[Senate Hearing 107-73]
[From the U.S. Government Printing Office]



                                                         S. Hrg. 107-73

     TISSUE BANKS: IS THE FEDERAL GOVERNMENT'S OVERSIGHT ADEQUATE?

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



                                HEARING

                               before the

                       PERMANENT SUBCOMMITTEE ON
                             INVESTIGATIONS

                                 of the

                              COMMITTEE ON
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 24, 2001

                               __________

      Printed for the use of the Committee on Governmental Affairs

                               __________

                    U.S. GOVERNMENT PRINTING OFFICE
73-395                     WASHINGTON : 2001

_______________________________________________________________________
For sale by the Superintendent of Documents, Congressional Sales Office
         U.S. Government Printing Office, Washington, DC 20402


                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                   FRED THOMPSON, Tennessee, Chairman
           JOSEPH I. LIEBERMAN, Connecticut, Ranking Democrat
TED STEVENS, Alaska                  CARL LEVIN, Michigan
SUSAN M. COLLINS, Maine              DANIEL K. AKAKA, Hawaii
GEORGE V. VOINOVICH, Ohio            RICHARD J. DURBIN, Illinois
PETE V. DOMENICI, New Mexico         ROBERT G. TORRICELLI, New Jersey
THAD COCHRAN, Mississippi            MAX CLELAND, Georgia
JUDD GREGG, New Hampshire            THOMAS R. CARPER, Delaware
ROBERT F. BENNETT, Utah              JEAN CARNAHAN, Missouri
             Hannah S. Sistare, Staff Director and Counsel
     Joyce A. Rechtschaffen, Democratic Staff Director and Counsel
                     Darla D. Cassell, Chief Clerk

                                 ------                                

                PERMANENT SUBCOMMITTEE ON INVESTIGATIONS

                   SUSAN M. COLLINS, Maine, Chairman
                 CARL LEVIN, Michigan, Ranking Democrat
TED STEVENS, Alaska                  DANIEL K. AKAKA, Hawaii
GEORGE V. VOINOVICH, Ohio            RICHARD J. DURBIN, Illinois
PETE V. DOMENICI, New Mexico         ROBERT G. TORRICELLI, New Jersey
THAD COCHRAN, Mississippi            MAX CLELAND, Georgia
JUDD GREGG, New Hampshire            THOMAS R. CARPER, Delaware
ROBERT F. BENNETT, Utah              JEAN CARNAHAN, Missouri
         Christopher A. Ford, Chief Counsel and Staff Director
     Linda J. Gustitus, Democratic Chief Counsel and Staff Director
                      Claire Barnard, Investigator
                     Mary D. Robertson, Chief Clerk


                            C O N T E N T S

                                 ------                                
                                                                   Page

Opening statements:
    Senator Collins..............................................     1
    Senator Levin................................................     3
    Senator Durbin...............................................     5

                               WITNESSES
                         Thursday, May 24, 2001

George F. Grob, Deputy Inspector General for Evaluation and 
  Inspections, Office of the Inspector General, U.S. Department 
  of Health and Human Services, Washington, DC...................     9
P. Robert Rigney, Jr., Chief Executive Officer, American 
  Association of Tissue Banks, Washington, DC....................    24
William F. Minogue, M.D., Chairman of the Board of Directors, 
  Washington Regional Transplant Consortium, Washington, DC......    27
Valerie J. Rao, M.D., Chief Medical Examiner, District Five, 
  Leesburg, Florida..............................................    30
Kathryn C. Zoon, Ph.D., Director, Center for Biologics Evaluation 
  and Research, U.S. Food and Drug Administration, Washington, DC    40

                     Alphabetical List of Witnesses

Grob, George F.:
    Testimony....................................................     9
    Prepared statement...........................................    49
Minogue, William F., M.D.:
    Testimony....................................................    27
    Prepared statement...........................................    74
Rao, Valerie J., M.D.:
    Testimony....................................................    30
    Prepared statement...........................................    82
Rigney, P. Robert, Jr.:
    Testimony....................................................    24
    Prepared statement...........................................    58
Zoon, Kathryn C., Ph.D.:
    Testimony....................................................    40
    Prepared statement...........................................    84

                              Exhibit List

 1. G``Warning Letter'' from the U.S. Food and Drug 
  Administration to Lions Club of District 22-C, Eye and Tissue 
  Bank and Research Foundation, Inc. (Seabrook, Maryland), dated 
  August 25, 2000, regarding improper alteration of records......   110

 2. G``Warning Letter'' from the U.S. Food and Drug 
  Administration to Pacific Coast Tissue Bank (Los Angeles, 
  California), dated April 21, 2000, regarding inadequate written 
  procedures and improperly maintained records...................   112

 3. a. GLetter from elderly gentleman to Dr. Valerie Rao, 
  District Five Medical Examiner's Office, Leesburg, Florida, 
  dated March 26, 2001, expressing interest in and concerns about 
  donating his body..............................................   114
    b. GResponse letter from Dr. Valerie J. Rao, Lake County 
      Medical Examiner's Office, Leesburg, Florida, to elderly 
      gentleman, dated May 2, 2001, responding to his concerns...   115

 4. GWashington Regional Transplant Consortium (WRTC) Donor 
  Referral/Tissue Donor Worksheet for an 82-year-old man with 
  prostate cancer, indicating his unsuitability as a potential 
  donor..........................................................   116

 5. GLions Eye and Tissue Bank of District 22-C Donor Medical and 
  Social History Questionnaire, indicating the Lions' awareness 
  of the potential donor's prostate cancer.......................   118

 6. GE-mail from John Gaston to an organ procurement 
  organization, dated May 16, 2001, soliciting customers for his 
  new tissue recovery company....................................   119

 7. GLetter from the Food and Drug Administration to Regeneration 
  Technology, Inc. (RTI), dated May 3, 2001, raising questions 
  about the safety of ``pooling''................................   120

 8. GPermanent Subcommittee on Investigations Staff Background 
  Memorandum, ``Tissue Banks: Is The Federal Government's 
  Oversight Adequate?''..........................................   123

 9. GReport of the Department of Health and Human Services, 
  Office of Inspector General, ``Informed Consent in Tissue 
  Donation: Expectations and Realities,'' January 2001, OEI-01-
  00-00440.......................................................   135

10. GReport of the Department of Health and Human Services, 
  Office of Inspector General, ``Oversight of Tissue Banking,'' 
  January 2001, OEI-01-00-00441..................................   166

11. a. G``Special Investigation: The Body Brokers'' (5-part 
  series of articles), The Orange County Register, April 16-20, 
  2001...........................................................   189
    b. G``Cadavers For Cash In Texas: `People Make A Lot Of Money 
      Selling Tissue,' '' Chicago Tribune, May 22, 2000..........   220

12. GLetter from Senator Richard J. Durbin, dated January 9, 
  2001, to Dr. Jane Henney, Commissioner, Food and Drug 
  Administration, regarding regulations of tissue for 
  transplantation and new FDA rules for tissue banks.............   222

13. GStatement for the record of the College of American 
  Pathologists...................................................   224

14. GStatement for the record of the North American Transplant 
  Coordinators Organization......................................   226

15. GStatement for the record of the Southeast Tissue Alliance, 
  Inc............................................................   232

16. GStatement for the record of Regeneration Technologies, Inc..   235

17. GLetter from Regeneration Technologies, Inc, dated June 4, 
  2001, to Dr. Valerie J. Rao, Lake County Medical Examiner, 
  regarding Rao's testimony before the Permanent Subcommittee on 
  Investigations on May 24, 2001.................................   245

18. GLetter from Dr. Valerie J. Rao, District Five (Lake County) 
  Medical Examiner's Office, dated June 7, 2001, to Regeneration 
  Technologies, Inc., responding to Regeneration Technologies, 
  Inc. June 4, 2001, letter (above)..............................   249

19. GLetter from American Association of Tissue Banks (AATB), 
  dated July 15, 2001, to the Permanent Subcommittee on 
  Investigations, responding to Senator Collin's inquiry on 
  number of tissue banks operating after rejection for 
  accreditation or after being expelled or departed from AATB....   251

20. GStatement for the record of Lions of District 22-C Eye and 
  Tissue Bank and Research Foundation, Inc. received by the 
  Permanent Subcommittee on Investigtions on August 9, 2001......   253

 
     TISSUE BANKS: IS THE FEDERAL GOVERNMENT'S OVERSIGHT ADEQUATE?

                              ----------                              


                         THURSDAY, MAY 24, 2001

                                       U.S. Senate,
                Permanent Subcommittee on Investigations,  
                  of the Committee on Governmental Affairs,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 9:30 a.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Susan 
Collins, Chairman of the Subcommittee, presiding.
    Present: Senators Collins, Levin, and Durbin.
    Staff Present: Christopher A. Ford, Chief Counsel and Staff 
Director; Mary D. Robertson, Chief Clerk; Claire Barnard, 
Investigator; Eileen M. Fisher, Investigator; Barbara Cohoon, 
Staff Assistant; Linda Gustitus, Democratic Chief Counsel and 
Staff Director; Laura Stuber, Democratic Counsel to the 
Minority; Jennett Rona (Senator Lieberman); Anne Marie Murphy 
and Elissa Levin (Senator Durbin).

              OPENING STATEMENT OF SENATOR COLLINS

    Senator Collins. The Subcommittee will come to order.
    Good morning. Today, the Permanent Subcommittee on 
Investigations is holding an oversight hearing to examine the 
practices of the tissue industry and the adequacy of the 
regulatory framework that governs this industry. This hearing 
will also look at procedures for obtaining the informed consent 
of families who contemplate the donation of a loved one's 
tissue. Senator Richard Durbin of Illinois was the first to 
recommend that the Subcommittee investigate these important 
issues.
    While most people are familiar with the concept of organ 
donation, tissue donation is not very well understood by most 
Americans. Yet the tissue industry is very diverse and growing 
rapidly. The recovery and medical use of tissue, including 
skin, bone, cartilage, tendons, ligaments, and heart valves, 
are increasingly common and can play an essential role in 
improving the quality of recipients' lives.
    Tissue donation is also on the rise. In 1994, an estimated 
6,000 individuals donated tissue. By 1999, however, this figure 
had increased more than three-fold to approximately 20,000. 
Donors now make possible as many as 750,000 tissue transplants 
every year in the United States.
    Nevertheless, the industry that carries out these tasks has 
received little public scrutiny. The organizations that make up 
the tissue industry are collectively referred to as tissue 
banks. Some are engaged in tissue recovery, while others 
process, store, and distribute human tissue. Some tissue banks 
are nonprofits, while others are for-profit companies.
    Unlike organ transplants, human tissue is not usually 
transplanted ``as is'' from the donor's body into that of the 
recipient. Rather, donated tissue frequently undergoes 
considerable processing before it can be used. Bone from a 
donor's femur, for example, may be completely reshaped into a 
component designed to give support to a recipient's spine. 
Technology that greatly reduces the risk of rejection now 
allows surgeons to use actual bone in their patients rather 
than metal or other synthetic substances. In addition, donated 
tissue, once it is reshaped, can frequently be stored for an 
extended period of time, unlike organs, which must be 
transplanted into the recipient's body within hours of their 
recovery.
    Tissue donation can improve the lives of many Americans. 
Just one donor, in fact, can help a large number of people in 
various ways. Skin donations, for instance, can be used to help 
heal burn victims or aid in reconstructive surgical procedures. 
Ligaments and tendons can be used to repair worn-out knees. 
Bone donations can be used in hip replacements or spinal 
surgery, enabling recipients to regain mobility. Donated 
arteries and veins can restore circulation, and heart valves 
can be transplanted to save lives.
    With the phenomenal growth and the new uses for tissue 
transplants have come some problems. Just over a year ago, the 
Orange County Register ran a series of articles on the tissue 
industry.\1\ Several of these articles brought to light 
incidents in which tissue obtained from unsuitable donors 
entered the American tissue supply, raising questions about the 
adequacy of Federal regulation. Other concerns have been raised 
about whether the practices of some tissue banks are sufficient 
to reduce the danger of spreading such illnesses as the human 
variant of ``mad cow disease.''
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    \1\ See Exhibit No. 11.a. which appears in the Appendix on page 
189.
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    Because communicable diseases such as HIV and hepatitis, 
among others, can also be transmitted through tissues, it is 
vital that tissues be tested effectively and that potential 
donors be properly screened for suitability. It is equally 
important to ensure that persons and organizations involved in 
the tissue industry follow good tissue handling and processing 
practices in order to prevent contamination, and that the 
industry employ sound tracking procedures so that if a problem 
develops, all of the affected tissue recipients can be promptly 
notified.
    Toward this end, the Federal Food and Drug Administration 
has proposed new rules that would extend the FDA's oversight 
role in the areas of donor screening, tissue testing, and good 
tissue practices.
    The FDA's current rules focus on screening potential donors 
for suitability, testing tissue, and keeping proper records 
detailing the screening process. The FDA verifies such records 
through periodic inspections of tissue banks. In addition, the 
FDA has begun to implement a new rule requiring the 
registration of all tissue banks. Although the FDA has 
inspected only 118 tissue banks since 1993, we have recently 
learned that at least 350 tissue banks of various types have 
now registered with the FDA. These statistics suggest that many 
tissue banks may have been operating with little or no Federal 
oversight.
    The tissue bank industry would not exist without the 
generous individuals who decide to donate tissue from the 
bodies of their loved ones. Of particular concern to me, 
therefore, is whether or not accurate and appropriate 
information is provided to the families of potential donors 
during what is always a very difficult time.
    Only with adequate information can families make the right 
choice for them. Potential donor families want to be assured 
that their loved ones' tissues will be used to help others. 
They also expect that their loved ones' bodies will be 
respected throughout the tissue recovery process and that the 
tissue will be treated with the dignity and respect reflecting 
the generous gift that it is.
    The process by which tissue banks obtain consent, 
unfortunately, has not always worked well. For example, a 
tissue recovery technician in Arizona removed a deceased 
donor's leg bone without obtaining consent and then falsified 
the records to cover it up. While this may be an extreme case, 
there are other troubling examples of inadequate information 
being provided to donor families.
    As a lucrative tissue market has developed with medical 
breakthroughs making possible new ways to use tissue, 
competition for tissue has increased dramatically. By some 
accounts, a single donor can yield more than $200,000 in 
revenue to tissue banks. Tissue banks make this money not by 
selling human tissue, which is illegal, but by charging 
processing fees to the recipients of this material. Some tissue 
banks have charged others with making misrepresentations and 
with concealing information from potential donor families.
    In response to these concerns about safety, oversight, and 
consent, last year, my Subcommittee colleague, Senator Durbin, 
and I asked Health and Human Services Secretary Donna Shalala 
to undertake a review of the tissue industry. Today, we will 
hear from the HHS Office of Inspector General about the results 
of that investigation.
    This morning's hearing will examine many complex issues 
related to the tissue bank industry and to the adequacy of 
current and proposed regulatory oversight. We will hear from 
representatives of the FDA and a private accreditation 
organization working to ensure the safety of our tissue supply. 
We will also hear from experts who have firsthand knowledge of 
tissue banks and their operations. Finally, we will discuss 
ways to improve the tissue bank industry so that tissue 
recipients can have confidence that the tissue supply is safe 
and donor families can be assured that their concerns are 
respected.
    I look forward to the testimony of all of our witnesses 
today and to learning more about this very important issue.
    I would now like to recognize my colleague, Senator Levin, 
for any opening remarks that he might have.

