Eshoo. Well, let me just interject something though. As 
we listen to constituents and what they say, I am always 
mindful that if you only pick up on what one person says, and 
put a multiplier on it, you may be causing a boomerang on a 
hundred others.
    But there is a common thread of complaint in this area. So 
if this were being taken care of in the consultation, or what 
did you just refer to what it is?
    Ms. Zoon. Our meetings?
    Ms. Eshoo. Your meetings. Why would there be these 
complaints? I mean, if it is already being taken care of, and 
it is a lopsided number. Maybe you can't give the answer, and 
maybe subsequent panels will speak to it, panel members. But it 
is an area that is a rub.
    Are you pleased with it, and do you have something from 
inside the agency where you are trying to beef this up and 
improve upon this outcome?
    Ms. Zoon. Well, I think the answer is that if in fact this 
particular vehicle under PDUFA-2 was made available for 
everyone--the question is how many people actually know about 
it and utilize it to the extent perhaps they may wish to, or 
want to, in other areas.
    Ms. Eshoo. Let me ask you this. What is the agency doing to 
proactive if you think that people don't know, and you see it 
as being highly workable and a problem solving arena?
    I have a sense that there is a shortcoming here, and I am 
not trying to pick on you or find something. In our review of 
when we reauthorize this, it is always about making something 
good even better.
    So I am mindful of that and I think that this is an area 
where there is a shortcoming, and the approval times that 
CBER--I think that seriously when you look at the numbers, they 
seriously lag behind those at the CDER.
    So that is up to the agency to tell us why this is so. 
These are the numbers that you have created, and that's why I 
raised them.
    Mr. Crawford. If I could respond. These meetings are as Dr. 
Zoon indicated optional, but the reason that we--we need to 
find out the reason that they are not taking advantage of them. 
So there is some sort of shortcoming.
    Ms. Eshoo. But have you raised them from inside the agency 
to take a look at it, or is it the Congress through these 
hearings weighing in that is making you aware of it?
    Are we both doing it at the same time, or have you looked 
at it, looked at this number, 129-to-1, and said, all right, 
now we see that this isn't all that it should be, and this is 
what we are doing.
    Or is this news to you today, or is it something that you 
have not had time to take a look at, even though you are aware 
that the numbers aren't so great?
    Mr. Crawford. This is not new to us. It is something that I 
have not had time to take a look at, but I will, and I 
appreciate that.
    Ms. Eshoo. Is there any news about the appointment of the 
Commissioners at the FDA?
    Mr. Bilirakis. Why don't you ask Dr. Crawford very briefly 
Ms. Eshoo. Dr. Crawford, do you want to comment on that? You 
know, I raised that because--I know that people are thinking I 
am raising it because of political sensitivity or whatever.
    The FDA is one of the most important Federal Agencies in 
our entire Nation. My constituents bank on the FDA protecting 
them. I mean, they feel very strongly about it, and I know in 
the past when there were attacks and whatever, they said, look, 
don't destroy or take the whole thing down.
    And so for an agency to be--well, I shouldn't say 
rudderless, but not to have a person at the top I think is why 
I raise it. What can you tell us?
    Mr. Bilirakis. Very briefly, Dr. Crawford.
    Mr. Crawford. Unfortunately, I can't tell you anything, and 
I will be honest with you.
    Ms. Eshoo. All right. Thank you. Thank you, Mr. Chairman.
    Mr. Bilirakis. Dr. Zoon, do you have something to add to 
that?
    Ms. Zoon. The only thing, and just to further address one 
of the issues is that one of our thoughts is, and we actually 
are going to be doing some proactive outreach to make sure that 
people understand what PDUFA offers to them in a outreach 
program as part of our center initiatives.
    Because I think we saw the numbers, and we are trying to 
understand them, but we think one thing we can do is do more 
outreach to make sure that people understand the options open 
to them.
    Mr. Bilirakis. All right. Thank you, doctor.
    Ms. Eshoo. Thank you, Mr. Chairman.
    Mr. Bilirakis. Dr. Norwood to inquire.
    Mr. Norwood. Thank you, Mr. Chairman, and I do thank all 
the panelists for being here, particularly Dr. Crawford, who is 
a former professor at the University of Georgia, and at 
Georgetown University, a couple of my favorite universities out 
there.
    So welcome one and all. The questions have all been good it 
seems to me for once, and we are all sort of on the same page, 
but I want you to tell it to me. Do you believe PDUFA-3 needs 
to be preauthorized?
    Mr. Crawford. I do believe it needs to be authorized. It is 
very important for the public health of this country.
    Mr. Norwood. It is very important for the public health of 
this country, and I would say that in some ways that it is 
pretty important for the FDA, too, wouldn't you agree with 
that?
    Mr. Crawford. Absolutely, yes, sir.
    Mr. Norwood. Well, since you were down in Georgia long 
enough, we can have some straight talk. Dr. Crawford, we need 
that performance goal letter by 5 p.m. Monday. There is 
absolutely no reason that all of us are going to work next 
weekend, and you put your people to work, too.
    If you want to have this thing authorized, you get that 
letter to the chairman. We have problems, too. Now, get it 
done. And if you can't get it done on Monday by 5 p.m., tell me 
right now why; or just better yet tell me you will get it done.
    Mr. Crawford. It pains me to beat around the bush here, 
but----
    Mr. Norwood. Please don't. Please don't do that.
    Mr. Crawford. But we will make every effort to get it as 
soon as we possibly can, and that is----
    Mr. Norwood. No, that is not an answer. It is not 
reasonable for you not to answer the question. If you can't get 
it by 5 p.m. Monday, when? The date. And then make it work. 
This is critical.
    Mr. Crawford. Okay. Well, you know, until we get into it, 
we can't really say the exact date, but I hear you.
    Mr. Norwood. Yes, you can. You set the date and make them 
go to it. The chairman will not authorize this without that 
document.
    Mr. Crawford. We understand that, and we will get to work 
on it, and that is a promise.
    Mr. Norwood. Can anybody tell me if 5 p.m. on Monday is 
okay?
    Mr. Crawford. I think I am the one, and I do, too. I do 
know that. Okay. I hear you.
    Mr. Norwood. Well, I don't know how to say this any other 
way, except to say that you are not answering the question, and 
it is a good thing that we are friends, and all of that, but 
you need to answer the question.
    You need to commit yourself to when the chairman will have 
the documents so we know what to do, because we all want to 
look at the document, and we hope then from that that we can 
reauthorize a critical issue. Now, set the darn time, and work, 
and make it happen.
    Mr. Crawford. We will surprise you.
    Mr. Norwood. Well, I have a feeling that we will surprise 
you back if you don't surprise the subcommittee.
    Mr. Crawford. I am well aware of that, yes.
    Mr. Norwood. Mr. Chairman, I think I am through.
    Mr. Bilirakis. We have a series of votes. I had hoped that 
we could finish up with Dr. Crawford before we left, but there 
is just no way that we can do it. I think we are going to have 
to break.
    Please, let's get back just as soon as we cast that second 
vote. I think there is two of them, and let's finish up. Thank 
you.
    [Brief recess.]
    Mr. Bilirakis. Mr. Bryant to inquire of Dr. Crawford.
    Mr. Bryant. Thank you, Mr. Chairman, and Dr. Crawford, 
welcome. I just have a few follow-up questions, three to be 
precise, and so I will try to squeeze those in about 5 minutes, 
and so if you could take and consider that when you answer.
    I have been in and out, but I know that the FDA has done 
some studies in regard to the issue that perhaps some have been 
about rushing these reviews, and in some respects compromising 
safety.
    I don't know how much you have talked about those studies, 
but I would like to have those, if reasonable, attached to your 
testimony. Is that a very large study, or is it feasible?
    Mr. Crawford. No, we can give you some information on that 
and attach it without exception.
    [The following was received for the record:]

    The Office of Inspector General (OIG) of the Department of 
Health and Human Services is evaluating the efficiency and 
effectiveness of the review process for new drug applications 
under PDUFA II. We understand that the OIG is in the drafting 
stages of their report.

    Mr. Bryant. Can you give me a bottom line?
    Mr. Crawford. Yes. The bottom line is that since PDUFA-1 
went into effect, the number of drugs that have to be recalled 
because of safety concerns has not changed, and although more 
drugs are being approved, no higher percentage are having these 
kinds of difficulties.
    Mr. Bryant. You were about to answer a question earlier on 
from someone, and you were cutoff a little bit, and you started 
out if you can remember this that if you keep the drug off the 
market, and you were kind of cutoff at that point.
    I assume that this has some connection with the impact of 
PDUFA on making drugs and biologics more available to the 
American consumer? Could you explain that for me?
    Mr. Crawford. Yes. What I was referring to was that each 
new generation of drugs that FDA has regulated has genuinely 
been safer and even more effective than the previous 
generation.
    So when a new drug, which is a breakthrough entity that has 
real prospects for improving public health in the country comes 
along, it is incumbent upon us in my view to review it as fast 
and as accurately as we possibly can so that it can get on the 
market and begin improving the public health of this country.
    We can't compromise the safety and efficacy requirements 
that we have, but if it isn't introduced expeditiously, and it 
hasn't been too many years ago when it took 4 or 5 years to do 
what we are doing now in about 6 months.
    And people did suffer as a result of that, and so we have 
done a variety of things, like PDUFA, and even some other 
initiatives to try to be sure that the drug is safe, and be 
sure it is effective, and then if it has the promise that many 
of these do, try to get it on the market, or try to get it 
approved as soon as we possibly can.
    Mr. Bryant. My last question is has PDUFA had any effect on 
pharmaceutical research and development?
    Mr. Crawford. Well, actually, if you go back and look, and 
all of us have been briefed on this, one of the goals was to 
send a signal to the pharmaceutical industry, and the biologics 
industry, that the FDA is shaping up its approval process.
    We are changing as a result of PDUFA, and rather than 
getting credit for turning down drugs, we are going to get 
credit for approving drugs correctly.
    And that message being sent to the pharmaceutical industry 
was intended to spur innovation and development of these new 
drugs, particularly those for diseases that no drug existed 
for, and we think by and large that it has worked.
    Mr. Bryant. I have no other questions, but just one comment 
just in follow-up to Mr. Norwood. I think you received his 
message clearly, and coming from an arena of law here I had to 
negotiate quite a bit, and I understand the situation that you 
are in with this letter, and there is some give and take on 
this, but if one side is under a deadline, usually they are at 
a disadvantage.
    But I think in this case that neither side--I think that 
both sides have a real interest in getting this done, and so 
even though you are here and we are talking to you, I would 
send that message out clearly to those in the audience that 
represent the other side, and who very clearly have a strong 
interest in this bill being reauthorized that we really need 
agreement as quickly as possible, and maybe even as soon as 
next Monday.
    But it would help us in that regard. So I think that all 
the parties agree that we need to have this done. Thank you, 
and I yield back my time.
    Mr. Bilirakis. I would expect that there are an awful lot 
of representatives here from quote, the other side, who have 
gotten that message. Mr. Waxman to inquire.
    Mr. Waxman. Thank you very much, Mr. Chairman. Dr. 
Crawford, rapid drug approval has put an extra burden on FDA to 
watch for unexpected safety problems after marketing.
    The FDA no longer has the luxury of a lengthy review period 
to detect safety issues before approval, nor does it have the 
advantage of watching the European experience with a drug 
before it is marketed here.
    At the same time the FDA's post-market surveillance system 
is seriously flawed. It is based on voluntary reporting from 
health care professionals, and I understand that the FDA 
estimates that it hears of less than 1 percent of serious 
adverse reactions.
    And while the FDA allocates over 2,000 FTEs to premarket 
reviews of new drugs, it has been able to assign less than 5 
percent of that number to post-market safety monitoring.
    I am concerned that the FDA's current post-market 
surveillance system is not up to the challenge posed by rapid 
drug approvals. What changes in FDA's post-market surveillance 
program are needed to run an effective program, and will the 
amount of money the industry has put forward pay for the needed 
changes?
    Mr. Crawford. That is one of the things that I am very 
concerned about, and have been briefed on by Dr. Woodcock and 
her staff. And I would if I may like to ask her to give the 
bottom line of those briefings.
    Ms. Woodcock. That is a complex question you are asking. 
The recommendations that we have arrived at would actually 
double the size of the review staff in drug safety at the 
agency, and that would be a tremendous boost.
    However, there are many drugs, of course, that are generic, 
that are off patent, that have safety problems. Most of the 
drugs on the market have not been newly approved, and as you 
know, my feeling is that drug safety is a broad issue, and it 
does not pertain to the first year or so after a drug is 
approved.
    It pertains to all drugs that are on the market. We find 
problems years, sometimes decades, after a drug is on the 
market.
    Mr. Waxman. Well, you mentioned that this funding from user 
fees will double the staff of post-marketing, but I understand 
that is over a 5 year period.
    Ms. Woodcock. Correct.
    Mr. Waxman. Just tell us in your best professional judgment 
what would FDA need to have in place to do a post-market 
surveillance program that will accomplish what we would like to 
see ideally to assure the public about the safety of drugs that 
are on the market?
    Ms. Woodcock. For drugs, we need money for access to data 
bases, and the linked health care data bases that exist now, 
and the health care organizations that link adverse reactions 
to prescriptions, and outcomes, we need the money to do studies 
so that when health problems are detected or suspected with 
drugs, we can go out and confirm or evaluate whether or not 
these are real, and if so, what to do about them.
    Mr. Waxman. I assume the money that will be provided in 
this agreement with the industry will not be sufficient to do 
what ought to be done for a post-marketing surveillance 
program.
    Ms. Woodcock. In my judgment that is true, but that many of 
these drugs are not new drugs.
    Mr. Waxman. How much money and how many staff people in 
your best professional judgment would be needed to do a good 
post-marketing surveillance program? You might want to get it 
for the record.
    Mr. Crawford. Yeah, I think that is a good idea. Can we 
submit that for the record?
    Mr. Waxman. Yes, please. I understand in this agreement 
with the industry that it authorizes the FDA to use a portion 
of the user fees to gain approximately a hundred new FTEs 
devoted to post-market safety over the next 5 years.
    And while it is a good start, and welcome change, I am 
concerned that though there is apparently nothing explicit in 
the agreement about the number of FTEs that FDA can add to the 
post-market surveillance program.
    Instead, the only explicit part of the agreement is a goal 
that is set for premarket review. And I would like to know how 
we in Congress can be sure that the fees currently earmarked 
for post-market safety will in fact be used for that purpose.
    For example, if in a given year the FDA does not have 
sufficient resources to meet its performance goals, which again 
are only for pre-market approvals, what will stop the agency 
from taking resources from the post-market safety program to 
help meet performance goals for faster approvals?
    Ms. Woodcock. We issue a report to Congress yearly, both a 
performance report and a financial report. We would expect that 
the yearly reports issued under this new program would have a 
line item for how many dollars, and how many FTEs are devoted 
in drug safety from user fees.
    Mr. Waxman. Well, I guess what I want to try to focus on is 
that the agreement, which could be the basis for legislation, 
spells out a performance goal for premarket reviews, and no 
performance goals for post-market safety activities.
    Don't you guarantee that post-market safety will always be 
sacrificed in order to meet pre-market review deadlines? And is 
pre-market review speed more important than post-market safety 
evaluation from a public health point of view. I think we would 
both say no.
    But can we be assured that we are not going to find 
ourselves in a position where that money is going to be used 
for pre-market instead of post-market if you fail to meet those 
performance standards?
    Ms. Woodcock. We have viewed it as an obligation to use the 
money as it has been intended under the user fee program, and 
that is laid out in the reports that we give to Congress. And I 
don't think that we would change the money around.
    Mr. Waxman. And will the people hired with user fee money 
be allowed to work on non-PDUFA-3 drugs?
    Ms. Woodcock. Could I answer that, because it is 
complicated?
    Mr. Waxman. Yes, sure.
    Ms. Woodcock. It is a level of effort arrangement. We don't 
have people with a star on their head saying user fee people, 
and non-user fee people. So we would have to devote a certain 
level of effort to the PDUFA-3 drugs, if that makes sense to 
you.
    But it would not be by individual, individually. 
Individuals would work on whatever was appropriate.
    Mr. Waxman. Can I ask just one last question, Mr. Chairman?
    Mr. Bilirakis. Yes, but just briefly.
    Mr. Waxman. My last question is this. I am concerned about 
the fact that we have direct to consumer advertising by the 
pharmaceutical manufacturers, and the FDA has a role to make 
sure that it is not false and misleading.
    I also understand that the FDA has very, very, little 
resources to accomplish that goal. Perhaps for the record you 
could tell us what you would need if you were actually going to 
do the job that you have the power to do, but not the resources 
to do, to supervise these consumer ads to be sure that they are 
not false and misleading.
    Mr. Crawford. May we submit that analysis for the record 
also?
    Mr. Waxman. And please submit the answers to my questions 
about optimal staff and budget, in terms of your best 
professional judgment, and not what is approved by every 
politician around, but your professional judgment.
    Mr. Crawford. Thank you, sir.
    [The following was received for the record:]

    The Division of Drug Marketing and Advertising (DDMAC) in 
the Center for Drug Evaluation and Research (CDER) is 
responsible for the regulation of prescription drug 
advertising. This Division currently has assigned 39 full-time 
equivalents (FTEs) positions. While DDMAC has worked to 
maximize its productivity and is currently undergoing a 
reorganization that is designed to further improve its 
efficiency and effectiveness, the current staffing is not 
adequate to keep pace with the rapidly increasing number of 
professional and direct-to-consumer advertisements for 
prescription drugs. It is estimated that CDER would need 
approximately 35 additional FTEs and supporting operating funds 
to fully staff the advertising review program.
    Currently, the Center for Biologic Evaluation and Research 
(CBER) has 4 FTEs to review all advertising and promotional 
labeling materials submitted. In order to adequately assess 
these materials and bring timely enforcement actions, a large 
increase in staff would be required. Based on the projected 
number of submissions for FY2003, and conservative estimates of 
man-hours needed to review these submissions, 30 additional 
review FTEs would be required. Additional management and 
support staff would also be needed, for a total of 38 FTEs at a 
cost of $5,130,000.00. An additional $550,000 would be required 
for IT upgrade and support of a tracking system. This would 
result in a total requirement of $5,680,000.00.

    Mr. Bilirakis. We will be submitting, of course, a number 
of questions to you. There are people here who have sat around 
all morning long, and haven't had the opportunity to inquire of 
you, Dr. Crawford.
    Per usual, you will be responding to those in a timely 
fashion. That being the case, we are going to finally excuse 
you and express our appreciation to you, and Dr. Zoon, and Dr. 
Woodcock, for the long delays and sitting in the chair as long 
as you have.
    Mr. Crawford. Thank you very much.
    Mr. Bilirakis. Thank you very much. Again, help us to help 
those who need to be helped.
    Mr. Crawford. We shall do that.
    Mr. Bilirakis. Thank you. Panel Number 2 will consist of 
Dr. Timothy R. Franson, Vice President of Clinical Research and 
Regulatory Affairs, U.S. Eli Lilly Research Laboratories; Dr. 
Alastair J. J. Wood, Assistant Vice Chancellor for Research, 
Professor of Medicine, and Professor of Pharmacology, at 
Vanderbilt University School of Medicine; and Dr. Mary 
Pendergast, Executive Vice President of Elan Corporation.
    Welcome to all three of you. We can start off with Dr. 
Franson. If you would, please. We are setting the clock at 5 
minutes. Your written statement, of course, is a part of the 
record.
    We would hope that you would supplement or compliment it, 
and let's do the best that we can.
    Dr. Franson, please proceed.