               OPENING STATEMENT OF SENATOR LEVIN

    Senator Levin. Madam Chairman, thank you. Today's hearing 
will address a sensitive and important subject: Human tissue 
banking and the regulation, or the lack of regulation, of the 
tissue bank industry.
    First, I want to thank Chairman Collins and Senator Durbin 
for their leadership in this area. We are here today because of 
their initiative and I think the Nation is in their debt 
because of it.
    Human tissue is an important resource for medical 
treatment. It is used, for example, for reconstructive surgery, 
cancer care, cornea transplants, burn treatment, and heart 
valve replacement. Recent strides in medical technology have 
expanded the use and value of human tissue, and as the demand 
for human tissue increases, we must ensure that appropriate 
safeguards are in place for humane and safe handling.
    Today's hearing will address some of the problems that have 
arisen in the tissue bank industry, which has been subject to 
only limited regulation. The lack of regulation is surprising 
to me, since organ donation is significantly regulated and 
since both organ donation and tissue banks involve the handling 
of human bodies.
    Moreover, unlike entities involved in organ donation, which 
are non-profit, tissue bank recoverers use for-profit tissue 
processing companies to process the human tissue. There are 
reports that some of the non-profit tissue banks may be 
receiving money from the for-profit processing companies in 
order to get exclusive rights to the tissue from a particular 
tissue bank.
    The last thing we want is a bidding war for human tissue. 
Apparently, the processing of the tissue and the development of 
the technology for the processing of the tissue requires for-
profit participation, or at least it has done so up to now, and 
the result is a tension between the concerns about the 
appropriate treatment of human tissue and the for-profit 
incentives of the companies involved. To date, the FDA has not 
directly addressed this potential problem.
    A number of other disturbing stories involving tissue banks 
have been reported in the press recently. One witness 
testifying today, the medical examiner for Lake County, 
Florida, said she cut ties to a non-profit tissue bank with 
ties to a for-profit company in Florida because she was 
disturbed by the financial issues and the way the bank's 
technicians treated donors' bodies.
    Concerns have been raised over the possible transmission of 
communicable diseases through tissue banks. Some news reports 
have indicated that human tissue with CJD, or what we call 
``mad cow disease,'' imported into this country from Germany, 
was transplanted into U.S. patients in the early 1990's.
    In another instance, after a 19-year-old Arizona woman died 
in a car crash, the family agreed to donate body parts to a 
tissue bank but expressly refused to authorize bone removal. 
The tissue bank admitted in court records to altering 
documents, making it appear as if consent to take bone from the 
woman had been given. The bones were returned after a 2-year 
legal fight, and her father said the following: ``Instead of 
having some closure after her death, it just became an unending 
saga. It was like she was dying over and over again.''
    The Los Angeles County Coroner's Office was found to be 
giving away or selling hundreds of organs and tissue from 
accident and homicide victims. The body parts were sent to 
researchers without ever seeking the consent of the families. 
As a result, in September 2000, California enacted legislation 
which bans county coroners from giving researchers body parts 
from accident and homicide victims without family permission.
    The FDA has reacted by proposing two new rules governing 
tissue banks, one which mandates increased disease screening 
and testing for tissue donors, and one which requires that 
tissue banks follow a good tissue practice standard. The FDA 
also finalized a rule in January of this year which requires 
the registration of all tissue banks. Prior to that 
registration rule, which was initially proposed in 1998 and was 
not finalized until this year, we had no idea how many tissue 
banks existed. I am hopeful that the FDA will expedite the two 
proposed rules so that it will not take as long as the 
registration rule, and today one of the questions we are going 
to ask is: Why has it taken the FDA so long?
    My own State of Michigan appears to have a good system in 
place that could serve as a model for the rest of the Nation. 
Instead of competing tissue banks in our State, Michigan has 
one federally-designated Organ Procurement Organization, the 
Gift of Life Agency, which also recovers tissue. The non-profit 
Gift of Life Agency is affiliated with the non-profit Michigan 
Eye Bank, which recovers only eye tissue, so that these 
entities work together and do not compete with each other. In 
many States, there are numerous tissue banks which end up 
competing for human tissue, and it seems to me that this is a 
source of a problem. I think we should be looking at ways to 
encourage States to move towards the Michigan model.
    One thing this hearing should not do, and must not do, is 
discourage people in any way from becoming tissue and organ 
donors. Organ and tissue donors provide the most important gift 
in the world to their recipients--the Gift of Life. A half-
million people or more each year rely on tissue transplants. A 
few unscrupulous tissue bank businesses should not be allowed 
to harm a life-giving and a life-improving medical therapy. 
Today's hearing can show us how appropriate regulation can 
inspire confidence in the public, and hopefully inspire more 
people to offer life-preserving tissue and organs after their 
own deaths.
    Again, I want to commend our Chairman and also Senator 
Durbin, whose leadership in this area has brought us to this 
point today and hopefully will lead to some additional advances 
in this important area.
    Senator Collins. Thank you, Senator Levin.
    I am now pleased to call upon Senator Durbin. As I 
mentioned in my opening statement, it is in large measure 
through his interest in the oversight of the tissue industry 
that the Subcommittee has begun its investigation in this area, 
so Senator Durbin, I am pleased you can join us.

              OPENING STATEMENT OF SENATOR DURBIN

    Senator Durbin. Thank you very much. I want to thank 
Senator Collins. When I raised this issue with her, she was 
immediately interested in it and looked into it and shared my 
belief that this is something that we need to address in 
Washington. Her staff has done an excellent job putting 
together the hearing on this topic today.
    I am concerned about the safety and the ethical oversight 
of the tissue donation system. It should be of interest to 
every single one of us.
    Last year, 6,000 people died while waiting for an organ 
donation. There are over 75,000 on a waiting list for possible 
life-saving organ transplants. While 6,000 people donated 
organs, another 20,000 tissue donations were obtained. The 
public and donor families do not usually differentiate between 
the two. They expect that both donations will serve a medical 
or a medical research purpose and will enhance, or in the case 
of organ donations, possibly even save, a recipient's life.
    My attention to this issue was called by a series in the 
Chicago Tribune, and then I read subsequent to that a series in 
the Orange County Register. In each case, they outlined some 
very serious policy concerns. I am going to submit my entire 
statement for the record, but I want to make this point as 
clear as I can.
    A decade ago, the tissue industry's revenues were $20 
million a year. By 2003, they are expected to reach $1 billion. 
I think we have a special responsibility in Washington, when it 
comes to setting down rules, to make sure that there are no 
abuses in this industry. I cannot even express strongly enough 
my concern if we undermine the integrity of organ and tissue 
donation by not accepting our Federal responsibility. People 
need to understand that when they are making these selfless 
gifts, that they are not doing it for a commercial purpose 
unless they expressly make that decision, and to do otherwise 
is, I am afraid, to discourage exactly what we should 
encourage, namely organ donations. I hope that the results of 
these hearings and some of the things that are brought forward 
will help us reach some changes in policy.
    I was happy last year when this first came up to call in 
then-Secretary Shalala and she agreed to take a look at this 
issue as quickly as possible. It was a bipartisan request. This 
should be a bipartisan issue. I do not think there is a 
Democratic or Republican approach to this. Any single one of 
us, Independents alike, could end up needing a tissue or organ 
donation and we have to make certain that we have policies that 
serve this country.
    I want to thank again the Chairman of this Subcommittee for 
her response to this issue. It is going to be something, I 
think, of great value in years to come. Thank you.
    Senator Collins. Thank you, Senator Durbin.
    [The prepared opening statement of Senator Durbin follows:]

              PREPARED OPENING STATEMENT OF SENATOR DURBIN

    I want to start by thanking my colleague, Senator Collins and her 
staff for putting together a hearing on this topic today. Both the 
safety and ethical oversight of the tissue donation system is clearly 
of great interest to many including myself. It is essential that the 
public have faith in the integrity of this system.
    Last year more than 6,000 people died while waiting for an organ 
donation and there are more than 75,000 on a waiting list for a 
possibly life-saving organ transplant. While 6,000 people donated 
organs, another 20,000 tissue donations were obtained. The public and 
donor families do not generally differentiate between organ and tissue 
donation. They expect that both donations will serve a medical or 
medical research purpose and will enhance, or in the case of organ 
donations, possibly save a recipient's life.
    My interest in the tissue industry originally stemmed from some 
news articles I read last year in the Chicago Tribune. The articles 
show the ever increasing commercialization of the tissue industry. What 
for donor families is an altruistic ``Gift of Life'' has become for 
others a multimillion dollar business.
    A decade ago, the tissue industry's revenues were $20 million a 
year. By 2003, they are expected to reach $1 billion. While it is 
illegal under Federal law to buy or sell either an organ or tissue for 
transplantation and it is illegal to buy or sell fetal tissue for any 
purpose, a tissue bank or processor may make a profit on ancillary 
services such as transportation, processing, etc. The Chicago Tribune 
and The Orange County Register reported that the tissue from one body 
could yield up to $230,000 in revenue for a company.
    Because of the profitability of tissue, a fierce competition has 
broken out between companies seeking access to donated tissue. Some of 
the methods used to, in essence, steer donations to a given tissue 
company, I believe, make many of us very uneasy. For instance, 
according to the Chicago Tribune, the head of the University of 
Wisconsin Hospitals, Robert Hoffmann, was found to have been paid by a 
company called Allograft, a tissue bank that Hoffmann helped create and 
that received donated tissue from the university hospital. In 1996, 
Hoffmann arranged to have the tissue harvested from hospital patients 
delivered to the American Red Cross. In return, the Red Cross paid him 
personally for those services. Two years later, several Red Cross 
employees, aided by Hoffmann, set up their own non-profit tissue bank, 
Allograft Resources. The hospital's donated tissue was then sent to 
Allograft rather than the Red Cross and Hoffmann continued to receive a 
fee. When this information was made public, Hoffmann eventually agreed 
to pay his $86,000 in fees to the university for ``organ donation 
education.''
    Other examples reported in the media tell of medical examiners 
receiving large sums of money in exchange for directing donations to a 
particular tissue business. For example, a second Chicago Tribune 
article reported that a Texas medical examiner was receiving $47,000 a 
year from tissue banks and his assistants also received $50 from the 
tissue bank each time they obtained a family's consent to harvest 
tissue. These payments basically are like ``bounty payments.''
    While donor families believe, in general, that the donations will 
go to medically necessary transplantation, the profitability of 
cosmetic uses is often higher and so a significant quantity of tissue 
is instead being processed for cosmetic uses such as lip enhancement, 
penile implants and face lifts. Donor families do not generally receive 
an opportunity to direct the donation to medically necessary uses 
including reconstructive uses, rather than cosmetic uses.
    At the same time, both the Chicago Tribune and The Orange County 
Register suggest that there have been shortages of skin for burn 
victims. In fact, the American Association of Tissue Banks and the 
American Burn Association surveyed their members involved in burn 
repair and found that shortages do exist, with surgeons sometimes 
having to delay surgery or to modify it to accommodate a smaller tissue 
sample.
    While we have, as a Nation, an allocation system for organs based 
on medical necessity, we have no similar system for tissue 
distribution.
    Likewise, we require that all organs be procured by non-profit 
Organ Procurement Organizations and we also require them to have 
representatives of transplant centers, voluntary health associations, 
and the general public on their board of directors. No such requirement 
exists for tissue procurers.
    As the Inspector General will, I believe, talk about in his 
testimony, tissue donation is often solicited by phone and the 
requesters tend to be far less trained than those used by Organ 
Procurement Organizations. Donor families often do not receive much 
information about the uses that the donation will be put to, nor do 
they receive information about the companies who will be getting the 
tissue and the financial arrangements of those companies. This lack of 
transparency, can undermine the public trust.
    Donated tissue can provide a fantastic therapeutic value to 
patients, whether it be for repairing burns, or for reconstructing 
those who have been injured or who have congenital problems. Many in 
the industry work extremely hard to ensure that they meet the highest 
standards. The American Association for Tissue Banks has a voluntary 
accreditation process that sets a high standard and it has also 
developed in collaboration with the Eye Bank Association of America and 
the Association of Organ Procurement Organizations, a model for 
appropriate informed consent.
    Unfortunately, only 40 percent of the tissue banks or processors 
are members of AATB. Many of the largest for-profit companies choose 
not to be members.
    In fact, FDA does not even know who all the companies are that are 
involved with tissue processing. FDA clearly cannot be inspecting those 
whose existence they are unaware of. When FDA has done inspections, in 
some instances, it has found very serious deficiencies in the areas of 
screening for diseases such as HIV and Hepatitis. It seems likely that 
those who are not inspected may well also have similar deficiencies.
    All of these problems led me to invite the previous Secretary of 
HHS to meet with me and several other Senators last year. Secretary 
Shalala met with Senators Wyden, Santorum, and me. After that meeting, 
the Secretary directed the Inspector General to perform the two 
investigations that the IG is discussing today.
    Those meetings also led the Secretary to direct the FDA to speed up 
the implementation of its new regulations. One regulation requires all 
tissue companies to register with the FDA and to list the types of 
products that they process. This will allow the FDA finally to be in a 
position to inspect all facilities with some regularity. The other 
rules that are in varying degrees of implementation will require 
increased scrutiny regarding donor suitability and, for the first time, 
``good manufacturing practices.''
    All of these new rules cost money. Currently, the FDA has been 
using money from other programs to pay for these new rules. It seems 
unwise to be robbing one good program to pay for another. Therefore, I 
asked FDA in January to provide me with budget details regarding how 
much money will be needed to implement these new rules. It is now late 
May and I still have not received an answer. It is difficult to help 
the agency get the resources it needs if it does not respond in a 
timely manner.
    I agree with the Inspector General's recommendations that FDA needs 
to move forward more aggressively to inspect all facilities and to 
establish a regular inspection process.
    I also have been concerned with the issue of prion diseases and 
have been working in the food safety area to minimize the likelihood of 
transmission of ``mad cow disease'' and the human counterpart, vCJD.
    Similar issues arise in the tissue field. Twelve years ago, Japan 
had a terrible problem with the transmission of CJD due to the mixing 
or pooling of tissue samples. This led AATB to prohibit pooling or 
batching for its members. Given that there is no known effective manner 
to deactivate prions, I am glad to see that the new FDA rules prohibit 
pooling or batching. Clearly mixing tissue samples from multiple donors 
significantly increases the risk of disease transmission.
    Since tissue transplantation is generally not done in a medically 
urgent setting and is life-enhancing rather than life-saving, it is 
very important that it not put a patient at additional risk for a 
horrible and ultimately lethal disease such as CJD.
    The only reason to batch-process tissue is to save money by using 
economies of scale. There is no therapeutic value to batch processing.
    I hope the FDA will remain firmly opposed to pooling or batch-
processing and will not get pressured by any company looking at its 
bottom line into sacrificing human health and safety.
    The issues involved in this area are very complex but it is now 
abundantly clear that business as usual is undermining the public's 
trust in the donation system. We need to move forward quickly to 
develop solutions to restore that trust.
    This hearing should provide a good start for the Subcommittee to 
examine the issue and get input from those familiar with the tissue 
industry, so that we can make improvements in the upcoming weeks.
    I want to thank again, my colleague, Senator Collins, for arranging 
this hearing and starting this very important dialogue. Our offices are 
currently working on legislation to encourage organ donation and I hope 
that we will also work together to craft solutions to improve the 
tissue system.

    Senator Collins. I would like to inform all of our 
witnesses that we will be using a timing system today. Your 
complete written statements will be placed in the hearing 
record. You will be given 10 minutes for your initial 
presentation and there will be a light system. When the light 
turns to orange, you have only 1 minute to sum up.
    I would now like to call upon our first witness this 
morning, who is George Grob. He serves as the Deputy Inspector 
General for Evaluation and Inspections of the Office of 
Inspector General within the Department of Health and Human 
Services. Mr. Grob has been with the Office of Inspector 
General since 1988 and he will testify regarding the findings 
in the Inspector General's reports on the tissue industry, 
which are entitled, ``Oversight of Tissue Banking and Informed 
Consent in Tissue Donation.'' \1\ We are very pleased to have 
you with us this morning. We look forward to your testimony.
---------------------------------------------------------------------------
    \1\ See Exhibits No. 9 and 10 which appear in the Appendix on pages 
135 and 166 respectively.
---------------------------------------------------------------------------
    Pursuant to Rule 6, all witnesses who testify are required 
to be sworn in, so at this time, I would ask that you stand to 
take the oath.
    Do you swear that the testimony you are about to give to 
the Subcommittee will be the truth, the whole truth, and 
nothing but the truth, so help you, God?
    Mr. Grob. I do.
    Senator Collins. Thank you.

 TESTIMONY OF GEORGE F. GROB,\2\ DEPUTY INSPECTOR GENERAL FOR 
 EVALUATION AND INSPECTIONS, OFFICE OF THE INSPECTOR GENERAL, 
  U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES, WASHINGTON, DC

    Mr. Grob. Good morning, Madam Chairman and Senators Levin 
and Durbin. It is a pleasure to be here, and I must begin my 
remarks by saying that the opening remarks of all the Members 
have covered all the ground that I was going to speak to today 
in a very thorough way, so if you do not mind, I will repeat to 
emphasize some of the points that you made and keep my remarks 
short, hoping that we can cover more ground in the questions 
and answers, which then may be more penetrating.
---------------------------------------------------------------------------
    \2\ The prepared statement of Mr. Grob appears in the Appendix on 
page 49.
---------------------------------------------------------------------------
    Human tissue in the form of skin, bone, heart valves, eyes, 
cells, and the like, is an important source of treatment, 
benefitting thousands of Americans every year. For example, 
donated skin can save the lives of burn victims. Donated bone 
can replace cancerous bone and be used in knee and hip 
replacements and for spinal surgery. As noted by the Chairman, 
there has been a very rapid growth in this industry, which is 
fortunate. The availability of these tissues is increasing year 
by year.
    But there are other changes underway, as well. Processing 
has become more sophisticated and tissue is being put to new 
uses. At the same time, the field is becoming more 
entrepreneurial. For-profit firms are increasingly entering an 
arena that was once dominated by nonprofit agencies. I wish to 
emphasize that I do not intend this last remark to be taken 
negatively. In fact, this may account for and contribute 
positively to the development of new products and treatments.
    However, as promising as these new trends are, the 
standards of practice have not kept pace with the growth and 
development of the industry. As a result, some donor families 
have been confused and disappointed by the treatment and 
disposition of the remains of their loved ones, and questions 
have been raised about the quality, safety, and supply of human 
tissue.
    When these issues emerged last year, Secretary Shalala 
asked the Office of Inspector General to examine the oversight 
mechanisms and the processes whereby donors and their families 
are approached for donation. We issued two reports in January, 
and I believe you all have copies. At the time of our study, 
the fall of the year 2000, we found shortcomings in both 
aspects of the service sector.
    First, with respect to oversight, the Food and Drug 
Administration focuses on preventing the transmission of 
communicable diseases by requiring donor screening and tissue 
testing. We found that the FDA had designed and was 
implementing an oversight system that was fundamentally sound. 
However, due to resource constraints, it was unable to sustain 
its program. Since 1993, it had inspected 118 banks. During 
this period, 68 had only been inspected once instead of every 2 
years, and we found another 36 that had never been inspected. 
Late-breaking developments show us that there were perhaps 
twice as many who were totally unknown, and, in fact, we found 
that at that time, the number and location of all tissue banks 
was unknown.
    Also because of resource limitations, several key 
regulations which were under development had not been 
finalized.
    The American Association of Tissue Banks conducts a 
voluntary accreditation program. In addition to screening and 
testing, it addresses operational practices and organizational 
aspects of tissue banking, including safety, equipment testing, 
labeling, and quality assurance programs. However, at the time 
of our study, it had accredited only 58 tissue banks. Another 
90 that we knew of at that time were not accredited.
    Florida and New York are the only two States that inspect 
tissue banks. Their requirements address a broad range of 
practices and also require that banks report adverse incidents. 
However, they only inspect those banks that do business within 
their jurisdiction.
    With respect to donor concerns, the expectations and 
altruistic motives of donors and their families are the 
foundation of tissue banking. There would be no tissue 
transplantation without them. Their concerns, then, are vitally 
important. Their assumptions and desires are that donated 
tissue will enhance the lives of others; the donor will be 
respected throughout the process, from recovery to use; the 
gift will be recognized as coming from donated human tissue; 
family emotional needs will be respected; the tissue banking 
industry can be trusted and will act as stewards of the gift.
    The reality of tissue banking raises some underlying 
tensions with regard to these assumptions. These arise from the 
commercialization of the service sector, the appearance of 
tissue being treated as a commodity, and the use of tissue for 
cosmetic purposes.
    The key to meeting the donors' concerns is information and 
their informed consent, but the circumstances during which the 
request is made present fundamental obstacles to this. It is 
the generous gift of these donors that makes it possible, but 
it occurs within hours of the death of a loved one.
    We found shortcomings in the oversight of requesters and in 
the written information provided to families. More importantly, 
at the time of our study, there were no standards or written 
principles governing the manner in which the request is made 
and informed consent obtained. Also, at the beginning of our 
study, there was no knowledge of the adequacy of supply of 
tissues, particularly of human skin. Subsequently and during 
the course of our study, we learned that the supply of skin for 
burn victims was somewhat tight.
    Our reports include recommendations to address the 
shortcomings that we found. During our study and since then, 
progress was made in addressing them. FDA is now beginning to 
inspect all known tissue banks. The regulation requiring the 
registration of banks and their products was issued in January, 
and since then, identification of a large number of tissue 
banks previously unknown has occurred. A draft regulation on 
good tissue handling practices was issued for comment, and 
comments on a draft regulation on donor suitability and tissue 
testing are now under review.
    Both industry groups and donor family groups have issued 
statements of principles to govern the informed consent 
process. The American Association of Tissue Banks and the 
American Burn Association have conducted surveys to determine 
the adequacy of the supply of skin.
    In short, progress is being made, but gaps remain. The 
tissue banking and transplantation industry has moved from its 
infancy to its adolescence. It is full of promise, but it is 
experiencing some significant growing pains. I hope our studies 
will be helpful in getting it through the stage, and I will be 
happy to answer your questions.
    Senator Collins. Thank you very much, Mr. Grob.
    In one of your reports, you noted that at least 36 tissue 
banks had never been inspected by the FDA, is that correct?
    Mr. Grob. That is right.
    Senator Collins. Now, what universe of banks were you 
dealing with at that point? How many, about 118 or so?
    Mr. Grob. About 150.
    Senator Collins. A hundred-and-fifty?
    Mr. Grob. Yes.
    Senator Collins. We have recently learned that more than 
350 tissue banks have registered with the FDA pursuant to the 
new regulation.
    Mr. Grob. Yes.
    Senator Collins. So what does that suggest when you were 
looking at 150 tissue banks, which presumably were all the 
tissue banks that you were able to locate by using various 
sources, like the FDA, the two States that regulate, is that 
correct?
    Mr. Grob. Yes, and a few other States that license them, 
wherever we could find it.
    Senator Collins. And you came up with a universe of 150, 
about.
    Mr. Grob. Or so, yes.
    Senator Collins. And yet out of those, you found that there 
were at least 36 that had never been inspected. Now we find out 
that there are something like 350----
    Mr. Grob. Yes.
    Senator Collins [continuing]. Tissue banks. Does that not 
suggest that there are literally scores of tissue banks that 
have been operating with no Federal oversight whatsoever?
    Mr. Grob. Or State oversight, or any oversight by the 
industry accreditation group. And the significance of that, if 
I could point out, is that when the Food and Drug 
Administration conducts its inspections, and when the American 
Association of Tissue Banks conducts its accreditation reviews, 
they do find problems and some of them are significant. So we 
have to assume that if they find problems in the banks that 
they inspect, then there are probably those same problems, if 
not more of them, in the banks that have never been inspected.
    Senator Collins. I think that is an excellent point, and 
that is what troubles me, as well, is that it appears that 
there are scores of tissue banks that have been operating with 
no oversight whatsoever, not by the FDA, not by the States, and 
not by the private accreditation group, and yet in those tissue 
banks that were known to FDA, there were still problems. It 
seems to me it is more likely that there will be even greater 
problems in the ones that no one was really aware of or 
watching over. Could you tell us about some of the inspections 
that the FDA has conducted and what they revealed?
    Mr. Grob. Where they found problems--they found problems in 
about half of the banks that they reviewed, and some of these 
were serious problems that required official action. Examples 
of that might have been cases where contamination had been 
noted, a bank that might not have been able to successfully 
recall tissue that needed to be recalled. There might have been 
some problems where they could not track the tissue back to the 
source, which, of course, is necessary to ensure that it is 
safe. And then a couple of cases where we had what you might 
call repeated testing to come up with the right result. In 
other words, if the testing is positive----
    Senator Collins. Can you explain that?
    Mr. Grob. The testing might be positive for some 
contamination. What you might then do is try to keep testing it 
until the result is negative, and then at that----
    Senator Collins. Let me stop you here to make sure I 
understand. This case, this repeating testing, where the first 
test of the tissue indicates that there is a problem.
    Mr. Grob. Yes.
    Senator Collins. It is contaminated or there is some other 
disqualifying result that has occurred in the testing.
    Mr. Grob. Exactly.
    Senator Collins. So instead of that tissue being discarded 
and taken out of the tissue supply, are you telling us that 
what happens is the technician just repeats the test until they 
get the result that they want?
    Mr. Grob. Yes, exactly.
    Senator Collins. That strikes me as an extremely dangerous 
practice.
    Mr. Grob. I would think so, yes.
    Senator Collins. Could you tell us, also, were there cases 
of tissue banks that failed to assure sterility of the tissue 
and lacked operating procedures to prevent cross-contamination?
    Mr. Grob. That is probably true. Now, the Food and Drug 
Administration's inspections are primarily related right now to 
the transmission to HIV and hepatitis, and their inspections 
then would look at such things as whether there are records 
that enable the tissue bank to be sure that the donor had been 
properly screened, and then whether there had been proper 
testing for those diseases, and, of course, for the general 
handling of the tissues to prevent their further contamination 
in the tissue bank.
    So some of those general things that they would have to 
look at would apply to other diseases, as well, but their look 
right now is limited only to those two. The good practices 
regulation, which has recently issued in draft form, would 
provide additional protection for a variety of ways the tissue 
is handled and the way the tissue bank is run and things of 
this nature.
    So right now, the Food and Drug Administration's 
inspections are more limited. For example, they are more 
limited now than the kind of review that is done by the 
accreditation association or by the States of Florida and New 
York, which have a broader set of requirements. Now, the 
requirements of the Food and Drug Administration will catch up 
with those and probably surpass them in detail when their new 
regulation is issued in final.
    Senator Collins. How extensive is the accreditation process 
by the American Association of Tissue Banks?
    Mr. Grob. Well, at the time we did the study, I think it 
was 58 banks that were accredited out of what we now know to be 
more than 350 tissue banks.
    Senator Collins. So while those 50 to 75, let us say, 
because I think it has gone up recently, banks may be held to 
higher standards----
    Mr. Grob. Right.
    Senator Collins [continuing]. Than even with the FDA 
standards----
    Mr. Grob. Yes, right now.
    Senator Collins [continuing]. There is still a vast 
universe of banks that are not accredited by the private 
organization, is that correct?
    Mr. Grob. Yes. If we were doing our study today, the 
finding would have been that we found that FDA had inspected 
118 banks but there were 350 total. I mean, the numbers would 
be very different, because at that time, the numbers were 
simply not known. The same thing is true for the accreditation. 
The accreditation is purely voluntary and there are lots of 
issues about that in the sense that you have to look to the 
motives of the banks to see if they have any motivation to 
become accredited.
    Senator Collins. Should the Federal Government or State 
Governments be encouraging accreditation by this private 
organization?
    Mr. Grob. It is my opinion that there should be an 
encouragement for accreditation by any suitable accreditor. The 
American Association of Tissue Banks certainly is doing that. 
Others could do it as well, or could be formed to do it.
    But I do think it is important to point out the differences 
between the FDA review and the accreditation. While they 
currently do not overlap, they both serve important purposes. 
For example, the accreditation association cannot do things 
like force a recall, take action against someone who has not 
been performing properly, things of this nature. So it does not 
have that enforcement authority that the FDA has.
    My own opinion is that some combination of the two is 
always better than just doing one, and to that extent, then I 
believe that it should be encouraged. Accreditation is used in 
many other health care sectors effectively, but I do not think 
it would be a substitute for the FDA inspection in this case.
    Senator Collins. I agree with you. You found tissue banks 
that had been refused accreditation by the American Association 
of Tissue Banks, is that correct?
    Mr. Grob. That is correct. Right.
    Senator Collins. Did anything happen to those banks that 
were turned down? Was there any sort of referral to FDA? Does 
FDA place those banks that were denied accreditation under more 
scrutiny?
    Mr. Grob. No, I do not think so. I think that--although you 
might want to check with your FDA witness on that particular 
point. But as a general rule, the answer to your question is 
that those banks that are not accredited are free to operate 
without having to follow any of the rules that they would have 
had to follow had they been accredited.
    Senator Collins. So there are no restrictions or they are 
allowed to engage in the same kind of practices as those that 
successfully sought and obtained accreditation.
    Mr. Grob. Right, only if they were violative of the FDA 
communicable disease standards.
    Senator Collins. In your judgment, to ensure public safety, 
how often should the FDA be inspecting a tissue bank?
    Mr. Grob. I would leave that up to FDA. Now, they have told 
us and in various places they have suggested every 2 years, 
which is why I referred to that. Other inspection programs or 
accreditation programs, if you look at hospitals and home 
health agencies and nursing homes, range from 1 to 3 years. So 
2 years certainly seems to be well within the range of practice 
in the health industry.
    Senator Collins. And of the inspections that you found that 
FDA had done, I think it was 188 inspections of 118 tissue 
banks----
    Mr. Grob. Yes.
    Senator Collins [continuing]. What kind of time cycle were 
those banks on? Were they being inspected once every 2 years, 
or did it vary greatly?
    Mr. Grob. It varied greatly, and as I said, only 68 had 
ever been inspected more than once, and that was data that went 
back to 1993.
    Senator Collins. Mr. Grob, is there a difference between 
the informed consent procedures for organ donations versus 
tissue donations?
    Mr. Grob. I think in principle, they are very similar, but 
in practice, there are some significant differences. For organ 
donation, all the requesting must be done by the organ 
procurement organizations who do this constantly or by a 
hospital or other personnel whom they train, whereas in the 
tissue business, some OPOs may be involved sometime, but in 
many cases, and probably more commonly, the requesting would be 
done by representatives of the tissue banking industry or 
different groups that work for them for this purpose. So the 
requesting that is done by different groups and the level of 
training, therefore, would be very, very different and not as 
consistent in the tissue banking industry at this time.
    Another difference, I think that is central here, has to do 
with the circumstances. Generally speaking, for an organ 
transplant, the patient would have had a close connection to 
the hospital right before the time of the consent, because, 
generally speaking, we are talking about a patient who is brain 
dead and so they are under the close supervision of the 
hospital. And so as a result of that, the organ procurement 
organization may have had communication with the family for 
several days or even a longer period of time before the actual 
consent is reached, whereas for the tissue patient, that is not 
limited to brain death. It could be a car accident or something 
and the family must be approached within hours of the death.
    I must say that the tissue banking has quite a challenge in 
this respect, to balance the desire of the family for some 
privacy or information and the circumstances. Often they, for 
example, will make the request by telephone instead of at the 
hospital, and that may be out of the respect for the family, 
who may want to get back to its home setting before they are 
asked.
    So there is not an easy answer to that, but because it has 
to occur within hours of the death, it makes it difficult, and 
that also causes some of the difference.
    Senator Collins. Thank you. My time has expired. Senator 
Levin.
    Senator Levin. Thank you, Madam Chairman.
    The National Organ Transplant Act forbids the selling of 
organs and tissues. However, the Act does permit a reasonable 
payment which is associated with the removal, transportation, 
implantation, processing, preservation, quality control, and 
storage.
    Mr. Grob. Yes.
    Senator Levin. We have heard stories, however, that there 
have been grants that have been made to some of the tissue 
banks that do the recovering of the tissue, that some of the 
profit-making processors that seek that tissue for processing 
have made some form of grant to some of the tissue banks that 
have done the recovering, which are usually not-for-profit in 
theory. Have you also run into those kind of stories?
    Mr. Grob. This issue of the profit making and the place at 
which there is a transaction of anything of worth was one of 
the issues that we struggled with more than any other, and I 
think I would have to report to you right now that the struggle 
continues, because I do not think that there is a consensus on 
exactly what should be done with regard to trying to govern in 
any way the transactions that occur during this period. So if I 
may, in this case, what I would prefer to do would just be to 
share with you some thoughts or ideas that we have talked about 
among ourselves and that might shed some light on this.
    Certainly, the intention of that Act was to prevent any 
individual from offering his or her tissue for sale or for 
anyone to approach an individual and offer to buy it from them, 
and in our discussions, there has been almost universal 
agreement on that point. What happens after that, though, is 
that the tissue needs to be handled in various ways, and I 
think that as the Act is written, certainly allows, as you 
said, for the reasonable payment of almost anything that occurs 
after that point in the sense that there is a storage or a 
handling or a transportation that occurs at almost every level 
there.
    So really, in terms of the law, the issue turns to the 
question of what is reasonable. How much is a reasonable 
amount? In talking to donors, we found that they were not 
upset, generally speaking, many of them, with the notion that a 
profit could be made in those middle transactions or that money 
should be paid, but they certainly did not want excessive 
profiteering. But there was no way for any of us to get a 
handle on exactly what is excessive. One could look at the 
profits that a company makes, but big companies make a lot more 
profit than small ones do, for example, and it is very 
difficult to second-guess the cost that a company incurs 
because of all the overhead that goes into the company's 
operation.
    We could think of no practical way to track that. We do not 
even know where the tissue goes right now. There is not even a 
way to sort out and track what happens to the tissue. And with 
the modern tissue banking industry, there are so many new 
processes coming into play all the time that it is difficult to 
even define the stages through which the tissue is going. And 
if one were to try to track it and consider what the price for 
that would be, any system you put into effect would probably be 
inaccurate within a few months of your doing it because of the 