 STATEMENTS OF TIMOTHY R. FRANSON, VICE PRESIDENT OF CLINICAL 
   RESEARCH AND REGULATORY AFFAIRS, U.S. ELI LILLY RESEARCH 
LABORATORIES; ALASTAIR J.J. WOOD, ASSISTANT VICE CHANCELLOR FOR 
RESEARCH, VANDERBILT UNIVERSITY SCHOOL OF MEDICINE; AND MARY K. 
     PENDERGAST, EXECUTIVE VICE PRESIDENT, ELAN CORPORATION

    Mr. Franson. Thank you very much. Chairman Bilirakis, 
Ranking Member Brown, and members of the subcommittee, thank 
you for the opportunity to discuss the reauthorization of 
PDUFA.
    My name is Tim Franson, and I am a physician, a pharmacist, 
and Vice President of Clinical Research and Regulatory Affairs 
at Eli Lilly and Company. And I am representing the views of 
the Pharmaceutical Research and Manufacturers of America, 
PhRMA.
    Very few legislative initiatives have been as effective and 
successful as PDUFA. The user fee program was created while 
keeping two overriding and principled goals in mind. There must 
be no real or perceived paying for a drug approval, and patient 
access to new treatments must be expedited.
    The results of the program are tangible. Since enactment of 
the program in 1992, the FDA has approved 712 drugs, and 198 of 
these being priority reviews, which have had a remarkable 
positive impact on patients.
    It is critical to note that the user fees are designed to 
be added to FDA appropriated base funds. Congress wisely added 
two triggers to assure that the FDA could not collect user fees 
unless the base line appropriation for FDA was preserved, and 
the necessary funds within the appropriations were spent on 
drug review in the full sense.
    The public health advantages of PDUFA cannot be overstated. 
Patient access to new, safe, and effective medicines has been 
expedited. Prior to the initial passage of the legislation, 
drug reviews at FDA took on average over 30 months.
    The review time has been cut in half over the past 9 years 
that the program has been in effect. The FDA is now approving 
new, life-saving therapies before other regulatory agencies in 
the world, giving American patients first access to these 
important medicines.
    There is improved, appropriate communication between the 
FDA and the companies developing these new drugs, and thus 
facilitating the decisionmaking process. And according to FDA 
statistics, the law has had no effect on market withdrawal 
rate, which has remained at 2.7 percent, both pre-and-post-
PDUFA.
    Clearly, this program is an excellent example of how to 
structure a successful working relationship between the 
regulator and the regulated without compromising safety and 
efficacy standards.
    The integrity of the program is in its simplicity; 
incremental resources for FDA and measurable performance goals. 
These goals have been kept out of the statute and dealt with in 
a side-letter from the Secretary of HHS to Congress.
    The statute is explicit about the use of user fee funds, 
and they can only be used for the process for the review of 
human drug applications. The retention of this limitation is 
critical to the proper scope of PDUFA.
    It focuses the additive resources on the activities that 
best serve the broad public health goal of the law, the prompt 
review of important new drugs.
    PDUFA-1 focused solely on the drug review process, and 
PDUFA-2 focused on improving interactions during the clinical 
drug development phase. As we look forward to extending this 
program, we identified several key objectives.
    Continuing to assure a sufficient financial base for FDA. 
Incorporating the most current information technology into the 
review process. Exploring new concepts to bring additional 
efficiencies to the process.
    Improving performance management, and continuing to assure 
that the safety of new drugs is of the highest priority. The 
FDA has proposed a risk management program in which the agency 
would gain additional resources to evaluate risk management 
plans associated with new products.
    These will address questions of what may occur as products 
reached to a larger number of patients in the first 2 to 3 
years of marketing, the time in which a vast majority of risks 
are identified.
    Additional user fees will be allocated for the risk 
management program, and this will complement the extensive 
programs that the FDA and PhRMA member companies have in place 
to monitor post-market safety of new drugs.
    In closing, I want to acknowledge the over 1,000 
professionals at FDA, who are a large part of the success of 
this program, and who are dedicated to doing their job to the 
highest standards.
    PhRMA hopes that Congress will act to reauthorize this 
program, assuring these employees of the shared commitment of 
all parties to continue the program for another 5 years, and to 
assure continued, timely flow of new therapeutic advances to 
waiting patients.
    Thank you, and I will be happy to answer any questions that 
members of the committee may have.
    [The prepared statement of Timothy R. Franson follows:]

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

    Mr. Chairman and Members of the Subcommittee, I'm pleased to be 
here on behalf of the Pharmaceutical Research and Manufacturers of 
America (PhRMA) to present its views on the reauthorization of the 
Prescription Drug User Fee Act (PDUFA). PhRMA represents the nation's 
leading research-based pharmaceutical and biotechnology companies, 
which are devoted to inventing medicines that allow patients to live 
longer, healthier, and more productive lives. Investing more than $30 
billion in 2001 to discover and develop new medicines, PhRMA companies 
are leading the way in the search for cures. Right now, our companies 
have some 30,000 researchers working on more than 1,000 potential new 
medicines. We want patients to have access to safe and effective 
medicines as soon as possible. That's why we're here today.
    As members of this Subcommittee well know, opportunities to make a 
real societal difference through legislation are unique and special. 
PDUFA, enacted in September 1992, was clearly a central piece of 
legislation that has affected the lives of many American citizens who 
needed prompt access to important new medicines. The Energy and 
Commerce Committee played a critical role at that time and the Commerce 
Committee was key again in 1997 when PDUFA was reauthorized as part of 
the Food and Drug Administration Modernization Act. As the members of 
this Subcommittee are aware, PDUFA expires at the end of this federal 
fiscal year. Prompt reauthorization is critical to all the 
stakeholders: to industry, which seeks to maintain timely review; to 
the FDA, which anticipates gaining important additional resources; and 
most of all, to the American public, who await new advances that our 
industry is developing to treat their diseases from cancer and AIDS to 
Alzheimer's and diabetes.
    The public health benefits of PDUFA cannot be overstated. Patient 
access to new safe and effective medicines has been expedited. Prior to 
the initial passage of the legislation in 1992, drug reviews at FDA 
took on average over 30 months. The review time has been cut in half 
over the past nine years that the program has been in effect. FDA is 
now approving new life-saving therapies before other regulatory 
agencies in the world, giving American patients first access to these 
important medicines. There is improved appropriate communication 
between FDA and the companies developing these new drugs. This leads to 
a greater and timelier exchange of information, facilitating the 
decision-making process. Finally, this program is a clear example of 
how to structure a successful working relationship between the 
regulator and regulated without compromising standards.
    The results of this program are tangible. One need only look at the 
number of drugs and biologics approved over the past nine years. FDA 
has approved 712 drugs; 198 of these were priority reviews. Among the 
examples of new treatments that American patients have access to are:
    (1) Gleevec--A drug approved for the treatment of chronic myeloid 
leukemia, which is a rare and deadly disease that affects some 25,000 
Americans. A priority drug, it was approved in just over two months.
    (2) Xigris--A drug approved for the treatment of adults 
hospitalized with severe sepsis that are at a high risk of dying. Prior 
to the approval of Xigris, about 1,000 people died of this condition 
every single day. A priority drug, it was approved in under 10 months.
    (3) Trisenox--A drug approved for the treatment of leukemia (acute 
promyleocytic leukemia) in patients who have not responded to, or have 
relapsed following all trans-retinoic acid and anthracycline-based 
chemotherapy. A priority drug, it was approved in six months.
    (4) Mylotarg--A drug approved for the treatment of a certain type 
of leukemia (CD33 positive acute myeloid leukemia) for patients 60 
years or older who have relapsed for the first time and are not 
suitable candidates for the standard but poorly tolerated cytotoxic 
therapy. A priority and orphan drug, it was approved in about seven 
months.
    (5) Zyvox--A drug approved for the treatment of bloodstream 
infection, hospital-acquired pneumonia, and community-acquired 
pneumonia. A priority drug, it was approved in six months.
    The concept of a user fee program to augment FDA resources was 
first proposed by the Agency. The lengthy time of drug reviews was 
attributed to the lack of adequate resources, a view put forth by the 
FDA and agreed to by the pharmaceutical industry. A distinct need for 
supplemental resources on top of those appropriated by Congress was 
established with one principal goal: there must be no real or perceived 
``paying for a drug approval.'' Over the past nine years this goal has 
been met. Although performance goals were established in both PDUFA-1 
and PDUFA-2, these were kept out of the statute and dealt with in a 
side letter from the Secretary of HHS to Congress. Thus, the PDUFA law 
itself is rather simple, covering the fee structure, how fees can be 
collected, and what they can be used for.
    It is critical to note that the user fees are designed to be 
additive to the FDA appropriated base funds. Congress, in its wisdom, 
added two ``triggers'' to assure that FDA could not collect user fees 
unless there was a baseline appropriation for all of FDA and the 
necessary funds within the full appropriation were spent on drug review 
activities. Collectively the two ``triggers'' emphasize the ongoing 
public responsibility to provide FDA with adequate resources to carry 
out its mission to advance the public health.
    PDUFA-1 focused solely on the drug review process, reducing the 
time to FDA action to six months for priority drugs and twelve months 
for standard drugs. FDA also agreed to process the backlog of pending 
applications within the first two years of the program. Both goals were 
accomplished.
    While PDUFA-1 focused on FDA review time, PhRMA stressed that the 
FDA review of an application, while significant, is only a fractional 
portion of the whole drug development time that was taking as long as 
12 years. As the pharmaceutical industry looked toward the first 
reauthorization of PDUFA in 1997, proposals were offered to the FDA 
that would improve interactions during the clinical development phase 
of drug development with the hope that improvements in this lengthy 
process (6-8 years) could be realized with the same degree of success 
that occurred with the FDA review phase. Agreement was reached on a set 
of metrics that has made such interactions more predictable. In 
addition, PDUFA-2 incorporated processes for resolving disputes, 
assessing special protocols, providing prompt feedback when sponsors 
submit information in response to a clinical hold, and simplifying the 
action letter that the sponsor receives following the review of an 
application. Collectively, these enhancements are beginning to improve 
the drug development process.
    As PhRMA began preparing for the PDUFA-3 reauthorization, we 
recognized that this is a sound program that works and works well. The 
integrity of the program is its simplicity: measurable performance 
goals in return for the added incremental resources for FDA. The 
statute is explicit about the use of user fee funds; they can only be 
used for the ``process for the review of human drug applications.'' The 
retention of this limitation is critical to the proper scope of PDUFA; 
it focuses the additive resources on the activities that best serve the 
broad public health goal of the law, the prompt review of important new 
drugs. While no less important, the broad array of other FDA regulatory 
activities that deal with a host of post-market issues are best funded 
out of the federally appropriated budget. PhRMA recognizes the critical 
role of these activities and the necessity for full funding of the Food 
and Drug Administration.
    One critical issue that surfaced back in 1992 was whether the 
nature of the proposed legislation constituted a ``tax'' on industry. 
It was argued at that time, successfully, that the program would not be 
a tax, but rather a fee for service. Thus, Congress avoided a difficult 
jurisdictional decision as to whether referral to the House Ways and 
Means and the Senate Finance Committees would be required. PhRMA would 
urge the Subcommittee to preserve the current language in the statute 
to insure that PDUFA continues to meet the above-mentioned process 
definition. In this manner, PhRMA hopes that Congressional jurisdiction 
will remain clear and unambiguous.
    The goals for the program over the next five years are 
straightforward. We must preserve the significant process improvements 
that have been made over the past nine years of PDUFA. PhRMA 
consistently has complimented the FDA for meeting every established 
performance goal, in most cases well ahead of schedule. Interactions 
between the FDA and sponsors of new medicines have never been better. 
The predictability of the regulatory process provides a degree of 
certainty to companies' drug development programs.
    There are some key aspects of the proposed PDUFA-3 program that are 
worth discussion.

 We need to continue to assure a sufficient financial base that 
        preserves the current services and achievements made during the 
        first two cycles of PDUFA. The current FDA budget that fully 
        funded the Agency's current cost of living increase was of 
        great assistance in meeting this goal.
 We must continue to move toward incorporating the most current 
        Information Technology (IT) into the review process. Over the 
        five years of PDUFA-2, industry has provided over $80 million 
        of user fees to upgrade the IT infrastructure of both the Drugs 
        and Biologics Centers. By the end of this fiscal year, FDA will 
        be in a position to receive all regulatory submissions in 
        electronic format. This includes not only the New Drug 
        Application, but also the large amount of information that is 
        required during the clinical development process, the annual 
        reports that are required of all approved drugs, and the 
        reports of adverse drug reactions. Industry is willing to 
        continue this level of funding and add extra funds toward 
        targeted programs. We must remember that FDA is responsible for 
        managing large amounts of information and this ongoing IT 
        initiative is critical to the Agency's function.
 We need to continue to explore new review concepts that will 
        bring additional efficiencies to the process. PhRMA has 
        proposed to pilot a ``cumulative marketing application'' in 
        PDUFA-3. Rather than waiting until the full application is 
        complete, FDA would begin to review defined modules of the 
        submission, as they are finished. This ``building'' of a 
        reviewed NDA may lead to marked improvements in the way drugs 
        are reviewed.
 We need to develop a workload adjuster that reflects all of 
        the activities of the new drug review process, rather than just 
        the completed NDA submission. FDA allocates user fee resources 
        to the review of efficacy and manufacturing supplements as well 
        as all of the interactions with sponsors during the clinical 
        development time period. During PDUFA-2, workload was 
        calculated only on the basis of fee-paying applications. By a 
        rough estimate this represents only about 40% of the net review 
        burden of the Agency. If the number of these applications dip, 
        as it has in the last couple of years, FDA's ability to carry 
        out all of its responsibilities will be hampered by 
        insufficient additional resources.
 PhRMA and the FDA have been in agreement that the safety of 
        new drugs must continue to be one of the highest priorities in 
        the development and approval process. To this end, we have been 
        in frequent discussions with other PDUFA stakeholders to 
        improve this function. We all acknowledge that drugs are not 
        without risks. The basic premise of drug development is 
        managing the benefit/risk relationship. Additional information 
        on the safety of drugs emerges constantly, particularly in 
        early use following approval. PhRMA companies already dedicate 
        significant resources, both personnel and money, to pre- and 
        post-approval safety vigilance activities. While there has been 
        no increase in the rate of drug withdrawals during PDUFA 
        compared to pre-PDUFA periods, the FDA has proposed a risk 
        management program in which the agency would gain additional 
        resources for the purpose of evaluating risk management plans 
        associated with new products, and to address questions of what 
        will occur as products reach larger numbers of patients in the 
        first 2 to 3 years of marketing--the time in which the vast 
        majority of risks are identified. Additional user fees will be 
        allocated for the risk management program.
 We should allocate a modest proportion of PDUFA funds for 
        improving performance management. By implementing ``good review 
        management principles,'' FDA can bring consistency throughout 
        the review divisions that are located within both CDER and 
        CBER. Secondly, as the PDUFA program enters its third cycle, 
        PhRMA believes that this is an appropriate time for a major 
        management review focusing on process review and analysis 
        within the two Centers. This review should be comprehensive, 
        involving a thorough analysis of IT utilization, review 
        management, and activity cost. The resultant process map should 
        enable FDA to make far greater use of its principal resource, 
        people power.
    Finally, we must not lose sight of the dedicated employees at the 
Food and Drug Administration who are a large part of the success of 
this program. User fees now support well over 1000 men and women who 
are dedicated to doing their job to the highest professional standards. 
PhRMA believes that Congress needs to act with all due speed to 
reauthorize this program, assuring these employees of the shared 
commitment of all parties to continue the program for another five 
years and the continued timely flow of new therapeutic advances to 
waiting patients.

    Mr. Bilirakis. Thank you very much, Mr. Franson.
    Dr. Wood.

                 STATEMENT OF ALASTAIR J.J. WOOD

    Mr. Wood. Mr. Chairman, Representatives, and Ladies and 
Gentlemen, thank you also for giving me the opportunity to 
testify today. As you already heard, I am Alastair Wood from 
Vanderbilt University, where I am Assistant Vice Chancellor, 
and Professor of Medicine, and Professor of Pharmacology.
    But I am also the drug therapy editor of the New England 
Journal Of Medicine. Prescription drug user fees have provided 
the FDA with additional resources to allow effective therapies 
to reach patients faster.
    The program has clearly been a great success and has 
achieved its goal. And with respect to that, I would like to 
highlight a number of points from my written testimony that 
addressed the future under PDUFA.
    We are at a time when the potential for innovative drug 
development has never been greater. While that innovative 
potential is enormously exciting, it will put extraordinarily 
new demands on the FDA.
    If only a percentage of the genes discovered by the Human 
Genome Project reveal new drug targets, this will provide 
thousands of new drug classes, and I am not just talking about 
new drugs. New drug classes never before seen.
    Facilitating such innovative therapies to market will 
require paradigm shifts in the way that we think about 
evaluation of safety and efficacy. Some of these new challenges 
are already apparent.
    The old models used to demonstrate efficacy may not be 
optimal for the therapies of the future. Drugs are being 
developed, for example, to enhance immune function in HIV AIDS.
    The reduction in viral load, which is the current standard 
measure of efficacy, may not be the optimal efficacy end point 
for such drugs. In the cancer area, a number of novel 
therapeutical strategies are in development.
    Here, too, the old measures of effectiveness based simply 
on reduction in tumor size may need reevaluating. 
Pharmacogenetics, defined as the effect of genetics on drug 
response, has the potential to identify patients whose 
particular genetic backgrounds made them either more likely to 
respond to therapy, or put them at particular risk from side 
effects.
    If it is an early stage in the drug development process, we 
can identify patients who, because of their genetic make-up, 
respond to a drug. And then by including only such patients in 
clinical trials, we could substantially reduce the number of 
patients that we need to study.
    The agency needs to work with industry to identify the 
issues related to the use of these more efficient trial 
designs, and ensure that their use does not result in overly 
restrictive labeling.
    Questions have been raised this morning about the effects 
of PDUFA on drug safety. The issue is framed sometimes in 
different ways. Sometimes the question has been posed are we 
approving drugs too quickly.
    I think the answer is clearly no. We are not approving 
drugs too quickly. In fact, I would go further and say that 
there is no intuitive reason to imagine that slowing the 
approval process will enhance safety.
    Drugs are not like wines; they don't improve with keeping. 
An additional way that the question has been posed is are we 
withdrawing more drugs because of safety concerns since PDUFA.
    Again, the data do not appear to support that conclusion. 
Another question that has been raised is how should PDUFA 
influence post-marketing surveillance? As someone has already 
said, the answer is complicated.
    First, it is worth saying that effective post-marketing 
surveillance is not and should not be the enemy of industry. 
Poorly performed post-marketing surveillance may result in the 
needless removal, as we have already, of safe and effective 
drugs from the market on the basis of invalid data.
    Fortunately, the information technology revolution is about 
to radically change the way physicians prescribe drugs. At 
Vanderbilt Medical Center, all physician's orders for in-
patients must now be entered by computer.
    Dosage, interaction risks, et cetera, are checked 
automatically at the time of prescribing, and the results fed 
back to the physician before direct transmission of the 
prescription to the pharmacy.
    The implications for improved patient safety are obvious 
and compelling, but there are also substantial opportunities 
for post-marketing surveillance.
    We will have access to complete data sets on prescriptions 
and outcomes, with positive implications for the drug approval 
process. The greater our confidence in the post-approval data, 
the earlier and faster we should be able to approve drugs.
    These prescribing systems are moving forward rapidly, and 
the FDA needs immediately to be a player in the development of 
such systems.
    In summary the upcoming challenges to the FDA are 
substantial. These challenges can only be met if the agency has 
the resources to hire and retain the quality scientific staff 
it needs.
    The salaries of FDA scientists need to be maintain parity 
with academia, and should be tied to the NIH salary cap. If we 
are to fulfill our hopes for novel therapies in the future, it 
is essential that the FDA has the increased resources it needs 
to participate as a full and credible scientific partner.
    User fees alone cannot be expected to provide the required 
increases in resources. Additional public funds are required to 
adequately fund this critical public health agency. Mr. 
Chairman, thank you for giving me the opportunity to present 
these views.
    [The prepared statement of Alastair J.J. Wood follows:]