changes that are occurring in the industry. And furthermore, 
there has been a long tradition of not establishing price 
limits for most products in the United States, including in the 
health care industry.
    So we were unable to come up with any practical way to deal 
with what I think is a very fundamental concern, and I think 
Senator Collins referred to this in her opening remarks, about 
the expectation that the tissue would not be used for 
commercialization, that it would be donated for the benefit of 
someone else, a very difficult thing.
    As far as we were able to take it in our own thinking, the 
key to it was information. Now, we think that the donors can 
make up their own minds about what to do, or at least could do 
that better, if they had more information than they have now, 
and we believe that information should occur at two times, once 
when the donation is being requested. The donor at that time 
may not be interested in those details, but there certainly is 
nothing wrong with providing written information that could be 
considered later, or perhaps in some cases it could be 
considered somewhat in advance if death is imminent.
    But above and beyond that, a more general form of 
information to inform the public about the donation process in 
general and perhaps about the companies involved in particular 
would be useful, perhaps an annual or periodic statement by 
these companies indicating their sources of revenue, the uses 
to which they put the tissue, things of this nature that could 
be out there, so that as people become more informed about 
tissue banking and tissue donation, they could look to those 
documents, much as they look to the annual statements of 
nonprofit agencies who produce an annual statement of what 
happens to their funds, and then they can decide whether they 
want to donate to a particular agency or not. Perhaps a similar 
thing could be beneficial in this industry, as well.
    So I am sharing with you a long journey of trying to come 
to grips with that one.
    Senator Levin. Well, there is another possibility, and it 
is what is in place in my home State of Michigan, which is that 
we have one organ procurement organization, one organ and 
tissue procurement organization----
    Mr. Grob. Yes.
    Senator Levin [continuing]. So that you do not have 
competition among different organizations for the tissue.
    Mr. Grob. Yes.
    Senator Levin. And it is that competition which then can 
precipitate grants, however you want to call them, monies going 
to various nonprofit recovering entities in order to get the 
tissue into the hands of the people who are making profit here.
    Now, one thing we could do would be to modify the Federal 
law, which is to say that there is one organ procurement 
organization responsible for organ and tissue donation 
activities per region. Right now, we do that with organs, but 
not with tissue. Why not do that with tissue and take away some 
of that competitive activity which exists which could 
precipitate the commercialization of tissue donation, which is 
what we want to avoid?
    Mr. Grob. I think there are lots of possibilities. If I 
may, I would like to speak as an analyst, so I will give you 
what I regard as the pros and cons of those kinds of 
arrangements. This is a difficult policy choice to make.
    I think I can preface it by saying that, recently, organ 
procurement organizations have become more visible and active 
in tissue requesting and recovery than they were in the past. 
One reason for that seems to be that a couple of years ago, a 
law was passed that the hospitals must inform the organ 
procurement organizations of the death of patients in the 
hospital. The idea was so that they would be more alert to the 
possibility of organ donation. But what happened was as a 
result of that was that the organ procurement organizations 
became more alert for tissue recovery, as well, and as a 
result, their role in tissue recovery has greatly increased. 
And so that certainly is very much of a possibility.
    However, it still is not the case that the organ 
procurement organizations are the ones who do it all, and if 
one were to switch over to that right now, then what would 
happen would be those tissue banks that have been involved, 
including many who have been involved for many years and are 
actually pretty good at it, then they might lose ground and 
then we may lose a resource in there for the tissue.
    Now, another thing I will just have to say is that 
different people will have different opinions as to the 
usefulness of the competition. I think in an ordinary business 
world, the competition is always valuable. Now, when there are 
questions that come up about the allocation of important life-
saving tissue, then those things can be set aside, as they are 
for organs.
    Another difference, though, is this, that for organs, the 
gap between what is available and what is needed is very 
severe. The number of organs that are needed to save lives are 
several times more that are needed than are available. As far 
as we can tell, with tissue, while there is probably a gap at 
times for skin, there certainly is not a gap of that magnitude 
as there is for organs. And furthermore, for other tissue 
types, there is not necessarily a gap. For example, for eyes, 
we are not aware of any particular gap. So the tissue industry 
is more diverse and the needs are different in terms of 
allocations here, if you will.
    So, again, I think that the ideas you are presenting need 
to be on the table, as well as all kinds of other ideas. I do 
not think we see a clear shot to the goal line on this one.
    Senator Levin. Your report does not get into pooling.
    Mr. Grob. No, it does not.
    Senator Levin. I am just wondering why not.
    Mr. Grob. The pooling at that time was simply not one of 
the things that we were looking at as part of the general 
oversight of the industry. At the time that we did our report, 
there was no rule against pooling as such. The rule against 
pooling will occur when the new regulations are issued. Then it 
will certainly be a rule. Now, FDA has always looked at 
pooling, but it really was not on the table of the oversight 
system that we were looking at at the time. The States, like 
New York and Florida, have rules against pooling, and I believe 
that the American Association of Tissue Banking has, as well.
    Senator Levin. You indicated a lack of resources, I 
believe, for the inspections.
    Mr. Grob. Yes.
    Senator Levin. Is that still true? Does the FDA have 
inadequate resources?
    Mr. Grob. FDA has made it clear what their budget needs are 
for the inspection program that they design. Now, those numbers 
may be modified in light of the doubling of the number of known 
tissue banks that have come out of the recent registration of 
tissue banks. These budgets for this were recently proposed and 
I do not know the disposition of them. Any additional resources 
for this which FDA, I believe, says is in the order of $3 or $4 
million a year for what they knew of at the time they made 
those budgets, were made in the current budget session, and I 
do not know what the disposition of that is in the current 
budget.
    Senator Levin. We will find out later today. Thank you. 
Thank you, Madam Chairman.
    Senator Collins. Senator Durbin.
    Senator Durbin. Thank you very much, Madam Chairman, and 
let me follow up on that question.
    For a number of years, I have been keeping a close eye on 
the Food and Drug Administration. I cannot imagine how they can 
keep up with all of the responsibilities we send their way.
    Mr. Grob. Exactly.
    Senator Durbin. An agency which spends roughly $1 billion a 
year is just being overburdened with all sorts of new 
responsibilities----
    Mr. Grob. Yes.
    Senator Durbin [continuing]. All legitimate, as far as I am 
concerned----
    Mr. Grob. Yes.
    Senator Durbin [continuing]. But certainly beyond their 
capability with current staffing.
    Mr. Grob. Yes.
    Senator Durbin. We have to get honest about this. If we 
want the Food and Drug Administration to perform valuable 
oversight, they have to be given the resources. Otherwise, I do 
not think it is fair to hold them accountable for too few 
inspections if they do not even have the inspectors, and you 
certainly spell out in your report to us about the inadequacy 
of the inspection of these tissue banks, since 1993.
    Mr. Grob. Yes.
    Senator Durbin. Let me ask you to comment on a couple of 
things, if you might. I want to get into the issue of informed 
consent in a moment, but first, an article in the Chicago 
Tribune last year \1\ suggested that in San Antonio, Texas, the 
medical examiner's assistants were receiving $50 from a tissue 
bank each time they obtained a family's consent to harvest 
tissue. The same article also alleged that county supervisors 
took bids from tissue banks on the right to bodies collected by 
medical examiners. The winning bidder, South Texas Blood and 
Tissue Center, agreed to pay $180,000 annually. Do you think 
such payments are legal under our law that prohibits the sale 
of organ and tissue?
---------------------------------------------------------------------------
    \1\ See Exhibit No. 11.b. which appears in the Appendix on page 
220.
---------------------------------------------------------------------------
    Mr. Grob. We have not considered the question you are 
asking, but we certainly can consider that. One of the things 
that happened during the course of our study was that we became 
more aware of the role of medical examiners, which was not on 
the table at the beginning of the study, but it was one of the 
things that we began to find out more and more about as the 
study progressed. So one of the things we have done is that we 
have decided that we will be conducting a study that examines 
the role of the medical examiners.
    Senator Durbin. But in terms of the payments, did you take, 
in the course of your survey, did you review the law as it 
relates to the sale of organs and tissues and whether or not 
you can receive compensation?
    Mr. Grob. We did examine the law quite carefully when we 
began our study, and I had summarized earlier some of the 
complexities we had in trying to come to grips with that law 
and define exactly what is legal. Once the tissue leaves the 
donor family, in other words, there is no question that at the 
point where the donation is being made by the family, that 
there should be no transaction from the individual to offer a 
tissue or organ for sale or to be offered any money for 
donating either, but after that point, then the money can be 
legitimately used for almost any aspect of the handling of the 
tissue. But, I guess----
    Senator Durbin. I want to make sure it is clear, if I can.
    Mr. Grob. It is only in exchange for the business.
    Senator Durbin. I want to make sure this is clear.
    Mr. Grob. Yes.
    Senator Durbin. So that the family's decision to donate----
    Mr. Grob. Is not affected----
    Senator Durbin [continuing]. Cannot be compensated.
    Mr. Grob. Exactly.
    Senator Durbin. But beyond that, once the donation has been 
made----
    Mr. Grob. Right.
    Senator Durbin [continuing]. There can be other 
intermediaries who start to put price tags on the tissue 
involved.
    Mr. Grob. Exactly.
    Senator Durbin. Is that correct?
    Mr. Grob. That is correct. The current law, basically, it 
actually has a list of what you can do more than that which you 
cannot, and that list, just superficially, would seem to cover 
almost all the products of tissue.
    Now, an interesting question you are raising that I do not 
have any immediate answer for, and I would not want to venture 
one without consulting with others, is whether--say if the $50 
were given, if that were covering a legitimate cost of the 
other agency, then the law would allow it.
    Senator Durbin. Yes.
    Mr. Grob. But if it was simply an inducement for business, 
I do not think that that is one of the things that the law 
allows.
    Senator Durbin. Right. That is an important distinction.
    Mr. Grob. Yes.
    Senator Durbin. Cost of transport and transportation, I 
think that is allowed.
    Mr. Grob. Exactly.
    Senator Durbin. But it really does get to the heart of an 
important issue here, and that is if there is a feeling that 
somehow this selfless act of a family in donating tissues or 
organs will relate in some commercialization, I think it is 
going to inhibit a lot of people from even considering that 
possibility, and I think that we have to be very honest about 
that.
    Now, you really address that from another angle, too, when 
you talk about the consent forms.
    Mr. Grob. Yes.
    Senator Durbin. That is something that I think bears a 
little bit of scrutiny here, as well.
    Mr. Grob. Yes.
    Senator Durbin. You were suggesting that the consent forms 
be more complete in terms of telling people what is actually 
going to happen to the tissues----
    Mr. Grob. Right. Exactly.
    Senator Durbin [continuing]. Donations from their loved 
one.
    Mr. Grob. Yes.
    Senator Durbin. You also note, though, that some people 
have said, I do not want to know too much about this.
    Mr. Grob. Exactly.
    Senator Durbin. This is a very sad moment in a life, when 
someone is dying----
    Mr. Grob. Yes.
    Senator Durbin [continuing]. And you can tell me something, 
but please----
    Mr. Grob. Yes. Do not bother me with that.
    Senator Durbin [continuing]. If you get into graphic detail 
here, I cannot absorb all of this and handle it.
    Mr. Grob. Right.
    Senator Durbin. I might just walk away from the whole idea.
    Mr. Grob. Exactly.
    Senator Durbin. This is a tough balancing act, is it not?
    Mr. Grob. It is a tightrope, and if you fall off the left 
side of that tightrope or the right side, you are going to be 
in trouble. So as far as discouraging donation, it is a hard 
one.
    I think that one idea here is, and I think that the 
statement of principles that were subsequently developed by the 
industry are somewhat promising in this regard because of the 
flexibility they provide. They sort of show that here are 
things that you definitely ought to--information that ought to 
be provided to a donor, and now here are some other things that 
you may want to raise, depending on the interest of the donor. 
And that is exactly what we found. I think in our study, we 
quoted an individual who said, ``I do not want to know any more 
about it.''
    We also found mixed reaction to the point you raised about 
the commercialization. There was not such a strong reaction to 
the idea that profit would be made or that prices would be 
charged. There was concern about whether those profits would be 
excessive or not, whether there would be profiteering. But 
there was no practical way to define it and everyone had a 
different idea.
    If I could just give you an example, no one objects to the 
fact that the surgeon who implants a tissue should get a 
salary, and then similarly, you could take that concept and 
just work it back through all the other parts of the processes. 
People do seem to understand that.
    But what concerned them more is if the tissue were being 
used for some commercial purpose that they did not have in 
mind. If they thought, well, this skin will be used for burn 
victims, for example, or medical research, or even the training 
of surgeons or hospital personnel, they might say that is fine. 
But they probably might not have been thinking that it might be 
used for some form of purely cosmetic or voluntary----
    Senator Durbin. That is an important distinction.
    Mr. Grob. Yes.
    Senator Durbin. It is one that I have really tried to 
grapple with here, because if you are talking about a tissue 
donation that is going to be used by a plastic surgeon to make 
an actress more beautiful, puff up her lips or whatever happens 
to be the fashion statement of the day, as opposed to skin that 
is being used in a transplant for someone who has been a victim 
of a burn, I mean, totally different world, but both commercial 
in nature.
    Mr. Grob. Yes.
    Senator Durbin. And drawing that line honestly so that 
people know what they are getting into makes a big difference.
    Mr. Grob. Yes.
    Senator Durbin. I was shocked when I read the series in the 
Orange County Register.\1\ It had never crossed my mind as I 
got into this about the use of cadavers for test purposes. I 
just never thought about a cadaver being used as a test dummy, 
and yet it has been done.
---------------------------------------------------------------------------
    \1\ See Exhibit No. 11.a. which appears in the Appendix on page 
189.
---------------------------------------------------------------------------
    Mr. Grob. Yes.
    Senator Durbin. I am virtually certain that the person who 
made that donation, signed that consent, did not have a clue 
that that is what might happen. They were donating for 
scientific research.
    Mr. Grob. Right.
    Senator Durbin. How much should they have known about what 
was going to happen? I will not go into the graphic details 
from that series. I invite those who are interested and have 
not read it to read them----
    Mr. Grob. That is right.
    Senator Durbin [continuing]. Because they are troubling, to 
think that people made these donations unaware of the lengths 
to which that donation might go.
    Mr. Grob. That is why I think that there really needs to be 
two ways in which the information is provided, one at the point 
of donation, but the other one more generally. I think that, 
for example, if I could just reflect with you for a moment, 
there are other donations we are more accustomed to. For 
example, I think most of us understand the donation of blood.
    Senator Durbin. Yes.
    Mr. Grob. And even of eyes. And over the years, we have 
been inculturated to accept this and to understand it and know 
about it, and that has grown up and we are all trained from the 
time we are very young. We are all trained about this and we 
understand this.
    The tissue that we are talking about here, though, we have 
not been inculturated about as much and there are these 
expectations or these surprises, as you were describing them, 
of what people's expectations are.
    So what I think is that we need to very gradually, but very 
concretely and very deliberately, begin to get people to 
understand that. I think there needs to be much more openness 
about all these things. Perhaps some people would be content if 
their tissue were used for cosmetic purposes. For example, for 
skin surgery, they largely need very large pieces of skin, and 
some of the smaller bits of skin may not be useful for that 
purpose but could be used, for example, for repairing blemishes 
or for some constructive type surgery of the face or other 
things and people might be totally content with that.
    So it is a complex matter and I do not think there is a 
clear rule or a clear principle, but I think what we need is 
more understanding and something that can be done to get that 
out there so people can gradually learn about this. Then they 
can make more informed decisions, I think.
    Senator Durbin. Let me ask you this. Is it true that 
current law prohibits the sale of fetal tissue for any purpose, 
but only prohibits the sale of adult tissue for 
transplantation?
    Mr. Grob. I would rather not answer because I did not 
prepare for that at all and----
    Senator Durbin. That is a fact. It raises some interesting 
questions.
    Mr. Grob. We did not--and it was with great deliberation--
did not take on anything related to reproductive tissue at all. 
The issues that were raised in the newspapers and elsewhere 
dealt with what we would call conventional tissue for 
transplant, and at the time, we were all trying to learn so 
much, just to come to grips with all of this, that it seemed 
better at the time just to keep it narrower.
    Senator Durbin. Well, thank you for your report. Thanks, 
Madam Chairman.
    Senator Collins. Thank you very much, Senator Durbin.
    Thank you, Mr. Grob. Your testimony and your work in this 
area has been very careful for the Subcommittee's analysis, and 
as we go forward, we will be in touch with you, so thank you.
    Mr. Grob. Thank you.
    Senator Collins. I would now like to welcome our second 
panel of witnesses this morning. We are pleased to have with us 
Robert Rigney, the Chief Executive Officer of the American 
Association of Tissue Banks; Dr. William Minogue, the Chairman 
of the Board of the Washington Regional Transplant Consortium; 
and Dr. Valerie Rao, the Chief Medical Examiner of the District 
Five Medical Examiner's Office in Lake County, Florida.
    Mr. Rigney was appointed as the first CEO of AATB in June 
of 1999. He has over 20 years' experience in health care 
legislation and regulation in both the public and private 
sector, and I understand actually began his career here on 
Capitol Hill, so we welcome him back to the Hill.
    Dr. Minogue began his distinguished career in private 
practice, specializing in internal medicine and cardiology, 
having served previously as the Director of Medical Education 
and then Vice President for Medical Affairs at Overlook 
Hospital in Summit, New Jersey. Dr. Minogue is now the Senior 
Vice President for Medical Affairs at Suburban Hospital in 
Bethesda, Maryland. He has also served as Chairman of a Joint 
Commission on Accreditation of Health Care Organizations task 
force.
    Dr. Rao currently serves as the Chief Medical Officer for 
several counties in the State of Florida, a position she has 
held since April of last year. She is board certified in both 
clinical pathology and forensic pathology and has 20 years of 
experience in this field. She is also now the President-Elect 
of the Florida Association of Medical Examiners.
    As I explained earlier, pursuant to the Subcommittee rules, 
all witnesses are required to be sworn in, so I would ask that 
you please stand and raise your right hand.
    Do you swear that the testimony you are about to give to 
the Subcommittee will be the truth, the whole truth, and 
nothing but the truth, so help you, God?
    Mr. Rigney. I do.
    Dr. Minogue. I do.
    Dr. Rao. I do.
    Senator Collins. Thank you.
    Mr. Rigney, we are going to start with you this morning, so 
you may proceed.

TESTIMONY OF P. ROBERT RIGNEY, JR.,\1\ CHIEF EXECUTIVE OFFICER, 
      AMERICAN ASSOCIATION OF TISSUE BANKS, WASHINGTON, DC

    Mr. Rigney. Thank you. Senator Collins and Members of the 
Subcommittee, my name is Bob Rigney. I am the Chief Executive 
Officer of the American Association of Tissue Banks. I am 
accompanied here today by our President, Dr. Richard Kagan. Dr. 
Kagan is the Medical Director of the Ohio Valley Tissue and 
Skin Center. He is also Assistant Chief of Staff at Shriners' 
Burns Hospital in Cincinnati and the Director of the University 
Hospital's Burn Special Care Unit. On behalf of our members and 
the people we serve, I want to thank you for the invitation to 
appear here. We welcome the opportunity to comment on this 
rapidly changing and critically important field of tissue 
banking and tissue transplantation.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Rigney Jr. appears in the 
Appendix on page 58.
---------------------------------------------------------------------------
    Today, human tissues are used in a host of medical 
procedures and new clinical applications are constantly being 
developed. In the past two decades, human cellular and tissue-
based products have improved and saved the lives of millions of 
our fellow citizens. It is imperative, therefore, that we do 
nothing to discourage Americans from donating their organs and 
tissues.
    Let me address the items on which you asked us to comment, 
first, the role of the AATB and the tissue banking industry. 
The AATB is a voluntary nonprofit professional scientific and 
educational organization. Our mission is public health. We are 
dedicated to ensuring that human tissues intended for 
transplantation are safe and free of infectious disease, of 
uniform high quality, and available in quantities sufficient to 
meet national needs.
    To further our mission, since 1984, we have published the 
only private ``Standards for Tissue Banking.'' This document is 
recognized as the authoritative source for the industry.
    For more than 15 years, we have also operated our own 
voluntary accreditation program to ensure compliance with our 
standards. All of our institutional members must be 
reaccredited every 3 years. Accreditation includes, among other 
requirements, an on-site inspection by independent inspectors, 
most of whom are former Food and Drug Administration compliance 
officers and none of whom are affiliated with any tissue 
facility. We offer a certification program for tissue bank 
personnel, and we also operate a tissue network and hotline to 
help tissue banks and hospitals in emergencies, locate 
musculoskeletal allografts for orthopedic surgeons, and skin 
needed to treat burn victims.
    The Association's membership currently includes nearly 
1,200 individual members and 74 accredited tissue banks engaged 
in the recovery, processing, storage, and distribution of human 
tissue. Not every tissue bank is a member of the AATB, but most 
of the major tissue banks have obtained AATB accreditation. In 
fact, we believe that at least a majority of the tissue banks 
in the United State are AATB accredited.
    With the exception of ocular tissue, we also believe that 
AATB members provide most of the commonly used structural 
tissues for clinical use in the United States. In 1999, the 
year for which the most recent data is available, the number of 
bone allografts distributed by AATB accredited tissue banks 
totaled almost 524,000, more than double what was distributed 5 
years ago.
    In addition, tissue donations to our accredited banks are 
increasing significantly. AATB accredited banks recovered 
tissue from more than 17,000 donors in 1999. This represents a 
274 percent increase in donations in the last 5 years.
    It is important to recognize that for nearly a decade 
following publication of our first edition of our Standards in 
1984, the AATB was the only organization overseeing tissue 
banking in the United States. Today, 17 years later, our 
Standards are still the most comprehensive and authoritative 
source in tissue banking, and over those years, we have 
compiled a remarkable record of donor service and patient 
safety.
    Second, you asked us to comment on the instances in which 
AATB has denied accreditation to tissue banks. At the outset, I 
want to make clear that the philosophy of our accreditation 
program is education, not regulatory enforcement. Our goal is 
to bring tissue banks into compliance with our Standards, not 
to penalize them for being out of compliance. We, therefore, 
allow for corrective actions to be taken, but we also provide 
for suspension, denial, and revocation of accreditation.
    Since the AATB's accreditation program began in 1986, a 
total of 116 tissue banks have been accredited. Of that number, 
43 banks are no longer accredited. Approximately 23 of the 43 
banks have either closed, merged with other banks, or for 
whatever reason did not seek reaccreditation. The remaining 20 
banks failed to demonstrate compliance with AATB Standards. Of 
these 20 tissue banks, 14 were denied accreditation following 
reinspections.
    Inspections of four banks were terminated because of 
obvious noncompliance at the time of the inspection and these 
banks withdrew from the accreditation process. Two additional 
banks would have been recommended for denial. Because their 
current accreditation was about to expire, they withdrew from 
the process and let their accreditation lapse. There have also 
been approximately ten other banks that applied for their 
initial accreditation but were denied or dropped out of the 
process.
    Third, you requested our views on the roles of for-profit 
and not-for-profit tissue banks. AATB accreditation is open to 
any tissue bank that, one, voluntarily agrees to abide by the 
policies and procedures of the Association, and two, 
demonstrates adherence to the Standards by successfully 
completing the AATB's accreditation program. To ensure 
compliance with our Nation's antitrust laws, we do not now, nor 
have we ever, differentiated between for-profit or not-for-
profit tissue banks.
    Next, you wanted our opinion regarding pooling tissue. In 
all the private and public reporting about tissue banking and 
tissue transplantation, the greatest untold story, in our 
opinion, is safety. During the past 7 years, for example, 
tissue banks accredited by the AATB have distributed more than 
two million allografts to surgeons without a single reported 
case of disease transmission from donor to recipient.
    For the past 12 years, AATB Standards have prohibited the 
pooling and commingling of tissues to prevent infectious 
disease contamination and cross-contamination. This requirement 
was adopted because of safety concerns after reports in the 
1980's that linked transmission of Creutzfeld-Jacob disease, or 
CJD, in Japan to human tissue that had been processed in 
batches in Germany. There has never been a case of CJD 
transmission from tissue processed in the United States. We 
believe that this safety record is due, at least in part, to 
the prohibition on pooling contained in our standards.
    Fifth, you asked for our assessment of the current 
regulatory oversight of tissue banking. Tissue banks have been 
regulated by the FDA since the agency issued its interim 
regulations in December of 1993. The agency issued its final 
regulations in 1997. As detailed in our written statement, the 
1997 regulations gave FDA the authority to inspect a tissue 
bank's facilities, equipment, processes, the screening and 
testing of donors, medical records, and products. The agency 
also possesses the police power to sanction tissue banks found 
in violation of the FDA regulations.
    The FDA's current regulatory authority over tissue banks is 
considerable and the agency has been exercising that authority. 
We know, for example, that in the past few years, the FDA has 
inspected approximately one-third to one-half of AATB 
accredited banks each year. For us, the question is not that 
FDA has no authority to regulate tissue banks, but whether it 
has the resources to enforce its existing regulations.
    Finally, you requested our opinion of the Food and Drug 
Administration's proposed rules to expand its oversight of 
tissue banks. The AATB has had a longstanding history of 
support for the FDA's goal of developing a balanced, effective, 
and reasoned program of tissue regulation. That support began 
with the FDA's first regulatory initiative in 1993 and 
continued with the 1997 final regulations.
    We have also supported the FDA's concept for regulating 
human tissues that was published 4 years ago. Human tissues are 
not drugs, biologics, or devices, and they should not be 
regulated as such.
    To implement this new regulatory framework, the FDA 
published its tissue action plan, the principal components of 
which were the three separate regulations covering 
registration, donor suitability, and good tissue practices. 
Since its first publication, the AATB has always supported the 
FDA's registration of tissue banks, and we are pleased that 
registration and product listing are now realities.
    The AATB has also strongly supported mandatory donor 
screening and testing to prevent disease transmission, as 
outlined in the FDA's proposed donor suitability rule. Since 
1979, the AATB has had published guidelines on donor selection 
criteria, and donor suitability requirements have been included 
in every edition of our Standards since they were first 
published in 1984.
    In addition, the AATB has generally endorsed the provisions 
of the FDA's proposed current good tissue practices rule. They 
are specifically and directly designed to address the risk of 
disease transmission to patients. We have also submitted 
extensive comments to the FDA that included recommendations for 
changes in this regulatory proposal.
    The AATB believes that the FDA has adequate regulatory 
authority at this time. The agency has proposed a regulatory 
framework for human cellular and tissue-based products that is 
in keeping with the unique characteristics of human tissue. 
Once all three proposed rules are final, we believe that sound 
public policy dictates that the new regulations are given 
sufficient time to work before their effectiveness is 
evaluated.
    In conclusion, let me simply reiterate that the principal 
focus of the AATB is the tissue donor, his or her family, and 
the recipient patients. We respect and honor our donors and 
their families for helping to ensure that patients receive 
their life-enhancing and sometimes life-saving gifts. We are 
the stewards of their gifts and we take that responsibility 
very seriously. We serve patients by helping to ensure the 
quality, safety, and availability of tissues and cells for 
transplantation. This is our public health mission and we are 
constantly reviewing and improving our standards, our programs, 
and our operations to address that mission.
    I thank the Subcommittee for its time and attention and I 
will be happy to try to answer any questions the Senators may 
have. Thank you.
    Senator Collins. Thank you, Mr. Rigney. Dr. Minogue.

TESTIMONY OF WILLIAM F. MINOGUE, M.D.,\1\ CHAIRMAN OF THE BOARD 
   OF DIRECTORS, WASHINGTON REGIONAL TRANSPLANT CONSORTIUM, 
                         WASHINGTON, DC

    Dr. Minogue. Thank you. Good morning, Madam Chairman. I am 
Dr. William Minogue, Chairman of the Board of Directors of the 
Washington Regional Transplant Consortium. I would like to 
thank you for this opportunity to testify before the 
Subcommittee today. My goal is to share with the Subcommittee 
WRTC's experience with the tissue banking industry.
---------------------------------------------------------------------------
    \1\ The prepared statement of Dr. Minogue appears in the Appendix 
on page 74.
---------------------------------------------------------------------------
    The Washington Regional Transplant Consortium is a 
federally-designated organ procurement agency for the 
Washington, DC area. We perform organ recovery services for 48 
hospitals in Maryland, Virginia, and the District of Columbia, 
a responsibility we have had since 1988. As you are aware, all 
organ procurement agencies are required by Federal law to be 
nonprofit. Each OPO has regulated functions, responsibilities, 
reimbursement practices, and a board of directors or an 
advisory board with federally-mandated representation.
    I think our Board of Directors illustrates this. It is an 
all-volunteer board which includes transplant surgeons, a liver 
transplant recipient, a donor family member whose wife was a 
donor and 4 years later, tragically, his daughter was a donor 
following a serious automobile accident, and a prominent 
biomedical ethicist, in fact, the senior ethicist at Georgetown 
University. I think the makeup of that board avoids any 
mischief that could possibly come in this industry. They give 
us such wonderful support. I am an internist.
    Federal law makes one OPO responsible for organ recovery 
and distribution in a given geographical area and makes the OPO 
responsible for approaching families regarding the option of 
organ donation. This same arrangement does not exist in tissue 
donation, as the Subcommittee obviously is aware. We have 
chosen to offer both organ and tissue recovery services for one 
purpose, to protect the integrity of both the organ and tissue 
donation processes.
    To the public, organ and tissue donation constitutes the 
same activity. Families confronting the loss of a loved one do 
not make a distinction between a person who recovers a heart, 
lungs, liver, or kidneys and the person or organization that 
recovers skin, bone, heart valves, and corneas. Each time a 
family decides not to donate because of confusion or suspicion, 
then we risk the lives of several people waiting for organ 
transplants. We have one high standard for family approach, 
donor screening, and tissue recovery and we have through 
experience developed an approach to working with donor families 
that respects their grief while offering them the possibility 
of turning their loss into some greater good.
    We are also responsible for the integrity of the organs and 
tissues that are recovered and are entrusted with protecting 
the recipient community from potentially unsafe organs and 
tissues. Moreover, we are accountable to the donors and their 
families to ensure that these gifts will be respected and 
utilized appropriately.
    For these reasons, we endorse the recommendations brought 
forth by the Model Elements of Informed Consent for Organ and 
Tissue Donation developed jointly by the Association of Organ 
Procurement Organizations, the American Association of Tissue 
Banks, and the Eye Bank Association of America. We encourage 
its implementation industry-wide.
    As you know, there are over 75,000 people nationwide 
waiting for life-saving gifts. Tissue donation is life-
enhancing and improves the quality of life. However, there is 
no comparable shortage of tissue for donation or urgency for 
tissue transplants, so we impose stricter standards on tissue 
donor suitability. If tissue donor evaluation and recovery 
practices are unsafe, a recipient can be subjected to 
unnecessary risk. Organ donation procedures are regulated while 
tissue donation is not. This is why we support the Food and 
Drug Administration's proposed rules on donor suitability and 
good tissue practices.
    WRT has chosen LifeNet, a federally-designated OPO in the 
Tidewater area of Virginia, as its tissue bank to process and 
distribute tissue recovered by us. Because of their high 
standards, they also recognize that tissue banking and organ 
donation are inextricably linked. We trust LifeNet as our 
partner because of their integrity, their commitment to quality 
products and services, and to donors and their families.
    Regrettably, not all organizations involved in recovery 
processing and distribution of tissue share our concern to 
maintain and respect the integrity of the donation process and 
the sanctity of the donated gift. Consider, please, the 
following scenario: An elderly patient dies at a local 
hospital. In accordance with the Federal regulations, the 
hospital refers this case to the local OPO for potential 
donation. The OPO determines that this patient is not a 
candidate for organ or tissue donation and communicates this to 
the hospital and the family. The decision is based on the 
generally accepted suitability criteria for tissue banks.
    Sometime later, the OPO receives an excited call from the 
local hospital, which demands to know why this patient is now 
being pursued for tissue donation. The OPO investigates this 
case and determines the following: Another tissue recovery 
agency obtained confidential patient information without the 
knowledge of the hospital. They told the family that this 
patient's tissue could be recovered for transplant purposes. 
The family specifically stated they did not wish the tissue to 
be recovered for use in medical research. The second tissue 
recovery agency was pursuing the tissue for transplant even 
though the following medical conditions existed: The patient 
was outside the generally accepted age range for donation; the 
patient had a history of cancer that had rendered the tissue 
medically unsuitable; the patient had been dead for almost 24 
hours; and there was evidence of a recent infection.
    The investigation points to the following conclusions: The 
fact that the family had specifically stated they did not wish 
to donate for research indicates that this agency was either 
pursuing donation for transplant purposes or recovering tissue 
for research but not fully disclosing that intent to the 
family. They were recovering tissue in our region for a 
publicly-traded for-profit tissue bank. Neither the for-profit 
tissue bank nor their local recovery agency had a written 
agreement with the hospital to recover tissue at that facility, 
nor were they authorized to talk to the family about tissue 
donation.
    Situations like this occur when organizations that lack 
sufficient experience in tissue recovery become involved. 
Furthermore, some of these organizations operate from profit 
motives that supercede the public interest. Our example 
illustrates the necessity for clear industry standards with 
regard to the safety and soundness of donated tissue.
    There are an increasing number of for-profit tissue 
processing and distribution agencies entering the donation 
arena. These entities need access to human tissue in order to 
generate revenue and are under shareholder pressure to increase 
their market position to maximize profit. They are not required 
to take the overall donation interest of the public into 
account, and unlike OPOs, their boards have no requirement to 
represent the public interest.
    In addition, we have seen for-profit tissue banks create 
nonprofit recovery agencies or use local nonprofit 
organizations as a conduit for human tissue into their 
processing and distribution facilities. These nonprofit groups 
usually have established relationships with hospitals outside 
of tissue donation, which gives them access to hospital 
facilities and patient information. Patients and their 
families, as well as members of the local nonprofit 
organizations themselves, are not aware that the donated gift 
will go to publicly-traded corporations as raw material, and 
these recovery agencies have also attempted to transfer bodies 
out of the hospital to locations where they are able to perform 
the recovery. We perform all of our recoveries in operating 
rooms under clean and sterile conditions.
    Our recommendations, then, are that both donor and 
recipients must be protected, the former by implementing an 
approach such as the Model Elements of Informed Consent for 
Organ and Tissue Donation, and the latter by the swift adoption 
of the Food and Drug Administration's two proposed rules 
expanding donor screening and testing and on standards for good 
tissue donation practices. We also endorse the institution of 
an annual reporting mechanism for all entities involved in 
tissue donation processes, both for-profit and not-for-profit, 
to ensure transparency.
    We are pleased that tissue banks have begun registering 
with the FDA in accordance with its newly implemented rule and 
hope that comprehensive inspection of all tissue banks by the 
FDA will soon follow. Moreover, we agree with recent actions 
taken by the FDA in urging a tissue processing and distributing 
organization to stop its practice of pooling from multiple 
donors during processing. The experience with a CJD 
contaminated dura mater allograft is adequate evidence of a 
need to ban this practice.
    WRTC would like to highlight two additional recommendations 
for consideration. First, we recommend giving OPOs oversight 
authority over all donation activities, including family 
contact, donor evaluation, recovery, processing, and 
distribution.
    Second, ensure that tissue recovery organizations are 
nonprofit and that relationships with for-profit organizations 
are held at arm's length. It is neither wise nor possible to 
eliminate for-profit companies from all processing and 
distribution activities resulting from tissue donation. In 
fact, new patient care technologies based on donated human 
tissue may well be developed by for-profit or jointly between 
nonprofit agencies and for-profit companies.
    In conclusion, society does not distinguish between organ 
donation and tissue donation. Organ donation is well regulated 
and closely controlled in the public interest. The task before 
us now is to ensure that the tissue banking industry is held to 
the same high standard. We look forward to the day when our 
citizens completely accept the benefits of organ and tissue 
donation as a common, dignified, and valuable contribution to 
the quality of life and to death with dignity. Thank you.
    Senator Collins. Thank you, Doctor. Dr. Rao.