 Prepared Statement of Alastair J.J. Wood, Assistant Vice Chancellor, 
                Vanderbilt University School of Medicine

    Mr. Chairman, Representatives, Ladies and Gentlemen, I am Alastair 
Wood from Vanderbilt University where I am Assistant Vice Chancellor, 
Professor of Medicine and Professor of Pharmacology. I have spent my 
entire professional life studying and writing about drugs. I have 
served on FDA advisory committees and have been the Drug Therapy Editor 
of The New England Journal of Medicine for over a decade.
    The purpose of the Prescription Drug User Fee Act was to provide 
the FDA with the additional resources it needed to allow faster review 
of NDAs and therefore have effective therapies reach our patients 
faster. The program has clearly been a great success and has achieved 
that goal. The success of the program and the occasion of its 
reauthorization provide an opportunity to look into the future to 
determine what actions are required to ensure that we can continue to 
further enhance the drug approval process.
    There has probably never been a time in drug development at which 
the opportunities were greater. While these opportunities are exciting 
they will also put extraordinary new demands on the FDA. It has been 
estimated that all of the drugs currently on the market act on only 500 
different molecular targets. If only a percentage of the genes 
discovered by the Human Genome Project reveal new drug targets this 
will provide thousands of new Drug Classes--Not just new Drugs--But 
completely new drug classes never seen before. Facilitating such 
innovative therapies to market will require, not more of the same but 
paradigm shifts in the way we think about evaluation of safety and 
efficacy.
    Some of these new challenges are already apparent. The old models 
used and demanded to demonstrate efficacy may not be optimal in the 
future. New approaches from biotechnology drug development are already 
posing new and unanswered regulatory questions. Drugs are being 
developed to enhance immune function in HIV/Aids--Reduction in viral 
load--the current standard measure of efficacy in HIV patients may be 
inappropriate for such drugs. In the cancer area drugs are in 
development to reduce the occurrence of metastatic cancer, to reduce 
blood vessel supply to tumors, to increase drug entry into cancer 
cells, while yet others will target the cell signaling processes that 
are deranged in cancer cells. Here too the old models of effectiveness 
based simply on reduction in tumor size may need re-evaluating. The 
development of such new approaches will require all of the 
stakeholders--Industry, regulators, academics and patients working 
together to define robust, relevant and measurable end points for the 
clinical trials of the future.
    Pharmacogenetics--The effects of genetics on drug response has 
considerable potential to enhance drug investigation and the approval 
process. It will allow us to identify patients whose particular genetic 
backgrounds either make them more likely to respond to therapy or put 
them at particular risk from side effects. Such genetic information is 
already being used to optimize drug dosage in the treatment of 
childhood leukemia. Of particular relevance to our discussion today is 
how this pharmacogenetic information could improve the drug approval 
process. If at an early stage in the drug development process we can 
identify patients who, because of their genetic makeup, respond to a 
drug, then by including only such patients in our clinical trials we 
could substantially reduce the number of patients who have to be 
entered into the pivotal trials required for drug approval. Conversely 
the ability to identify patients at particular risk of developing side 
effects from a drug and the exclusion of such patients from treatment 
or studies will also affect the risk benefit profile of such a drug. 
Drugs, which might otherwise be considered too toxic for widespread 
use, may be safely developed if we can exclude the patients at risk of 
toxicity. The regulatory issues are enormous and will again require 
substantial effort on the part of all the stakeholders. The Agency 
needs to work with industry to identify the issues related to the use 
of these more efficient trial designs and ensure that their use does 
not result in restrictive labeling.
    Concerns have been raised about the effects of PDUFA on drug 
safety. The issue has been framed in various ways.
    Sometimes the question is posed--``Are we approving drugs too 
quickly?'' I think the answer is clearly--No--we are not approving 
drugs too quickly in fact I would go further and say that there is no 
intuitive reason to imagine that slowing the approval process will 
enhance safety but such delays do prevent effective therapy reaching 
our patients. Delay has no inherent safety value, but may simply 
reflect indecision or lack of intellectual confidence.
    An additional way that the question is posed is ``Are we 
withdrawing more drugs since PDUFA?'' Again the data do not appear to 
support that conclusion.
    Another question that has been raised is ``How should PDUFA 
influence post marketing surveillance?'' The answer is complicated. But 
first it is worth saying that effective post marketing surveillance is 
not, and should not, be the enemy of industry. Inadequate post 
marketing surveillance will fail to identify drugs with unacceptable 
risk/benefit profiles. However just as importantly poorly performed 
post marketing surveillance is also dangerous because it may result in 
the needless removal of safe and effective drugs from the market on the 
basis of invalid data. Neither of these outcomes is acceptable. In 
addition the greater our confidence in the ability to generate quality 
post marketing data the greater should be our ability to approve drugs 
earlier.
    Fortunately changes in information technology may assist us. 
Doctors still prescribe drugs much as they have done for 2,000 years. 
With little assistance, they write out a prescription from memory 
(sometimes still in Latin!), give the prescription to their patient who 
carries it to a pharmacist, who tries to read it and dispense the 
correct drug. That process is about to change rapidly. At Vanderbilt 
Medical Center all physicians' orders for inpatients must now be 
entered by computer. Dosage, interaction risks etc are checked 
automatically at the time of prescription before direct transmission of 
the prescription to the pharmacy. Such systems will soon also be 
available and widely used in the outpatient setting. The implications 
for improved patient safety are obvious and compelling. However the 
introduction of such computerized prescribing systems also have huge 
implications for post marketing surveillance--For the first time we 
will have access to complete data sets on prescriptions and outcomes. 
Again I see these innovations as having positive implications for the 
drug approval process. The greater our confidence in the post approval 
data the earlier and faster we should be able to approve drugs and use 
them to treat our patients. Issues of privacy need to be dealt with but 
these systems are moving forward rapidly and the FDA needs to be 
integrated into such systems now so that the information can be used to 
push back the time to drug approval.
    I list these examples of the exciting new challenges and 
opportunities to you to emphasize that in the immediate future we are 
going to have to undertake considerable rethinking of our approach to 
the demonstration of drug safety and efficacy. Such innovative thinking 
will need to involve all of the constituencies--industry, regulators, 
legislators, academics and patients and will require considerable 
effort from us all. Reducing the time to drug approval does not depend 
solely on the review time for an NDA it also requires efficient trial 
design and execution and enhanced sponsor confidence that innovations 
in trial design and in definition of end points will be accepted at the 
time of NDA review. The strategy to speed drug approval needs to extend 
across the entire life cycle of development and use of a drug and 
therefore demands investment not just in the review process itself but 
also in developing and maintaining excellence in the pre and post 
approval process. The speed of scientific change and development of new 
knowledge requires a strategy to ensure that FDA's scientific staff 
maintains cutting edge scientific skills. Such strategies will require 
funding which will not come from user fees, yet the benefits should 
flow directly to better reviews and more efficient drug development 
strategies. Drugs can be developed faster if only meaningful high 
quality studies are demanded and required to be performed.
    Thus as we think about PDUFA reauthorization the opportunities 
offered by drugs to relieve the diseases that have plagued mankind are 
enormous. The challenges to the FDA to develop the new paradigms 
required will be substantial. These innovations will only be 
forthcoming if the agency has the resources to hire and retain the 
quality scientific staff it needs. The FDA competes with both industry 
and academia for such scientific talent. The salaries of FDA Scientists 
need to maintain parity with academia and should be tied to the NIH 
salary cap. If we are to fulfill our hopes for novel therapies in the 
future it is essential that the FDA has the increased resources it 
needs to participate as a full and credible scientific partner. User 
fees alone cannot be expected to provide the required increase in 
resources. Additional public funds are required to adequately fund this 
critical public health agency.
    Mr. Chairman thank you for giving me the opportunity to present my 
views today.

    Mr. Bilirakis. Thank you, Mr. Wood.
    Ms. Pendergast.

                 STATEMENT OF MARY K. PENDERGAST

    Ms. Pendergast. Mr. Chairman and members of the 
subcommittee, I am Mary Pendergast, Executive Vice President of 
Elan Pharmaseuticals, a member of the biotechnology industry 
organization.
    Thank you for letting me testify on behalf of BIO. Our 
message today is simple and it echoes what you have heard 
before. The Prescription Drug User Fee Act is an 
extraordinarily successful piece of legislation, and we are 
here to urge you to renew the program for another 5 years, 
quickly, and without taking on other issues.
    The additional resources provided to the Food and Drug 
Administration through user fees have facilitated FDA's review 
of new biotech therapies, many of which are life-saving, 
without compromising the agency's ability to make sound and 
scientific medical and regulatory decisions.
    In fact, the proportion of drugs removed from the market 
for safety reasons has not changed because of the user fee 
program.
    Yet, because safety is a paramount concern of industry, 
consumers, and FDA, we are ready to provide the FDA with 
additional resources to work with companies, physicians in and 
academic medicines, such as Dr. Wood, and consumer groups, to 
improve our understanding of the risks imposed by drugs and 
biologicals.
    And to find new methods to reduce those risks, companies 
will also work with the FDA to develop specific risk management 
plans for products that will be coming on to the market in the 
next 5 years.
    These new risk management efforts will buildupon the FDA's 
already considerable powers to give the public an added margin 
of safety. We also hope that the user fee resources will be 
used to respond to a problem we see in the FDA's implementation 
of the user fee program.
    There appears to be significant differences among FDA 
review divisions, as well as one center to the other, in both 
their review processes, and the timeframes for their 
application reviews.
    We want to understand the reasons for these differences, 
and we want to find ways to address them and hopefully reduce 
or eliminate them. So we hope that the FDA will study how it is 
conducting reviews now, devote both management attention and 
user fee resources to improve their review processes.
    And look at ways to enhance communication with companies 
during reviews, and to minimize the inconsistencies between the 
Center for Biologics and the Center for Drugs.
    Finally, because we recognize that biotechnology products 
are often novel and complex, we propose that FDA spend new and 
additional user fees that we are willing to put forward to 
bolster its access to the expertise crucial to the review of 
biotechnology products.
    We hope that user fees will be used when necessary to hire 
outside experts to help determine how a company could 
demonstrate safety and effectiveness. These experts would be 
selected by the FDA and screened by the agency, and the agency 
of course would have final decisionmaking authority.
    Thank you for the opportunity to present BIO's views at 
this meeting. We look forward to working with the subcommittee 
and the committee to reauthorize this important program.
    [The prepared statement of Mary K. Pendergast follows:]

  Prepared Statement of Mary K. Pendergast, Executive Vice President, 
                            Elan Corporation

    Mr. Chairman and Members of the Subcommittee, I am Mary K. 
Pendergast, Executive Vice President for Government Affairs at Elan 
Pharmaceuticals Management Corporation. I am pleased to be here today 
on behalf of the Biotechnology Industry Organization (BIO), to talk 
with you about the Prescription Drug User Fee Program and to urge the 
Subcommittee and the Congress to reauthorize this program, which 
expires at the end of this fiscal year.
    The Biotechnology Industry Organization, BIO, represents more than 
1000 biotechnology companies, academic institutions, and state 
biotechnology centers in all 50 U.S. States. BIO members are involved 
in the research and development of health-care, agricultural, and 
environmental biotechnology products. The companies BIO represents 
range from large, multinational corporations to much smaller, emerging 
companies. Since its establishment in 1993, BIO has worked with this 
Subcommittee on a variety of issues, including the one we discuss 
today--the product review and approval process at the Food and Drug 
Administration (FDA). BIO was active during congressional deliberations 
in 1996 and 1997 that led to the Food and Drug Administration 
Modernization Act and, importantly, to the reauthorization of the 
Prescription Drug User Fee Act (PDUFA).
    I want to begin by thanking this Subcommittee and its Members for 
your work over nearly ten years in creating and then continuing the 
user fee program for drugs and biologics. You were there at the 
beginning, with the first user fee bill sponsored by Mr. Dingell, Mr. 
Waxman, and others on the Energy and Commerce Committee; you were there 
five years later at the first reauthorization, with legislation 
sponsored by you, Mr. Chairman, Mr. Burr, Mr. Greenwood, and others; 
and here you are again. We greatly appreciate your support of this 
critical program.
    I also want to reiterate what already has been said here today: the 
Prescription Drug User Fee Act has been and remains an extraordinarily 
successful piece of legislation. Prior to enactment of PDUFA, FDA was 
often behind other nations of the world in approving new pharmaceutical 
products. What Congress and FDA repeatedly heard was that American 
patients waited while patients elsewhere had access to important new 
therapies. The drug and biologic user fee program reversed that 
scenario. Because of the additional funding made possible through the 
user fee program, the United States now leads the world, rather than 
following it. Today, FDA is the world's leading regulatory agency, not 
only in terms of the quality and safety of the products it approves for 
marketing, but also in terms of ensuring that new products are 
available to patients as soon as possible.
    For BIO, two key measures of the success of PDUFA I were, first, 
whether the law has facilitated FDA's review and approval of new 
products without compromising the agency's ability to make sound 
scientific, medical, and regulatory decisions and, second, whether the 
law worked for patients.
    By both of these measures, the initial user fee program succeeded. 
User fees enhanced FDA's resources so the agency could hire additional 
medical and scientific reviewers and function more effectively in its 
review of new products. And that was accomplished without a diminution 
in safety. Anyone who has worked with FDA knows they are now, as they 
always have been, the toughest regulators in the world. User fees have 
not changed that, nor has reducing average review times changed the 
proportion of products withdrawn from the market for safety reasons.
    Thus, when the time came to reauthorize the program in 1997, there 
was a keen recognition that we were seeing something unusual--a newly 
established program that had worked the way it was expected to work--
one that a wide variety of stakeholders were praising. PDUFA II also 
has been successful by many measures. Communication between FDA and 
application sponsors has continued to improve, leading to better 
applications and more effective use of scientific resources in making 
decisions. And, most importantly, the health of patients has improved 
through access to new products like Herceptin for metastatic breast 
cancer, Zevulin for non-Hodgkins lymphoma, Enbrel--the first disease 
modifying agent for rheumatoid arthritis, Xigris--the first therapy for 
life-threatening sepsis, and Synagis to protect newborns from 
potentially fatal infections.
    Mr. Chairman, as the Subcommittee moves forward with its work on 
reauthorizing this program for a second time, we know you will build on 
its successes. In particular, we are hopeful that in the next five 
years of the user fee program, while FDA maintains the strong standards 
it now requires, we will see enhanced efforts regarding product safety. 
This enhanced product safety program--FDA's risk management proposal--
will be supported by user fees. With these additional user fees, FDA's 
risk management program will hopefully prove to be an even better 
pharmacovigilance system than that which already exists in the United 
States.
    We also hope that you will recognize that positive results do not 
necessarily equate with perfection. As we have looked more deeply into 
the statistics regarding what has occurred over the last four years, we 
have recognized that some modifications in how the program is 
implemented may be in order and may improve on successes already 
achieved. The things we are looking at do not involve ways in which we 
think the law needs to be changed. Indeed, it is BIO's view that minor, 
largely technical, changes in the law may be called for, but that 
fundamentally this statute works well and should remain essentially 
intact. We also hope that this important legislation will not become a 
magnet or a train to which many unrelated provisions will be attached.
    Reports of PDUFA progress generally deal in averages across the 
agency, and often do not separate these averages to allow examination 
of whether different components of the agency are fulfilling the goals 
of PDUFA at the same level. This kind of sub-analysis is of great 
importance to the biotechnology industry, which often brings to FDA 
products that are complex, unique, and the outgrowth of emerging 
science. We are keenly interested in how the process for reviewing 
these biotechnology products--which are the primary preserve of the 
Center for Biologics Evaluation and Research (CBER)--and the time 
frames in which they are reviewed, tracks the review process and time 
frames for other pharmaceutical products.
    When BIO has examined the data, we have seen what appear to be 
significant differences among review divisions, as well as from one 
center to another, in both the review processes and the time frames for 
application reviews. We want to understand the reasons for these 
differences and we want to find ways to address and even reduce or 
eliminate them.
    To achieve this goal, BIO is proposing some modifications that we 
hope will enhance the FDA's review processes over the next five years. 
These proposals would not require any change in the legislation, nor in 
the standards for approval, but would be achieved within FDA through 
the agency's modification of some of its existing processes.
    First, BIO hopes to be able, through the user fee annual reporting 
mechanisms already in place, to see more clearly where there are 
differences among review divisions and between the two reviewing 
centers, the Center for Drug Evaluation and Research (CDER) and CBER, 
in terms of meeting the various goals of the user fee program.
    Second, BIO wants to see a more structured allocation of user fee 
resources to activities related to review process improvements, as well 
as greater involvement by officials in the Office of the Commissioner 
in evaluating these review processes, looking for opportunities for 
improvements and efficiency gains, and taking steps to implement them. 
Therefore, we propose that a small portion of user fee resources be 
specifically dedicated to review process performance improvement 
activities and that these resources and activities be overseen by the 
Office of the Commissioner.
    Third, we hope to improve further the level of communication 
between FDA and sponsors during the first review cycle. As you know, 
Mr. Chairman, the goal of PDUFA is for FDA to complete its review of an 
application in a designated period of time--six months for a so-called 
priority application, and ten months for a non-priority, or standard 
application. FDA's action on an application may be a letter to the 
sponsor requesting more data or information, a letter stating that the 
application is disapproved, or a letter stating that the application is 
approved. If FDA asks for more information, the sponsor generally 
provides the information to the agency, and then FDA enters into a 
second cycle of review, which can take several additional months. After 
this, third, fourth, and even fifth review cycles may be needed, 
depending on what additional information FDA requests after each of its 
reviews. Our review of data in FDA's reports to Congress, and 
information provided on the agency's web site, shows quite striking 
differences between the centers in regard to their ability to reach 
final decisions within one review cycle.
    With reviews that both FDA and sponsors believe have worked well, 
one of the common themes we have found is early and on-going 
communication. Another factor that influences review processes--and, 
consequently, review times--is inconsistency among divisions and 
between centers in review practices. To address both of these factors--
communication and consistency--we propose that FDA look at ways to 
enhance communication and to minimize inconsistency through the 
development, articulation, and implementation among divisions and 
between centers of effective review practices. We believe such sharing 
of good practices will go a long way to resolving differences among 
divisions and between the centers and will also contribute to greater 
efficiency of review across the board.
    Finally, BIO would like to encourage FDA to use another mechanism 
for obtaining expert advice on cutting edge issues. BIO recognizes that 
biotechnology products are often novel and complex so that only a small 
number of research scientists and medical specialists have the 
expertise to understand how the products' development should proceed. 
Specifically, it is often the case with these products that appropriate 
design of the clinical trials needed for product approval is more 
difficult than it would be with more well-understood science. The 
resources CBER currently devotes to its laboratory-based, scientific 
studies do not address sufficiently this expertise shortage. We propose 
that FDA initiate a mechanism whereby an outside expert could be 
brought in to a meeting between the product sponsor and the FDA to 
assist the sponsor and the agency in deciding how best to achieve the 
data needed to demonstrate safety and effectiveness for the product. 
Such an expert would, of course, be selected by the FDA and, as is 
currently the case, would be screened by FDA, to ensure no conflicts of 
interest and no breach of the confidentiality of proprietary 
information. We propose that a company be provided one opportunity for 
such an expert consultation, so this would not become overly burdensome 
for the agency. As is always the case, the recommendations or views of 
any consultant would be advisory to the FDA, which would remain the 
final decision-maker.
    In summary, BIO shares with FDA the goal of reauthorizing PDUFA in 
a way that not merely maintains but strengthens the FDA's drug and 
biologic review programs. We believe that the user fee program has 
provided, and will continue to provide, the agency the user fee 
resources it needs to do its work. Indeed, we propose that under PDUFA 
III, FDA receive a substantial infusion of new resources. But we also 
hope in the course of PDUFA III to achieve a better handle on review 
process efficiency, especially as it relates to biotechnology products, 
so we can look forward to even more enthusiastic support for the 
program reauthorization in the year 2007.
    Mr. Chairman, we share the belief that timing is critical in this 
reauthorization process. FDA must, because of federal personnel rules, 
initiate a Reduction in Force (RIF) unless the agency has the 
legislative authority to continue providing the salaries and expenses 
that are derived from user fees. Notices of the possibility of such a 
RIF must be sent to FDA employees no later than August 1, 2002, 60 days 
before the end of the fiscal year and detailed plans for any RIF must 
be developed months earlier than that. BIO urges you, Mr. Chairman, and 
the Subcommittee and Committee, to act with all appropriate speed to 
ensure the future of this program.
    Mr. Chairman, thank you for the opportunity to present BIO's views 
at this hearing. BIO looks forward to working with the Subcommittee and 
the Committee in your continuing role as the initiators and overseers 
of this important and highly successful program. This program has 
improved and even saved patients' lives, and has made the U.S. 
biotechnology industry the most productive in the world.
    I would be happy to answer any questions you may have.