 TESTIMONY OF VALERIE J. RAO, M.D.,\1\ CHIEF MEDICAL EXAMINER, 
                DISTRICT FIVE, LEESBURG, FLORIDA

    Dr. Rao. Good morning, Chairman Collins and Members of the 
Permanent Subcommittee on Investigations. My name is Dr. 
Valerie Rao. I have been appointed by the Governor of the State 
of Florida to hold this position as District Five Medical 
Examiner. The district involves five counties running from 
Central Florida all the way to the Gulf, so it is a very, very 
large area. I also sit on the Medical Examiner Commission, and 
that is also a Governor-appointed position. I have been there 
since April 2000, prior to which I was in Dade County for 18 
years and 9 months.
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    \1\ The prepared statement of Dr. Rao appears in the Appendix on 
page 82.
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    I would like to thank you for inviting me to appear today 
before the Subcommittee and I am very pleased to discuss this 
most important issue to me. I believe that human donation is a 
selfless and invaluable gift, and as such, would like to see 
that all tissue recovery organizations are required to adhere 
to standards that promote safety and respect for donation. 
Unfortunately, my observations tell a very different story and 
I would like to share my experience with this Subcommittee.
    The role of the medical examiner in organ and tissue 
transplantation results from government-mandated investigation 
into sudden and unexpected or traumatic deaths to determine the 
cause and manner of death. The manner includes natural, 
accident, suicide, or homicide. A medical examiner death 
investigation includes documentation and evaluating the scene 
of death or the injury as well as the body at the scene. 
Included is the determination of the terminal episode and the 
medical history of the decedent.
    In Miami-Dade County, where I spent 18 years and 9 months 
as an associate medical examiner, when a case arrives, it is 
initially screened by a tissue bank coordinator for 
consideration as a potential donor. If the quality appears 
suitable, the next-of-kin authorization is received. In the 
meantime, the medical examiner performs a careful external 
examination. The body is transported to a sterile autopsy suite 
where a tissue bank pathologist participates in the tissue 
excision process. During this procedure, blood and lymph node 
tissue are retained for screening. The body returns to the 
medical examiner for an autopsy. For the non-medical examiner 
case, the tissue bank pathologist performs the autopsy. At any 
time during this procedure, should testing raise doubt, the 
donor material is removed from the preparation and distribution 
pipeline.
    Most medical examiner donor cases are people of prior good 
health who experience violence, 24 percent; sudden, unexpected, 
non-infectious cardiac dysrhythmia or stroke, 76 percent. These 
are the statistics from Miami-Dade County, Florida, from 1995 
through 1999. The very nature of such cases of previously 
healthy individuals with sudden death creates a donor pool 
where infection and malignancy are minimized.
    The protection against transmittal of infection and 
malignancies must be the primary principle in all 
transplantation programs, and the shortage of donor materials 
and business pressures should not work against this principle. 
Therefore, it is recommended that tissue bank physicians and 
coordinators become aware of their own State medical examiner 
guidelines in order to understand the investigative process and 
its relationship to quality assurance.
    As the medical examiner determines the cause of death, a 
complete autopsy and tissue for subsequent microscopic 
examination serves as a quality assurance step in the 
transplantation process. Medical examiners are charged, in 
addition to forensic investigation into death, also with public 
health issues, particularly with regard to the possibility of 
transmission of infectious disease. Autopsies are required for 
donor acceptance, and medical examiners believe that autopsies 
should be done routinely on all donor cases. Autopsies are the 
only means by which diseases such as tuberculosis, 
histoplasmosis, degenerative disease of the brain, unsuspected 
malignancy, viral myocarditis, non-A, B, or C hepatitis, 
diseases of unknown etiology, and other potential transmissible 
diseases can be detected and those donors excluded from the 
donor pool.
    The entire issue of medical examiner participation in the 
acquisition of tissues from cadaver donors must also be 
considered in light of the recent developments. As I stated, 
medical examiners are the guardians of public health interest 
and should be in a position to make a determination which 
tissue bank serves both the interests of the recipient patient 
as well as to satisfy the medical examiner's statutory duties. 
Certainly, a trust in the professional competence and 
reputation of the tissue bank personnel is an important factor 
in making such a determination.
    Last April, I became concerned regarding several 
questionable practices by a tissue bank. My first concern was 
when Regeneration Technologies, Inc., through its association 
with the University of Florida Tissue Bank, would accept donors 
with non-metastasizing malignant tumors of the breast, colon, 
cervix, and lung. They also accepted donors with septicemia, 
pneumonia, and intestinal obstruction. To the best of my 
knowledge, they do not perform routine blood or bone marrow 
aspirate cultures, which is done to detect for possible 
disease. They do not require an autopsy and, hence, do not know 
the cause of death in the donor.
    Tissue excisions are performed by technicians without 
physician supervision or participation, and the use of sterile 
precautions are not observed during the excision and the 
retrieval process. The technicians do not have sufficient 
training and knowledge to observe changes which would be noted 
by a pathologist, yet they performed an autopsy removal of the 
brain which would obviously impair further medico legal 
investigation into the death of the deceased. Finally, the 
customary care and respect for the body of the deceased are not 
observed. I believe that the dead have rights, too.
    In contrast, the University of Miami Tissue Bank has 
demonstrated quite the opposite. All of their excisions are 
performed aseptically by trained physicians in an operating 
room environment. Blood cultures and bone marrow cultures are 
also routinely performed.
    As I stated before, I believe that public trust in the 
professional competence and reputation of those involved in the 
donation process is vital to its continued success. Thank you 
very much, Madam.
    Senator Collins. Thank you, Dr. Rao.
    Mr. Rigney, I want to start by asking you some questions. 
You mentioned in your testimony that the Association has 
accredited 74 tissue banks, is that correct?
    Mr. Rigney. That is correct. Our current membership is 74.
    Senator Collins. And according to the FDA, we know that at 
least 350 tissue banks have registered to date under the 
agency's new mandatory registration rule, and perhaps your 
testimony was written before that fact became available. I am 
trying to reconcile your testimony saying that most of the 
tissue banks in the United States have obtained AATB 
accreditation. In fact, we believe that at least a majority of 
the tissue banks are AATB accredited. If you have accredited 
74, yet we know that 350 have registered with the FDA, you are 
a long ways from accrediting the majority of banks, are you 
not?
    Mr. Rigney. That would be correct, Senator. The testimony 
was written when the only figure we knew was what the OIG had 
reported. We received the list that the OIG reported and 
compared it against our own banks and our knowledge of the 
existence of other banks. What we found in our review was that 
of the 90 banks that were not accredited and cited in the OIG 
figures, about 30 of those, as we counted them, were either 
double-counted because they were listed both under a former 
name of the bank and their current name, or they had gone out 
of existence and closed their operation, or they had merged 
with another bank, or they were now accredited by the AATB. 
Another third of that number were banks that we knew that did 
exist and were not accredited members. And the final third was 
a group of banks that we had never heard of before, quite 
frankly.
    Senator Collins. But you are talking about the OIG's 
report.
    Mr. Rigney. Right.
    Senator Collins. Were you surprised to learn that there 
were 350 tissue banks that registered with the FDA?
    Mr. Rigney. I just learned that yesterday, the number that 
had registered with the FDA. What I am told is that that number 
includes a number of reproductive banks, who are not required 
to actually register until the year 2004. It also includes a 
number of stem cell banks, a number of laboratories, and others 
that we would not necessarily consider a traditional type of 
tissue bank, but that would meet the regulatory definition 
under the registration rule.
    Senator Collins. I would inform you that the Subcommittee 
staff raised that issue with the FDA and that was not the case.
    Mr. Rigney. OK.
    Senator Collins. The vast majority of these are tissue 
banks----
    Mr. Rigney. Then that number would, indeed, surprise us.
    Senator Collins. And one of my concerns suggests that there 
are an awful lot of tissue banks out there that have been 
operating without accreditation by your Association, without 
oversight by State regulators--very few States have an 
effective regulation of tissue banks--and flying under the 
radar of the FDA, as well. We did get a breakdown of the 
numbers and there were actually 368 banks. We took out those 
that were the stem cell ones that you mentioned or reproductive 
and you still get close to 350.
    So it seems to me that the industry is far more extensive 
and there are far more organizations involved in the recovery 
and processing of tissues than any of us would have guessed, 
which is troubling to me in terms of proper oversight.
    The HHS Inspector General's report mentioned that there are 
differences between your required standards for accreditation 
and the FDA's current requirements. Could you describe those 
differences for us?
    Mr. Rigney. Let me describe them, if I can, Senator, in 
general terms. If you want a specific side-by-side, we will try 
to prepare that.
    Senator Collins. Just general will be fine.
    Mr. Rigney. Generally speaking, our current Standards are 
much more detailed and much more extensive than FDA's current 
final rule under which it is operating. That is sort of the 
long and the short of it. We go into many more areas in terms 
of accreditation of the tissue bank than FDA's current 
regulations would cover. Generally speaking, as a follow-on, 
their proposed rule, that good tissue practices proposed rule, 
is patterned in many respects off of our Standards.
    Senator Collins. Do you require more testing than the FDA 
does for specific pathogens?
    Mr. Rigney. We require basically the same testing, except 
one that immediately comes to mind in terms of living donors. 
We would also require a hepatitis B core antigen test.
    Senator Collins. Do you require screening for CJD, because 
I do not believe the FDA does.
    Mr. Rigney. We do have screening requirements for CJD in 
our Standards.
    Senator Collins. Has the AATB ever suspended or revoked its 
accreditation of a tissue bank?
    Mr. Rigney. Yes, and I cited some of those numbers in my 
statement.
    Senator Collins. When that occurs, however, there is 
nothing that prevents that tissue bank from continuing to 
operate, is there?
    Mr. Rigney. No. Our Association and our accreditation is 
voluntary. You submit to it. The only power we have, 
essentially, is to revoke one's accreditation once it is 
granted, or to deny it if they are applying for it.
    Senator Collins. Do you know if any of the banks for which 
you have revoked or denied accreditation are still operating?
    Mr. Rigney. I personally cannot answer that for you right 
now. I would be glad to check that out and report back to 
you.\1\
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    \1\ See Exhibit No. 19 which appears in the Appendix on page 251.
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    Senator Collins. I would appreciate your doing so. Based on 
our investigation, there are indications that some of the banks 
that have been denied or revoked accreditation by your 
organization are still operating.
    When you do act to revoke an accreditation, do you report 
that action to the FDA or share that information with the FDA?
    Mr. Rigney. Generally speaking, no.
    Senator Collins. Do you think that would be helpful to the 
FDA in its inspection and evaluation of tissue banks that might 
be problematic?
    Mr. Rigney. The problem we have, Senator, is that our 
accreditation program provides certain assurances of 
confidentiality as the bank is moving through the process.
    Senator Collins. Do you believe that the FDA should 
prohibit pooling of tissues, as your members are prohibited 
from doing?
    Mr. Rigney. Right now, based upon what we know, we have, as 
I noted, had standards prohibiting pooling for 12 years and 
think that the FDA should probably have the same standards----
    Senator Collins. Thank you.
    Mr. Rigney [continuing]. If they do not already.
    Senator Collins. Dr. Minogue, your testimony is very 
interesting to me because you have tremendous experience in 
overseeing organ transplants in the donation process, which 
seems to me, as your testimony suggests, to be much more 
regulated, much better understood. Processes are far more 
established. One area that concerns me as I have been examining 
this issue is the differences between organ and tissue 
donation. Do you think that the procedures for obtaining 
informed consent for tissue donation should be more like those 
that are used for organ donation?
    Dr. Minogue. Yes, I do. I believe that the organ 
procurement process has matured over time. I happen to have 
been one of the founding members of this board 14 years ago and 
it was pretty much made up of transplant surgeons and the 
hospitals they represented trying to get our act together. Now 
it is so wonderful and mature and it sounds to me, and I am 
learning more today than I ever did know about the tissue side, 
that tissue has to mature in a similar fashion. But it needs 
this oversight. I strongly favor the not-for-profit, altruistic 
model of my board. There is just no possibility for us to get 
into, as I mentioned before, some mischief of this type. There 
must be oversight. Also, of course, favor that there be one 
regional tissue procurement organization, whatever that may be, 
so that this competition goes away.
    Senator Collins. Modeled on the OPO----
    Dr. Minogue. Modeled on the OPO arrangement.
    Senator Collins. I would like to talk to you further about 
a local nonprofit organization that you referred to in your 
testimony, because I think it illustrates some of the 
underlying issues that you have identified and that we are 
discussing today. It is my understanding that the organization 
involved is a local service club and that it provides tissue to 
a large for-profit tissue company called Regeneration 
Technologies, Inc., or RTI.
    It is further my understanding that RTI uses tissue 
pooling, or has been using tissue pooling, which many experts 
tell me, and you have testified this way, also, that the risks 
far outweigh the benefits. Is that an accurate statement?
    Dr. Minogue. That is a perfectly accurate statement, yes, 
ma'am.
    Senator Collins. I would like to refer to a specific 