    Mr. Bilirakis. Thank you.
    Well, Dr. Wood, and I will say Ms. Pendergast, how does the 
FDA compare to other countries in terms of regulating drugs; 
the efficacy, the safety, et cetera?
    Mr. Wood. I think this is undoubtedly the gold standard 
internationally and for drug regulation. It is the gold 
standard in lots of ways, both in terms of scientific 
expertise, in terms of the rigor with which drugs are reviewed.
    But also importantly I think, and something that we tend 
not to think about it in this country, the openness with which 
that process operates. In many other countries the process is 
much more secretive and advisory committees being held in the 
open, and individuals' views being exposed to open criticism in 
the public, and is not characteristic of the approach taken in 
many other countries.
    So I think we have an excellent system, but that doesn't 
mean that we can't do better, and we can't improve many of 
these things, but most countries I think would view this as one 
to which they would aim rather than the opposite.
    Mr. Bilirakis. Thank you. Ms. Pendergast.
    Ms. Pendergast. I share Dr. Woods' views. The FDA is and 
remains the gold standard for the rest of the world, and I 
think this is especially true with regard to safety.
    I feel as though the FDA has been unfairly criticized for 
its safety record.
    I think we need to remember that in the United States that 
only approximately a tenth of the drugs are pulled from the 
market as they are pulled in other countries. So I think that 
while it is true that drugs do get pulled from the market from 
time to time, the FDA has an enviable record compared to the 
regulators in the rest of the world.
    Mr. Bilirakis. Concerns have been raised by members of the 
panel that PDUFA, or at least this is the way that I 
interpreted their statements, that PDUFA may have hurt the 
quality of FDA, particularly safety, and maybe shifting from 
what was done previously to PDUFA because of the fees coming 
in.
    Do you have any comments regarding that, Ms. Pendergast?
    Ms. Pendergast. I do not think that the prescription drug 
user fee program has impacted safety. I think the data shows 
that a lesser percentage of drugs have been pulled from the 
market now than before.
    I think we have studied twice as many patients before 
putting drugs on the market than we did before the prescription 
drug user fee program began, and I think we have a solid safety 
base upon which the FDA can make decisions.
    So I do not think that the user fee program, which has 
given the FDA additional resources, has impacted adversely on 
safety.
    Mr. Bilirakis. Thank you. Dr. Wood you are an academic. I 
would say you probably don't have any axes to grind, I am not 
insinuating that anybody does, about your opinion.
    Mr. Wood. Yes, I think that one of the things that we need 
to do is we need to look at the safety of a drug throughout its 
life cycle, and one of the things that we have focused on 
today, I guess, has been PDUFA, which really focuses on the 
narrow part of the life cycle of a drug, the time during which 
an NDA, or a new drug application is being considered and 
approved.
    But really we need to--and of course that is the part for 
which PDUFA fees are available--we really need to focus on the 
breadth of the entire life history of the drug before the NDA 
is filed during the appropriate--ensuring that the appropriate 
studies are done, but not excessive studies are done.
    And that requires an appropriate interaction to industry, 
and FDA, and others. But also in the post-market, what I have 
heard is the concerns about the post-marketing surveillance 
being inadequate, and whether that should be wrapped up, and we 
can talk about that, I guess, later.
    Mr. Bilirakis. Dr. Wood, I want to go into one area very 
quickly. These recommendations that you have just made in terms 
of details, I understand that you touched on that in your 
statement.
    If you have any specific recommendations regarding these 
areas, if you could give that to us in writing so that we can 
take them all into consideration, and the sooner the better 
obviously, so that we can do this on a timely basis, and 
consider them.
    Post-market surveillance. All of us agree that it is a 
necessary function of the FDA. I don't know that anybody has 
disagreed with that. Just comment, in terms of the user fees, 
on whether user fees will be adequate for that, and if not, 
should it be accomplished with appropriated dollars.
    Mr. Wood. Well, I have not seen the specifics as you have 
either.
    Mr. Bilirakis. Well, we haven't either.
    Mr. Wood. But the stories that are circulating include 
statements which may not be correct. That the ability to use 
these user fees will be restricted to some period after 
approval, and 2 years for drugs without a black box warning, 
and 3 years for drugs with a black box warning.
    That seems to be inappropriate, and if----
    Mr. Bilirakis. Inappropriate?
    Mr. Wood. Inappropriate, given that for the first 6 months 
of a drug's approval you usually have no data. It just does not 
come in that quickly, unless something really bad is happening.
    And then after that, and in the last 6 months of that 2 
year period, people obviously are going to be distracted and 
thinking about other things. So you are really looking at a 
window of a year in there, and that seems inadequate, and seems 
like an inappropriate restriction to put on it.
    There are two problems in the post-marketing surveillance 
area. One is for drugs where we already know the side effect 
before the drug goes on the market. And the second one is where 
we are looking for novel side effects that have not been 
recognized prior to the drug going on the market.
    And these are different problems, and that need different 
solutions. In the first case, where we already know about the 
side effects before the drug goes on the market, you are 
talking about a management issue.
    How do you educate doctors and others appropriately to use 
these drugs, and we have done a relatively poor job of that. It 
is not the FDA's fault entirely. It is people like me perhaps 
that are to blame for that, academics and physicians, who 
perhaps have not gotten that word out.
    But uniformly when we have made labeling changes to drugs, 
these labeling changes have not been widely incorporated into 
physicians' practices. So where we have information on side 
effects, we are not able to translate that readily into action.
    In the other setting where we are looking if you like and 
sort of drilling for oil, and we are looking for unexpected 
side effects that have never been described before, that is 
difficult, because we are better at identifying side effects 
that have already been recognized.
    For example, it is easy for a physician when a patient 
develops a rash to say that might be the antibiotic that you 
were taking, and to make that connection. It is much harder for 
a physician to make a connection between some adverse event 
that may be drug related, but has not been previously 
described.
    Now, that's where the opportunity of a computerized 
prescribing really opens up tremendous opportunities. Quite 
quickly, physicians are going to start prescribing drugs on 
their Palm Pilots. And they are going to be prescribing the 
drugs like that, and then sending it to the pharmacy.
    We still prescribe drugs very much like we have done for 
the last 2,000 years. You know, we get our pen out of our 
pocket, and we get a bit of paper, and we try and remember the 
dosage, and we try and remember the drug, and all the stuff 
that goes with that.
    And we write it down, sometimes in Latin still on a bit of 
paper, and the patient carries that in their hand to a 
pharmacy, and the pharmacy tries to read my writing, and 
translate that and give the patient the drug.
    And that really has been virtually unchanged in 2,000 
years. Clearly that is going to change dramatically, and has 
already changed in the in-patient setting at Vanderbilt, and 
will change dramatically over the next 2 years.
    This is not going to take long, and we need to have the 
agency incorporated into these systems at the get-go for two 
reasons. One is that we can use these systems to capture data 
and totally transform the issues that were discussed earlier 
this morning.
    Somebody said that only less than 1 percent of adverse 
reactions are reported. If we were capturing a hundred percent 
of any particular dataset, we would have a totally different 
perspective on drug safety.
    Second, as we move to the computerized prescribing, drug 
labeling is going to change. Drug labeling right now is a 
paper-based system. It goes with the dispensing of the drug, or 
it is put up in a book like the PDR.
    Once we are prescribing drugs on our Palm Pilots, what is 
on the Palm Pilot is going to be what my residents, or interns, 
or physicians, see.
    They are not going to be running around looking for bits of 
paper anymore. We need to know what is on that Palm Pilot, and 
we need to ensure that labeling is appropriate to that.
    So there are huge opportunities, I think, to transform the 
way that we do this, and the agency needs the funds, and it 
needs the intellectual horsepower, and it needs the ability to 
recruit people who can really do that.
    And to do that in a collegial way with all of the 
stakeholders--industry, academia, and others.
    Mr. Bilirakis. Doctor, with the indulgence of my 
colleagues, I let you go because----
    Mr. Wood. Sorry.
    Mr. Bilirakis. No, it is of great interest to me and to all 
of us here. I know that Mr. Stupak, in particular, and you 
might expand in writing on your comments regarding that 
subject. I appreciate that very much. Mr. Brown.
    Mr. Brown. Thank you, Mr. Chairman. Ms. Pendergast and Dr. 
Wood, I had--Dr. Wood, you had said as we develop entirely new 
medicines, particularly those rooted in pharmacogenetics, then 
regulators in the drug development industries have to think of 
how efficacy and safety should be demonstrated in entirely new 
ways.
    Most of us have visited biotech firms in our districts or 
in our regions. I visited a firm called Athersis some time ago, 
and saw the sort of exciting new things they are doing in 
research development.
    And you see that and you are given the revolution promised 
by the expediential growth and understanding of how and why 
disease occurs, and why drugs work in individuals.
    Does it make sense, and if both of you would respond, to 
continue or to separate the regulators into separate entities 
in this CDER and CBER? Does it make sense to continue that 
separation, and why?
    Ms. Pendergast. We are not prepared to make recommendations 
as the board management changes that the FDA might want to 
make.
    But we do see differences between how biotech products, 
which are regulated by both the Center for Drugs, and the 
Center for Biologics, are handled by the number of rounds of 
review that they take, and the number of months that it takes 
for the FDA to make a decision.
    So what we are proposing in our performance management 
assessment is that we give the FDA money so that they can do 
the management, and so they can study what works, and what 
doesn't work, and so they can develop consistency across the 
agency.
    We are not prepared to tell them what to do, or to manage 
it. We are just saying please study it. We see major 
differences. Please, take a look.
    Mr. Brown. Dr. Wood.
    Mr. Wood. I think innovation is going to occur across both 
those areas, both in CDER and CBER, and I think we need to be 
prepared to embrace innovation in both areas. And I am not sure 
that it makes a lot of difference now whether the drug came 
from a biological background, or came from a chemical 
background.
    Eventually they are going to produce the same novel 
effects, and some of these effects that we are talking about 
are going to be in drugs that may have exactly the same action, 
and exactly the same target, but maybe generated in one case 
from a biological background, and in the other case from a 
chemical background.
    It makes little sense to regulate these differently, I 
think, and although there are some issues that obviously are 
peculiar to biologics that need to be addressed on issues of 
infection and so on.
    Mr. Brown. Dr. Franson, we all know that prices in the 
United States for prescription drugs are based in large part on 
whatever the market will bear, whether you are negotiating with 
an HMO or whether you are selling to the Federal Government.
    And that is not really market will bear, but certainly when 
you are selling individual drugs to individual consumers. Our 
neighbor to the north as you know sells its drugs at their 
pharmacies at much lower prices.
    Could you tell me how Eli Lilly, how they sell drugs into 
the Canadian market, and how those prices are determined?
    Mr. Franson. Well, that is not an area that I have 
expertise in, and I am sure that PhRMA or Lilly would be happy 
to provide you information as you wish in writing.
    But as a physician and regulator, I am not even allowed to 
handle the checkbook at home. So certainly I am not prepared to 
answer that.
    Mr. Brown. Is that at the office or at home that you are 
not?
    Mr. Franson. Both.
    Mr. Brown. All right. That's fine. Thank you, Mr. Chairman.
    Mr. Bilirakis. Mr. Stupak, you may inquire.
    Mr. Stupak. Well, thanks. Let me pick up where Sherrod left 
off, Mr. Franson, or Dr. Franson. I realize that you came here 
to testify on behalf of a trade association and not Eli Lilly, 
but nonetheless your testimony presents me with an opportunity 
to clarify just what Eli Lilly and other industry is prepared 
to do about protecting the safety of patients when the FDA is 
denied legal tools to compel compliance.
    You know, if you take a look at it, post-marketing surveys 
or risk-management as it is called. First of all, I want to ask 
you a question that arose last year. The committee was 
considering the reauthorization of a pediatric exclusivity 
provision, and at that time the industry opposed it, and did 
everything that they could to defeat my amendment.
    Common sense requirements to require drug companies to make 
changes in their labels to reflect the results of studies of 
their drugs in children before they could take an advantage of 
the 6 months additional exclusivity that you receive for 
undertaking this important research, really got their 6 months 
exclusivity for studying the effects of prozac in children.
    You completed the study some time ago. In fact, you 
received your exclusivity, I believe, last year, somewhere 
between February and August. So generic was permitted on the 
market, and so you had a chance to do another 6 months of 
marketing, which is estimated to be worth $900 million to your 
executives and your shareholders.
    As of January 2002, Lilly still has not changed the label 
for this drug, while consumers in this country continue to pay 
for it. What is the status of the labeling change for pediatric 
exclusivity with Lilly?
    Mr. Franson. Well, I am happy to answer that, realizing 
that it has no relationship to PDUFA, but I will tell you 
that----
    Mr. Stupak. No, no. You will see a pediatric exclusivity 
fight again in PDUFA, and that's why I am bringing it up, just 
to refresh your memory. You will see this fight again on 
pediatric exclusivity.
    Mr. Franson. I am happy to address that, and I will tell 
you that I believe that four clinical studies and three 
clinical pharmacokinetic studies were submitted to the FDA in 
timely fashion, and those discussions as to labeling remain 
under review.
    So I believe that we have met our obligation and our 
desire, and we are working with the FDA to expedite that.
    Mr. Stupak. So as of January of this year then, you have 
submitted your studies?
    Mr. Franson. We actually submitted it well over a year 
prior to that.
    Mr. Stupak. A year prior to that? So if there is a labeling 
change, we still don't know if there is a required labeling 
change, even though you got your exclusivity last year, right?
    Mr. Franson. Well, the provision of exclusivity is a 
submission to data to FDA, with their acknowledgement that it 
meets their standards.
    Mr. Stupak. But, you know, in your statement, you said that 
patients should have access to more drugs. But shouldn't 
patients also have information, access to information? You have 
the information, Lilly does, and it has been given to the FDA.
    You get your 6 month exclusivity, and get $900 million more 
in profit. All the while, we don't know if prozac, in the 
dosage and the amount that the doctors have prescribed, is 
appropriate for adolescents.
    And yet you get your exclusivity and your 6 month patent 
protection. Shouldn't we have that information before you get 
the patent protection, the extra 6 months? Shouldn't the 
labeling be done before?
    Mr. Franson. Well, we certainly acknowledge the importance 
of providing information to prescribers, and we also recognize 
our obligations to comply with FDA in terms of labeling, and 
the pharmaceutical manufacturer, be it my company or others, 
cannot go out and talk about new uses and so forth, such as in 
pediatrics, without the approval of FDA, and we respect FDA's 
oversight.
    Mr. Stupak. But you get the approval before you even have 
the study completed and submitted, and a label change is even 
made. That is part of the enforcement problem that we have.
    Let's go to PDUFA-2, where you are supposed to do post-
marketing surveillance, okay? We here, even though the study 
has been sitting on the Director's desk for 5 months, we hear 
that 90 percent of the pharmaceutical companies did not do 
PDUFA-2 post-marketing surveillance.
    Is that a true statement, that 90 percent have not done it 
under PDUFA-2?
    Mr. Franson. I actually believe that that is seriously 
flawed information.
    Mr. Stupak. What is the number then? What is the number?
    Mr. Franson. Well, I can tell you what our company's number 
is, because----
    Mr. Stupak. I thought you were on top, on the part of 
PhRMA, the whole industry, and so I was hoping you would give 
me that number.
    Mr. Franson. I do not have an industry number because we 
have not seen the report from the FDA, but I can tell you that 
my understanding from colleagues and from the FDA is when their 
data base was updated, that one is probably looking at 90 
percent of studies being completed, and others pending.
    So I believe that information was flawed because of poor 
data submission, tracking and collection by both industry and 
FDA.
    Mr. Stupak. So that was updated recently then, within the 
last 5 months, since the study has been sitting on the 
Director's desk?
    Mr. Franson. My understanding is that the update that has 
been submitted would verify that, but I have not seen that, nor 
have my colleagues. So I think it would be very important to 
validate that information.
    Mr. Stupak. Well, it is updated on the computer, and we 
should just go to the computer and we can get the information, 
and we don't have to wait for the director then do we?
    Mr. Franson. I'm sorry, but to wait for----
    Mr. Stupak. I mean, if it is all updated on the computer as 
you said, the computer has been updated, and it is 90 percent 
completion, and so we shouldn't have to wait for the director.
    We should just be able to go to this computer. Do you have 
the website where we could get this updated information, 
because I would really like to know about it, because if I am 
saying something wrong here, I would really like to know about 
it.
    Mr. Franson. I think it would be important to see this 
report which is pending, and we are also anxious to see that. I 
am certainly glad to verify as a company what kind of 
commitments have been met.
    Mr. Stupak. Well, you had indicated that it has been 
updated and it is on a website.
    Mr. Franson. I did not indicate a website.
    Mr. Stupak. I'm sorry, that the computer was updated, that 
the FDA updated their computer, I believe you said.
    Mr. Franson. Our understanding was that that tracking 
system had not been maintained because it was not a performance 
goal or requirement.
    Mr. Stupak. But now it is your understanding that it has 
been updated?
    Mr. Franson. That is correct.
    Mr. Stupak. And the number is now 90 percent completed and 
did not?
    Mr. Franson. My understanding from colleagues with whom I 
have spoken is that the companies with whom I am interacting 
have that kind of compliance. We anticipate that would be it 
broadly, but we have not seen the report.
    Mr. Stupak. Can you tell me what computer has been updated 
so that I can go there and get the most recent information on 
this issue?
    Because to a lot of us, when you talk about the integrity 
of PDUFA, there is no integrity when 90 percent of the reports 
have not been completed. That lessens the integrity of PDUFA.
    Mr. Franson. I think it would be very important to see that 
report, and our understanding is that with updates that 
information is seriously outdated.
    Mr. Stupak. Okay. Well, hopefully we see it before we have 
any further mark-ups or hearings on this, because it is hard 
for us on whether or not we should reauthorize PDUFA, 
especially when we are trying to get to enforcement issues. Do 
you agree that the FDA should have subpoena power to get to 
your records, and access to reports?
    Mr. Franson. I am not aware that the FDA has had any 
difficulty obtaining any information on inspection, visits, and 
so forth. So I am not sure what you are asking for.
    Mr. Stupak. Really? Like Serzone, were you here for my 
opening statement, where with Serzone in 1994, they did a 
report, and the FDA has been asking for the report, and they 
still don't have it? That is over 6 years old.
    Mr. Franson. I am not aware of that situation. I am aware 
of your reference to it, of course. PDUFA
    Mr. Stupak. Do you believe that they should have subpoena 
power to get information if it does take 6 years, or in another 
case, 15 years? Do you think they should have subpoena power to 
get that information as a regulatory agency concerned with the 
safety for the American public?
    Mr. Franson. I think it is important for any regulatory 
body to be able to validate information that they receive. As 
to the specifics here, since I have no knowledge, and since it 
is to a degree a legal matter, I am over my head in that.
    Mr. Stupak. You don't know the difference between subpoena 
and not?
    Mr. Franson. What I don't understand is what the gap is, 
and whether it is a systematic gap.
    Mr. Stupak. Would you support putting the PDUFA-3 agreement 
in the Federal Register so the public can take a look at it 
before we authorize PDUFA-3? Would you support that?
    Mr. Franson. I think it would be very good for all parties 
to have full knowledge of the kinds of things that have been 
discussed by those who have directly been involved with PDUFA 
processes, and probably can offer the best insight on what has 
worked well, and what can be improved.
    Mr. Bilirakis. The gentleman's time has expired.
    Mr. Stupak. Thank you, Mr. Chairman.
    Mr. Bilirakis. Mr. Waxman.
    Mr. Waxman. Thank you, Mr. Chairman. Dr. Franson, in this 
recommendation that the industry and the FDA is submitting to 
Congress to review and to adopt in either form it is submitted 
to us, or with changes that we might make, we have been told 
that you pushed forward and got an agreement that requires the 
FDA to retain an outside consultant whenever an applicant 
requests one.
    This consultant would advise the FDA on an outstanding 
issue of the applicant's choice during review of a new drug 
application. Now, it is my understanding right now that the FDA 
voluntarily retains outside consultants to supply needed 
expertise.
    And, in fact, the FDA did so dozens of times last year in 
its oncology division alone. It is also my understanding that 
applicants are always free to bring their own outside experts 
to meetings with the FDA.
    Why do you feel it was necessary to remove FDA's discretion 
about whether it should hire its own outside expert and place 
that decision solely in the hands of the applicant; and what 
was wrong with the voluntary system?
    Mr. Franson. Well, all I can say is that on PhRMA's behalf, 
and looking primarily at the Center for Drugs' processes, we 
are comfortable that the dispute resolution and use of 
consultants, and so forth, are very appropriate.
    And we are comfortable with the FDA's oversight. However, 
we respect the fact that there are other considerations that 
are important to address in other centers. And I guess that I 
would have to defer comment. That is not one that----
    Mr. Waxman. But am I wrong in assuming that you personally 
had asked for the mandatory outside consultants to be brought 
in if an applicant requested it?
    Mr. Franson. That was not PhRMA's proposal, no.
    Mr. Waxman. That was not PhRMA's proposal. Ms. Pendergast, 
was it yours?
    Ms. Pendergast. Representative Waxman, there is no 
mandatory requirement that the FDA engage the services of an 
expert. Rather, the biotech companies have asked that for 
biotech products only at the Center for Biologics, that a 
company may ask once the agency to bring in an outside expert 
into a meeting.
    And we will pay for these expert consultancy fees, but the 
choice of the expert is up to the agency.
    Mr. Waxman. Why is there a mandatory requirement that the 
agency must hire an outside consultant?
    Ms. Pendergast. There is no mandatory requirement. It is 
totally at the FDA's discretion, and we aren't given additional 
funds so that they may do this when we ask, but they are under 
no obligation to do it even when we ask.
    Mr. Waxman. Thank you. Then that clarifies that issue. Dr. 
Wood, it appears that even with the money that this agreement 
will pay toward post-market safety programs, pre-market review 
will receive far more resources than post-market safety. Do you 
believe that post-market surveillance deserves fewer resources 
than pre-market review?
    Mr. Wood. No. I think it needs adequate resources. I can't 
tell you that it should be fewer or more, and I would say what 
I said earlier. I think it is important that we think about 
drug safety as a continuum.
    That there is a continuum that starts with the right 
studies being done in the early stages before an NDA is filed, 
and that continues through the relatively small number of 
subjects or patients who are studied prior to an NDA being 
filed, and often as few as 2,000 or 3,000 people.
    Mr. Waxman. Well, back to the adequacy question. Do you 
feel that that the post-market safety program agreed to under 
the industry-FDA proposal is adequate to protect consumers from 
the risk of marketed drugs?
    Mr. Wood. My concern about the rumors, which is what they 
are, and from what I hear about this agreement, is that there 
seems to be excessive restrictions on both what these 
additional FTEs can do, and what they can spend their time 
doing, although I heard Janet Woodcock say that they won't be 
people with a star on their hat.
    And as specifically designated, there will still be some 
expectation that at the end of a year that people have spent an 
appropriate amount of time on PDUFA approved drugs. Drug safety 
is an overall issue that involves not just the PDUFA drug.
    Sometimes it is an interaction with a standard drug. 
Sometimes the appearances of the toxicity has occurred because 
of the longstanding, and long approved drug, when in fact it is 
an interaction with the newly approved drug. So that kind of 
rigidity seems inappropriate to me.
    Mr. Waxman. Ms. Pendergast, it is my understanding that at 
some point in the negotiations between the industry and the 
FDA, a tentative agreement was reached that would allow user 
fees to be used to support some drug advertising reviews. Why 
was that tentative agreement withdrawn?
    Ms. Pendergast. There was never a tentative agreement. 
Rather, the FDA has the capacity to, and does use user fee 
monies, to review advertising, and they are free to do that in 
the future.
    And nothing about this agreement changes either their 
substantive ability or the standards they impose. The question 
on the table was if industry gave the FDA more money to review 
advertising, could the FDA review it quicker.
    So the FDA cost it out on how much it would cost to get the 
FDA to do it faster than it does now, and not better, and not 
to a different standard, but just faster. And when the FDA came 
back with how much it would cost to serve the industry by 
getting their reviews done quicker, the industry looked at it 
and said of all of the priorities of the things we have to 
spend money on, this goes to the bottom of the list, or at 
least below what people were willing to give additional 
resources for.
    So I don't think it is fair to say that in any way, shape, 
or form, does this stop FDA's review. They are free to devote 
whatever resources they wish to to it, but it is just speeding 
it up didn't seem cost effective.
    Mr. Waxman. Dr. Wood, just on the question of the----
    Mr. Bilirakis. Just a very brief question and response.
    Mr. Waxman. The others have had a little bit more time, and 
I would like just another minute or so. Dr. Wood, do you 
believe that mandatory use of outside experts is a good policy? 
If you could answer just yes or no?
    Mr. Wood. I think there are a number of problems with that. 
First of all--and I will try and be brief.
    Mr. Waxman. If you could just answer yes or no, and then we 
can get--because I want to ask just one other question after my 
time has already expired.
    Mr. Wood. All right. I think it is complex, and I think in 
an ideal world the answer is no, although there are lots of 
opportunities. And I personally have served as an expert for 
the FDA on occasion, and told them to get experts in. I think 
that is a good thing.
    And I think that should be a decision that should be left 
to the FDA.
    Mr. Waxman. My last question relates to Mr. Stupak's issue 
that he raised, and it is my understanding that several of the 
drugs that were recently withdrawn from the market for safety 
reasons ran into problems because doctors prescribed them 
against the label directions, and continued to do so even after 
the label warnings were repeatedly strengthened.
    It looks to me like doctors either don't read label 
directions and warnings, or don't believe them. Do you believe 
the FDA should continue to rely on label warnings to solve 
known safety problems with drugs?
    Mr. Wood. Can I take time to answer that?
    Mr. Bilirakis. Take time, doctor.
    Mr. Wood. That is a very complicated question, and I think 
it does merit a longer answer. The issue is that frequently 
drugs--a problem is identified which people believe can be 
avoided by increasing the amount of testing that is done on 
patients prior to them receiving the drug or while they are 
receiving the drug.
    An excellent example is an anti-diabetic drug called 
Rezulin that caused liver failure, and increasingly frequent 
liver function tests were ordered, and were suggested in the 
labeling, to allow Rezulin to remain on the market.
    And these were changed every few months, and rezulin was a 
drug that was being used to treat diabetes. When patients were 
being asked to return for a liver function test to be performed 
every 2 weeks, or 3 weeks, that becomes an incredible 
imposition on a patient's lifestyle, and is clearly 
unrealistic.
    We know that only 7 percent of the patients who were taking 
Rezulin were actually following these instructions. It may be a 
problem with physicians, but it clearly is an expectation 
problem.
    It is unreasonable to expect that a patient with a chronic 
disease like diabetes can come back to the doctor's office on a 
regular basis to have liver function tests drawn when they have 
another life. They have got a job and so on.
    So we need to work out how we are going to manage these 
risks better, and this is a complex question, and it involves 
education of physicians, and it involves setting reasonable 
expectations.
    It involves defining and making certain that introducing 
these restrictions actually improves safety. That is not always 
the case. And sometimes there is just a desire to do more.
    And so I think it is a very complicated question, and I 
think the answer is unclear, and I think it is something that 
we need a lot more work on.
    Mr. Waxman. Thank you, Mr. Chairman.
    Mr. Bilirakis. All right. Mr. Green, do you have questions 
of this panel?
    Mr. Green. I will try and be brief, Mr. Chairman. I 
appreciate it. I'm sorry I was not here earlier for the first 
round, but it is the nature of the business. If any of the 
panel could--one of the criticisms of PDUFA has been that some 
of the drugs that are receiving priority are neither innovative 
nor life-saving.
    While we all appreciate the need for drugs to treat, for 
example, male pattern baldness, we certainly want to make sure 
that truly innovative drugs are receiving the highest priority 
at the FDA.
    And we understand that the FDA has a process whereby 
certain NDAs receive priority in the review process. Can any of 
you share some information about that concern that maybe some 
of these pharmaseuticals are not necessarily life-saving or 
innovative?
    Mr. Wood. Well, male-pattern baldness sounds like a pretty 
high priority for me.
    Mr. Green. Well, I have to admit that I may be getting 
there, but it is not life-saving.
    Mr. Wood. I think if I could respond to that. I think one 
of the things that we do at our peril is apply paternalistic 
views to patients' suffering, and sometimes--and I plead guilty 
to that, too.
    And the drugs that have been used for diseases that 
patients truly suffer from, but may not be life-threatening, 
can still be very debilitating for patients. Novel therapies 
for these diseases still should receive rapid review and 
approval, because they can still be very debilitating for 
patients.
    I am only being a little facetious about male-pattern 
baldness, but irritable bowel syndrome, for instance, which 
doesn't sound such a serious disease to some patients, has 
devastating effects in one's life.
    It is clearly not life-threatening, but devastating effects 
in one's life. So I think we need to be--and we meaning 
experts, need to be careful about adopting an attitude that 
views life-threatening as the only criteria for urgent 
approval.
    Mr. Green. And again it is a priority, I guess.
    Mr. Wood. Right.
    Mr. Franson. And I was just going to add that the category 
of priority reviews are usually made on the basis of an unmet 
medical need, which can include, but isn't limited to, life-
threatening illness.
    And the determination on that is not made by the sponsor 
submitting the application, but by the FDA.
    Mr. Green. Mr. Chairman, just one more question. Ms. 
Pendergast, in your testimony you presented about BIO, it makes 
clear that your organization is concerned about both CDER and 
CBER meet the review times set out in the performance goals.
    The CBER takes longer and more cycles to approve biologic 
based drugs; is that correct?
    Ms. Pendergast. Yes, sir, it is. If we look at the data for 
the last 4 years of PDUFA-2, what we see is that year in and 
year out the Center for Drugs is able to organize itself such 
that roughly half of all drugs are finally reviewed on the 
first cycle.
    Whereas, that percentage for the Center for Biologics is 
only 20 percent. The differences are also striking in terms of 
the number of months it takes for the FDA's consideration for 
them.
    Again, the Center for Drugs is simply faster than the 
Center for Biologics, and we would like to understand the 
reasons for those differences.
    Mr. Green. I think some of us would also to see if there is 
an interest in it. We are informed that the FDA also enacted 
with PDUFA-2 when it was reauthorized provides for something 
called special protocol reviews, whereby firms presumably 
through the advantage of inexperienced companies that more 
typically submit their applications, the CBER can take 
advantage of the FDA expert assistance in designing that 
special protocol that binds the FDA, absent scientific 
breakthrough to accepting the terms of that protocol in the 
review process. Is that correct?
    Ms. Pendergast. Yes, there are certainly many more 
companies that have availed themselves of this opportunity for 
consultation with the agency, and the Center for Drugs than for 
the Center for Biologics.
    Again, we are not giving the reasons for this widely 
disparate set of numbers, but we are offering to give the 
agency additional resources so they can conduct studies to find 
out why it is that companies are so hesitant to do it, and why 
the FDA is so hesitant to offer this service for biotech 
companies.
    Mr. Green. How many members of BIO are also members of 
PhRMA or not members? Is there----
    Ms. Pendergast. The vast majority of the members of BIO are 
not also members of the Pharmaceutical Manufacturers 
Association. There are a few, and we would have to get that for 
the record, but it is probably less than 10 percent.
    Mr. Green. Okay. Do you believe that Dr. Zoon puts less 
pressure on her reviewers than Dr. Woodcock, or do you want to 
touch base on that?
    Mr. Bilirakis. Are you going to withdraw that?
    Mr. Green. I will withdraw it. Thank you, Mr. Chairman.
    Mr. Bilirakis. Mr. Bryant to inquire.
    Mr. Bryant. Thank you, Mr. Chairman. Dr. Wood, I have 
rushed back here so that I could be sure to let you see me here 
so that you could go back home to Tennessee and tell people I 
am working.
    Mr. Wood. I will be sure to tell them that.
    Mr. Bryant. We don't work away from these rooms here. Let 
me ask you, and I know that I am sort of catching up here, and 
you have already given your testimony and answered a number of 
questions, but the performance goals which accompany the PDUFA 
focus on review times, I know that you are very interested in 
finding ways to shorten the clinical developmental time or 
development times.
    Do you have any suggestions on how to best shorten clinical 
development times?
    Mr. Wood. Yes. I think we need to avoid doing studies that 
are either of low quality--and I don't mean that they were not 
performed right, but were done because somebody perceives the 
FDA may ask for them later.
    And we need an increased certainty that a package of 
studies put together will indeed satisfy the agency when they 
get there, and that was addressed a moment ago. And so I think 
we need to work as a group with all the stakeholders to work 
out what it is that we are going to need to do to get a drug 
approved.
    In many examples that are currently out there, we don't 
know that right now. We are talking about novel therapies that 
work by novel approaches, and that work in ways that have not 
been seen before.
    And we are going to have to put a lot of effort, and the 
agency is going to have to spend a lot of time and effort in 
working out what the best approach to these new drugs is. And 
that is going to have to be done in a way that reassures 
industry that if they follow that approach that they will 
target approval if the studies come out the right way 
obviously.
    Mr. Bryant. In your written testimony, and I believe in 
your oral statement today also, you speak about the need to 
find new ways to measure efficacy. In the future should this 
debate be a part of the PDUFA negotiations or should it be left 
solely to the agency?
    Mr. Wood. The reason that I emphasized that is that I think 
it is important that the agency have sufficient funds 
independently of PDUFA, and to allow them to make the 
innovative changes that we are going to have to do.
    That is going to take a lot of time, and it is going to 
take a lot of consultations, and it is going to take a lot of 
effort. And this should not become a distraction in NDA 
approvals, but it will take effort, and that seems to be an 
appropriate reason for funding to be increased.
    The past is not going to be a prologue to the future here. 
We are going to have to make paradigm shifts in the way that we 
think about drugs, and that is going to take effort and 
expenditure.
    Mr. Bryant. You speak of pharmacogenetics, and I am not 
pronouncing that correctly. Do you believe that we will ever 
get to the point where drugs and biologics are only approved 
for certain individuals with specific genetic makeups?
    Mr. Wood. Well, that is a very interesting question,and one 
that the FDA and industry really need to work on, because what 
we don't want--we want to encourage the development of drugs 
for identified patient populations.
    We want to discourage patients who are not going to respond 
to drugs getting drugs, and we want to discourage patients who 
are going to develop adverse effects getting these drugs.
    And industry on the other hand, and I shouldn't speak for 
them, I guess, but industry is also worried that they don't get 
an overly restrictive label for a drug, and that would restrict 
the potential market for the drug.
    So somehow we need to work to use the genuine benefits of 
pharmacogenetics to allow us to better target drugs to our 
patients without limiting the potential for these drugs in the 
future.
    Mr. Bryant. Do either of the other witnesses on the panel 
have brief comments on any of those questions, or would like to 
add to, or take away from?
    Mr. Franson. I would just say that the notion of 
pharmacogenetics, and the opportunity that it does offer is 
exciting and probably will be a centerpiece for PDUFA-4, given 
the time that it will take to evolve.
    And I would just say that we would foresee the same high 
standards of efficacy and safety being held in approval, but 
perhaps different measures to get at those end points.
    Ms. Pendergast. I would just like to say that while today 
we are talking about the funding that the companies are 
providing to the agency, I would like to underscore what Dr. 
Wood said before.
    In an era where we are doubling the NIH's budget, we know 
that the products that they are studying and developing will 
come to the FDA 5 years down the road. And there will be 
paradigm shifts in terms of the impact of the genetic 
revolution, pharmacogenomics.
    And I urge the Congress to consider increasing the 
appropriations for FDA and not rely obviously just on what bit 
the companies can throw into the pot.
    Mr. Bryant. Thank you, Mr. Chairman.
    Mr. Bilirakis. Thank you, Mr. Bryant.
    Mr. Brown. Mr. Chairman, I want to make sure that--and 
again I think you had already done this, but any members that 
have written questions for the panelist--Dr. Franson--I had 
asked him about the Canadian pricing, and if you or the people 
at PhRMA would answer that.
    Mr. Bilirakis. Yes. Members have 3 days to submit questions 
to the committee and we will submit them to you. I know that 
you would be very pleased to respond to them.
    Obviously your response being sooner rather than later 
would be very helpful. The knowledge that you all have is just 
terrific, stupendous, and it is going to be of great benefit to 
us.
    Again, I not only ask you to respond to the questions, but 
submit to us any information voluntarily that might help us do 
our job. Thank you very much. The hearing is adjourned.
    [Whereupon, at 1:42 p.m., the subcommittee was adjourned.]
    [Additional material submitted for the record follows:]

      Responses of the Food and Drug Administration for the Record
           questions submitted by chairman michael bilirakis

    1. Is the United States now the country where most new drugs are 
first-approved? Was this the case prior to PDUFA?
    Yes, the United States (U.S.) is now the country where most new 
drugs are first approved. A study by the Tufts University Center for 
the Study of Drug Development confirmed that FDA's implementation of 
PDUFA has helped enable American patients to be first in the world to 
have access to many new drugs. During the years 1991-1995, drugs were 
first marketed in the U.S. only 31 percent of the time. During the same 
period, drugs marketed for the first time in other countries were first 
marketed in the U.S. within a year of their foreign introduction only 
43 percent of the time.
    During the period 1996-1998, however, nearly 47 percent of all new 
drugs marketed world-wide were first marketed in the U.S., and American 
patients had access to 78 percent of the world's new drugs within the 
first year of their introduction. (Kaitin, KI. ``Impact of the 
Prescription Drug User Fee Act of 1992 on the Speed of New Drug 
Development.'' Tufts University Center for the Study of Drug 
Development, prepared for FDA Public Hearing on PDUFA, September 2000.)

    2. I understand that after this year there will be no carry-over 
funds available to pay FDA reviewers. That is, if the Congress doesn't 
reauthorize the program, FDA will have to lay-off employees. Is this 
the case? If so, how many reviewers will have to be laid off? When will 
these employees first be notified of the possibility that they may be 
laid-off if the program is not reauthorized?
    Your understanding is correct, Mr. Chairman. FDA will have 
virtually no carryover PDUFA funds available to pay our employees when 
the fiscal year ends on September 30, 2002. FDA currently has about 
2,400 staff-years devoted to the drug review process. Since 
prescription drug user fees are used to support approximately 50 
percent of the staff devoted to the drug review process, FDA will begin 
planning for a furlough and/or a reduction in force (RIF) in June and 
by August 1, 2002, we would issue a general notice of a possible RIF to 
all 2,400 employees.