exhibit, which is Exhibit No. 4,\1\ and I think you have it in 
the book before you, also. Now, as you probably recognize, this 
is a WRTC donor referral and tissue bank donor worksheet, and 
it is my understanding that this is used to establish the 
medical history of a potential donor in order to evaluate the 
suitability. I would note that we have redacted any personal 
information that could identify the individual involved. Is 
that what this is used for, to work up whether or not this 
person may be suitable as a donor?
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    \1\ See Exhibit No. 4 which appears in the Appendix on page 116.
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    Dr. Minogue. That is correct.
    Senator Collins. Now, as I look at this worksheet, it seems 
pretty clear to me that WRTC rejected this individual as a 
donor for skin, bone, heart valves, and eyes, and the reasons 
why that the WRTC found the donor unsuitable were two reasons, 
primarily, one, that he was 82 years old, and second, that he 
had a history of prostate cancer. In your view, would those two 
factors make it too risky to transplant tissue from this donor 
to someone else?
    Dr. Minogue. The age is problematic because of the 
suitability of the tissue and the likelihood of an effective 
transplantation later on. And as you have heard earlier, since 
there is not a great shortage of tissue, as there is with solid 
organs, why in the world take these risks, even if we do not 
have scientific evidence that prostate cancer, which may well 
be very localized, would be harmful to the patient or to the 
recipients downstream. This sort of case, and it sounds quite 
like the case that I illustrated in my testimony, was rejected 
by us and would continue to be.
    Senator Collins. I would like to switch to Exhibit 5,\2\ 
which--this is a worksheet that was produced by the local 
nonprofit organization that I mentioned that was acting as a 
tissue bank, and as you can see in the first question, has the 
deceased ever had cancer, tumors, leukemia, lymphoma, received 
radiation therapy or drugs for cancer, and the answer is yes to 
that. It further goes on to ask some other questions, which 
also identify problems. But the very first question indicates 
that this tissue bank knew that the individual had prostate 
cancer, so there is no doubt that that was known to the tissue 
bank based on this document, is there?
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    \2\ See Exhibit No. 5 which appears in the Appendix on page 118.
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    Dr. Minogue. None whatsoever.
    Senator Collins. Do you know whether this tissue bank, 
despite this information, tried to persuade the donor family to 
give permission to recover various tissues from the body 
anyway?
    Dr. Minogue. I do not, as personal knowledge, know. A 
colleague of mine, from WRTC, who directs all of this tissue 
donation process, is here today and he might be able to 
comment, if you wish, but I do not know.
    Senator Collins. Is that individual available?
    Dr. Minogue. Yes, he is.
    Senator Collins. Would you like to consult and relay?
    [Pause.]
    Dr. Minogue. David DeStefano, my colleague, says he does 
not believe there was persuasion per se, and I believe that was 
part of the question, but they were indeed pursuing this 
patient for donation and the patient had already been rejected 
by WRTC.
    Senator Collins. It is unclear to me why any tissue bank 
would pursue this individual as a potential donor--not pursue 
the individual, but discuss this with the individual's family. 
Do tissue banks face pressure to produce a certain amount of 
tissue?
    Dr. Minogue. That is the perception that we are working on. 
Again, I do not have firsthand knowledge of that, but there 
seems to be quite a bit of aggressiveness in some parts of that 
industry and that is disturbing to us.
    Senator Collins. And it is your opinion that the for-profit 
sector of the tissue bank industry is particularly subject to 
pressure to recover more tissue?
    Dr. Minogue. It seems logical, particularly on the recovery 
side. As I mentioned in the testimony, the for-profit 
processing end of the equation and that whole industry may well 
do creative works and research and so forth if properly 
regulated and motivated, but to tie the donation itself to 
profit is very disturbing to us for the reasons I mentioned, 
that these are very delicate situations at the bedside, as you 
can imagine, and to have any suggestion of aggressiveness in 
this regard is just destructive to the whole process.
    At our board, we look very carefully at all of our 
hospitals and do death review, for example, and any time we see 
that there was an opportunity missed for solid organ 
transplantation, we treat that and investigate it and encourage 
the hospital to investigate it, because as many as five or six 
lives could have been saved by that proper donation. Why did it 
go wrong? That is how seriously we take one single loss of an 
opportunity. So in any way tainting this terribly complex 
dynamic at the bedside is just wrong.
    Senator Collins. What characteristics does WRTC look for 
when developing a relationship with a tissue bank?
    Dr. Minogue. A high degree of integrity, that they have the 
same feeling and passion for protecting the donation process 
and that they remain at arm's length as far as all of the 
business, if you will, of their organization, and just have the 
same philosophy of integrity and ethics.
    Senator Collins. Do you at times refuse to do business with 
certain tissue banks?
    Dr. Minogue. We do.
    Senator Collins. Thank you. Just one final question for 
you. Do you believe that tissue banks--you have testified that 
there needs to be a better regulatory structure for tissue 
banks. Do you believe as part of that that there needs to be 
regular inspections of tissue banks to ensure compliance with 
good procedures?
    Dr. Minogue. Absolutely.
    Senator Collins. Thank you.
    Dr. Rao, I would like you to explain further about your 
experiences with RTI and tell me more specifics on what 
troubled you about this particular tissue bank.
    Dr. Rao. Yes. When I took the job initially, I had to find 
out what was going on in the district and there were several 
tissue banks that came in and were taking tissues and my 
technicians were telling me that there were some very strange 
goings on, and so I waited to see for myself, and the first 
case I saw, as soon as I saw the case, this was a lady whose 
upper extremities were taken and the incisions run all the way 
down the arm to take out the long bones and the incisions were 
not even closed and the body was--it just took me aback. I was 
not used to this. I just looked at them, like, no, these people 
are not coming back here. That was it. I had made my decision.
    I received a lot of political pressure because of that 
decision, but I just could not be associated with that kind of 
business, because a medical examiner--what will happen is they 
will say it came from District Five and then it reflects on the 
medical examiner that was involved in that transaction. So I 
told all the tissue banks that there had to be a moratorium on 
tissue recovery in District Five until I could look at 
everything that was going on. That was one incident.
    The other incident, they took bones prior to it becoming a 
medical examiner case. Initially, it was not a medical examiner 
case, and then the family called with some history which then 
brought it under the jurisdiction of the medical examiner. And 
the issue that was to be discussed by the medical examiner was 
did this lady have a stroke? So when I opened the body and the 
head, I found that they had taken the brain and they had placed 
the cerebral hemispheres in the chest cavity, and then they 
took a dowel to replace the spine that was removed and pushed 
it up into the foramen magnum, as a result of which the entire 
cerebellum was all squashed. So there was no way I could 
determine, did this lady have a stroke. But they did not 
realize it was going to come to the office.
    So there was a second incident that I saw this happened, 
and after that, of course, I was determined not to allow them 
to come into the office.
    The above examples all pertain to the University of Florida 
Tissue Bank, an affiliate of RTI.
    Senator Collins. In the first case that you gave us as an 
example of inadequate respect for the dignity of the donor and, 
undoubtedly, the family would have been very upset to see the 
body left in that condition, and I want to indicate that is not 
typical, that most tissue banks do a very good job and are very 
respectful, as are the OPOs and those involved in organ 
donation, but that was an example where there was inadequate 
respect for the donor's body.
    The second case sounds like the haste to recover tissue 
caused you to be unable to perform your duties as a medical 
examiner, is that accurate?
    Dr. Rao. Exactly.
    Senator Collins. Could I ask you about a third issue, and 
that is have you ever been concerned about whether there were 
sufficient screenings performed on tissue to make sure that 
they were safe for donation?
    Dr. Rao. Yes. At one of the ME committee meetings I had, 
the director of the University of Florida Tissue Bank came to 
me and talked to me and asked if he could come back into the 
office, and I said to him, ``If you agree to these standards 
and these tests, then yes.'' And he looked at me and he said, 
``Well, that will not be essential,'' and then I said, ``Well, 
then you cannot come back.'' So he did not want to comply with 
what was required, as a result of which I thought even more 
that he should not be allowed to take tissue from District Five 
cases. So they do not want an autopsy on every case because it 
is expensive and it will cut into the profit margins, but I am 
not concerned about profit margins. I am concerned about the 
public health, safety in the recipients that get this bone 
donation.
    Senator Collins. What kind of research can a family, which 
is considering donation of a loved one's tissues, do to ensure 
that they are dealing with a reputable tissue bank? Is there 
any advice you can give us? I actually think that is a very 
difficult burden to put on the family. I mean, the family is 
going through a time of incredible grief and difficulty, which 
is one reason why I think we have to look to the Federal 
Government to perform that kind of role.
    But assuming we do not have a good regulatory structure in 
place right now, or a sufficient one, what kind of advice could 
you give to families that are considering donation, that very 
much want to make a gift that is going to enhance the quality 
of life for others, yet want to make sure that they do not run 
into the kinds of problems that you have identified?
    Dr. Rao. Actually, to answer that, there was a letter 
received, which is part of your exhibit package,\1\ from an 
elderly gentleman, and you can see that he is keeping up with 
the literature and with the press releases out there, and I was 
pretty surprised to get that letter from him. You see the 
giving nature of this individual. He is a pretty elderly man, 
84 years old, and he still wants to give of himself but he is 
very concerned. Am I doing the right thing? How should I go 
about this?
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    \1\ See Exhibit No. 3 which appears in the Appendix on page 114.
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    Being unaware of the many agencies out there, my advice 
would be to do some research as to which bank is going to take 
this, what is their reputation out there, and research it on 
their own, then make a decision, hopefully they will talk to 
the medical examiner, if it is a medical examiner case, and 
think, am I comfortable with this tissue bank, and go from 
there.
    Senator Collins. Thank you. I just have one final question 
for all three of you. This morning, we heard some very 
disturbing testimony from the Office of Inspector General on 
practices that the FDA had caught during its inspections, which 
we have learned have not been as frequent or as widespread as 
we would all like to see, which identified tissue banks engaged 
in the practice of repeat testing in which tissue is repeatedly 
tested until the tissue bank obtains the result that it wants 
of no disease, even after previous tests have identified 
problems.
    Are either of you familiar with that and could you comment 
on that practice? Dr. Minogue, we will start with you.
    Dr. Minogue. Certainly, I was as startled as you were to 
hear that today, and I am not aware of any test in medicine 
that goes from positive to negative just through repetition. So 
there is something very strange about that piece of 
information.
    Senator Collins. I thought it was one of the most 
disturbing statements made at this hearing. It just seems to me 
that if a negative test, or a positive, in this case, a 
positive test indicating a problem is reached, that tissue 
should immediately be discarded. The idea that, instead, the 
technician just tests it again and tests it again and tests it 
again in hopes of getting an all-clear result is very troubling 
as far as the safety of the tissue in the system.
    Dr. Minogue. Repeated testing, we will do confirmatory 
tests often. If we have a suspicion, let us say, and we get a 
negative, we might test to be darn sure. But to repeatedly, and 
that was the testimony, to repeatedly test until it is 
negative, that is just awful.
    Senator Collins. Mr. Rigney, have you heard of this before?
    Mr. Rigney. Certainly. Senator, every manufacturer's test 
kit, be it for living donor sera or for cadaveric sera, 
contains test kit instructions specifying how you are supposed 
to conduct that test. Without going into the details of how 
these tests are run, repeated testing that would in any way be 
different than what is in the manufacturer's instructions would 
be a violation not only of our Standards, but I think of FDA 
requirements. It would certainly, in our case, trigger a 
mechanism to suspend or revoke accreditation, or to deny it if 
it was somebody applying initially.
    Senator Collins. Thank you. Dr. Rao, have you heard of that 
before, and given your extensive experience as a physician, 
could you give me your opinion of that practice?
    Dr. Rao. I am not familiar. I was pretty disturbed, too, 
because in blood banking, we did blood banking during our 
training, if there was a unit which had anything, any little 
thing, the unit was discarded, and I think blood banking and 
tissue banking should both be on a similar par when you think 
of standards, because this is somebody's life one is dealing 
with.
    Senator Collins. Thank you.
    Mr. Rigney. Senator, I would simply note that the stories I 
have heard and the reports that I have seen of such cases would 
not be limited to tissue banking. They also involve blood 
banks, where there have been a number of recalls precisely for 
those reasons, as well as other types of laboratories.
    Senator Collins. Thank you. I want to thank all of you for 
your testimony and your assistance to the Subcommittee. Thank 
you.
    Senator Collins. Our final witness today will be Dr. 
Kathryn Zoon, the Director of the Center for Biologics 
Evaluation and Research within the Federal Food and Drug 
Administration. She has been with the FDA since 1980. Dr. Zoon, 
we are very pleased to have you with us today. Before you get 
too comfortable, I do have to swear you in.
    Do you swear that the testimony that you are about to give 
to the Subcommittee will be the truth, the whole truth, and 
nothing but the truth, so help you, God?
    Dr. Zoon. I do.
    Senator Collins. Thank you. Please proceed with your 
testimony.