    3. FDA has stated that increasing revenues and addressing risk 
management were its top two priorities in the discussions with 
industry. How successful was FDA in addressing these issues in the 
negotiations?
    FDA believes that both of these priorities are successfully 
addressed in the proposed Goals Letter and proposed statutory changes 
to PDUFA. If these recommendations are enacted into law, FDA will 
receive a substantial increase in funding. Fee revenues would increase 
from an estimated $148 million in Fiscal Year (FY) 2002 to $222.9 
million in FY 2003. Ultimately, fee revenues would increase to $259.3 
million in FY 2007. The increased fee revenues would enable FDA to 
achieve both the letter and spirit of the performance goals. Increased 
resources would be available for increased staffing, training, guidance 
development, and other key aspects of the process for the review of 
human drugs.
    The proposed funding for risk management activities would allow FDA 
to double its safety staff by FY 2007. The increase in staff and 
resources would enhance FDA's ability to monitor new drugs for safety 
problems that could emerge after their introduction on the U.S. market. 
Enhancing this programmatic ability is especially critical now that 
U.S. patients are increasingly the first population to receive new 
drugs.

    4. You state in your testimony that PDUFA performance goals have 
helped harmonize drug and biologic product review. However, on January 
25, 2002 FDA issued a report on review times, and it shows that CDER 
reviews and approves priority drugs in six months, but that CBER 
reviews priority biologics in 11.5 months and approved them in 13.2 
months. Similar disparities existed for standard reviews. Why the 
disparity between the two Centers?
    The Center for Drug Evaluation and Research (CDER) and the Center 
for Biologics Evaluation and Research (CBER) have met the performance 
goal deadlines for review and action on priority (90 percent within 6 
months) and standard (90 percent within 12 months) applications. 
Approval times, on the other hand, have differed between the Centers. 
Although there has been no systematic study of the reasons for these 
differences, the Agency believes that they are the result of multiple 
forces including the difficulties that applicants experience in 
manufacturing the product. Another problem that occurs frequently with 
biological products is the inability to ``scale-up'' the manufacturing 
process. The sponsor can produce a batch of product for clinical 
trials, but when larger scale production is initiated the product no 
longer meets the same specifications as the product tested in trials. 
These difficulties can lead to longer approval times.

    5. What will be done under PDUFA III to lessen the disparity in 
review and approval times between CDER and CBER?
    The PDUFA III proposals recommended to Congress include several 
initiatives to evaluate and address differences between Centers. The 
First Cycle Review Performance initiative provides for increased 
communication (e.g., of the early-identified deficiencies) to the 
sponsor at the time of the filing review and the development of a 
guidance document by review staff on Good Review Management Principles. 
This initiative includes further training to implement those 
principles, and a study to evaluate best practices on the part of both 
FDA and industry during the first cycle of review. The Performance 
Management initiative includes funding for a review and analysis of the 
review process in both Centers.

    6. I understand that one key component of the tentative agreement 
made between FDA and industry relates to performance management. 
Specifically, FDA has agreed to a study of internal management and 
performance. Please describe for us the nature of the performance 
management agreement and how your office will ensure that this 
important piece of PDUFA III is fulfilled.
    FDA's Office of the Commissioner will conduct a series of studies 
to identify opportunities for enhanced program performance. These will 
include a study through an outside consultant to perform a 
comprehensive process review within CDER and CBER. The anticipated 
outcome of this review will be a thorough documentation of the drug and 
biological review process, a re-map of the process indicating where 
efficiencies can be gained, activity-based project accounting, optimal 
use of review tools, and a suggested path for implementing the 
recommendations. FDA would anticipate delivery of a report of the 
consultant's findings and recommendations in FY 2004-2005. The Agency 
would consider these recommendations in planning any redesign or 
process reengineering to enhance performance.

    7. Recent data indicate that drug approval times have been 
increasing. The approval times for novel drugs (``NCEs'') have 
increased from 12.6 months to 17.6 months between 1999 and 2000. What 
are the reasons for the upward trend?
    The median total approval time for priority new molecular entities 
(NMEs, i.e., drugs not previously approved by FDA) approved by CDER has 
been approximately 6 months for the past 5 calendar years (1997-2001). 
Over the same 5 calendar years, the median approval times for standard 
NMEs approved by CDER have ranged from a low of 13.4 months in calendar 
year 1998 to a high of 19.9 months in calendar year (CY) 2000. For 
calendar year 2001 the median approval time for standard NMEs was 19.0 
months.
    While FDA has met or exceeded all of its performance goals for the 
review of NME applications during PDUFA II, the median total approval 
times for NMEs over the past three calendar years have been higher 
compared to the all-time low of 13.4 months experienced in CY 1998 
(16.3 months in CY1999, 19.9 months in CY2000, 19.0 months in CY2001). 
There are many factors that may affect the total approval times for 
standard NMEs in any calendar year including the quality and 
completeness of the applications and the time required for the sponsor 
to resolve any safety, efficacy, or manufacturing deficiencies 
identified by FDA. However, FDA has noted that the trend of increased 
total approval times for NMEs during the past three calendar years has 
coincided with implementation of the increased procedural goals (e.g., 
meeting management goals) under PDFUA II. FDA believes that the 
increased workload it has experienced during PDUFA II and the 
implementation of FDAMA requirements may have contributed to this 
trend. It is important to note that a similar trend has not been seen 
for priority applications or for standard non-NME new drug applications 
(NDAs).

    8. When will the FDA issue its draft guidance on use of surrogate 
markers in imaging?
    The only guidance that FDA is developing on medical imaging is the 
guidance for industry on Developing Medical Imaging Drugs and 
Biological Products. This guidance for industry is being developed with 
extensive input from the public. A first draft of the guidance was 
issued for comment on October 14, 1998. FDA held public meetings on the 
draft guidance on January 25 and March 26, 1999. After considering the 
discussion and comments at the meetings and after reviewing all written 
comments, FDA issued a second draft for comment on July 31, 2000. The 
Agency has considered carefully the second round of comments, and the 
final version of the guidance is currently moving through the clearance 
process. We expect it to be released during the next month or two.

    9. When will FDA address the cGMP requirements for PET products?
    The Food and Drug Administration Modernization Act (FDAMA) directs 
FDA to consult with patient advocacy groups, professional associations, 
manufacturers, and physicians and scientists who make or use PET drugs 
as we develop PET drug CGMP requirements and approval procedures. We 
have taken extraordinary steps to develop the PET CGMPs with extensive 
input from these groups. We presented our initial tentative approach to 
PET drug CGMP requirements and responded to numerous questions and 
comments about that approach at a public meeting on February 19, 1999. 
In the September 21, 1999, issue of the Federal Register (64 FR 51274), 
we published a notice of availability of preliminary draft regulations 
on PET drug CGMP requirements. These preliminary draft regulations were 
discussed at a public meeting on September 28, 1999. After considering 
the comments on the preliminary draft regulations, FDA has decided to 
make several changes to those regulations, to publish a notice of 
availability of a revised preliminary draft proposed rule, and to 
publish an accompanying draft guidance document. These documents should 
publish very soon. We intend to hold another public meeting on May 21, 
2002, after which we will evaluate the comments, make appropriate 
changes, and publish a proposed rule for comment.

    10. To what extent has CDER and CDRH worked to harmonize 
requirements for drug and device manufacturers seeking similar 
indications (e.g., perfusion indications for MR/US drugs and MR/US 
machines)?
    CDER, the Center for Devices and Radiological Health (CDRH) and the 
FDA Ombudsman's office work together to assure that sponsors of similar 
drug/device products are treated the same with respect to regulatory 
requirements and review procedures. If any company believes they are 
being treated differently than similarly situated competitors, they are 
encouraged to bring the issues to the FDA Ombudsman or to the CDER or 
CDRH Ombudsmen.

         QUESTIONS SUBMITTED BY REPRESENTATIVE JOHN D. DINGELL

    What is the legal status of the side agreement? Specifically, is 
this a contract, a regulation, a guidance, or something else?
    The document referred to as the ``side agreement,'' which is a 
letter sent from the Secretary of the Department of Health and Human 
Services (HHS) to the Committee on Energy and Commerce of the House of 
Representatives and the Committee on Health, Education, Labor, and 
Pension of the Senate (the ``Goals Letter''), is not a contract, 
regulation, or guidance. The goals letter is a statement by the 
Secretary about what the FDA intends and expects to accomplish with the 
additional resources provided through the proposed legislation. This 
letter is specifically referenced in the proposed PDUFA legislation in 
the findings section (section 101) and in the section specifying annual 
reports (section 104).
    Does this side agreement create any enforceable rights on the part 
of industry or FDA? If so, please describe these.
    The Goals Letter does not create enforceable rights on the part of 
industry or FDA. The PDUFA III legislation, if enacted, would provide 
FDA the authority to collect and spend user fees as specified in the 
enacted legislation.
    Are the provisions of the side agreement enforceable in any way by 
third parties?
    No. However, there is substantial oversight of FDA's activities 
under PDUFA that allows the Administration, Congress, the regulated 
industry, and all other interested persons to evaluate FDA's 
performance on a regular basis. The proposed PDUFA legislation, if 
enacted, would direct the FDA to provide both an annual performance 
report and an annual financial report setting forth its performance in 
achieving the goals and its expenditures from PDUFA funds, as it has 
during PDUFA I and II. Both of these reports are made available to the 
public.
    If enforceable by anyone, what are the available remedies?
    As discussed above, while neither industry nor other interested 
persons can file suit against FDA to enforce the performance goals 
contained in the letter, the annual reports provide Congress, regulated 
industry, and other interested persons with the information about the 
Agency's accomplishments and use of funds collected under the PDUFA.
    Is FDA free to modify or ignore any or all of the provisions of the 
side agreement for any reason? Can it modify or ignore the agreement in 
the name of public safety?
    FDA fully intends and expects to perform in a manner consistent 
with the Goals Letter. FDA's performance under PDUFA over the past 10 
years demonstrates that this expectation is likely to be met. Under the 
PDUFA legislation, FDA may only use user fees for health activities 
related to the process for the review of human drug applications. If a 
public safety emergency required FDA to shift resources away from the 
process for the review of human drug applications, FDA could shift 
resources, but would not be able to collect or spend user fees for any 
activities not authorized by PDUFA.
    On page eight of your testimony you compare product withdrawals pre 
PDUFA and during PDUFA and conclude that drug safety has not suffered 
because withdrawal rates are basically the same. Can you comment on 
drug safety issues that are of concern to FDA, but that do not result 
in product withdrawals? For example, could you provide us with a pre 
PDUFA and PDUFA comparison of such post market drug safety matters as 
warning letter, package inserts, black boxes and the like taken by FDA 
other that withdrawals?
    A report to the Commissioner of FDA from the Task Force on Risk 
Management entitled, ``Managing the Risks from Medical Product Use'' 
was issued in May 1999. This report is enclosed as Appendix 1. Appendix 
A of the enclosed report provides a comparison of post-approval risks 
for drugs and biological products approved before and after the 
implementation of PDUFA.
    Could you outline in detail each element of the side agreement? I 
realize that it is still undergoing departmental review, but it would 
be helpful to us to have a run down of the agreement now. Will you 
provide us with written text of the agreement as it currently stands?
    Since the Subcommittee held its hearing on March 6, the 
Administration has transmitted the Goals Letter to the Energy and 
Commerce Committee. The full text of the Goals Letter appears in 
Appendix 2.
    Can you explain for us exactly why this side agreement needs to be 
cleared by OMB. That sounds a lot like a regulation. If so, why aren't 
APA notice and comment procedures being followed?
    Regulations are not the only documents appropriate for the Office 
of Management and Budget (OMB) clearance or review. OMB reviews budget 
estimates as well as documents in support of pending or planned 
legislative proposals. (See OMB Circular A-19 for the policy on 
clearance of legislative proposals and Circular A-11 for the policy on 
clearance of budget matters). The Goals Letter is, in part, a budgetary 
matter since it involves Agency resource commitments. It is also 
referred to in a legislative proposal that the Administration has 
decided to advance for FY 2003. For these reasons it is appropriate for 
OMB review. Because the Goals Letter is not a regulation, the 
Administrative Procedure Act (APA) requirements for notice and comment 
rulemaking are not applicable.
    Could you explain the pros and cons of subjecting the side 
agreement to notice and comment in the Federal Register before making 
it final? Wouldn't such a procedure provide a broader base of input to 
FDA and a greater assurance to all that the agreement is in the public 
interest?
    FDA believes that this process, as well as the legislative process 
that Congress engages in, provides great assurance that the PDUFA 
program will continue to be in the public interest. In order to receive 
input from a broad range of interested persons on the concepts in the 
proposed legislation and Goals Letter, FDA hosted a series of 
discussions over the past 18 months. Since the fall of 2000, FDA has 
engaged in a series of public meetings with patients, consumers and 
other stakeholders to obtain their views on their issues and priorities 
for PDUFA reauthorization. FDA has also engaged in a series of meetings 
with representatives of the biotechnology and pharmaceutical industry 
to discuss some of the more technical aspects of application review, 
information technology in support of application review, and fee 
collection and use.

 RESPONSES TO THE RECOMMENDATIONS AND/OR CONCERNS RAISED IN THE PAPER 
    COMPILED BY THE PATIENT AND CONSUMER COALITION, AS REQUESTED BY 
                      REPRESENTATIVE JOHN DINGELL.

    Hold balanced hearings on PDUFA reauthorization and drug safety 
concerns. The hearings should include testimony from patients who have 
been harmed by problem drugs--or their representatives--and consumer 
advocates who are knowledgeable about PDUFA. Such hearings would send a 
vital signal to FDA from Congress that what the public wants and 
deserves is a thorough review and oversight process for drugs and 
biologics, not just speedy approval of new products.
    FDA defers to the prerogatives of the Energy and Commerce Committee 
to determine the choice of witnesses for its hearings.
    Adequately fund the entire range of FDA's approval and safety 
oversight activities from general revenues. There is an urgent need for 
increased funding for post-marketing surveillance and other safety-
related activities not covered by current user fees. User fees are not 
a substitute for adequate federal funding of these vital and growing 
public health functions. 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 tot he regulator from 
the regulated industry.
    Administrations, both past and present, as well as Congress have 
determined that the process for the review of human drugs and biologics 
at FDA should be funded through a combination of appropriations and 
user fees. FDA has been able to administer this policy without 
compromising its integrity or the safety and efficacy of the products 
it approves.
    Give the FDA Total Control Over All Review and Surveillance 
Activities--If an unwillingness to appropriate adequate funds leads 
Congress to consider the expansion of user fees, it is absolutely 
essential that the FDA alone determine their usage, without the kind of 
inappropriate control over the use of these fees (through mandated 
decision-making deadlines) that the industry has exercised with new 
drug approvals.
    Under PDUFA, fee revenues may be used by FDA to cover the costs of 
the process for the review of human drugs. In the context of receiving 
these additional revenues, FDA agreed to meet certain performance goals 
for the review of applications and certain procedural and processing 
goals. FDA retains the ability to allocate the fee revenues as it sees 
fit in order to meet its public health obligations and to meet the 
PDUFA performance goals. It is important to remember that the 
performance goals in PDUFA relate to the timeliness of review and 
processing of applications, not the approval of applications. FDA 
believes that the current system works well and the PDUFA program has 
overall been good for the public health.
    Address Drug Safety Concerns Created by PDUFA's Excessive and 
Inappropriate Focus on Swift Approval--PDUFA III should include new 
safety protections that, to the greatest extent possible, protect the 
public from potential harm caused by adverse reactions, side effects 
and adverse events related to pharmaceutical products and biologics. 
Decision-making deadlines for drug review should be redefined to focus 
on the FDA's responsibility to guarantee safe drugs, not only on the 
speed with which reviews are conducted. The agency's antiquated and 
under-funded adverse event reporting system (for drugs, biologics and 
devices) should also be modernized.
    A report to the Commissioner of FDA from the Task Force on Risk 
Management, entitled, ``Managing the Risks from Medical Product Use'' 
was issued in May 1999. That report (enclosed as Appendix 1) found 
that, for drugs approved during the PDFUA era, the rate of drug 
withdrawals for safety concerns was relatively unchanged from the rate 
of drug withdrawals for safety concerns in the pre-PDFUA era. The most 
recent data show that the percentage of PDUFA drugs withdrawn for 
safety concerns is the same (2.7%) as the percentage of drugs withdrawn 
for safety concerns during the pre-PDFUA period (2.7%). This finding is 
particularly notable when one takes into account the fact that nearly 
80% of newly approved drugs are either approved first in the United 
States or are approved in the United States within one year of their 
being approved anywhere else in the world.
    The draft Goals Letter for PDUFA III includes no substantive 
changes to the performance goals for review of applications compared to 
those currently in place. The draft Goals Letter also includes a 
proposal for an expanded risk management program for new drugs approved 
under PDFUA III. FDA believes that this new risk management program 
will significantly enhance its ability to detect risks of drugs early 
and improve FDA's ability to work with the sponsor, health care 
providers, and patients to manage the risks of new drugs more 
effectively. The proposal for PDUFA III would allow FDA to use PDUFA 
fee revenues to cover the costs of this new risk management program, 
including activities that occur for up to three years after drug 
approval. The availability of these new PDFUA fee revenues for risk 
management would allow FDA to approximately double the staffing in its 
drug safety program over five years.
    Please refer to the response provided to the question below 
relating to ``Improve Adverse Event Reporting'' for details relating to 
adverse events.
    Eliminate the linkage between appropriated and user fee funds. The 
current law results in disproportionate funding for the drug approval 
process compared to most other research, regulatory, and public 
education functions. At a minimum, the program must be re-designed in 
such a way as to prevent the draining of funds from vital FDA 
functions.
    During the period of FY 1994 to FY 2001, the effect of the 
statutory triggers established under Prescription Drug User Fee Act 
(PDUFA) on the availability of funding for non-PDUFA programs has been 
less significant than the absence of additional appropriations to fund 
the annual pay raises for Food and Drug Administration (FDA) employees. 
During these years, FDA's appropriations failed to include increases to 
cover the annual costs of mandated Federal pay raises. The cumulative 
impact of absorbing the cost of the Federal pay raise during this 
eight-year period was more than $200 million. This resulted in a 
reduction in staffing for activities other than the process for the 
review of human drug applications (e.g., compliance activities, review 
of over-the-counter drugs, etc.) of more than 1,100 staff years since 
PDUFA I was enacted.
    Although the absence of additional funds to pay the cost of 
mandated pay raises has had the greatest effect on non-PDUFA programs, 
one of the PDUFA triggers has also had a significant effect. Section 
736(g)(2)(B) requires that FDA annual spending on drug review from 
appropriations be at least as much as the amount of appropriations that 
FDA spent on drug review in FY 1997, adjusted for inflation.
    The legislation that the Administration has proposed includes 
modifications to the trigger (Section 736(g)(2)(B)) such that FDA will 
no longer be compelled to spend amounts that are significantly greater 
than the amount required by this trigger. The proposal would provide 
FDA a margin of error in its effort to meet this requirement of the 
law. Under this proposed modification, if FDA's spending from 
appropriations on drug review is within 5 percent of the amount 
required by this section of the law, the requirement is considered to 
be satisfied. In cases where FDA's spending from appropriations is 
within 3 percent of the trigger amount, no adjustment in fees will be 
required. If the spending is between 3 percent and 5 percent below the 
trigger amount, then FDA will, in a subsequent year, decrease user fees 
by the amount of the shortfall that is between 3 and 5 percent (i.e., a 
maximum of 2 percent).
    The purpose of this change is to relieve FDA of the need to 
overspend from appropriations each year, as has occurred consistently 
since FY 1993. Spending from appropriations on the drug review process 
each year is still expected to be at, or very close to, the amount 
specified by this trigger, and may never be more than 5 percent below 
the trigger amount.
    Require that user fees support the life cycle of the review 
process. Presently, FDA staff hold numerous pre-New Drug Application 
meetings with manufacturers before the agency receives any PDUFA fees 
for the intended application. While these meetings benefit sponsors 
greatly by improving their understanding of FDA expectations and the 
quality of their applications, they also divert FDA staff time from 
other review functions and increase the cost and difficulty of meeting 
PDUFA goals. In other words, the required meetings are an un-funded 
mandate on the agency.
    The financial provisions in the legislation that the Administration 
has submitted should satisfy the concerns that prompt this issue.
    First, it is important to note that PDUFA revenues come from three 
fees--application fees, product fees, and establishment fees. The fees 
from all of these sources can be used by FDA to enhance its activities 
in any part of the drug review process, from the submission of an 
investigational new drug application through the FDA decision to 
approve or not approve a new drug application. Some of the revenue from 
product and establishment fees is used to support the work FDA does at 
the investigational new drug stage, before a marketing application is 
ever submitted.
    The Agency agrees that under PDUFA II, FY 1998 through FY 2002, fee 
revenues were insufficient to adequately fund the work necessary to 
meet the PDUFA II performance goals. The legislative proposal that the 
Administration has forwarded to the Energy and Commerce Committee 
addresses this problem by significantly increasing the revenue levels 
from FY 2003 through FY 2007. This proposal calls for revenues of 
$222.9 million in FY 2003--a 30% increase over revenue levels FDA 
expects to spend in FY 2002. These revenue levels will rise to $259.3 
million by FY 2006 and 2007--an increase of more than 50% compared to 
FY 2002 spending levels. Further, these figures are in FY 2003 dollars, 
and will be adjusted to account for the impact of inflation and 
workload increases. FDA believes that this proposal would fully fund 
the work obligations that would be required of the Agency over the next 
5 years.
    Finally, under the proposal, FDA would be allowed to use fee 
revenues to fund some activities that the Agency will perform after a 
drug is approved. For drugs approved on or after October 1, 2002, risk 
management and epidemiological studies that may be needed in the first 
two to three years after approval may be paid for from PDUFA fees. The 
Agency expects that this provision will enable FDA to approximately 
double its headquarters drug safety employment levels in CDER and CBER 
by FY 2007. We believe that this is an important addition to the 
resources available to FDA that helps to assure the safety of drugs in 
their first two or three years of market life.
    Question Consult All Stakeholders--If performance goals are not 
eliminated in PDUFA III, consumers and patient representatives should 
be involved in developing them.
    FDA has conducted a fair and balanced effort to hear from all 
parties that have a viewpoint about PDUFA. In preparation for 
submitting the Administration's PDUFA III proposal to Congress, the 
Agency engaged in a comprehensive initiative to involve all PDUFA 
stakeholders--consumers, health providers, patient groups, and the 
manufacturers of drugs and biologics--in the development of PDUFA III 
proposals. This process included:

 Two public hearings.
 ``Listening'' sessions with consumer and patient groups.
 Consumer roundtables where PDUFA was a major topic of 
        discussion.
 Meetings with drug and biologic manufacturers.
    At our public hearings, FDA received 12 hours of testimony. Of the 
total of 28 witnesses who provided testimony, 23 were representatives 
from consumer, patient and health provider groups. Seventy-five 
consumer, patient and health provider groups were also represented at 
the ``listening'' sessions and roundtables. This is evidence of the 
broad representation that served as a foundation for the 
Administration's PDUFA III proposal and the development of the PDUFA 
III performance goals.
    Grant FDA a ``Scientific Override''--When the FDA requires 
additional information or clarification from the manufacturer as part 
of the review process, the FDA should be allowed to ``stop the clock'' 
on review deadlines while waiting for this information to be provided.
    The fundamental premise of the performance goals for review of 
applications outlined in the letter from the Secretary of HHS to 
Congress is that sponsors are expected to submit a complete application 
for FDA review and FDA will perform a complete review of the 
application within a defined time (i.e., 6 months for priority 
applications and 10 months for standard applications). If FDA 
determines during the review of an application that additional 
information is needed from the sponsor, FDA may request the information 
from the sponsor while continuing its review of the application as 
submitted. If the additional information is submitted to FDA during the 
same review cycle, FDA has several options on how to handle the new 
information. If there is sufficient time remaining on the review clock, 
FDA may choose to review the new information without changing the 
review clock. Alternatively, FDA may choose to extend the review clock 
by up to three months if the new information constitutes a major 
amendment to the application and is submitted within the last three 
months of the review cycle. Finally, FDA may defer review of the new 
information until the next review cycle. Thus, FDA already has a 
significant degree of discretion in deciding how to process new 
information submitted during the review of an application and FDA 
considers these options sufficient to address issues that arise when 
new information is submitted to an application during a review.
    Eliminate Rigid Management Goals--These goals require the agency to 
set up meetings with the industry within specific timeframes. They 
should be replaced by a more flexible system that allows the FDA to 
prioritize these requests, thus decreasing undue burden on the agency.
    FDA is satisfied with the current prioritization of meetings into 
three categories, such that a meeting about a critical issue takes 
precedence over a more routine discussion. Type A meetings are 
considered necessary for an otherwise stalled drug development program 
to proceed (a ``critical path'' meeting). For example, a Type A meeting 
would be held when FDA has placed an investigational new drug on 
``clinical hold'' and the investigation cannot continue. Type A 
meetings are held within 30 days. Type B meetings are usually held to 
discuss anticipated submissions (pre-initial IND, end of Phase II, or 
pre-NDA) and are held within 60 days. Type C meetings are any other 
type of meeting and accordingly, have the longest timeframe of 75 days. 
Fee revenues in the proposed statutory changes for PDUFA provided the 
necessary resources to support these meetings.
    Allow FDA More Flexibility For Standard Reviews--There is no public 
health justification for requiring the FDA to decide on a ``me too'' 
drug that duplicates therapies already on the market at the same speed 
as a drug that might offer therapeutic advantages to some patients. The 
FDA should be granted greater authority to prioritize the review of 
standard drug applications.
    FDA has existing criteria by which decisions are made regarding 
whether to prioritize the review of new drug applications based on the 
therapeutic potential of the drug. The two review classifications and 
their definitions are:

 Priority review drug--The drug product, if approved, would be 
        a significant improvement compared to marketed products in the 
        treatment, diagnosis, or prevention of a disease. Improvement 
        can be demonstrated by, for example: (1) evidence of increased 
        effectiveness in treatment, prevention, or diagnosis of 
        disease; (2) elimination or substantial reduction of a 
        treatment-limiting drug reaction; (3) documented enhancement of 
        patient compliance; or (4) evidence of safety and effectiveness 
        of a new subpopulation.
 Standard review drug--All non-priority applications will be 
        considered standard applications.
    Under PDUFA, the review clock for priority applications is 6 months 
and the review clock for standard applications is 10 months. FDA's 
performance goals for a complete review of both types of applications 
are 90% completed within the goal dates.
    FDA believes that the current system for designation of products 
for priority review and the current review clocks and performance goals 
work well and allow FDA to prioritize its review work. The PDUFA III 
proposal would not change the current performance goals.
    Create Safety Goals--FDA should establish performance goals 
oriented toward protecting the health and welfare of consumers, such as 
tracking and reviewing Phase IV trials, improving the collection, 
analysis and response of adverse event reports, and enhancing the speed 
and quality of review of direct-to-consumer advertisements.
    The PDUFA III proposal does not include performance goals for the 
activities identified in this question. However, FDA has conducted, and 
will continue to conduct, significant activities in the areas 
identified in this question. Details of these activities follow:
Tracking and Reviewing Phase IV Trials
    Following the enactment of FDAMA, FDA initiated a number of steps 
to implement the provisions on postmarketing studies (section 130). In 
addition, several procedural improvements were made and a data tracking 
system was developed to improve monitoring and processing of annual 
status reports and final study reports. The improvements include:

 Updating staff operating procedures at CDER to clarify how 
        postmarketing commitments and the annual status reports will be 
        processed, reviewed, and archived.
 Designating CDER personnel to be responsible for monitoring 
        the submission of reports. Target review timelines have been 
        established for annual status reports and for the review of 
        final study reports. These timelines will be tracked and 
        monitored.
 Developing new CDER data systems to more efficiently capture 
        the existence of postmarketing commitments, the submission of 
        annual study progress reports, the submission of final study 
        reports, and final review determinations. This new database was 
        implemented in July, 2001.

Improving the Collection, Analysis and Response of Adverse Event 
        Reports
    One of the objectives of the risk management component of the PDUFA 
III proposal is to develop surveillance approaches in a directed and 
well thought out manner that could yield the greatest value for the 
particular drug. In circumstances where there are suggestions in the 
pre-market database of adverse events of concern, risk management and 
active surveillance approaches could be developed to manage and further 
evaluate those concerns. In other situations where there are unexpected 
events, the current reporting system has been able to detect signals of 
an event of concern. Good pharmacovigilance requires evaluation of drug 
safety from many perspectives and sources. In addition, the current 
system depends upon the involvement of drug companies to ensure that 
they conduct the initial follow up that is so important for full 
evaluation of a report.

Enhancing the Speed and Quality of Review of Direct-to-Consumer 
        Advertisements
    CDER currently has an active program focused on the timely review 
of direct-to-consumer advertisements. CDER recognizes the importance of 
insuring that such advertisements are accurate and provide balanced 
information about the benefits and risks of the product. CDER is 
currently implementing plans to reorganize its advertising review 
division to improve its ability to review direct-to consumer 
advertisements. CDER, however, has limited resources to apply to this 
area in the face of an increasing number of direct-to consumer 
advertisements.
    Grant FDA Civil Monetary Fine Authority and Subpoena Power--When 
companies fail to complete Phase IV confirmatory trials or when 
companies repeatedly violate prescriber and direct-to-consumer 
advertising guidelines, the agency should be given the authority to 
levy significant monetary penalties. The agency should also have the 
power to compel companies to produce relevant documents.
    As part of FDAMA, Congress provided additional authority in section 
21 USC 356b to monitor the progress of postmarketing studies that 
sponsors have agreed to conduct. Congress also instructed FDA to 
provide a report providing information on the status of postmarketing 
studies that sponsors have agreed to conduct and for which annual 
reports have been submitted. As indicated in the recent ``Report to 
Congress on Reports on Postmarketing Studies,'' in implementing 21 USC 
356b FDA has defined the content and format of annual progress reports 
for postmarketing studies. The Agency has also modified a number of 
internal operating procedures and programs to more efficiently track 
and monitor the status of postmarketing studies. At this time, FDA is 
not recommending any changes to legislative authority regarding 
postmarketing studies since the Administration's proposals only relate 
to PDUFA.
    FDA has an active enforcement program to help ensure compliance 
with the Act and regulations governing promotion and advertising. If 
the Agency determines that the enforcement program governing these 
activities is not resulting in sufficient levels of compliance with the 
law, FDA will inform Congress and, if necessary, seek authority for 
additional penalties.
    A number of provisions both in the Act and the implementing 
regulations enable FDA to gather information from manufacturers related 
to drug safety. For example, FDA's inspectional authority is set out in 
21 USC 374. Under this authority, FDA is authorized to enter and 
inspect any factory, warehouse, or establishment where drugs are 
manufactured, processed, packed, or held for introduction into 
interstate commerce. New drug application (NDA) and abbreviated new 
drug application (ANDA) holders are also required to establish and 
maintain records and make reports to FDA of relevant data determined by 
FDA to be ``. . . necessary to enable the Secretary to determine . . . 
whether there is or may be ground for invoking subsection (e) . . .,'' 
the provision in the Act setting forth the procedures for the 
withdrawal of approval of an NDA or ANDA on safety grounds. 21 USC 
355(k)(1). NDA and ANDA sponsors are required to report adverse events 
associated with the use of a drug in human to FDA. 21 CFR 314.80. NDA 
and ANDA sponsors must report other safety-related information to FDA 
under 21 CFR 314.81. Under 21 CFE 310.305, manufacturers, packers, and 
distributors of marketed prescription products without NDAs or ANDAs 
must also report serious, unexpected adverse events to the FDA. Under 
the proposed PDUFA legislation, funds from user fees will be able to be 
expended on pre- and peri-NDA/BLA risk management plan activities. This 
change in the PDUFA program will help ensure that drugs approved for 
use in the United States continue to be among the safest in the world. 
As stated, if FDA determines that the tools currently in place are not 
adequate to maintain the high degree of drug safety in the U.S., FDA 
will inform Congress, and if necessary, seek additional authorities.
    Launch Independent Drug Withdrawal Investigations--An office or 
agency independent of the FDA should investigate the circumstances 
surrounding the withdrawal of medical products from the market, as the 
National Transportation Safety Board does for plane crashes.
    The complex decision to withdraw an approved product from the 
market requires multi-disciplinary expertise, often the same expertise 
critical to the decision to initially approve the product. Since FDA's 
mission is to protect and promote the public health, FDA believes that 
the creation of a separate agency to evaluate product withdrawals is 
unnecessary and would result in the duplication of functions that are 
currently being performed, and must continue to be performed, by FDA.
    Increase Monitoring and Review of Phase IV Trials--Require the FDA 
to track Phase IV trials, strictly monitor and enforce the informed 
consent and protection of human subjects in those studies, and, in a 
timely manner, review the quality of the studies and the accuracy of 
the findings.
    Please see response to the question relating to creating safety 
goals, above.
    Improve Adverse Event Reporting--Hospitals, HMOs, nursing homes and 
other healthcare providers should be required to automatically report 
(the present system is voluntary) serious adverse drug events, adverse 
reactions and medical errors to the FDA, CDC, and/or other relevant 
agencies. Appropriations for FDA's oversight of adverse event reporting 
should be dramatically increased.
    At the present time, FDA does not have authority to require 
hospitals, Health Maintenance Organizations (HMOs), nursing homes, and 
other healthcare providers to report all adverse drug events to FDA. In 
addition, to have all healthcare providers report every adverse event 
directly to FDA would overtax the system without necessarily yielding 
additional quality data. Part of the objective of the risk management 
component of the PDUFA III proposal is to develop surveillance 
approaches in a directed and well thought-out manner that could yield 
the greatest value for the particular drug. In circumstances where 
there are suggestions in the pre-market database of adverse events of 
concern, risk management and active surveillance approaches could be 
developed to manage and further evaluate those concerns. In other 
situations where there are unexpected events, the current reporting 
system has been able to detect signals of an event of concern. Good 
pharmacovigilance requires evaluation of drug safety from many 
perspectives and sources. The current system also depends upon the 
involvement of drug companies to ensure that they conduct the initial 
follow up that is so important for full evaluation of a report.
    Utilize the Centers for Education and Research on Therapeutics--
CERTS should examine the feasibility of: (1) implementing a patient 
self-monitoring reporting system for signaling possible adverse drug 
reactions; and, (2) expanding the use of medical registries to follow 
patients who may be at risk of serious reactions.
    FDA is currently working with the Centers for Education and 
Research on Therapies (CERTS) on a number of projects that relate to 
risk management. A current area of active work is a series of workshops 
that FDA, CERTS, and industry are conducting that address risk 
communication, risk assessment, and risk management. The objective of 
these workshops is the development of a research agenda to further 
advance the science of risk management as it relates to 
pharmaceuticals. In addition, the CERTS and FDA are beginning to look 
at the feasibility of active surveillance in emergency departments for 
adverse events related to drugs.
    Broaden Distribution of Medication Guides--Consumers should be 
given power to make informed decisions about drugs and devices and to 
avoid preventable harm. It is time to mandate that medication guides 
with scientifically accurate, unbiased and clearly worded information 
about the risks and benefits of a treatment be included with every 
dispensed drug (as proposed by the FDA in 1995). Such medication guides 
would also, for the first time, provide a mechanism for notifying 
consumers directly when new safety concerns about a drug emerge that 
require a change in a drug's approved labeling.
    As noted in the question, in 1995 FDA published a proposed rule to 
increase the quality and quantity of written medication information for 
consumers. FDA proposed requiring manufacturers to produce Medication 
Guides for certain medications that pose serious and significant public 
health concerns. In addition, the proposal encouraged that written 
information be produced and distributed for all drugs, and set targets 
for the distribution of such information with new prescriptions.
    The following year a workshop was convened by FDA to discuss this 
proposal and, subsequent to the workshop, Congress passed legislation 
(P.L. 104-180) that asked interested parties to develop a plan which 
would attempt to achieve in a voluntary manner the goals of FDA's 1995 
proposal. A plan was developed in response to the legislation that 
included identifying mechanisms and incentives to ensure voluntary 
efforts to provide useful information to consumers. The target goals 
established in P.L. 104-180 provided that by 2000, 75% of individuals 
receiving a new prescription receive useful information. By 2006 the 
target goal increased to 95%. FDA currently requires a Medication Guide 
in certain circumstances, but for most drugs the distribution of 
medication information to patients by a pharmacist is voluntary and is 
accomplished using third party vendors of such information.
    Regarding the voluntary distribution of information, FDA contracted 
for a study of the quality and quantity of the information that was 
being distributed in response to the year 2000 goals. FDA is currently 
evaluating the results of this study and will be determining what 
additional actions and public discussion may be needed in an effort to 
ensure that the 2006 goals are achieved.
    Regarding the required medication guides, these are a relatively 
new risk communication tool that also requires further evaluation. In 
particular, FDA is now working with the CERTS to develop projects 
evaluating the effectiveness of medication guides as a risk management 
tool. In addition, more study is needed of the degree to which 
medication guides are distributed by pharmacists and how frequently 
they are read and comprehended by consumers.
    Section 506B of the Food, Drug, and Cosmetic Act should be amended 
to expand the scope of information made available to the public to 
include information [such] as study protocols, patient accrual rates, 
reports of unexpected, i.e., unlabeled, suspected adverse reactions, 
and study results.
    As a public health agency, FDA supports making useful information 
available to consumers regarding the safe and effective use of 
regulated products. However, there are a number of considerations that 
must be taken into account when a determination is made to make 
information publicly available. Given the complex issues involved, the 
Agency would need to examine the language of a specific proposal in 
order to comment on whether or not it is advisable.
    Scrutinize Single Controlled Clinical Studies--An increasing number 
of drug manufacturers have indicated that they will begin submitting 
new drug applications using data from only one controlled clinical 
study, which is now allowed by law, rather than multiple studies. An 
independent study should be conducted at an appropriate time to assess 
the effectiveness of single controlled studies in assessing the safety 
of drugs and biologics.
    The usual requirement for more than one adequate and well-
controlled investigation reflects the need for independent 
substantiation of experimental results. A single clinical experimental 
finding of efficacy, unsupported by other independent evidence, has not 
usually been considered adequate scientific support for a conclusion of 
effectiveness. However, FDA has, under certain circumstances, approved 
drugs on the basis of development programs that included only one well-
controlled clinical trial in addition to evidence from other studies 
that confirmed its results. The Agency issued a ``Guidance for 
Industry: Providing Clinical Evidence of Effectiveness,'' in 1998 to 
specifically address this, as required by FDAMA. Situations in which a 
single controlled clinical trial might be considered adequate (in 
combination with confirmatory evidence) for drug approval include:

1. When the effectiveness of a new use can be extrapolated from 
        existing studies of an already approved use (e.g., a new dosage 
        regimen; pediatric uses).
2. When a single study for a new use is supported by data from related 
        adequate and well controlled trials (e.g., a different phase of 
        the same disease or a closely related disease, studies in a new 
        special population, studies in combination or as monotherapy; 
        studies in a closely related disease).
3. When a single controlled study includes multiple centers and is so 
        large that it, in effect, serves as multiple studies.
4. When the endpoint and results of the single controlled study are 
        such that the study could not ethically be repeated or the 
        statistical results are very persuasive, with consistency 
        across subsets of the analysis.
    Although FDAMA encouraged the Agency to issue a Guidance on the 
subject, FDA has applied these principles for many years and continues 
to be actively engaged in discussions to further refine them. For 
example, FDA participated in a meeting convened by the Center for Drug 
Development Science at Georgetown University in January, 2002, 
entitled, ``Confirmatory Evidence to Support a Single Clinical Trial 
(SCT) as a Basis for Drug Approval.'' Participants included 
academicians, leaders from FDA's CDER, CBER and CDRH and the 
pharmaceutical industry. A written summary of the conference is 
currently being drafted. Discussion topics included: 1) the nature, 
sources and standards for evidence of effectiveness; current issues 
concerning satisfactory requirements for ``confirmatory evidence;'' 2) 
the standards for a single clinical trial itself, and; 3) current 
issues in establishing an adequate safety database, assuming that 
effectiveness is independently confirmed.
    Discussions at the meeting were constructive and productive. In 
general, at the meeting there was a great deal of reluctance on the 
part of regulators and the pharmaceutical industry, as well as many of 
the academicians, to apply the SCT model widely. This was felt to be a 
model that should only be used in limited circumstances, such as those 
already articulated in FDA's 1998 Guidance. It was generally 
acknowledged that scientifically sound clinical studies should be the 
goal of any drug development program, and simply conducting large 
numbers of poorly designed or inefficient trials is not in the interest 
of the public health. While most of the work at the conference centered 
around clarifying the principles related to the single adequate and 
well-controlled trial, it was widely agreed that one of the greatest 
needs for data at the time of NDA review is regarding safety. This 
point is often lost in discussions about single controlled trials and 
must not be, particularly in light of recent public concerns about 
drugs reaching the market prior to adequate safety testing.
    Examine Comparative Safety Data--Manufacturers should be required, 
as part of their application to the FDA to market a new drug or 
biologic, to submit the results of tests comparing the safety and 
efficacy of their product to others already on the market that are used 
to treat the same indication.
    FDA does not have the legal authority to require sponsors to submit 
the results of clinical trials comparing the safety and efficacy of 
their product to others already on the market that are used to treat 
the same condition. While FDA does not have this legal authority, FDA 
often encourages sponsors to conduct such comparative trials and in 
many cases the sponsors do conduct comparative trials and submit them 
for FDA review. If these trials meet FDA standards, the data are often 
included in the approved labeling for the product.