 TESTIMONY OF KATHRYN C. ZOON, PH.D.,\1\ DIRECTOR, CENTER FOR 
     BIOLOGICS EVALUATION AND RESEARCH, U.S. FOOD AND DRUG 
                 ADMINISTRATION, WASHINGTON, DC

    Ms. Zoon. Thank you. Good morning, Madam Chair and Members 
of the Subcommittee. Thank you for inviting me to participate 
in this hearing concerning human tissue banking. I am Kathryn 
Zoon, the Director of the Center for Biologics in the FDA. My 
Center is responsible for the regulation of many different 
types of human tissues and cells used in transplantation. 
Today, I will provide background information on the regulation 
of human tissues for transplantation and FDA's current and 
future actions to help ensure the safety and availability of 
these important products.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Zoon appears in the Appendix on 
page 84.
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    No medical product is risk-free. The FDA regulates tissue 
under the authority of the Public Health Service Act and the 
Federal Food, Drug, and Cosmetic Act. Several categories of 
human tissue used for transplantation are being regulated as 
medical devices under the 1976 Medical Device Amendments. Many 
cellular and tissue base products are regulated as biological 
products under the Public Health Service Act and the Food, 
Drug, and Cosmetic Act, and other cells and tissues are 
regulated for communicable diseases under the PHS Act.
    FDA's goals with regard to human tissues are to: One, 
prevent the spread of communicable disease; two, to ensure the 
safety and efficacy is demonstrated for cellular and tissue-
based products; and finally, enhance public confidence in these 
products. FDA plans to accomplish these goals through 
implementing regulations in a manner that will not discourage 
the development of new products. Human tissues for 
transplantation include skin replacement for severe burns, 
tendons and ligaments for injury repair, and corneas to restore 
eyesight, as well as bone for replacement.
    The increased use of human tissues has heightened public 
awareness of the need for appropriate regulation to minimize 
potential risks. Developments in the 1980's and 1990's prompted 
FDA to examine our approach to the regulation of tissue. 
Several incidents illustrated the risks of disease transmission 
when adequate precautions were not taken.
    In 1991, it was discovered that seven people had been 
infected with human immunodeficiency virus through the 
transplantation of organs and some tissue from a donor who 
tested negative for HIV. This led to intense discussions within 
the tissue bank community and the Public Health Service on how 
to reduce the risk of infectious diseases from transplanted 
human tissues, and ultimately to the comprehensive approach 
that I will describe.
    In 1993, FDA learned that human tissue from foreign sources 
was being offered for sale in the United States with little or 
no documentation of the source. There was little, if any, 
information on the medical condition of the donor, the cause of 
the donor's death, or the results of donor screening and 
testing. This raised significant concerns about the safety and 
quality of that tissue. The agency quickly confirmed that the 
tissue was not adequately screened and tested for infectious 
diseases. The agency acted promptly by promulgating a 
regulation and exercising its enforcement powers.
    In December 1993, FDA took action to minimize the risk of 
disease by issuing an interim rule for human tissue for 
transplantation, which required donor screening, infectious 
disease testing, and recordkeeping to prevent the transmission 
of infectious disease. Under this regulation, FDA could also 
conduct inspections, and when necessary, could order tissue to 
be detained, recalled, or destroyed. This interim rule was made 
final, with some modification, on July 29, 1997.
    After careful consideration of the health issues and 
extensive public discussion, FDA published the proposed 
approach to the regulation of cellular and tissue-based 
products in 1997. This document described FDA's planned 
regulatory framework for human cellular and tissue-based 
product regulation. Subsequently, FDA has accomplished many of 
the regulatory goals described in the February 1997 document 
through publication of a series of proposed and final rules.
    The 1997 proposed approach provided a framework for the 
regulation of both traditional and new products. This framework 
detailed the type of regulation necessary to protect the public 
health and provide a risk-based tiered approach to cell and 
tissue regulation. For human cells and tissue products where 
the risk is limited to disease transmission, FDA's proposed 
regulation is intended to prevent transmission of disease 
through the use of these products. For products that pose 
greater risk, the framework additionally provides for pre-
market review and approval of product applications.
    To accomplish the implementation of the proposed approach, 
the agency developed a tissue action plan that contained a 
description of the steps and time frames the agency would use. 
Many of these steps have already been accomplished, including a 
final registration and listing rule and the proposed rules on 
donor suitability and good tissue practices.
    The registration and listing rule requires establishments 
to register and list with the agency their human cell tissues 
and cellular and tissue-based products. Under this final rule, 
establishments engaged in the recovery, screening, testing, 
processing, storage, or distribution of tissues, with 
conventional tissues such as bones, skin, and corneas, are 
required to register and list their products. Other 
establishments that manufacture nonconventional or new cellular 
and tissue-based products, such as hematopoietic stem cells, 
are required to register and list by January 2003, although I 
might add that they can register voluntarily now.
    In September 1999, FDA published a proposed rule regarding 
the donor suitability for cellular and tissue-based product. 
Disease agents, such as HIV, hepatitis B virus, hepatitis C 
virus, syphilis, and CJD have been detected in human tissue. 
The proposed rule, when final, will expand current screening 
and testing requirements to include donor screening for CJD and 
donor testing for syphilis and would apply broadly to cellular 
and tissue-based products. A donor who tested repeatedly 
reactive for a particular disease agent or who posed clinical 
evidence of or had risk factors for such a disease will be 
considered unsuitable and cells or tissues from that donor will 
not ordinarily be used. The agency is currently reviewing 
public comments on the proposed rule.
    Tissue establishments perform various procedures that may 
affect the safety or quality of tissue products. Therefore, in 
January of this year, FDA published a proposed rule for good 
tissue practices for manufacturers of human cellular and 
tissue-based products. With this proposed rule, FDA completed 
the set of proposals that, when finalized, implement the new 
regulatory framework. The proposed rule will require 
manufacturers to follow good tissue practices, which include 
practices involving methods, facilities, and controls used in 
tissue manufacturing, tracking, process validation, and the 
establishment of a quality program. FDA is in the progress of 
carefully reviewing all comments received in response to this 
proposed rule.
    In 2002, FDA estimates that the agency will dedicate $4.35 
million to the regulation of human tissue. This is part of the 
President's Fiscal Year 2001 budget request for FDA, which 
represents a 10 percent increase for the agency over the Fiscal 
Year 2000 level. Estimates of the implementation of the tissue 
regulation will be developed as part of the 2003 budget process 
and may be revised as we garner additional information for 
future establishment registrations. Such additional information 
will help us determine with greater accuracy the amount of time 
and resources that will be needed to conduct inspections and 
other compliance-related activities.
    FDA conducts on-site inspections of tissue establishments 
to determine compliance with FDA regulations. As a result of 
these inspections, FDA has taken the following actions: Fifteen 
orders for retention or recall, six warning letters, and nine 
opportunities for voluntary corrective action letters. Further, 
the number of voluntary recalls of banked human tissue have 
increased over the past 7 years, from approximately three in 
1994 to 24 in the year 2000.
    FDA is concerned about pooling of tissues from multiple 
donors during processing. In general, FDA believes that the 
risks associated with pooling tissues from multiple donors at 
this time appears to outweigh any identified medical benefits. 
Risks include possible exposure and cross-contamination from 
one tissue to another, such infectious disease agents as 
viruses, bacteria, fungi, and prions. FDA currently can address 
these issues based on our communicable disease provisions of 
Section 361 of the Public Health Service Act.
    In order to successfully implement agency plans for the 
regulation of human tissues, FDA has involved tissue 
establishments and medical professionals in many of our public 
discussions. In the future, FDA intends to provide opportunity 
for additional public discussions on issues related to cellular 
and tissue-based products.
    FDA can assure the Subcommittee that we are committed to 
establishing a regulatory framework which will not only help 
ensure the safe use of human tissue for transplantation, but 
also allows the development of this technology and instills 
public confidence. While FDA has taken many steps towards this 
end, we realize that more remains to be done. We look forward 
to working with this Subcommittee regarding the regulation of 
tissues and I am happy to answer any questions you may have 
today.
    Senator Collins. Thank you, Dr. Zoon.
    I want to talk to you further about two issues that have 
arisen today. One is pooling, the other is repeat testing. You 
mentioned in your statement that you have just concluded that 
the FDA believes that the risks of pooling outweigh the 
benefits. Could you explain further why pooling could be 
problematic from a safety standpoint?
    Ms. Zoon. Yes, I would be happy to. When you pool products, 
if there is just one component of a mixture of components, that 
component could have the ability to raise the infectious 
disease or communicable disease risk to the entire batch of 
product processed together, and that is why we are concerned 
about this. It is very important in those considerations to 
make sure that risks such as this are minimized.
    Senator Collins. So it is a cross-contamination issue?
    Ms. Zoon. That is correct.
    Senator Collins. The FDA has recently proposed regulations 
that would require tissue banks to employ specific good tissue 
practices. As part of those good tissue practices, has the FDA 
banned pooling or prohibited pooling?
    Ms. Zoon. The current proposed regulation states that the 
agency does not permit pooling, although it does give an 
opportunity for exemption or a waiver for this if one can 
validate that their procedure would inactivate certain 
infectious agents.
    Senator Collins. With regard to repeat testing, we have 
heard very disturbing testimony today from the Office of the 
Inspector General that some tissue banks, when they do not like 
the first result that they get on a batch of tissues, they just 
keep testing it in the hopes of getting the all-clear result. 
That, to me, is just incredible and totally unacceptable. Has 
the FDA proposed anything that would deal with that issue?
    Ms. Zoon. Yes. You cannot test a piece of tissue into 
compliance.
    Senator Collins. That is a good way to put it. Is there any 
specific regulation, though, or part of the good tissue 
practices that speaks to that issue?
    Ms. Zoon. Yes. Under our current regulation, which is the 
1997 final rule on tissue, that addresses at least this issue 
with respect to HIV and hepatitis B and hepatitis C, and the 
same would be true with respect to the donor suitability 
proposed regulation that would expand the infectious agent 
testing. But that provision is true. You cannot test a piece of 
tissue into compliance.
    Senator Collins. Dr. Zoon, if you find that a tissue bank 
is engaged in these questionable practices, does the FDA have 
the authority to prohibit the tissue bank from operating?
    Ms. Zoon. Well, we have the authority--under our current 
regulation, we can deal with the products. In the proposed 
regulation, it also allows the agency to deal with the 
establishment itself.
    Senator Collins. We had testimony today from the private 
accreditation association AATB in which I asked the CEO whether 
or not there is any reporting from the AATB when they revoke an 
accreditation, whether that information is conveyed to the FDA, 
because, clearly, there is a serious problem with a tissue bank 
if it loses its accreditation. Now, I recognize that there is a 
difficult balance here because the accreditation is voluntary 
and we want, presumably, to encourage more tissue banks to 
become accredited. But it seems to me that once a tissue bank 
is accredited, if the AATB finds grounds that are serious 
enough that causes the Association to revoke its accreditation, 
that there should be some sort of report to the FDA. Would you 
agree, or what would your views be on that?
    Ms. Zoon. Well, certainly, if the AATB wanted to provide 
that information to the agency, the agency would certainly look 
at that information and weigh that in on terms of prioritizing 
some of our inspectional proceedings.
    Senator Collins. Would it be helpful for you to get that 
information? Would it be a red flag to you that perhaps you 
need to send an FDA inspector in? The problem here is AATB may 
discover a problem way before the FDA does, yet AATB's 
revocation of accreditation does not do anything to prevent 
that tissue bank from operating, whereas the FDA has the 
ability to stop the tissue bank from operating.
    Ms. Zoon. Right. Well, we would welcome any information 
that could and would help facilitate our jobs.
    Senator Collins. Let me talk to you a bit more about the 
FDA's inspection process. According to the HHS Inspector 
General, FDA performed 188 inspections which identified 98 
problems and they resulted in 26 notices of official action. 
There were also 72 notices calling for voluntary corrective 
action. Could you explain to us what a notice of official 
action is and how serious that is on the scale of approaches or 
responses that the FDA could take?
    Ms. Zoon. Right. Well, there are three levels of evaluation 
of an inspection. One is the one you would hope for, which is 
no action indicated, and that is called NAI.
    And then you have a voluntary action indicated, which means 
that there were observations of concern that required the 
particular sponsor to take corrective action on their own in 
order to facilitate remedying these, and these would be checked 
as follow-up on the next inspection and they would address 
those issues to the agency in the interim.
    OAI is the most serious classification of an inspection. It 
means official action indicated. And generally, this can result 
in a number of things. The most normal follow-up from something 
like this might be a warning letter that the agency would then 
issue to the company in which this was observed. They would 
need to respond to this, as well.
    Senator Collins. Could you give us some examples of the 
kinds of violations that would trigger a notice of official 
action?
    Ms. Zoon. Yes. Improper infectious disease testing and 
issues related to quarantining tissues that might lead to 
increased risk of improperly using those tissues. Those are two 
examples. There could be many others, depending on the proper 
screening of a particular tissue. As you know, most of our 
regulations and issues are focused on communicable disease 
testing. So really those things that would increase the risk of 
infectious disease transmission would be the things that we 
would focus on.
    Senator Collins. So these are pretty serious violations 
that could pose a significant threat to public health or to at 
least the recipient of the donated tissue, is that a fair 
assessment?
    Ms. Zoon. Yes.
    Senator Collins. You mentioned that FDA has included a 10 
percent budget increase to assist with tissue inspections and 
your expanded regulatory process. Given the large number of 
tissue banks that have registered with FDA, which, based on our 
conversations with FDA and other experts, exceeded what was 
expected, do you believe that the FDA can conduct adequate 
inspections of these tissue banks?
    Ms. Zoon. Well, as you know, there is not enough resources 
to inspect tissue banks biennially, which is where ultimately 
we would like to be, and we have diverted some of our blood and 
plasma inspectional resources to do some of the tissue 
inspections that we are currently doing today. So we are trying 
to balance many responsibilities to do the best job we possibly 
can. And in order to do this, we really have developed a risk-
based strategy for doing tissue inspections, so those that we 
believe are the highest risk get the most attention and those 
with the lower risk are not.
    So the risk strategy that we are currently using are those 
banks that have had a violative inspection have the highest 
priority. The next-highest priority are those which are tissue 
banks that have not been accredited and have not been inspected 
yet. Then the next level is the laboratories that actually do 
the infectious disease testing of these. And then it goes down 
to those tissue banks that have voluntary action indicated, and 
then tissue banks that are accredited and not inspected, and 
then finally the last tier is those banks that have not had 
problems.
    Senator Collins. The problem is, it is difficult for you to 
set those priorities and say that the last tier are tissue 
banks that have not had problems when nobody even realized that 
there were so many tissue banks out there, and when scores and 
scores of tissue banks, perhaps 100 tissue banks, have never 
been inspected or regulated by anybody. So how can you tell 
that there are no problems? I mean, unless you have a plan to 
inspect every tissue bank once every 2 years or once every 3 
years, how can you conclude that--how can you even rank them?
    Ms. Zoon. Well, no. The ranking was based on--your point is 
well taken, that you would like to have the database of having 
biennial inspections for a while. But with the existing 
resources, we wanted to use our resources most wisely to make 
sure that when we have a problem--and I forgot to mention, the 
second priority is actually for-cause inspections. I misspoke 
in the previous one. So the first is those with violative. The 
second is for cause, where that means we get a report from 
somebody who says that there is a problem in a particular bank 
so we can respond to that.
    But your point is that with the registration and listing 
rule, we will now have the opportunity to have actually an 
inventory of what is out there, so now we will be in a position 
to finish the inspections of those banks that we have never 
inspected that are now registered. Our goal for this fiscal 
year is to do the remaining banks that were identified by the 
IG that had not been looked at by the FDA and any other banks 
we may find from the registration and listing provisions that 
have not yet been inspected by the FDA. So those are our two 
areas where we are really going to focus.
    Senator Collins. The problem is that OIG identified 118 
banks that have been inspected, if memory serves me correctly. 
OIG thought that the total universe was about 150. We now know 
it is about 350. It is over double what anyone expected. It 
seems to me until you have a plan to inspect every one of those 
350 tissue banks, that it is just a shot in the dark. It is 
just throwing darts as far as trying to figure out what are the 
high-risk tissue banks.
    Ms. Zoon. I might just make a comment that the 368 
registered components actually includes each location of a 
tissue bank. So if a tissue bank has more than one location, it 
will register based on the number of locations. So I just want 
to make sure, some of those numbers--and there is also, if 
there are distributors or procurers, they will have to list 
separately and register separately. So when we use the term 
tissue banks, we need to be a little bit careful because there 
may be multiple locations in some of these, and I just thought 
I would point that out, so the numbers may not be as off as 
they might indicate.
    Senator Collins. It still strikes me that is an enormous 
undertaking for FDA and yet an absolutely critical one in terms 
of protecting the public health and also in ensuring that the 
families of potential donors feel comfortable about donating 
tissue and do not experience some of the problems that we have 
heard today that are very disturbing.
    Ms. Zoon. I think we would agree that we believe this is an 
important part of our program, and I think the inspectional 
programs have been extremely valuable in helping us deal with 
the scope of issues with respect to the tissue banks that are 
important to the Congress.
    Senator Collins. I want to just ask you about one specific 
inspection that led to a warning letter, and it is going to be 
Exhibit 2 \1\ in your book, also the notebook that is right 
there should have it. I will give you a moment to find it.
---------------------------------------------------------------------------
    \1\ See Exhibit No. 2 which appears in the Appendix on page 112.
---------------------------------------------------------------------------
    [Pause.]
    Senator Collins. It is a warning letter that the FDA sent 
to a particular tissue bank, Pacific Coast Tissue Bank, on 
April 21 of last year. The letter documents Pacific Coast's 
failure to develop and follow written operating procedures, its 
failure to ensure proper donor testing, its failure to maintain 
complete records. In this letter, the FDA also sets out its 
disagreements with Pacific Coast's response to a prior letter 
and requests that the tissue bank notify FDA of the corrective 
measures it will take to prevent a recurrence of similar 
violations.
    What worries me about this case is it seems to me that this 
tissue bank has been found wanting on very serious grounds, 
such that this is the second letter that the FDA has had to 
send to this particular tissue bank. Could you tell me if the 
FDA has inspected Pacific Coast Tissue Bank for compliance 
since this letter was sent in April 2000?
    Ms. Zoon. I am aware that the FDA will be inspecting 
Pacific Coast Tissue Bank this year, and it is inappropriate 
for me to tell you when in public.
    Senator Collins. I can understand that. But what concerns 
me is it is over a year later and we do not have any guarantees 
that this tissue bank has corrected some very serious 
deficiencies that the FDA inspection identified. What process 
does the FDA use to make sure that serious problems are 
remedied?
    Ms. Zoon. There are several. The company must respond to 
the warning letter, so that information comes back to the 
agency for review, and certainly the response of that will be 
evaluated and looked at, and any follow-up issues, such as the 
issues pointed out in this warning letter, will have direct 
follow-up with respect to the Pacific Coast Tissue Bank on 
their next inspection. So then there can be a series of other 
actions that the agency can take with respect to this 
particular company and we will be looking into our options, 
depending on the finding.
    Senator Collins. One final question on behalf of Senator 
Durbin, who is unable to attend this part of the hearing. 
Senator Durbin sent a letter in January to Dr. Henney, who I 
realize is no longer Commissioner, but asking for a breakdown 
of costs for implementation of the new rules.\1\ Are you 
familiar with that letter?
---------------------------------------------------------------------------
    \1\ See Exhibit No. 2 which appears in the Appendix on page 112.
---------------------------------------------------------------------------
    Ms. Zoon. Yes, I am.
    Senator Collins. Has the FDA responded to that request?
    Ms. Zoon. The FDA has prepared a response to that request. 
It has been cleared by the FDA and now it is being reviewed 
within the Department.
    Senator Collins. I would ask that you share that request 
with the Subcommittee.\2\
---------------------------------------------------------------------------
    \2\ As of July 2001, the Subcommittee staff was informed by the 
Food and Drug Administratoin that the response letter to Senator 
Durbin's January 2001 letter, has not yet been cleared for external 
release by the Department of Health and Human Services.
---------------------------------------------------------------------------
    In closing, I just want to encourage you, if you need more 
resources to make sure that our Nation's tissue supply is safe, 
you should ask for them. We know that this is a big task. We 
know that there are far more tissue banks than ever was 
anticipated, that the registration process would bring forth, 
and there is a certain frustration on the part of the Members 
of this Subcommittee that the FDA has been very slow in acting 
in this area.
    If we want to increase the supply of tissue, and that is a 
goal that many of us share, of encouraging more donations for 
life-enhancing procedures, we need to make sure that we can 
both assure the public that the donated tissue will be treated 
with dignity and respect, and also that it is safe for the 
recipient. And until we have a vigorous regulatory structure in 
place, I do not think we can make those assurances, and that is 
troubling to me because I want to see this very positive trend 
of more tissue and organ donations increase.
    So we look forward to working with you and making sure that 
you have the support that you need. I would also ask that you 
provide the Subcommittee in writing any suggestions for 
legislative changes that you might have. We have heard a number 
of suggestions this morning, of making the law more similar to 
that for organ donation, and we would welcome your suggestions.
    Ms. Zoon. Thank you very much.
    Senator Collins. Thank you. I want to thank all of our 
witnesses for coming today and sharing their perspectives on 
the tissue bank industry and the adequacy of Federal regulatory 
oversight. We entitled this hearing, ``Tissue Banks: Is the 
Federal Government's Oversight Adequate?'' and based on what I 
have heard today, I think the answer to that question is no, 
that it is improving, that the new regulations are going to 
make a big difference, but until we match the new regulations 
with an aggressive inspection process and until we in Congress 
work with the administration to provide the resources 
necessary, it appears to me that there are still going to be 
holes in the safety net of regulation.
    I especially want to thank the Health and Human Services 
Office of Inspector General for its very comprehensive and 
helpful reports, which have shed some light on the state of the 
tissue bank industry and which formed the starting point for 
our discussions today. But the testimony of all of our 
witnesses has been extremely helpful.
    I finally would like to thank the Members of my 
Subcommittee staff who have helped prepare for these hearings, 
especially Claire Barnard, Barbara Cohoon, Eileen Fisher, Chris 
Ford, and Mary Robertson. They have worked very hard on this 
area. Thank you.
    The Subcommittee is adjourned.
    [Whereupon, at 12:03 p.m., the Subcommittee was adjourned.]


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