     FURTHER QUESTIONS SUBMITTED BY REPRESENTATIVE JOHN D. DINGELL

    Dr. Woodcock, as Director of CDER, you have the responsibility of 
assuring that new drugs approved under NDAs are safe. I understand that 
clinical trials, even ones involving thousands of patients, cannot be 
expected to pick up safety problems, less frequently occurring but 
dangerous, even fatal, side effects, is that correct?
    It is correct that clinical trials would not be expected to detect 
rare adverse events due to the limited numbers of patients in such 
trials. In addition, clinical trials are limited in duration and tend 
to include carefully selected patient populations. For these reasons, 
it is critical that we maintain careful vigilance over newly marketed 
drugs to be able to detect such events. The new risk management program 
in PDUFA III will be an important step forward toward this goal.
    So safety is primarily evaluated through animal studies and 
pharmacokinetic models is that correct?
    No. The safety of a new drug is evaluated prior to approval based 
on data available from a variety of studies. This includes data on how 
the drug is manufactured and the drug's stability over time, an 
analysis of safety of drug impurities, inactive ingredients, and 
degradation products, data from an extensive battery of animal 
toxicology and pharmacology studies, data from human pharmacodynamic 
and pharmacokinetic studies, and data from the clinical trials of the 
drug in humans. While the amount of safety data in humans varies 
depending on the drug and the indication to be treated, for chronically 
administered drugs, the International Conference for Harmonization 
(ICH) standard for the minimum size of the clinical safety database is 
1,500 volunteers/patients. In many cases, FDA may require that the 
clinical safety database be far greater than the ICH minimum prior to 
approval. FDA also considers any data available from foreign post-
marketing surveillance of the drug if the drug has been approved in 
other countries prior to approval in the United States.
    I understand that CDER is working on better early measures of liver 
toxicity and heart toxicity both in animals and in humans so drugs that 
product unacceptable side effects are detected earlier in the process. 
Could you elaborate on you work in this area? When might we see more 
sensitive tests leading to greater assurance of safety at time of 
approval?
    Regarding cardiac toxicity, FDA is addressing this issue from both 
the pre-clinical and clinical standpoint. FDA is working to develop 
guidances on appropriate pre-clinical assessment of drugs to screen for 
cardiac toxicity, in particular prolongation of the QTc interval on 
ECGs. This activity is still in its early stages and it may be some 
time before a guidance is finalized. From the clinical standpoint, FDA 
is working on developing guidance for industry regarding appropriate 
cardiac evaluation of a drug during its development. In addition, it is 
important for FDA to have direct access to ECG data as we evaluate 
drugs, and so a public meeting has been held on the topic of submitting 
ECG data electronically for analysis. Another public workshop is 
planned for this spring following which draft guidance will be 
developed.
    Regarding hepatotoxicity, a public workshop was held in February 
2001 at which time a White Paper on hepatotoxicity was written which 
described the issues to be addressed. These included pre-clinical, 
clinical and post-marketing issues. Since that time FDA has been 
working with industry and others to further identify the issues to be 
addressed and develop plans to address the various issues that are 
identified. These include:

 Examining the sensitivity and specificity of screening tests.
 Examining the time course and patterns of hepatotoxicity 
        related to drugs to better inform future actions.
 Determining background rates.
 Determining the feasibility of active surveillance approaches.
       further questions submitted by representative richard burr
    When will the Agency issue the final ``Guidance for Industry on 
Developing Medical Imaging Drugs and Biological Products''? The last 
draft was issued in June 2000. This Guidance is necessary in order to 
implement the radiopharmaceutical regulation directed by Section 122 of 
FDAMA which was supposed to be effective almost 3 years ago under 
FDAMA.
    The guidance for industry on Developing Medical Imaging Drugs and 
Biological Products is being developed with extensive input from the 
public. A first draft of the guidance was issued for comment on October 
14, 1998. FDA held public meetings on the draft guidance on January 25 
and March 26, 1999. After considering the discussion and comments at 
the meetings and after reviewing all written comments, FDA issued a 
second draft for comment on July 31, 2000. The Agency has considered 
carefully the second round of comments, and the final version of the 
guidance is currently moving through the clearance process. We expect 
it to be released during the next month or two.

     FURTHER QUESTIONS SUBMITTED BY REPRESENTATIVE HENRY A. WAXMAN

    It is my understanding that FDA has fewer than 15 FTEs to review 
over 37,000 prescription drug ads each year, and the triggers in the 
user fee program have been partly to blame because FDA has been forced 
to drain resources from other programs, including drug advertising, to 
meet its obligations under PDUFA. In your best professional judgment, 
how many FTEs would be needed and how much would it cost to fund an 
effective drug advertising review program and bring enforcement actions 
against misleading ads in a timely manner?
    The Division of Drug Marketing and Advertising (DDMAC) in CDER is 
responsible for the regulation of prescription drug advertising. This 
Division currently has assigned 39 FTEs. While DDMAC has worked to 
maximize its productivity and is currently undergoing a reorganization 
that is designed to further improve its efficiency and effectiveness, 
the current staffing is not adequate to keep pace with the rapidly 
increasing number of professional and direct-to-consumer advertisements 
for prescription drugs. It is estimated that CDER would need 
approximately 35 additional FTEs and supporting operating funds to 
fully staff the advertising review program.
    Currently, CBER has 4 FTEs to review all advertising and 
promotional labeling materials submitted. In order to adequately assess 
these materials and bring timely enforcement actions, a large increase 
in staff would be required. Based on the projected number of 
submissions for FY2003, and conservative estimates of man-hours needed 
to review these submissions, 30 additional review FTEs would be 
required. Additional management and support staff would also be needed, 
for a total of 38 FTEs at a cost of $5,130,000.00. An additional 
$550,000 would be required for IT upgrade and support of a tracking 
system. This would result in a total requirement of $5,680,000.00.
    Have statutory triggers in PDUFA adversely affected funding of 
other FDA programs? If so, which ones?
    As is mentioned above, during the period of FY 1994 to FY 2001, the 
effect of the Prescription Drug User Fee Act's (PDUFA) statutory 
triggers has had on the availability of funding for non-PDUFA programs 
has been less significant than the absence of additional appropriations 
to fund that annual pay raises for Food and Drug Administration (FDA) 
employees. During these years, FDA's appropriations failed to include 
increases to cover the annual costs of mandated Federal pay raises. The 
cumulative impact of absorbing the cost of the Federal pay raise during 
this eight-year period was more than $200 million. This resulted in a 
reduction in staffing for programs other than the process for the 
review of human drug applications (e.g., compliance activities, review 
of over-the-counter drugs) of more than 1,100 staff years since PDUFA I 
was enacted.
    Although the absence of additional funds to pay the cost of 
mandated pay raises has had the greatest effect on non-PDUFA programs, 
one of the PDUFA triggers has also had a significant effect. Section 
736(g)(2)(B) requires that FDA annual spending on drug review from 
appropriations must be at least as much as the amount of appropriations 
that FDA spent on drug review in FY 1997, adjusted for inflation.
    There are two aspects of this trigger that may adversely affect FDA 
programs other than drug review. These are:

(1) The minimum that FDA must spend from appropriations increases by an 
        inflation factor each year. In years when FDA does not receive 
        appropriated increases to cover the cost of the Federal pay 
        raise, FDA must increase the amount allocated for PDUFA drug 
        review programs by an amount sufficient to meet the adjustment 
        for inflation established in the PDUFA statute. The only means 
        of accomplishing this is to reduce the amount spent on non-
        PDUFA programs. This aspect of the section 736(g)(2)(B) trigger 
        is directly related to whether or not FDA receives the 
        appropriations necessary to cover the cost of the Federal pay 
        raise.
(2) This trigger is based on FDA spending, an amount that cannot be 
        measured until after the fiscal year ends, when the accounts 
        are closed and final reports are produced. Failure to meet this 
        spending threshold would be catastrophic. Fee revenue collected 
        in the previous year would all have to be returned and this 
        loss in revenue would mean that FDA would have to lay off a 
        significant number of employees. To avoid these catastrophic 
        consequences, FDA must always err on the side of caution by 
        spending more on the drug review process than the minimum 
        amount required. This is necessary to be certain that, when the 
        final accounting is completed at the end of the year, FDA will 
        have met the minimum spending required.
    The table below outlines this situation. It depicts:

(1) the minimum amount of spending required from appropriations each 
        year as a result of this trigger (Section 736(g)(2)(B));
(2) the actual FDA spending from appropriations each year on the drug 
        review process; and
(3) the amount by which FDA spending exceeded the minimum spending 
        mandated by the statutory trigger (i.e., the difference between 
        1 and 2.)

----------------------------------------------------------------------------------------------------------------
                                           Minimum Spending
                                              Required by       Actual Spending                         Percent
               Fiscal Year                      Section              from             Difference      Difference
                                             736(g)(2)(B)       Appropriations
----------------------------------------------------------------------------------------------------------------
1993....................................       $120,057,253        $126,515,577          $6,458,324           5
1994....................................       $123,380,438        $129,337,138          $5,956,700           5
1995....................................       $126,958,144        $139,830,318         $12,872,174          10
1996....................................       $124,302,476        $152,289,387         $27,986,911          23
1997....................................       $125,872,166        $147,959,689         $22,087,523          18
1998....................................       $147,959,689        $151,836,635          $3,876,946           3
1999....................................       $150,083,954        $159,669,575          $9,585,621           6
2000....................................       $153,508,177        $167,646,122         $14,137,945           9
2001....................................       $158,213,295        $162,691,657          $4,478,362           3
----------------------------------------------------------------------------------------------------------------

    Will your recommended alteration in one of the triggers ensure that 
funding for other programs is no longer drained?
    The most important action to assure that funding from other 
programs is not drained in the future is an appropriation each year 
that includes the full costs of the mandatory Federal pay raise. We are 
pleased that for the current fiscal year the President requested, and 
Congress appropriated, funds that specifically included amounts to 
enable FDA to meet the costs of the mandatory Federal pay increase. 
Further, the President's budget for FY 2003 that is now before Congress 
also includes specific increases to cover the cost of the mandatory 
Federal pay raise anticipated in FY 2003.
    In addition, the legislation that the Administration has proposed 
will include modifications to the trigger (Section 736(g)(2)(B)) such 
that FDA will no longer be compelled to spend amounts that are 
significantly greater than the amount required by this trigger. The 
proposal will provide FDA a margin of error in its effort to meet this 
requirement of the law. Under this proposed modification, if FDA's 
spending from appropriations on drug review is within 5 percent of the 
amount required by this section of the law, the requirement is 
considered to be satisfied. In cases where FDA's spending from 
appropriations is within 3 percent of the trigger amount, no adjustment 
in fees will be required. If the spending is between 3 percent and 5 
percent below the trigger amount, then FDA will, in a subsequent year, 
decrease user fees by the amount of the shortfall that is between 3 and 
5 percent (i.e., a maximum of 2 percent).
    The purpose of this change is to relieve FDA of the need to 
overspend from appropriations each year, as has occurred consistently 
since FY 1994. Spending from appropriations on the drug review process 
each year is still expected to be at, or very close to, the amount 
specified by this trigger, and may never be more than 5 percent below 
the trigger amount.
    What changes in the triggers would be necessary to protect the 
funding of the generic drug and advertising review programs?
    The PDUFA statute does not apply to generic drugs or to post-
approval drug advertising. Since there are no user fee or non-user fee 
amounts authorized for these programs under the PDUFA statute, it is 
difficult to conceive of a modification to the PDUFA statute that would 
accomplish this objective.
    The best way to protect funding for these and other non-PDUFA 
programs is to assure that they receive adequate appropriations each 
year, including increases to cover the costs of mandatory Federal pay 
raises.
    In your best professional judgment, how many FTEs would be needed 
and how much would it cost to fund a generic drug program that can 
review generic drug applications in the statutory 180 days.
    It is estimated that the Office of Generic Drugs (OGD) would need 
approximately 55 additional FTEs at a cost of $9,570,000 above its 
current base to meet the statutory review time of 180 days. This amount 
includes salary, operating costs, and overhead to support these 
additional employees.
    In addition, other parts of the Agency, such as the Office of 
Compliance, CDER, and FDA's Office of Regulatory Affairs and Office of 
Chief Counsel, would need additional FTEs and budgetary support. These 
other organizations provide essential inspection and legal support to 
OGD's review activities. It is estimated that an additional 66 FTEs 
would be needed to cover the increased workload in these organizations 
in support of the Office of Generic Drugs for a total of $20,430,000. 
This figure includes salary, operating costs, and overhead.
    As I understand it, your agreement with the pharmaceutical industry 
will include a performance goal of 6 months for reviewing any portion 
of a cumulative marketing application. This is the same review period 
as a priority drug; hence these partial applications are going to be 
given as high as priority as priority drugs. I am concerned that this 
will take resources away from needed drugs that are ready for approval, 
and give them to drugs that may be far from approval. Does your 
agreement include sufficient additional fees to cover the cost of 
carrying out these additional high priority reviews? Can we be sure 
that resources will not be diverted from the review of drugs that are 
ready for approval to review CMAs?
    FDA carefully considered the resources that would be necessary to 
implement the two pilot studies of continuous marketing application 
(CMA) review without taking resources away from the review of completed 
new drug applications. The necessary resources have been included in 
the PDUFA III proposals. It is also important to note that both pilot 
CMA programs will be limited to Fast Track drugs--those drugs that are 
intended to treat serious or life-threatening conditions and that 
demonstrate the potential to address unmet medical needs. Additionally, 
Pilot 1 is limited to Fast Track drugs that have already demonstrated 
significant promise as a therapeutic advance in clinical trials and 
Pilot 2 is limited to one application per review division over the 
five-year period of PDUFA III. FDA believes the additional resources 
and the limitations on the CMA pilot program will provide opportunities 
to shorten drug development time for promising new drugs, while 
ensuring appropriate resources are devoted to other new drugs that are 
ready for approval. FDA proposes to conduct a formal evaluation of 
these Pilot programs during PDUFA III in order to evaluate these and 
other considerations.
    After FDA has completed a review of a portion of a cumulative 
marketing application, is the agency free to rereview all or part of 
that portion when the full application is submitted, if the agency 
believes a rereview is needed?
    Yes. FDA plans to publish a guidance to industry on the cumulative 
marketing application pilot programs by the end of FY03 and the pilot 
programs will begin in FY04. FDA anticipates that the guidance document 
will outline the procedures that FDA will follow with regard to any 
changes that may occur to a ``reviewable unit'' from the time that it 
was pre-submitted for review until the time that the complete 
application is submitted. The pilot programs described in the PDUFA III 
proposed Goals Letter do not preclude FDA from re-reviewing previously 
reviewed ``reviewable units'' if that is felt to be necessary. The 
pilot programs as described in the draft Goals Letter also make clear 
that the deficiencies transmitted to the sponsor in a discipline review 
letter on completion of review of a pre-submitted ``reviewable unit'' 
are ``not final, definitive decisions relevant to the NDA/BLA.''
    At the hearing, the witnesses representing BIO testified that, 
under the agreement, the decision whether to use an outside expert 
requested by an applicant is completely within FDA's discretion. I was 
pleased to hear this, because I believe that restricting FDA's 
discretion raises serious questions about the integrity of the review 
process. What are the specific terms in the agreement concerning the 
use of outside experts that establish FDA's discretion to use them as 
the agency sees fit?
    Section IX of the Goals Letter provides for the use of independent 
consultants for biotechnology clinical trial protocols. The text of 
this section of the Goals Letter is reprinted below.
    IX. INDEPENDENT CONSULTANTS FOR BIOTECHNOLOGY CLINICAL TRIAL 
PROTOCOLS
    A. Engagement of Expert Consultant: During the development period 
for a biotechnology product, a sponsor may request that FDA engage an 
independent expert consultant, selected by FDA, to participate in the 
Agency's review of the protocol for the clinical studies that are 
expected to serve as the primary basis for a claim.
    B. Conditions
    1. The product must be a biotechnology product (for example, DNA 
plasmid products, synthetic peptides of fewer than 40 amino acids, 
monoclonal antibodies for in vivo use, and recombinant DNA-derived 
products) that represents a significant advance in the treatment, 
diagnosis or prevention of a disease or condition, or have the 
potential to address an unmet medical need;
    2. The product may not have been the subject of a previously 
granted request under this program;
    3. The sponsor must submit a written request for the use of an 
independent consultant, describing the reasons why the consultant 
should be engaged (e.g., as a result of preliminary discussions with 
the Agency the sponsor expects substantial disagreement over the 
proposed protocol); and
    4. The request must be designated as a ``Request for Appointment of 
Expert Consultant'' and submitted in conjunction with a formal meeting 
request (for example, during the end-of-Phase II meeting or a Type A, 
meeting).
    C. Recommendations for Consultants: The sponsor may submit a list 
of recommended consultants for consideration by the Agency. The 
selected consultant will either be a special government employee, or 
will be retained by FDA under contract. The consultant's role will be 
advisory to FDA and FDA will remain responsible for making scientific 
and regulatory decisions regarding the clinical protocol in question.
    D. Denial of Requests: Except in the most unusual circumstances 
(for example, it is clearly premature) FDA will honor the request and 
engage the services of an independent consultant, of FDA's choosing, as 
soon as practicable. If the Agency denies the request, it will provide 
a written rationale to the requester within 14 days of receipt.
    E. Performance Goal Change: Due to the time required to select and 
screen the consultant for potential conflicts of interest and to allow 
the consultant sufficient time to review the scientific issues 
involved, the performance goals for scheduling the formal meeting (see 
section III) may be extended for an additional sixty (60) days.
    F. Evaluation: During FY 2006, FDA will conduct a study to evaluate 
the costs and benefits of this program for both sponsors and the 
Agency.

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